House of Commons
Prayers
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Oral Answers to Questions
Dr Phillip Lee (Bracknell) (Con)
1. What steps he is taking to ensure that nuclear power provides a significant proportion of the UK’s future electricity supply.
Mr Marcus Jones (Nuneaton) (Con)
16. What steps he is taking to ensure that nuclear power provides a significant proportion of the UK's future electricity supply.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Government remain committed to ensuring that conditions are right for investment in new nuclear power in the UK without public subsidy, and we have taken action to remove potential barriers. The carbon floor price and electricity market reform will provide the certainty needed for investment in low carbon generation, including nuclear. The Government are talking to NNB GenCo about the potential terms for Hinkley Point C, and earlier this week I welcomed the excellent news that Hitachi had acquired Horizon Nuclear Power.
Dr Lee
I thank the Secretary of State for his answer. Like him, I was pleased to hear about Hitachi’s investment. If Britain is to reach its low carbon targets and retain energy security in the longer term, nuclear energy remains the only credible solution. In view of the consequent need for significant investment in order to achieve that, would the Government consider investing in, say, Westinghouse, or purchasing Centrica’s share in what was British Energy, thereby reversing the remarkably short-sighted decisions of the previous Administration?
Mr Davey
I am grateful to my hon. Friend for his support. He is right to say that we need all forms of low carbon generation if we are to meet our demanding targets. I do not think that I am attracted by the idea of the state getting involved in the nationalised delivery of nuclear power. The conditions that we have set up mean that there will be a market-based approach.
Mr Jones
I congratulate my right hon. Friend and his ministerial team on encouraging the substantial investment to secure Britain’s nuclear future that Hitachi has announced only this week. Will he say a little more about what the Government are going to do to ensure that we secure as many British jobs as possible from this substantial investment?
Mr Davey
My hon. Friend is absolutely right. This is not only good news and a huge vote of confidence for the UK’s energy policy; it is also good news for British industry. Hitachi has already signed a memorandum of understanding with Rolls-Royce and Babcock, and the supply chain potential is huge, with 6,000 jobs during construction at Wylfa and Oldbury, and 1,000 permanent jobs after construction. When I announced the Hitachi decision, I also announced that we had set up the Nuclear Industry Council to enable the Government to work with the industry to maximise the potential for the supply chain in this country.
Albert Owen (Ynys Môn) (Lab)
As the Secretary of State said, the decision by Hitachi to purchase Horizon Nuclear Power is a vote of confidence in Anglesey, in north Wales and in UK plc, and I am proud to bat for all three. Will he give the House an assurance that, to make this project a reality, the Office for Nuclear Regulation will have adequate resources to assess the new technology, in order to ensure that we have safe nuclear generation as soon as is practical?
Mr Davey
I thank the hon. Gentleman for his question. I pay tribute to him, to the Government of Wales and to my right hon. Friend the Secretary of State for Wales for the important role that they have all played in this deal. I can confirm that the Office for Nuclear Regulation will have all the resources it needs to go through the generic design assessment for the advanced boiling water reactors that Hitachi is proposing.
Tim Farron (Westmorland and Lonsdale) (LD)
Does my right hon. Friend share my concern that the new nuclear build for the west coast of Cumbria seems to be tied to the storage of nuclear waste at the site? Given the recent earth tremors in west Cumbria, one of which reached nearly 4 on the Richter scale a year or so ago, does he not agree that that would be the worst geological site in the UK on which to store nuclear waste?
Mr Davey
I have to say to my hon. Friend that that is certainly not what our scientists and analysts are saying. I know that there is a debate about the geological disposal facility in west Cumbria, but I am reassured that the local authorities are going about the decision on whether to host such a GDF in a sensible and authoritative way, and I am sure that they will support the proposal, which is an important step forward for new nuclear.
Nadhim Zahawi (Stratford-on-Avon) (Con)
2. What steps he is taking to encourage early take-up of the green deal.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
To drive early take-up of the green deal, we have announced a £125 million cashback incentive for consumers, a £10 million pioneer places fund to encourage early activity from local authorities, and a £12 million fund for core cities to prepare the supply chain. The new energy saving advice service helpline is in place: the number is 0300 123 1234. We have published green deal quick guides, and the new green deal website was launched on Wednesday 17 October.
Nadhim Zahawi
I congratulate my right hon. Friend on the fantastic work that he is doing on the green deal. The supply chain that he mentioned is incredibly important. What steps is he taking to encourage smaller businesses from across the country to become suppliers?
Gregory Barker
I am grateful to my hon. Friend for that question. I know he is a huge champion of smaller businesses, and I can assure him that we see small and medium-sized enterprises as critical to the delivery of the green deal. In fact, I regularly meet SMEs, and this week had a meeting with the Federation of Small Businesses. My Department has set up an expert panel specifically to consider the role of SMEs, chaired by the right hon. Member for Greenwich and Woolwich (Mr Raynsford), for whose co-operation I am very grateful. We have also held a series of national roadshows around the country to alert local businesses to the opportunities right the way through the green deal supply chain, which I am pleased to report to my hon. Friend has attracted a great deal of interest.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
The green deal is an excellent initiative and we obviously hope it will get results, but clearly the current economic situation is not a time when many people are going to be keen to take out loans for anything at all. Will the Minister tell us what steps he is taking to support people on lower incomes who might feel unable at the moment to take out loans under a green deal scheme?
Gregory Barker
First, let me make it absolutely clear that green deals are not loans—certainly not loans as most people understand them. Everybody taking out a green deal should be better off, net-net, on their energy bill after they have had the interventions. It is not something that anybody could feel unable to afford. For those on particularly low incomes, where more work needs to be done on the home than can be financed on a green deal plan, there is £1.3 billion ECO—energy company obligation—programme, which will unleash a huge wave of investment to bring up to standard the homes of the most vulnerable and poorest.
Nick Smith (Blaenau Gwent) (Lab)
3. What steps he is taking to help households improve their energy efficiency.
Alison Seabeck (Plymouth, Moor View) (Lab)
7. What steps he is taking to help households improve their energy efficiency.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The green deal, together with the energy company obligation, is the coalition’s transformational programme to help consumers make energy saving improvements to their homes. We expect the first green deal finance plans to be written by the end of January next year. Our ambitious roll-out of smart meters will have reached every home in the country by 2019.
Nick Smith
Homes in Blaenau Gwent, some more than 1,200 feet above sea level, need energy saving insulation now. Locally based RIS Insulation says there is a serious gap in Government policy as the green deal will not offer loans until late next year and that many jobs could be lost. How are the Government going to bridge that gap?
Gregory Barker
I am very pleased to correct that misinformation. The green deal finance plans will be written from January next year. The ECO is already in place, while the carbon emissions reduction target and the community energy saving programme will continue through to the end of this year, so there is a substantial programme of work that is seamless, running from the end of CERT and CESP right through to the take-up of the more transformational green deal programme.
Alison Seabeck
Evidence produced by the Office for National Statistics and highlighted in the Plymouth Herald this week has highlighted the fact that many more people are working beyond pensionable age, in part because of the need to pay their high energy bills. The last Labour Government put tough obligations on those energy companies to support vulnerable families, including pensioners, with insulation. With only 10 weeks left, Ofgem is now warning that many of those energy companies are not going to meet their targets. What is the Minister doing to nail these energy companies and to explain to my pensioners in Plymouth that they are going to be supported and be warm?
Gregory Barker
The hon. Lady is right: there have been shortcomings in the programmes introduced under the last Government—namely, CERT and CESP. We have done much more to drive deployment of those programmes into vulnerable homes and for the super priority group. I have assurances that we will meet those targets for CERT and CESP, but the great thing about the green deal is that it is applicable to every single home. Whether it be pensioners living in rented accommodation or people living in social housing or on their own, the green deal will be for them, along with a whole range of measures that were not available under CERT.
Mr Tim Yeo (South Suffolk) (Con)
Recognising entirely the important contribution that the green deal will make, does the Minister nevertheless accept the concerns expressed by the Select Committee about the relative absence of energy-efficiency measures from the draft energy Bill? When the final Bill eventually appears, will it include further measures, and has his Department given consideration to a feed-in tariff for energy efficiency?
Gregory Barker
This is one of a number of measures under active consideration at the moment. The energy Bill is very complex, as my hon. Friend the Chair of the Select Committee knows, but it will include the most transformational, radical proposals on energy efficiency ever introduced in this place. Given the complexity and the need to consult, some of these measures may be introduced by way of Government amendment as we take the Bill through the House. I can tell my hon. Friend that the Government are leading and are determined to act on energy efficiency in a way that the Labour party failed to do in 13 years of office.
David Morris (Morecambe and Lunesdale) (Con)
The Hitachi deal is welcome in my constituency, but during a recent Select Committee hearing, the chief executive of EDF said that nuclear was not a done deal and that there would be some underwriting. Can the Minister tell us what that underwriting is, and whether there will be a public subsidy for nuclear generation?
Mr Speaker
Order. May I encourage Members to look closely at the question on the Order Paper, and to frame their supplementary questions accordingly?
Simon Hughes (Bermondsey and Old Southwark) (LD)
4. What his policy is on subsidising new nuclear power stations; and if he will make a statement.
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
What a pleasure it is to answer energy questions for the first time, and to do so with the wind in my sails!
New nuclear power will have a vital role to play in our energy mix, alongside other low-carbon forms of generation. It must be delivered to provide value for money for consumers, and funded through the investment that will spring from our exciting market reforms.
Simon Hughes
May I seek absolute clarity? Given that the Liberal Democrats oppose a new generation of nuclear power stations, and given that the coalition deal was done only on the basis that there would be no public subsidy for any nuclear power, may I have an express assurance that the construction and operation of every nuclear power station in the future will receive no Government subsidy at all? Can that be made absolutely clear, so that Hitachi understands it and everyone else understands it too?
Mr Hayes
Let me be crystal clear, because the right hon. Gentleman is right to inquire about this. There will be no levy, no direct payment and no market support for electricity supplied or capacity provided by a private sector new nuclear operator unless similar support is provided more widely for other types of generation. I could not be clearer than that.
Caroline Lucas (Brighton, Pavilion) (Green)
With respect, the Minister could be a lot clearer than that. A subsidy is still a subsidy even if it is given to other types of generation as well as nuclear.
According to recently published estimates, just the 16 GW of new nuclear capacity to be built by 2025 will require between £5.5 billion and £12.6 billion a year in finance. That is a huge cost to householders and businesses. Does the Minister agree with those figures, and will he admit that given the constraints of the levy cap, he faces a choice between breaching the renewables directive, breaching the Climate Change Act 2008 and abandoning his increasingly implausible plans for new nuclear build?
Mr Hayes
Nuclear power is a low-emission technology, and the hon. Lady should welcome it accordingly. She obviously regarded this week’s good news as bad news, but it is good news in terms of the supply chain—as my right hon. Friend the Secretary of State has said—it is good news for the British people, and it is good news for our energy mix and our energy security. I will not be influenced by the preoccupations of bourgeois-left academics; I will be inspired by the will of the people.
George Hollingbery (Meon Valley) (Con)
5. What recent assessment he has made of the role of reduction in demand in ensuring the UK’s security of energy supply in the long term.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Following a recommendation from the Select Committee, I will shortly be publishing the Government’s energy security strategy. It will set out the Government’s framework for considering and addressing energy security, including the contribution of reduced demand. Building on that, the strategy will set the long-term direction for increasing energy efficiency, and the electricity demand reduction consultation proposes policies to unlock potential for further electricity efficiency. All three documents will be published later this year.
George Hollingbery
Will my right hon. Friend outline the balance of the investment required for the building of new energy generation capacity and for measures to reduce consumption?
Mr Davey
The key purpose of electricity market reform is to allow the market to make decisions of that sort. As the hon. Gentleman will know, my Ministers and I are extremely supportive of demand reduction and energy efficiency measures, which have a critical role to play in our energy mix, but we also need to bring in new supply. We face rising electricity demand as we electrify the transport and heating sectors in the years ahead to meet our climate change targets, even if we have the most ambitious energy efficiency policies imaginable, so we need both a supply-side and a demand-side response.
Mike Crockart (Edinburgh West) (LD)
Does the Secretary of State agree that although demand reduction is essential, demand balancing must also receive a bit more attention, and intelligent smart meters in homes would make an important contribution to that?
Mr Davey
My hon. Friend is absolutely right. Sometimes in energy debates people think there is one particular solution or technology. The truth is we need a diverse-mix balanced approach on both the demand and the supply sides, and new technologies such as smart grids and smart meters have an important role to play.
Julie Hilling (Bolton West) (Lab)
6. How many people self-disconnected from their energy supplies in the last 12 months.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The Department does not hold, and never has held, this information. However, Ofgem monitors disconnection issues more broadly, and in particular the obligation on energy companies not to disconnect vulnerable customers during winter months. I am pleased to be able to tell the House that Ofgem’s latest figures show that in 2011 the number of people disconnected from their energy supply for debt-related reasons fell by 54% for electricity and 59% for gas.
Julie Hilling
The energy companies proudly tell us they rarely disconnect customers. However, last year they installed prepayment meters to recover debt in more than 200,000 households, which increases the cost of power and, more importantly, means some households cannot afford to use gas and electricity. Will the Minister ask the energy companies to record the number of people who are so-called “self-disconnecting”?
Gregory Barker
This is obviously an issue for Members on both sides of the House, and we need to do more to address it. I am very pleased that we have made progress in reducing the total number of disconnections, but I take on board the hon. Lady’s point and I would be very happy to meet her to discuss her ideas.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
There is a group of residential consumers who are off the gas grid and do not have the protection of Ofgem: people who use heating oil and liquefied petroleum gas. Will the Minister say something about people who in effect self-disconnect by not buying oil?
Gregory Barker
This is a significant issue. In Sussex I am one of those customers, and the cost of heating oil is staggering. My hon. Friend the Member for Wealden (Charles Hendry) did terrific work in this area when he was a Minister in the Department. Last year, he looked extensively into possible cartels and competition issues, and we continue to look very carefully into that. Again, I would happily meet my hon. Friend to explain exactly what we are doing.
Mr Mike Weir (Angus) (SNP)
The Minister only talked about on-grid electricity and gas in his original answer, but there are also serious off-grid disconnection problems. Sometimes they arise because people are unable to afford supplies, and sometimes there are involuntary disconnections because of difficulties in getting supplies through in bad weather. Has the Minister spoken to the major suppliers in this market to remind them of the difficulties faced by those on low incomes and to ensure there are no disconnections this winter?
Gregory Barker
I have not personally spoken to suppliers of heating oil because that is not part of my portfolio; it is part of the Energy Minister’s portfolio. As I have just said, however, the former Minister, the hon. Member for Wealden (Charles Hendry), was extremely forensic in taking this through, and his work continues in the Department.
Stephen Mosley (City of Chester) (Con)
I welcome Ofgem’s changes allowing households on prepayment meters with debts of less than £500 to switch to a cheaper tariff with a different electricity operator. Does the right hon. Gentleman agree that making it easier for consumers to shop around and get a cheaper tariff will benefit everybody on prepayment meters, as well as those on other forms of payment?
Gregory Barker
Absolutely. We not only want to make it easier for consumers to shop around; we also want to ensure they are supplied with better information. We will use legislation to help people get the best deal.
Claire Perry (Devizes) (Con)
8. What steps his Department is taking to help people lower their energy bills.
Katy Clark (North Ayrshire and Arran) (Lab)
9. What steps his Department is taking to help people lower their energy bills.
John Robertson (Glasgow North West) (Lab)
18. What steps his Department is taking to help people lower their energy bills.
Sir Tony Baldry (Banbury) (Con)
19. How he will ensure that the forthcoming Energy Bill makes provision to enable consumers to receive the best deal on their energy.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
We have three ways to help people lower their energy bills. The first way is to help people save energy through policies such as the carbon emissions reduction target, Warm Front, the green deal and the energy company obligation. The second is to help people switch to get better deals; we will do everything we can, including through the energy Bill, to get people on to the lowest tariffs. The third is to help low-income and vulnerable households with their energy bills directly, through policies such as the warm home discount.
Claire Perry
My hon. Friend the Member for Suffolk Coastal (Dr Coffey) alluded to the fact that many of us who live in the real world—the one not inhabited by bourgeois left-wing academics—live off the grid and are reliant on sources of fuel such as heating oil; indeed, 53% of people in rural Britain rely on heating oil, I believe, as their primary fuel source. I welcome the Government’s recent support for community fuel buying schemes. Will the Minister say a little more about that? We have a very effective scheme in Wiltshire, which is saving people on average £140 a year, which is a sum not to be sneezed at.
Mr Davey
The hon. Lady is absolutely right, and she will know that I have championed collective purchasing and collective switching. People who are dependent on off-grid fuels such as heating oil have been doing an awful lot of work through heating oil clubs over a number of years. They have been trying to take on the imperfections they see in the market and get a much better deal for those communities. She is right to say that this is the way to go, and I commend her and others who support those projects.
Katy Clark
Two weeks ago, the Prime Minister said that he would make the energy companies move everyone on to the cheapest tariffs. Will the Secretary of State update the House on when and how my constituents will be moved on to the cheapest tariffs?
Mr Davey
The hon. Lady is right; we will do everything we can, including through legislating in the energy Bill, to get people on to the lowest tariffs. We are examining the retail market review that we have just had from Ofgem, which contains a number of excellent ideas, and we will be putting forward options on this issue, including legislation in the Bill.
John Robertson
The Secretary of State will know that one of my pet hates is the lack of attention paid to vulnerable people and their bills. Will he consider legislation to ensure that the energy companies actively find those people to help them rather than use mealy-mouthed words that mean absolutely nothing and then do nothing to find them?
Mr Davey
I agree with the hon. Gentleman that we need to do more to help the most vulnerable, who are facing the problems of rising electricity and gas bills. One argument that I am putting forward with collective switching is that if we can get community groups and local authorities involved in helping residents in their areas to buy energy together, they will be able to reach out to those vulnerable groups. In announcing “Cheaper Energy Together”, a £5 million competition in which local authorities and community groups can apply to set up these community switching schemes and community buying schemes, I made it clear that the only condition successful schemes had to meet was that they had to show they were helping people who are in fuel poverty—the most vulnerable in our society. I do see this as a route to helping the people whom the hon. Gentleman wants to help.
Sir Tony Baldry
Does my right hon. Friend support Ofgem’s proposals to limit each supplier to four tariffs per fuel, per meter and per payment type? Does he agree that tariff simplification, greater transparency and increased competition should be the starting points for energy market reform?
Mr Davey
My hon. Friend is right that the Ofgem package contains many attractive proposals. I am not going to say today that we agree with every one of them, but we are studying them. It is right for my Department and my Ministers to study the proposals carefully, because this is a crucial area. I reassure him that we are attracted to many of those ideas, and we will be putting forward our options for consultation and for the Bill.
Caroline Flint (Don Valley) (Lab)
Two weeks ago, the Prime Minister announced that the Government would be legislating so that energy companies have to give the lowest tariff to their customers. In our debate last week, the Secretary of State tried to clarify what the Prime Minister meant, saying that we are going to use the
“Energy Bill to ensure that the energy companies have to inform people of the best deal.”—[Official Report, 24 October 2012; Vol. 551, c. 939.]
But is he not aware that, as I pointed out last week, sections 76 and 77 of the Energy Act 2011 already give him the power to force energy companies to tell their customers about the lowest tariff? So can he explain why he is planning to introduce new legislation to bring in powers he already has?
Mr Davey
The right hon. Lady will know that I have already acted on this issue. Two months into office, I negotiated a voluntary agreement with the big six so that they would provide details of the best available tariff on people’s bills already—so I am afraid that she is behind the times again. I note that she has not commented on Ofgem’s proposals, not least because she wants to abolish Ofgem. That would be very damaging to the interests of energy consumers, both households and businesses. So I have to say to her that she needs to engage with the real debate, which is Ofgem’s proposals and our thinking.
Damian Hinds (East Hampshire) (Con)
Does my right hon. Friend agree that although having multiple price points for exactly the same product can be good for consumers, that stops being true when the poorest and most vulnerable are less able to access them and when the sheer volume, complexity and rate of change of those tariffs makes it almost impossible to make meaningful comparisons and keep up?
Mr Davey
My hon. Friend is right. Under the previous Government we had a multitude of tariffs, which became confusing and complex, but that Government failed to take action. It is good to know that Ofgem, with our support, has brought forward proposals after careful study, and we will act on them. Although it is possible to have too much simplification, which puts us in danger of reducing choice and competition, Ofgem is trying to strike the right balance and that is why we are studying its proposals so closely rather than dismissing them.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
When the Minister addressed 400—
Mr Speaker
Order. The hon. Lady has tabled Question 10 and must ask that first.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
10. What recent assessment he has made of levels of investment in clean energy infrastructure.
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
The electricity market reform White Paper, published in July 2011—I have a copy here for those who have not brought theirs with them—stated that up to £110 billion in investment in the power sector is likely to be required by 2020, of which approximately £60 billion relates to investment in clean energy capacity.
Sandra Osborne
I thank the Minister for that reply and apologise for pre-empting it. When he addressed 400 industry delegates at the renewable energy UK conference the other day, he spoke of the need for clarity and certainty in renewable energy policy to provide the right framework for investment. He then told the media that enough is enough when it comes to wind power. Which of those mixed messages represents the Government’s policy and what will he do to retrieve the situation, which has caused such uncertainty in the industry?
Mr Hayes
The commitment to renewable technology is an essential part of delivering the energy mix that I mentioned earlier. It is absolutely right that we should have renewables as part of that mix. That builds sustainability and resilience and helps us to meet our emissions targets. It is also good for consumers, because that mix guarantees our energy security.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Does my hon. Friend agree that Drax provides both clean and renewable energy? Will he see fit to increase the level of investment in and Government support for biomass, which is helping to feed renewable energy into Drax and helping growers in Thirsk, Malton and Filey at the same time?
Mr Hayes
The principle of using biomass as a feed of the kind that my hon. Friend suggests will have had a boost since, as Minister, I have cut the red tape and made it more straightforward. I share her view. I did it very quickly, because I like to do things quickly when it is in the public interest so to do.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
Clean energy infrastructure also includes carbon capture and storage, which is widely supported on both sides of the House. The coalition agreement, lauded by all members of the ministerial team and, I am sure, everyone sitting behind them this morning, made a commitment to fund four commercial scale CCS projects in the UK. Does that commitment still stand?
Mr Hayes
The competition to which the hon. Gentleman refers will allow a record level of investment in carbon capture and storage, in which Britain is a world leader. It is critical that in dealing with emissions we recognise what my right hon. Friend the Secretary of State has said and what the hon. Gentleman has acknowledged, which is that carbon capture and storage can be a vital part of those ambitions.
Tom Greatrex
I am sure the industry, which has expressed some concern over the past couple of days, will have heard the failure of the Minister to confirm whether those four projects will still be funded. Is he not concerned that without any firm commitment on funding by the UK Government, the prospects of securing the European Commission funding under the NER300 funding stream, which the UK did so much to put in place, are limited? Does he not understand the anxiety of those seeking to develop CCS that his failure to give a clear signal to the Commission could jeopardise access to up to €600 million, which could make the difference, as he says, in ensuring that our lead in CCS is realised?
Mr Hayes
The hon. Gentleman knows that the process was competitive. It was described by the spokesman from that sector as “very good news”. My right hon. Friend the Secretary of State took a personal interest in this matter because of its significance and he used his usual endeavour and diligence to ensure that we got it right. He personifies that approach in running this Department.
Mr Henry Bellingham (North West Norfolk) (Con)
Does the Minister share my support for the recent and very high level of investment in clean offshore energy off the coast of Lincolnshire, Norfolk and the Wash? Does he agree that it makes no sense for communities in those coastal counties to have controversial onshore wind farms forced on them unless there is overwhelming public support?
Mr Hayes
My hon. Friend will know that, since I became the Minister, we have called for evidence on both the community benefit and cost of onshore wind. It is critical that communities see that benefit and feel a sense of ownership over developments that affect them. During the process we will of course allow the normal expressions of interest by both proponents and opponents of onshore wind and will then consider them, as the Prime Minister said yesterday. When we have met our current targets, we will have to consider what to do. I suggest, as the Prime Minister has done, that all parties need to have that discussion.
Duncan Hames (Chippenham) (LD)
11. What outcome he will be seeking on climate finance at the UN climate talks in Doha in November 2012.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
At the climate talks in Doha, as part of a balanced outcome, I want to see a collective commitment from developed countries to maintain climate finance at least at Fast Start levels from 2013. We also want work on mobilising sources of finance to continue to reach the goal of jointly mobilising $100 billion a year by 2020. Finally, we will need to endorse the host country for the green climate fund.
Duncan Hames
That is indeed the goal, yet so far there is no agreement on how the funds will be raised. One option is a carbon price on emissions from international shipping, which, as the Secretary of State pointed out in a recent speech at Chatham House, are not covered by existing agreements. Will he raise the matter at the Doha talks?
Mr Davey
I raised it at the pre-COP talks in Seoul. It is a really interesting source of new climate change finance and should be explored alongside other potential revenues. It is absolutely vital that developed countries raise their ambitions in this area. We must show developing countries that we want to support them in this change and that moving to ambitious targets for reducing carbon emissions globally is possible and will not stunt growth. Green growth can go together with economic growth, whether in the developed or developing worlds, and we must support those countries.
Sheila Gilmore (Edinburgh East) (Lab)
Will the Secretary of State explain whether his energy Minister’s disdain for left-wing bourgeois academics signifies any change in the Government’s commitment to climate change science and, therefore, to seeking the necessary funding?
Mr Davey
Left-wing bourgeois academics are obviously welcome to contribute to any discussions in this House, because we want to hear from all sides. I must say that climate change scientists are not noted for their political beliefs; they do their work as scientists. They are providing the evidence that the Government, the country and, I hope, the rest of the world will act on. Their scientific results are extremely disturbing. Most recently we have seen what is happening in the Arctic, where the polar ice cap is melting faster than people had previously thought. That is what the scientists are telling us, and we should take it very seriously.
Chris White (Warwick and Leamington) (Con)
12. What steps his Department is taking to encourage new entrants to the energy market.
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
Wider participation is key to a competitive market and to securing the investment we need. The forthcoming energy Bill will reform the electricity market to incentivise new investment in a diverse, low-carbon energy mix.
Chris White
In a few weeks’ time I will have the pleasure of opening the new offices of First Utility in my constituency. It is one of the fastest growing energy companies in the country and a major local employer. It is pioneering new ways to help make household bills cheaper through a range of technologies and is an excellent example of the innovation that new entrants to the energy market can bring. Will the Minister meet me and First Utility to discuss how we can support new entrants into the energy market and boost competition to make household bills cheaper?
Mr Hayes
Just this morning I had a meeting with my diary secretary in which I prioritised just such a visit. It is vital that we allow new entrants into the market, because that will create the competitive pressure to drive down prices. The right hon. Member for Don Valley (Caroline Flint) told the House only last week that that had not happened over the past 15 years, and who was in charge of energy policy then?
Dr Alan Whitehead (Southampton, Test) (Lab)
The Minister will be aware that power purchase agreements are extremely important for the ability of independent low carbon generators to enter the market. Does he share my concern about the fact that power purchase agreements are disappearing from the market and that they will probably totally disappear by 2017? Does that not point to a concentration of generator ownership rather than the ability of low carbon generators to enter the market?
Mr Hayes
The Energy and Climate Change Committee, of which the hon. Gentleman is a member, is concerned about that point. We have called for evidence on exactly that subject, too—and for precisely the reasons that lie behind his question. We want to know what the issues and barriers are.
The hon. Gentleman is right to say that a plural marketplace is essential if we are to create the competitive pressure that I have described. Entry to that marketplace is therefore a priority. Actually, I think that that view is shared across the House.
Mr Jim Cunningham (Coventry South) (Lab)
13. What steps the Government are taking to stimulate the manufacturing of renewable energy technology in the west midlands.
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
We have recently set out support levels under the renewables obligation until 2017 and expect that the support will bring forward £20 billion to £25 billion of new investment in that period.
The energy Bill, the landmark measure to which I refer once again, will transform the electricity market, delivering a diverse energy supply and simultaneously stimulating the economy by bolstering jobs and skills.
Mr Cunningham
I remind the Minister that Coventry and the west midlands have a strong history of manufacturing and the potential to be at the forefront of developing and producing green technology. What are the Government doing to ensure that the region can develop the skills required and get the financial support to create the capacity to become a major manufacturer of renewable energy?
Mr Hayes
I know of the hon. Gentleman’s commitment to manufacturing, not only during his time as a Parliamentary Private Secretary but in the work he has done in his constituency and more widely, particularly in the automotive sector.
Just yesterday, I was in discussion with colleagues at the Department for Business, Innovation and Skills about this precise matter of ensuring an adequate supply of training and skills to meet the demand of the energy sector. There is more to be done, but it will be achieved best by the expression of that demand in stimulating the right kind of supply—from trainers, further education, higher education and elsewhere. It is about not just new entrants, but upskilling and reskilling too.
Mr Speaker
We are getting a very full insight into the Minister’s working week, for which I am sure we are all extremely grateful.
Jeremy Lefroy (Stafford) (Con)
Alstom, a major Stafford manufacturer, has just announced a welcome investment in tidal energy. Will the Minister please update us on the potential for tidal energy and associated manufacturing in the UK?
Mr Hayes
My hon. Friend will know that I am profoundly interested in renewable technologies that deliver. Tidal energy has immense potential. We have already committed resources to the work being done to get it to a scale on which it could be commercially viable. What my hon. Friend points to in his constituency, backed by his personal support, can only assist us in that practice.
Andrea Leadsom (South Northamptonshire) (Con)
14. What his policy is on onshore wind farms; and if he will make a statement.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Our policy remains the same: to support onshore wind farms. Onshore wind is good for our energy security, emissions reductions, economic growth and jobs, and it reduces pressures on consumer bills. The new wind projects to deliver the ambition of 13GW by 2020 are largely on the table. The Government are clear that those must be properly sited and must provide genuine benefits to local communities.
Andrea Leadsom
I am disappointed that the Minister, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), did not respond to my question; I have welcomed his comments in the press in recent days. Does my right hon. Friend believe that it is fair that my constituents in Helmdon, Sulgrave and Greatworth have spent two years and thousands of pounds of their own money fighting a wind farm in their area, with support from South Northamptonshire council, only to have the decision overturned on appeal? The inspector said that all their objections were very valid and upheld them, but added that national policy overruled local wishes. What steps is the Secretary of State taking to improve that unfair situation?
Mr Davey
I am sorry if I have disappointed my hon. Friend by my presence at the Dispatch Box. She will know that Ministers do not comment on particular planning applications, but I have made it absolutely clear, working with the Department for Communities and Local Government, that the planning system needs to be more responsive to local communities. I personally launched the consultation on trying to get greater community benefits for communities who host renewable sites. I hope that she will, with her experience, contribute to that consultation process, which is very important in ensuring that communities who host these sites can gain a real benefit.
Mr Speaker
I understand the temptations, but may I ask the right hon. Gentleman to face the House in answering questions, not to look backwards at the hon. Member who happens to be asking the question?
Caroline Flint (Don Valley) (Lab)
The last time we met at Energy and Climate Change orals, I asked the Secretary of State why he was failing to stand up to his Conservative colleagues who want to kill off the British wind industry. He said:
“I have to disappoint the right hon. Lady, because my Conservative colleagues and I are working very closely on this matter.”—[Official Report, 12 July 2012; Vol. 548, c. 433.]
By that, of course, he meant the former energy Minister. After yesterday’s outburst by the Minister of State, the hon. Member for South Holland and The Deepings (Mr Hayes), how closely would he say they are working together now?
Mr Davey
My hon. Friend the energy Minister suggests that I use the word “intimately”, but I can say that we are working very closely. My hon. Friend and I—as you, Mr Speaker, requested I will face the House—may occasionally disagree on issues of substance, and I certainly did not agree with his remarks the other day, but I have to say that I really admire his style.
Caroline Flint
The Secretary of State said to the media yesterday that there has been no change to Government policy, but as we have already heard during questions, investors themselves are saying that this latest shambles is very damaging and is putting investment in new jobs and new industries at risk. The energy Minister says that wind farms are imposed on local communities, but nearly half of all planning applications get turned down. He says that wind farms affect house prices, but there is no evidence in the UK showing that that is so. He says that wind farms are too noisy, but the existing planning guidance already sets noise limits. How does the Secretary of State feel about being tricked into agreeing a review that is nothing more than a hatchet job on the British wind industry?
Mr Davey
What the right hon. Lady did not say is that in the renewables banding review that we announced in July, which was warmly welcomed across the industry, we set the support levels until 2017 and sent a very strong signal to investors in the sector. She also did not tell the House what the Prime Minister said yesterday in supporting my position that the renewables policy has not changed. The Prime Minister and the Secretary of State are at one on this. We will continue with our renewables policy; it has not been changed.
Charles Hendry (Wealden) (Con)
Is the Secretary of State aware that oil and gas-rich countries such as Norway, Saudi Arabia and Kazakhstan recognise that an integral part of their energy security is the development of their own renewable resources, including onshore wind? If it is right for them, it must be right for us as well. He has given us clarity on long-term nuclear policy, developed on both sides of the House over a number of years. Will he now continue his work to deliver exactly the same clarity for investors in other low-carbon technologies such as renewables, because vital long-term investment decisions are being made now and people need that clarity?
Mr Davey
If I may, Mr Speaker, I should like to pay tribute to the great work that my hon. Friend did at the Department in a whole range of sectors and thank him for the support he gave me. He is absolutely right that countries around the world, even those that are richer in oil and gas supplies than ours, are investing in renewable energy, and I think we should continue with that. We should make it clear that this is one of the best places in the world to invest in renewable energy.
John Robertson (Glasgow North West) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Since my Department’s previous Question Time, I have attended the pre-COP ministerial climate change talks in Korea. In addition, we have announced the winners of the record-breaking 27th North sea licensing round and the shortlist for our £1 billion carbon capture and storage competition. We have put in place the framework for our flagship green deal energy efficiency programme. We have welcomed the news of Hitachi’s major investment in new nuclear power stations in Britain. Energy UK has reported that energy investment in the UK is running at a 20-year high, including record investment in renewables. As you know, Mr Speaker, I intend this month to introduce the energy Bill, which will reform the electricity market, provide long-term certainty to investors, and ensure that British households and businesses enjoy affordable, secure and clean electricity supplies.
John Robertson
I thank the right hon. Gentleman for his short answer. He knows of my great support for nuclear energy and that I would like it to help to reduce our carbon emissions, but we have to respect the public’s concern about radioactive waste. What does he plan to do to ease people’s concerns in the realm of waste?
Mr Davey
I am grateful for the hon. Gentleman’s question. He will know that we have made it clear that new nuclear investors need to be responsible for the decommissioning costs and disposal of their waste. That is part of the deal—they must meet those financial obligations. In addition, as I said earlier to my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron), we are working with a number of communities, particularly in west Cumbria, on a geological disposal facility.
Simon Hughes (Bermondsey and Old Southwark) (LD)
T4. Just over the bridge at the Elephant and Castle, a major regeneration scheme is under way. When the Liberal Democrats ran the council, we proposed that the scheme should have an energy centre whereby the community could generate its own energy as well as keep prices as low as possible. Will the Government commit to supporting such community initiatives, to make sure that we get the best deal in our communities, led by our communities?
Mr Davey
I could not agree more with my right hon. Friend, who has championed community energy for many years. As Secretary of State, I am determined that we promote even more ambitious polices. We will introduce a community energy strategy in the spring. We have already made a number of announcements to encourage community groups and democratic local authorities to support these types of schemes.
Caroline Flint (Don Valley) (Lab)
A year ago today, the Government announced their first round of cuts to the feed-in tariff for solar power. As instillations flatline, Ministers have clung to the line that their plans will allow 4 million homes to be solar powered, with 22 GW of solar to be installed by 2020. Will the plan for 22 GW, which was announced in April, still be the Government’s policy when they publish their renewable road map, or does he now accept that, because of his cuts, Britain will not reach that target for at least another 30 years?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I do not know whether the right hon. Lady is deliberately misunderstanding what was said or whether she just did not grasp it in the first place. What we said about deployment rates is that we have the potential to deploy 22 GW if we can continue to drive down the cost of solar.
Gregory Barker
Yes, I did, but there was a little more context to it. If the right hon. Lady stopped muttering and rabbiting on, she would hear what I am saying. If she would like the answer, 22 GW is certainly our ambition, but in order to meet that ambition we need not just deployment, but deployment at a level that the country can afford. That is what we are about on the Government Benches—delivering renewables at a rate that the country can afford and that delivers good value to consumers, as opposed to the open handed, open cheque book, high-cost model deployed under the Labour party.
Duncan Hames (Chippenham) (LD)
T5. Both the Energy and Climate Change Committee and the independent Committee on Climate Change have argued that the Government should set a carbon intensity target for the power sector. Does my right hon. Friend the Secretary of State agree with them?
Mr Davey
I am grateful for my hon. Friend’s question. I think that there is a case for a decarbonisation target for the power sector, but that is still subject to ongoing discussion in Government. We are in a coalition and we need to get Cabinet approval for a decision such as this. However, it is worth noting for the benefit of the House that it is not just the Climate Change Committee and the Select Committee that have called for a carbon limit on the power sector by 2020. More than 50 companies, third sector bodies and trade bodies recently signalled their support in an open letter. There is huge support from industry for this measure and I hope that we can win that argument in this House.
Graham Stringer (Blackley and Broughton) (Lab)
T3. Do Ministers not think that it would help the energy debate in this country if the costs of renewables were itemised separately on energy bills?
Mr Davey
The hon. Gentleman seems to suggest that there is a lack of transparency in the way in which energy costs are delivered. I have to say that I disagree with him. There are huge amounts of information about the different costs of green energy. He will know that the cost of renewables for bills is tiny and that the cost of energy efficiency schemes, such as the carbon emissions reduction target and the energy company obligation, is significantly greater. The real costs involved in and the real reason energy bills are going up are the rising price of wholesale gas on global markets and the need to invest in our distribution networks that need to be replaced. Those are the real drivers behind higher gas and electricity bills, and people who suggest otherwise should look at the facts.
Robert Halfon (Harlow) (Con)
T9. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), has been instrumental in forcing inquiries into the uncompetitiveness of the oil companies in keeping prices high at the pump. Will he also urge the Treasury to stop the 3p planned fuel duty rise in January, which will cost motorists an extra £60 a year?
The Minister of State, Department of Energy and Climate Change (Mr John Hayes)
Needless to say, I will not make any commitments above my pay grade or outside my remit, but my hon. Friend has been a doughty campaigner and as a result of that campaign will know that I have taken a series of measures along the lines that he has proposed, in my Department and elsewhere, to ensure that we can meet the objectives that he sets out. I am a Blue Collar Conservative by origin, by inclination and, as you can see, Mr Speaker, by sartorial choice.
Mr Speaker
Order. May I remind the House that there is much interest in topical questions, which I am keen to accommodate? Brief questions and brief answers would assist.
Mr David Hamilton (Midlothian) (Lab)
T6. Cockenzie coal-fired power station, in my neighbouring county, will close very shortly. That will be followed by a spate of closures of coal-fired power stations. What discussions is the Minister having about the gap that that will leave and the skills that will be lost in that important industry, and indeed in what we still have of the coal industry?
Mr Hayes
The hon. Gentleman is right that one challenge that the Government and the country face is ensuring that we get sufficient capacity, taking account of closures. It is true that our generating stock is ageing, and there are of course issues to do with the gradual end of coal and an ageing nuclear stock, so capacity is critical. Part of our reforms in the Energy Bill will be to do exactly what he asks and create sufficient incentive for investment to meet that capacity challenge.
Mark Pawsey (Rugby) (Con)
The Rugby Advertiser reports that a local pensioner has been scammed into paying £99 for a device that was claimed to save energy but that, according to Warwickshire trading standards, is dangerous and will not save any money. Will the Minister join me in condemning companies that take advantage in that way of consumers who are concerned about their energy costs?
Gregory Barker
Absolutely. I was appalled to read of the case raised by my hon. Friend, who is a great champion of his constituents. Trading standards exists to help such victims, and I am pleased to hear that Warwickshire trading standards is investigating the case. I would be grateful if my hon. Friend kept me informed of progress, as we take the matter very seriously indeed.
Mr Ben Bradshaw (Exeter) (Lab)
T7. If the new nuclear power station at Hinkley Point goes ahead, the people of Bridgwater will face 700 extra lorry movements a day and other massive strain on their infrastructure. Will the Minister ensure that they get long-term community benefit in return?
Mr Hayes
I am looking closely at the community benefits from new capacity, including new nuclear. The right hon. Gentleman is right that part of getting things right in the long term is to examine the effects on communities, which I have spoken about before in the House. We are doing so, and I will respond to him about the particular circumstances that he raises.
Andrew Stunell (Hazel Grove) (LD)
Energy demand management must be based on reducing demand in the home. Will Ministers assure the House that they are working closely with colleagues in the Department for Communities and Local Government to ensure that building standards reflect the need to improve the performance of our homes?
Mr Davey
I can confirm exactly that. I pay tribute to my right hon. Friend for the fantastic work he has done in pursuing those policies for many years, not least as a Minister in the DCLG. He will know that the Under-Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bath (Mr Foster), is continuing his excellent work.
Ian Lucas (Wrexham) (Lab)
T8. Does the Secretary of State agree that investment in onshore wind is not a matter for levity, and that his relationship with his energy Minister is not sustainable?
Mr Davey
I do agree that investment in onshore wind is a serious matter. We need to ensure that industry and investors know that the Government are committed to a long-term, stable and consistent framework. The hon. Gentleman will know that I lead on renewable energy strategy and I decide the policy, and the industry has heard that.
Neil Carmichael (Stroud) (Con)
I, too, welcome Hitachi’s expression of confidence in our nuclear industry, especially as the plans include Gloucestershire. What does the Minister think about the need to develop skills and the labour market to support that infrastructure?
Mr Hayes
When I was the Minister responsible for skills, I convened a meeting that was attended by DECC and Department for Business, Innovation and Skills officials to ensure that we had a clear expression of demand from the industry, and the Government met that demand by talking to skills suppliers to ensure that we attracted new people to the industry and built the skills necessary. We are on the case, and the nuclear skills academy is leading that process. I can assure my hon. Friend that nuclear presents a chance for new jobs and skills as well as being important for our energy security.
Mr Nigel Dodds (Belfast North) (DUP)
Following the reductions in winter fuel payments that the Government have implemented, many senior citizen households are finding it difficult to meet bills, especially for lump-sum payments for home heating oil. What are the Government doing to address that problem?
Gregory Barker
I am afraid I did not catch the last part of the right hon. Gentleman’s question about heating oil.
Gregory Barker
As the right hon. Gentleman may know, more than 2 million of the most vulnerable households—primarily pensioners—will receive the warm home discount in addition to winter fuel payments. The Government are taking record action to ensure that our support is directed at those who need it most, and we are proud of our record.
Christopher Pincher (Tamworth) (Con)
Are Ministers on the Treasury Bench aware of the assertion by GE Hitachi, which is engaged in buying the Horizon consortium, that it can build fast nuclear reactors in four years, thus reducing the time to market and, potentially, the subsidy required?
Mr Davey
I am aware of Hitachi’s record, and with its Canadian partner it has a fantastic record of building new nuclear reactors on time and on budget. It has built 20 nuclear reactors over the past 40 years—an impressive track record—and I welcome it to the UK energy market.
Ann McKechin (Glasgow North) (Lab)
Does the Secretary of State agree that the development of carbon capture technology should be a priority for the new green investment bank?
Mr Davey
As the hon. Lady will know, the Government have already made a big commitment to carbon capture and storage, and we have announced the next stage of our £1 billion competition, with four of the original eight bidders going forward. It is not for me to set the investment priorities of the green investment bank; the purpose of it being at arm’s length from the Government is so that it can set its priorities.
Mr Graham Stuart (Beverley and Holderness) (Con)
This country accounts for 2% of global carbon emissions, and that level is falling. It is, therefore, essential that we engage with countries around the world that have larger emissions. When did a Minister from the Department of Energy and Climate Change last visit China?
Mr Davey
I will write to the hon. Gentleman with the exact dates of when a Minister from our Department last visited China. I recently met the relevant Minister from China in London, and in Seoul at the international climate change talks. We are working closely with the Chinese, and they have taken up our 2050 road map calculator for how we can plan to reduce carbon emissions in an ambitious way. Our relationship with China in that area is solid.
Helen Goodman (Bishop Auckland) (Lab)
When the Government changed the rules on feed-in tariffs, 100 jobs were lost in my constituency. What calculation has been made of the number of jobs that will be lost if, as in the view of the Minister of State, no more onshore wind turbines are to be built?
Gregory Barker
We have big ambitions for microgeneration and distributed energy, but only if it provides real value for money for consumers who pay the bills and will be buying that technology. We can do that if we provide a long-term stable framework, which is what we are doing. The feed-in tariff was never designed as a job creation scheme in itself; it was designed to drive a mass take-up of distributed energy.
Tessa Munt (Wells) (LD)
The National Grid Company has a statutory duty to consider social and environmental costs when evaluating routes for electricity transmission, whether overhead, underground or undersea. It wrote to my constituents acknowledging that duty, and assured them that it would provide detailed analysis for the Hinkley C connection project. As the company has plans to announce its route alignment on Tuesday 6 November, but has not yet provided that information, will the Minister intervene on behalf of my constituents to ensure that it does not ignore its statutory duties—
Mr Speaker
Order. We are extremely grateful to the hon. Lady, but we need a sentence question.
Mr Speaker
Order. I am sorry to disappoint colleagues, but we must move on.
Business of the House
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Angela Eagle (Wallasey) (Lab)
Will the Leader of the House give us the business for the next week?
The Leader of the House of Commons (Mr Andrew Lansley)
The business for next will be:
Monday 5 November—Second Reading of the Growth and Infrastructure Bill.
Tuesday 6 November—Second Reading of the European Union (Croatian Accession and Irish Protocol) Bill, followed by motion to approve European documents relating to banking union and economic and monetary union.
Wednesday 7 November—Opposition day (8th allotted day). There will be a debate on regional pay in the NHS, followed by a further debate on a subject to be announced. Both debates will arise on an Opposition motion.
Thursday 8 November—A debate on a motion relating to the medium-term financial plan for the House of Commons administration and savings programme, followed by a general debate on stimulating growth through better use of the prompt payment code. The subjects for these debates have been nominated by the Backbench Business Committee.
Friday 9 November—Private Members’ Bills.
The provisional business for the following week will include:
Monday 12 November—Opposition day (9th allotted day). There will be a debate on an Opposition motion. Subject to be announced.
Tuesday 13 November—Business to be nominated by the Backbench Business Committee.
I should also like to inform the House of business in Westminster Hall:
Thursday 22 November—A debate on the Transport Select Committee’s report on air travel organisers’ licensing reform, followed by a debate on the Committee’s report on flight time limitations.
Thursday 6 December—A debate on fisheries.
Ms Eagle
I thank the Leader of the House for announcing the business for next week.
Last week, I welcomed the new Chief Whip to his position. This week, I should congratulate him on another parliamentary record. John Wakeham, his predecessor, lost a Commons vote within 40 days in the job; this Chief Whip has done it in only 13 days. At least his experience in John Major’s Cabinet means that he knows what it is like to serve under a weak Prime Minister who is unable to control his parliamentary party.
Yesterday lunchtime, the Prime Minister said he was in favour of cutting the EU budget, but yesterday evening he voted against cutting the EU budget. It says something about his unique negotiating strategy that he thinks he strengthens his position by voting against the very thing he says he will argue for; and it says something about his approach to party management that, ahead of last night’s vote, he told his Back Benchers—in colourful terms—that the House
“is not some…sixth-form debating society”.
Yesterday, the Prime Minister said the Government were seeking a real-terms cut in the EU budget, but today the Deputy Prime Minister has ruled that out. Who speaks for the Government?
Two weeks ago, the House voted against the scrapping of 2nd Battalion the Royal Regiment of Fusiliers, and the Government ignored the vote; last week, the House voted against the badger cull and the Government carry on regardless; but they must not ignore the vote of the House last night—after all, this is not a “sixth-form debating society”. May we therefore have an urgent statement from the Foreign Secretary on what steps the Government will now take?
I am afraid I owe the House an apology. Last week, I tipped Flashman for the 4.25 at Doncaster, but when it came to it Flashman over-promised and under-delivered. He turned out to be a great disappointment. There is a lesson in that for Conservative Back Benchers: don’t waste your money on a gelding called Flashman.
Back in September, the Prime Minister announced with great fanfare that he was setting up a growth implementation committee. He said it would be
“a forum which will be focused on implementation and driving implementation.”
When asked, the Business Secretary—vice-chair of the committee—could not remember its even being set up. So unmemorable and unimportant was the committee on “driving implementation” that the Business Secretary’s officials had to remind him that the committee had in fact met twice and that he had been there. There we have it: the PR Prime Minister announces by press release a drive for growth, and nothing happens.
It is no wonder that, halfway through the life of this Government, they had to ask Lord Heseltine to report on how to drive economic growth. His report concluded:
“the UK does not have a strategy for growth”.
They did not need to ask Lord Heseltine to find that out. So far, we have had a growth implementation committee and a growth report, and next week we will debate the Growth and Infrastructure Bill, but since the Government were formed and over the entire period they have been in office, the economy has grown in total by just 0.6%. Whether plan B or plan H, the Government need a plan for growth, so may we have an urgent statement from the Chancellor on what the Government are doing to implement the report’s recommendations?
The Conservative Energy Minister said this week about onshore wind farms that “enough is enough”. Hours later, up popped his boss, the Liberal Democrat Secretary of State, to announce the opposite. For good measure, a “source” told the Guardian that the errant Energy Minister “has been very silly”. We clearly need an urgent statement from the Secretary of State for Energy and Climate Change so that we can find out precisely what this Government’s policy on onshore wind farms really is, because it did not become any clearer in today’s questions. We also need an assurance that his junior Minister will not contradict the policy the day after it is announced.
Then there is Trident. This week, the Defence Secretary announced one position, and then the Deputy Prime Minister announced a different one. We have not heard from the Leader of the House on the subject, so maybe he would like to announce a third.
This week we have had two defence policies and two wind farm policies and today we have got two EU budget policies. Even a sixth-form debating society would do better than this.
Mr Lansley
I am grateful to the shadow Leader of the House for her tip last week, but I was looking forward to one this week. It turns out that all we get from the Labour party is a non-starter. The hon. Lady has to get it right—if the horse does not run, you keep your money, and that is what we are going to do. We are going to keep the money.
The hon. Lady is right: we are not a sixth-form debating society, but people might have thought differently from the way the Labour party approached yesterday’s debate. It was a classic of student politics—do one thing and say another. This is a party which in government saw the EU budget rise by 47%. It said it would go and negotiate toughly on the budget, but gave away the rebate and saw the budget go up by £8 billion. That is not a party that has any credibility. On the contrary, our Prime Minister will go to those negotiations looking for a cut, not—as the shadow Leader said—aiming for no cut. We have already started with the toughest position ever achieved in relation to the EU budget, with the Prime Minister already having done what the Labour party talked about but never did—creating allies in Europe for constraining the EU budget, as he did in December 2010. Contrary to what the Labour party says, the Prime Minister is prepared to use the veto on the EU budget if necessary, whereas Labour says it would not.
The hon. Lady did ask a question—I always search for them. She asked whether the Chancellor would make a statement about Lord Heseltine’s report “No Stone Unturned”. The Prime Minister and Chancellor commissioned that report and welcomed it. It rightly stressed that we are on the right track. Anyone who knows Michael Heseltine well—as I do—will recognise that he always wants to be pushing forward, and that is what we will do. The Chancellor will make the autumn statement on 5 December and show how we are taking forward growth, because from our point of view it is vital to achieve growth in the economy.
The hon. Lady asked about Trident. All that my right hon. Friend the Secretary of State for Defence was doing was announcing the next phase of what was announced back in May in relation to the design and development process. There was nothing new or exceptional about that. The shadow Leader of the House seems to have written her response to the business statement before she came to the House to listen to the Secretary of State for Energy and Climate Change respond to questions. He and his Ministers could not have been clearer. We are achieving improvements in renewable and green technologies in ways that Labour could only dream of.
I remind the shadow Leader of the House that she told her constituents in the Wirral News yesterday that
“we desperately need…some good news on the economy.”
I find that astonishing. Does she not realise that we have reduced Labour’s deficit by a quarter? Under this Government, there are more than 1 million more people working in the private sector and an increase in employment of 750,000. The number of people claiming the main out-of-work benefits has fallen by 170,000. Furthermore, 950,000 people have started apprenticeships in the past two years, and more new businesses have been created than in any other year on record. That is happening under this Government. Only Labour believes in a plan B— B for borrowing!
Mr Speaker
Order. As usual, a large number of hon. and right hon. Members are seeking to catch my eye. If I am to accommodate anywhere near all of them, in the light of the important and heavily subscribed Back-Bench business to follow, brevity from Back and Front Benchers alike will be vital. We can be led in this important parliamentary endeavour by the Chairman of the Procedure Committee, Mr Charles Walker.
Mr Charles Walker (Broxbourne) (Con)
May we find time for an urgent debate on the shocking performance of the East of England ambulance service? I am in no doubt that the performance of the chairman, Maria Ball, and the chief executive, Hayden Newton, is falling well short of acceptable.
Mr Lansley
May I take this opportunity to congratulate my hon. Friend on his election to the chairmanship of the Procedure Committee and say how much we look forward to working with him in discharging our business efficiently and effectively and in making the procedures of the House increasingly accessible, so that the public can engage with what the House does?
Mr Lansley
I am addressing Mr Speaker, if that is all right with the hon. Gentleman, as I think I am required to do.
The East of England ambulance service, like all other ambulance trusts across the country, has for the first time met all its category A response times, but it is important that it continue to do so right across the territory, not just on an aggregate basis. It is important for colleagues to raise this matter, and my hon. Friend and his colleagues might have the opportunity to pursue it in an Adjournment debate.
Andrew Miller (Ellesmere Port and Neston) (Lab)
Last week, the Leader of the House’s successor in the Department of Health made some strong comments in the media about the need to improve the regulatory regime around medical implants. The Science and Technology Committee has just published an important report on this subject. Given the anxiety among the public, may we have an urgent statement from the Secretary of State so he can explain what he is doing about this important subject?
Mr Lansley
Given my knowledge of these subjects, the hon. Gentleman will know that although I recognise that his Committee’s report is an important contribution, my noble Friend Lord Howe and other Health Ministers have never regarded this matter as anything other than important and urgent, and I am sure that they will endeavour to inform the House fully of any matters that arise. Their work not only in response to the breast implant scandal but, in particular, on how hip implants are regulated is proceeding apace.
Mr Christopher Chope (Christchurch) (Con)
May we have an early debate on the lack of accountability of NHS foundation trusts? The Royal Bournemouth and Christchurch Hospitals Foundation Trust is proposing to merge with the Poole Hospital NHS Foundation Trust. The Office of Fair Trading has given a two-week opportunity for public comment, but the trust has refused to supply me, under the Freedom of Information Act, with the 50-page document purporting to set out the public benefits. Without that document, it is very difficult for a Member of Parliament to comment constructively on the merits or otherwise of such a proposed merger. Is this not an outrage?
Mr Lansley
My hon. Friend will recall that the arrangements reducing the accountability of NHS foundation trusts to this House were established in legislation passed under the last Government, but in the future the NHS competition provisions will be transferred from the OFT to Monitor, which should enhance accountability. He raises an important point, however, about the application of the Freedom of Information Act to NHS foundation trusts, and I will ask my colleagues in the Department of Health to respond to that matter.
Nick Smith (Blaenau Gwent) (Lab)
Health professionals say that 125 amputations occur weekly owing to diabetes, yet 80% are preventable. The National Audit Office says that we could save £34 million annually if late referrals to specialist teams were halved. In the interests of patients and NHS budgets, may we have a debate on how to prevent amputations from diabetes?
Mr Lansley
I am grateful to the hon. Gentleman. I do not recall: does he have an early-day motion on this matter?
Mr Lansley
I hope there will be opportunities to discuss these issues. The hon. Gentleman might talk to his colleagues on the Opposition Front Bench. Instead of a debate on regional pay in the NHS, which is not proposed, he might have invited his colleagues to have a debate on improving outcomes in the NHS, which is what this Government are setting out to do. Where diabetes is concerned, that is one of our priorities.
Mr Speaker
Order. Can the hon. Gentleman assure me that he was present in the Chamber at the start of the Leader of the House’s statement?
Greg Mulholland
Indeed, and before the end of Energy and Climate Change questions, Mr Speaker.
Greg Mulholland
May we have an urgent debate on the nonsense of empty properties having to pay rates? It is hugely damaging and is preventing business. Wharfebank business centre in my constituency renovates old mill space to provide wonderful office space. The business is desperate for tenants, yet it cannot renovate further space, because if it does it will be forced to pay full rates on it. It does not make sense and is holding back growth.
Mr Lansley
Many Members will be aware of this issue, and my hon. Friend makes an important point. I will not dwell on the arguments, but he might note that, given the importance of the issue to small businesses, there will be an opportunity to consider it in the context of the Growth and Infrastructure Bill, which I have announced is due for debate on Monday.
Alison Seabeck (Plymouth, Moor View) (Lab)
I draw the House’s attention to my indirect interests, in relation to this question and the one I asked in Energy and Climate Change questions.
The NAO report “Managing the impact of Housing Benefit reform”, which is published today, makes it clear that private and social rents are rising fast—private rents in the south-west are expected to rise by 48% in the next eight years—and that the housing benefit budget is rocketing as more people in work find it more difficult to meet their housing costs. May we have a debate on the report and the desperate failure of the Department for Work and Pensions and the Department for Communities and Local Government to understand the implications of their own shambolic policies?
Mr Lansley
I do not recognise what the hon. Lady describes as the view inside the Department for Work and Pensions, which is well aware of the necessity of reducing what under the last Government became the ballooning costs of housing benefit, but in a way that recognises the difficulties that people may have. That is why the Government are providing additional funding, totalling £190 million, to smooth the transition over the next five years. If the hon. Lady wishes to raise the matter again, there will be opportunities to do so at Work and Pensions questions on Monday.
Bob Stewart (Beckenham) (Con)
The 6 December is the 30th anniversary of the Ballykelly bombing, when 17 people were killed—murdered, rather. Six of them were civilians and 11 were soldiers, six of whom were from my company. May I ask the Leader of the House, on our behalf, to note this very sad anniversary and, on behalf of all of us, to pass on our thoughts to the relatives, who are still grieving after 30 years?
Mr Lansley
I am grateful to my hon. Friend for raising this, as I think colleagues across the House will be. It is important that we take opportunities in this House not only to debate current issues but sometimes to stand back and to recognise and commemorate losses in the past. The sadness of those losses lasts to this day and will continue to do so.
Mr Nigel Dodds (Belfast North) (DUP)
Following the question from the hon. Member for Beckenham (Bob Stewart), next week marks the 25th anniversary of the Poppy Day massacre in Enniskillen, in which 11 people were murdered by the IRA. Clearly the House will want to join me in expressing condolences to the victims and their families. Today’s dastardly news of the murder of a prison officer by terrorists in Northern Ireland reminds the entire House that the battle against terrorism and for democracy and freedom continues in Northern Ireland and across this kingdom. We wish to send our condolences and sympathy to the family of the victim this morning.
Mr Lansley
I am grateful to the right hon. Gentleman; he is absolutely right. Members across the House know that we must never relent in the fight against terrorism. Equally, building democracy and creating the opportunities for people to take charge of their own destiny in a way that is peaceful in the long term is something that we have all contributed to and that we all support.
Philip Davies (Shipley) (Con)
May we have debate on localism? In a referendum with a 49% turnout in Menston in my constituency, 98% of those who voted opposed a proposed 300-house development in that village. However, Labour and Lib Dem councillors from other parts of the Bradford district came in and voted to impose that housing development on the village, which was clearly against the express wishes of the local people. Until the Government resolve issues such as these, localism will seem like a pipe dream to my constituents.
Mr Lansley
I understand my hon. Friend’s point. In my experience, we should have more locally led planning decisions, which this Government are making possible. Also, local authorities’ use of neighbourhood plans can give further force to local decision making, but that has to be pursued within each local authority.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
Sir Howard Davies has been appointed by the Government to look into aviation. Lord Heseltine, echoing the call from the shadow Secretary of State for Transport, says that the report due in 2015 will be far too slow in arriving, and Mayor Boris Johnson is threatening legal action against the Government if they do not advance that timetable. Is there any indication from the Department for Transport that it will be issuing a statement accepting that advice and bringing forward the report earlier?
Mr Lansley
Ministers have been clear about the nature of the complexities involved and the task required of Sir Howard Davies, and said that an interim report will be available next year.
Richard Fuller (Bedford) (Con)
May we have an early debate on career progression opportunities for black and minority ethnic employees in the health and care sector? There are hundreds of thousands of BME employees at the lower levels, but it would be good to see more at the higher levels, where there is just a handful at the moment.
Mr Lansley
I am grateful to my hon. Friend for that question. I do not have an immediate opportunity for a debate on that subject, but he might like to pursue the matter through other routes, such as an Adjournment debate. This is an important issue. I know how important it is that the national health service should pursue equality and diversity policies that are truly effective. To that end, I will ask my colleagues in the Department of Health to contact my hon. Friend to tell him how they are doing that.
Barbara Keeley (Worsley and Eccles South) (Lab)
Despite having had three spare hours of debating time on Tuesday, the House has still done nothing effective to hold the Department of Health to account for its lack of action on the alleged abuses by Jimmy Savile on NHS premises. Those three hours could have been used to question the lack of an independent inquiry, and to ask why the Department believes that internal reviews overseen by NHS insiders are sufficient when abuses against children and vulnerable patients are being alleged. The Leader of the Opposition has called for a single independent inquiry. Will the Leader of the House now allocate available time for a debate on this vital issue?
Mr Lansley
I do not have time immediately available for a debate on the investigations and inquiries relating to Jimmy Savile. Indeed, it might be difficult to hold such a debate while police investigations are taking place. None the less, I will of course ask my right hon. Friends to reply to the hon. Lady on this. I would also say, as someone who knows Kate Lampard, that I am sure she will conduct her investigations in relation to the NHS independently and effectively.
Pauline Latham (Mid Derbyshire) (Con)
Will my right hon. Friend grant us a debate on the employment figures? The Opposition seem to want to do down those figures, but I would particularly like to celebrate the fact that there are more women in employment now than ever before.
Mr Lansley
My hon. Friend makes an important point. It is important to recognise that, if employment were not rising, Labour Members would have been the first to say that we should debate the matter. Instead, they dwell on bad news. Such, I suppose, is the nature of opposition. They seem to be wallowing in that kind of thing. They seem to like being in opposition, and I think we will leave them there for a long time. My hon. Friend is absolutely right, however. The increase in employment, especially among women, and the reduction in youth unemployment are things that we should take the opportunity to celebrate.
Jonathan Ashworth (Leicester South) (Lab)
May we have a statement from the appropriate Minister on Government endeavours to help get back from the US the UK citizens who are stranded there because of the hurricane? I am particularly concerned about a party of 38 school girls from Leicester high school who are stranded in New York. They have been offered a flight on Tuesday, but the problem is that many of them have exams next week, so may we have a statement and will the Government look at ways of getting those schoolgirls back in time for those exams?
Mr Lansley
Ministers from the Foreign and Commonwealth Office were here answering questions on Tuesday, when I think this issue might have arisen. The hon. Gentleman makes an important point. There are probably something approaching 50,000 British nationals in the most affected parts of the United States. The events, the damage, the distress and the loss of life and livelihood in America are dreadful. One of our responsibilities is to do as the hon. Gentleman asked and offer consular assistance wherever possible for those who need it, so I will contact my colleagues in the FCO to see if they can respond to him.
Charlie Elphicke (Dover) (Con)
May we have a debate on unemployment? In my constituency, Dover and Deal have seen unemployment rocketing over the last Parliament. The latest quarterly claimant count figures are welcome, showing a decrease of 5%. That is a great result, but we should look at what more we can do to win the war on unemployment.
Mr Lansley
My hon. Friend is absolutely right. In that context, support for the Work programme is terrifically important. It is an unprecedented campaign to help the longer-term unemployed to get back into work. Encouraging as those employment figures were, we know that a substantial number of people have been out of work for some considerable time. The Work programme is directed to that, and 693,000 people are already accessing support through it.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
May we have a debate on communication between Government Departments and Members of Parliament with regard to individual constituents’ issues? Until recently, I have had named individuals in the Department for Work and Pensions whom my office could contact to discuss benefit inquiries on behalf of very vulnerable individuals, but I have now been told to contact the general inquiry line. At a time when, thanks to this Government’s draconian policies, DWP offices are inundated with inquiries from vulnerable people, this is not an adequate response.
Mr Lansley
I was not aware of any reduction of such facilities, but I will of course talk to my colleagues in the DWP. I know from conversations I have had with them that they are looking for Members to continue to be able to access dedicated support in looking after their constituents’ interests, but I will take a personal interest in the matter and ask DWP colleagues to reply to the hon. Lady.
Henry Smith (Crawley) (Con)
Tragically, in 2006 Captain James Philippson was killed in Helmand province. Disturbingly, a year later, the Ministry of Defence blamed my constituent, Army Major Jonny Bristow, for his death, yet in 2007, a coroner’s inquest exonerated Major Bristow of any wrongdoing and, indeed, identified a lack of proper equipment supplied by the Ministry of Defence at the time. May we have a statement from the Defence Secretary about the lack of equipment that used to exist for our troops in Afghanistan and about the way in which the Ministry of Defence handles its justice procedures?
Mr Lansley
I am grateful to my hon. Friend for raising this clearly important issue. I am aware that Major Bristow has submitted a formal service complaint, and I understand that the Ministry of Defence is in direct contact with him. That complaint is ongoing and is being considered at the highest level within the Army’s internal complaints mechanism. I am sure that my hon. Friend would not expect me to comment—it would be inappropriate for me to do so—while that process is continuing. He has had the opportunity to put the matter on the record; I will raise it with my right hon. and hon. Friends in the Ministry of Defence and ensure that they are made aware of it.
Ian Murray (Edinburgh South) (Lab)
My hon. Friend the shadow Leader of the House was correct to mention the confusion at the heart of government with regard to the Cabinet Growth Implementation Committee. If that Committee has met twice, why have the Government refused to answer my parliamentary question about its membership? May we have an urgent statement on the membership of this Committee, when it has met and what will be on the agenda for its next meeting?
Mr Lansley
I am sorry that the hon. Gentleman appears not to be aware that the document listing the members of Committees and Cabinet Committees was published on Tuesday. He could have seen it already.
Mr John Leech (Manchester, Withington) (LD)
The number of my constituents who are waiting more than six months for the UK Border Agency to process their applications for indefinite leave to remain is on the increase. May we have a statement on the agency’s performance in that regard, and also an explanation for the delays?
Mr Lansley
I will of course ask my colleagues at the Home Office to respond to the specific point that my hon. Friend has raised, but let me say to all Members that we are continuously trying to improve the Border Agency’s performance. I hope that the Government will look for opportunities to update the House as soon as possible.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Against the backdrop of growing concern about the fact that the local economic partnership strategy is simply not working, may we have an early debate on the Heseltine growth strategy paper? It contains radical proposals, not least for the shifting of resources from the centre of localities and a fundamental shake-up of local government. This is urgent, and we cannot wait for the Chancellor’s December statement.
Mr Lansley
I do not think for a minute that we are waiting for the autumn statement. Things are already happening. For example, the local enterprise partnerships are established, and 24 enterprise zones have been set up across the country. On the Friday before last the Deputy Prime Minister announced regional growth fund allocations for hundreds of projects all over the country, totalling more than £1 billion, and more than 60% of the projects in rounds 1 and 2 are up and running.
Simon Kirby (Brighton, Kemptown) (Con)
The St James’s street area of central Brighton is very important to the social life of the city. May we have a debate about the importance of city centres to the cultural and economic life of their communities, and about the need for the police to maintain order in such locations?
Mr Lansley
Yes. I cannot identify an immediate opportunity for such a debate, but my hon. Friend’s point about the vibrancy of city centres is important, and I think that many Members will share his view. The policing aspect is part of a wider issue, namely the need to ensure that people feel that they can go to such places confidently and in safety.
I hope that there will be an opportunity for the debate for which my hon. Friend has asked, but he may wish to look for one himself. For instance, it may be possible for him to raise the matter on the Adjournment.
Kevin Brennan (Cardiff West) (Lab)
May we have a statement on the continuing mystery and whiff surrounding the decision by the former Secretary of State for International Development to restore aid to Rwanda? During international development questions yesterday, the present Secretary of State confirmed that the humanitarian situation in eastern Congo had worsened, but also said that she understood the decision to have been made on the basis of officials’ advice. May we have a statement so that that advice can be published and we can all see exactly what happened?
Mr Lansley
As the hon. Gentleman will know, the Prime Minister responded to a question about that on the Wednesday before last. However, I understand that the former International Development Secretary is due to give evidence to the International Development Committee, which will provide an opportunity for the position to be set out very clearly.
Guto Bebb (Aberconwy) (Con)
The interest rate swap mis-selling scandal, to which Members on both sides of the House have drawn attention, resulted in the setting up of a redress scheme by the Financial Services Authority. May we have a debate on the issue in Government time before Christmas, once the pilot programme for the scheme has been completed?
Mr Lansley
The issue of redress is important. As my hon. Friend knows, it is important for the pilot scheme for the review process to be completed—although it has now been extended for two weeks—and to focus on the need to provide redress for customers, when appropriate, as swiftly as possible, because of the impact on small businesses of the mis-selling of interest rate hedging products. I will ask my colleagues whether there will be any opportunities for the issue to be raised in a debate—I am not aware of one at present—but the hon. Gentleman should consider using the Parliamentary Commission on Banking Standards, for instance, as a mechanism enabling him to raise the issue more extensively.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
Last week an individual collapsed suddenly right outside Hamilton jobcentre. A constituent of mine went to the aid of the individual and asked the jobcentre staff to phone for an ambulance. They refused to do so, citing rules that they were not allowed to call ambulances for outside their premises. May we have a statement from the Department for Work and Pensions on this appalling situation so that we can have common decency, good sense and even, perhaps, life-saving activity, rather than adherence to strange rules?
Mr Lansley
The hon. Gentleman will understand that I am not aware of those circumstances, but I will, of course, talk to my DWP colleagues so that they can investigate what happened and respond to him.
Andrew Selous (South West Bedfordshire) (Con)
May we have an urgent debate on how to stop unnecessary EU regulations strangling UK businesses? My constituent Mr Hart from Leighton Buzzard is faced with losing his car transporter business because of EU regulation 1071, despite the fact that the Department for Transport has confirmed that there is no evidence for this whatever.
Mr Lansley
My hon. Friend will be aware that the EU regulation he cites came into force in December last year, so the flexibility to exempt vehicles and small trailers of up to 6 tonnes that existed under the previous EU directive is no longer permitted. That adds burdens to some businesses using small trailers, but my hon. Friend will also be aware that vehicle and trailer combinations of over 3.5 tonnes that carry their own goods can still make use of the small trailer exemption. I hope that is some small comfort.
Helen Goodman (Bishop Auckland) (Lab)
The unemployment rate in the north-east is almost 10%, which is the highest rate in the entire country. Will the Leader of the House make time for a debate on the state of the economy in the north-east?
Mr Lansley
The hon. Lady might like to talk to her colleagues about holding a debate on the economy in Opposition time. I have encouraged the shadow Leader of the House to consider that over the past two or three weeks, as good news on the economy has been emerging, which she has signally failed to recognise in her communications with her constituents. The hon. Lady, or her other colleagues representing north-east constituencies, might like to seek an opportunity to raise the topic of the economy on a regional basis in an Adjournment debate, when they could celebrate the fact that on Friday the Deputy Prime Minister announced £120 million, I think, of the regional growth fund round 3 moneys for the north-east, which is the largest sum of regional growth fund moneys.
John Glen (Salisbury) (Con)
Many bank complaints are not dealt with internally by banks, but are referred to the financial ombudsman, causing massive delays and adverse credit ratings for individuals, including my constituent Mr Ashley. Will the Leader of the House make time for a statement on the complaints procedures of banks and the performance of the financial ombudsman?
Mr Lansley
I fear, Mr Speaker, that I am at risk of repeating a number of times that there is an opportunity to raise issues with the Parliamentary Commission on Banking Standards. It is examining a very important area, and it could consider the topic my hon. Friend raises. I will also make sure that we take it into account as we look at opportunities for discussions relating to banking, perhaps as legislation on banking reform comes forward in the new year.
Helen Jones (Warrington North) (Lab)
Will the Leader of the House find time for a debate on transparency in pay and taxation, because I am sure the House would like an opportunity to debate recent reports that the interim chief executive of the Independent Parliamentary Standards Authority is being paid off the books through a company, thus, one assumes, saving a great deal in tax and national insurance contributions? Could we also then debate why IPSA, an organisation dedicated to transparency, refuses to publish details of these arrangements and say to its press officers that no matter how many stories they then leak, we will keep raising this issue?
Mr Lansley
I remind the hon. Lady that we will—not immediately, but at a future date—have an opportunity to discuss the appointments of further lay members to IPSA, which might enable her to raise such issues. On the specific point about the temporary chief executive, I should point out that it was very much a temporary appointment, with a contract for a short period of time, and those are precisely the circumstances in which, as is the case in business life, one would tend to have a special contracting procedure.
Gavin Barwell (Croydon Central) (Con)
With help from the Government and the Mayor of London, Croydon council is today announcing a package of nearly £9 million to regenerate west Croydon and the London road area, which was so badly affected by last year’s riots. However, many businesses are still waiting for compensation through the Riot (Damages) Act 1886 or from their insurance companies. May we have a debate about how government—local and national—and the insurance industry have helped the areas affected by those riots?
Mr Lansley
I am sure that the House will welcome what my hon. Friends says about the support being given by Croydon council to west Croydon as a consequence of the riots. I will ask my colleagues at the Home Office to write to him about what is being done in relation to the Riot (Damages) Act.
Sheila Gilmore (Edinburgh East) (Lab)
In the past few days, a number of important reports have been published, including one from the Joseph Rowntree Foundation suggesting that far from lifting people out of poverty, universal credit may leave them in poverty, and one from Gingerbread saying that universal credit will not get more single parents back to work. So will the Leader of the House make time during Government business to discuss those important reports?
Mr Lansley
The hon. Lady will be aware that there will be Work and Pensions questions on Monday, which is one occasion when this matter can be raised. She referred to a number of reports, so may I draw her attention to the one from the Resolution Foundation, which rightly pointed out how important it is for low-income and middle-income households in this country to move from dependence on benefits into work? Work is the best solution to poverty.
Stuart Andrew (Pudsey) (Con)
The independent Safe and Sustainable review into children’s heart units has recommended that Bristol children’s hospital be designated as one of the centres of excellence, but yesterday it became clear that the Care Quality Commission has issued a formal warning about staffing levels on one of its cardiac wards. That has resulted in a reduced programme of cardiac surgery. Many of us have had grave concerns about the validity of the Safe and Sustainable review’s decision. May we have a statement on this, because the warning raises new concerns, and means that the review’s decisions are now dangerously flawed and that all confidence in them has been lost?
Mr Lansley
My hon. Friend will be aware, not least from the debates that have taken place in Westminster Hall, that following the Safe and Sustainable review, which was carried out as an independent review within the NHS of child heart surgery, and the referral of these matters to the Secretary of State, he has asked the independent reconfiguration panel to look at the review’s recommendations. So, if I may, I will not trespass on the panel further than that.
Wayne David (Caerphilly) (Lab)
Last night, the Government were attempting to argue that there should be public expenditure cuts in all member states of the European Union but not in the EU itself. This morning, the Government seem to have changed their position somewhat. May we have a debate about precisely what the Government’s position is now on the EU budget?
Mr Lansley
I think that the House heard from right hon. Friends very clearly what the Government’s position is. The Government will listen to and hear what the House said in yesterday’s debate and vote. As I said earlier, my right hon. Friend the Prime Minister will set out at the European Council to deliver the very best deal he can for this country. He has already demonstrated his determination to do that by building alliances on the EU budget and by his willingness to use the veto, if necessary.
Andrew Jones (Harrogate and Knaresborough) (Con)
Please may we have a debate about Government investment in skills training, particularly on what further can be done to tailor it to the needs of young people who have not yet been able to get a job, despite the encouraging economic news recently, including the news from my constituency, where the youth unemployment rate is 3.5% and falling?
Mr Lansley
My hon. Friend makes an important point, not least in relation to the commendable enterprise in his constituency. I draw the House’s attention to what is really important about the Youth Contract, launched by the Deputy Prime Minister, which is its fantastic range of support for young people. In addition to apprenticeships, it involves: 250,000 work experience or sector-based work academy places; 160,000 wage incentives to take on 18 to 24-year-olds; 20,000 incentive payments specifically to support additional young apprenticeships; and £126 million to support the hardest to reach 16 and 17-year-olds. The Youth Contract will make the biggest difference we have seen yet in helping young people into work experience and then into work.
Ian Paisley (North Antrim) (DUP)
I know that the House will be saddened and outraged in equal measure to learn of the dastardly murder of a prison officer this morning in Northern Ireland, ambushed on his way along a motorway in our country. Given that that happened 10 days after the security threat level was reassessed across the whole United Kingdom, will the Leader of the House ensure that the Secretary of State for Northern Ireland comes to the House at her earliest convenience and makes a statement about the current security threat level in Ulster and what she is doing about it?
Mr Lansley
The House will share the hon. Gentleman’s sense of shock and outrage in relation to that death. My understanding—I am happy to correct this if I am wrong—is that the Home Secretary made it clear that there was a change in the security assessment for mainland Britain, but not for Northern Ireland. I will talk to my hon. Friends at the Home Office, who continuously consider and assess these matters.
Mike Crockart (Edinburgh West) (LD)
Today is the first day of Movember, and who can forget the transformation in a previous year of the Deputy Leader of the House into Tom Selleck? Can time be set aside for a debate on men’s health and awareness of prostate and testicular cancer in particular? We need to do all we can to overcome men’s reluctance to discuss these issues and drive down the high number of preventable deaths.
Mr Lansley
My hon. Friend makes an important point and I share his view. I hope that tens of thousands of people across the country will demonstrate their support for Movember. We need to ensure that there is just as much recognition of the symptoms and of the necessity of seeking medical advice and diagnosis for cancers that affect men, particularly prostate and testicular cancer, as there is about breast cancer for women. In the past, we have made some successful steps forward on breast cancer that have led to improvements in diagnosis and survival for women, and we now want to see that happening for men with prostate cancer.
Mark Garnier (Wyre Forest) (Con)
My right hon. Friend will be aware that there have been a number of questions asked about the poor performance of London Midland trains, particularly in the west midlands. Despite that, their performance continues to be absolutely atrocious. Given London Midland’s habitual underperformance, will the Transport Secretary make a statement on how that pitiful situation can be resolved?
Mr Lansley
My hon. Friend will know that London Midland has been experiencing a high level of cancellations for about two months now. London Midland is not yet technically in breach of its obligations, but if improvements are not seen in very short order, the Department for Transport will need to consider taking action against the train operator. I will talk to my colleagues and ensure that they update relevant and interested Members.
James Morris (Halesowen and Rowley Regis) (Con)
Earls high school, an excellent academy in my constituency, recently received a grant from a local company to invest in an innovative scheme to teach primary school children mathematics. May we have a debate on what more the Government can do to encourage innovative teaching methods, particularly in maths and science?
Mr Lansley
I will, of course, talk to my colleagues at the Department for Education about whether and when we might have an opportunity to do that. My right hon. Friend the Secretary of State was in Cambridge to talk to the department of mathematics there to see precisely how we can ensure improvements in mathematics teaching and I know that he, like my hon. Friend, is very exercised about improving standards in that respect. I shall seek advice about when we might be able to debate that further.
Fiona Bruce (Congleton) (Con)
I understand that this week the House of Commons Commission met to discuss the future of this great building. Will the Leader of the House clarify when Members will be given the opportunity to have some input into those considerations?
Mr Lansley
I am grateful to my hon. Friend, who is right that the House of Commons Commission and the House Committee in the other place considered the internal study group report. In this House, we took the clear view that we know our responsibilities are to ensure the efficient and effective delivery of the business of this House while protecting a building that is vital, historically and otherwise, and protecting value for money. We have asked collectively for further challenging work to be done on those options. Part of that challenge will be to ensure that the House of Commons Commission and the House Committee know well and fully the views of members of both Houses about the options.
Stephen Mosley (City of Chester) (Con)
Last year my constituent Rebecca Coriam went missing from a Bahamian-registered Disney cruise ship off the coast of Mexico. The Bahamas authorities have apparently conducted an investigation and provided a summary to Cheshire police but, despite assurances given to me personally by the high commissioner, they have not granted the police permission to release it to Rebecca’s family. May we have a debate on the appalling record of some Governments to investigate thoroughly and openly incidents on ships flying flags of convenience?
Mr Lansley
My hon. Friend is absolutely right to pursue the interests of his constituents as fully and rigorously as he can. As the ship in question was off the Mexican coast, Foreign and Commonwealth Office consular staff have been actively pursuing the initial police report from the Mexican authorities and, as he knows, are in contact with the family, Cheshire police and relevant local authorities. He also raises the issue of ships flying flags of convenience, and I will raise that with colleagues at the Department for Transport and ask them to get in touch with him about it.
Natascha Engel (North East Derbyshire) (Lab)
The Leader of the House has witnessed for himself the large number of Back Benchers who come to the Backbench Business Committee and seen the high quality, topicality and importance of the debates brought to us. As a business manager, he will also be aware that Government business sometimes collapses before the full allotted time. Will he work with the Committee to ensure that precious parliamentary time is put to best use and to see whether Back-Bench business debates can be slotted in on those occasions when it is quite predictable that Government business might collapse?
Mr Lansley
As a relatively new business manager, I will of course be very glad to discuss these matters with colleagues, not least the House authorities and my hon. Friend the Member for Broxbourne (Mr Walker)—he is no longer in his place—who chairs the Procedure Committee. [Interruption.] I know, as does the hon. Lady, that there are circumstances in which it is proper to allow time for debate and not proper to assume that there will not be a substantive debate on an issue that will take all the time available, so it can sometimes be difficult to anticipate when business will finish sooner than it might otherwise do.
Bob Blackman (Harrow East) (Con)
The improved economic figures are clearly welcome, but it is important that we improve our trade with developing nations. The Indian state of Gujarat has achieved record year-on-year growth, yet its First Minister, Narendra Modi, was denied access to the UK by the previous Government. May we have a statement from the Foreign and Commonwealth Office facilitating a state visit by Shri Narendra Modi to this country so that we can hear at first hand what wonders he has performed in Gujarat?
Mr Lansley
I will, of course, talk with colleagues in the Department for Business, Innovation and Skills about what opportunities there might be to look at Gujarat’s economic performance, but I remind my hon. Friend that, as he probably knows, over the past two years British exports of goods have increased to China by 72%, to India by 94% and to Russia by 109%. The Government are only too conscious of the importance of developing our trade with these leading emerging economies and will continue to give that real push.
Christopher Pincher (Tamworth) (Con)
Will the Leader of the House find time for a debate on local jobs fairs? I am holding a jobs fair in Tamworth tomorrow, where 40 employers, local and national, big and small, are coming to offer jobs to local people. I think that a debate would highlight the value of such fairs and the role that Members of Parliament can play in helping our communities get into work.
Mr Lansley
Yes. I congratulate my hon. Friend on the steps he is taking and am sure that his constituents really value his support for the jobs fair. It is vitally important. We all know how frustrating it is that there are continuing and persistent levels of long-term unemployment in circumstances in which the number of vacancies is approaching 500,000, so providing opportunities for people who are out of work to find work is something we can all support and work towards.
Mr Speaker
I have been saving up the hon. Member for Harlow (Robert Halfon).
Robert Halfon (Harlow) (Con)
Thank you very much, Mr Speaker.
Has my right hon. Friend seen my early-day motion 669?
[That this House notes the Chancellor’s strong support for motorists thus far, in particular the 1p cut in fuel duty in 2011 and the overall freeze in fuel duty that has lasted for two years; urges the Government to stop the 3p fuel duty rise planned for January 2013; and believes that this is an issue of social justice, as highlighted by the PetrolPromise.com website, showing that a 3p petrol tax will cost motorists an extra £60 at the pumps in 2013 and the Office for National Statistics, which shows that fuel duty is regressive, hitting poorest citizens the hardest.]
The 3p fuel duty rise in January will cost motorists £60 next year; for anyone who has to drive to work, that undoes one third of the benefit of raising the tax threshold. Will my right hon. Friend do everything possible to lobby the Treasury to stop the January rise and may we have a debate on the cost of living and fuel duty?
Mr Lansley
I am grateful to my hon. Friend; I have indeed seen his early-day motion. He will know, and it is important to remember, that as a result of the steps that the Government, not least Treasury Ministers, have taken, pump prices are now approximately 10p per litre lower than if we had stuck with the Labour party’s plans. That is tremendously important.
On the cost of living, if somebody is on the minimum wage and in full-time work, the effect of the increase in allowances coming through in April next year will be to halve the income tax that they pay. That, too, is an important point about the cost of living, among other things.
Points of Order
Henry Smith (Crawley) (Con)
On a point of order, Mr Speaker. Last week, the hon. Member for Derby North (Chris Williamson) accused me in a point of order of wrongdoing. I am pleased that you rejected his claims. May I seek your advice, sir, on the protocol, and not least the courtesy, that hon. Members should show each other in giving prior notice of when they are making an accusation against another hon. Member?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. The position has been and remains entirely clear. If a right hon. or hon. Member is going to allege misconduct on the part of another Member, there is a duty to inform the subject of the complaint in advance of making that complaint on the Floor of the House.
Mr Speaker
Order. The hon. Gentleman must contain himself; his appetite will be satisfied ere long.
It is in all our interests for us to operate on the basis that I have described. I thank the hon. Member for Crawley (Henry Smith) for giving me the opportunity to make the position absolutely clear.
Greg Mulholland
On a point of order, Mr Speaker. The Government have now decided that they will deal with Back-Bench business by ignoring it, not taking part and therefore not giving the House the opportunity to express a view. I do not believe that that is acceptable, Mr Speaker. Would you like to comment?
Mr Speaker
That is not really a point of order for the Chair now, although I could have an interesting discussion with the hon. Gentleman or other Members about it. How the Government react to individual Backbench Business Committee debates must be a matter for the Government.
I do not think that now is the occasion for me to enunciate an entire doctrine on the subject, but suffice it to say that I am hearing what is being said and attending to it rather closely. I am sure that the Government will want to respect the debates that take place under the auspices of the Backbench Business Committee; after all, the House, with Government support, established the Backbench Business Committee.
Backbench Business
Beer Duty Escalator
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Before I call the hon. Member for Burton (Andrew Griffiths) to move the motion, I remind the House that, on account of the level of interest, I have imposed an eight-minute limit on each Back-Bench speech. That limit will take effect after the motion has been moved.
Andrew Griffiths (Burton) (Con)
I beg to move,
That this House welcomes the essential contribution of brewing and pubs to the UK’s economy in providing one million jobs; notes the 42 per cent increase in beer duty since 2008 and HM Treasury forecasts that have shown that there will be no additional revenue generated from beer duty despite planned increases over the next two years; is therefore concerned about the effectiveness of this policy in tackling the Budget deficit, its impact on valued community pubs and the continued affordability of beer in pubs; and therefore urges the Government to support the UK’s beer and pub sector by conducting a thorough review of the economic and social impact of the beer duty escalator to report back before the 2013 Budget.
I begin by thanking the Backbench Business Committee for giving us the opportunity to debate this important issue on the Floor of the House. I know from the number of e-mails and telephone calls that I have received that publicans, brewers and people in pubs up and down the country are tuning into the Parliament channel to listen to the debate, such is their level of interest. I commend the Backbench Business Committee for giving us this opportunity.
Colleagues will know that the debate is a result of the fact that 104,000 people have signed a petition demanding the scrapping of the beer duty escalator and calling for the issue to be debated on the Floor of the House. I congratulate everybody who took the time and opportunity to familiarise themselves with these issues and sign in support of their pubs and breweries. Of course, 104,000 signatures do not appear overnight. I pay particular tribute to the work of the British Beer and Pub Association; CAMRA, the Campaign for Real Ale; SIBA, the Society of Independent Brewers; and brewers such as Hobgoblin, which has done so much to raise the profile of Britain’s brewers.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I must declare an interest as secretary of the all-party Scotch whisky and spirits group. This issue affects Scotch whisky as well as beer. The whole whisky industry employs some 34,000 people in this country, and they are being affected too. Will the hon. Gentleman include them in his plea to the Government to look again at the escalator?
Andrew Griffiths
I completely understand the hon. Gentleman’s wanting to defend an important industry in his constituency, but I gently point out to him that the Scotch whisky industry had a 10-year freeze on duty under the previous Government, that 95% of Scotch whisky is exported, and that spirits have now become the drink of choice for young people across the country. I am making the case on behalf of the brewing industry, which has been so badly served.
Thomas Docherty (Dunfermline and West Fife) (Lab)
On the hon. Gentleman’s point about the choice that young people are making, Dunfermline Round Table recently held a beer festival that raised more than £20,000 for local good causes and charities, and I assure him that very many young people came along to support that event and had a very good evening drinking beer.
Andrew Griffiths
I thank the hon. Gentleman not only for making that important point—I agree that the pub offers a safe environment particularly for young people to be introduced to alcohol—but for the work that he has done on behalf of the all-party beer group, as have other colleagues in the Chamber, particularly my hon. Friend the Member for Leeds North West (Greg Mulholland), who, with the all-party save the pub group, has done such a lot to champion our pub industry.
Sir Tony Cunningham (Workington) (Lab)
With 16 pubs a week closing, it is important to remember that is what is really at risk is the football team, the cricket team, the golf society, the theatre at the back of the pub, the small library, the shop, the bowling green—the list goes on and on. The pub is a huge part of the community. I hope that the hon. Gentleman agrees with that.
Andrew Griffiths
Clearly, the hon. Gentleman has read my speech. We all recognise the value of the community pub in our communities. Be it the last pub in the village, the pub on the council estate, or the bar on the high street, we recognise that those establishments are at the heart of our communities. They not only provide employment but give people an opportunity to come together to celebrate and to meet friends, and they run football clubs, for example.
Dr Julian Huppert (Cambridge) (LD)
I congratulate the hon. Gentleman on securing this important debate. He is right to mention not only the social role but the economic role of pubs. Is he aware that each pub injects an average of £80,000 into a local economy? In my constituency alone, pubs employ just under 1,500 people, many of them young.
Andrew Griffiths
I thank the hon. Gentleman for that intervention. He is absolutely right. Some 85% of pubs across this country are small and medium-sized enterprises—small businesses that are trickling that economic impact down into our communities.
I draw the hon. Gentleman’s attention to the statistics released today by CAMRA, which show that there is an alarming increase in the number of pub closures. We all thought that we had seen the back of the bad old days in 2010 when 26 pubs per week were closing, once the figure had fallen to 12 per week. However, the new figures released by CAMRA show that 18 pubs per week are closing. That means that since March this year some 450 pubs have closed, and since the introduction of the beer duty escalator in 2008 some 5,800 pubs have closed.
Christopher Pincher (Tamworth) (Con)
A regrettable statistic—and I remember the days—is that one used to be able to buy six pints for a fiver. [Interruption.] I did not drink them all, I might say; I was buying a round. Since then, the cost of beer has increased and, as my hon. Friend says, the number of pubs that have gone to the wall and are going to the wall is increasing. As a result, revenue to the Exchequer is falling. Does he agree that the beer duty escalator is not simply raising money? It is losing money for the Exchequer.
Andrew Griffiths
My hon. Friend has put his finger on the nub of the problem. I want to remind the House that when the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), introduced the beer duty escalator he said that,
“as incomes have risen, alcohol has become increasingly more affordable…In order to ensure that alcohol duties keep pace with rising incomes, alcohol duty rates will increase by 2 per cent above the rate of inflation”.
Andrew Griffiths
If I could finish my point, I will then give way. The reality is that since the introduction of the beer duty escalator in 2008, beer duty has increased by a crippling 42%.
Jesse Norman (Hereford and South Herefordshire) (Con)
I congratulate my hon. Friend on securing this debate. Herefordshire has wonderful pubs, which are hard-pressed, breweries and some of the finest hops in the country. Does my hon. Friend agree that part of the review’s solution must be to include a rebalancing of duty away from pubs and towards retailers?
Andrew Griffiths
My hon. Friend makes an important point. The gap between prices charged at the pub and those charged at the supermarkets has widened. The supermarkets have driven the price down, as they did with milk, which affected our dairy farmers, and every time there is a duty increase it is the brewers who are forced to stand it.
Andrew Griffiths
I think I am in danger of breaking the record for the number of interventions taken, but I will give way to the hon. Member for Coventry South (Mr Cunningham).
Mr Jim Cunningham (Coventry South) (Lab)
I thank the hon. Gentleman for giving way. As he has said, since March 2008 the duty has gone up by 42%, which is surely not sustainable. It has had an effect on pubs since 2008, and over the past 10 years at least 18,000 pubs have closed.
Andrew Griffiths
The hon. Gentleman makes a valid point. We should consider the impact that the beer duty escalator has had on our brewers.
Andrew Griffiths
I would like to make a little progress, if I may.
Since the introduction of the beer duty escalator, beer sales have reduced by 16%. To put that in perspective, it is the equivalent of the loss of 1.5 billion pints as a result of the beer duty escalator. To put it another way, it is the equivalent of one major brewery in our country closing every year since the introduction of the beer duty escalator.
Andrew Griffiths
The hon. Gentleman is quite exercised, so I will give way to him.
Mr Donohoe
I am very grateful to the hon. Gentleman for giving way. Will he reconsider his previous answer to me? Scotch whisky is the heaviest taxed of all the spirits, beers, ciders and wines in this country. [Interruption.] It is the heaviest taxed.
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Gentleman will sit down. We are not discussing duty on whisky, as much as some Members would like to discuss it. We will keep to the debate, which is about beer duty and pubs.
Andrew Griffiths
Thank you, Madam Deputy Speaker. What I would say to the hon. Gentleman is that 95% of all Scotch whisky is exported. In the UK, 87% of all the beer that is drunk in this country is brewed in this country. Beer is a great British manufacturing success story, which is why we need to support it.
Sir Roger Gale (North Thanet) (Con)
Shepherd Neame, a Kent family brewer, and Thorley Taverns in Margate are both major employers in one of the areas of highest social deprivation in the south-east. They are both under threat, paying huge amounts of their revenue in tax while companies such as Starbucks pay virtually nothing at all. Putting the beer duty escalator to one side, I remember going to see John Cope—now Lord Cope—when he was a Treasury Minister about 20 years ago, and our parliamentary delegation demonstrated then that the more we tax, the less revenue we take in the end. Is that not the nub of this argument—it is counter-productive?
Andrew Griffiths
I agree completely with my hon. Friend. The point about an escalator is that we stop when we get to the top. We have reached the top of the escalator and we are in danger of going off the edge of a cliff. That is why we must do something about the beer duty escalator.
Robert Halfon (Harlow) (Con)
I congratulate my hon. Friend on securing this debate on the cost of living. I recently attended the Campaign for Real Ale’s Harlow beer festival, which was supported by small independent breweries. Does he accept that the big breweries have a role to play, and that we need evidence to understand whether they are partly responsible for keeping beer prices high?
Andrew Griffiths
I commend my hon. Friend for supporting CAMRA, but I do not think there are such things as a bad brewer and a good brewer. We need large breweries just as we need micro-breweries, because we need a mixed economy. The problem is that all brewers are being hammered by the escalator.
The figures speak for themselves. In the last quarter alone, beer sales reduced by 5.6%, which is absolutely unsustainable. The Economic Secretary knows the figures better than I do, and he will know that the Treasury’s own projections for the next two years demonstrate clearly that the beer duty escalator will raise absolutely no money. Instead, it will hit the brewing industry and cost jobs and production.
Mark Pawsey (Rugby) (Con)
My hon. Friend is making a strong case. He has just spoken about micro-breweries. Does he agree that they provide great diversity in the beer market? We have fantastic micro-breweries such as The Atomic Brewery and Wood Farm Brewery in my constituency, and we need to support the concession necessary to provide the breadth and diversity of product that is now available.
Andrew Griffiths
I congratulate my hon. Friend not only on supporting breweries but on managing to get both his local brewers into Hansard in one attempt, which is absolutely fantastic.
Bill Wiggin (North Herefordshire) (Con)
I am grateful to my hon. Friend for his generosity in giving way. He will be aware that we need it, as he is one of the few Members whose speech does not have a time limit.
Will my hon. Friend use his excellent speech and the sense of unity in the House today to ensure that people paying duty on beer do not fight with people paying duty on cider? We must stay united, otherwise the Treasury will win.
Andrew Griffiths
I completely understand what my hon. Friend is saying. Nobody wants one industry to fight against the other, but we are seeing a reduction in the brewing industry simply because it is being treated unfairly. All that we are calling for is fairness. He talks about cider, and he will know that there is a 50p difference between the duty paid on a pint of cider and on a pint of beer. How can it make sense to the Treasury that every time somebody buys a pint of cider instead of a pint of bitter, it not only disadvantages brewers but costs the Treasury 50p?
Greg Mulholland (Leeds North West) (LD)
I am delighted to be working with my hon. Friend on this matter. He is aware that beer carries higher duty per serving than any other form of alcohol—spirits, wine or cider. Duty is 19p on a pint of cider and 41p on a pint of beer, which is simply not fair. We are calling today for fair duty on beer.
Andrew Griffiths
My hon. Friend hits the nail on the head.
We need to understand that the beer and pubs industry employs 1 million people across the country, 50% of whom are under the age of 25. We have a problem with youth unemployment, so surely supporting such a dynamic industry is the right thing to do.
Heather Wheeler (South Derbyshire) (Con)
I congratulate my neighbour on introducing the debate. We rely greatly on jobs in the industry in South Derbyshire and Burton. We have some fantastic local brewers such as Tollgate Brewery in Shardlow, John Thompson in Ingleby and of course the Burton Bridge Brewery, which has opened its fantastic pub, the Brickmaker’s Arms, in Newton Solney. They all create jobs, and we are asking Treasury Ministers to understand the cost-benefit analysis and bring the price down.
Andrew Griffiths
I thank my hon. Friend; nobody does more to support the brewing industry than she. I am astounded at the level of understanding shown by right hon. and hon. Members. Clearly Parliament gets it, and our job today is to ensure that the Treasury gets it, and that it scraps the tax and does more to support Britain’s beer and pubs industry.
Dr Sarah Wollaston (Totnes) (Con)
Last week, I met people from the Victoria Inn and the Kings Arms in Salcombe, as well as the publican from the Ferry Boat Inn in Dittisham. Those are among the finest pubs in Britain, and I was told that they could employ more young people if they had lower overhead costs, which includes the beer duty escalator. Does my hon. Friend agree that the greatest threat to those wonderful pubs is the toxic effect of ultra-cheap alcohol from our supermarkets? We must do more to level the playing field.
Andrew Griffiths
My hon. Friend does a great deal of work on alcohol and responsible drinking, and I am pleased that she has seen for herself the benefits that pubs can provide in educating young people and providing low-strength, high volume drinks such as beer.
I am getting some looks from the Chair, so I must press on and finish my speech. I hope hon. Members will forgive me, but Madam Deputy Speaker is giving me that stern look.
The beer and pub industry pays £11 billion in tax, and many of our brewers pay more than 50% of their turnover in tax and duty to the Treasury. This is not special pleading, and the industry does not expect to be treated any differently from others, but as my hon. Friend the Member for North Thanet (Sir Roger Gale) pointed out, companies such as Starbucks and Kentucky Fried Chicken, which have vastly larger turnovers, pay no tax. We want proper support for a good, British manufacturing industry.
We also want fairness. Britain pays 40% of all EU beer taxes, yet we drink just 13% of the beer—we are clearly not drinking hard enough. Why do we in Britain pay eight times more duty than a French drinker, 10 times that of a Spanish drinker, and 11 times that of a German drinker?
Philip Davies (Shipley) (Con)
I commend my hon. Friend on his speech, which is excellent as ever. Is not the point that beer duty disadvantages pubs against supermarkets? Supermarkets have 40,000 other products that they can cross-subsidise, perhaps by selling beer at a loss or a reduced price. We are in an economic mess because we have over-spent, not because we are under-taxed, and the Government’s solution should be to reduce spending, not to seek to increase taxation for ever.
Madam Deputy Speaker (Dawn Primarolo)
Order. There is a great deal of pressure on this debate, and I wish it took only a look from the Chair to remind Members that introductory remarks are supposed to last for 10 minutes or so. The speech by the hon. Member for Burton (Andrew Griffiths) has already lasted considerably longer, and I would be grateful if he would make progress so that others can contribute in full speeches, rather than interventions.
Andrew Griffiths
Thank you for reminding me of my obligations, Madam Deputy Speaker. I will come quickly to a conclusion.
My hon. Friend the Member for Shipley (Philip Davies) makes two important points. First, supermarkets have the ability to force brewers to include in the price paid for the beer any increases in duty, whereas publicans, who tend to run small businesses, do not have that opportunity. Secondly, supermarkets use their bulk buying power to drive down the price and use alcohol as a loss leader, which disadvantages pubs.
Mr John Leech (Manchester, Withington) (LD)
Will the hon. Gentleman give way?
Andrew Griffiths
I will not; I am going to finish my speech if I may.
The reality is that most pubs get 65% of their income from the sale of beer. That is why beer duty—rather than duty on wine, spirits, cider or anything else—is so important. Publicans, those small businesses in all our constituencies, rely on selling beer, and the 45% increase in duty that we have seen is simply unsustainable.
This is an opportunity. A fair taxation system for beer would help to drive growth, and if beer were given a fair break, it would challenge the industry to find ways of providing growth and employment, particularly for young people. I remind the Minister that some 2,370 people are employed in the beer and pub industry in 78 pubs in his constituency, including at the fabulous Bird’s Brewery in Bromsgrove of which he will be aware. A study by Oxford Economics showed that scrapping the beer duty escalator would save 5,000 jobs in the first year alone, and stop the closure of hundreds of pubs in all our communities. This is a huge opportunity to bring balance and fairness into the duty system, and to support our pubs and breweries.
I thank the House for taking such an interest in the debate. The Minister has a perfect opportunity today to demonstrate that the Government understand the pressures on hard-working families and do not want to penalise them by over-taxing the great British pint of beer. This is a great opportunity for the Minister to be the man who saves Britain’s brewing industry, protects the nation’s pubs and saves the great British pint. Scrap the duty!
Mr David Hamilton (Midlothian) (Lab)
I will try not to take up too much time. I want to be specific, because it appears from the interventions on the hon. Member for Burton (Andrew Griffiths) that hon. Members have a wide range of opinions that all go in the same direction. They will give the facts and figures during the debate.
When I was a young man, there were 23 pubs in Dalkeith high street. Times have changed. The price of alcohol has created problems for the brewing industry, but so have changes in habits and priorities. There is no doubt that taxation is one of the many factors that have created a problem for our pubs. Every day, we see on television and in the newspapers the problems on high streets at weekends, but no one talks about the thousands of pubs in villages and housing estates where there are no problems whatever. We want to protect those pubs.
No doubt the Minister will say that treating alcohol-related diseases costs 3% of the NHS budget; that only £10.6 billion is raised in tax; and that £21 billion is spent through the NHS on treating alcohol-related injuries and so on. I understand that, but I have a specific point for him to consider. Many hon. Members will talk about draught beer and cider, which are disproportionately affected by what happens in the supermarkets. In Scotland, there will be a threshold for alcohol pricing in supermarkets, but a minimum pricing regime will mean that the supermarkets take the money—nobody else will get it. Will the Treasury consider transferring the duty, and reducing the tax on some products and increasing it on others?
If hon. Members go to Tesco across the road from the Palace, they will find that four cans of John Smith’s will cost them £3.50—so I am told. A pint of the same beer will cost them £4.10 in The Red Lion. The tax on alcohol in supermarkets is completely disproportionate to the tax on alcohol bought at the bar.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
The hon. Gentleman makes a serious point about the health impact of alcohol on our society. Does he agree that pubs are a more controlled environment for drinking, and that people are less likely to abuse alcohol in pubs than if they buy cheap booze from the supermarket?
Mr Hamilton
I could not agree more. As a side issue, the central location of television soap operas is the pub. Things might be exaggerated on television, but pubs are about families and people getting together. Pubs are controlled environments where people look after one another. It is not uncommon for the bar steward to say to someone who is too drunk, “You’ve had enough. Away you go.” Somebody might look after someone who is too drunk in the pub. Drinking at home is uncontrolled and causes far more bother. Another problem we must face is that, nowadays, people—youngsters especially—meet in houses and get drink-fuelled before going out to the nightclubs.
Mr Jim Cunningham
Does my hon. Friend agree that one big problem with our high streets is the fact that there have been a lot of pub closures? Working men’s clubs are also affected. Are they not contributing factors to why we have ghost city centres, as we call them these days? A commission is looking into that.
Mr Hamilton
It is also the case that it is not just about pubs and the price of beer. Pubs, and especially clubs, have a far wider role. My local club, the Dalkeith miners club, has about 25 different organisations, including ones for kids, using its big halls during the day, and it is looking at other avenues. In many cases, clubs are community centres where no other community centre exists. They become the focal point for everyone.
I know that other hon. Members will raise a host of issues, but I have a specific point I wish to make. Surely it is not beyond the wit of the civil servants in the Department to come up with a mechanism that would tax a 50-pint cask of beer differently from anything else. That would allow draught beers to be taxed at a different rate—nobody is going to go to Tesco and buy a 50-pint cask and carry it home. Draught beers, ciders and lagers could be taxed differently.
Mr Leech
Is not the easy solution a differential on beer duty as between off-sales and on-sales? Minimum pricing for alcohol in supermarkets is still going to make supermarket alcohol much cheaper than in the pubs. If there is a massive differential in duty between supermarket alcohol and on-sales, it would make a massive difference in terms of encouraging people to drink in the pub instead of front-loading from the supermarket.
Mr Hamilton
I agree with the hon. Gentleman’s point, but without a cross-subsidy—the money raised from one being transferred to the other—I would be reluctant to go down the road of minimum pricing as proposed by the Scottish Government. Nobody has yet told me where that extra money will go, and that is a really big question that has to be answered. It has to be taken on board by the Department.
On the wider issue of alcohol taxation, it is a fact that the tax nowadays is so draconian compared with many years ago that it is a case of beer drinkers subsidising tax revenues. That has to stop, and the European Commission has to be drawn into line. I believe strongly that there is an alternative to the present proposal of cutting tax across the board. A selective cut could be effective. There have been many campaigns on beer, cider and lager, but there is an easier method if the tax is considered in terms of barrels of beer. It would have to be cleared through Europe, but the civil servants could do it.
Greg Mulholland (Leeds North West) (LD)
I am delighted to be a co-sponsor of the motion and to work with my hon. Friend the Member for Burton (Andrew Griffiths). He is the chair of the all-party parliamentary beer group and I am the chair of the all-party parliamentary save the pub group, and we are delighted to be working together on this very important campaign. I add my thanks to the Backbench Business Committee for granting us this time. I also congratulate the 104,000 people, and counting, who have signed the e-petition, and CAMRA and others who have achieved that figure.
This debate is about our national drink, beer, but it is also a Treasury debate about a major national industry. There are brewers up and down the country—
Greg Mulholland
Despite being a co-sponsor, I only get eight minutes, so I will take only two interventions.
Neil Carmichael (Stroud) (Con)
I wish to highlight the fact that I have four breweries in my constituency—Uley brewery, Severn Vale, Stroud and John Kemp’s excellent brewery, which has produced a Coalition ale, appropriately for this debate. All four do a huge amount for the community. Does my hon. Friend agree that that is a powerful reason to support this motion?
Greg Mulholland
It is, indeed. I have not tried Coalition ale—perhaps we can toast with it when the Government abolish the duty escalator next May. Exactly the same point applies to my own breweries: Wharfebank, Briscoe’s, Rodhams and other Leeds breweries all contribute to the local economy.
John Hemming (Birmingham, Yardley) (LD)
I declare an interest on behalf of myself and my hon. Friend the Member for Cheadle (Mark Hunter). We are both members of the Campaign for Real Ale. Does my hon. Friend agree that the social environment of pubs is very important?
Greg Mulholland
My hon. Friend is absolutely right. The key point from the hub perspective, as opposed to the beer perspective, is that beer duty is simply absorbed by the big supermarkets. They do not need to pass it on. They do not even have to make a profit from beer. Indeed, they have been shown to be selling irresponsibly at a loss. The point is not one of unfairness, though; the escalator simply makes no sense in terms of the Government’s own agenda, because it pushes people away from drinking in the sociable, controlled environment of the pubs and social clubs around the country, and encourages them to drink at home.
Beer is now 10 times more expensive in pubs than in supermarkets. That cannot be good. I am delighted to see the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), who has responsibility for community pubs, in his place. I welcome him to his post and look forward to working with him, as well as with the Economic Secretary. Frankly, though, we should also have a Health Minister attending this debate, given the health impacts that are being discussed.
The beer duty escalator does not make economic sense. It was introduced in 2008, at a time when alcohol duties were keeping pace with rising incomes and when inflation was considerably lower. Now, incomes have fallen, inflation is higher and VAT has risen. The simple reality is that since 2004 beer duty rates have increased by 60% and beer duty revenue by just 10%—a significant fall in real terms. As well as the damage to jobs, in putting up the duty, the Government are simply not taking the revenue projected. It is nonsense. It is a tax that simply does not add up.
It is encouraging to see Opposition Members now opposing the escalator. We have this strange situation, though, in which Labour, which introduced it, now opposes it, and Conservative and Liberal Democrat MPs who opposed it at the time now support it. Can we not unite the House now and say that this silly tax should go? We are sending that message loud and clear today.
I know that the Economic Secretary is a fan of pubs, and I know his Bromsgrove constituency well, because it is where my in-laws come from. I often visit and am pleased to drink in some of his local pubs. As well as announcing—I hope—that he will conduct this review, will he take the opportunity to consider other forms of progressive taxation that can help the British pub? There are various ways of doing that.
On the question of whether we can tax cask beer or real ale—or, indeed, all draught ale—separately, there is of course the problem of European regulation, as the Economic Secretary will point out when he sums up. First, we should challenge those regulations, but secondly may I put to him the interesting possibility presented by the duty-free element on cask beer? The reason for the duty-free element is the sediment in cask beer and the fact that cask beer requires much more care and effort to store, and lasts for a much shorter time. At the moment, we have a complex regime under which different breweries have different rates for different casks of beer. It is very complex and costly to administer. Could we not consider standardising the allowance and being generous with it, because it could provide a perfectly legal way of applying a lower rate of duty for real ale, our great British beer?
I also ask the Economic Secretary to consider the report by the Institute for Public Policy Research on the possibility of community pubs being granted 50% business rate relief if they can demonstrate their social and community impact. It has come up with a test, and I urge him and his officials to look into that and other ways of benefiting the pub in the way that right hon. and hon. Members are suggesting, alongside getting rid of the beer duty escalator.
As the chair of the save the pub group, I would be the first to say that the beer duty escalator is not the only issue facing pubs. There are others that should also rightly be tackled. I want to raise with my hon. Friend the Minister the issue of large pub companies and the large pub-owning breweries. Unfortunately, the large pub companies’ tenants and lessees also face their own pubco escalator, with unfair rises resulting from the eye-watering debts that those companies incurred because of their irresponsible actions some years ago. It is also important to tackle that. When my hon. Friend announces the review, as I hope he will, I hope he will also make it absolutely clear to those companies that they should pass on any drop in beer duty, because if they do not, those tied pubs will see no benefit whatever. In conducting the review and, we hope, making that announcement in the Budget next year, he must issue and receive a firm guarantee that any drop will be passed on, so that it benefits licensees and can therefore be passed on to customers, so that those pubs can become more attractive in competing with free houses.
My final point—I say this to the community pubs Minister—is that we must look at giving more protection to pubs in planning law.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
Does my hon. Friend agree that the work we have done to allow the community right to buy and to bid has been helpful—just this afternoon I am visiting the Norton pub, which has been taken over by the community in order to save its local pub—and that any work we can do to support those pubs will be helpful?
Greg Mulholland
I thank the Minister for that, and I look forward to working positively with him. The inclusion of pubs in the national policy planning framework is hugely positive. I would also point him in the direction of Cambridge city council’s excellent policy, which I hope he will encourage other councils to follow.
At the moment we face a ludicrous situation, which is absolutely pertinent to this debate. We talk about supermarkets and wanting people to drink in pubs, but at the moment the planning system allows pubs to be turned into Tesco and Sainsbury’s shops without even having to go through the planning process and without any opportunity for the community to have a say. The supermarkets are engaged in the predatory purchasing of profitable pubs from indebted pub companies that are desperate to sell them just to try to balance their books. The Minister is the man who can stop it, by making very simple changes to the planning law and dealing with the fact that free-standing pubs can be demolished. I hope that there is progress, but there are also simple things that I hope he will do—both as part of this process and in getting rid of the beer duty escalator—so that the Government can live up to the Prime Minister’s claim about this being a pub-friendly Government.
As I hope I have pointed out already, and as I know many colleagues will, it is absolutely fantastic to see so many colleagues here when those of us on this side of the House have been put, I believe wrongly, on a one-line Whip. Whatever the vote, and even if there is no vote, it is absolutely clear what the will of the House is on this issue, and the Government must not ignore it. The beer duty escalator does not make economic or social sense. It is unfair, unsustainable and unjustifiable. I hope the Minister will have the courage today to say, “We will have the review,” and I look forward to a sensible economic strategy for growth in next year’s Budget which involves abolishing the beer duty escalator once and for all.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to follow the hon. Member for Leeds North West (Greg Mulholland). I do not think it does either of our reputations any good to declare to the House that he once bought me a pint at Huddersfield railway station—and very good company and a very good pint it was too.
This is an important issue, and I pay tribute to the Backbench Business Committee for arranging the debate. I want to focus on the impact in my constituency. The pub and brewery industry is of both historical and current importance to Hartlepool. It is said—I do not know about the accuracy of this, but it is a good statistic regardless—that in the early part of the 20th century, Hartlepool had the highest ratio of pubs to streets in the entire country. Sadly that is no longer the case, and we have seen a steady stream of pub closures. The hon. Member for Leeds North West quite rightly talked about the planning system. Only in the last month one of the pubs in Hartlepool—the Pink Domino—has been earmarked for demolition. There is a planning application going through at the moment for a supermarket to be built in its place, with a loss to the community.
However, I am not just looking backwards. The pub and brewery trade is still hugely important to my town, both socially and economically. We have first-class pubs, such as the Causeway, the Fisherman’s Arms, the Pothouse and the Jackson’s Arms. Hartlepool has an economy that employs about 34,000 people. Of those, some 1,000 are employed in the pub trade, so it is not an insignificant part of the town’s economy. Indeed, that figure does not take into account those employed in working men’s clubs or, like my mother, behind the bar in venues such as the town hall or the borough hall on the Headland. The pub trade therefore has a major impact on the town’s economy and employment, particularly for younger people and those in part-time flexible working.
Hazel Blears (Salford and Eccles) (Lab)
My hon. Friend is making a powerful case. I have had the pleasure of visiting his constituency and having a drink of beer in Hartlepool at the time of his election. My community in Salford and Eccles is similar to the community in Hartlepool. We have a great brewery, Joseph Holt, which just this year has been forced to get rid of 11 pubs, with the loss of 94 jobs, at the same time as seeing massive increases in duty. Does my hon. Friend agree that the escalator is punishing communities in poorer areas such as ours, where people’s wages have not kept pace with duty increases?
Mr Wright
My right hon. Friend is exactly right. She mentions the importance of the pub trade in the local economy—the economies of Salford and Hartlepool are very similar—but she also talks about breweries, which brings me to my next point.
We have a major brewery in my constituency: Camerons brewery—I am pleased to confirm to the House that it has nothing to do with the Prime Minister, thank goodness. Camerons brewery has been on the same site for more than 140 years, using the unique Hartlepool water from its own well to make the beer. It now employs 100 people and is involved in large-scale ale and lager production. Not only does Camerons produce quality ales of its own—I would recommend to hon. Members Camerons Strongarm and 6th Sense, which are particularly good pints—but its modern manufacturing facility and investment in plant means that the brewery is now capable of producing 1.3 million hectolitres per annum, with the potential to increase that, given certainty in the brewery trade, to 2 million hectolitres. Camerons has been well positioned to win orders for beer and ale production from global brands such as Carlsberg. The brewery continues to be—and has been for the best part of 150 years—an important part of the town’s manufacturing base.
Andrew Bingham
Does the hon. Gentleman agree that it is not just the big breweries that are affected, but small microbreweries, of which there are many in rural constituencies, where pubs are extremely important socially, such as Howard Town brewery and Buxton brewery in my constituency of High Peak?
Mr Wright
I absolutely agree with the hon. Gentleman. If manufacturing is to be an important part of this country’s economic base, with small and medium-sized enterprises forming a key part of that, the food and drink sector—of which microbreweries have to be an essential and growing component—will be vital to that.
I have listened closely to other hon. Members’ contributions to this debate, which has been fair and balanced. It is unreasonable to suggest that beer duty is the sole reason that the pub and beer trade is facing difficulties. There are long-term social and economic forces at work. Over the past 30 years, people have switched away from beer to wine in their alcohol consumption. That is true not just in Britain, but throughout western Europe and the United States. Significantly—this point has been touched on many times in the debate, but it is worth repeating—people are now consuming alcohol in their homes rather than in pubs. In fact, some 70% of the alcohol purchased in the UK is bought for consumption at home. Traditionally, 30 or 40 years ago, people probably bought alcohol only in a pub; now, it is far more likely that beer will be bought in a supermarket.
Dan Rogerson
The hon. Gentleman is making a good point about wine drinking in the home. Does he agree that, because wine has a much higher alcohol content and because people are often drinking not in pub measures but in much larger glasses at home, the health issues are a result more of wine and spirits than of beer, which has a much lower alcohol content?
Mr Wright
The hon. Gentleman makes an important point. Among even the strongest beers and ales, Cameron’s 6th Sense, which I mentioned earlier, is only 6%, but some of the bottles of wine that are being consumed in one go at home can be 13% or 14%. That has health implications, as does the departure from responsible and supervised drinking in pubs.
The switch from on-trade to off-trade purchase and consumption via the supermarkets has had major effects on the pub industry. The Treasury’s own analysis of alcohol consumption in the UK, which was published in December 2010, showed enormous price elasticity for off-trade beer. That illustrates the enormous competition between supermarkets, the price wars that are going on and the cutting of margins on beer by supermarkets, all to the detriment of the pub trade.
Pubs have an enormous disadvantage, in that they tend not to have the buying power, or the ability to achieve economies of scale, of the major supermarkets, and the nature of their business model means that they have to pass on increases in prices—whether in the form of additional duty, increased VAT or rises in the cost of raw materials—directly to the consumer. Supermarkets are, by and large, able to cross-subsidise, as the hon. Member for Shipley (Philip Davies) pointed out, and they often have the ability to absorb any price rises. Beers can even be used as loss leaders to encourage shoppers, a practice that the pubs cannot afford to compete with.
These problems arise not just from the beer duty escalator but from rises in raw material prices, and there must be concern that beer prices will rise still further because of the recent wet summer, which has had an impact on barley crops, and the increase in VAT last year by the Government. The rise in VAT must have put an extra 5p or 6p on the price of a pint, which in turn will put additional pressure on the viability of pubs. Has the Minister looked at the impact on pubs of that VAT rise, of the rises in barley prices and of the beer duty escalator?
On the point about raising revenue, it was estimated when the beer duty escalator was introduced in 2008 that it would generate between £500 million and £600 million for the Exchequer. Given the difficulties since then, and the squeeze on household incomes, has it actually generated that much revenue? What cost-benefit analysis has the Treasury put in place to determine whether the escalator is raising revenue for the Exchequer to the detriment of local economies and local pubs?
I appreciate that the duty is, and should be, a source of revenue for the Exchequer—about 2% of all Government receipts. I appreciate that beer has generated revenue for the Treasury for centuries, to the dismay of beer drinkers everywhere, and that it will continue to do so. I also appreciate that, in a free country, the manner in which people wish to consume a legal product is up to them and not up to the Government. If somebody wants to drink beer bought from the supermarket in their front room while watching the football or a film and having a takeaway, without causing any hassle or intimidation to anybody else, that is entirely up to them. However—this is my key point—if we as a country value the social and economic importance of the pub as a focal point for the community and a means of encouraging responsible and supervised drinking, what steps can the Government take to nudge consumers towards drinking beer in pubs?
In responding, will the Minister set out how he proposes to tackle the growing gulf in prices between pints in pubs and beer in supermarkets? I am not suggesting that he attempts to turn back the tide of social trends over the past 30 years, but I hope he will tell us how the Government value the pub as one of the great British institutions and how he will work with his colleagues, using the tax system, beer duty and any other means at his disposal, to ensure that the pubs and brewing industries of Britain have a brighter and longer-term future as part of a revitalised manufacturing base. I think we would all drink to that.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow the hon. Member for Hartlepool (Mr Wright), who has made an impassioned case for pubs and beer drinkers across the country. I have a passionate belief in beer drinking; I have been doing it, and keeping the brewers and the Treasury going, for more than 40 years. Pubs, working men’s clubs, social clubs, sports centres and students union bars all have an important role in our society, not only as places to meet and greet people but as social centres where people can sit down and have a quiet drink and a bite to eat, along with some social interaction. They offer a wide variety of drinks, including soft drinks, wines and spirits, although it is much better to drink beer. They also provide a place for families to get together.
One problem that has arisen in the past few years as a result of the pressure on pubs to make money is the loss of that social atmosphere and the emergence of vertical drinking establishments, whose aim is to pour as much alcohol as possible into individuals in order to maximise profits. That presents huge risks. Similarly, in urban and suburban areas, big pubs with car parks that occupied large plots of land have been bought by ruthless developers and turned into flats, destroying the local community. It is important to protect our pubs from those predatory developers, and I look to the newly appointed Economic Secretary to the Treasury to assist in that task.
Neil Carmichael
My hon. Friend is making some excellent points. Will he join me in commending the work of the Campaign for Real Ale, which does an outstanding job of promoting local pubs and sensible drinking? It certainly does that in my area of Gloucestershire.
Bob Blackman
I thank my hon. Friend for his intervention. I must declare an interest as a member of CAMRA. I have been a strong supporter of the organisation since I was at university. It is indeed important to promote the responsible drinking of real ale.
Jane Ellison (Battersea) (Con)
The problem that my hon. Friend has just raised about developers is particularly acute in London, where development land is so valuable. We have seen more than 40 pubs go in the past six months. A popular Battersea pub, The Castle, which has been in existence for more than 300 years, is now threatened with demolition, precisely because the land is worth more than the pub. Does he agree that this is an acute problem in London?
Bob Blackman
Indeed. Pubs in my constituency have been closed down and redeveloped as flats. The loss of those extremely valuable centres results in the destruction of the whole community.
Beer has a relatively low alcohol content. Those who promote the beer duty escalator talk about the health risks related to drinking, but I am a great supporter of responsible drinking and of transferring people to beer drinking, given its relatively low alcohol content. A person would almost have to drink more beer than their capacity would allow in order to damage their health, whereas relatively small quantities of spirits can cause immense damage.
The supermarkets have not only helped to destroy local pubs; they have completely eliminated off-sales from other environments. Anyone can wander into a relatively small supermarket in my constituency today and buy six cans of beer for a fiver, but if they go across the road to the local pub, The Duck in the Pond, they will have to pay £3 for a pint. Why would anyone do anything other than buy beer from the supermarket and wander off home, or drink it on the street? This is causing real damage to the people who are providing these important facilities.
Some people call for minimum unit pricing for alcohol, and I can understand why they do so. I believe that there are huge risks involved in minimum pricing, but we have to address the supermarkets’ predatory pricing and prevent them from subsidising alcohol sales. We need to ensure that they compete fairly with local pubs, rather than ruthlessly getting customers by selling alcohol as a loss leader.
The Treasury’s own figures show that the beer duty escalator will produce only a flat level of income. If that is the case, and if the duty is going to increase year on year, that can only mean that the Treasury is forecasting reduced volumes of beer sales in this country. That can only mean more threats to our pubs and our communities, and there will be implications for other forms of alcohol as well.
Guto Bebb (Aberconwy) (Con)
I have three breweries in my constituency—Bragdy’r Nant, Bragdy’r Gogarth and Bragdy Conwy—and for those slow on the uptake, Bragdy is Welsh for brewery. Those businesses are paying about 50% of their turnover in tax. They recently invested in a pub in the local community, but they will not be able to do that again because so much of their turnover currently goes in tax.
Bob Blackman
Indeed, and the potential of local pubs to contribute to growth in the economy is threatened by the beer duty escalator.
There is an alternative. If we abolish the beer duty escalator, promote the responsible drinking of beer, as my hon. Friend the Member for Leeds North West (Greg Mulholland) mentioned, and allow the price of a pint at the pump to be reduced, that will help people to move away from irresponsible supermarket drinking back into pubs. That would mean they consumed less over a longer period and in a more sociable atmosphere, while the Treasury would get more income as those sales increased. We would therefore see a better outcome—for health, for pubs and for the Exchequer—making this a win all round. I thus urge our new Minister to have a full and proper review of how to reduce the price at the pump and dissuade the supermarkets from cross-subsidising their sales, leading to much better social interaction in our society and encouraging pubs to grow, and make sure that it continues.
My final point relates to the growth of small pubs in areas where they are taking over empty shops. I think this is a potentially serious problem, when large groups of relatively small pubs become a threat to the local environment and to local communities. It is a threat to the big traditional pubs, which have served this country so well over many years, particularly in the suburban and urban areas. Landlords of these new pubs often do not have the same sense of responsibility as the previous landlords. We need to look at the impact of that and understand why this it is happening. I look to Ministers to review the situation so that everyone can see the benefits of the great British pub and, indeed, of all the social centres that we have discussed in the debate. We must ensure a fair and reasonable deal for pubs—from the Exchequer and in competition with supermarkets.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I greatly welcome the opportunity to participate in today’s debate, and it is a pleasure to follow the hon. Member for Harrow East (Bob Blackman), who made an interesting and insightful speech. I would like to thank the hon. Member for Leeds North West (Greg Mulholland) and others who have kept the all-party group going for a number of years, providing a strong focus for this issue, which is important for all our constituencies. I shall concentrate my remarks on my concern about the pub trade in my constituency.
There are 86 pubs in Ayr, Carrick and Cumnock, which support 877 full and part-time jobs in my constituency. Pubs inject an average of £80,000 into the local economy each year, but these pubs will be under threat if the beer duty escalator remains in place, because, as hon. Members have said, this mechanism is making a pint in the pub unaffordable. In my constituency, many pubs have already closed.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Was the hon. Lady as surprised as I was to learn that beer tax in the UK is 13 times higher than in Germany?
Sandra Osborne
I am not really surprised: I am well aware of it, and I was going to make a similar comment. I know that this will be of concern to many Members.
In their first Budget after the 2010 general election, as hon. Members will be aware, the coalition Government launched a review of the taxing and pricing of alcohol, including the beer duty escalator, which was first introduced by the former Labour Government in 2008. The coalition’s aim was to ensure that it
“tackled binge drinking without unfairly penalising responsible drinkers, pubs and important local industries.”
If the views expressed so far are anything to go by, we would all agree that that is simply not working. I am aware that the Government have stated that they intend to keep the escalator in place until 2014-15, although Treasury forecasts have shown that no additional revenue will be generated from beer duty, despite the increases of 2% above inflation planned in forthcoming Budgets over the next two years. The Government are not even going to make any money out of it. The planned 2% rise above inflation, equating to a 5% price increase, came into effect from 1 April 2012.
The Campaign for Real Ale, which has 450 members in my constituency alone, and the British Beer and Pub Association have criticised the decision not to abolish the escalator in the Budget, claiming that the increase could cost thousands of jobs. CAMRA has also expressed concern about the impact of the escalator on the industry, stating that a third of the cost of a pint of beer goes to the Exchequer—as was said earlier, that is the second highest rate of duty in the EU—while 16 pubs now close in the UK every week. The Government need to recognise the harm this is doing to brewers as well as to community pubs.
Since the escalator was first introduced, beer sales in pubs and clubs have fallen by 23%, leading to more than 6,000 pubs closing. Since that time, so much has changed: inflation has risen, VAT has increased, brewing costs have risen and household incomes have fallen. According to the Beer and Pub Association, beer taxation now costs the average pub around £66,000 a year. As other Members have stated, this is having a terrible impact on towns already suffering from the current economic situation, as more people are purchasing alcohol from supermarkets, which is competitively priced, to drink within their homes rather than having a social drink in their local pub. I am aware that the most common complaint received by the local licensing department in my constituency is about the threat posed to the local pub trade by the volume of cheap sales of alcohol by supermarkets.
Given that beer and pubs support almost a million jobs in the UK and that 48% of pub employees are under 25, the Beer and Pub Association has stated that if the escalator is removed, the industry has a real capacity to create jobs, raise more for the Exchequer and contribute to growth.
Heather Wheeler
I am interested in the hon. Lady’s point about how many jobs are created by our pubs. The 115 pubs in South Derbyshire employ 1,040 people. It is a hugely important industry for us locally. I am grateful to the hon. Lady for making the point that this is about jobs, industry and growth. I am sure that Ministers will be listening intently to that.
Sandra Osborne
I thank the hon. Lady. Another problem is that when many of the small pubs that employ only a few people close, that is not highlighted. With bigger announcements about redundancies, it is always made clear that huge job losses are involved, but I would argue that this is just as insidious for those working in the smaller pubs.
I recognise concerns about alcohol-related harm and the serious problems that alcohol causes, of which we are very aware in Scotland. I recognise, too, that campaigners have called for some time for the Government to introduce a duty rate escalator on alcoholic drinks as part of a wider strategy to tackle the social impact of alcohol consumption.
Mr Iain McKenzie (Inverclyde) (Lab)
My hon. Friend makes an impassioned point about the alcohol problems that continue to be encountered in Scotland. Pubs are more sociable places for the consumption of alcohol and are more family friendly nowadays, but what we are seeing is the mass purchase of alcohol in supermarkets for home consumption.
Sandra Osborne
That is very true, and I think we should give some credit to UK pubs which they have made great efforts to be family friendly places where people can drink with the assurance that there will be no problem if they take their children with them. That is important.
I share the concern that continued increases would penalise only responsible drinkers and, as stated earlier, drive responsible social drinkers out of pubs and into supermarkets because the price of alcohol is increasing in pubs but decreasing in supermarkets. The current duty system ensures that higher-strength drinks are the cheapest drinks available to consumers. Pubs are already being hit hard by the current economic situation and are suffering further with the escalation of beer duty.
On 23 March 2012 the Government published their alcohol strategy, which seeks to reduce the UK’s relatively high drinking levels and the serious health and disorder problems that are caused by excessive alcohol consumption. The strategy contains a number of proposals to
“reshape our approach to alcohol and reduce the number of people drinking to excess”,
including the introduction of a minimum unit price. As Members will know, minimum pricing has already been introduced in Scotland, but is currently being challenged in court by the Scotch Whisky Association.
Following a recent Adjournment debate, a Minister said that abolishing the escalator would cost the Exchequer £35 million in 2013-14, and that that revenue formed
“a vital part of the Government’s plan to tackle…debt”.
However, the Government would
“continue to keep all taxes under review and monitor the impact of alcohol duty”. —[Official Report, 2 July 2012; Vol. 547, c. 733-36.]
I ask the Government to recognise the tough challenges that face the beer and pub industry, and to take them into consideration. I think it would be a good idea for the Government to cut VAT temporarily and to undertake a wider reform of the industry, including the introduction of a statutory code to regulate pub companies. The last Labour Government introduced a 12-point plan to support community pubs, which was backed by CAMRA, and my colleagues on the Opposition Front Bench have pressed the Government to build on it.
As we have already heard, there is an online “Stop the beer duty escalator” petition, which currently has 104,000 signatures. I ask the Government to note that significant number, to support the country’s beer and pub sectors by conducting a thorough review of the economic and social impact of the beer duty escalator, and to announce before the 2013 Budget that they will abolish it.
Charlotte Leslie (Bristol North West) (Con)
It is great that so many Members are in the Chamber today despite a one-line Whip. Let me begin by congratulating my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) on being such staunch campaigners. I know that there are other campaigners on the Opposition Benches.
All of us probably enjoy a pint, but why is this debate so important? It is about a bit more than a pint in the pub, although of course that is very important to a lot of us. The debate is important for several reasons. First, if we are to talk about the big society, we should recognise that the pub is at the heart of it. It is a little-known fact that pubs donate more than £120 million a year to charitable causes. That is impressive stuff. My local pub, the Bear and Rugged Staff, raised over £1,000 recently to help Lisa Fry, a lady who had tragically been diagnosed with cancer. Pubs are where people come together, they often support local sports clubs, and—another little-known fact—27% of couples first met in the pub, so I do not know what we are all doing here.
Empowering people also happens in the pub. The Bristol free school, which was one of the first free schools in the country, was started as a result of a conversation between me and some parents—guess where? In the local pub. Thank you very much, the White Lion and the Mouse. Moreover, I am sure that I am not the only Member present who, wanting to find out what is happening in the constituency, goes first of all to the pub and enjoys a nice pint at the same time. Pubs are also where discussions take place. In many ways, they are the Chamber of the real world, where there are proper debates about real things.
I have mentioned the social value and the big society value of pubs, but what about the economic value? Pubs not only donate £120 million a year to good causes but contribute £21 billion a year to the economy, and, as has already been said, each pub contributes an average of £80,000 to the local economy.
David Rutley (Macclesfield) (Con)
We are very fortunate in Macclesfield. Passionate Pubs owns pubs such as the Wharf, the Vale Inn and the Snow Goose, and there are vibrant micro-breweries such as the Storm Brewing Company, Bollington Brewing and the Wincle Beer Company. They have helped to make Macclesfield an important and distinctive destination. Does my hon. Friend agree that it is easy to underestimate the impact of such institutions on the visitor economy as well as the wider economy?
Charlotte Leslie
Absolutely. My hon. Friend has made an extremely good point. A tourist’s picture of Britain always includes the beautiful and the great British pub. The trouble is that once such institutions have gone, they have gone for ever. We are currently overseeing the decimation of the keystones of our culture and heritage, which not only have social and morale value, but are massively important to our economy.
I am probably not the only Member present whose first job was in a pub. In my case it was the Fox, in the constituency of my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti). I was not brilliant behind the bar, so I moved swiftly on.
Justin Tomlinson (North Swindon) (Con)
My hon. Friend is making a very interesting speech. She has just mentioned first jobs in pubs. Having spoken to representatives of my local family brewery, Arkell’s, I know that they are crying out for young people—graduates, and those with hospitality management skills—who have the potential to become pub landlords. The pub sector is very important for young people.
Charlotte Leslie
That, too, is a good point. More than a million people are employed in the pub industry in this country, and more than half of them are young people. Pub employment not only constitutes an important first step on the jobs ladder, but provides a great opportunity for career progression. People learn a multitude of skills that will be useful in future careers.
I think that the Government have done quite well. The appointment of a pubs Minister was a very good move—I am sure that we all wish to pay tribute to the previous pubs Minister, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), for the work that he did, and to welcome the new Minister—and, having produced the Live Music Act 2012, localism and the right to buy, we are now making progress with minimum pricing. All that is good stuff. However, pubs are still closing at the rate of about 12 a week, and we need to do more.
Given that beer represents about 60% of sales in community pubs, it is not very surprising that the beer duty escalator is having such a dramatic impact. It is true that there are other factors, such as social and demographic changes and the fact that, as my hon. Friend the Member for Leeds North West pointed out, it is so easy to sell a pub and turn it into a Tesco—we have probably all seen that happen—and issues involving pub companies and pub ties also need to be considered. However, the escalator is a major component of the problem. Given that all the beneficial elements are being stripped away as pubs close, and that beer sales fell by 5.6% in the third quarter of this year, it is hardly surprising that the Treasury’s own figures show that the escalator is not doing what it is supposed to do and raising funds.
Bob Stewart (Beckenham) (Con)
We have already demonstrated that the beer duty escalator will not increase the finances going to the Treasury, so why the heck do we have to wait until the Budget? Why cannot a Minister make a decent decision and scrap it?
Charlotte Leslie
I think that many of us would like the Minister to make a snap decision and scrap it, but this debate is about a review, and that is an important first step if we want accountability. I should prefer a quicker decision, as I am sure would many other people, because my hon. Friend is right: every day while the escalator continues, pubs are closing, including historic pubs such as the Lamplighters in my constituency. We are struggling to save the Lamplighters, and Pete Bridle, of the local branch of CAMRA, has been fantastic in that regard. Although it is a review for which we are asking, there is definitely a degree of urgency.
So what can we do? Let us get the review done, and I think that its conclusions will be pretty clear. We must also press on with minimum pricing, and we must tackle the discrepancy between off-trade and on-trade alcohol prices. The damaging social effects of cut-price booze in supermarkets are plain for all to see. One solution may be to deal with the discrepancy between pub and supermarket licensing fees. At present, any pub with a rateable value of more than £87,000 pays fees two or three times higher than those paid by a supermarket with an equivalent rateable value, because the multiplier for pubs does not apply to supermarkets. If the Treasury is concerned about tax revenue, we could act now to produce a far more tax-neutral measure.
Let us look at what is at stake. If we end the escalator fast, we can save 5,000 jobs a year—an estimated 16,000 over three years—we can secure a national foundation stone of the big society, which I know is important to our Government; and we can secure our great British beer industry and the pride of Britain, our pubs. I urge the Minister and the Government to end this disastrous beer duty escalator with all speed.
Madam Deputy Speaker (Dawn Primarolo)
Order. I am reducing the speaking time limit immediately to five minutes. There are still 13 Members wishing to contribute to the debate, and I shall do my best to ensure that they are all able to do so.
Mr John Denham (Southampton, Itchen) (Lab)
I am very pleased to have an opportunity to speak in this debate, and I commend the Backbench Business Committee on securing it. When I was briefly Secretary of State for Communities and Local Government at the end of the last Labour Government, we appointed my right hon. Friend the Member for Wentworth and Dearne (John Healey) as the first pubs Minister. His 12-point plan has been mentioned today, and it still sets the agenda on issues such as the community right to buy, the need to change the planning rules, and the relationship between pub companies and pubs. I am very pleased to have a chance to return to this issue today, prompted by not only the wider concerns, but the fate of one pub in my constituency that illustrates some of the wider problems.
The Castle pub in Midanbury in Southampton has been sold by Enterprise Inns to Tesco, which has just put in a planning application for the minor changes needed to develop a convenience store. That is deeply unpopular with the 600 people in the area who signed a petition against the move, partly because they did not want to lose the pub and partly because they do not want a Tesco. They have been utterly powerless to influence the decision, however.
Similar situations have been described by other Members. The latest figures I have from CAMRA show that its members have identified 189 conversions of pubs to supermarkets since the start of 2010, with a further 41 pubs under serious threat. Of those 189, Tesco has done 124 conversions, while Sainsbury has done 21.
In my constituency, in addition to the Castle pub, the Bulls Eye in Sholing and the Woodman were also owned by Enterprise Inns and are being converted by Tesco. Other pubs have been sold to the Co-op, the Best-one convenience stores, the Alfresco group and the One Stop group.
Beer duty is one of the factors contributing to this trend. Because it impacts on the profitability of pubs, for the big pub companies considering what to do about a pub it is one of the factors that tips the balance away from investing in it and strengthening the management and towards simply seeing selling the pub as a property deal, which is often what those capital-hungry companies are after. The bigger picture is of communities such as mine being left without any say when two giant companies —Enterprise Inns and Tesco in this case—have commercial strategies that they work on together and which suit them, but that give local people no voice and no say at all in the future of their pub and community.
Greg Mulholland
I congratulate the right hon. Gentleman on raising this serious problem. It is a tragedy to see our local pubs being turned into supermarkets. What is happening is predatory purchasing. I will send the right hon. Gentleman the Save the Pub group planning charter, which addresses this issue. I ask all Members to urge the community pubs Minister to make simple planning law changes to give communities the right to have a say, and to stop the nonsense of no planning permission being required for supermarket conversions. That would stop the collusion the right hon. Gentleman mentions between the giant indebted pub companies and the giant supermarkets. What is currently happening is certainly not an example of the big society.
Mr Denham
I commend the hon. Gentleman on his work on this issue. What he says is right. In the case I have mentioned—and, I suspect, in many others—there was never even an open disposal. There was never an opportunity for somebody else to come in and start up a microbrewery for instance. The whole thing takes place behind the scenes, and the deal is done. The first thing the community ever knows is that the property has already changed hands and is on the way to being converted.
Greg Mulholland
There are huge growth opportunities in the pub sector. Many pubs are being taken on by small pub companies, and their figures show they are doing well. The managed pubs sector is doing perfectly well. Lots of small breweries around the country are also buying pubs, but they are often prevented from doing so because of the situation the right hon. Gentleman describes. This can be solved through the planning system, and it must be, or else growth in the sector will be hampered.
Mr Denham
The hon. Gentleman again makes a fair point. I say to the Treasury Minister on the Front Bench, the hon. Member for Bromsgrove (Sajid Javid), that in addition to reviewing beer duty and changing the planning laws, the way in which these big companies operate needs to be looked at.
The hon. Member for Bristol North West (Charlotte Leslie) talked about the big society. We cannot have a big society if two big companies shut the community out. Labour Members talk about responsible capitalism; it is not responsible capitalism if big companies collude to stop small entrepreneurs starting up businesses of the sort we want to see in our communities.
In every one of the cases I have raised where a Southampton pub has been turned into a convenience store, that pub offered a safe, social environment for the responsible consumption of alcohol, and it was replaced by an off-licence that trades on cheap booze. I am not saying nothing ever goes wrong in a pub, but there are social constraints on how much people drink and how they behave. If the outcome of public policy is that we lose the places where alcohol is consumed responsibly and replace them with outlets for cut-price booze that encourage people to drink too much at home, where those constraints might not exist, there is something wrong with public policy. The message from Members on both sides of the House is that the Government need to look at beer duty and the wider context.
The Minister on the Front Bench and other current Treasury Ministers, along with previous Treasury Ministers over many years, have all said—because this is in the word processor in the Treasury—that it is difficult to untangle the impact of beer duty from the other factors affecting pubs. Of course that is true, but that is no reason for not looking at beer duty and all the other factors affecting pubs.
Dr Julian Lewis (New Forest East) (Con)
I thank the right hon. Gentleman, my near neighbour, for giving way. To encourage him in his line of argument, may I say that when my party was in opposition we had a standard letter to send to people who inquired about beer duty, saying we were launching a campaign entitled “save the great British pub” and urging them to sign the online petition? I am sure, therefore, that the Minister will want to give a positive response to the right hon. Gentleman’s excellent speech.
Stephen Gilbert (St Austell and Newquay) (LD)
I am grateful to have been called to speak in this timely and important debate. I pay tribute to my hon. Friend the Member for Burton (Andrew Griffiths) for his work on this issue, and to my Liberal Democrat colleague, my hon. Friend the Member for Leeds North West (Greg Mulholland), for the work that he does with the all-party save the pub group. I also thank the Backbench Business Committee for responding to the legitimate calls from the public for the House to debate this topic.
I share the concerns expressed by other Members about the inevitable effect of the beer duty escalator, and I join them in calling for a review. Without a review, I fear many more pubs in my beautiful constituency might close, leading to job losses, mostly among younger people. The loss of these important institutions in our communities might also lead to cultural decline.
The pub is a gathering place for the local community. As has been said, it is the equivalent of this Chamber out there in the country, where debates are held every day. It is a place where people can gather to drink safely and responsibly. Speaking for my constituency, the pub is also part of Cornwall’s legendary charm. Many Members will have been to Cornwall and walked down the narrow streets and sat inside the solid granite walls of our local pubs, rich in history, legend and atmosphere. We need these pubs to survive to keep Cornwall full of character and competitive in the tourist market. Having spent the past few weeks talking to constituents about this subject, I can confidently say that if the beer duty escalator continues without review, jobs, community spirit and the local economy will be under threat.
The beer and pub industry contributes £45 million a year to the local economy in my constituency. St Austell brewery is a fantastic local family business that has more than 160 years of history, that runs 170 pubs, predominantly in Devon and Cornwall, and that employs a significant number of my constituents. Since the beer duty escalator’s introduction in 2008, the brewery has seen a 23% reduction in demand, and on an annual turnover of about £100 million, it pays £25 million in tax. The burden is too high not only for that brewery but for the countless independent and unique pubs from coast to coast in the heart of Cornwall. Some 2,500 people are employed in the sector in my constituency.
Alison McGovern (Wirral South) (Lab)
The hon. Gentleman is painting a wonderful picture of pubs in Cornwall. Does he agree that it is important that we visit and support not only local pubs, but local breweries such as the Brimstage brewery in Wirral, which has an excellent relationship with local pubs, ensuring that people in Merseyside can drink good, local beer?
Stephen Gilbert
The hon. Lady is, as ever, a firm advocate for her local brewer, just as I am for mine. I take on board the point she makes; she is entirely right.
I will not detain the House for too long, but it must be recognised that beer tax in the United Kingdom is high compared with that of equivalent countries in the European Union. Ours is nine times higher than France’s and 13 times higher than Germany’s. British consumers pay 40% of the total EU beer duty, and beer duty has increased by 42% since 2008. Of course, I share my right hon. Friend the Chancellor’s view that we are all in it together, but we need to redress the balance and ensure fairness.
Sir Alan Meale (Mansfield) (Lab)
Drinkers in Britain pay 40% of the EU beer tax bill, but consume only 13% of the beer.
Stephen Gilbert
The hon. Gentleman cites a stark contrast. When he makes the point in that way, the uneven spread becomes even more apparent and visible.
I support the motion, because we need to protect pubs, which are at the heart of our communities, not only in Cornwall, but across the country. We need to make sure that we are doing all we can to drive down youth unemployment, and the beer and pub sector plays a key part in that.
Grahame M. Morris (Easington) (Lab)
I wish to place on record my thanks to the hon. Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing this debate, and I congratulate them on doing so. I also thank the Backbench Business Committee for allowing this important and timely debate to take place. I realise that the Minister is relatively new to his position, but he should know that these arguments were made when clause 186 of the Finance Bill was debated. Similar arguments were pursued by my good self and by my hon. Friends the Members for Livingston (Graeme Morrice), for Gateshead (Ian Mearns) and for Wansbeck (Ian Lavery). I ask the Minister to have a look at those arguments and to review the decision, as that would be extremely helpful.
I was rather alarmed to hear the hon. Member for Leeds North West suggest on a point of order earlier that the Government were not giving serious consideration to issues chosen for debate by the Backbench Business Committee. I hope that is not the case, because there is a powerful case for the Minister to consider the House’s decision on this motion.
I must declare an interest as the vice-chair of the all-party save the pub group. I am also a member of the Working Men’s Club and Institute Union, and as such I am very concerned about the impact of the beer duty escalator on working men’s clubs—this was also raised by my hon. Friend the Member for Midlothian (Mr Hamilton). Nobody in this House can be in any doubt about the impact of the current economic climate and, in particular, the beer duty escalator on the pub trade—the Minister certainly cannot, unless, like the Olympic flame, he does not go out. [Laughter.]
It is apparent that since the beer duty escalator was introduced in 2008 a range of new and demanding costs have been applied across the industry. Like many hon. Members, I have received briefings from the British Beer and Pub Association and, through the all-party save the pub group, I have had discussions with stakeholders. It has been pointed out to me on numerous occasions that inflation has risen, VAT has increased and brewing costs have risen, whereas incomes have fallen right across the sector. The fuel duty increases have also had an adverse impact on delivery costs.
Hazel Blears
My hon. Friend is clearly well versed and an expert on these issues. As well as the economic costs, there are clearly important social costs to our pubs closing. A constituency such as mine has only a handful of remaining public houses, many of them intimidating places where the general public do not want to go. Will he therefore support communities that want to take over those pubs and bring them back to life, as we are trying to do with the Woolpack pub in Salford?
Grahame M. Morris
My right hon. Friend makes a really good point, and I hope the Minister is taking note.
As we all know from our constituencies, pubs are a vital part of our social life and a social hub. No matter what sort of area we represent, be it Labour, Tory, Lib Dem or nationalist, be it in the north or the south, be it countryside or urban and be it wealthy or poor, public houses are the hubs of our communities. Just as important is the fact that pubs and brewing are vital to the UK economy. Other hon. Members have mentioned the figures, so I will not repeat them, but the sector makes a huge contribution—I believe it is in excess of £20 billion. I believe that the Minister acknowledges that the proposals in the beer duty escalator would be revenue-neutral—they would not generate any additional revenue for the Treasury—so what can be the justification for continuing with it? The only answer I can come up with is that this is part of another public policy agenda—perhaps the Minister can enlighten us. Might it be an issue of public health? Perhaps the Government think it desirable to force up the price of alcohol to dissuade people from consumption. We have heard from various hon. Members that the consequence has actually been the reverse, so perhaps this is a perverse application of policy, resulting in the public buying beer, wine and spirits from the supermarkets in cut-price deals, and consuming them at home. There is a strong case for reviewing the escalator.
Mr Jim Cunningham
Does my hon. Friend agree that this issue affects not only pubs, but working men’s clubs up and down the country? We are in danger of destroying our cultural heritage, whereby the family could go out on a Sunday and have an entertaining afternoon in the pub as a family unit. That whole thing is being destroyed, as we have lost a large number of working men’s clubs in Coventry, as well as pubs.
Grahame M. Morris
I absolutely agree with my hon. Friend, and a similar point was made by my hon. Friend the Member for Midlothian. I am a strong supporter of working men’s clubs and the whole ethos of inclusivity, so I completely agree with that point.
In the limited time available to me, I want to mention something that has been alluded to by one of my colleagues: it is time for the Government to be much more proactive, not only to help the pubs struggling now, but to boost growth in the pub and brewing industry, as it could be a vital engine of economic growth. If that is the strategy, we have an opportunity to pick up the baton and run with it. The previous Government went so far as to appoint a Minister with special responsibility for pubs, as has been mentioned. That was my right hon. Friend the Member for Wentworth and Dearne (John Healey), who came up with some excellent ideas in a 12-point plan, which was agreed with the trade and CAMRA. I hope that the current Minister is familiar with that; it would be beneficial if he could build on it. That would create vital jobs and build on a great UK manufacturing success story.
Our British beer is famous around the world and our pub culture is envied by many countries. There is also the multiplier effect: one job in brewing supports one in agriculture, one in retail, one in the beer supply chain and 18 in pubs and clubs. We are all concerned about the wider economic implications and I urge hon. Members on both sides of the House to support the motion.
Caroline Nokes (Romsey and Southampton North) (Con)
I pay tribute to my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing the debate. I agree with the hon. Member for Easington (Grahame M. Morris) that this is a powerful and important message for the Minister.
I also want to pay tribute to the right hon. Member for Southampton, Itchen (Mr Denham), my immediate constituency neighbour, who drew attention to the conversion of The Woodman pub in my constituency to a Tesco. I remind him that The Castle Inn has on occasion—I recollect this from the 2001 general election—played host to a polling station, which is evidence of a pub playing its role in the big society.
Historically, Romsey is a brewing town. I vividly recall from my primary school days the smell of the brew from Strong’s brewery hanging over the playground. On my 11th birthday the last brew began at Romsey brewery, but I am pleased to say that after a short gap Romsey is now host to a micro-brewery in Flack Manor, which brews some wonderful ales. The proprietor of Flack Manor, Nigel Welsh, and publicans in Romsey and Southampton North have forcefully told me that the beer duty escalator is deeply harmful to their commercial success. They are not alone; their opposition is shared by such august organisations as CAMRA and the Society of Independent Brewers.
The pub trade employs nearly 1,000 people in my constituency and contributes more than £14 million to the local economy, but publicans tell me that their trade is held back by a policy based on false assumptions about its social, economic and health benefits.
Mr Robert Buckland (South Swindon) (Con)
My hon. Friend highlights the contribution made to her local economy. In Swindon, 1,425 people are employed by the brewing and pub industry, which adds about £17.2 million to our local economy. The issue touches not just Romsey but every community in the country.
Caroline Nokes
My hon. Friend makes an excellent point. The economic argument is also flawed. As we have heard many times today, the amount of money raised through the Exchequer since the rise in beer duty in 2004 has failed to match the predicted levels of revenue. That has cost 5,000 jobs a year and VAT revenue has been lost through reduced beer sales.
The basic laws of supply and demand dictate that if the price of a commodity is increased, demand will fall. Demand for beer in pubs certainly has fallen. I am not suggesting that the beer duty escalator was the sole reason for the closure of pubs such as The Vine Inn in Stockbridge, or The Wheatsheaf in Braishfield, which has fortunately now reopened, but figures show that, despite the Olympic games and Euro 2012, in the three months to October this year pubs sold 117 million fewer pints than in the same period last year. I am not suggesting that nationally we are drinking less beer; we are simply changing our habits, giving an advantage to supermarkets over the traditional pub.
Before the introduction of the escalator, it was four times more expensive to drink in a pub than at home, but it is now 10 times more expensive. Beer sales in pubs are falling and the proportion of alcohol consumed outside that responsible, supervised environment is increasing. That brings me to my second point, about the benefits of the escalator to health and social policy. I believe that that merits close scrutiny. A recent study of the impact of alcohol pricing on consumption in Sweden produced some interesting results, showing mainly that increasing the price of alcohol in an attempt to reduce consumption might actually have the opposite effect, since drinkers who were buying more expensive brands simply switched to cheaper drinks and as a consequence bought and drank more. In other words, making it more expensive to drink in pubs simply pushes people to drink cheaper alcohol and possibly fuels binge drinking.
Binge drinking is a real and growing problem. Just last night Romsey police tweeted a picture of a massive quantity of alcohol they had seized from under-age drinkers. The beer duty escalator does nothing to prevent that. I give full credit to the local police for their action, and I encourage hon. Members to look at that photo on Twitter. It does not show alcohol bought at a pub—far from it. The cut-price bulk offers on alcohol in supermarkets often encourage parents to buy more, and that means easier access to large quantities of alcohol stored at home.
According to data from the World Health Organisation, alcohol consumption in the UK increased by approximately 4% between 1985 and 2003, whereas in Europe it decreased. Over the same period, alcohol-related harm has grown. For example, there were 8,758 alcohol-related deaths in 2006, twice as many as 15 years previously. The Government know this: in a preliminary assessment of the economic impacts of alcohol pricing policy, published by the Home Office in June 2010, the conclusion stated that duty increases are
“a ‘blunt instrument’ that does not target those drinkers who cause harms”.
The tax raises little revenue, causes unemployment and encourages binge drinking on cheap alcohol—and the taxpayer has to bear the burden.
I am on record as supporting minimum pricing for alcohol, but that does not in any way contradict my support for a review of the beer duty escalator. Major supermarket chains, such as Tesco, ruthlessly promote cut-price deals, so it is not the traditional public house, supplied by excellent local breweries, that promotes excessive drinking, but the supermarkets, which use their ability to buy and sell alcohol cheaply, often as loss leaders, to the detriment of the local pub, the local economy and the local community.
Albert Owen (Ynys Môn) (Lab)
It is a pleasure to speak in the debate and I pay tribute to the hon. Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing the debate. I am happy to be a co-sponsor of the motion, which is very important.
I have only five minutes, so I cannot list the fine establishments in my constituency. I would be a fool to miss some of them out, so I will not attempt to list them. I do not have any major breweries, either, but I want to give the debate a different dimension and add something new. People have quite rightly promoted their public houses and breweries, but there is an important link between the breweries and the pubs—that is, between the suppliers and the distribution industry. In rural and periphery areas, they are vital in getting the product to the licensed outlets, whether they are clubs, pubs or hotels. In periphery areas such as mine, and in many other parts of the country, visitors make a very important contribution to the local economy. They use the public houses for their leisure activities and we need to put the multiplier effect into its proper context. Hundreds of millions of pounds are generated by the tourism industry and the public house is key to that. It is not just a local pub, but a centre of attraction for visitors.
Mr Graham Stuart (Beverley and Holderness) (Con)
The hon. Gentleman is making a very important point, particularly about the knock-on impact of pub closures in rural areas. The Great Newsome brewery, a small brewery in my constituency, has seen six of the pubs it supplies close in just the last two years. Evidence has shown that each pub puts £80,000 into the local community and makes the East Riding of Yorkshire a more attractive place for tourists. The hon. Gentleman is absolutely right and I hope that we will see a change of direction from the Government.
Albert Owen
I am grateful to the hon. Gentleman. I am very fond of going to Yorkshire. I went to university there and regularly visit York and the fine pubs in that area, so I might come to Humberside and the east coast at some point.
The suppliers are important small and medium-sized enterprises. A family business in my constituency, Joseph Keegan and Sons, wrote to me. It has been established for many years and supplies the area and its concerns are about beer duty and fuel duty, too. Many companies have been hit by the high levels of fuel duty when transporting their goods, so there is a double whammy of which the Minister must take note in his review.
The motion before the House is very moderate, because all it calls for is a review. The hon. Member for Leeds North West, in his measured contribution to the debate, was right to say that Members across the House have supported escalators when there was a need to do so. The beauty of an escalator is that we can get on or off it when the conditions are right, so the Government would not lose face by coming off it. A previous Conservative Government brought in the fuel duty escalator and then came off it when they thought that was necessary, so that can happen quite simply.
Andrew Griffiths
I agree completely with the hon. Gentleman’s point about the rising cost of fuel for brewers. He will also be aware of the rising cost of the raw materials that brewers must purchase and the falling incomes of households across the country.
Albert Owen
The hon. Gentleman is absolutely right. We are talking about the business of pubs, clubs, hotels and suppliers, but we must also consider the producers. Much of the problem is beyond the control of Governments and the terrible weather this summer has affected the price of raw materials, and that all has an impact on costs.
I want to talk, as many Members have done, about the social value of the pub as a hub in our towns and villages. My hon. Friend the Member for Hartlepool (Mr Wright), who is no longer in his place, said that Hartlepool once had the highest concentration of pubs in the country, a claim that many of us could make for our constituencies. In the port communities of Holyhead and Amlwch in my constituency there is certainly a tradition of pubs, but they are more than just public houses serving food and drink; they are social hubs. Many local sports clubs meet in the public houses, particularly in the winter when they cannot train. I have known one or two rugby and football clubs that spend an awful lot of time in pubs; they get their business over with very quickly and then get on to the drinking and the sandwiches. The pub is an important place for people to meet in those communities.
I pay tribute to the hon. Members who tabled this important motion. Yes, it is specifically about beer duty, but I am sure that the Minister and the Treasury will take on board all the points that have been made today. It is nonsense to impose a duty that does not make any money for the Treasury. That is the nub of the debate. But many other issues have been raised by Members in their contributions. It is worth emphasising the importance of the pub, but we must not forget the supply chains that help the pub, hotel and catering industries across the United Kingdom, which are major contributors to the British economy.
I will draw my remarks to a close as I know that other Members wish to speak. I do not want to walk past pubs in my constituency with “For Sale” signs outside, and I do not want to see empty pubs; I want to be invited by members of the local community to open a pub, because I want to see a renaissance of the great British pub in both rural and urban communities across the country. The Government can make a difference by having the review and looking at its results and, if it shows that the duty is cost-neutral or loses the Treasury money, they will have my backing for coming off the escalator and putting the emphasis on the great British pub.
Peter Aldous (Waveney) (Con)
I am grateful to my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing the debate and for their hard work and to the 104,000 people who signed the e-petition. I wish to speak in favour of the motion, and there are compelling reasons for doing so. First, if we do nothing and carry on regardless, an iconic British business will wither on the vine—or should I say the hop? Secondly, small businesses will close at an accelerating rate, with a devastating impact on individuals, families and communities, both urban and rural. Thirdly, it is important to base fiscal policy on well-founded and up-to-date research. Times have changed significantly since 2008.
Indeed, the face of the industry has changed dramatically over the past 30 years. In East Anglia, great names such as Lacon’s, Bullard’s, Mann’s, Tollemache and Cobbold have long gone. Visionary and iconic businesses remain: Adnams, St Peter’s brewery and Green Jack in my constituency, the latter being the most easterly brewery in Britain. We owe it to them to promote a level playing field on which they can develop their businesses, play a full role in the economic recovery and create new jobs.
If we go on as we have been doing, we will kill the goose that lays the golden egg. Beer duty has risen by 40% since 2008, yet the pub trade has shrunk by a third over the same period. Britain pays over 40% of EU beer tax but consumes only 13% of beer sold in Europe. Investment in the beer and pub sector has shrunk dramatically, from over £2 billion in the late 1990s to £600 million in 2010. A sector that employs 1 million people, often young people, needs nurturing, not suffocating.
If there was a rationale for introducing the escalator in 2008, it has long since gone. Time are very different: inflation, VAT and input costs are all higher; there has been a poor harvest; energy costs are higher; and these are compounded by a fall in household incomes. The escalator today is in many respects a straitjacket; it is no longer fit for purpose in these straightened times.
It is important to bear in mind the unique nature of the industry, the effect of the punitive form of taxation and its potential for growth if properly nurtured. It is very much a British industry, with a supply chain that creates a significant number of jobs. As we have heard, one job in brewing supports one job in agriculture, one job in retail, one job in distribution and 18 jobs in pubs and clubs. In my constituency, more than 1,200 people are employed directly or indirectly as a result of the industry, and there are nearly 100 pubs and the industry puts £26 million into the local economy. Some 85% of pubs are small or medium-sized enterprises, the foundation stone on which we must build the recovery. They are particularly vulnerable to rises in duty, being less able to absorb duty and other cost increases. It is also important to take into account the community and social benefits of pubs, both in villages and in urban areas.
Pubs are under attack on all fronts. The landlords who lease from pub companies find themselves confronted with excessive rent increases. Landlords find themselves strangled by red tape; lock-ins have long since gone, having been replaced by late-night sessions of burning the midnight oil and completing VAT returns. Many are told, “You don’t want to rely on beer; you want to get into food.” Yet landlords find themselves competing on an unlevel playing field with supermarkets as they have to charge VAT on their sales.
Andrew Percy (Brigg and Goole) (Con)
On that point, I commend the Percy Arms in Airmyn, a pub that has transformed itself, but purely around food, because making money out of beer has become almost impossible.
Peter Aldous
My hon. Friend makes a good point.
It would be churlish not to commend the Government for the good work they have done. They have made it easier for pubs to put on live events, they have introduced the community right to buy through the Localism Act 2011, and the forthcoming proposed introduction of a minimum unit price for alcohol will help to provide a level playing field.
However, the elephant in the room remains. This brings me back to the motion and the need for a full review of the economic and social impact of the escalator before decisions are made in next year’s Budget. Tax policy must be underpinned by proper research. The research that has been carried out shows that there will be devastating unintended consequences if the escalator is retained. Oxford Economic Research Associates has shown that if the rise goes ahead, there will be 5,000 job losses and the additional beer duty received will be offset by a loss of employment, lower revenues from other taxes and an increase in social security spending. I urge the Government to carry out the review with all haste.
Sir Bob Russell (Colchester) (LD)
I wish to pay tribute to Mr John Parrick, the doyen of Colchester’s publicans and the town’s longest-serving landlord, who in little more than three months will celebrate 27 years as “mine host” of the Odd One Out public house, which I had the honour to open officially on 16 February 1985. The former Mermaid pub had been shut almost a year earlier by the late brewers Ind Coope and John Parrick, a former military policeman who at the time was a staff sergeant at the military corrective training centre in Colchester, left the Army and took the bold step, alongside his wife Bridget, of taking on the abandoned hostelry, which he has turned into an incredible success story, a dream establishment for those who appreciate real beer and real cider.
Under Mr Parrick’s stewardship, The Odd One Out has won many local and regional awards from the Campaign for Real Ale for its range of real beers and ciders. His is a traditional pub, which resonates with a bygone age and has been in the “Good Beer Guide” for 25 consecutive years. However, such is the plight of community pubs—and not exclusively because of the high taxation imposed by successive Governments—that Mr Parrick’s reward is lower than the minimum wage, given all the long hours that he is putting in. He made that clear to me last night that, having studied the economics and the balance sheet. The situation must be even more dire for many other community pubs that do not have the niche appeal of The Odd One Out, particularly if they are tied to the onerous terms of pubcos and brewers.
I hope that this debate will lead to the Government’s restructuring of the taxation on alcoholic drinks. If the coalition is serious about localism, it should know that the local pub is an important part of many of our urban and rural communities. Fiscal policy should be tailored to help small community businesses, including neighbourhood public houses, which are shutting at the rate of a dozen or so every week.
Sadly, a cut in the tax levied on beer sold in community pubs is too late to save The Maypole and The Drury Arms in my constituency, which both shut earlier this year—or, for that matter, The Beer House and The Clarendon, which are currently closed, although many hope that the closures will be temporary. There is uncertainty at The Britannia, which shut recently, although there is talk of its reopening as a gastropub, and at The Lord Nelson, which displays a “For Sale” sign.
I am grateful to Colchester historian Mr Jess Jephcott, author of “The Inns, Taverns and Pubs of Colchester”; he has provided me with useful comments about the decline of the local pub, that great British institution, because of the actions and inactions of successive Governments. Today’s debate about the beer duty escalator must not be viewed in isolation as we look at this sorry saga. Mr Jephcott is an authority on public houses, both historic and contemporary, so I value what he says. He told me:
“Whilst the Beer Escalator issue is an important one, and does play a part in the loss of our pubs, there is a far more damaging issue—that of pubcos imposing unrealistic terms on their tenants. I have this week been reading about Vince Cable’s frustrations with self-regulation over this. It is the pubcos that are killing our pubs, to my mind.”
With great emphasis, he added:
“Tenants are tied to the pubco and cannot shop around and negotiate prices. That is precisely what is killing many of our pubs.”
He says that free houses, or those free of tie arrangement, thrive:
“Cases in Colchester are The Odd One Out, Fat Cat, etc. No tie, no problem.”
Mr Jephcott concluded, with a sigh:
“This is our heritage as well as our way of life. Yet Colchester is plagued by drunks who get drunk before they go out and by bars that make matters worse with their special deals to get them drunker.”
That scenario, of course, afflicts towns and cities throughout the country. Successive Governments have failed to address the scandal. Taxation policies have made matters worse. We need to amend the tax levy on beer sold in our traditional public houses. We should have a tax-neutral approach to keep the Treasury happy and bring huge social benefits, including job retention and creation, rather than there being the loss of jobs that we continue to witness in the sector.
Most publicans of neighbourhood and village public houses run responsible establishments. Their customers should be rewarded, not financially penalised because of the irresponsible marketing carried out by supermarkets and mega-drinking establishments.
I should declare an interest: Adnams Broadside, brewed on the Suffolk coast at Southwold, is my favourite tipple. Some have suggested that I should promote the former Essex brewer Ridley’s Old Bob beer, which has now been absorbed within Greene King’s product range, but I will stay loyal to Adnams and Broadside.
In conclusion, I should say that this debate is taking place in British pub week. I commend those who have secured the debate. I shall resist the temptation of listing every public house in my constituency, but they are all doing a grand job and I hope that they can all be saved.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I will have to drop the time limit to four minutes. I ask hon. Members not to make interventions so that we can get everybody in.
Pauline Latham (Mid Derbyshire) (Con)
I congratulate my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland). I know that my hon. Friend the Member for Burton has a large brewery in his constituency, but I want to speak up for micro-breweries. My understanding is that there are more micro-breweries and members of CAMRA in Derbyshire than anywhere else. In Derby we also have a beer king, whose ceremonial role includes opening the annual beer festivals in Derby and representing Derby when the city mayor and others go to our twin city of Osnabrück in Germany.
In my constituency of Mid Derbyshire, the brewing and pub sector is a vital and dynamic part of the local economy. It creates jobs, adds to the local economy and is at the centre of the hospitality industry, our cultural heritage and the social life of every community. A world heritage site runs through my constituency.
The beer and pubs industry is a vital part of the local economy in Mid Derbyshire. There are 75 pubs and three micro-breweries, which generate 1,076 jobs—some 307 of those are filled by young people between the ages of 16 and 24. The point about the employment of young people is important, because in spite of recent good news on the employment front, people in that age group continue to find employment very hard to come by.
Some 65% of staff at the Derby Brewing Company are under 25; the company also operates entry-level management schemes that have promoted many promising young people from bar-staff to senior-manager level, none more so than at my local, The Queen’s Head in Little Eaton, which has recently reopened. The brewery is working towards brewing real ales with a much lower alcohol content; it is working down towards a 4% beer.
This debate is critical to business in Derbyshire. Representatives of the Derby Brewing Company, which owns three pubs, have told me that since the introduction of the beer duty escalator, excise duty has increased by 42%—almost 20p per pint.
My husband and I are supporters of the Campaign for Real Ale because we believe that going to the pub, particularly the local, is a core British tradition and so is enjoying great beer, although personally I am not a beer drinker. Unfortunately, however, beer sales in pubs and clubs have fallen by 23% and more than 6,000 pubs have closed. I believe one of the main reasons for that is that beer taxation now costs the average pub around £66,000 per year. I strongly believe that those unintended consequences go completely against the Government’s strategy for economic growth. The Treasury forecasts a small increase in duty revenues from the policy—so small that no additional revenue is predicted in the Budget document.
I recognise that we have alcohol-related problems in our society that we need to tackle, as they cost the NHS billions of pounds every year. There is also the crime and disorder associated with alcohol and the fact that alcohol is the second biggest risk factor for cancer after smoking. But trying to tackle those problems with increased tax at this time is not the right way forward. The issue is having a profound effect in Derbyshire; pubs continue to close across the county. Brewing and pubs are fundamental to British industry, generating a huge amount locally and nationally to GDP. In these troubled times, local pub owners are urging me, as their MP, to ask for their industry to receive some relief from the excessive duty increases. In Derbyshire, a change to the policy could make a big difference and safeguard jobs.
Richard Fuller (Bedford) (Con)
I very much welcome this debate and would like to draw attention to two aspects. I want to call for the economic and social impacts, both of which are equally important, to be covered in the review.
On the economic impact, there is the principle of the automatic above-inflation tax increases enshrined within the escalator principle. I shall address myself directly to the Minister, who is new to his post. I do not wish to test his mettle today, but he will be keen to make an impact so I ask him this. What ethics lead to a Government’s presuming that they should increase taxation—automatically, year on year—on such staples of life as beer and fuel? I can think of no more regressive taxation than to continue with above-inflation increases on those items.
We have already had a debate on the automatic fuel duty escalator; I am sure that the Minister heard the strong voices of those on the Government Benches arguing that the Government should abandon that policy. The same applies to beer duty. Many hon. Members have talked about the economic impact of the brewing sector in their constituencies. My constituency of Bedford is home to the largest family-owned brewery, Charles Wells, maker of Bombardier beer. What could be more patriotic than drinking Bombardier beer on St George’s day—or, indeed, any other day of the year?
Brewing is now taxed at 50% of its turnover. A 50% tax on brewing turnover will almost certainly tax our brewers out of existence. This is not an issue that the Treasury can avoid, and that is why so many hon. Members have spoken in favour of the motion.
Richard Fuller
I will not, if that is all right, because time is limited.
I would like to mention the social aspect of pubs. As part of “MP in a pub” week, which must be one of the easiest campaigns to organise that I have heard of, I met Nickie and Roger McGlory at The Half Moon. I am sorry for the impact on the profitability of The Half Moon during my session there! I have also spoken to Nigel and Sue Anstead at The White Horse, who, every single week, do something to support local charities and endeavours. This Saturday, many of us will be joining Paul Davies at The Cricketers Arms as Bedford Blues rugby club gets ready to thrash Newcastle in a very important game. Whether it has to do with sports or charities, pubs are an essential part of what we do in our communities.
The vital point, as several hon. Friends have said, is the role of pubs in ending pre-loading. When the Minister deals with this issue, will he also consider the imposition of minimum pricing such that the health benefits can more than outweigh the reduction in revenues from scrapping the beer duty escalator?
Dan Rogerson (North Cornwall) (LD)
It is a pleasure to follow the hon. Member for Bedford (Richard Fuller). As a Cornish exile in Bedford for a number of years, I am well aware of the great contribution that Charles Wells, and Wells and Young’s, make to the economy. I once saw the Blues beat Newcastle at Goldington Road, and I wish them every success this weekend.
Beer is part of the culture of this country. I do not mean that in the sense that the tabloid press would have us see it in focusing on the sad events we see on streets around the country, when most of the problem is not due to beer but to alcopops and novelty drinks, irresponsible promotions in the night-time economy, and people pre-loading before they go out in the evening. I am talking about the centuries of beer culture that we have in this country in producing an incredible, natural product. When the water was not safe to drink, beer was, and people would brew it at home. In the Victorian era, there was a huge growth in regional and family brewers, which—those that remain—are well- loved institutions in the parts of the country that they inhabit.
The pub is very much at the heart of the community, whether in a village or in an urban neighbourhood. In North Cornwall, they are where charitable events take place and huge amounts of money are raised, where clubs and societies meet, and where the fabric of the local community is stitched together. I was recently at The Bullers Arms in Marhamchurch, where the owner of the pub, having lost his most recent tenant, is concerned about its future and putting forward plans to build housing on part of the site. People in the village are very worried, but I know that by coming together they will guarantee the future of that pub and keep it there.
I am very fortunate to have in my constituency such small, innovative brewers as Penpont and Tintagel, and, more recently, Harbour brewery on the edge of Bodmin, and Frys. That is adding to the diversity of the beers on offer to local people and visitors to the area alike. We also have a great success story in Sharp’s, which was acquired a couple of years ago by Molson Coors. I was apprehensive about that. I feared, as did many local people, that it would buy the brands and shut the brewery down, but it did not. Instead, it has invested in those brands, and Doom Bar is now a fast-growing brand across the country. It has also created jobs for young people who are now getting into a career in brewing. It has brought increasing numbers of skilled jobs to the low-wage economy of North Cornwall. We need to underpin the industry by supporting pubs but supporting brewing too.
We have heard about the growth in wine drinking, which has happened without the need for any economic support. Can you imagine, Mr Deputy Speaker, a similar situation in France or Italy, with the wine industry needing to have a debate to try to get support from its own Government? I cannot imagine such a scenario, so why do we need to have a debate about the urgent need to support our brewing industry, which is the equivalent in this country?
Because our beer industry is so innovative and forward looking, with the growth in craft brewing, many people from across the world are coming here to learn these skills. As a result, we now see craft brewing in places such as Italy, America, Australia and New Zealand, where people look to the styles of beer that we brew—the stouts, the milds, the IPAs, and all those kinds of products. We must be proud of the contribution that our beer is making to the culture of the world, let alone the culture of this country. It would be such a small thing for the Government to take account of that by getting rid of this punitive and unrealistic levy on a core industry that could create many more jobs and do far more to underpin the lives of our towns and villages. I urge the Minister to listen to what everybody has said today.
Richard Drax (South Dorset) (Con)
Thank you, Mr Deputy Speaker, for calling me to speak in this debate. It is a pleasure to be tail-end Charlie, and to follow the hon. Member for North Cornwall (Dan Rogerson).
Richard Drax
In that case, I am probably the gunner instead.
It is a great sadness to me that a great friend of mine, David Woodhouse, who was the boss of a brewery in Dorset, has died before the beer duty escalator was removed, as I hope and believe that it will be. Aged 49, he died prematurely of a heart attack. This tax was one of his main concerns, fears and worries, because, sadly, every time it went up, he had to lay people off.
The beer duty escalator provides the perfect illustration of the law of diminishing returns: the higher the duty, the lower the volume of beer sold. Yet despite the evidence, brewing has been cruelly lumbered with a 2% above-inflation increase every year since 2008. That means a 27% increase in beer tax in the life of this Parliament alone. Beer taxation now costs the average pub about £66,000 per year, with 35p in every pound taken over the bar being passed on in taxes, most of them duty, and while beer prices have risen, sales have fallen sharply by 23%. Over 6,000 pubs, or thereabouts, have closed, and a pint of beer is, sadly, fast becoming an unaffordable luxury. In fact, the Office for Budget Responsibility forecasts very limited additional revenue from beer tax in the next two years, and the wider costs—the loss of jobs and reduced VAT and corporation tax payments—have not been accounted for.
In my constituency, more than 2,000 people are employed in the brewing and pub trade. They form a small but vital part of the quarter of a million people who work in the sector in rural constituencies. The Dorset brewery that I mentioned, Hall and Woodhouse, has just invested £5 million in a new brewery, which will safeguard more precious jobs. Its reward? Yet more duty on a pint of beer. In the struggle for growth, how can it make sense to strangle this vital part of the UK economy?
Pubs have historically been a focal point for a community—a place to meet, eat, drink and socialise. Our naturally brewed ales are world renowned, and pubs are high on every tourist guide’s must-see list. Smaller, tenanted pubs, in particular, are suffering, and each new rise in duty is nothing less than a kick in the teeth. We are penalising one of Britain’s oldest and most cherished industries. This is not a recipe for growth—something that this Government have banged on about day after day—nor is it fair. As we have heard, UK consumers now pay 40% of the total EU beer tax bill, yet we consume only 13% of the beer. I could argue that perhaps the EU officials are guzzling too much, but that would be facetious. We are driving people out of pubs, where, in the main, law-abiding citizens consume a low-alcohol drink in a controlled environment.
I see that my time is running out because, being the gunner, we are now down to four minutes. I shall therefore end by making this appeal to the Minister: on behalf of the breweries and all those in the business, not least in my constituency, and my friend David Woodhouse, who has sadly passed away, please get rid of this dreadful tax.
Jane Ellison (Battersea) (Con)
Thank you for calling me to speak, Mr Deputy Speaker. I am now officially tail-end Charlotte.
I want to make two brief points, the first of which concerns the nature of the debate, which is an ideal use of Back-Bench time. I congratulate the hon. Members who secured it from the Backbench Business Committee, of which I am a member. The Government have reasonably taken the view that, for the most part, Thursday debates are advisory and give them a steer on what people think about policy, and this really is an advisory debate. It has painted a picture—a vivid mosaic—of the micro-economic growth that is taking place in lots of constituencies all over the country, and many hon. Members have spoken on behalf of enterprises that are far too small to employ clever lobbyists like so many of the big industries do. It is therefore an ideal use of Back-Bench time to allow hon. Members to talk about the incredible enterprises that are growing and generating wealth.
In Battersea, Sambrook’s brewery, which I saw start when I was a parliamentary candidate in 2008, has grown. It is employing more people and brewing more beers. It has gone from being an enterprise that started in 2008 to winning a world beer award last month. We have heard from other hon. Members that that is happening all over the country. Sixty-eight per cent of the small breweries—the micro-breweries—in this country are investing and growing and reporting that they are planning for growth. This is an important area for driving growth, but it is in danger of having too small a voice, because we perhaps tend to focus on bigger industries with more organised lobbies. We as Members of Parliament are, I hope, the organised lobby for our small enterprises—our pubs, small breweries and micro-breweries. I hope that that is what we have done today by painting a picture of lots of individual enterprises throughout the country that, in their own way, are making important contributions to economic growth in their area.
In 2012, the number of breweries in Britain has exceeded 1,000 for the first time since the great war, which is extraordinary, but that success story cannot continue unless there are pubs in which to serve the ale. I therefore hope that the Minister will consider the picture that has been painted and use this opportunity to say that this is the very moment to back this important engine of economic growth in Britain.
Graham Evans
Was that a penultimate, or just a Charlie?
I must confess that I have stopped many barrels of beer going sour over the years. Indeed, I met Mrs Evans in my local pub, The Church House inn in Bollington near Macclesfield, when I was a wee slip of a lad—I was 20-something—serving behind the bar. My mother worked in a pub, by brother and sisters worked in a pub and my father spent most of his time in a pub, so it is fair to say that I grew up in pubs.
Many hon. and right hon. Members have mentioned socialising and communities during this excellent debate, which was ably secured by my hon. Friend the Member for Burton (Andrew Griffiths). As has been said, pubs are often at the heart of the community. They are not just watering holes, but the glue that binds the fabric of local society. The decline in the number of pubs across Britain is, rightly, a source of concern for us all, so I welcome the steps that the Government have already taken to halt that decline. The right to buy has given many local communities the agency to control their own environment, and I sincerely hope that the rate at which pubs are closing continues to drop, as it has done in the past two years.
We are here to discuss the economic value of the beer and pub industry. It has contributed £21 billion to the national economy this year, with some 60% of that coming from beer sales alone. It is understandable that groups such as the Campaign for Real Ale believe that the impact of the beer duty escalator will result in reduced beer sales and a reduction in profit for our hard-working publicans.
We are all aware that society’s relationship with alcohol has changed. With less money in people’s pockets, the appeal of cut-price booze from supermarkets is clear. Many hon. Members have touched on the social and health implications of that change in drinking habits. I welcome the Government’s commitment to a minimum unit price, which will encourage responsible drinking and, I sincerely hope, realistically allow pubs to compete with supermarkets.
It is also worth considering that the previous Government increased beer duty by 60% while spirits duty increased by a mere quarter. Unit for unit, spirits are becoming cheaper and cheaper, and their increased consumption makes it much harder to encourage responsible drinking.
Of course, we are in a difficult economic position. Alcohol excise duty makes an important contribution to reducing our inherited deficit, but it is clear that the escalator is of concern to publicans, constituents and hon. Members. I therefore urge the Minister to carefully consider the duty’s impact on the profitability of pubs, responsible drinking and the future of local communities before making recommendations for the 2013 Budget.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I first congratulate the Members who secured this important Backbench Business debate. We have heard a number of thoughtful, well-informed and impassioned contributions from hon. Members of all parties. I am sure that the various groups in the beer and pub industry that have provided briefings, met with hon. Members and given them information ahead of the debate will be pleased that their comments and concerns have been not only taken on board by Members from all parties, but reflected during the course of the debate. By my reckoning, there have been 20 speeches plus numerous interventions, and I think that that demonstrates the level of concern and the interest in this issue. The question now is whether the Government will not only take those concerns on board, but take some action in response to them. I look forward to hearing what the Minister has to say.
As we have heard, Backbench Business debates are important because they give everyone the opportunity—perhaps in a less partisan way—to explore issues and to come together and agree on certain things that need to be done. We may have differences of opinion from time to time, but none the less we are able to give advice and guidance on how we would like the Government to take things forward.
As we have heard, the beer and pub industry is a vital part of the economy, both nationally and locally. Many hon. Members have mentioned how local establishments in their areas contribute to the community. I will say more about that shortly.
In 2009, the industry paid more than £6 billion in tax, and the average pub will employ—we have heard this figure repeatedly today—about 10 people, many of whom will be young people who are trying to find their way into the job market or who are having difficulties in finding work at present. We have also heard that, according to the Beer and Pub Association, nearly £21 billion a year is contributed to the UK economy by the production and sale of beer. Worryingly, CAMRA’s latest figures—it released them only today—show that 18 pubs close every week across the UK. The hon. Member for Burton (Andrew Griffiths) referred to that in his opening speech and the point was repeated and reinforced by a number of other hon. Members, including my hon. Friend the Member for Hartlepool (Mr Wright), who gave an interesting history lesson on the number of pubs that used to be in his constituency. I am sorry that I have not yet had the opportunity to sample any of them; perhaps he will invite me.
Cathy Jamieson
I think that I have just been invited. In order to take my duties as a shadow Minister seriously, I have now identified a whole list of areas throughout the UK where I have not yet had the chance to sample the local hostelries. It would be remiss of me if I did not plan a tour at some point over the coming months.
To return to the important points, I have also heard from my local publicans and CAMRA members. Some of them spoke to me about the beer escalator in particular at the recent Ayrshire real ale festival, which was held in the constituency of my hon. Friend the Member for Central Ayrshire (Mr Donohoe) at which I had the very difficult Friday afternoon task of judging one of the beer contests. I am sworn to secrecy as to which beer won the Scottish heat. All will be revealed in due course. CAMRA members and, indeed, many other people who had travelled to the beer festival took the opportunity to make their case to me.
We have heard about the e-petition, which now has more than 104,000 signatures. I am sure that all Members appreciate the work of both the British Beer and Pub Association and CAMRA in providing information by constituency, and I believe that important information from Oxford Economics has been circulated to all of us, showing how the beer and pub industry affects our own areas.
In my constituency, which is next door to that of my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) and not dissimilar from it, there are about 88 pubs. As she said, they provide an average of £80,000 a year to the local economy, and they support about 894 full and part-time jobs. I am aware that that is not as many as in the Economic Secretary’s own constituency, where I understand there are slightly fewer pubs but also a brewery. I am sure he is well aware of the importance of jobs in the industry to his local area, as I am in my area.
I want to put the Opposition’s position on record. I do not want to introduce a discordant note, because everyone has spoken in favour of the motion so far. I hope that the Economic Secretary will take that on board. However, it is incumbent on me to explain why we will support the motion. [Interruption.] I hear somebody say from a sedentary position that it is because we are in opposition, but I have some important points to make that are pertinent to the debate.
A number of Members have referred to the impact of VAT, and we believe that the Government made a mistake in increasing it back in January 2011. That hit families hard, costing a couple with children the equivalent of £450 a year. It also hit confidence, cost jobs and undermined the economic recovery.
The extension to the beer duty escalator was introduced when VAT was 17.5%. The rise in VAT was equivalent to a 12% increase in duty, and in 2011, the coalition Government’s first full year, there was the biggest ever pence per pint annual increase in the beer tax. A couple of hon. Members have mentioned that the VAT rise increased the price of a pint in a pub by some 5p but the price of a can of beer in a supermarket by less than 2p. It has hit pubs harder than supermarkets, and it risks hitting the pub trade harder than the duty increases have.
As hon. Members will know—we have said it in a number of previous debates—as part of the five-point plan for growth and jobs that we set out back in 2011, we called for a temporary VAT cut back to 17.5% until the economy was growing strongly again. We wanted to ease the squeeze on families and ensure that the economy was moving. That would have had an effect on the price of beer in pubs, and I hope that the Government will take account of VAT when considering whether to support the motion.
We will not oppose the motion, because we believe that there should be a review of the beer duty escalator and its impact on the economy and jobs in the pub trade. It would clearly need to include an examination of the impact of VAT as part of the wider debate and discussion. As a number of Members have said, VAT amounts to half the total tax paid on beer in pubs. A review would also provide an opportunity to consider other issues that have been raised today, including barley prices.
A number of Members, including my hon. Friend the Member for Midlothian (Mr Hamilton), have made the point that pubs are at the centre of our local communities. He had been doing some research—desk research only, obviously—by comparing prices in local establishments and supermarkets. I note that Dalkeith miners club is a responsible establishment that is well worth visiting.
A number of hon. Members have mentioned their concerns about the traditional community-based pub disappearing, not only in the rural areas to which many Members have referred but in urban ones, where the issues are slightly different. In rural areas, many pubs are closing because they find it difficult to sustain custom for a range of reasons. In urban areas, as we have heard from a number of Members including my right hon. Friend the Member for Southampton, Itchen (Mr Denham), supermarkets, off-sales and other forms of licensed trade are appearing instead of the traditional pub. As Members have said, that changes the culture and our approach to alcohol and can bring different problems to local communities. Those points have been made powerfully during the debate.
I realise that time is short, so I will conclude. I ask the Minister to give thought to all the points that have been made today, and specifically to ensure that he links up with Ministers in the Department for Business, Innovation and Skills to ensure that the wider economy of the pub trade and the brewing industry is seen as an important issue for BIS, not simply a matter for the Treasury.
The Economic Secretary to the Treasury (Sajid Javid)
I congratulate my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) on securing what has been an excellent debate, and on the excellent work that they do through chairing the all-party beer group and the all-party save the pub group respectively. I also thank all Members who have contributed to the debate—I, too, counted 20 Back-Bench colleagues—as well as the 104,000 people who have signed the e-petition and all Members who are in the Chamber today.
Richard Graham (Gloucester) (Con)
Does my hon. Friend agree that the British brewing sector, British pubs and the British people have paid a heavy price for the previous Government’s beer duty escalator? May I urge him to hold a review and then do what Treasury Ministers have done to the previous Government’s fuel duty escalator, which is to stop it? In that way, he will deserve a celebratory pint from all my constituents in Gloucester, a pint of beer from the—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The Minister will not have time to drink the pint if we have such long interventions.
Sajid Javid
I thank my hon. Friend, and I will come on to that point.
The Government really do recognise the importance to the British economy of pubs and brewers. I fully support the industry, and I know that Members of all parties would like to see it prosper. We have heard a lot from hon. Members about beer duty, but let us be clear that the previous Government introduced the escalator. They increased beer duty by 60% while they were in office, and in fact for the poorest households it went up by 80%. That was the inheritance that we had to deal with. At the same time, as we all know, we were burdened with a huge budget deficit of £159 billion, or 11% of gross domestic product, which was greater than that of any other developed country. That inevitably meant that the incoming Government had to take some difficult decisions that the Labour party dodged. We had to deal with that legacy.
We set out a clear plan to deal with the deficit, part of which was the planned increase in beer duty rises until 2014-15, about which we have heard so much today. We have announced no changes to that policy. Cancelling the planned 2% duty rise represented by the escalator portion of beer duty would cost £35 million next year and £70 million the following year. If that tax were cancelled, the revenue would have to be recouped one way or another, either through further public spending cuts over and above what is already necessary or by finding increases in other taxes or duties.
Richard Drax
The whole point is to reduce taxation and thereby encourage growth and employment. That will create wealth, which will inevitably end up in the Treasury’s pockets. Is that not the Conservative way forward for the long term?
Sajid Javid
My hon. Friend makes a good point, but I think he will accept that the Government need to raise taxes to pay for public services in one way or another. However, we continue to keep all taxes and duties under review, including the ones that have been discussed today, and we regularly monitor alcohol duties to ensure that we are on top of their impact on the industry and consumers.
Cathy Jamieson
I hear what the Minister says about keeping matters under review, but in my experience that sometimes means keeping something on a shelf. Is it not time to dust down some of that information and hold a review that reaches a conclusion?
Sajid Javid
I assure the hon. Lady that, as an incoming Minister who is new to this portfolio, I plan to keep nothing on the shelf. I will be looking at everything, which includes all duties and taxes for which I have responsibility. That would be a sensible thing for any Minister to do.
Let me say a word about the importance that the Government attach to pubs and brewers in the wider economy. The sad truth is that pubs have been closing for many years, and that decline has been influenced by many factors, not just alcohol duty. Lifestyles and consumer tastes are changing and individuals have increased choice in their leisure activities. Those things have an impact, and those factors—not just alcohol duty— determine the size of the pub sector. The number of pubs continued to decline in the early 2000s, despite relatively flat alcohol duties in real terms. The Government are rightly doing a lot to support pubs and brewers, and those businesses will benefit from many decisions taken in the tax system and elsewhere.
Let me give a couple of examples. Changes to business rates mean that small pubs can benefit from small business rates relief, or rural rates relief. The Government have extended the small business rates relief holiday until March 2012. We have also legislated to allow local authorities to give grant discounts to businesses, including pubs and brewers, as appropriate.
Other wider actions will also benefit the pubs and brewing industry, and the cut in corporation tax from 26% to 22% by April 2014 will help brewers. Small businesses such as pubs benefit from the small profits rate, which has fallen from 21% to 20%. The change in machine gaming taxation will affect the majority of pubs. From February 2013, machine games duty will replace the current system of taxation on gaming machines, and more than 70% of pubs will benefit from that move to MGD through reduced tax liabilities.
My hon. Friends the Members for St Austell and Newquay (Stephen Gilbert) and for Mid Derbyshire (Pauline Latham) mentioned small breweries’ relief, which helps small brewers up and down the country, and that is vital to our economy. The right hon. Member for Southampton, Itchen (Mr Denham) mentioned entrepreneurship. The Government have supported entrepreneurship by lowering beer duty for small producers, and helping small brewers invest and grow. There were 394 small breweries in 2002 when that relief was introduced, and today there are more than 730. My hon. Friend the Member for Bristol North West (Charlotte Leslie) mentioned the Live Music Act 2012, which came into force on 1 October and is already making it easier for pubs to play live music. The Government have launched a £90 million support programme to help eligible community organisations take on the community ownership and management of assets that are important to them, including pubs.
A number of hon. Members, including the hon. Member for Midlothian (Mr Hamilton) and my hon. Friend the Member for Harrow East (Bob Blackman), mentioned the Government alcohol strategy. Alcohol drunk in moderation can have a positive effect on the well-being of adults, but excessive consumption has negative consequences on both individuals and wider society. The Government published their alcohol strategy earlier this year, which includes plans for minimum unit pricing. Setting a floor price for alcohol will prevent heavily discounted alcohol from being sold in supermarkets and off licences. Raising the price of cheap alcohol will help tackle excessive alcohol consumption, and I hope that pubs will benefit from minimum unit pricing once the demand for cheap alcohol in the off-trade has been tackled.
The Government recognise the importance of pubs and brewers to their local communities and the wider economy. We have done much to try and support that industry—I have given a few examples, which I hope was helpful—and it makes sense for us to keep looking at other ways to continue that support.
May I thank again those who sponsored the debate and all hon. Members who took part, as well as all those who signed the public petition? In conclusion, I will respond to a comment that was made by the mover of the motion, my hon. Friend the Member for Burton at the start of the debate. If I remember his words correctly, he challenged me to become known as “the Minister who saved the great British pub.” I am very tempted, although I would have to compete for that honour with the Under-Secretary of State for Communities and Local Government (Brandon Lewis), who has responsibility for pubs. I am sure, however, that we can work well together and perhaps jointly take that title.
I assure all hon. Members who have contributed to the debate that I have been in listening mode. This debate has been valuable and showed just how important debates tabled by the Backbench Business Committee can be. I will take on board a lot of messages from the debate, and ensure that the Government do even more to help the pubs and the brewing industry.
Andrew Griffiths
I thank all colleagues who have contributed to the debate so passionately and knowledgably, and I thank the Economic Secretary to the Treasury and the Minister responsible for community pubs, who has been present throughout. Both I and my colleague, the hon. Member for Leeds North West (Greg Mulholland) have been encouraged by the positive way in which both Ministers have engaged with the issue in the few short weeks they have been in office.
We are clearly disappointed that the Minister was not able to give us more positive news from the Dispatch Box, but he should be in no doubt about the clear view of the House. Every Member who has contributed to this over-subscribed debate, has spoken out against the beer duty escalator and in favour of Britain’s pubs and brewers. Let me assure the Minister that we will not let the matter rest there, and he would not expect us to. We will continue this campaign because it is not just a business or brewery that is at stake, but the future of a central part of our communities. We will continue to campaign and do all we can to save Britain’s pubs and breweries.
Question put and agreed to.
Resolved,
That this House welcomes the essential contribution of brewing and pubs to the UK’s economy in providing one million jobs; notes the 42 per cent increase in beer duty since 2008 and HM Treasury forecasts that have shown that there will be no additional revenue generated from beer duty despite planned increases over the next two years; is therefore concerned about the effectiveness of this policy in tackling the Budget deficit, its impact on valued community pubs and the continued affordability of beer in pubs; and therefore urges the Government to support the UK’s beer and pub sector by conducting a thorough review of the economic and social impact of the beer duty escalator to report back before the 2013 Budget.
Sir Bob Russell (Colchester) (LD)
On a point of order, Mr Deputy Speaker. Would it be possible for you to discuss with Mr Speaker the conduct of the previous debate? Injury time was given on numerous occasions owing to hon. Members almost wandering in off the street, lobbing a bit into the debate and then disappearing. Perhaps injury time should not be allowed. In particular, the hon. Member for Bedford (Richard Fuller) and my hon. Friend the Member for North Cornwall (Dan Rogerson), were prevented from giving their thoughtful speeches in full, yet they were signatories to the motion.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I have a lot of sympathy with the hon. Gentleman, although as he knows, that is not a point of order. He may wish to take the matter up with the Procedure Committee and it will then be for the House to decide.
Air Passenger Duty
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Priti Patel (Witham) (Con)
I beg to move,
That this House believes that the UK’s air passenger duty acts as a barrier to economic growth and deters both inward investment and inbound tourism; notes the financial impact on families of the rising costs of air passenger duty; further notes the impact on British businesses wishing to export and take advantage of business opportunities overseas; notes that the current air passenger duty regime is the highest air passenger tax in the world, which makes the UK less competitive than countries with lower aviation taxes; further notes that over 200,000 members of the public are calling for a review of the economic impact of air passenger duty; calls on HM Treasury to commission a comprehensive study into the full economic impact of air passenger duty in the UK, including the effects on jobs and growth, reporting in advance of the 2013 Budget; and calls on the Government to use the evidence from the study to inform future policy-making.
I am grateful to members of the Backbench Business Committee for granting this timely debate in advance of the autumn statement next month, and I pay tribute to the outstanding efforts made by the fair tax on flying campaign in securing the support of more than 200,000 members of the public who have lobbied right hon. and hon. Members on the matter. The campaign has given families and businesses across the country a strong voice to express their opposition to air passenger duty.
I also pay tribute to colleagues on both sides of the House who have supported the call for this debate, including my hon. Friend the Member for Crawley (Henry Smith) and the hon. Member for Blackley and Broughton (Graham Stringer), whose early-day motion influenced the wording of the motion. In addition, as part of its recent inquiry into the matter, the all-party aviation group, chaired by the hon. Member for Central Ayrshire (Mr Donohoe), has produced compelling evidence in support of an economic review into air passenger duty.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Of late, I have received more representations on this issue than on any other. It is important that the hon. Lady has been able to raise this issue, and she can count on considerable support.
Priti Patel
I thank the right hon. Gentleman for his remarks. All hon. Members feel very strongly about the representations we have received. The purpose of the debate is to give the issue of APD a thorough airing and to make those representations to my hon. Friend the Minister.
The motion calls on the Treasury to respond to the concerns of 200,000 members of the public and business representatives about the air passenger duty system. It specifically calls on the Treasury to conduct a comprehensive study of the system’s full economic impact and urges the Government to use the evidence gathered from the study to inform future policy making on aviation taxes.
The evidence that I have seen, the views of families and businesses in my constituency, and views from the aviation sector, suggest it is time that the Government considered aviation taxes.
Philip Davies (Shipley) (Con)
I commend my hon. Friend for introducing the debate. Is it not a question of making the UK competitive around the world? In the previous debate, the Minister said that if we cut taxes on one thing, it will mean either more spending cuts or increases in taxes elsewhere, but should not the message be, “Let’s cut air passenger duty and cut spending”? After last night’s vote, perhaps the Government could start with the EU.
Priti Patel
APD has a detrimental impact on our competitiveness, which is why we are calling for the economic impact. I will come to competitiveness later.
I hope my hon. Friend the Minister will be open-minded to the concept of looking at the financials and to doing an economic impact assessment, because families and businesses feel that APD is a punitive tax. Research demonstrates that the costs to the wider economy are far greater than tax receipts for the Treasury. The World Travel and Tourism Council estimates that the cost to the economy in 2012 will be £4.2 billion, and as many as 91,000 jobs.
Sir Malcolm Bruce (Gordon) (LD)
I commend the hon. Lady for introducing this extremely important debate. I represent Aberdeen airport. We are doubly disadvantaged, first because we are much more dependent on air travel—it takes seven and half hours to get from Aberdeen to London by train—and secondly, we must pay tax twice if we inter-line in London. That gives us an incentive to use continental rather than UK airports.
Priti Patel
The right hon. Gentleman touches on both the cost of APD and our competitiveness. A 2011 York Aviation report estimated that Scotland would lose 1.2 million passengers, 148,000 tourists and around £77 million in the period up to 2014.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
Is the hon. Lady aware that the Scottish airports consortium has published a report today that says that Prestwick airport, which is in the constituency of my hon. Friend the Member for Central Ayrshire (Mr Donohoe), and which is very important to the whole Ayrshire economy, is the worst affected in Scotland in percentage terms? It will lose 14% of the traffic it currently hosts.
Priti Patel
The hon. Lady demonstrates the scale of the challenge, and why we need a review.
I am sure right hon. and hon. Members are aware that Britain has been ranked 134th out of 138 by the World Economic Forum on air taxes and airport charges. We clearly have a major problem. I am unapologetic in my belief in lowering taxes, which is the most effective way in which to promote sustainable growth in the economy. The figures demonstrate how damaging and counter-productive air passenger duty is becoming to the Government’s growth agenda.
I recognise that the current APD system was introduced by the previous Government and note that it raises £2.9 billion for the Treasury, which is a significant sum of money. I do not doubt that it is an essential contributor to removing and reducing the Government’s deficit, but when taxes cause more harm than good, they need to be reviewed and reformed.
Mark Garnier (Wyre Forest) (Con)
I congratulate my hon. Friend on introducing the debate. Does she agree that APD can act as a barrier to expansion for some regional airports? Were it not for the high level of APD, they could attract other carriers, thereby rebalancing our economy.
Priti Patel
I completely agree with my hon. Friend. That is part of the challenge of our wider aviation policy and strategy.
Already in this Parliament, the Government have rightly recognised a number of counter-productive and damaging taxes, and scrapped a number of them, including the cider tax, the jobs tax and the broadband phone tax, and the planned increase to the small profits rate was replaced with a cut. On that basis, I urge the Minister to consider the economic impact of APD.
Iain Stewart (Milton Keynes South) (Con)
I am grateful to my hon. Friend, who is being generous in giving way. APD will be considered by the Select Committee on Transport when we begin our aviation inquiry. APD has an economic impact, but it is critical to the debate on the UK’s aviation capacity. Perhaps she will refer to that later in her speech.
Priti Patel
The Davies commission has a role. When considering the future of APD, we must remember where we stand internationally in terms of competitiveness. Britain is in a global race, and competing in a global environment that is tougher and more competitive than ever before. Foreign businesses, which can bring much needed investment to our economy, can relocate to other countries. Our competitors in Europe and throughout the world are all too ready to recognise that. Prior to being elected to the House, I saw how our competitors were on standby to welcome new investment, particularly from emerging markets.
Fiona Mactaggart (Slough) (Lab)
Businesses in Slough tell me that they have invested in the town I represent because of its proximity to Heathrow. Some international companies are thinking of disinvesting because of the insecurity of Heathrow’s future. That is a classic example of the importance of airports to inward investment in the UK, and particularly the importance of what used to be the premier airport in Europe.
Priti Patel
The hon. Lady makes a valid point. I have no doubt that right hon. and hon. Members recognise the global trends and the direction of travel when they see the rise of super-hubs and big business destinations, such as Singapore, Dubai and Mumbai. There is certainty around their aviation and economic strategies, and we are competing against many big international centres. We must remain competitive to survive. Tax rates that are higher than those in other economic centres put businesses off when they are making investment choices and decisions. Attracting foreign direct investment is an essential component of the Government’s plan for growth, and current APD rates are a barrier to foreign investors who are looking to expand into the UK.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The hon. Lady is making a great speech. Does she agree that APD, as a gateway tax, sends a signal and puts down a marker, and leaves a bad taste in the mouth for many who are thinking of coming to the UK? Their first taste of the UK, and the first piece of information they have about it, is the very high-tax regime to get into the country.
Priti Patel
The hon. Gentleman makes a valid point on how counter-productive taxes such as APD are when it comes to inward investment and the attraction of Britain as a place to do business.
Martin Craigs, chief executive of the Pacific Asia Travel Association, has stated:
“The UK is an island trading nation, air services are the vital lifeblood of modern global commerce. The UK Air Passenger Duty is now the world’s highest by a wide margin. It is certainly turning away tourism and trade from the world’s fastest growing economic region”,
which, of course, is Asia-Pacific.
APD also acts as a deterrent to British businesses that are looking to exploit lucrative business opportunities elsewhere in the world, and particularly in emerging markets. Businesses in my constituency, including small and medium-sized enterprises, provide more than 80% of local jobs. They are hit hard by APD. They want to export more, but APD is a barrier.
Dr Phillip Lee (Bracknell) (Con)
Many of the businesses in my constituency are based there because of the proximity of Heathrow airport, like the businesses in the constituency of the hon. Member for Slough (Fiona Mactaggart). Many of my constituents who work at Heathrow are concerned about the level of APD. It seems perverse that, at a time when our trade is becoming more non-EU, we are discouraging or making it more difficult to trade with those parts of the world that continue to grow.
Priti Patel
I thank my hon. Friend for his intervention. As I said earlier, this tax is seen as counter-productive when it comes to inward investors, and we have to tackle that. One business man has written to me saying that the tax is having a major impact on both new business opportunities and maintaining current business. A reduction in it would bolster the aviation industry in the United Kingdom. Another has commented:
“I am a frequent business traveller trying my damndest to provide export business for this country and it grieves me to be paying such a punitive tax to travel on behalf of the country.”
A review of the economic impact of APD would show the true extent of the cost to businesses. In fact, the Government previously looked at the impact of APD on the Northern Irish economy and reduced APD to band A—currently, the standard rate is £26 and the reduced rate is £13—to ensure that Belfast could compete with Dublin’s air travel tax, which is just €3. Just as APD needed to be reformed to help Belfast compete with Dublin, APD should be reduced to help London’s airports compete not just with Amsterdam, Paris, Frankfurt and Madrid, but with many of the Asia-Pacific and other international hubs.
Naomi Long (Belfast East) (Alliance)
The hon. Lady is making a compelling case. The Irish Republic has announced that despite the fact that its APD equivalent is only €3, it intends to scrap it, because it believes it is an impediment to growth in the economy.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We have a lot of Members who wish to speak and they should recognise that if they have already intervened, they will go down the list—and not be upset about that.
Priti Patel
I take on board the hon. Lady’s point.
As well as compromising trade, the cost of APD is felt by the aviation and tourism sector across the country. Last year, more than 30 million visitors came to Britain and spent £18 billion in our economy. We all want to see that number increase, and I want to see more foreign tourists flying to our international airports and travelling to see attractions elsewhere in the country—including the county of Essex, where the tourist sector supports 54,000 jobs and adds £3 billion to our local economy.
Heather Wheeler (South Derbyshire) (Con)
I congratulate my hon. Friend on securing this debate. She talks about Essex with passion, which is fantastic. In South Derbyshire we are equidistant from East Midlands airport and Birmingham airport and we have a huge amount of tourism, as well as many jobs based in the airport industry. I hope that Ministers listen to my hon. Friend and think again about a tax that is holding back growth.
Priti Patel
I thank my hon. Friend for her comments.
We would all like to see travellers from Brazil, Russia, India, China and a range of emerging markets choose to spend their dollars, rupees and other currencies here, but the current rates of APD are deterring inbound tourism, especially from developing countries with a growing middle class. Why would a family of four from China wishing to take a holiday in Europe come to Britain where APD would add a further £324 to their travel costs when they could hop on a flight to France and pay aviation taxes totalling £36 or to Germany where they would also pay less? The Government’s tourism strategy clearly warns that we are pricing ourselves out of the mass or middle market and will swiftly relegate Britain from being the sixth most popular destination in the world to the margins of the industry. The aviation sector supports more than 900,000 jobs and contributes more than £50 billion to GDP. I urge the Government to consider how APD can be reformed to support tourism as well as business.
In 1994, modest levels of £5 for short-haul travel in the EU and £10 for destinations beyond the EU were introduced. APD is now having a negative impact on our economy. When the then Chancellor of the Exchequer, the Minister without Portfolio, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), announced the introduction of APD in November 1993, he said it was a small duty on all air passengers from United Kingdom airports. The predicted revenue was £330 million a year. It now raises 10 times more than that, and a family of four travelling economy class to Florida this winter will pay £260 in APD.
Mr David Hamilton (Midlothian) (Lab)
That figure would be a lot higher if the family were going via one of the regional airports and could not get the same carrier, because they would pay two lots of APD. It is now proving very difficult for many families to have a decent holiday abroad.
Priti Patel
The hon. Gentleman makes his point clearly. APD is having a wider multiplier effect.
If that same family of four were travelling to Australia, they would have to fork out £368. Those figures are not small and are having a severe effect on households with modest incomes throughout the country, including pensioners who wish to visit relatives living abroad. We have all had correspondence from our constituents, and one of mine wrote to me on this point to say that she supports this campaign because both of her children and her grandchildren live overseas and flying is the only way to visit them.
Another has written:
“Having friends and family in the Caribbean we have to pay even more of this excessive tax than flying to the west coast of the USA although the distance flown is less.”
This tax is clearly having a negative impact on families. It is deterring foreign direct investment, it is holding back our businesses, and it is making our country less competitive. For those reasons, I hope that colleagues will support the motion and I urge the Minister to take on board the remarks that I have just made.
Mr Deputy Speaker
Order. I am introducing an eight-minute limit. I hope that I will not have to reduce that, but interventions cause problems.
Paul Goggins (Wythenshawe and Sale East) (Lab)
I congratulate the hon. Member for Witham (Priti Patel) on securing the debate and leading it as ably as she has this afternoon. She described how APD, from relatively modest beginnings, has become a real monster because of the economic problems that it creates and the burdens that it places on the aviation industry and our constituents when they seek to take a holiday. This is a tax on holidays. It is also a tax on the aviation industry and, as the hon. Lady argued so effectively, it is a barrier to economic growth.
Mr Tom Clarke
Like me, my right hon. Friend is a former Minister; in my case, I was a Minister for tourism. Is he worried by the representations we have received that indicate that APD at the current level—the highest in the world—is a disincentive for the kind of tourism that we expected after the Olympic games, the Paralympics and other events?
Paul Goggins
My right hon. Friend was a very able Minister for tourism and he did a superb job. He is right: APD is a tax on our constituents who seek to go on holiday, but it is also a tax on those who want to come here to enjoy the wonderful countryside and the great features of our society, with the associated benefit to our economy.
The APD, as hon. Members know, is the highest in Europe. Denmark, Norway and Holland have scrapped it. Ireland, as my hon. Friend the Member for Belfast East (Naomi Long) pointed out, has all but scrapped it—it intends to do so in the near future.
As the hon. Member for Witham argued, we have to look at this in terms of the wider economy. I wish to look at it particularly from the perspective of the Manchester city region, and it is good to see the hon. Member for Altrincham and Sale West (Mr Brady) in his place. I know that he has a great commitment to Manchester airport. I also see my hon. Friend the Member for Blackley and Broughton (Graham Stringer), who is a former chairman of the airport. It now serves more than 200 destinations, has 24 million passengers a year, and employs 19,000 people on the site, with many thousands more provided in the wider economy. It is estimated to bring in around £3 billion to the UK economy as a whole.
One of my principal concerns, which I have already mentioned, is that APD is a tax on our constituents. Let us reflect on that for a second. Hard-working families already paying tax on their hard-earned incomes have to pay tax again if they want to take their children on holiday. We ought to think about that. In particular, let us consider the economic problems that APD creates. There is clear evidence that airlines are not coming to Manchester airport because of APD. In particular, AirAsia X has dropped its plans for a route from Manchester to Kuala Lumpur and routed instead to Paris Orly. The airlines will go where the profits are greatest, and with those profits will go the jobs and all the additional economic value.
Henry Smith (Crawley) (Con)
AirAsia X also stopped flying from Gatwick to Kuala Lumpur, and cited exactly the same reason—APD being far too high. The right hon. Gentleman makes a good point.
Paul Goggins
The hon. Gentleman makes it clear that this is an issue not only for Manchester but for other airports and therefore the whole economy.
I am particularly concerned about the barrier that APD might pose to Manchester’s ambitious plans for an airport city—a plan that fits squarely with yesterday’s report by Lord Heseltine, which locates the focus for economic development absolutely in the city regions, the ambition, skill and energy of which are the drivers of that development. Manchester is at the forefront of that. The plans would result in major investment in manufacturing, office development, retail, leisure and an ambitious plan for a medipark that would mean major international investment in health and biotech industries. All that would be in the area around the airport and, crucially, would be facilitated by the presence of that international airport. It could become an economic hub drawing in investment from across the world, bringing high-value investment, much-needed jobs and links to destinations throughout the world.
The vision for the airport city has the Government’s full support. They have given it enterprise zone status, which brings with it rate relief and access to superfast broadband. It is utterly contradictory, however, to have that plan in place but then to impose on every business passenger passing through Manchester airport a tax on that business. It is like saying to an investor from north America, “We’re very grateful for your business, and by the way it’s going to cost you an extra £65 every time you want to visit that investment.” It is preposterous, and it is a barrier to the kind of economic growth that we need and want.
We cannot wish APD away. As the hon. Member for Witham said, it brings nearly £3 billion into the Treasury, which of course helps to pay for our schools and hospitals, but one way or another we must think our way out of this creatively. I support—I suspect that not all hon. Members would—a further investigation into regional APD variations, because they could encourage the use of spare capacity at some of our regional airports and facilitate the kind of economic development, such as our ambitions for airport city that I have described.
Stephen Gilbert (St Austell and Newquay) (LD)
The right hon. Gentleman is making precisely the point that I wanted to make. The way APD is implemented can harm the development of regional airports such as Newquay, so I hope that his idea has been heard by the Economic Secretary.
Paul Goggins
The Treasury has already considered the argument for regional variations, which has been made before, and I look forward to hearing what the Economic Secretary has to say. It seemed to park the idea after its review, but I hope that Ministers are prepared to reconsider it, particularly to encourage the use of spare capacity and to get behind the vision and drive for economic initiatives such as airport city.
We must recognise the need to accelerate the economic growth that can come from airports. With that growth would come higher tax returns. We have to get off this hook. The alternative is to keep overtaxing the aviation industry, which should be one of our best industries, and to watch it decline further and further under this burden we have placed on it, without facilitating economic development in and around our airports, which could put our constituents back to work and get our economy on the move again. I welcome this debate and hope that the Minister is listening, because this issue has to be addressed.
Mr Graham Brady (Altrincham and Sale West) (Con)
It is a pleasure to follow the right hon. Member for Wythenshawe and Sale East (Paul Goggins), with whom I share an interest in the importance of Manchester as a key driver of growth, jobs and prosperity in the north-west of England, particularly in the part of Manchester that we both represent. I am pleased to follow the good and cogent case he made about the importance of the airport and of freeing it up to attract more investment into the UK.
I also congratulate my hon. Friend the Member for Witham (Priti Patel) and others on securing this important debate. The case is unanswerable. We always want this country to be a world leader, except when it comes to the levels of taxation we impose on businesses and investment, and on our people when they have the modest aspiration of taking a foreign holiday. That is the position we find ourselves in. I am delighted to see the Economic Secretary in his relatively new position. He is a sensible man and a good Minister, and I hope that he will give this debate a good hearing.
I know that the Government believe in our key point, because they have set about reducing levels of corporation tax with the express intention of making us more competitive in the world and ensuring that businesses see the UK as a place to locate, rather than going to other places. The argument here is exactly the same. We do not want to be at the top of the international league table for aviation tax; we want to be towards the bottom, as that will help to bring in international business and investment.
Neil Carmichael (Stroud) (Con)
I am listening carefully to this important debate and I have heard a lot from my constituents about it. I recognise the revenue-raising function, but should we not underline the importance of international competition in transport and capacity, and think more in terms of an holistic approach to this policy area?
Mr Brady
That is absolutely right. It is also important to note, as the hon. Member for Belfast East (Naomi Long) did, that the Government have recognised the strength of this argument, not just in general terms about levels of taxation applied to business but specifically in relation to APD. They understand that in the case of Northern Ireland competing against the Republic there was an unanswerable case for a reduction in APD. It is apparent to us all that precisely the same argument applies to the UK and particularly to the regional airports—which many Members have mentioned—that compete with airports in continental Europe.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
The hon. Gentleman seems to be talking as though every tax has a similar effect. It is quite clear that this tax is damaging industry, damaging our enterprise and damaging investment, particularly in the regions, although we have even heard from Essex, which is close to London. Would it not be better for the Government not just to rely on broad taxation, such as the 5p reduction for people earning over £100,000, which has no real targeted effect on industry and enterprise, but perhaps to take the revenue from that broad source and offer relief from this damaging tax?
Mr Brady
I do not always agree with the hon. Gentleman, but I am pleased to agree with him about that. This tax precisely targets investment and international trade, which are exactly the things that the United Kingdom needs to focus on if we are to grow our way out of the problems we face.
Mr MacNeil
The hon. Gentleman said that Northern Ireland is competing with the Republic of Ireland, but surely we are all competing with the Republic of Ireland and with each other. We had better make sure we have that mindset; otherwise we will be left very much in the slow lane.
Mr Brady
That is absolutely right. Unlike the hon. Gentleman, I hope we will not be competing internationally with Scotland in the near future, but if we are, I hope we have lower aviation duty. The regional effects—on Scotland and Northern Ireland, but also on airports in the north of England—are clear. There is a plain and unanswerable case.
Like my hon. Friend the Member for Witham (Priti Patel) and the right hon. Member for Wythenshawe and Sale East (Paul Goggins), I want to touch briefly on the impact on families. Air travel should not again become a luxury that only the rich can afford. It is not a luxury in the modern world. Air travel, whether for business or leisure, is an essential part of modern life. It has opened up the world, opened people’s minds and enhanced the quality of life for us all.
I have said that I am confident that my hon. Friend, being such a good Minister, will respond warmly to the case we are all making. The final reason for that is that the proposers of the motion have been so modest in their aspirations. The motion highlights some of the damage that we think is being done by this tax, but we do not call for it to be cut or axed altogether. We are asking only for the Treasury to look carefully at its effect before next spring’s Budget. All we want is a proper detailed review and economic assessment of whether this tax does more economic harm than good. I think that all who have spoken so far believe it does.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I congratulate the hon. Members for Witham (Priti Patel) and for Crawley (Henry Smith) on securing this debate. As a co-sponsor of the motion, as well as a seasoned and regular air traveller, I apologise to the House: because of the inclement weather coming in from the Atlantic, I shall try to rush back to Scotland this evening rather than waiting, or having my constituents wait until tomorrow afternoon before they see me.
I do not know whether I was targeted, but as chairman of the all-party aviation group I certainly received my fair share of correspondence on the petition connected with this debate. Indeed, I do not believe I have ever been contacted by as many constituents on any subject in my time in this place, and I have been here for some 20 years. As has been mentioned, the all-party group instigated an inquiry, not only into this tax but into the whole question of aviation and its future in the UK. It was clear from that work—a fairly major inquiry, with some 50 submissions and two oral evidence sessions—that we are likely to damage the whole UK economy unless we get this tax right. That was clear to me and the all-party group, with all conclusions supported by all parties in the House that were part of the inquiry, which is a first when it comes to the future of air traffic.
A report is available, and if hon. Members ping me an e-mail, I will send them a copy, if they have not already read it. The report has been sent to the Prime Minister and a fairly sizeable number of Treasury civil servants have asked for a copy, as a consequence of which I presume that the Minister is aware that the report is in existence. If he has not done so already, I would ask him to look at it, because we still await a response from Treasury officials and the Minister. There is overwhelming support from all sections of the House; indeed, we have already heard—as I am sure we will hear again this afternoon as we approach 5 o’clock—about the disadvantages of air passenger duty, as well as the evidence for those disadvantages. The vast majority of submissions received stated that the UK was being placed at a significant competitive disadvantage as a result of the tax. That applied to 43 of the 51 submissions, which I suggest is overwhelming.
But—and it is a big “but”—it is impossible to draw a comprehensive picture of the national economic impact of air passenger duty without Treasury support in looking at the issue far more closely. I am looking for that support from the Government this afternoon, and I also hope to see their response to the report sooner rather than later. The report also mentioned reports from the British Chambers of Commerce and from Oxera. They were good reports with credible data sources, but they were selective. We need a comprehensive assessment of the effects of the tax, and that is a task for the Treasury to undertake.
There are examples of air passenger duty leading to direct commercial loss. We have already heard my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) talk about Manchester airport, and say that AirAsia X cited ever-increasing taxes as its primary reason for abandoning its flights to UK destinations. I have been given other examples as well. It is a matter of public record that Continental Airlines, now part of United Airlines, would have abandoned flights from Belfast to the United States had the level of APD not been reduced in October 2011.
If only some thought could be given to the idea of regional variation, as my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) said. That would have the greatest effect on the regions in question. Only yesterday, Aberdeen, Glasgow and Edinburgh airports called for immediate action on the levy. They estimate that, by 2016, £210 million less will be spent each year in Scotland because of the tax. Glasgow airport’s managing director, Amanda McMillan, has said that APD
“will continue to damage Scottish aviation by making routes unviable and decimating Scotland’s links to the rest of the world.”
As my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) said, the problem is also affecting my own airport at Prestwick.
Mr MacNeil
Given the quote from the managing director of Glasgow airport that the hon. Gentleman has just read out, does he support the Calman commission’s recommendation that air passenger duty should be devolved to Scotland?
Mr Donohoe
The hon. Gentleman might well be shocked by this—indeed, I expect him to fall off his seat—but I do actually support that proposal. I would suggest, however, that any such duty should not be frittered away, as many of the tax receipts obtained by the Scottish Government are. I would suggest that, if it were devolved, it should be hypothecated so that the money could be put into the airports, rather than into some of the other high-falutin’ schemes that happen north of the border at present—[Interruption.] I do not know what the hon. Gentleman is saying from a sedentary position, but I will give way to him again if he wants to intervene.
Mr MacNeil
Surely the idea behind devolving APD would be to cut it to make Scotland more competitive.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I warned the hon. Member for Na h-Eileanan an Iar Mr MacNeil) that he would be at the bottom of the list, but there is a danger that he will fall off the list because the amount of time available is disappearing.
Mr Donohoe
In order not to prolong the debate, and to give the hon. Gentleman time to speak later, I will not respond to his intervention.
The report suggests that, as a result of air passenger duty, 2 million fewer passengers will fly from Scotland from 2016 onwards. That is a fair number of passengers, given the number of people who fly. There are other reasons to believe that the problem is more serious in the regions than it is in the south-east of England, but I will not go into them in depth now. Our report recommended that the Treasury and the industry come together to undertake a comprehensive study. I would echo today’s calls that, until such an assessment is made, APD should be frozen.
I shall briefly mention VAT and fuel duty. If either were to be imposed on aviation fuel, the airlines—and not just those based in the UK—would go abroad for their fuel in order not to have to face that problem. Buying it here would simply no longer be an earner. I put it to the Minister that any suggestion of such an imposition should be studied in much greater detail. Indeed, fuel is not taxed for other forms of transport in the UK. There are a number of unconvincing arguments. One is that whereas the UK does not levy VAT on domestic flights, international air travel is generally VAT-exempt in many other countries. There are all sorts of other things that have to be brought into the picture. The aviation sector has no competitive advantage over other forms of public transport.
Let me look at the question of tax and tax avoidance. There is a good deal of evidence coming to the fore to suggest that families, instead of travelling out of the UK long haul, are travelling to other hub airports in mainland Europe and even further afield. As a consequence, the Treasury will lose the business and “Air UK” will lose the business.
Mr David Hamilton
Is my hon. Friend aware that travel agents throughout Scotland—and, I suspect, in the north-east, where the regional airports are based—are now actively encouraging people to go via Europe because it will save them quite a bit of money? For a family like mine, going to America otherwise means paying £1,000 extra.
Mr Donohoe
I am very grateful to my hon. Friend, but he is eating into my time and I have to be careful in that what happens in that respect has already been mentioned. I am told that up to £380 extra per person might need to be spent in those circumstances.
In conclusion, as we know from the length of the Davies commission, the Government appear to be in no rush to address the competitiveness problems of the UK aviation industry, which are impacting on the whole of our economy. The abolition or reduction of APD has the potential to make the UK more internationally competitive. As a minimum, I urge the Minister’s Department to undertake research to find out what the impact of APD has been on the aviation industry and what it means for that industry.
Henry Smith (Crawley) (Con)
This debate is most important for the well-being of the British economy. I would like sincerely to thank the Backbench Business Committee for allowing time on the Floor of the House for today’s debate, and I particularly pay tribute to my hon. Friend the Member for Witham (Priti Patel) for helping to secure it.
It is perhaps of little surprise that I take a great interest in this subject, as I represent the constituency that contains Gatwick airport—the world’s busiest one-runway, two-terminal airport—and it is also the home of a number of aviation-related companies. We have tour operators, globally renowned companies such as TUI Travel and, of course, British Airways operating from Gatwick. We have the headquarters of Virgin Atlantic, an iconic British company that is innovative in the services it provides, and we also have easyJet, now this country’s largest airline with about 40% of the flights from the area—indeed, 1,078 easyJet flights go out of Gatwick airport every week. I am delighted to say that, from next spring, easyJet is starting a new route to Moscow. It is little surprise, then, that many of my constituents who work locally in the aviation industry are deeply concerned about air passenger duty. Mention was made of the number of e-mails that right hon. and hon. Members received from the fair tax on flying campaign, and I believe I received more than 1,000 such e-mails.
It is not for parochial reasons, however, that I speak in today’s debate and raise my concerns again about the level of APD that we charge. Almost a year ago, I was fortunate enough to be granted an Adjournment debate and warned that if APD were to be increased, as was suggested, we would do some real damage to this country’s economic prospects.
I entirely understand why the Treasury is seeking to bring in revenue. We are all acutely aware of what is happening to the national finances. The deficit that we are sustaining is deeply troubling, and although I warmly congratulate the Government on reducing it by a quarter in just two and a half years, it is little wonder that the Treasury does not view with enthusiasm the prospect of giving up an income of almost £3 billion in APD receipts.
Adam Afriyie (Windsor) (Con)
Although the Exchequer may be raising between 2 billion and £3 billion from air passenger duty, it may be losing an equivalent amount, if not more, as a result of the reduction in trade and improved economics. Is it not for that reason that we should demand a forward view of the economic impact?
Henry Smith
My hon. Friend has anticipated what I was about to say. The Netherlands scrapped air passenger duty after studies conducted by the Dutch Government established that it was costing the economy more than it was bringing into the Treasury. I think that it is for the same reason that only six European countries charge any form of air passenger duty, and the amounts that they charge are very modest.
Guy Opperman (Hexham) (Con)
My hon. Friend is making a very articulate case not only on Gatwick’s behalf but in favour of the change that we all want to see, but does he agree that air passenger duty is not just a London tax? If the Government are interested in supporting the regions of England, at the very least they should bear in mind the fact that a change in APD would make a huge difference to regions such as the north-east and the north-west.
Henry Smith
My hon. Friend is right. Air passenger duty is a bad tax for the UK as a whole, regardless of which nation or region within it Members may happen to represent.
Michael Connarty
The hon. Gentleman is making a very good case. It is estimated that air passenger duty raises £2.6 billion, which is nearly £1 billion more than the £1.76 billion that it raises in all the other European countries. It is a tax on tourism and trade, and the Government should act before it does more damage. It is estimated that up to £3 million will be lost in trade by 2016 if the present position continues.
Henry Smith
The hon. Gentleman is absolutely right.
Members have suggested that we adopt some form of regional banding, but I think that that would be a mistake. I think that the solution is for us to get rid of air passenger duty altogether over time, or at least reduce it to a very modest level. I do not think that we should pit one part of the United Kingdom against another. We, as a relatively small country, achieved global dominance because we are a trading nation, and we either stand together or fall apart when it comes to trade. I think that we need to view the argument holistically, and to see this as very much a British issue.
In the remaining time available, let me deal with some of the misnomers that have been applied to air passenger duty. First, it is not an environmental tax. If it were I would support it, because I think it important for us to reduce our emissions whenever possible, but it is purely a revenue-raising tax—albeit a misguided one and a false economy, because it costs our economy far more than it raises. In fact, we are subject to double taxation when it comes to air duty. The European emissions trading scheme, which was introduced at the beginning of this year, is an environmental tax, and I have no complaint about it; but air passenger duty is almost certainly not.
I also want to debunk the myth that we need APD because aviation fuel and air tickets are not subject to value added tax. Under the conditions of the Chicago convention, it is impossible to charge VAT on aviation fuel and air tickets, but even if it were possible, the current APD represents a far higher amount than VAT would. We are, therefore, greatly overtaxed.
A year ago I had an Adjournment debate in which I asked the Government not to increase APD. I am sorry that I failed in that, and APD went up. Today, we are not calling for a cut in APD, however; we are simply calling for APD to be frozen at its current level until the Treasury assesses whether it is costing our economy more than it brings into the Exchequer, as I contend. The Treasury conducts surveys and studies all the time, and it is perfectly reasonable to ask it to carry out a study on this matter so that we can have some proper facts and figures and are able to make an informed decision.
The stakes are very high. We are a trading nation with competitors, not only in continental Europe but around the world, who are eager to take our business. We will lose out to them if we do not carry out an assessment so that we can understand APD’s impact on our economy and take action if necessary. I therefore hope the Government will respond positively to this reasonable motion. They should carry out a study of the effects of APD. Until that is done, we must not harm the British economy by increasing APD still further.
Dame Anne Begg (Aberdeen South) (Lab)
I support the motion in the name of the hon. Member for Witham (Priti Patel) and others. Aberdeen depends greatly on the airlines, and especially on connecting flights. If the hon. Lady thinks the situation is bad in Essex, she should consider what it must be like for my constituents. Her constituents—and others who live within easy reach of London—have some choice in how to get out of the country; they can travel by Eurostar, for instance. From Aberdeen, however, it is impossible to get out of the country without either flying or spending a very long time travelling.
APD’s great impact on my constituents’ lives is highlighted by the fact that I received more e-mails about the fair tax on flying campaign than any other MP. Although it is good that 800 or so constituents got in touch with me, I do not necessarily want to thank them, because I received half of those messages in a two-hour period one afternoon after British Airways sent out an e-mail to all its executive club members. I thought I was under cyber-attack because my computer went mad; it started constantly pinging. In all the years I have been an MP, this is the issue on which I have received the most e-mails.
Other Scottish Members have mentioned a report published today by York Aviation, which was commissioned by Scotland’s largest airports. Derek Provan, the managing director of Aberdeen airport, said:
“This report shows, quite simply, that APD is damaging Scotland. It is damaging our economy, our tourism potential and our ability as a nation to bounce back from the recession. It limits our opportunities for growth in the employment market, costing as much as £50 million in the process.
At Aberdeen Airport we run a real risk of losing around 200,000 passengers by 2016 through this damaging tax. Each recent increase in APD has had a dramatic impact upon what we, as airports, have achieved and could have achieved without APD. It is imperative that the UK government undertake a detailed and comprehensive review into APD with the utmost urgency, and at the very least freeze APD whilst that is taking place.”
So both Aberdeen airport and other airports in Scotland are being affected because of not only the level of APD, but its existence and the way it acts as a disincentive to those furthest from the hub airports.
Mr MacNeil
Does the hon. Lady agree with her colleague the hon. Member for Central Ayrshire (Mr Donohoe) that APD should be devolved to Scotland?
Dame Anne Begg
Whether or not APD is devolved to Scotland, the problem we face is the level of APD and the way it is operating. Just because a tax is devolved, does not necessarily mean it would be treated any differently in Scotland—
Dame Anne Begg
It might be, but it could be treated differently down here, too. The problem I have with devolving some of the taxation that the hon. Gentleman would want devolved is that, as we know, the Scottish Government have a huge hole in their budget. So in terms of their priorities and how they spend their money, there is a fear that they would see APD as an easy cash cow, as indeed the Westminster Government do. There is no guarantee that a devolved APD would be any different from the one we see here.
Dame Anne Begg
Mr Deputy Speaker is shaking his head, so perhaps I should not allow the hon. Gentleman to come back in, because we are getting away from the points I wish to make.
Most people who fly out of Aberdeen connect to other routes. Although lots of the flights from Aberdeen go to other domestic destinations, many of the people on the planes—the ones that the right hon. Member for Gordon (Sir Malcolm Bruce) and I are on every week—come to London to connect on to another route. I would like there to be a lot more direct flights from Aberdeen, but that, like the debate on the devolved nature of APD, is an issue for another day.
At the moment, most people in Aberdeen who want to travel abroad have to connect through one of the major hubs. The Government are making it particularly difficult to make Heathrow attractive as that hub. It is important for the British economy that Heathrow remains the main hub and that it is through Heathrow that all the traffic going out of the UK is filtered. There are two main reasons why Heathrow is becoming less and less attractive. The first is the system of APD, as anybody connecting through Heathrow is inevitably caught one way or the other. If they have booked their flights in separate lots they get a double-whammy, and if they have a through-flight, they still end up paying APD. Secondly, it would be remiss of me if I did not mention that part of the reason for Heathrow’s unattractiveness is the congestion there because of the lack of a third runway. People in north-east Scotland strongly support the building of a third runway at Heathrow.
Those two things, put together, mean that people in Aberdeen, and possibly in Edinburgh and elsewhere, are more attracted to using other airports as the hub through which to transfer. For people from Aberdeen that means going through Schiphol or Paris—and Lufthansa now has flights on to Frankfurt. Those who book the different parts of their journey separately pay only one part of APD—they do not pay APD on their full flight. So financially that approach becomes much more attractive. The consequence is business loss not only for Heathrow but for the UK carriers, who are suffering the most. That is a real problem and a shame.
We know that there is often no option other than to fly out of Aberdeen. We do not have an electrified rail service north of Edinburgh and we do not—and probably will never—have high-speed rail. It might get to Manchester, it might get to Scotland, but it is unlikely ever to get as far as Aberdeen. It takes too long for us to get a train to the Eurotunnel, so many people are affected by the rise in APD. This does not just affect business travellers. Aberdeen airport survives because we have a very buoyant economy in the north-east of Scotland because of the offshore oil and gas industry, but that economy will not be enough to support the airport if the Government are intent in undermining much of that travel through the increase in APD.
Many business travellers come through Aberdeen and they want to be connected to the whole world, not just part of it. They want to be able to fly through Heathrow and go on to some of the emerging markets, which often also have oil and gas. That is why it is important that the Government should listen to this afternoon’s debate.
Sir Roger Gale (North Thanet) (Con)
Most Members have made the point about the value of the aviation industry to the UK as a whole. It is of considerable value to all the UK’s major conurbations, and particularly to the south-east. Historically, Heathrow has been one of the major—if not the major—hub airports in the world. The interlining that has gone on through Heathrow over decades has been worth almost incalculable sums of money, not merely to the aviation industry but to business as a whole through the people who hold business meetings in airport meeting rooms and the people who come through London and spend money doing business in the City or as tourists. That is what is at stake and it is difficult and dangerous to ignore those facts.
At the moment, the United Kingdom is losing business. Not in 10, 15 or 20 years—it is happening now, today. Every day we lose business to Schiphol, to Frankfurt and to Charles de Gaulle. Would not the French, give or take Mr Hollande, like to create in Paris the financial centre of Europe, to replace London? It is not a pipe dream on their part; it could happen if we drive the business travellers away from the south-east of England. I am sorry that this is to some extent a south-east problem, but that happens to be where the City of London is and we cannot change that.
There are two issues: airport capacity and air passenger duty. My friend the hon. Member for Central Ayrshire (Mr Donohoe) and the hon. Member for Aberdeen South (Dame Anne Begg) both made the point that people are now travelling short haul to interline and take long-haul flights from Schiphol, Frankfurt and Charles de Gaulle. They pay APD on the short-haul flight and get a much cheaper and better deal on the long-haul flight to the far east, Brazil—a developing market—and, of course, the United States. It is happening now.
Guy Opperman
My hon. Friend is making an articulate case about the impact on the economy of Great Britain, but there is also an impact on overseas economies. For example, the APD banding is so arbitrary and wrong that the APD for somewhere such as the Caribbean is more than for somewhere as far away as Hawaii. Surely that shows the illogicality of this blunt tax.
Sir Roger Gale
If I wanted to use one word to describe the banding, it would be chaotic. That is what it is. We are losing business now.
We have an opportunity—I have a constituency interest in this—in Manston, Kent’s international airport. My hon. Friend the Economic Secretary to the Treasury is aware, I think, of the opportunity Manston presents. It has one of the longest runways in the country and also one of the widest—three runways wide—because during the war it was used for landing planes one after the other. There is no suggestion that it should ever become a fourth, fifth or sixth London airport, but it could be developed at very modest cost to take the pressure immediately—not in 10 or 15 years’ time—off Gatwick, which in turn, with released capacity, could take the pressure off Heathrow. That would create the breathing space we need while the Government work out whether to have a third runway at Heathrow, a second runway at Gatwick, a second runway at Stansted or Boris island—that is not the purpose of this debate. If we are to develop Manston and use its capacity, we must give it a chance to breathe commercially, and air passenger duty is damaging that chance.
We need a modest investment in infrastructure, and the Minister of State, Department for Transport, who has responsibility for aviation, will visit us very soon. As long as the air passenger duty element of travel from the United Kingdom is as high as it is, regional airports such as Manston, and the many others that Members across the House have represented this afternoon, will suffer. Because Manston is in the south-east, it will presumably be banded at a south-east price, which in itself is nonsense. We must take into account the nature and capacity of each individual airport. I want air passenger duty to go completely, but I believe that in the interim, as a short-term measure, we have to look seriously at banding, which has been referred to, and at some kind of variation between regional and hub airports.
The Economic Secretary to the Treasury might be new to his role, but he is very bright and he can do sums, which is why he got the job. It is very easy to say glibly that something is worth £2 billion, £5 billion or whatever to the Treasury without taking into account what my hon. Friend the Member for Windsor (Adam Afriyie) referred to as the downside. The real cost must be calculated in terms not just of aviation lost, but of lost business, tourism and all the other things that flow from being a world-class, international centre, which is what London is, always has been and must be allowed to remain.
There is a Treasury mantra—I am looking to the civil servants’ box—which says that more tax equals more money. That card was played earlier this afternoon with regard to beer duty. It is wrong. A modest amount of tax might raise a modest amount of money, but there comes a point, and my hon. Friend the Economic Secretary must recognise this, when a tax kills the goose that lays the eggs, whether they are gold, silver, bronze or straightforward eggs. We cannot go on killing this industry, and that is what is happening. Of course, another huge concern has been voiced by holiday travellers. The impact on family holidays is dramatic and costly.
Adam Afriyie
My hon. Friend is making a powerful case. It strikes me that at the heart of the debate there is an absence of evidence; there is an evidence-shaped hole at its heart. All the points that have been made, including his points, could be dealt with cleanly and crisply if the review takes place.
Sir Roger Gale
My hon. Friend is absolutely right, and his point leads me swiftly to a conclusion. The sums have not been properly analysed and so we need the review. There is no evidence to support the case that the Treasury is making. In the meantime, United Kingdom Ltd is being damaged. We need the review. I ask the Minister, please can we have it?
Mr Deputy Speaker (Mr Nigel Evans)
Order. The time limit is being reduced to seven minutes.
Graham Stringer (Blackley and Broughton) (Lab)
I do not know whether I should thank you for that, Mr Deputy Speaker, but I do thank you for allowing me to catch your eye.
I congratulate the hon. Member for Witham (Priti Patel), who secured the debate and moved the motion. The debate is important; we can see that from the agreement on both sides of the House and from the number of e-mails, letters and postcards that we have all received. For the first time as a Member of Parliament, I have had more correspondence about a serious economic issue than about the welfare of animals—an extraordinary feat.
I have agreed with almost every word of every speech that has been made this afternoon. By and large I am not an angry person and do not lose my temper, but there should be anger about what is happening to aviation in this country, and air passenger duty is part of the problem. Aviation is absolutely vital to this country’s future; it represents about 4% of the economy when we add up the jobs and its overall impact.
However, aviation is much more important than that. Sadly, we have seen the cotton and other industries go and they have been replaced in the best places by newer, more modern industries. That cannot happen with aviation. This country’s economic welfare depends on its ability to get cargo and people in and out on aeroplanes. We are in a competitive situation to get those aeroplanes to land in this country. In many senses, we are losing that race. I know that the number of passengers expected in Manchester airport’s business plan 10 years ago is down. My guess is that that is true of most of the major airports in this country. They are under a double attack. One attack is on capacity in the south-east. Heathrow is our most important asset in this regard and the sooner the Government make a decision about it the better; I do not believe that any more information can be made available on the third runway at Heathrow. All the information is there and the Government need to stop dithering, make a decision and put some certainty into the issue. The lack of capacity at that hub means, of course, that passengers use other hubs in Europe; they are more profitable and invest in more runways while Heathrow gets less competitive.
Air passenger duty has the same impact. I do not want to repeat figures that have been given out previously, but it is worth going through the figures that show the damage being done. The £2.5 billion raised from air passenger duty is about twice as much as that raised in the whole of the rest of the European Union. A single person flying in the European Union pays about €16 in duty from here; they would pay €3 from Ireland, €4 from Italy, €7.5 from Germany, €5.2 from France and €8 from Austria. Our rates are more than double those of other European countries. We can see the impact of that, not only within Europe but outside it.
It is estimated that Stena Line Ferries is taking 20,000 extra passengers into this country who have flown from India alone. That is a loss to our airports and aviation business. Those are people who have bothered to fly on a plane and then get on a boat. Lots of people would not bother to do that. The trade from China has halved; that is not surprising when we consider how much duty a Chinese family must pay to come to the UK—£648, compared with zero in air passenger duty if they flew into the Netherlands or a number of other European countries.
The hon. Member for Crawley (Henry Smith) is not in his place, but he must have hacked into my e-mails, because he made the same points about green taxes that I was going to make. I will not just reproduce what he said. Part of the camouflage for air passenger duty is that it is somehow an environmental tax. It is not—it takes no account of what sort of aeroplane is involved or of the levels of carbon dioxide or other gases coming out of it. It is simply a tax—and an unnecessary one, given that we have introduced the European Union emissions trading scheme. It is doing serious economic damage, and so this very moderate motion asks for an economic impact study. The World Travel and Tourism Council has carried out a study that shows that in 2012 it expects that damage to equate to over £1 billion more than the amount raised. That is an appalling figure, although it may have got its figures wrong. Perhaps we can rely on the Treasury to get the figures right when it undertakes a study.
I do not believe that our economy now, or in future, can afford to maintain this tax. I am happy to support this very moderate motion, but I hope that Members in all parts of the House will be increasingly critical of Government policies that damage one of our most important industries.
Mike Crockart (Edinburgh West) (LD)
I add my congratulations to the Members who secured this debate, not least because the motion is supported by a large number of Members across the whole House. I should declare a particular interest, as Edinburgh airport—voted best European airport 2011 in the 5 million to 10 million- passenger category—lies within my constituency. As a result, I recently took part in the all-party aviation group’s inquiry, which was mentioned by the hon. Member for Central Ayrshire (Mr Donohoe). Its report made 15 recommendations, four of which related directly to air passenger duty and mirror the tone of the motion.
When APD was introduced in 1994, I do not think that anyone foresaw the likely levels that it would reach 18 years later. The problem is that in those intervening years insufficient notice has been taken of whether those levels were reaching what Gordon Dewar, the chief executive of Edinburgh airport, has described as a tipping point at which they have a detrimental impact on the economy as a whole.
As the hon. Members for Crawley (Henry Smith) and for Blackley and Broughton (Graham Stringer) said, it is sometimes argued that APD is an environmental tax. Perhaps before the inclusion of the aviation sector in the EU emissions trading scheme, that was a valid argument, but it is far more difficult to make it now. If the tax were levied on a per-plane basis to encourage higher occupancy, or if its levels reflected the fuel efficiency of the planes involved to encourage airlines to upgrade their stock, then perhaps that argument could be made again, but as it stands APD is simply a revenue raiser—and an attractive one to the Treasury, at that, because it is easy to administer, has low collection costs, and to a large extent it is hidden from the end consumer. Nevertheless, the Treasury must examine it to ensure that its overall impact on the UK’s tax take is positive, not negative, as seems to be the case.
Mr MacNeil
Would the hon. Gentleman support the devolution of air passenger duty to Scotland, as some Labour Members seem to do?
Mike Crockart
I almost thank the hon. Gentleman for his question, but it is a bit of a broken record and tangential to this debate. Devolution of this tax would merely recreate the problem that existed between Belfast and Dublin; my constituents would get in their cars and drive for two hours to use Newcastle instead. We have already heard the argument about regionalisation of APD, which is a far better and more efficient way of dealing with the problem.
Levels of increase in APD over the past five years stand at between 160%, for the bottom rate, and up to 360% for band D long-haul flights. Many submissions to the APPG’s inquiry, and others made since, including one that I received yesterday from the Federation of Small Businesses, make the case that levels of APD are now putting the UK at a competitive disadvantage in relation to other European and global destinations. The evidence is that that shows itself in a number of ways.
First, APD acts as a disincentive to foreign carriers using UK airports as destinations. A number of hon. Members have mentioned the report by the Scottish airports on their perceptions of the effects of APD. It shows that Scotland’s connectivity grew from servicing fewer than 40 destinations in 2001 to almost 150 in 2009, but the figure has slipped back in recent years to about 130. That hampers not only establishing new business markets, but bringing in new tourists to Scotland. The figure also compares poorly with other small European states. Of course, some of those states have major hubs, but Belgium has links to 220 international cities and Denmark has more than 150 such links.
If APD levels hold back local airports and their connectivity, they will also hold back the surrounding local economies. The Edinburgh airport campus employs 5,000 people and its activities support a further 2,000 across Scotland. It estimates that its contribution to the Scottish economy is £146 million, of which £118 million entered the Edinburgh city regional economy. The question must be: could it do more, if allowed?
One of the key debates on the impact of APD is about price elasticity, a phrase that takes me back to 1984, when I was studying economics at Edinburgh university. Different products have different elasticities—the rate at which demand is lessened by an increase in price. On the impact of APD rises, the report prepared by the three Scottish airports estimates that, accumulatively, by 2016 Edinburgh, Glasgow and Aberdeen will carry 2.1 million fewer passengers each year than if APD had not risen since 2007. Price elasticity is lower in Aberdeen, so the impact would be less, but it might still lose 200,000 passengers. Edinburgh’s higher number of low-cost carriers will result in a far higher potential impact—it might lose 1 million passengers per year.
Those are not just numbers; they are business men making connections and sales, and tourists spending money. The 2009 Civil Aviation Authority’s passenger survey suggests that about 36% of international passengers are visitors to Scotland and that 40% of domestic passengers are similarly inbound to Scotland. If we combine the drop in actual and projected numbers with the CAA figures and apply VisitScotland’s average tourist spend, we will see that the results are very worrying.
The 2007 drop in passenger numbers appears to have amounted to a £90 million per annum loss with regard to Scottish tourism. Following the 2009 APD rise, that figure has risen to £160 million and, if projections are correct, it will rise to £210 million per annum by 2016. This simply cannot continue.
Much of what I have said has come from the industry and some might say, “Well, they would say that, wouldn’t they?”, so I did a small internet survey last night via booking sites. I imagined myself as a business man trying to establish trade with some of the BRIC countries and looked at flying direct to Sao Paulo. A flight on 14 November from Heathrow would cost me a best direct price of £768, the APD for which is about £184. However, a direct flight from Paris, where the APD equivalent is €4, would cost £642—a saving of £126, which is more than enough to cover a Eurostar ticket. If I chose to start a business with Chennai, I could fly there with Gulf Air for £475, but the cost of a flight from Paris would be £240, which is almost half the price.
If I was a tourist heading to Las Vegas—this is the worst example—I could get the 11.20 Virgin Atlantic flight for £644, but if I travelled to Dublin for £17 I could get the exact same flight from there for £453. That is a saving of £191, for which, once I arrived in Las Vegas, would buy me the “hound dog” package, whereby Elvis would sing three songs to me and I could get a rose bouquet and be walked down the aisle. That would be an interesting use of £191. I think we can do better. When the taxation system causes such anomalies, it is not only Elvis who has left the building; common sense has left as well.
Mr Nigel Dodds (Belfast North) (DUP)
I will be relatively brief, because many of the general arguments about air passenger duty have already been advanced. The UK has the highest air passenger duty in the world, twice the level of the next most expensive, which is that levied by Germany. Only five or six other countries in Europe levy APD and, as we have heard, the Irish Republic, which currently levies a €3 rate, is planning to abolish it altogether very soon as it believes that will help its economic growth.
When the tax was introduced it was relatively affordable, but there have been swingeingly massive increases in recent years. I suppose that highlights the danger of new taxes in general, because they are always introduced at a level that is seen as relatively modest and we are given all sorts of commitments about them, but very soon they start to ratchet up. That happens especially when they are perceived as not hitting people directly. We know that income tax, national insurance and so on are sensitive matters, but insurance premium tax, APD and so on start by being seen as easy hits. Now, we have got to the stage at which APD is clearly hitting businesses, families, ordinary people and the aviation industry, and that is causing real damage. As the hon. Member for Edinburgh West (Mike Crockart) and others have pointed out, it is clearly not an environmental tax but purely a revenue raiser.
Lord Heseltine’s growth report was published yesterday. When one considers the effect of APD on the aviation industry’s economic prospects, it is clear that it is a tax on exports, businesses, tourism and families. Like other right hon. and hon. Members, I have received many representations about it. Many of them have come by e-mail—we have all received the e-mails—but more than a fair share have been made to me personally. I have been stopped at airports by business men, travellers and students, and people have come to my advice centre to raise the issue with me. It is a matter of concern to many people.
I will not go over the effect of APD on families and tourism, because the hon. Member for Edinburgh West has done his research on that and shown the price differences, but the aggressive nature of the tax is a real problem for families. What is most concerning is that it puts us at a severe disadvantage as a country, particularly in the part of the world where I come from, Northern Ireland. It helps our competitors and makes us more uncompetitive. It affects London, of course—as has been pointed out, it is often relatively cheap for people to go to Europe and then fly on long-haul from there—but the implications are particularly severe in Northern Ireland.
I acknowledge, of course, that the Government have granted a concession to Northern Ireland on long-haul flights, but there are other important considerations in Belfast. The right hon. Member for Gordon (Sir Malcolm Bruce) said earlier that it took seven hours to get from Aberdeen to London by rail or car, and of course it takes considerably longer to get from Northern Ireland to London or the south-east of England by rail or car and ferry. For businesses, there is no alternative to the air link between Belfast and London and the south-east, so that is a unique consideration. It is also now easy to get to Dublin using the new motorway links that have been created. It is therefore attractive and tempting to businesses, tourists and others to travel to Dublin to avoid the APD that is levied on flights out of Belfast.
The Belfast to London route is particularly important. To go off slightly at a tangent, but not too much, we all need to keep an eye on events following the recent merger of BMI and British Airways, which has raised real concerns in Northern Ireland now that Aer Lingus has moved its operation from Belfast International to Belfast City. There are concerns about future links between Belfast and London Heathrow in particular, which need to be monitored carefully.
I received an e-mail the other day from one of my constituents. He said that he flies often, and that his wife is director of a small company in my constituency that regularly sends its employees all over the world. He continued:
“We have both found it to be significantly less expensive to fly out of Dublin, and as I am sure you are aware, this is money lost to both the Exchequer and to our local economy.”
That is the problem in a nutshell. By holding tax on short-haul flights at its current level, we are losing revenue in Northern Ireland and across the country. The tax acts as a disincentive, and something needs to be done. I therefore welcome the opportunity to contribute to this debate, and I join others in paying tribute to those responsible for securing it. I look forward to hearing contributions from other hon. Members.
Adam Afriyie (Windsor) (Con)
I welcome this debate and the motion tabled by the Backbench Business Committee and moved by my hon. Friend the Member for Witham (Priti Patel).
Of all campaigns in this Parliament, I have received the highest level of communication from my Windsor constituents about the air passenger duty, and that says a lot. My constituents are wonderful people. They are incredibly articulate and eloquent, and although they are extremely good at writing letters on all sorts of subjects, I was taken aback by the level of communication on this issue.
Although we love our noisy neighbour, Heathrow, do not wish to see it close and hope that its status will be maintained, the air passenger duty lies right at the heart of the airport’s future. We will need further capacity in the south-east, but Heathrow is not fully utilised at the moment, and I wonder whether part of our failure to use it to its full capacity is due to air passenger duty.
Let me make some brief observations about APD. First, it is an odd tax in its own right; it is a tax on the free movement of people and goods in our country, the European Union and the world in general. It is a harmful tax—it harms competition and trade—and it is damaging to our reputation and connections with the rest of the world. The tax directly affects people’s behaviour. I am sure that many hon. Members have had their mouse hovering over the online basket when buying air tickets, and then suddenly realised that on occasion, the tax is higher than the price of the ticket. That bizarre anomaly lies at the heart of today’s debate.
It strikes me that there is an evidence-sized hole at the heart of this debate. The Treasury may have conducted reviews into how much revenue is raised and how much money APD brings in, but the absence of a full review leaves a huge hole and lack of information about the overall economic impact of this tax on our nation.
Penny Mordaunt (Portsmouth North) (Con)
I represent Portsmouth, which is quite a deprived area, and my constituents are concerned about keeping interest rates low and expect the Government to be watchful of the cost of living and life’s necessities. Much like my hon. Friend, however, the volume of mail that I have received on this issue suggests that my constituents are sceptical about whether air passenger duty produces a positive return for the Exchequer.
Adam Afriyie
My hon. Friend puts her point incredibly well. This issue has led to more than 200,000 communications with Members of the House of Commons, let alone the House of Lords and other places. Interestingly, just 100,000 names on a petition would have, in any case, triggered a debate in this Chamber, and the Government would have had to listen closely to that.
APD is a very blunt tool. The hon. Member for Edinburgh West (Mike Crockart) referred to his days studying economics in the ‘80s. I also studied economics at that time, and it is clear that air passenger duty does not recognise the elasticity of demand, and potentially the elasticity of supply. It does not differentiate between different types of consumer or passenger.
The APD is also a blunt instrument and an anomaly because it does not deal with carbon emissions or global warming—the EU emissions trading system deals with them. The APD does not recognise opportunity cost. By raising revenue through the APD, the Exchequer might be forgoing a great deal more revenue from trade and travel, which might generate economic activity in other spheres.
The APD is an odd tax, but I should give a little credit to the Government, who had an opportunity to raise even more money from it in the past year or two. Thankfully, they contained the rate of increase. Nevertheless, it is beholden on them to consider the overall economic impact of the APD to ensure we have evidence and move forward on a rational basis and tidy up the matter.
The beauty of the motion is not just its presenter, but the motion itself and the fact that it is reasonable. It is not strident and does not attack the Government, and it is not party political. We have had a free and easy debate because all hon. Members recognise that we are talking about the rational outcome of tax. The motion is not party political or contentious; it is plain common sense. I urge my good and hon. Friend the Minister wholly to embrace the direction of the motion and to commission an overall review of the economic impact of this rather bizarre tax that is holding our country back.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
I apologise in advance to you, Mr Deputy Speaker, and to the general public, for the repetitive nature of the comments I am about to make. I genuinely believe that the more people say these things, and the more often we say them, the more the Government will listen.
APD was introduced under the guise of an environmental tax, but all hon. Members know that it simply is not an environmental tax. No money from it goes back into the aviation industry or into the environment—nothing is ring-fenced. However, it is discriminatory against people who live north of the Watford Gap, because they have to pay twice, which is grossly unfair. From that point of view, will the Minister consider the possibility of ensuring that people do not pay APD twice, even if he does not abolish or freeze it, to ensure that it does not discriminate against people?
The APD has a significant cost impact on passengers, and therefore on the UK’s competitiveness and on the profitability of the UK aviation industry. The UK has the highest air passenger tax in the world. Taking air tax, air ticket taxes and airport charges together, the World Economic Forum ranks the UK 134th out of 138 countries. Only six European countries tax passengers for international air travel, and UK rates are twice the level of the next most expensive tax, which is levied in Germany.
A number of colleagues have identified examples of APD. A Chinese family of four flying to the UK must pay £648 APD to fly premium economy. They would pay only £134 to fly to France, and £141 to fly to Germany. A British family of four holidaying in Florida must pay £260 APD to fly economy. A German family of four would pay £141, and a French family would pay just £133.
We should also look at comparators from other European countries. Aviation duty considered by the Belgian Government was never implemented because of concerns about the impact on industry. In the Netherlands it has already been abolished. In Germany, it has led to a significant reaction from airlines, including the withdrawal of low-fare airline capacity. Denmark briefly introduced a ticket tax, but it has since been withdrawn, and of course we know what is happening in Ireland. In Malta, a duty was removed following a legal challenge from the European Commission, with the tax being described as “discriminatory”.
Several hon. Members have asked for an impact assessment, but that has been being carried out for the past 18 years. Currently, the aviation industry contributes £49.6 billion, or 3.6% to UK GDP, supports 921,000 UK jobs, and pays more than £7.9 billion in tax. Glasgow airport in my constituency provides 5,000 jobs both directly and indirectly.
As has already been said, the APD will cost Scotland more than 2 million passengers per annum. Up to 5% of long-haul demand may be lost. There will be a loss of competitiveness, which is important to the economy, and it will have an impact on the tourism industry, with more than 148,000 trips and £77 million in visitor expenditure lost over the next three years. By 2016, APD will cost the Scottish economy up to £210 million in lost tourism spend per annum. Those figures are from York Aviation.
The aviation industry is under severe pressure. Hon. Members may recall the recent terrorist attacks in Glasgow. BAA, the airport authority, has had to make extensive investment in security to make Glasgow airport more secure, and the airlines have also had to contribute. There are significant pressures on airports such as Glasgow to compete, and both management and the workers whose jobs are on the line are extremely concerned about the competitive nature of aviation. We have already heard about the competition from railways. Like the right hon. Member for Belfast North (Mr Dodds), I am approached by people in airport lounges who tell me that they have done an assessment of travelling from Glasgow to London and it takes almost the same time to fly—given the time it takes to get to the airport, go through security, get on the plane, get to London, get the Paddington Express—as it does on the train. The danger is that we could lose the aviation industry as it stands.
There are other arguments against the APD. Some 200,000 people have written to their MPs calling for an impact assessment, and that is crucially important. Some 90,000 overseas travellers have written to the Treasury asking for similar measures. APD does not do what it was supposed to do. It is not an environmental tax—it goes straight to the Treasury. The three largest airports in Scotland are putting pressure on Members of Parliament to ask the UK Government to look at the tax and do something to help the people in the aviation industry to retain their jobs.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To accommodate the remaining Members, I am shaving a minute more off the time. The limit is now six minutes.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I do not intend to rehearse the arguments that have been made so eloquently by several hon. Members, especially my hon. Friends the Members for Aberdeen South (Dame Anne Begg) and for Paisley and Renfrewshire North (Jim Sheridan) about the impact on Scotland and the wider aviation industry. Like colleagues on both sides of the House, I have had hundreds of e-mails on this subject, and I am delighted that it would appear that the Treasury is beginning to take heed of the arguments.
The issue that I wish to raise is one with which you are familiar, Mr Deputy Speaker. It was first raised with me at last year’s Commonwealth parliamentary conference by many of our colleagues from elsewhere in the Commonwealth, especially the Caribbean. You will be aware, Mr Deputy Speaker, of the excellent work that the right hon. Member for Saffron Walden (Sir Alan Haselhurst) has been doing as the chairman of the Commonwealth Parliamentary Association to highlight to the Treasury the damaging impact that the current APD rules have on the Caribbean.
It is worth noting that some Caribbean countries, particularly our overseas territories, have not yet moved to a fully mature local economy, and in some the percentage of gross domestic product coming from tourism is astounding. In Antigua, it is 75%; in Anguilla, one of our overseas territories, it is 65%; and in the British Virgin Islands—I am the chair of that APPG—is 58%. The way in which APD is structured has a negative impact on those Caribbean countries, because their rather larger neighbour, the United States, is classed as single zone for travel, so regardless of whether someone is going to Washington DC or Honolulu they pay the same rate of APD. That has a significant impact on the Caribbean’s ability to compete. Of course, it is not just about tourism or business going from the UK to the Caribbean. My hon. Friend the Member for Slough (Fiona Mactaggart) tells me that she has a vast number of constituents originally from Anguilla and that for those who wish to travel home to see relatives, loved-ones and friends the cost is prohibitive.
The right hon. Member for Saffron Walden has previously made representations to the Treasury about this matter, and the Economic Secretary, whom I welcome to his place, will be familiar with the representations made earlier this year by the Caribbean Council of Ministers. I would be grateful, however, if he could indicate whether in the near future he would be prepared to meet a cross-party delegation of Members with an interest in the Caribbean, led by me and the right hon. Member for Saffron Walden—I am sure that the hon. Member for Romford (Andrew Rosindell) and others would be keen to take part too—to discuss the impact of APD on the Caribbean, particularly the overseas territories. I would also be grateful if the Minister could indicate whether the Treasury plans to meet the Premiers and Chief Ministers of the Caribbean overseas territories affected when the overseas territories council meeting, which the Foreign Office holds every year, takes place in December.
Finally, I congratulate the hon. Member for Witham (Priti Patel) on securing this excellent debate. Almost every Member has been thoughtful and added something to the debate, and I look forward to hearing further contributions from other colleagues.
Naomi Long (Belfast East) (Alliance)
I am pleased to participate in today’s debate. I am a member of the Northern Ireland Affairs Committee, which has spent some considerable time considering this issue, and I am sure that more of my Committee colleagues would have been here today had they not been in Dublin on an official visit. I also congratulate the hon. Member for Witham (Priti Patel) on bringing this matter to the Floor of the House.
I am committed to rebalancing the Northern Ireland economy from its current over-reliance on the public sector, but I believe that that must primarily be achieved by growing the private sector rather than cutting the public sector, and the current APD regime is a significant obstacle to that agenda. APD is a commercial challenge to Northern Ireland business and it conflicts with the positive measures being taken to boost tourism and related employment, and to encourage foreign direct investment. It adds to the cost of indigenous businesses, particularly those seeking to grow their export market. The Committee received evidence of that just last week from a large fish processor in Northern Ireland now exporting to the far east but finding APD a huge burden on business. At best, it adds to cost; at worst, it could jeopardise connectivity between Northern Ireland and other UK and international markets.
Although APD was originally relatively affordable, it has increased significantly, particularly on long-haul flights. The increases have been very steep since 2007—up to 260% for short-haul flights—and between 2008 and 2011, for example, the number of passengers carried by Virgin Atlantic decreased by 7.7%, but the amount of APD paid by its passengers increased by more than 45.5%.
Members will be aware that this is an issue I have raised frequently in the House. I apologise if what I say today has been heard before, but until it is fully acknowledged and acted on, it bears repeating. I concur with a lot of what other hon. and right hon. Members have already said, but I want to focus on the impact on Northern Ireland. Northern Ireland is unique, but it offers an effective demonstration in microcosm of the impact that APD can have more widely in the UK. The last time I raised the issue with Treasury Ministers, I was mildly scolded for not first acknowledging the work that the Treasury had done on APD for direct long-haul flights from Northern Ireland. In an attempt to be more charming and to heal those wounds, I will therefore refer to that first on this occasion.
The United Continental flight was hugely important, as our only long-haul direct route, for a number of reasons. First, of the 600,000 passengers it carried in the last six years or so, 40% were in-bound tourists and business visitors. Furthermore, the route’s success is a demonstration to others of the viability of Northern Ireland as a tourism and business destination for direct long-haul flights, and provides a base on which we can build. APD placed the flight in jeopardy because the rates are so much lower in Dublin, which is less than two hours away. I give credit to the Treasury for responding to lobbying by MPs, the Northern Ireland Assembly and businesses and to the report of the Northern Ireland Affairs Committee inquiry into air passenger duty by reducing APD for long-haul flights from Northern Ireland and indicating recently in the Budget that it would be devolved to the Northern Ireland Assembly.
Having I trust paid due regard to the progress made, I still have to acknowledge that the change does not assist with the unfair burden placed on Northern Ireland by air passenger duty on necessary regional flights or the double duty that is paid, as our access to the UK hubs often requires separate flights owing to the small number of through carriers. UK economic policy remains to focus development on the south-east;, so other regions need to access that market to develop. In addition, the main hub airports in the UK for international travel are based in the south-east. Connectivity to and through the south-east is therefore vital, yet for those of us living on an island off an island it can only be achieved by flying.
The case for a review of APD is strong across the UK. We are island nations and aviation is crucial. However, in Northern Ireland the situation is more acute, as we are the only region with a land border with another EU member. Price-sensitive advantage in the Republic has directly affected Northern Ireland, which is something we need to be conscious of. I have mentioned the Irish Government’s intention to abolish the tax. We should note that, despite the huge economic pressure on them to reduce their deficit, low rates of corporation tax and APD are two things on which the Irish Government refuse to budge because they recognise them as key economic drivers.
APD also has a detrimental effect on tourism in Northern Ireland. Ultimately, if people fly to Dublin, they stay in the Republic of Ireland and spend there. We are lucky in Belfast if we can extract a day trip out of their visit. We need people to come and have bed nights in Northern Ireland. We need them to spend their money in Northern Ireland, which is best achieved by getting people to fly there.
I recognise that APD is lower on regional flights, but it is also paid on both legs of a journey. When combined with passenger landing charges for those on regional flights for which Heathrow or Gatwick is the destination airport, APD significantly increases costs for travellers. There is a disproportionately negative effect on those travelling from Northern Ireland, and there are few practical travel alternatives for us.
I want briefly to reflect on two other key issues: the environmental impact of aviation and the financial impact of change. APD was introduced as a means of taxing aviation to reflect the environment impact. I have no objection to aviation paying its fair share in that regard, but APD has long since parted company with that objective and is now merely a revenue raiser for the Treasury. That may sound dismissive, but it is not intended to be. Raising revenue is hugely important, given the context of the deficit, but the international evidence suggests that taxation on aviation is such a constraint on other revenue that it outweighs its benefits. I am therefore pleased to be able to support the motion today, which seeks a proper review of the situation.
In the few seconds I have left, I would like to reflect on the need for us also to consider the impact on outbound travel—
Siobhain McDonagh (Mitcham and Morden) (Lab)
I have a large Caribbean community in Mitcham and Morden, many of whom moved to Britain 20, 30 or 40 years ago. For them, air travel is not a leisure choice, but something they save up for over many years, often from low incomes, scraping together every spare penny to visit their friends and families. For most of us in the Chamber, the people we treasure live close by—my mum lives round the corner. We are not charged £81 in tax to see our friends and families, but to my constituents that is what air passenger duty really is: a tax on friends and family. Let us not forget that those constituents are also a lot less well off than we are. Many are pensioners; others are in low-wage jobs, having come to this country to do the kind of work that the rest of us did not want to do.
Earlier this autumn, I hosted a party here in Parliament to celebrate 50 years of Jamaican independence. Mitcham and Morden has a large Jamaican community, and I wanted to celebrate the role that people from that country and the rest of the West Indies play there. Most had never been invited here before, and I am pleased to say that hundreds of people came along. It struck me that this was a community that had had it hard, yet despite often encountering prejudice and discrimination, they had never stopped. They had worked hard to put food on their children’s plates, yet they also found time to help the community, whether through the church or by setting up local youth groups.
Most of all, it struck me that those people were not only proud to be British but determined never to forget where they had come from. They were proud of their culture, proud of the country that they were born in and proud of the country that they now live in. And they have every right to be proud, because they have improved this country, and Mitcham and Morden in particular. However, I am not proud of the effect that this tax has on them and their families.
I appreciate that when air passenger duty was introduced by the Major Government, it was done with the best of intentions. There are problems with emissions, and the aviation industry has an obligation to reduce them, just as every industry does, but I do not think that imposing a duty on every passenger is the best way to encourage airlines to make their planes produce fewer emissions. It is too crude, and regulating emissions achieves better results, as we are now discovering thanks to the efforts of the European Union—not a body that is often praised. At the time, however, APD seemed a modest way of tackling the problem and, right up until 2007, economy class passengers paid only £5 for flights to Europe, and £20 for flights beyond. Sadly, since then, under this Prime Minister and the previous one, air passenger duty seems to have become more about raising revenues than reducing emissions. In the past two years, APD on flights to the Caribbean has risen nearly two thirds, to £81.
What makes the tax so unfair is that it disproportionately targets poorer, ethnic minority communities. Because of the anomaly that says the capital of Jamaica is more than 4,000 miles from London, while the capital of the USA is not, passengers flying to Kingston have to pay more than people going to airports in the States that are further away. In 2010, that anomaly cost passengers to the Caribbean £5 more than passengers to the US. Now the difference has more than trebled, to £16.
What my constituents want to know is: how can it be fair that those travelling to Kingston should have to pay 25% more duty than much better-off passengers flying to Los Angeles, which is about 20% further away? If anyone were to look at this from an equalities point of view, they would be appalled. The impact falls disproportionately on the lower paid and on the black community. Like many Members, I have been petitioned by hundreds of people about this unfair tax, and the unfair anomaly that I have just mentioned is a major concern.
It was disappointing that the Government’s consultation did not respond to those legitimate concerns. It is already difficult and expensive to fly to Jamaica. I had a quick look on Expedia before coming here, and in the week starting 17 November there are only three days on which it is possible to get a direct flight to Kingston, although there are direct flights to Los Angeles every day. As a result, the cheapest return to Kingston costs more than £900, while a return to LA is just £564. Clearly, that is not all because of air passenger duty. It is because there is not enough capacity at London’s airports, which is why I support an extra runway at Heathrow, to bring in extra jobs and cut travel costs for my constituents.
However, those differences show that the cost of travel for our low-income, ethnic minority constituents is already disproportionately high. Air passenger duty is a regressive tax that only makes that situation worse. If it is about cutting carbon, it should be based on real emissions, and it should not favour wealthy passengers travelling to developed countries such as Canada and the US over people travelling to developing countries in the Caribbean. This Government have failed to take advantage of the opportunity offered by their consultation to introduce a fair alternative, or to tackle emissions meaningfully. That is a source of considerable disappointment.
Mr Andy Slaughter (Hammersmith) (Lab)
I was first alerted to the air passenger duty issue about four years ago, long before the fair tax on flying campaign. A large number of constituents were writing to me. Many of them, like the constituents of my hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh) and for Dunfermline and West Fife (Thomas Docherty), had family in the Caribbean. They were concerned about the quantum level of the charging—and if they had known that the income from APD was going to double between 2010 and 2016 from just over £2 billion to almost £4 billion, they would have been even more concerned—but they were more concerned about the unfairness and the fact that under the ridiculous banding system, the capital city system, it costs more to fly to the Caribbean than to Alaska or the west coast of America.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
There is another impact of the banding. Alan Glen, who runs an independent travel agency in my constituency specialising in long-haul destinations, is finding that people trying to get these fares is having an impact on his business.
Mr Slaughter
I am grateful for that intervention. I was just going on to talk about the effects not only on families, which is often devastating, but on commercial organisations, and not just those in this country, but, to continue with an earlier example, in the Caribbean as well. I got to meet the Caribbean Tourism Organisation and Ministers from Caribbean countries—sadly, it was here rather than there, but there it is. We share a long historical tradition and we have not just family and cultural ties, but economic ties with the Caribbean. There was and still is a strong feeling that this country was letting the Caribbean down. It came up in many debates under the last Government, particularly during the passage of what became the Finance Act 2009. I found myself in the unusual and uncomfortable position of agreeing with the then Opposition Front-Bench team more than my own. I went to see the then Chancellor with a number of my hon. Friends, particularly my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), who took a strong stand on this issue. When we debated the Finance Bill, I was perplexed that the then Opposition did not push the issue to a vote, as I thought they might have won. I was a little suspicious about why they did not press it then.
Let me remind the present Government Front Benchers what their equivalent numbers were saying at the time, as it bears repetition. The hon. Member for Canterbury (Mr Brazier), who was a shadow Transport Minister, gave an interview to The Daily Telegraph in late 2009. He said that his party supported
“a per plane tax rather than the existing one based on passengers”
and that
“whatever tax is employed if the Conservative Party wins the next General Election, the ‘absurd capital cities rule’ of APD banding would be abolished.”
On 15 April 2010—some three weeks before the election—the hon. Member for Chelsea and Fulham (Greg Hands) gave a fuller interview to the Travel Trade Gazette, in which he outlined details of the plans for the first time. He said that the Conservative Government
“would scrap the much criticised system of distance bands, which have led to people travelling to the Caribbean paying more than those to the west coast of the US, which is further from Britain. A replacement system possibly using more bands and based on actual distance rather than distance between capital cities…would be introduced.”
He said:
“the reform would change APD to tax aircraft rather than passengers, apply to transfer passengers who are now exempt, and charge a lower rate for newer, more fuel efficient aircraft.”
Finally, he said the aim of the reform was to
“properly tax the environmental impact of aviation, not raise more revenue.”
Let us have a look at how many of those promises, made just three weeks before polling day, have been kept. Those same promises appeared in the manifestos of both coalition parties and in the coalition agreement. We are perhaps used to over-promising, particularly from this Government, but this is over-promising on a tuition fees scale. What happened as a consequence? We had the review during the Government’s moratorium on an increase, but after a year of engagement with the industry, the Government decided not to change the tax’s banding structure in regard to different classes of flights or in respect of the application of APD to the regions. The Government’s only proposed reform was to extend APD to business aviation from 1 April 2013. That may be welcome, but it will raise only about £5 million a year, without addressing the central issue that all hon. Members who have spoken today would, I think, wish to see addressed. The dismay that this has caused to those who lobbied so hard and were promised so much is very clear from a press release put out at the time the consultation was published by the Caribbean Tourism Organisation. It said:
“Today’s announcement on the APD is a slap in the face for all Caribbean people. It dismisses all of the research and information CTO has provided to the British Government over the past three years, and it contradicts the message sent by the UK Chancellor…in March 2011 when he cited the discrepancy between the USA and Caribbean APD rates as one of the reasons for holding a consultation on reform of UK APD. The Caribbean is the most tourism-dependent region of the world and the British Government’s decision totally ignores the negative effect that APD is having on our economies and the Caribbean’s business partners in the…travel industry.”
Thomas Docherty
My hon. Friend is presenting a compelling argument. He may be interested to know that in the last three years the Eastern Caribbean Currency Union has seen a 20% drop in the number of people travelling to the area.
Mr Slaughter
That is a good point.
The fair tax on flying campaign was organised very efficiently, but I do not think that the 200,000 UK residents and about half that number of people living abroad who have written to the Chancellor, either via their Members of Parliament or directly, have been treated terribly well. I have received letters from more than 500 constituents, and I note that the hon. Member for Chelsea and Fulham (Greg Hands) has received 1,281. Perhaps there is some justice, as that is only 10 shy of the highest number received by any MP.
I have seen the standard replies sent by the Treasury and by Conservative MPs, and I am dismayed by them. They are positively insulting to the people who wrote those letters. They do not deal with the issues at all; they simply mention that VAT is not charged on domestic flights, which is almost entirely irrelevant when long-haul flights are the issue, and that the business jet loophole will be closed, which, as I have already explained, goes nowhere near dealing with the problem. I feel that my constituents and those of many others have been treated with contempt. They have been betrayed by the Government’s broken promises, and they have received a wholly inadequate response to the campaign that they mounted.
The demands made in the motion are very modest, and an economic case has also been presented. I urge the Minister to accept the proposals in the motion, and I urge the House to vote for it in the event of a Division. I hope that there will be a review which, unlike the consultation that has taken place so far, will enable us to address the real problems that air passenger duty is causing, not only for my constituents—and not only for the poorer constituents mentioned by my hon. Friend the Member for Mitcham and Morden—but for the economy of this country, and the economies of many regions with which we trade.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I note that no Member has spoken in favour of APD, which I think says a lot. In the midst of a recession, when the cult of austerity is starving the economy, taxes such as APD are bleeding the economy. That is not just my view; it is the view of those in the frustrated aviation and airport sector in Scotland, who see themselves as hostages of a Government policy here at Westminster that is damaging their sector and, by logical extension, the wider economy.
Amanda McMillan, the managing director of Glasgow airport, has said:
“Due to the size of the market in Scotland, we will always find it difficult to attain and sustain new routes, and this situation is compounded…further by APD which simply serves to artificially depress demand and dissuade airlines from basing aircraft here.
Unless APD is reformed, people travelling to and from Scotland—who must fly due to the lack of feasible alternatives—will continue to face some of the highest levels of taxation in Europe which is clearly a disincentive to travel.”
Jim Sheridan
If APD were devolved to Scotland, and Scotland then cut the tax, would there not be consequences for the Barnett formula?
Mr MacNeil
If APD were devolved to Scotland, the economy would grow. I should like all taxes to be devolved, so that the benefits of the policies introduced by the Scottish Government could go to the Scottish Exchequer. That is a logical extension, and it is what is happening in all the other countries. I am sure that, given the level of APD in the United Kingdom, no other country would be as foolish as the Government whom the hon. Gentleman supports at Westminster. He wants a Tory Government to have these powers over Scotland, and, given that he is a Labour MP, I find that quite shocking.
It is calculated that APD will have cost the Scottish economy £210 million in lost spending by 2016. So short-sighted is this policy that it will end up with our losing up to £50 million in other taxes through economic activity that will not take place. The Federation of Small Businesses has been damning of the UK policy on this tax:
“The Government’s determination to tax air passengers has resulted in a sustained negative impact on businesses as well as on leisure travel. IATA reported in June 2012 that UK passenger numbers have declined slightly over the past four years at a period when Germany, France and the Netherlands saw growth of between 2-4%.”
That must have damaged our economy.
The UK has embraced this tax in a helter-skelter fashion. It is regressive and it hits the poor disproportionately. It is a poll tax of the skies. It is felt less by millionaires in the Cabinet and elsewhere than it is by others.
Other countries have been wiser in their approach. Some countries that have introduced APD, such as Germany and Austria, have done so at a lower level. The Germans are economically canny, of course, and after they introduced it, they reduced it, rather than increasing it as the UK has done. We must welcome the fact that Aer Lingus is planning to fly to Edinburgh and therefore give us more choice, but there is still the handicap of high APD.
King Louis XIV of France was known as the sun king, and perhaps his sunny disposition was in part due to this quote from his Finance Minister, Jean-Baptiste Colbert:
“The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the smallest possible amount of hissing.”
For the benefit of Members, I have translated that passage from the French. We have not had much of a sunny disposition from the Treasury for the past two years, but there has been plenty of hissing—and booing—in its direction.
Since 2007, APD has risen by 160% on short-haul flights and between 225% and 360% on long-haul flights. The Aberdeen Airport managing director has said:
“At Aberdeen Airport we run a real risk of losing around 200,000 passengers by 2016 through this damaging tax. Each recent increase in APD has had a dramatic impact upon what we, as airports, have achieved and could have achieved without APD. It is imperative that the UK government undertake a detailed and comprehensive review into APD with the utmost urgency, and at the very least freeze APD whilst that is taking place.”
Gordon Dewar of Edinburgh Airport adds:
“This tax has now hit its tipping point where the damage it is doing to Scotland far outweighs the benefits. This cannot stand and must be reviewed as a matter of urgency.”
No wonder people are concerned, especially as the Calman commission recommended this policy be devolved in 2009 and the MSP representing the Edinburgh airport area, Colin Keir, says:
“APD hits tourism and business and we need to have the power at Holyrood to maintain competitiveness with other countries and fairness to those travellers who have to use our airports.”
The economic mismanagement from Westminster is frustrating people, especially as this Parliament and Government will not devolve this policy to Scotland. I tell Parliament and the wider country, however, that in 2014 people will have a chance to have APD devolved and to give Scotland a competitive edge. After the independence referendum of 2014, I look forward to the devolution of APD, along with everything else, by one means or another.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I will not be churlish, so let me say only that it is a pleasure to follow the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), with whom I have shared a number of flights to destinations both within the UK and further afield. I have therefore heard him speak at great length on some of the issues he has just discussed, but he has still not persuaded me of anything other than that we are better together.
I congratulate those Members who secured the debate. By and large, we have had some helpful and thoughtful contributions, and I was very aware from the outset that a number of Scots were in the Chamber. I was glad to see that. Most of them are still here, although I note that my hon. Friend the Member for Central Ayrshire (Mr Donohoe), who has an encyclopaedic knowledge of the airline industry and was warning of inclement weather, is no longer in his place. I am worried that the rest of us might be detained here for somewhat longer than we had wished—I hope that will not be the case.
Hon. Members have made the case for the motion powerfully and persuasively. I am not going to repeat everything that has been said, although some points are worth reiterating because the issue has clearly touched a lot of people. The fact that well over the 100,000 people needed to trigger a debate in this place were drawn to sign the fair flying petition is evidence of that. Although I perhaps did not receive as many e-mails as other hon. Members, I know from my postbag that the issue matters to people. It matters to those who fly for business purposes, for family reasons, and for leisure and holidays.
I undertook a short survey of those who responded to the fair flying petition, asking them for their comments. I heard from a 65-year-old woman who flies from Scotland regularly to see her elderly father, who lives in the south of England; from the mother of a young person who is working overseas as a teacher—she told me that she helps to pay for the flights to enable the visits; and from a grandmother who travels regularly to the other side of the world to see her grandchild, who has a long-term condition. Those are the real-life examples that people were bringing to me. It is important to recognise the strength of feeling on this issue.
There has been wider frustration at this Government’s lack of consistency or urgency on aviation policy, as well as concerns about APD. When the economy has been struggling, the family purse strings have been tightened and businesses are crying out for support, the lack of direction has not been helpful. A number of speeches have dealt with the issues of tourism and jobs. I can tell the hon. Members who mentioned the Caribbean question that I have agreed to meet a delegation to discuss that in more detail, just as I have agreed to meet a number of other organisations after this debate to see where we take things in future.
It is important to remember that when Labour was in government APD was restructured so that it would be based on four geographical bands set at intervals of 2,000 miles. It was intended that travellers flying further would pay a higher rate of duty, but I know that hon. Members have discussed some of the anomalies. The intention was that additional taxes on air travel would be targeted at the most polluting, long-haul flights—again, people have raised issues about that today.
As we heard from my hon. Friend the Member for Hammersmith (Mr Slaughter), during the election campaign both the Conservatives and the Liberal Democrats argued for reforming APD further. The Conservatives argued that they wished to
“reform Air Passenger Duty to encourage a switch to fuller and cleaner planes.”
The Liberal Democrats’ manifesto contained more detail, suggesting that they would ensure that pollution was properly taxed by replacing the per-passenger APD with a per-plane duty—PPD—and that air freight would be taxed for the first time. They also said they would introduce an additional, higher rate of PPD on domestic flights if realistic alternative and less-polluting travel was available.
Those statements in the manifestos were supposed to be translated into action following the coalition agreement, which confirmed that the Government would
“reform the taxation of air travel by switching from a per-passenger to a per-plane duty”
and
“ensure that a proportion of any increased revenues over time will be used to help fund increases in the personal allowance.”
Those allowances were referred to in an earlier debate, and they have been referred to again today.
The Chancellor announced in the 2010 Budget that major changes would be subject to a public consultation. We then saw speculation in the press that the Government had had a change of heart over per-plane duty. Indeed, that was what triggered the organisations coming together to launch the fair tax on flying campaign, to apply pressure in order at least to get some action or clarification on APD.
In the 2011 Budget, the Chancellor announced that the Government would consult on simplifying the structure of APD. He also announced that he was dropping the commitment made in the coalition agreement and not pressing ahead with a per-plane duty, and that APD rates would rise in line with inflation, although the next increase would be deferred for a year. After promises of wholesale reform, the industry and the public heard that he was not only keeping the current structure but raising the rates further.
I am always happy to try to give people credit where it is due, not that I have had to do that often in the Chancellor’s case. There was a consultation and it covered a number of areas, including private jets, different tax bands, premium economy flights, flights from regional airports and the devolution of APD—all the things that people have talked about today. However, having consulted, the Government failed to propose anything. They did not propose any changes to the tax’s banding structure, to how different classes of flights are taxed or to the application of APD to the regions. Instead, they seemed for some time to have given up on any reform of APD at all. They argued, as the Minister did again fairly recently, that although no action had been taken there was no reason for another consultation or review.
I have only a couple of minutes left to summarise the debate and I realise that this subject is very difficult, given the range of considerations that must be balanced—including those of industry and business, the travel trade, airlines, consumers and the Treasury. I recognise the Scottish issues and those in Northern Ireland, particularly those outlined as regards Scotland and the connections with the main hub airports.
Mr David Hamilton
If a passenger uses the same airline—British Airways, for example—from Scotland to London and then to America, Australia or South Africa, the duty in the regional airport does not matter. The real issue is the double tax.
Cathy Jamieson
My hon. Friend makes a valuable point and I know that he has raised that question on a number of occasions. A sensible review would allow us to consider such matters. For the Government to undertake a consultation and take no action, without even considering any further work on the issue, was disappointing and showed a lack of leadership. It did not go unnoticed by the aviation industry, and we have heard a string of comments from the travel organisations, airlines and consumers. The Select Committee on Transport stepped in, in a sense, with its inquiry into aviation. The Chair helpfully confirmed that that inquiry would consider APD issues and it has provided an initial focus.
In conclusion, I hope that the Chancellor and the Minister, who will relay this debate to him, will take note of what has been said today and will consider and act on the findings of the Transport Committee’s report when it is published. Many Members are arguing for action and a review. The motion is modestly worded, although at some points I might not have worded it in such a way. However, in the spirit of co-operation, we want to ensure that we have the opportunity to consider the issue in more detail. We recognise the significant economic issues in the UK that need tough decisions, but such decisions should be based on the best available evidence.
The consistent message coming from all sectors of the industry is that the lack of certainty is causing problems, delaying investment decisions, risking future development and, crucially, risking jobs. I hope that the Minister, who comes fresh to this issue—indeed, he is the third Minister I have faced across the Dispatch Box in the relatively short time for which I have been shadow Minister—will take account of the points that have been made today, take away the work that needs to be done and introduce the review asked for in the motion.
The Economic Secretary to the Treasury (Sajid Javid)
We had an excellent debate earlier on beer duty and now we are discussing APD. I am pleased that, as far as I know, there will be no debate on fuel duty this afternoon. After this debate, I would like a cold beer and a trip to the Caribbean.
I congratulate my hon. Friends the Members for Witham (Priti Patel) and for Crawley (Henry Smith) on securing the debate. I will address some of the specific issues raised by my hon. Friends and by all hon. Members —I believe that 15 spoke from the Back Benches.
As the Minister responsible for air passenger duty, I would like to acknowledge clearly the important contribution the aviation industry makes to the growth and development of the UK economy. The sector connects millions of UK consumers and businesses with international markets, enables tourism to and from the UK and makes long-distance visits between families and relatives possible. I also recognise that recent economic conditions and the global downturn have been challenging for both consumers and the aviation sector. However, there are positive signs for the industry, as evidenced by the recent increase in recorded passenger numbers. I believe that the aviation sector will continue to play an important role in helping the UK economy back to health and strong growth.
I would like to say a little about my own experience. Before being elected to the House, I spent 20 years doing business in emerging countries, and I did that from New York, London and Singapore. I relied very much on the aviation industry and on global international hubs. Therefore, I understand the importance of global aviation to the UK economy if we are maintain our position as one of the world’s leading financial and business centres.
Let me respond to the hon. Members who have expressed concern about the overall level of APD and the impact of recent rises in the duty. The real-terms increases in APD in 2009-10 and 2010-11 were legislated for by the previous Government. Despite the challenge of the budget deficit we inherited, this Government have limited the rise in APD to inflation over the period 2010-11 to 2012-13. Also, in recognising the sector’s need to plan ahead, we have sought to provide airlines and passengers with clarity on future rates. The 2012 Budget set out APD rates for 2013-14, and again the rise is limited to no more than RPI inflation. The real burden of APD will therefore remain unchanged for a further year, as my hon. Friend the Member for Windsor (Adam Afriyie) helpfully recognised.
Hon. Members have today raised concerns about the impact of APD on the UK’s competitiveness and ability to attract inward investment. My hon. Friend the Member for Witham described us, rather intelligently, as being in a global race, and she is absolutely right. The UK has the third largest aviation network in the world, after the USA and China. The Government wish to ensure that UK airports and airlines remain internationally competitive. In that regard, it is important to consider the tax system as a whole.
The Government are committed to creating the most competitive tax regime in the G20, and we have already made significant progress towards that aim. The corporation tax rate has already been reduced to 24% and will be cut to 22% in 2014, which is significantly lower than, for example, the rate in the United States, France and Germany. The further cut in the main rate of corporation tax was warmly received and has encouraged businesses that had previously left the UK to return, such as WPP. It is also encouraging new businesses to relocate to Britain. For example, Aon, one of the world’s largest insurance brokers, has announced plans to relocate its global headquarters from Chicago to London.
Changes to controlled foreign company rules have also been welcomed, with the CBI stating that the new rules will meet the Government’s objectives of simplification and greater competitiveness. As part of the Government’s ambition to increase exports, in July 2012 we also announced a £5 billion export refinancing facility, to be delivered through UK Export Finance as part of its UK guarantees. That will help banks to provide long-term trade finance for UK exports.
Let me say a little about the Government’s approach to APD. I know that some hon. Members have called clearly today for a cut in APD, or at least a freeze in cash terms, but let us be frank about the situation we find ourselves in. Let us not forget that when we came to office we inherited a fiscal deficit of historic proportions. We were burdened with the largest budget deficit in the developed world: £159 billion in the last year of the previous Government, which was more than 11% of the country’s income. At that rate, the previous Government were borrowing more in one week than we raise in one year with APD. The Government’s position is that there can be a sustainable platform for economic growth only if we are willing to tackle that overspending. The plan has earned credibility around the world. Our actions to reduce the deficit and rebuild the UK economy have secured interest rates at near-record lows, benefiting thousands of businesses and families alike. APD is forecast to raise about £2.9 billion in 2013-14. Those revenues will be important if we are to maintain progress towards our goal.
I also remind hon. Members that international aviation is generally not subject to tax on fuel and, in contrast to many other countries that apply VAT on domestic flights, no VAT is levied on international or domestic flights in the UK.
Let me also address hon. Members’ concerns about inbound tourism. The Government continue to place great value on the tourism sector, which makes an important contribution to the economy. Tourism is one of the largest industries in the UK and our third highest export earner, worth around £116 billion to our economy, or roughly 9% of GDP. The Government remain focused on building a long-term tourism legacy from the Olympic games, with Visit Britain investing £125 million in one of its largest international tourism campaigns. One ambition is to raise the number of Chinese visitors from 150,000 now to 500,000 by 2015. Visit Britain is developing a specific marketing plan for China to respond to that challenge.
Domestic tourism is also very important. Of course, for tourism to grow, it must remain affordable. We acknowledge that family budgets are being squeezed and we have to take action to help. The changes to the personal income tax allowances that the Government have already made have helped the budgets of more than 25 million individuals and taken 2 million people out of income taxation altogether.
Our action to reduce the deficit has led to near-record low interest rates, which have also made a contribution. We must not forget that. If interest rates today were just 1% higher than they are now, businesses—particularly small and medium-sized enterprises—would face an additional interest rate bill of almost £10 billion in total, and the average mortgage for a family would rise by almost £1,000 a year.
Let me also address concerns that hon. Members have raised about the 2011 APD consultation and calls for further research. The consultation examined whether reforms to the design of APD could improve the overall fairness of the tax. Following the consultation, we confirmed that APD would be extended to business jets, and the majority of people who responded to the consultation agreed with that.
However, in weighing up the case for reform, the Government recognised that no banding structure could be entirely free of anomalies. A number of hon. Members have mentioned flights to the Caribbean. They have made good points on that issue, which we have heard about before in the House. The hon. Member for Dunfermline and West Fife (Thomas Docherty) asked whether I would be prepared to meet him and a delegation; I would be more than happy to do so. The hon. Members for Mitcham and Morden (Siobhain McDonagh) and for Hammersmith (Mr Slaughter) also eloquently referred to flights to and from the Caribbean.
A revenue-neutral change would have required 90% of passengers—those who fly to band A destinations across Europe and band B destinations, such as the US—to pay more for their flights. The Government felt that, in the current economic climate, it would not be fair to ask the majority to pay more to help fund a cut in APD for the minority. They therefore decided to retain the existing structure of four APD distance bands.
Sarah Teather (Brent Central) (LD)
I hope that the Minister recognises that his words are extremely disappointing to many of my constituents who travel regularly to the Caribbean—[Interruption.] I have been watching the debate on television. Those constituents will be very concerned about the Minister’s words. Will he reconsider the issue and look at a more granulated banding system that would ensure that those from the Caribbean were not particularly disadvantaged? I recognise his point about asking others to pay more, but the situation is surely unfair for those who are travelling not very far—not as far as to the US.
Sajid Javid
I thank my hon. Friend for her intervention. I am pleased to hear that she has been glued to her television set watching this debate. I take her point about the Caribbean. Several hon. Members have made a similar point, and I have listened carefully.
Mr MacNeil
The hon. Gentleman has spoken about having a revenue-neutral tax. When the Government cut taxation from 50% to 45% for millionaires, did the revenue-neutral consideration enter into that equation?
Sajid Javid
Absolutely. I can assure the hon. Gentleman that the effects on taxation were taken together and that the Government had determined that the extra 5% was raising hardly any tax whatsoever.
Given that we have recently completed a comprehensive consultation on the subject, we have no plans for further reform at this point.
Henry Smith
Would it not be reasonable, though, to have a study, as proposed in the motion, to see the impact on the economy that air passenger duty is having? Surely a study by the Treasury is a reasonable thing to request.
Sajid Javid
I thank my hon. Friend. I will come to that point in a moment.
As I said, we have no plans at this point for further consultation, but we are keen to ensure that the aviation sector can continue to enable economic growth and support jobs across the country. APD makes an essential contribution to the public finances and to this Government’s plan to create a stable platform for growth.
This has been an excellent debate that has given me and the Government much food for thought. There have been excellent contributions from Members in all parts of the House, and I assure them that I have been listening very carefully. Should the motion pass; I have a feeling that it might well do so—
Jim Sheridan
Before the hon. Gentleman concludes, does he accept that it is grossly unfair for British people to pay APD twice, depending on where they live?
Sajid Javid
I thank the hon. Gentleman. We have looked at these issues in the consultation, and I believe that I have addressed them.
I have listened carefully to the debate, and the many thoughtful contributions from Members on both sides of the House have been very valuable. Should the motion pass, then of course the Government will take note of Parliament’s view; it is important that we listen to the views of Parliament. Let me conclude by thanking my hon. Friends the Members for Witham and for Crawley for raising this important issue with the House.
Priti Patel
I thank all right hon. and hon. Members for their contributions to this powerful debate in which we have heard about the impact of this tax on hard-pressed families and businesses, and about its counter-productive nature. I thank my hon. Friend the Minister for his remarks. I hope that he and the Treasury will keep a very open mind about the call in the motion for an economic assessment and a full review and will not rule it out, because, as we have heard, this tax is having a counter-productive impact on the economy. All Members present will continue to press him and the Treasury to secure a review in future.
Question put and agreed to.
Resolved,
That this House believes that the UK’s air passenger duty acts as a barrier to economic growth and deters both inward investment and inbound tourism; notes the financial impact on families of the rising costs of air passenger duty; further notes the impact on British businesses wishing to export and take advantage of business opportunities overseas; notes that the current air passenger duty regime is the highest air passenger tax in the world, which makes the UK less competitive than countries with lower aviation taxes; further notes that over 200,000 members of the public are calling for a review of the economic impact of air passenger duty; calls on HM Treasury to commission a comprehensive study into the full economic impact of air passenger duty in the UK, including the effects on jobs and growth, reporting in advance of the 2013 Budget; and calls on the Government to use the evidence from the study to inform future policy-making.
Rhiya Malin
(12 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Eleanor Laing (Epping Forest) (Con)
I am bringing before the House the matter of the death of little Rhiya Malin, who was two-and-a-half years old when she died at Eton Manor nursery in Chigwell in my constituency. I do so because it is our duty here in Parliament to hold public bodies to account. The people of this country rely on Government and Government agencies to protect them from wrongdoing. Sadly, however, we sometimes discover instances in which the attitude of a Government Department or agency is based on a box-ticking, passing the buck and “it’s in the rules, so it’s okay” attitude. Sometimes the real effect on real people is passed by—
Mrs Laing
I had not realised that we were ahead of time. We will have an extra minute, so the Minister will be delighted that she will be able to give an even longer explanation of what went on in the case under discussion.
As I was saying, sometimes the effect on real people, who rely on Government Departments and agencies, is passed by, forgotten or ignored. Sadly, that is true in this case.
Before I begin the main part of what I have to say, I welcome the new Minister to her position. I appreciate that she has played no part whatsoever in and has had no personal responsibility for the matter until now, but some of her predecessors, of whom I am critical, should bear some responsibility for passing the buck and an over-reliance on bureaucratic rules. My intention in bringing the matter to the House’s attention is to ensure that, in future, such matters will be dealt with in a better way and have a more satisfactory outcome.
This is a very sad case. Five years ago, on 8 November 2007, Rhiya Malin, a little girl aged two, died while in the care of Eton Manor day nursery in Chigwell in my constituency. The nursery is still operating. Some of the people who had care of—or, it could be argued, did not have care of—the little girl at the time she died are still working there. The facts speak for themselves. Someone put a child aged two and a half in a nursery. We are not talking about a child aged seven or eight, who can run about and do things that lead to accidents, such as climb trees, go up on roofs or fall off bicycles. We are talking about a two-year-old baby who should have been supervised. She was unaccounted for for 25 minutes, so something went wrong. The facts speak for themselves. That little girl should not have died while in the care of that nursery.
I fully appreciate that it is not the duty of Parliament to hold individuals to account and that some proceedings relating to this matter are still sub judice. I also appreciate that neither the Minister nor anyone else can comment on those issues in public, and I will not do so either, because that would be wrong. The question whether a particular individual was or was not responsible for the apparent negligence that led to Rhiya Malin’s death is a matter for the courts, not us, but the nursery has accepted responsibility for the health and safety failings and it is still trading. The people who failed to find that little dying girl for 25 minutes that day are still there.
I am not interested in dealing with a criminal standard of proof, and I am not interested in retribution—as I said, those are matters for the courts. I just want to ensure that we do all we can to hold public bodies to account and ensure that what happened at Eton Manor nursery that day does not happen again, ever, to any other little child who has been put in the care of people who have been presumed to be responsible but have acted irresponsibly.
One aspect of the case that really upsets me is that Ofsted has treated it as though a child had broken a leg or an arm and it were required to ensure that it did not admit liability for fear of having to spend public money on compensation to the parents of the injured child. That has been its attitude throughout.
For me to receive a letter from one of the Minister’s predecessors suggesting that I could hold Ofsted to account by going to a Select Committee or the ombudsman was an utter insult to a family who are bereaved and a little child who lost her life. There has been a box-ticking mentality of passing the buck. The mentality has been, “We have done everything we were meant to do,” and “It says here that this is what Ofsted should do, so that is what it did—no more, no less—so it is okay. Go away, Member of Parliament. What are you getting so upset about?”
I am getting upset because there were many complaints about that nursery before little Rhiya died. I have evidence of complaints or investigations in September 2004, April 2005, June 2005, September 2005 and September 2007. There may have been many more, but those are the ones of which I am aware. Yet nothing was done. Ofsted appears to have gone in and said, “Well, this could be improved on and that was wrong”, or “This was right, but that could be done better”, and nothing happened. There was probably not a good enough ratio of carers to little children, but it is not for me to make that judgment. It is for Ofsted to make it, and to carry through the job that is assigned to it by ensuring that a nursery—a place where little children are supposed to be looked after—is properly run and properly regulated.
I have delayed and delayed bringing the matter to the House, because we were awaiting the inquest, a judicial review result and the result of health and safety hearings, but it gets to the point where enough is enough. Five years have now passed, and in bringing the matter to the notice of the House and the Minister in public today, I think what I would say to myself if, five years after a tragic incident such as this, a similar incident were to occur in that nursery or some other nursery that could have been prevented if steps had been taken and lessons learned from the death of Rhiya Malin. After five years, I perceive that nothing has changed in that nursery. That is why I have brought the matter before the House. I appreciate that the Minister may be restricted in what she can say because parts of the case are still sub judice, but I do not mind because at least we are airing the matter in public.
One of the most concerning issues is re-registration. Soon after little Rhiya died, the nursery in question was re-registered under a different company name. We all know about the ownership of companies and the corporate veil and so on, but it looks as if deliberate steps were taken to re-register the nursery under a different name so that the record was wiped clean, and so that prospective parents researching whether it was a suitable company and place to put their small children would not have been able to find out that a child died. That change in company might have been a coincidence, and the name might have been changed for some other business, financial or tax reason, but it looks very much as if re-registration occurred because the company wished to conceal its responsibility—or possible responsibility—for what happened when little Rhiya died.
In September 2008 a director of Casterbridge Care and Education Ltd applied to register the five nurseries in that company with another company, Casterbridge Nurseries Ltd., of which they were also a director. Ofsted should have inspected Eton Manor in 2008, but because the company had re-registered, that did not happen.
An e-mail from someone at Ofsted states:
“I have an open CIE case…and the Midlands have an open CIE case…on two provisions within Casterbridge nurseries chain…Both provisions have recently been re-registered as the provider has changed its name from Casterbridge Care and Education Ltd to Casterbridge Ltd. The new certificates giving the new registration numbers have already been dispatched to the provider. The provider’s history with Companies House shows numerous changes of names over the last 5 years and a high number of CIE cases. Is it possible for us to transfer these cases which are logged against the old registrations to the new one? Or are we now in a position where we are forced to accept the provider’s resignation…which would effectively mean that the CIE cases trail is lost and the cases that are now live are simply closed?”
I know the Minister will say that the system has changed since 2008. One of her predecessors wrote to me saying that matters have been improved, and that as a result of this case Ofsted now deals differently with such matters. I am still wary, however, that not enough has been done to pinpoint who was responsible on the day that little girl died, and to make them feel their responsibility.
A letter from Ofsted from December 2009, on exactly the same matter, states:
“On the law as it stands, it is not clear that we have the power to publish the regulatory history of the old company in connection with the new company. Our current position is that we do not do so. We do not have any direct evidence to show that providers have used changes in legal entity to remove a poor registration history deliberately, although we are aware and mindful of the risks on this going forward. However, our registration process is sufficiently robust to pick up any significant concerns, such that if required, we would refuse registration.”
That is not so. A little girl died in that nursery five years ago, and it has gone on trading every day since. Other two-year-olds have been in that nursery every day since the death of Rhiya Malin, and Ofsted has not taken the necessary steps to stop it happening again.
As I have said, this is a complicated matter, but I do not want the Minister and her officials to wriggle out of it by saying, “We cannot hold any particular individual responsible because that is a matter for the criminal law,” or, “We cannot hold this company responsible because the nursery is no longer owned by it—it has changed from being this company to that company and another company.” Individuals within those companies have been involved all along. I know what happens when company names change and ownership changes. I am bringing the matter before the House because somebody somewhere in the chain of responsibility should have stopped passing the buck and ticking the boxes. They should have said, “This is not a case in which a child was injured or something remotely distasteful occurred. A child died in this case. It is not run of the mill. It is not an every day occurrence—thank goodness.” This is an unusual and exceptional case, and it should have been dealt with as such.
As I have said, I appreciate that the Minister has not dealt with the matter before, but I ask her to look at these facts. The nursery is still in operation; the people who were in charge are still there; no one has been held responsible for the death; and nothing has been done to ensure that it never happens again. I hope she can give some answers today, but I appreciate that it is difficult for her to do so. I hope that those in the chain of responsibility—through Ofsted and other Government agencies—sit up and take note. It is unacceptable to allow five years and more to pass after the death of a small child in a place that was regulated by the Government, where such a child should have been safe and properly cared for.
In bringing the matter to the House, I pay tribute to Rhiya Malin’s parents—her bereaved, heartbroken parents. They could have drawn a line under their tragedy, but they did not. They have continued to campaign and to do all they can to ensure that no other parents and little children suffer the tragedy they have suffered. I pay tribute to them for all they have done and continue to do.
The Minister is not afraid of taking on a challenge. I hope that by bringing the matter to the House, I have given her an opportunity to take action to ensure that nurseries such as Eton Manor are safer in future, and that the people who run such nurseries as businesses—not for the sake of caring, but simply for the sake of making money—are not allowed to hide behind the corporate veil.
The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)
I thank my hon. Friend the Member for Epping Forest (Mrs Laing) for obtaining a debate on this important issue and bringing it to my attention. Rhiya Malin’s tragic death happened a few years ago and was a truly appalling ordeal for her parents. It was also a truly appalling thing to take place in a nursery that—as my hon. Friend points out—is regulated by the Government. She raised two issues in her very passionate speech. The first was about how individuals who had taken decisions in the chain of command had been held to account, and the second was about the way in which Ofsted operates and the role it plays.
I agree with my hon. Friend that it is extremely important that Government bodies are held to account and that individuals take responsibility for their actions, whether they are in an agency or a central Department. I will certainly follow up on the specific issues that she mentioned.
My hon. Friend also highlighted the processes that Ofsted goes through, especially how it regulates and inspects nurseries and other child care providers. We launched a new early years foundation stage in September which sets stringent welfare requirements that inspectors regulate against. We are being clear that staff have responsibility for the safety and health of children; that children must be properly supervised in nurseries; and that nursery managers and other staff must fulfil certain qualification requirements. One of the very important factors in the safety of children in nurseries is the quality of management and staff. As she pointed out, I have only recently started work on this portfolio and I will shortly make further comments on staff qualifications and Ofsted regulation in response to the Nutbrown review of qualifications. I hope to talk to my hon. Friend before announcing those new measures. I hope also that they will address some of the issues that she has raised, such as box-ticking rather than understanding outcomes, and looking at what is happening on the ground—both important points that she raised in her speech.
On the particular powers that Ofsted has to intervene, Ofsted can set actions on providers that must be met within specified time scales. If failings are serious or pose a risk to the welfare of children, registrations can and should be cancelled. I will consider the implications of the outcome of the health and safety prosecutions of Casterbridge Care and the staff on duty at the time of Rhiya’s death. In response to my hon. Friend’s points about registration and inspection, I understand that the previous Minister accepted Ofsted’s proposals to retain information about previous registrations on its website for three years, and that information will be kept irrespective of whether there has been a change in ownership. That includes the inspection reports, and complaints and actions taken in respect of them. Parents will be able to press nursery owners, whether related to previous owners or not, about possible links with the previous registration.
It is my priority in this role to put in place a system that ensures that safety and quality in our nurseries and child care provision are the most important things. We want our regulatory system to focus on those two important areas. That is what parents care about. They want to know that if they leave their child in the trust of a nursery, they will be cared for and kept safe. If a nursery is not capable of keeping children safe and secure, it should not be in operation.
I mentioned that we were shortly to respond to the Nutbrown review and to consider various issues, including the salaries and qualification levels of staff operating in the child care industry. We are keen to ensure that it is a professional sector where people take responsibility, where there is proper training and development in all parts of the industry and where quality supervision and best practice are followed in nurseries across the county.
I have also been in discussions with Ofsted about how to ensure that our inspection system is of the best possible quality and cannot be accused of simply ticking the boxes. Inspectors must be properly observing what happens in nurseries and child care settings and ensuring that children are properly supervised, engaged with, educated and given the skills and tools they need to lead a successful life. Evidence shows more and more how important those early years are to children’s future development. And of course parents’ No. 1 concern is to ensure that their children are safe. That is all about the quality of the supervision and the people involved.
I congratulate my hon. Friend on pursuing this case for such a long time. I am concerned that she and the parents, who have gone through an extremely distressing time, have not yet had the full answers and full accountability they need. It is right that public bodies be held to account for their actions. I commit to her that, as well as ensuring that the structures under which Ofsted operates are the best possible and ensuring the safety and quality of the care that our children receive, I will also look into the issues that previous Ministers have undertaken to look into to see what further action can be taken.
Question put and agreed to.
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Common Agricultural Policy
(12 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Miss Anne McIntosh (Thirsk and Malton) (Con)
Welcome to the proceedings, Mr Chope. It is a great honour and a pleasure to serve under your chairmanship. On behalf of the Select Committee on Environment, Food and Rural Affairs, I am delighted to have secured this timely debate. Before I go any further, I draw colleagues’ attention to my modest entry in the Register of Members’ Financial Interests, which is pertinent to this debate.
We are discussing our first report of this Session, which I commend to the House, on greening the common agricultural policy, and the Government response. Our debate is timely for a number of reasons. The next round of CAP reforms will build on those achieved by Commissioner MacSharry and Commissioner Fischler, and now on the proposals launched by Commissioner Ciolos. The European Commission package introduces numerous greening measures with which farmers will be asked to comply. One of the first conclusions of the Committee was that there is insufficient detail for us to do an in-depth analysis, although we managed as best we could. Some of the problems that I will discuss include potential problems of cross-compliance, the possibility that the proposals might overcomplicate rather than simplify the CAP, and our main concern that it should not be a one-size-fits-all policy.
The backdrop includes the unprecedented weather conditions faced by UK farmers this year. We started with a drought that then became the wettest drought, followed by a late harvest in which many crops rotted in the ground, and our current potato crop is virtually impossible to harvest. I recognise that not only the farmers in my community, but those across Britain and the whole of Europe, have suffered. That will affect falling farm incomes.
I am delighted to see the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath), in his place, and I welcome him to his new position. The Department for Environment, Food and Rural Affairs will not publish farm incomes until January. I shall certainly watch them closely to see what the impact has been. One study on the area of northern England in which I grew up—I am sure that it is not dissimilar to the area that I now live in and represent—shows that hill farmers’ incomes have fallen to £8,000, which is unsustainable.
Two challenges form the backdrop for the next round of CAP reform: food security and climate change. Those twin challenges were identified by the outgoing Labour Administration. The Committee conclusions state that we believe that the Commission should allow member states to tailor environmental measures to their local environmental and agricultural conditions. I commend successive British Governments’ approach; we have a raft of agri-environmental measures that place our farmers ahead of many other European farmers. I believe that our agri-environmental schemes, among the best in Europe, deliver meaningful year-on-year environmental benefits. The Committee concluded that those benefits must not be watered down or diminished by the Commission’s greening proposals.
Huw Irranca-Davies (Ogmore) (Lab)
I commend the hon. Lady on her introductory remarks to this debate. It is a good opportunity. I agree entirely with her comments about flexibility. We support the Minister in seeking to achieve that flexibility for UK farming, but farmers in other EU nations should not be allowed any sort of opt-out. That would add further inequality to the playing field that we are trying to level.
Miss McIntosh
I absolutely take the hon. Gentleman’s point. It is essential that farmers in other European countries should catch us up. I will come to in-depth issues such as modulation in a moment.
I hope that the Minister will tell us where we are procedurally. I had the opportunity to visit Brussels last month, and I understand that MEPs have tabled about 7,000 amendments to the Commission proposals to reform the CAP. The agriculture committee in the European Parliament now has co-decision. It is vital that all of us with an interest snuggle up to MEPs of all nationalities and try to influence them to use that new power responsibly.
The European Parliament agriculture committee has set itself a deadline of the end of November for negotiating and voting on compromise amendments. Given the challenges that we face nationally—due to weather, falling incomes, rising fuel and feed costs—and globally, we must increase production significantly. We are asking farmers to do so by using both land and chemicals more responsibly, and by using less water.
Will the Minister consider the budget and procedure? The EU budget as part of the multi-annual financial framework proposes—I hope I am not being too controversial; I think we all agree that we must reduce overall expenditure on the CAP—that spending on the CAP will fall from 37% of the total EU budget in 2014 to 27% by 2020. It will still total €38.3 billion. I had understood that structural funds would undergo wholesale reform and would fall, but they are set to rise by 18% by 2020, to a total of €76.6 billion.
What will the impact be if we do not secure a freeze but move to annual budgets? What will the implications be for reaching agreement on the farm reforms if the debate on the multi-annual financial framework is delayed from November to December? The message that I am hearing loudly and clearly from farmers in my constituency—I am sure this is shared across the country—is that they need an element of certainty. They need to know what the reforms will be and they need sufficient time to implement them. Lead-in time is crucial.
The UK food system faces other problems. As I mentioned, prices are rising. I am told that food price inflation is running at 4%, but farm incomes are falling. We must grasp that.
Will the Minister say more about what will happen to the rural development programme for England? Is that programme bound up with the negotiations? Again, will farmers have an element of certainty?
I recognise that we have a new Minister and a new Secretary of State, but it would be helpful if the Minister set out the UK’s negotiating position. What discussions have been held with the devolved Administrations? Who are our main allies in the Council of Ministers and, just as importantly, the European Parliament? Will he update hon. Members on Commissioner Ciolos’s response to the original proposals and the British negotiating position? Does the Minister agree with the Select Committee’s view, which we set out clearly in our report, that the Commission
“should set the high-level objectives for the CAP and provide for flexibility of approach through delegating the details to Member States while ensuring that there are…safeguards to protect the competitive position of UK farmers”?
Does the Minister agree that the CAP is complex and burdensome? Will he agree to press for further simplification of the CAP? Does he share our concern that the proposals on ecological focus areas and the definition of “smaller farmer” will lead to farmers having a less clear understanding of the conditions with which they have to comply? Will he ensure that the policy is implemented and provides value for money for the British taxpayer?
What is the Minister’s response to the Danish bid for a rebate? Returning to the budget, will he confirm that the implications of the loss of the British rebate in the Blair negotiations are severe? The rebate was lost on the non-agricultural element, which, in the scenario I set out earlier, is due to increase, and the rebate that we kept is only on agricultural spending, which is due to decrease from 37% to 27%. The implications for farmers are very serious.
Will the Minister further ensure that the reforms to the CAP are coherent with the UK’s existing agri-environment schemes? Any greening requirement should take account of environmentally beneficial activities undertaken by a farmer under an agri-environment scheme.
To protect the competitive position of UK farmers, the Select Committee would say that modulation has gone far enough. In powerful evidence to the Committee, the national farming unions said that English farmers are already subject to a higher modulation rate, whereas continental farmers enjoy a higher direct payment rate. Obviously, if we are modulating to a 19% rate in England and 11% to 14% in the devolved Administrations, whereas most other EU countries are modulating only to 10%, the implications of the Government’s proposal to transfer money between pillar one—direct payments—and pillar two are extremely serious. Farmers told us in a previous inquiry that the higher rate of modulation creates unfair competition, and they advocated either equal rates or no modulation. DEFRA seems to argue that higher rates of modulation are needed in England to fund environmental stewardship schemes. How can the Minister convince hon. Members that, by doing that, we are not disadvantaging our farmers?
One of my main concerns is about the Government’s response to the CAP report, particularly to recommendation 28 that
“farmers currently in agri-environment schemes will receive no penalty for leaving…should either the design of or payments under those schemes alter as a result of ‘greening’.”
The Government response states:
“However, there is no legal basis for allowing farmers wishing to withdraw from their agreements ahead of the new programme (and before the five or ten years of their agreements has expired) and they would be required to return all payments received during the life of their agreements, plus interest, in the normal way.”
That seems flatly to contradict the Minister’s predecessor, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), who told the Committee that no farmer will suffer a penalty from the new greening measures if they have entered a new 10-year scheme. That is a real and present problem, because our farmers are under great pressure to sign up to new agri-environment schemes.
Huw Irranca-Davies
The hon. Lady is pursuing an important point, and I would be concerned if there was some contradiction, but does she agree that if protection is afforded by the Minister in the EU negotiations for those farmers who are in agreements, to ensure that they do not lose out and are not penalised, reciprocally we should expect them to continue in those agreements as long as they are not penalised? That is signally different from possible future schemes. We want people to continue in agri-environment schemes for the wider public good.
Miss McIntosh
That is the case, but farmers who are coming to the end of a 10-year agreement now face the prospect of receiving no agri-environmental moneys. What should we recommend to each individual farmer who comes to our surgery or whom we meet at auction marts on a regular basis? What is our advice to them? Will the Minister give a commitment that they will not be penalised? My recommendation is not that they exit a scheme that is still running, but my request is for confirmation that if they enter a new 10-year scheme, which I understand the Government are encouraging them to do—farmers would currently benefit from existing EU agricultural moneys—they will not be penalised. That is precisely the response that the previous Minister gave. I am afraid that the Government’s response set off alarm bells.
There are a number of other issues that I, and I am sure the Select Committee, wish to flag up. We need to ensure that the reforms do not damage food security and that we do not, as a result of the greening reforms, take land out of food production. I do not think that is the Government’s wish, but it could be the consequence of the Commission’s reforms. We want assurance that this country’s agricultural sector will remain competitive and viable so that our farmers do not lose out to competition from devolved areas of the UK or other EU countries.
Will DEFRA set out more clearly how it will reduce reliance on direct payments, and outline the tools it needs to do so? I have absolute confidence in the ability of the British farmer to go out, match and compete with the best in Europe and the world, but if we are taking our farmers out of direct payments, we want an assurance that other EU farmers are also coming out of direct payments and that there is that elusive level playing field.
If the Minister can give us new ideas on how to make UK farming more competitive, that will be welcome. I hope he will reject the Commission’s one-size-fits-all policy. The Committee favours greater flexibility for member states to develop measures that are better tailored to local environmental and agricultural circumstances, and we believe that any greening policy should enable that to happen. We also advocate that the Commission limit itself to setting out the high-level objectives, thereby allowing member states to implement how they will apply on the ground in each country. We also make the plea that DEFRA must stop gold-plating the regulations—something first identified by my noble Friend Lord Heseltine. I commend the work that DEFRA has done through the Macdonald taskforce. We watch with interest to see precisely which regulations will be removed or renegotiated. However, when the new proposals come before the House to be implemented at the end of the process, we must not gold-plate them. We must have a categorical assurance from the Government—from the Minister today—that that will not happen.
We set out our concerns relating to crop diversification and the Government responded, so I think they are alert to them. There were also issues relating to the retention of permanent pasture and ecological focus areas. I have a particular concern, which is shared by those who represent upland farmers and reflected in the Committee’s conclusions, about the role of tenant farmers in agriculture. Will the Minister ensure that any negative impact of CAP reform does not disproportionately affect them? I welcome the Government’s response, which states that the definition should relate to active farming of land, rather than the type of organisation. I mentioned the potential exit. I urge the Government to take the opportunity to explain how the exit strategy will work for those farmers who are signing up to new agreements.
On the definition of public good, I have to mention—colleagues would be disappointed if I did not—the project in my own area, the Pickering pilot scheme, which enjoys funding from a number of sources. If the scheme works, it could be rolled out across the rest of the country. I therefore hope that the Minister will look favourably on that type of project, under the definition of public good, and that the negotiations will allow that to happen.
The reforms greening the CAP have to balance the twin challenges of food security and climate change. The absolute bottom line is that greening the CAP should not damage the competitive position of UK farmers. I hope the Minister will respond positively to the debate, clarify the Government’s response to our report on the issues I have mentioned, update the House on the proposed timetable, and give us an assurance that the CAP will be agreed before the end of the Irish presidency, allowing enough time for our farmers to prepare and have the certainty of knowing when the reforms will be implemented.
DEFRA has a big agenda: CAP reforms, common fisheries policy reform, bovine TB, dairy package and so on—I will not list them all. However, EU plans to impose new environmental regulations must not damage the very good work that our farmers have undertaken to green our land. I hope the message will go out that we are very European and very green, and that we will not allow the Commission proposals to damage the work that our farmers have done. There should not be a one-size-fits-all policy. We cannot expect farmers from Finland through Britain to Sicily to be tied down by rules that are too prescriptive. We hope that the Department will not compound that with gold-plating. I commend our report to the House.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I intend to make a short contribution. I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh) on a worthwhile and important report, which highlights the importance of food security and climate change, and the fact that one size does not fit everybody. All too often, we have seen agricultural policies in which one size fits nobody at all. The fact that 7,000 amendments to the proposal have been suggested demonstrates aptly why people across Europe think that this process has to be made to work in individual member states, and in different geographic regions of member states. Perhaps it is even ambitious to think that a continent as diverse as ours in its climate, geography and economy could have a one-size-fits-all policy on anything.
The key point I want to make is that farmers need to be given credit for what is already happening on greening. They are already engaged in the stewardship of the land—in looking after and maintaining it. That is not always profitable. It is probable that only a small proportion of farms would be economically viable without the kind of support provided by the common agricultural policy. It is important to recognise that farmers are engaged in a wide range of climate change and environmental practices that are already helping to move towards a greener CAP. I hope the Minister will take on board that starting point and argue strongly that what many farmers are already doing is an important step.
I hope there will be room for member states—in the case of the UK, for the devolved Administrations—to tailor solutions to circumstances, and that there will be subsidiarity in how the policy is rolled out. The National Farmers Union has provided a briefing that suggests a range of sensible amendments to the greening proposals. For example, it asks for a menu approach—a regional approach—for measures on crop diversification and permanent grassland that are particularly relevant to Scottish agriculture. I hope Ministers will look at those proposals closely as the negotiations go forward and work closely with the Scottish Government to make sure that we find workable, practical solutions.
The hon. Member for Thirsk and Malton highlighted the wider context in which the greening proposals are being made. I have slightly different view on the CAP budget. Part of the problem for Scottish agriculture and the CAP to date has been a disproportionately low benefit. Scottish farmers receive €130 per hectare, compared to a UK average of €229 per hectare. I hope that the Minister recognises that we need a fairer proportion of the EU budget, and that spending should be more equitably distributed within the UK. Scotland has particular climatic, geographical and land quality issues that the CAP is designed to address. I hope Ministers will take those issues on board.
Will the Minister give me assurances today that any uplift via the convergence mechanism will come back to Scotland? The UK will qualify for uplift on the basis of Scotland’s already very low benefit from the scheme. The only countries with a lower benefit from the CAP than Scotland are Latvia, Romania and Estonia. After the proposals are implemented, we could be the worst in Europe on both pillar one and pillar two. If Scottish agriculture is to meet its food security and climate challenges, it needs to be supported in the right way. Greening measures have been accepted across the board in principle, but we need to make them work in a practical way.
Neil Parish (Tiverton and Honiton) (Con)
It is a pleasure to serve under your chairmanship, Mr Chope. I thank my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Select Committee, for securing the debate.
First, I want to say that I am probably a very sad case, because I spent 10 years in the European Parliament, and all that time was spent on the agriculture committee, which I chaired from January 2007 to June 2009. I am actually waiting for the men in white coats to come and get me; I am sure they will, before too long. The only thing that gives me some recompense is the knowledge that I will probably not be the only one who is taken away. It is a good idea to debate greening the common agricultural policy. Like the Chair of the Committee, I want to start with some history—how we have come to the place we are in—and the issue of the mythical level playing field that farmers always seek, but that often seems further and further away.
We not only do not have a level playing field across the 27 member states of the European Union, but do not have a level playing field in the United Kingdom, because we have three different agricultural policies. The policy in England is to spread payments across the land and is not so historically based on the number of cattle and sheep kept, whereas in Wales and Scotland payments are made entirely on the basis of historical payments made to farmers between 2000 and 2001-02. There is no doubt but that we must look again at some of the systems of payment, because it is ridiculous to base an agricultural policy from 2014-15 to 2020 on payments made to farmers in 2001-02.
Another issue, which is probably more European, is that Estonia receives €70 per hectare and Greece €500 per hectare, so there will have to be a little bit of levelling of those payments. When in the European Parliament, I was not always admired by the French and Germans when I said, “In 2004, when the new member states came in, they were not equal, but by the time we get to 2014-15 and later, they ought to be much more equal.” Those payments will have to be levelled, like it or not, across the EU. The one good thing for British farmers is that we are somewhere in the middle of the payment table, between Estonia and Greece, so should not be affected too badly by some sort of levelling. If there is to be any form of common policy, the level of payment across Europe needs to be considered.
The CAP was started in 1962 by five member states to produce food after the war, and it was successful in producing food until the 1980s, when there was a lot of food in the world and Europe was subsidising it. When there was too much food in Europe, we put it on the developing world’s markets, destroying their markets. Something had to be done about that. We were subsiding Greek tobacco, for instance. One can argue about whether it is right or wrong to subsidise food and food production, but to use good taxpayers’ money to subsidise tobacco takes a little bit of working out, especially when one third of the tobacco grown in Greece was burnt in heaps on the ground, one third was reasonable quality and the other third was dumped on developing-world markets, leading to Zimbabwe and other countries having trouble with this dodgy tobacco.
We have to face up to the fact that it is no good producing food for the sake of it. The idea of CAP reforms was to move towards an environmental, land-based payment. That is being done to some degree. It is also useful from a world trade point of view, because payments are put into the so-called green box and are not directly linked to production, and so can technically be made to farmers without distorting the international market for food. That also means that we are not directly subsidising the number of cattle or the number of hectares—in real money, acres—of corn, and so on, to produce more food.
We have rightly moved in that direction, but as we move into 2012-13 and onwards, we should recognise that we are living in a different world. The Labour Government, slightly belatedly, worked out that there was a need for food and food production. I attended a Morrisons breakfast the other morning. We were talking about the affordability of food. There is no doubt—I do not level the charge at Morrisons in particular—that certain big buyers over the years have looked around the world to buy reasonably cheap food. However, now there are not vast amounts of cheap food to be had out in the world. China was eating 500,000 tonnes of beef 40 years ago, but is now eating 5 million tonnes of beef. The United Kingdom produced 1 million tonnes, but China is now eating five times the amount of beef that we produce. The beef produced in Brazil, Argentina and other countries that produce lots of beef is not necessarily finding its way on to our markets; it is finding its way into China. Therefore, food and raw material prices are higher.
Although the CAP must be greened, it also has to reflect the fact that we need food that is produced at an economic price that our consumers can afford. I am a farmer—I declare an interest—and farmers would like the prices that they are paid for food to be higher. Of course, consumers are having to pay more. We should ensure that enough of the money that the consumer pays the retailer for his or her food gets back into the producer’s—the farmer’s—pocket. Although that is not necessarily part of CAP greening, it is relevant to agriculture and farmers’ incomes.
Huw Irranca-Davies
The hon. Gentleman makes an important point about food prices. Does he agree that, although people always say that farmers receive subsidies, as if those are going straight into their back pocket, the truth is that in a lot of cases farm subsidies in recent decades have subsidised a cheap-food policy? Household expenditure on food has been falling for many decades, and that has reversed only recently.
Neil Parish
The hon. Gentleman makes an interesting point. The payments coming to farmers have encouraged them to produce food—in many ways quite rightly—and helped to keep the price of food down for the consumer. It is only now, in recent times, with 7 billion people and rising in the world, that more food has been needed, and its price is going up.
In recent times, the prices of fertiliser, fuel and all those inputs that are needed to produce food have doubled. Therefore, the key is to consider an agricultural policy that is not only green, but looks to ensure that food that can be produced sustainably, is supported. This point has been made many times before, but if we look at our upland and hill farming, why are our hills so green and pleasant? Because they are farmed, and because there is stock on those hills. We need to consider that in respect of the CAP, because again—I am probably a little bit more controversial than some in this regard—it is no good just making a general payment across all farmers in future; we must look at the way that those payments are made.
Does the East Anglian farmer on the fens, who can produce 4 or 5 tonnes of wheat per hectare, necessarily need the same payment as the farmer struggling on the hills? Is it not time that we found a way for the farmer in East Anglia, who could carry on producing good wheat, to trade his environmental payments with somebody farming on the hills? In Britain there is not a shortage of land used for conservation and agri-environment schemes; nearly two thirds of the land is in one scheme or another.
Huw Irranca-Davies
I attended the same breakfast as the hon. Gentleman; it was a good discussion. On the important point that he is making, is there a case for the Minister engaging in that? In respect of high levels of CAP payment, particularly to the large agri-industrialist arable farmers towards the top end, there may be a case to be made for ensuring that the additional money from taxpayers is used for increased innovation, research and development, and more targeted and accurate farming, so that the productivity, not just production levels, on such farms is massively increased as a result of using taxpayers’ money.
Neil Parish
The shadow Minister is exactly right, and he leads me down a path towards making a point on which not all will agree with me, which is that the one thing that is being denied to European and British farmers is biotechnology and science. No other industry in this country is hampered by not being able to use the best science. A blight-resistant potato used for starch production is in existence. Eventually, we will have a blight-resistant potato fit for human consumption; will we then deny ourselves the use of it? Many in the House are better historians than me, but was it not potato blight that caused the potato famine in Ireland? Solving the problem of having to spray potatoes 20 times a year—probably more this year, because of the terrible weather conditions—would be a great bonus. Similarly, as always promised, we might soon have nitrogen-enhancing wheats and oilseed rapes. Will Europe deny itself those, too?
As a Government, we need to be a little more proactive in discussing biotechnology. It is not for the Monsantos and Syngentas to promote it, but perhaps for our universities and others, so that we can tell people about the possible green bonus from crops that need to be sprayed less and that use less artificial fertiliser—all part of science and technology.
George Freeman (Mid Norfolk) (Con)
On science, technology and innovation, as my hon. Friend knows, because he has attended meetings of the all-party group on science and technology in agriculture, of which I am chair, the Government have just launched a call for evidence on precisely that—a strategy for agricultural science and research, as part of a comprehensive life sciences strategy. Does he agree that, as we think about greening the CAP, we should consider how Europe’s farming and its agriculture, science and research base, often led by this country, can play a part globally in tackling the challenge of sustainable intensification, as laid out in the foresight report?
Neil Parish
My hon. Friend makes a good point. I congratulate him on chairing the all-party group. We need to bring to the attention of the world what is needed, with biotechnology. We have a moral duty not only to look after the environment, but to feed people. As there is more and more global warming, northern Europe, and we in particular, will need to produce more and more food, and using biotechnology is the way forward. Europe, however, has dragged its feet, as has this country. The debate would be worth having if the potential for environmental and productive gains and slightly cheaper food could be presented to the British public, and if they could see some financial benefits—people’s hearts are on the left and their pockets are on the right.
If we look at the protein that we feed our chickens, our pigs in particular, and our dairy cows, most comes from South America and America, and most is genetically modified soya, so the idea that we are living in a world free from GM is absolutely wrong. The Americans, dare I say it—I never was politically correct—might in part be slightly overweight, but they have not died from eating GM products, which have been used to good effect in America. If we want a more competitive agriculture in Europe and Britain, denying ourselves GM in the future would be wrong. A Government who brought up that subject for debate would be brave, although I think that the public might just about be ready for it. I am interested in what our new Agriculture Minister will say. I am tempting him, ever so slightly, to comment on the subject.
We have some good stewardship schemes in this country, probably among the best in Europe. The trouble is that the Ciolos reform is trying to go down to the lowest common denominator. Of the 27 countries, some have monocultures of maize, maize and more maize, so Ciolos is trying to bring in such things as a four-crop rotation, but if we have land in stewardship schemes or permanent pasture, or hill land that is extremely valuable for its landscape, the last thing we want to do is encourage farmers to plough up part of it. Some of what is coming through from Ciolos, therefore, is complete madness. One idea is that every farm has to have 7% set aside, but some farms have anywhere between 20% and 40% of their land in a stewardship scheme—some more—while other, highly productive farms are much better off producing food and getting on with it. That is why “one size fits all” is not the way forward, as my hon. Friend the Member for Thirsk and Malton said.
We will have to fight hard in Europe—I look forward to the Minister fighting his corner—because in this country we run very productive farms. We farm pretty competitively. When some of my farmers in the west country get excited if the Commission talks about small farmers, I warn them, “Don’t get too excited,” because the Commission means farmers of about 5 acres, or 2 hectares, not farmers of 50, 100 or 150 acres. Poland has more farmers than the rest of the European Union, or certainly did when it entered, because it has so many small farms. Be careful when the Commission offers handouts to small farmers, because it does not mean ours.
That brings me to a key point. As we green the CAP, what is needed is agricultural environmental policy, and at the moment too much social policy is involved. Many member states will talk about labour requirements that very much favour the huge amount of labour on the very small farms in some countries, which will put British farming at a disadvantage. That will also take the CAP from where we want it to go, because the whole idea—probably with cross-party support—is to see farmers not only farming in a green way, but producing food competitively, and we also want them to get more money out of the marketplace. That is where I disagree with the hon. Member for Banff and Buchan (Dr Whiteford), who spoke before me. It is not a matter of finding more money from the CAP to support farming; it is about enabling farmers to be competitive and produce food well. I do, however, agree with the need to look much more at what land is given the CAP payments; that is where Scotland may well benefit.
Dr Whiteford
I agree with the hon. Gentleman on his latter point, because in Scotland we have some serious disadvantages, in the kind of land that we have, its quality and its location. My key point was that the proportion we get of the overall CAP budget, whatever its size, needs to be more equitable.
Neil Parish
I understand exactly where the hon. Lady is coming from, but looking at Scotland, dare I question whether the highlands and the bare rocks need the same payment as some land that can be farmed, such as grasslands? Averages of payment throughout Scotland are interesting. How I dare even suggest such things, I do not know—I do not want to get into a war with Scotland—but there are statistics and statistics.
We are at a crossroads, and at a place where Britain is well in advance of others, with regard to environment payments. We need to ensure that we can pay for those payments. I agree with my hon. Friend the Member for Thirsk and Malton that modulation is unfair to British farmers. However, I also know that the Treasury is not noted for its generosity, and if we do not modulate, we will not have enough money to pay for our stewardship schemes. If the Minister and the Secretary of State with responsibility for agriculture went cap in hand to the Treasury, saying, “We already receive £2 billion or £3 billion from the CAP, but we need more money from the Treasury to prop up stewardship schemes,” I suspect that they would be told in good Anglo-Saxon terms to go on their way. As we negotiate the new agricultural policy, we must ensure that those stewardship schemes are funded through it in some shape or form. We must be careful when we say that we will throw the modulation out with the bathwater, because that may not be the right way forward.
This debate is a great opportunity, and I wish Ministers well in their negotiations. The argument in Europe is always that we should have an agricultural policy for the whole of Europe and a budget to fit that policy, but in the real politics of the European Union, there is a budget for agriculture, and agricultural policy is then fitted to that budget. That is exactly what will happen this time.
We must get the best deal for our farmers and the environment. I wish our new Minister and the Secretary of State well in their negotiations with our European partners. We must be tough to ensure that we move our agriculture forward to competitive food production and a green agriculture policy, but we must not lose sight of the fact that in the end, much of the food that our farmers produce is also part of the green environment.
George Eustice (Camborne and Redruth) (Con)
Does my hon. Friend agree that a problem with a one-size-fits-all policy such as the CAP is that it is difficult to have policy innovation, because any such innovation is stifled by the need for negotiations between 27 member states? Does he think it might be better gradually to move to a system with a common agricultural policy with common objectives—safeguarding the environment, improving animal welfare, and food security—so that those policies are increasingly delivered on the ground by national Governments from their own budgets, and we do not recycle funds through the EU in the first place?
Neil Parish
Yes. My hon. Friend raises a good point. What needs to be brought in is not only a policy, but co-financing, because each member state would then pay for its own agricultural policy, and might not be quite so keen on throwing money away on strange projects, as some countries do. Olive oil is produced in Greece, and reindeer are supported in north Finland and Sweden. Wheat and barley are grown across much of Europe, and rice is grown in parts of Italy and Greece. It is difficult to support a policy and have one aim. It would be much better to ensure that member states had their own money. The downside of that is that we do not want the French throwing all its money into supporting suckler cows and beef production, and that highly subsidised beef then coming across the channel to compete with our beef, which may not be subsidised in the same way.
George Eustice
I completely accept that point, but does my hon. Friend agree that for any other goods, and in any other part of the single market, state aid rules, which the European Court of Justice enforces, prevent that from happening? It would be possible to have an agricultural policy with common objectives, but delivered nationally, with those state aid rules to prevent the sort of behaviour he mentioned.
Neil Parish
My hon. Friend has heard the phrase, “The law works for the law-abiding,” and we can be certain that the French would find every reason to distort the market in their favour, wait until that was challenged by the European Commission, and drag it through the European courts for years, so I am not as sure as he is that state aid rules will stop the French or anyone else distorting the market. We must be careful if we go down that route. State aid rules are a blunt weapon, and I believe the Anglo-Saxons in Europe conform to them more closely than those in other parts of the European Union. State aid rules alone will not be enough.
We must ensure that CAP reform is done in a way that does not distort the market further. We should green it, but have food production, and ensure that as we deal with farmers in this country, we have food production on the best land and increase it sustainably, but have conservation on our more marginal land. That is the way forward, and that is where we must be careful in our negotiations on the greening of the CAP. I look forward to Ministers doing a good job.
Mr William Bain (Glasgow North East) (Lab)
It is a pleasure, Mr Chope, to serve under your chairmanship again. I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh), Chair of the Select Committee, on a superb report. It is always a pleasure to follow the hon. Member for Tiverton and Honiton (Neil Parish). I was particularly struck by his remarks about food prices. He and all right hon. and hon. Members know that there is no greater pressure on household budgets at the moment than the rising cost of food.
The CAP can do a huge amount to limit that pressure, but the EU could make a more concerted effort, through the G20, to look at the position limits that some major financial institutions hold in the food futures markets. When the Better Markets campaign visited the Houses of Parliament last year, I was struck to find out that the share of speculation in food futures markets has risen from a third to two thirds, and that the share of liquidity being injected into the market has fallen from two thirds to one third as a result. There is clear evidence that speculation at global level is driving increases in food prices. We know that that hurts consumers in Europe, and it hurts people in Africa particularly. There has been a crisis in the horn of Africa over the last couple of years when food prices rose by 70%, so I hope that the debate spurs the Government on to regulating and calling for proper position limits as the US Administration have done on food prices.
Given the increased public awareness and scrutiny of the multi-annual financial framework for 2014-20, the debate is extremely timely. Spending on the CAP has reached €55 billion a year, or 41% of the EU’s total budget, although that is set to reduce to 32% by next year. That sum has been frozen in real terms until 2013, but it is still far higher than what the EU spends on science, innovation and promoting research and development. Given that unemployment in the EU stands at more than 25 million, with low growth and weak economic demand across the Union for the foreseeable future, we must question whether that is sustainable.
Open Europe’s report in February demonstrated that there is no link in the CAP between a country’s wealth and how much it receives from the CAP. For example, Latvia receives £115 per hectare—the least of all member states—from EU direct subsidies despite the average farmer’s income being only 35% of the EU average. Lithuania, whose farmers are the poorest in Europe in absolute terms, receives the third least from the CAP. In contrast, wealthier member states such as Ireland and France continue to do well out of the CAP. Despite a series of reforms, those inequalities in the system remain, which is why the discussions and negotiations of the financial framework should be more radical.
On the environment, in the UK the share of the CAP spent on explicit environmental aims and protection is only 13.6%. That is caused partly by the fact that the CAP fails to differentiate between different types of land, and it actively channels public resources away from those areas in which the biggest environmental gain could be generated.
There are four main aims that a comprehensive reform of the CAP should attempt to achieve in this financial framework period. First, it must generate greater food security and food price stability. The Commission said, in the proposals that the Committee evaluated in its report, that there is a strategic interest for the EU in retaining significant food self-sufficiency. As Commissioner Barnier said, during his time as France’s Agriculture Minister,
“if Europe were to cut back on its agricultural production then the increase in its own food imports would contribute significantly to a worldwide increase in food prices.”
In other words, maintaining Europe’s farm outputs at current levels also contributes to the stabilisation of global food markets. There is some truth in that, but the question is whether the design of the CAP actively helps or hinders that aim.
Secondly, the CAP must remove trade-distorting barriers and enable investment in science and innovation in agriculture to increase, so that we see higher growth, innovation and productivity in the sector. Thirdly, reform of the CAP should increase the contribution that food supply chains make to the EU’s targets for reducing greenhouse gas emissions from the agricultural sector, and also improve standards of environmental stewardship. Finally, CAP reform should promote greater trade justice in the EU’s relationships with the developing world.
One approach specifically identified by the EU and the Commission is the provision of basic income support payments—which could be uniform per region, but not flat rate across the EU, based on new criteria and capped at a certain amount—and a compensatory environmental payment for additional actions that improve stewardship; that includes crop rotation, permanent pasture or even an ecological set-aside. I note that the Committee has expressed concerns about the detail of those proposals, so I hope that the Minister can demonstrate that, alongside the positive benefits that there will be from environmental stewardship, farmers will not be unduly inconvenienced by such measures.
On market measures, the Commission’s plans identify some scope for streamlining and simplifying measures, and possibly introducing new elements in terms of better functioning of the food chain. Whereas market measures accounted for 92% of CAP spending as recently as 1991, just 7% of the CAP budget was spent on them in 2009. Eliminating trade-distorting subsidies is not simply about increasing growth; it is also a matter of justice for the developing world. The combined US and EU subsidies for cotton production over the past nine years amounted to $32 billion, which has had the effect of driving down global cotton prices, reducing demand for west African cotton, and restricting that region’s ability to export its way out of poverty. The EU pays out approximately $2.50 per pound in cotton subsidies to support 100,000 cotton growers in the EU; that is far more than the market price for cotton. Fairtrade estimates that those subsidies have resulted in a lost income of $250 million a year for west African cotton-producing nations. The EU could therefore fulfil the pledge that it made during the World Trade Organisation negotiations to eliminate those unfair subsidies and ensure that the provisions from the treaty of Lisbon are implemented to assess the effect of EU policies on developing nations. That needs to happen in the CAP as well.
The CAP must be about showing how agriculture can change and improve through investment in research and development. The 2011 UN Food and Agriculture Organisation report recommended a major increase in investment in research and development. We need a CAP that rewards farmers and others in the food supply sector who make the right investments in photovoltaic cells, wind farms, better water-recycling policies, and better use of soil. It is true to say that converting a CAP that, at the moment, pays perhaps too much for pure production instead of investment will be an important part of the reforms.
Finally, I turn to the role of tariffs. Open Europe estimated that
“the average external tariff paid on imports from countries without special arrangements with the EU”—
those that do not have most-favoured nation status—
“range between 18% and 28% of the value of the good imported... This is much higher than the average 3% tariff paid on manufactured goods.”
Any proper programme of CAP reform must look at the effect that the tariffs have on imports, and particularly, on the economies of places such as Africa, where clearly, if they are to see an improvement in living standards, they need to have fairer access to our markets than our distorted trade rules provide.
Those are the aims that I believe we should have in a comprehensive and radical set of CAP reform proposals. The Government will have the Opposition’s support if they pursue a programme in Europe of securing greater partners for that, and I wish them success. However, they will face scrutiny from us to ensure that they achieve their aims and that we secure an agricultural policy in Europe that is better for the environment and for the consumer.
Kerry McCarthy (Bristol East) (Lab)
As ever, it is a pleasure to serve under your chairmanship, Mr Chope. I want to focus on the concerns being raised by environmental organisations about this issue, and particularly on the views expressed by the Royal Society for the Protection of Birds, the Campaign to Protect Rural England, and the Wildlife and Countryside Link. It is important to note that although this matter is immensely important to our farmers, it is not only about them, as everyone should have a stake in the countryside, whether they own land, make money from it, work on it, or not.
Huw Irranca-Davies
May I commend my hon. Friend, Mr Chope, on introducing to the debate the concept of a one-nation CAP reform?
Kerry McCarthy
I thought for a moment that my hon. Friend was congratulating you, Mr Chope, on introducing that concept, and I wondered whether I had missed something. Yes—a one-nation CAP reform. That is our slogan for today.
If the concerns raised by environmental organisations are not addressed, there is a danger that the CAP, which has demonstrably made some progress over the past 20 years—albeit painfully and slowly at times—could, as part of a process intended to improve its environmental performance, perversely be taken backwards. I am glad to say that there is general agreement on the need to green the CAP, which I regard as absolutely necessary if we are to achieve three objectives: first, to support more long-term sustainable food production; secondly, to address the ever-increasing challenge of global food security; and, thirdly, to meet our environmental goals, which range from halting and reversing biodiversity declines by 2020, to meeting our climate change targets.
Greening of pillar one payments must happen and, at the same time, pillar two must be fully protected or ideally, increased. The added justification for those changes is, in the words of the RSPB’s evidence to the Committee’s inquiry, to
“legitimise expenditure of €300 billion over the next seven years.”
That is a huge sum of money. We know from yesterday’s debate on the EU budget just how much concern there is in this place, and among the wider public, about EU spending, of which the CAP is the largest single component. I agree with the Committee’s conclusion that it is a concern that greening may be seen by the Commission as a way of justifying the significant public expense of its policy on direct payments, rather than a way of delivering environmental improvements across the EU. I hope that the Minister will devote some time to that concern in his response.
There is also concern, as there is in relation to other areas of Government policy, that this could become an exercise in so-called greenwashing—greening in name, but not in outcome. Greening must be designed and implemented in a way that secures genuine environmental improvements at farm level and across all member states. There are worrying signals that the member states want to maintain the status quo but to repackage the status quo as green when it is clearly not. The Luxembourg paper contains some strong examples of that. The measures suggested by 16 member states in that working paper, published in April, are even worse in delivering environmental outcomes. In particular, the section on farmers who are “green by definition” has raised concerns. Arguing that a farm is automatically green just because a certain proportion of it is grass is nonsensical, as there is huge variation.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
indicated assent.
Kerry McCarthy
I am glad that the Minister is nodding. I hope that he repeats that when he comes to make his speech at the end of the debate. Grassland can be managed in a way that is good for the environment, but can also include reseeded and extensively managed grassland, which does not deliver comparable environmental benefits. The UK was one of the member states involved in that document. I am pleased that the Government have since distanced themselves from it, saying that the UK was not a co-signatory, but just wanted to move the Commission’s thinking forward. I hope that the Minister will use this opportunity to clarify that again.
One argument that we are hearing a lot, including from the Country Land and Business Association and the NFU in the UK, is that farmers in agri-environment schemes should be counted as “green by definition”. It is true that there are many good examples of what those schemes are achieving in the UK, but there are two problems. First, there would be no environmental additionality from such an approach, and that is badly needed. Secondly, it would in effect involve double funding. Farmers would be paid once via their agri-environment scheme payment—paid for under pillar two—and paid again from their new greening payment, when the new CAP comes into force, under pillar one. Therefore, although it is important that greening and agri-environment schemes work coherently together, I do not think that “green by definition” is the answer.
Let me move on to talk about flexibility. The Select Committee and the Government agree that a one-size-fits-all approach is not appropriate. The Select Committee Chair, the hon. Member for Thirsk and Malton (Miss McIntosh), talked about that in some detail today, as did the hon. Member for Banff and Buchan (Dr Whiteford). It is only practical for there to be flexibility so that environmental measures can be tailored to local environmental and agricultural conditions. I would very much support that approach. However, there are some dangers with too much flexibility.
I can see that, for the UK, a flexible approach makes most sense, as we are leading the field with our higher-level stewardship schemes and would most likely use that flexibility to deliver positive environmental outcomes. However, if member states are allowed the full flexibility that they are calling for to implement greening in their own way, that flexibility could extend even to determining what counted as green. That could allow member states to kick out the Commission’s greening proposals and do what they liked, and sadly in many EU countries that could amount to next to nothing. The NFU has also raised concerns about that, but from a different perspective. As the report outlines, the NFU is concerned that DEFRA may impose more stringent greening measures on UK farmers that would not apply in other EU countries.
As I think the hon. Member for Tiverton and Honiton (Neil Parish) said, it is very important that we achieve the level playing field that is talked about so often when it comes to EU matters. I therefore support the calls from a number of environmental bodies that there should be a common framework that every member state must deliver, with flexibility to tailor implementation to local circumstances. A free-for-all on greening is not the best outcome for the environment in the EU.
Let me deal briefly with ecological focus areas. It is perhaps in the Commission’s proposals for EFAs that a common approach has best been mapped out and could make the best contribution to realising the ambition of greening the CAP. There is criticism outlined in the report about the proposed percentage of a holding that would be included in EFAs, with concern that that would mark a return to set-aside and severely limit increases in food production and competitiveness. However, as many environmental organisations have pointed out, because it could include a wide range of landscape features and low-grade agricultural land, which may already be under some form of environmental management, it would not necessarily mean taking significant areas of high-quality arable land out of production.
EFAs could have significant potential to make the direct payments that farmers receive from pillar one of the CAP deliver more for the environment. By including in EFAs important landscape features of the countryside, such as hedgerows, and ensuring that EFAs help to protect and maintain them, the character of our farmed landscapes and their wildlife could be greatly enhanced. However, the proposals would not achieve that aim and would need to be carefully designed and implemented to deliver real environmental benefits.
Lastly, I would like to raise an issue outlined by the CPRE. It stresses the need to ensure that the environment does not lose out when it comes to allocating funding to rural development measures under pillar two. Ensuring that pillar two is adequately funded is essential not only for green farming schemes, such as environmental stewardship, but to ensure that enough rural development funding is available for measures that support local food producers to boost economic sustainability in rural areas. The CPRE recently mapped the links between those who produce, process, buy and sell food sourced locally. It found that local food networks could be contributing £6.75 billion of value to local economies.
That is particularly important in Bristol, one of whose seats I represent. We recently held a mini food summit, bringing together organisations such as the CPRE and the people running Bristol’s green capital bid, which I very much hope we succeed with next year—it may be third time lucky. We were talking about how we could bring together people working in the food sector across Bristol as a hub for the south-west. The shadow Farming Minister, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), was there, and I think that he would agree that it was a productive discussion in terms of how we can look at sustainability issues, encourage people to grow food locally and tackle food waste, which I have not mentioned today, but have spoken about on many other occasions. Obviously, that is also an issue in the EU. It is important to us locally that we look at how we can support local food networks.
The Select Committee says that DEFRA must redouble its efforts
“to find, engage and secure reliable allies across the European Union”
and have the resources in place
“effectively and persuasively to put the UK’s case that the CAP should support…the agricultural sector and provide environmental protection.”
I totally support that conclusion. I am somewhat pessimistic about what can be achieved, but I urge the Minister to throw his weight—his much-diminished weight, it must be said—behind our efforts to ensure that real progress on environmental issues can be made as part of this process.
George Eustice (Camborne and Redruth) (Con)
Thank you for allowing me to speak, Mr Chope. I am conscious that I was not here for the opening of the debate. The title of the Select Committee’s report is “Greening the Common Agricultural Policy,” but more specifically the Commission’s proposals are about greening pillar one of the CAP. It is worth noting that supporting the greening of pillar one represents quite a significant departure from the long-standing British foreign policy position, which is that we should gradually phase out pillar one and direct payments all together and put our support into pillar two, so that we can have more tailored local and national support for environmental stewardship schemes.
My concern is that by going for the greening of pillar one, we will end up with what is already being called in some circles green taping—rather than red tape, we will have green tape. There will be quite bureaucratic and centralised diktats coming out about what farmers can and cannot do, which invariably will not have been thought through properly. We might lose the opportunity to achieve the more satisfactory long-term objective of removing pillar one altogether and having effective, well thought through countryside stewardship schemes. In recent decades, British Governments of all colours have led the way in developing some of the successful ones. The entry-level and higher-level stewardship schemes are held up as exemplars for others to follow. There is a danger that we will lose that momentum towards a more sensible CAP and end up reverting to and getting bogged down in, again, quite a bureaucratic process.
I shall highlight a few key problems that I see with some of the proposals. There is the idea that we should go back to set-aside. We moved away from set-aside 15 or 20 years ago because it was not working. The point was made by my hon. Friend the Member for Tiverton and Honiton (Neil Parish) that it is not always right to have just 7% of every farmholding set aside and not farmed intensively. The evidence is that if we really want to encourage wildlife, we should have wildlife corridors. Some parts of the country where the agricultural value of the land is lower might opt to do more of these environmental schemes—
Neil Parish
My hon. Friend is absolutely right about the set-aside argument. Do we get value for money in greening with set-aside, counterbalancing the fact that we are taking out a lot of land that could be used for food production? There is a moral duty to produce food as well as taking land out for so-called environmental set-aside.
George Eustice
That is right. The environmental stewardship schemes in pillar two are much more proactive about encouraging wildlife and improving biodiversity, whereas the problem with set-aside is that it becomes something that has to be done and everyone finds all sorts of ways around the rules so that, for instance, they can graze a particular type of goat on the land and get away with it. There is an issue with the bureaucratic system of set-aside.
My hon. Friend the Member for Tiverton and Honiton also alluded to the crop rotation requirement. Anyone who has been a farmer, as I once was, knows that crop rotation is a good thing. A farmer who farms without rotating their crops, particularly in the arable or vegetable sectors, will soon run into problems, such as crop disease, which causes a great deal more expense than any subsidy would have been worth. I question the value of insisting, in the latest proposals, that each farmholding must grow three crops. It proves that whoever came up with the idea is not a farmer; they are a bureaucrat. One could grow three brassicas—cabbage, oilseed rape and cauliflower—which would satisfy the three-crop rule, but the farmer would have clubroot disease in all those crops within two or three years.
I understand why some would regard the proposal to cap subsidies to individual farmholdings as superficially attractive; they think, “Why should we give a huge amount of money to very large farms?” However, no one has thought through the likely impact. Large farmholdings might break themselves into small farmholdings to get around the rules. There would be all sorts of avoidance problems, which would need a suite of anti-avoidance measures and people to ensure that farmers did not break up their holdings to circumvent the provisions. There would be major problems with that, so one must question what we are trying to achieve. If an objective of the CAP always has been and should be to promote food security and competitive farming, why would we want a policy designed to undermine the most productive and efficient farms in Europe and reward the least efficient? Although I understand why some would find the proposal superficially attractive, it is a mistake.
Huw Irranca-Davies
What are the hon. Gentleman’s thoughts on the proposal I floated earlier? Farms receiving the very high CAP payments are on the most productive land, but they need to be more productive because we face food security challenges. The very high CAP level should recognise additional investment in innovation, targeted farming, research and so on, so that it was based not purely on production volume, but on increased production.
George Eustice
That is an interesting proposal, which I would like to look at more closely. I have previously argued that we could develop a system in which environmental obligations became transferable in some regards. The lettuce grower on the Cambridgeshire fens, who has a model that getting the single farm payment is irrelevant to, might forgo the payment, which could instead go to a farmer on more marginal land in, let us say, Wales—I do not want to offend anyone with a Welsh background. Such schemes could therefore receive more investment.
A problem that we all recognise in the EU negotiating process, which I alluded to in my question to my hon. Friend the Member for Tiverton and Honiton, is that rather than going into negotiations saying, “What is the best possible agricultural policy we could design?” and “What is the optimum policy we could pursue?” we are always hamstrung by voices in DEFRA and the civil service that say, “You can’t do that because Denmark won’t agree. If you advance this idea France will reject it, and we will lose our allies in Poland and eastern Europe.” Everything about agricultural policy ends up being seen through the prism of an incredibly complicated 27-way negotiation, which frankly leads to a poverty of vision of what our agricultural policy could become. We instead plod along like a blinkered horse, trying to achieve what we can. It is all about the lowest common denominator, rather than genuinely successful and thoughtful policy. Pillar two is a classic case of that.
[Mr Dai Havard in the Chair]
In the last Parliament, our Committee, before I was on it, criticised the Labour Government for arguing that we should phase out pillar one and have pillar two only, because it was not achievable and undermined our negotiating position. If we do not even articulate what we believe because we are concerned that doing so will undermine our negotiating position, there is a problem.
I would like a much looser CAP in future: a common policy about common objectives. We could set common objectives for improving animal welfare, safeguarding the environment, enhancing biodiversity and promoting food security. There could be much looser policies and arrangements centrally and much more decision making and responsibility for implementation devolved to national Governments.
Neil Parish
This will tempt my hon. Friend further from the topic of debate, but would a looser common agricultural policy, or an agriculture policy, be part of a new relationship that we might negotiate with Europe?
George Eustice
It might be, if we get to that point, but I do not want to be distracted by that now.
There is potential and it is not unrealistic, because that is the direction of the common fisheries policy. The Commission, under Commissioner Damanaki, is buying into ideas that will effectively lead to a partial repatriation —of sorts—of the management of individual waters and fisheries only to those groups of countries that share that fishing water. That is a sensible plan.
Huw Irranca-Davies
The hon. Gentleman has graciously given way. He tempted me in because I was the Minister who oversaw the instigation of that regionalisation of the common fisheries policy. It is a good approach, but it must be balanced against the imperative to achieve sustainability of fisheries in sea areas. In the same way, we are talking about the long-term sustainability of agriculture and getting more out from less in. There cannot simply be devolved management and let-loose chaos; it must be well planned and managed by individuals and organisations on the ground or on the seas.
George Eustice
I absolutely agree. In fisheries, the developments and techniques on maximum sustainable yield and how they are calculated and measured, with all their complexities, have come a long way. That should be the guiding philosophy of the common agricultural policy. The US has a statute that states that there cannot be overfishing beyond the maximum sustainable yield, and we could look at something like that at a European level. I accept what the hon. Gentleman says, but I am talking more about the implementation to deliver maximum sustainable yield in fisheries, how we could devolve management of that and how we could do the same for the common agricultural policy. We could set clear objectives to enhance animal welfare, biodiversity and environmental protection, but give individual countries much more scope to work out how best to achieve them.
I am interested in another area that has always struck me as a missed opportunity. The Committee took evidence on the natural environment White Paper proposals, which the Government launched soon after the election. Some of that evidence made it clear that putting a value on biodiversity and the natural environment was a powerful idea that had a great deal of potential. There were interesting proposals in the White Paper, but the big thing that held them back was the lack of funding to make them a reality and to make such a market a reality. A huge amount of money—the best part of 40% of the EU budget—is tied up in the common agricultural policy, but there is no really thoughtful, innovative policy in it. There are interesting ideas in the White Paper, but no money for them. Could we somehow marry the two and use some of that CAP money to make a reality of the natural environment White Paper?
Miss McIntosh
Welcome to the proceedings, Mr Havard.
My hon. Friend did not hear my opening remarks when I highlighted the fact that funds under the CAP are going to the projects that he mentioned. Perhaps the Minister will clarify whether those will continue under the revised rural development programme for England and possibly the agricultural environment schemes as well. Does my hon. Friend the Member for Camborne and Redruth (George Eustice) agree that we heard powerful evidence that this could be achieved through private enterprises, such as water companies, which might be a better route and attract more investment?
George Eustice
There are a number of routes that we could pursue to bring this forward. My point is that there is a huge amount of money tied up in the CAP. There are funds, as my hon. Friend said, in pillar two. If we are serious about greening pillar one, we could try to transform it into a market, with state funds available to do that, to promote environmental schemes, so it could be almost a transferable obligation. The lettuce grower on the Cambridgeshire fens might choose not to participate. Another farmer might choose to participate in quite a big way, so we would get some critical mass. We would have wildlife corridors and make a genuine difference rather than making token gestures.
A lot of the proposals are probably beyond the scope of the CAP negotiations. It was ever thus. One of the big problems with the CAP is that it always tends to be about 10 years behind where it needs to be. It is now focusing on the environment when it probably ought to be paying, as my hon. Friend the Member for Tiverton and Honiton said, a little more attention to food security. However, I know there is room for negotiation and an understanding that greater flexibility needs to be included in some of the proposals. We should at least be arguing for them, and not be afraid of arguing for them just because we do not think that we have enough allies at this point.
Huw Irranca-Davies (Ogmore) (Lab)
Mr Havard, it is good to serve under your stewardship.
Huw Irranca-Davies
I am glad. I need watching, Mr Havard. My thanks to your predecessor, who was here until a couple of minutes ago. You tried to throw me by changing chairmanship as I stood. It was a delight to serve under Mr Chope’s stewardship as well.
I welcome this debate. It is an excellent and timely chance to examine the Government’s approach in the EU negotiations, and to support and challenge it where necessary. I thoroughly commend the Environment, Food and Rural Affairs Committee, and its Chair, the hon. Member for Thirsk and Malton (Miss McIntosh), on their work. I had some lovely nights in my flat reading the Committee’s compendious volume. It was very good and had some excellent recommendations, to which the Government have responded; I read that response, too. The report has brought a good open and transparent debate to some of the key issues around the CAP, including the issue of greening the CAP, which we are debating.
I also commend the engagement of wider society in this debate—that is imperative—including the engagement, mentioned by several hon. Members, with domestic and international non-governmental organisations, farming bodies, farming leaders, farming unions, and farm workers. EU parliamentarians are playing an increasingly important role in this recent process of co-decision. The hon. Member for Thirsk and Malton urged MPs—and Ministers, I think—to, in her words, “snuggle up to MEPs”. We are indeed facing some cold winter evenings, so that might be something that we want to do, although it could lead to some racy headlines, particularly for a happily married man such as me.
The process was always going to be complex and all-consuming for those concerned with food security, domestic and international; competitiveness within the farming sector; and, of course—the focus of today’s debate—the wider environmental and public benefits that good reform can bring. There is the rub: good reform, not just any old reform.
The hon. Lady, who introduced the debate, rightly talked about the potential impacts of any delay to agreement on the multi-annual framework. That is an item that we have raised before. It would be good to get an update from the Minister on where he thinks the budgetary debates are going, because they could have an impact on CAP reform and forestall the changes that we are talking about. The hon. Lady also commented on the broad issue of achieving a level playing field, which we are always chasing. Today’s debate has flushed out not only the difficulty, but the absolute necessity, of achieving that, so that our farmers who strive for the highest standards of environmental gain and animal welfare are not at a disadvantage in so doing, compared with farmers in other EU nations. What struck me about the hon. Lady’s comments was that there is probably cross-party agreement that in the reforms we should be seeking a green and pleasant, but also productive and biodiverse land.
The hon. Member for Banff and Buchan (Dr Whiteford) pointed out that many farmers would not be viable without the support of the CAP, which tempted me to reiterate a comment that I made earlier this year: happy 50th birthday to the common agricultural policy! I do not think that many hon. Members will join me in saying that, but there is an element of truth in the statement that one of the unavoidable outcomes of the CAP over the past five decades has been an element of price stability and avoidance of price volatility. As we move towards a more competitive CAP with fewer barriers to trade that opens out internationally, the challenge will be different.
Successive Governments have made it clear that they need to move away from food production subsidy to more competitive farming and fewer trade barriers. Indeed, the hon. Lady spoke up extremely well for diversity within farming—a critical issue not only within CAP reform, but in wider domestic reforms that the Government are looking at. I entirely agree with her that we need to see the socio-economic importance of the diversity of farming. That will give us resilience, and it includes having smaller farmers alongside larger farmers, and highly productive land alongside less favoured areas. Diversity needs to be maintained and supported, not least for the public benefits that it brings.
Public benefits are not purely about the birds and the bees. I declare an interest as my wife keeps bees. They have done very well this year. I will discuss with the Minister later how they have done well, because it is to do with the preponderance of a particular non-native species in our area, which has kept them going in pollen this year.
Huw Irranca-Davies
Indeed. The hon. Member for Tiverton and Honiton (Neil Parish) spoke with expertise, as always. He described how we got here with the CAP, and spoke about the diversity of approaches to payments in the UK. That will be a major factor for the Minister as he tries to steer a way forward. The hon. Member for Tiverton and Honiton also spoke of his worry that his infatuation with the CAP and farming meant that the men in white coats would soon be coming. I assume he is not referring to officers of the Animal Health and Veterinary Laboratories Agency. He also referred to the madness of some of the Commission’s proposals, so there seems to be a running theme in his contribution.
My hon. Friend the Member for Glasgow North East (Mr Bain) widened the debate significantly and spoke with a great deal of expertise about the increasing speculation in food markets by those who, frankly, have never set foot in a field or run a farm—other than a health farm, so that they could have their limbs massaged alongside their profit margins. There is a world of difference between commodity trading by farmers to enhance their profit margins and pure speculation, which my hon. Friend mentioned, which lines the pockets of traders to the complete disadvantage of not only farmers, but consumers, because it is undoubtedly having an effect on prices.
My hon. Friend also talked about the overriding priorities that we should be focusing on: food security, food price stability and removing trade barriers. Removing such barriers will help the competitiveness of our UK farmers and improve the viability of those in developing nations. It will help us to tackle the global food supply and shortage problems. He talked about innovation and the priorities affecting food supply chains, and their role in climate change, as well as the big social justice issues that we often miss when we talk about CAP reform. He also reminded us specifically of the market distortions of CAP, and their impact on developing nations in particular—the reason we are trying to change it and move away from it.
My hon. Friend the Member for Bristol East (Kerry McCarthy), with a little instigation from me, introduced the concept of one-nation CAP reform, for which I thank her. The basic premise is simple: CAP reform is not only to do with farmers. It is to do with wider public benefits, and taxpayers have a prominent stake in it, as do consumers, NGOs and farmers. It must be a subject that inspires debate beyond the agricultural or food-processing community and this Chamber. My hon. Friend called for genuine environmental benefits, not greenwashing. I am sure that the Minister heard her, and I hope that that call is also heard in the European Parliament. It is a valid concern and brings us back to my initial point: let us have good reform, not just any old reform. One Europe-wide organisation, BirdLife, said that the rather purist original Luxembourg proposals
“would signal the end of any legitimacy of EU direct payments to farmers”.
I think we all agree that we need to avoid that result at all costs and explain to people the wide variety of reasons why it is valid to put those funds back into farming, not least of which is the environmental and wider public benefits.
The hon. Member for Camborne and Redruth (George Eustice), the closing Back-Bench speaker after a wide range of contributions, raised the issue of green tape, as opposed to red tape, and complexity. I agree with him that we need to find ways of simplifying things. He engaged with the detail of proposals and interestingly discussed the cap on CAP payments. That raises the question, for me, of what additional benefits in public goods for the taxpayer can come from very high-level payments. They might take the form of increased productivity on the part of the largest recipients of CAP payments. There is an increasing necessity to explain to taxpayers, day by day, why their money is being used as it is. We can do that, but we need, with the Minister’s help, to explain why it is a good use of money, and what extra we get from it, as opposed to large volumes of production.
The hon. Member for Camborne and Redruth also dwelt on the potential for greater regional management and subsidiarity, which is the direction under the common fisheries policy; I think it is slightly ahead of the CAP in that respect. It took a fair deal of persuasion to get where we are on the CFP, and NGOs, alongside fisheries people, did a lot of good work to articulate the fact that the approach could work scientifically as well as commercially. I think we will win in that case, and I hope that the process continues. Perhaps, some time in the future, we can reach the point of much more ownership, regionally and locally, among the farming communities, NGOs and others, of how we take things forward. Sustainability underpins all that is happening, and the scientific evidence. The hon. Gentleman also introduced the interesting concept, which raised quizzical looks between me and the Minister, of transferable obligations. That strikes me as having some similarities with carbon trading, which has advantages, but also loopholes and disadvantages. The concept is interesting, and worthy of further consideration.
The UK has long been in the lead among the more progressive nations on CAP reform. I am thankful for the leadership shown under successive Governments, in successive negotiations, including by my right hon. Friend the Member for Leeds Central (Hilary Benn) when he was Secretary of State. At the forefront of like-minded and progressive nations, he advocated strong reform of the CAP, to bring about enduring benefits for farmers, consumers, taxpayers and the environment from bold, ambitious, green reform—good reform.
Miss McIntosh
I should take this opportunity to thank all the witnesses to the inquiry, which I did not do before. There is a long list, as the hon. Gentleman mentioned. On the point about negotiations under successive Governments, it is important to recognise that this is the first time that co-decision has rested with MEPs and the Council of Ministers. Like my hon. Friend the Member for Tiverton and Honiton (Neil Parish), I served in the European Parliament, for 10 years, and—this is a secret, so I know it will not go beyond this Chamber—for six months as a stagiaire with the Commission, so I have even more chance of being carried off by the boys and girls in white coats. I am concerned that we may we overlook this point: MEPs so often feel ignored and neglected, and among the 7,000 amendments there will be some sensible ones on which we can possibly do business. It is incumbent on us all to use whatever contacts we can, in the most platonic of ways.
Huw Irranca-Davies
The hon. Lady raises a strong point and is right. Although co-decision brings more challenges in negotiation, I welcome the fact that it is a great enhancement of democratic engagement beyond what has been referred to as the bureaucrats. It puts things into the hands of people who are democratically elected, and can speak up for their regions, including on international issues and trade. They can speak up for wildlife and farmers. We need to engage with and influence those individuals.
I was delighted that the head of the agriculture committee came to Westminster for a seminar, attended by various organisations, that brought us up to speed on the 7,000-odd amendments. He has his plate full, because he must work through the various Members who have tabled them and come up with his priorities, just as Ministers do. It is almost like adding a new but very democratic level to the previous tripartite arrangement. However, the hon. Lady is right that it gives an opportunity for a different means of influence. We should use that. Towards the end of the month, I shall be going out to meet European parliamentarians to discuss that very issue. I shall treat that as being as important as meeting the Commissioner.
We continue to believe that farmers should be supported by the Government for the public goods for which the market will not automatically reward them. As my hon. Friend the Member for Wakefield (Mary Creagh), the shadow Secretary of State for Environment, Food and Rural Affairs, has said:
“Labour wants CAP reform to encourage growth, a secure food supply and environmental benefits”.
As the Environment, Food and Rural Affairs Committee notes, those sometimes apparently contradictory aims can be difficult to reconcile, not least in the minutiae of EU negotiations, made more complex, as we have just heard, by democratic co-decision. However, we must reconcile them if we are to have good reform, not just any old reform—and especially not the old-style reform, which did not take us as far as we wanted. To do that we must have friends, and work with them, so I ask the Minister, as the hon. Member for Thirsk and Malton did, to update us on progress on the greening proposals of the more progressive, like-minded states—our friends, including the Danish and Swedish Ministers—and on the extent to which their influence is being felt among the clamour of competing voices, some of which may be arguing for a more retro approach to CAP reform, a “déjà vu all over again” approach of protectionism and old-style production subsidy. By the way, the accidental use of the imported term “déjà vu” in no way indicates any one specific nation that may advocate a less bold set of reforms.
Mr Dai Havard (in the Chair)
We will take note of that when we are dealing with French treaty discussions.
Huw Irranca-Davies
Among progressive reformers, there has long been a focus on delivering a smaller, greener CAP with a more competitive and productive farming sector, both in the UK and across the EU. Does the Minister agree that yesterday’s vote in Parliament on the question of seeking a real-terms reduction in the next multi-annual financial framework actively assists the Government in pursuing those aims? If so, perhaps he can explain why Ministers were whipped to oppose the motion. Surely yesterday we provided a clear assist to the Government, in strengthening their hand in negotiations on the overall budget, and ultimately in respect of bold CAP reform. We should not forget, with regard to greening and all other matters, that part of this long-advocated reform is intended to reduce the barriers of protectionism, not put more up. It is intended to liberalise trade, which I am sure is supported on both sides of the House.
As well as the need to increase the competitiveness and productivity of UK farming, there is a need to level the playing field across the EU. Let us not forget the need to reduce the trade barriers that disadvantage the poorest farmers in the developing world. We often talk about food security in domestic terms only, but it is also an issue for international trade and developing nations. We urgently need to support growth in agricultural production, especially in the developing world, to feed a rising and poor population.
Let me again commend the forensic work of the EFRA Committee, and then ask the Minister several specific questions on the greening elements of the CAP. First, on a consensual note, we are glad to see the Government continuing with Labour’s focus on a greener CAP, with a greater proportion spent on public goods. We note as well the Government’s commitment
“to a very significant reduction of direct support under Pillar 1 …and a CAP that moves away from market-distorting subsidies.”
We are also glad that the Government are focused on simplification. However, we share the EFRA Committee’s concerns that elements of the proposals, as currently understood, will indeed add to the complexity and the bureaucracy of delivering public goods, including environmental benefits.
The Government must continue to argue in the EU for flexibility for the UK to devise and implement greening measures, to build on what has been referred to in this debate as the great success of the past couple of decades—it is 25 years since we first introduced agri-environment schemes in the UK—and to further those environmental gains. We do not want to destroy our progress or duplicate, overcomplicate or add bureaucracy. One of the things that have not been emphasised as much as they should have been today is the fact that the EU needs to go further. Resting on our laurels, however comfortable, is not an option. Ambitious green reforms need an acknowledgement from Government and from farming leaders that there is more still to do.
I note the Government’s response to the Committee’s concerns, expressed in recommendation 8, about gold-plating greening, in which they restate their high level of ambition for greening across the EU. It is right that we should be ambitious about greening in the UK. Does the Minister agree that, despite all our progress in this area, we need to do more? We need to ensure that there is a level playing field, and that farmers in other nations are stepping up to the green mark, and not finding easy access to indirect payments that support production, thereby disadvantaging UK farmers who are doing the right thing.
The Commission’s impact assessment estimates a 15% increase in administrative burdens linked to direct payments. I hope that the Minister can tell us that he will not be returning to the UK at the end of the negotiations with additional costs and burdens for farmers. What can he tell us of his hopes to achieve simplification and lower costs, alongside the green reforms and public benefits? He understands the concerns about the crop diversification proposals, which, in the UK, could have negative consequences, whereas crop rotation could improve soil and water quality, and help climate change mitigation.
There needs to be flexibility in the ecological focus area proposals to reflect the diversity of UK farming. Perhaps we could use our imagination and modify further the proposal. One suggestion, which is already in play for the Minister, would assist farmers and the environment, and it ties in with ideas proposed by the hon. Member for Camborne and Redruth. It reduces the 7% devoted to EFA to 5% for farmers who are willing to work together to collaborate on projects such as wildlife corridors, and to co-ordinate on a spatial and regional basis to develop those things that help us with climate change adaptation. I have met with large-scale farmers, both out in the fields and here at Westminster, who are already working effectively together on environmental measures, and such an approach, I suspect, would appeal directly to them.
The permanent pasture proposals are in danger of failing to deliver the environmental benefits that they profess to seek.
Neil Parish
Not only is there a problem with permanent grass payments, but if we are not careful, farmers will plough up in advance grassland that they would not otherwise have ploughed up if it had not been for this ridiculous measure coming from the Commission.
Huw Irranca-Davies
Indeed. That is one of the many unintended consequences of devising a central system, which is why it is vital that we have the right flexibilities in place, so that we can sometimes work around this. We will support the Minister in any way that we can on this matter. I remember, at the 11th hour of a three-day CAP meeting, when we had come up with a final list of proposals, a great chap—I will not say what region he came from, to avoid the risk of embarrassing somebody—who had been involved in the negotiations from the fisheries side came up to me and said, “I cannot say this publicly, but well done, Minister. That is the best possible deal we could have had. I am now going to go away and see how we can work around it.” What we do not want is that sort of outcome. We do not want to come up with a complex list of things that people plan to work around. We would rather see the matter simplified. None the less, the hon. Gentleman makes a good point.
I mentioned the permanent pasture proposals. There is a world of difference between valuable permanent pasture that is not ploughed over regularly, which is home to semi-natural vegetation and great biodiversity, and pasture that is periodically cultivated and seeded. How does the Minister intend to negotiate the maximum public good from that proposal?
On exemptions, how does the Minister guard against the fear of double payments and maximise taxpayer benefit? Will he give us more details on the ways the Government will improve the competitiveness and productivity of UK farming while promoting further progress in greening and the achievement of wider public good? What specific measures are the Government working on now, regardless of CAP reform, that will allow both aims to be achieved simultaneously? We do not want the green food project, which has been quite well received, going the same way as the green deal in the Department of Energy and Climate Change, which has over-promised, is forecast to underachieve and is fundamentally flawed. The green food project needs to produce benefits and to bring together all the strands. I am sure that the Minister will be able to stand up and assure us that that is the case.
The Government have had some criticism from the EFRA Committee and others for the late introduction of proposals for a points system that would aid flexibility of the Commission’s proposals on a member state basis. I welcome the proposals, but wonder whether playing this card so late has diminished the chances of success in negotiations. May I also ask the Minister how, in promoting the laudable aim of achieving member state flexibility, we can guard against the use of such flexibility by some member states to dilute their greening imperatives? Does not that risk mean that the Commission will strictly have to constrain any flexibility, and what impact will that have on the Government’s ability to deliver for farmers in the UK while trying to guard against the dangers of flexibility among other EU nations? I notice that the Minister is chuckling, but he knows what I am talking about.
In short, flexibility at member state level is not just desirable but essential, but it cannot be allowed, in other nations, to add to the very real cost for UK farmers and consumers. It cannot be allowed to become a euphemism for an abdication of environmental responsibility.
The Minister has a lot on his plate, but if he tires, I am more than willing to step in and pick up where I left off. That would of course require this Government to step aside, so it may not be an option for the moment. Meanwhile, I genuinely wish him well in continuing negotiations on greening, and on all other aspects of CAP reform. Labour will support where we can, and we will challenge where we should, to achieve the outcome that is good for farmers, consumers, taxpayers and the environment—a smaller, greener CAP, and a more competitive and productive farming sector. I am talking about a one-nation approach to CAP reform where the many, not the few, gain.
Mr Dai Havard (in the Chair)
I call Mr David Heath to speak. He got a soundbite in as well.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
Thank you for calling me to speak, Mr Havard. I do not deal in soundbites; I deal in solid policy and solid negotiation. We will leave soundbites to the hon. Member for Ogmore (Huw Irranca-Davies).
It is a delight to serve under your chairmanship today, Mr Havard. I also want to say a big “thank you” to my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, first for committing her Committee to the report—the very compendious report—that it has produced, and secondly, for having the good sense to apply for the opportunity to debate it here in Westminster Hall today. It has been extremely useful for us to debate the report, not least because my official title is the Minister of State, Department for Environment, Food and Rural Affairs, so I am responsible for both agriculture and the environment, and it is nice to have a topic that clearly places both parts of my job description in the frame.
I am grateful to my hon. Friend for making it clear in her early remarks that we have these priorities of food security and climate change, and they are part of our background thinking in this sector. I am also grateful to her for drawing attention to the difficult weather conditions in the past few months, which unfortunately may continue, and to the need for certainty. Nothing would please me more than to say—through her to the farming communities, the people who are looking at this debate in terms of social policy and the people who are desperate to have answers to the environmental questions—that we have a degree of certainty, but the reality is that we do not. The negotiations that we are involved in are still very much in play and I will try to give the House the benefit of our experience, to say where we are and what our objectives are. However, I am afraid that what I will not be able to do, with any degree of certainty, is to say where we shall end up, because there is still an awful lot to play for.
I start by making it clear that the Government are very much in agreement with the majority of the EFRA Committee’s findings and with the conclusions in its report; that was also very clear in the formal Government response to the Committee’s report. If I may paraphrase, the Committee’s two key conclusions are that the UK’s existing agri-environmental schemes should not be undermined by greening, and that greening should be applied in a simple, flexible way that recognises local circumstances. As I say, we could not agree more with the Committee on either of those aspects. May I say how much I value the agri-environmental schemes that we have in this country? It is not being complacent to say that they are of a very high standard and that in many ways we achieve a higher level of outcome than many other EU member states.
Of course, I would always like us to do better and there are ways in which we can continually improve, not least by recruiting more people to higher-level stewardship schemes, but I will not say anything other than that we do a pretty good job at designing those schemes and we have done so for some time. The hon. Member for Ogmore said “Happy 50th birthday” to the common agricultural policy. I am not sure that that many people will be lighting candles in support of that contention, but I hope that more people might like to have a small celebration at the 25th anniversary of the groundbreaking agri-environmental schemes in England. I want to make it plain that we want to preserve and extend that legacy for future generations.
Huw Irranca-Davies
In light of the earlier comments by various hon. Members today, does the Minister agree that the success of the HLS schemes—albeit they might need to be tweaked again as time goes by—and the welcoming of that success is a result of DEFRA officials being out there on the farms, in the fields, with people, fine-tuning the schemes until the eleventh hour to get them right? Actually, the success of those schemes gives us a lesson about the need for there to be as much subsidiarity as possible within the CAP reform greening proposals. They need to be worked in the UK, for the benefit of UK farmers and the UK public.
Mr Heath
The hon. Gentleman is absolutely right. Mr Havard, we are going to have an embarrassing degree of consensus in Westminster Hall today on an awful lot of this material, because we have very strong common ground across the political parties and across the nations and regions.
I must say that it was not always so. When agri-environmental schemes were introduced, I remember that in my part of the world in particular there was a huge outcry about the “imposition”, as it was described, of agri-environmental schemes on the Somerset levels. People were very upset about what was happening, and then effigies of Ministry of Agriculture, Fisheries and Food officials were burned on the levels. We get very excited about these things in my part of the world—we are all revolting peasants at heart.
Mr Heath
My hon. Friend will agree with that contention, as I know where he comes from.
The confidence in agri-environmental schemes is, as the hon. Member for Ogmore says, the result of careful preparation and consideration, as well as ensuring that everybody understood not only what they were to do, but the reasons why they were to do it and why the schemes would have an effect.
That is partly the answer to the point made by my hon. Friend the Member for Thirsk and Malton about modulation. From our point of view, it is essential that we are able to ensure the continuation of these schemes, and the way that we can do that is to make sure that there are the funds within pillar two that enable us to maintain them. It is not just the agri-environmental stewardship schemes that matter, although they are important. It is also through one of the other things that she mentioned—the rural development programme for England—that we can deliver the other added benefits and the public good, by the use of modulated payments. We must be very conscious of that.
My hon. Friend also made a specific point about the exit from the schemes. I hope that the Government response to the Committee’s report set out the position of someone who has signed up to a 10-year involvement, which is clearly the legal position. However, if difficulties arise after we have concluded the negotiations and if the new schemes clearly require us to look again at transition, I will be happy to talk to her, the rest of the Select Committee and indeed other interested parties about that, to ensure that people are not penalised for something that is outwith anything that they might reasonably have expected. That is because my determination is that farmers who enter into agri-environmental stewardship schemes have the confidence that, in doing so, they are not shackling their businesses to something that they do not want to do and are not making a rod for their own back. Instead, they should have the confidence that the scheme will continue and will provide the support they need for them to do the things that they want to do, both in running their businesses on that land and in achieving the environmental benefits for the wider good. I happily give my hon. Friend that assurance.
Miss McIntosh
What would be helpful is a letter of clarification. Perhaps I am misinterpreting the Government response, but when it so clearly states that
“there is no legal basis for allowing farmers wishing to withdraw”,
does that refer to an existing scheme or a new scheme that they are about to sign up to, which will then be an existing scheme from which they may wish to withdraw if the greener proposals are more advantageous to them? As I say, a letter clarifying that issue, which we could place in the Library, would be most helpful.
Mr Heath
I am happy to give my hon. Friend a letter. Again—I am not trying to avoid the question—there may be some uncertainties at the moment, as we are discussing transition, a key issue, with the Commission. It is giving us all sorts of potential headaches in the administration of schemes. We have a limited time horizon, and we simply do not know at what point new arrangements will kick in and what those new arrangements will be. Until we know that, it is difficult to make longer-term plans. However, I will happily write to her and set that out if it is helpful.
Huw Irranca-Davies
I get the hon. Lady’s point. What we need clarity on—I understand if the Minister cannot give it today—is where the cut-off point is and at what point in the process it occurs. We need that clarity so that we and he can encourage farmers to keep signing up for existing schemes without fear that they will lose out.
Mr Heath
The hon. Gentleman has grasped that we need to understand from the Commission what will and will not be acceptable. We need to know how we can make a satisfactory transition. I assure him and my hon. Friend that my intentions are to maintain that continuity in a way that is fair to everybody. I am not resiling from the difficulties; I am simply saying that we are trying to find ways of ensuring that that is the case.
Miss McIntosh
To make it simple for the Minister, we want an assurance that he is saying what the outgoing Minister for Agriculture said: that farmers will be able to exit. I am detecting a change of position.
Mr Heath
There is no change in position. I am simply saying that we certainly want to ensure that people are not penalised. However, we will not be happy if people enter stewardship schemes and then try to exit for no good reason when there is no substantive change from the new arrangements—if they simply say, “We signed up for 10 years, but we now think that it is in our interests to bail out after two,” for unconnected reasons. I will write to my hon. Friend and copy in the hon. Member for Ogmore to ensure that there are no difficulties in understanding. Perhaps I am not expressing myself well.
Mr Dai Havard (in the Chair)
For the record, my understanding is that this discussion has been about Select Committee recommendation 28. The answer is given on page 9 of the Government response. Anybody outside who may have been listening to the runic, delphic discussion that has just gone on will have some idea of what we have been talking about.
Mr Heath
I am grateful to you for setting that out, Mr Havard, but I have to say that anyone who hopes to follow all the ramifications and tergiversations of the common agricultural policy negotiations will need those pieces of paper in front of them to have any chance of understanding much of what we are talking about. Having said that, let us try to express ourselves.
I will now be even more runic, because the hon. Member for Banff and Buchan (Dr Whiteford) asked me about the effect of the rebate. Anyone who tries to explain how the rebate works inevitably ends up confusing everybody. I will simply say something about it, I hope without entering into a longer discussion, because we will all get confused.
If part of pillar one is greened, that will not affect the rebate. Even if we manage to secure a transfer of the greened component from pillar one to pillar two, it still would not have any impact, because all pillar one expenditure and all pillar two expenditure originating in pillar one counts toward the rebate calculation. I hope that the hon. Lady finds that helpful. Looking at her, I am not sure whether she does. Again, I can provide further information later if she likes.
I move to one of the key underlying issues of this debate: the Committee’s ambitions for simplicity and flexibility. Those are fundamental to the Government’s position on greening. We seek to ensure that the administrative burden is low for farmers and administrators. For farmers’ sake, we do not want to gold-plate—as my hon. Friend the Member for Thirsk and Malton called it—any proposals introduced, but the thrust of Government policy has been exactly in the opposite direction.
My hon. Friend mentioned the Macdonald review, but I think that it delivered some sound suggestions about how we could reduce the impact of red tape on the farming community. We are making good progress on implementing them. I am afraid that farmers do not always recognise when that has been done, because when they no longer have to fill in a form that they used to have to fill in, they do not notice. We may need to make people better aware of the fact that we are proceeding with that as fast as we can. Sometimes it will need changes in legislation, which will take a little longer, but wherever we can, we are trying to implement the Macdonald review. I have regular meetings with Richard Macdonald to ensure that we keep up with his timetable.
Dr Whiteford
I welcome the Minister’s comments. Compliance has been the biggest single issue with the CAP. It is the issue that constituents raise most often with me, and I am sure that it is the same in his constituency. I questioned his predecessor on several occasions about whether the new CAP would tackle some of those compliance issues, and I urge him to keep trying to do away with what the hon. Member for Camborne and Redruth (George Eustice) called the green tape in the new CAP.
Mr Dai Havard (in the Chair)
I apologise to the hon. Lady. It is “Whiteford,” is it not? I got the first bit right but the second bit wrong. That is that Neath valley problem.
Mr Heath
It is certainly an awful lot better than the pronunciation of the hon. Lady’s constituency from the hon. Member for Ogmore, so I would not worry too much, Mr Havard.
The hon. Lady is right. To be absolutely clear, one of the big bones of contention in the negotiations is that we think the Commission’s direction of travel on the issue is precisely wrong, and we have to push very hard back the other way. One of my drivers for that—I am sure my counterpart in Scotland feels the same way—is that I simply want to ensure that we can implement the CAP effectively and efficiently when it is introduced. I do not want the Rural Payments Agency in England to go back to the dark days of a few years ago, when it was incapable of doing the job set for it because it was insufficiently well equipped to meet the complexities. I want to ensure that on the day when the arrangements are implemented, whatever they may be, we can deal with them. That means a long implementation time and simplicity in the construction and design of what is proposed.
Huw Irranca-Davies
Will the Minister return to the point that I raised about the Commission’s impact assessment suggesting that the proposals would add about 50% to the costs? He can extrapolate from that to complexity and bureaucracy as well. Is it his intention that the final outcome of the negotiations will entail no increase in complexity or costs to farmers, or will he accept some complexity if that is the only way to finalise negotiations?
Mr Heath
There are all sorts of competing interests. The hon. Member for Bristol East (Kerry McCarthy) is keen to ensure that member states cannot simply slide away from the commitments that they make. It is difficult to answer on what the final outcome will be. We are clear about our objectives, which are to simplify the proposals dramatically to achieve the environmental objectives, but with enough flexibility to ensure that we do not engage in complications that would jeopardise some of the things that we have in this country. We certainly do not want to increase costs. At the moment, I can give no assurance to the hon. Gentleman about the result of the negotiations. All I can give him an assurance of is our best endeavours toward that end.
Huw Irranca-Davies
I seek the Minister’s graciousness in giving way again only to highlight the fact that his answer sounds remarkably like the answer that the Opposition gave when we were in government, which was, “We would love to have no increase in regulation, but there just might be some, because that might be where we end up.” We took a lot of flak when we were in government over regulation and gold-plating. Sometimes there is good regulation as well.
Mr Heath
There is, but it must achieve the right objectives, and our concern about some of the proposals is that they increase the complexity and the regulation and do not achieve the beneficial effects. That seems axiomatically wrong, and I think the hon. Gentleman is agreeing with me.
Mr Heath
I note what the hon. Gentleman says about flexibility. That is certainly what we are trying to achieve. We want the flexibility to apply practical, effective and simple measures for our farmers. I thought that he ended a sentence in his speech with, “We want flexibility in the United Kingdom but not in other nations”. I thought, “Right. Yes, just stop there,” but I do not think that that is an achievable negotiating position. To be fair, he did carry on with his sentence.
Let us be absolutely clear: we want to achieve an environmental benefit across Europe, but we do not want to lose our high standards. We are engaging, therefore, with the European Commission, the European Parliament and other member states to ensure that there is flexibility in the EU’s approach to greening.
My hon. Friend the Member for Thirsk and Malton requested an update on the process. It will be extremely difficult to offer the precision that she requires. Many different views are being expressed within the Agriculture Council and the European Parliament, and much will depend on the outcome of the overall budget negotiations. As Members have already said, until that budget is completed we will not know what the quantum is, and it would be difficult to resolve many of the CAP issues without knowing the size of that envelope.
There is a move by the Cypriot presidency to achieve a partial general agreement, before the end of the year and the end of its EU presidency. Such an agreement will come about only if we are satisfied that we have something that is sustainable in all its senses, and as far as the UK is concerned I think that we are some distance from that. I expect—this is no more than an expectation—that it is more likely that we shall come to a conclusion during the Irish presidency, following the conclusion of the budget round.
My hon. Friend the Member for Thirsk and Malton asked whether we have allies. Yes, we do. As always with European negotiations, there is a constantly changing kaleidoscope on different issues, but there are member states that clearly understand our points about flexibility and complexity and about how we can achieve the results, rather than focusing on an incomplete understanding of how we can best achieve better environmental benefits across Europe. It would probably be unhelpful at this stage in the negotiations to be numbering our friends and our enemies, because someone’s friend on one issue will often be their opponent on another.
Let me make it plain that we are not opposed to the concept of greening if it delivers greater public benefits from taxpayer expenditure. That is our clear position—the hon. Member for Bristol East made that point—and we want it to be achieved in a way that recognises the wide diversity of agriculture around the European Union. I just do not believe in the one-size-fits-all approach. It is hard to find such an approach even within the United Kingdom, as the hon. Member for Banff and Buchan said. Circumstances are different within England itself, with a hill farm in the Pennines being different from a cereal farm in East Anglia, and different parameters apply. I entirely agree with the EFRA Committee’s view that a one-size-fits-all approach might lose its relevance when applied to particular circumstances, and certainly when applied to our own.
Each of the areas proposed by the Commission initially, which were crop diversification, the retention of permanent pasture and the need for a proportion of land to be designated as ecological focus areas, has the capacity to divide opinion—informed opinion, because of exactly the points that Members have made today. Each measure contains the essence of a good idea—there is something there in the initial thinking—but the environmental benefits are not clear when the proposals are considered in the light of our own circumstances. I know that many other European Union member states are forming the same view, particularly when the supposed benefits are considered in the light of the costs and complexities of implementation. It is not obvious that the money should be spent in a way that more demonstrably delivers complexity rather than environmental benefit, which is crucial.
It is fair, and not unkind to Commissioner Ciolos, to say that a particularly remarkable aspect of the greening debate in Brussels is the fact that the Commission seems to have few, if any, supporters for the precise way forward that it has proposed. I would take some comfort from that if I saw a majority in favour of an alternative, but at the moment there are only many minorities.
Some countries have yet to be convinced about the basics, about the further shift towards paying farmers for delivering environmental public goods. They see ideals that we have long shared in this country as an expensive luxury at a time of economic difficulty, and we have to be alive to that view. There are attempts by some to water the proposals down and exempt the majority of their farmers. It is funny how definitions always exempt a member state’s own farmers from their effects—that is known as greenwashing. There are issues about greening by definition, and we do not want this to be a badge of convenience, with people carrying on exactly as before but with the application of greater funding, as that cannot be in anyone’s interest.
Neil Parish
The Minister makes an interesting point. There are cases in Europe of people wanting to exempt small farmers from a lot of the conditions. In countries where the majority of the land is made up of very small farms, all the greening aspects get taken out because the farmers are ruled out of them.
Mr Heath
Precisely so. Time and again people pay lip service to a “very good idea” but somehow it then does not apply to their own circumstances. We have to be wary of that and not fall into the same trap.
If we are to go down a route of some form of greening by definition—to which there is some advantage, in reducing complexity and allowing for easier systems—it has to be on the basis of something that shows the environmental benefit. I would argue, for instance, that our stewardship schemes do that. We could demonstrate beyond anyone’s reasonable doubt that our environmental schemes show a clear commitment to environmental benefits on the land within their compass. If we extend the self-definition too far, however, we get to the point at which simply having a hedge is sufficient qualification to be a greened farm. That is not an adequate definition.
Other member states share our view that this is basically the right direction for the CAP to be moving in, but that the Commission’s proposals are too blunt, too inflexible and too complex in their implementation. We have heard a few examples of that. The hon. Member for Banff and Buchan talked about the definition of “active farmer,” and my hon. Friend the Member for Tiverton and Honiton (Neil Parish) pointed out that quite a lot of Scotland is not farmed as intensively as most parts of England because of the nature of the ground. Yes, that is true, but the Scots have a case with, for instance, grazed heather, and we are helping to press that case strongly in the negotiations on behalf of the Scottish Government, with whom we have very close contacts, as we do with the other devolved Administrations.
With tenants, there is a question of who is the active farmer. It is far more important to identify the activity, rather than the status, of the person doing the farming. I hope we can move in that direction. I have already mentioned hill farming, and in the negotiations we have to be alive to the interests of less favoured areas. I said as much when I was in Cumbria recently and, not surprisingly, I received a measure of support, but we have to be conscious of the fact that there are many different types of farming, and we need to have something that, as far as possible, can accommodate those differences.
The hon. Member for Ogmore and others mentioned capping—I am sorry, but I cannot remember who provided the response. With the proposals on capping and young farmers, for instance, it is all too easy for lawyers simply to adjust the holding to fit the policy, rather than change what is happening. I am wary of that. I want to maintain the incentives, the competitiveness and all the rest. Although I can sometimes see the advantages of such proposals, I do not want the nominal ownership of an enterprise to be changed simply to create a money stream that would not otherwise be there, because that is not in the interests of efficient farming or the objectives that we have set.
Huw Irranca-Davies
I urge the Minister to keep his mind open, because the larger arable farmers would argue that they are already the most productive, that they invest the most in innovation and that they collaborate the most extensively. On that basis, they should be the most susceptible to an argument that, for the largest payments in the country, they should easily be able to prove that they are adding value, not purely on acreage or hectarage, but in the productivity and innovation of their farms. I urge him not to close his mind, because that is a sharp and intelligent argument for the good use of CAP payments.
Mr Heath
I never close my mind to anything. I am always open to a discussion, but the hon. Gentleman’s proposal is not that different—if, indeed, it is different at all—from something that the Commission proposed right at the start of the negotiations.
There are difficulties, but I am happy to have further discussions with the hon. Gentleman, because I never rule out proposals until I can see clearly that they are not in the wider interest. In return, I ask him to consider the potentially significant problems with artificially fragmenting landholdings or artificially transferring titles, which are not helpful things to encourage.
If there is a consensus among member states, it is that greening is too complex an issue on which to rush to agreement. I have already indicated that, in setting out the timetable, there are still wide differences in approach, and few support the proposals as they stand. It seems to me that there is still a lot of work to be done, and the negotiations need to continue. The one thing in the Select Committee’s report that I would take slight issue with is the implied criticism that Ministers and DEFRA have not been as active as we might be in Brussels on greening. I simply do not recognise that in the case of my right hon. Friends the Members for Meriden (Mrs Spelman) and for South East Cambridgeshire (Sir James Paice), who are the predecessors of the Secretary of State and me. They were very active in Brussels on CAP reform in general and on greening in particular. The Secretary of State and I are taking that forward and engaging at all levels. We are working with the Commission, the European Parliament and other member states.
My hon. Friend the Member for Thirsk and Malton enjoined me to cuddle up to MEPs. I do not know about cuddling up, but I do have conversations.
Mr Dai Havard (in the Chair)
I am not sure where “snuggling” and “cuddling” fit in the lexicon of Hansard.
Huw Irranca-Davies
The Minister should put on record to whom he was snuggling up.
Mr Heath
An eminent member of the European Parliament’s agriculture and rural development committee, whom I hope can advance our cause. It is important that we keep in contact because of the co-decision process that has changed the way such things move forward. It is important that we understand what is being talked about in the European Parliament, what the positions that are being adopted look like and whether we can, at the earliest stage, influence the way that those positions develop and where coalitions form to ensure that, as far as possible, our interests are served not only in the Council but in the Parliament, because ultimately we need to persuade both of what we want. Greening is on the agenda for pretty much everything that we do in Brussels on CAP reform at both ministerial and official level.
We are also working with stakeholder organisations on greening, because it is important to hear what they have to say. My message today is that achieving the right outcome will not be easy, and I am not going to pretend that it is. There are so many viewpoints to accommodate across the EU, and there is always a risk that we may not fully agree with every element of a wide-ranging package of measures. I find it reassuring that there is no discernible fundamental difference between the Select Committee and the Government on greening, but in some ways it is even more reassuring that there is no discernible difference in attitude between all the Members who have spoken in this debate and the Government or between the parties. We are clear on what the British position needs to be; the question is whether we can persuade others to adopt a similar position.
I am coming to the end of my contribution, but I want to mention agri-science, which was raised by my hon. Friend the Member for Tiverton and Honiton. In a way, agri-science is only tangentially relevant, but in another way it is fundamental. If we are talking about food security and measures that could benefit the environment within a context of higher food production, we have to embrace the best technologies to make that happen. I do not say that lightly—sometimes we have to adopt clear precautionary principles when we embrace new technologies—but the agri-science consultation launched by my Department and the Department for Business, Innovation and Skills, which has responsibility for science and technology, is important. Finding ways to get the research community and higher education properly engaged in those areas will be crucial to finding solutions in the long run.
My hon. Friend mentioned blight-resistant potatoes. I went to a research laboratory a few weeks ago and spoke to the only man in Britain who was really pleased about potato blight. That is perhaps being unkind to him, but he was researching blight-resistant potatoes and told me, “Look, everyone’s got potato blight this year—and we haven’t! I have a crop that has been shown to be resistant to potato blight.” There are things that can be done. It is not just about genetic modification or novel foods; we need to be engaged with, and make progress on, a range of areas.
Not only do we owe it to people in this country to make sure that we persist with the sustainability of our agriculture, but we owe it to people in other countries who will be facing much bigger difficulties—something mentioned by the hon. Member for Glasgow North East (Mr Bain). There are people across the world who need to be fed, and they will find it more and more difficult as the effects of climate change are realised. We are in a unique position because of what we can achieve with the quality of our research and technology. Our skills will provide some of the solutions to the questions that will increasingly be asked. I want this country to be in that position, I want the European Union to be in that position, and I hope that it is axiomatic to what we are discussing.
This has been a fascinating and positive debate. I hope I have been able to cover most of the issues raised and to indicate where we stand. At the moment, this is an incomplete and difficult negotiation. I will not be able to be certain about the outcome until the point at which we have an agreement, first on the budget and then on the CAP. However, I assure hon. Members, and the Committee in particular, that the concerns they have expressed are very much at the heart of our negotiating position. Dealing with those concerns is precisely what we are attempting to do as Ministers engaged in those discussions.
Mr Dai Havard (in the Chair)
Thank you all for an intelligent and informed discussion. I wish the Minister the best of luck with his negotiations.
Question put and agreed to.
Written Ministerial Statements
JHA Council
(12 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Mrs Theresa May)
The Justice and Home Affairs (JHA) Council was held on 25 and 26 October in Luxembourg. My right hon. Friend the Secretary of State for Justice (Chris Grayling MP) and I attended on behalf of the United Kingdom. Frank Mulholland QC also attended the justice day on behalf of the Administration in Scotland. The following items were discussed.
On an EU civil protection mechanism there was broad support for the presidency’s compromise proposal on risk management, which removed the obligation on member states to share risk management plans with the Commission and replaced it with an obligation to apply a risk-based approach to disaster management. There was also some progress on the proposed arrangements for a voluntary pool of pre-committed member states’ assets that would be available for EU operations. However, member states were divided on financial incentives to support the commitment of member states’ assets to the pool, where the UK argued that the Commission’s proposed funding levels for maintenance costs were too high and suggested that EU funding would be better used paying for the one-off costs of adapting resources for use in EU operations, or to co-fund training to aid interoperability. The UK also emphasised that civil protection should remain the primary responsibility of member states and stressed that the nature of the asset pool must be truly voluntary; member states should not have to provide justification when deciding whether to commit assets.
The UK, with some support, also resisted the Commission’s proposal to address capacity gaps through EU funding for buffer capacities. The UK said that there was a danger that this may lead to an overall reduction in capabilities. With no consensus the presidency called for further working group level discussions.
On the common European asylum system (CEAS), the presidency said that the reception conditions directive was due to be approved under the Council’s legislative items; only technical questions remained on the Dublin (III) regulation; negotiations with the European Parliament continued on asylum procedures, and COREPER had agreed the EURODAC package. The UK has opted in to the Dublin (III) regulation and the new EURODAC proposal. The UK has not opted in to the three other directives on reception conditions, asylum procedures and qualifications.
On Syria, the Commission warned that 350,000 people had already left Syria, with around 16,000 asylum applications being lodged in the EU. The EEAS also referred to the United Nations forecast that the number of Syrian refugees could double. Member states supported the establishment of an RPP, arguing for swift progress with a priority to support rapid capacity building in the region.
The United Kingdom noted that asylum claims had increased, albeit from a low base, and it was right that the priority would be to work with UNHCR. The UK had donated £39.5 million of humanitarian aid to Syria and could support the creation of an RPP, with the aim of ensuring protection close to the country of origin, on the condition that resettlement would be a measure of last resort and only after local integration or return is no longer an option. Swiftly establishing a broader dialogue with Turkey was another essential component of supporting the region. The presidency called upon the Commission to continue preparatory work of an RRP.
The Council adopted the Council conclusions on the protection of soft targets from terrorist activities. The UK has supported the presidency’s initiative, particularly in relation to the sharing of experience and best practice in protecting soft targets.
The presidency presented its progress report on the implementation of the 2011 Council conclusions on enhancing the link between the internal and external aspects of counter-terrorism. The European External Action Service underlined the importance of a coherent approach given, it argued, that the most significant threats to member states all have links outside the EU. The counter terrorism co-ordinator acknowledged the significant progress made but called for the inclusion of counter-terrorism in all funding instruments, enhanced engagement in CT projects in third countries by the EU agencies, and the involvement of DG Justice on the judicial aspects.
The Commission gave a presentation by the Commission on the illicit trafficking of firearms, undertaking to produce a communication early next year.
Over lunch there was a discussion on intra-EU relocation of beneficiaries of international protection, resulting in general support for a voluntary mechanism. The UK emphasised the importance of practical co-operation as the expression of “solidarity” rather than relocation, keeping any minimal relocation voluntary, and the need to ensure any proposal for action in this area did not go ahead until it could be demonstrated that the lessons of the previous project (in Malta) had been learnt.
The mixed committee with Norway, Iceland, Liechtenstein and Switzerland (non-EU Schengen states) started with an update on the implementation of the second generation Schengen information system (SIS II). Comprehensive testing phase had been successfully completed. The UK continues its support for the continuation of the current SIS II project.
On Bulgarian and Romanian accession to the Schengen acquis, the presidency and Commission expressed regret that the Council was still not in a position to agree given both countries had fulfilled the technical criteria to join. The UK accepts that Romania and Bulgaria have met the technical criteria to join the Schengen area.
On the implementation of Greece’s national action plan on asylum reform and migration management, Greece, the Commission, Frontex and the European Asylum Support Office provided an update on progress. The UK thanked the Greek authorities, the Commission and other agencies for their work, but noted that urgent needs remained and a priority should be for the Greek Government to make use of available EU funding. The UK had deployed a national expert to Athens to support the authorities on accessing funds and had offered support in translating materials. The UK looked forward to seeing a sustainable plan in place, with clear benchmarks, and would consider further assistance to Greece on the basis of a refreshed action plan. Others agreed, with a particular emphasis on clear benchmarks. The presidency agreed to return to this at the December Justice and Home Affairs Council when the action plan will be revised.
There were updates on the EU action plan on migratory pressures (the road map) from the Commission, Eurosur and Frontex. The key tools and risks were discussed. The UK welcomed the presidency’s report noting that the most important objective was to take real and concrete measures to tackle illegal immigration including the abuse of free movement. Momentum had been seen in several areas, including on returns, trafficking and co-operation with Turkey, and the UK highlighted the Commission’s recent work on the sham marriage handbook as a positive example of practical action. The UK highlighted a recent case in which an individual was imprisoned for four years for his role in an organised criminal conspiracy to conduct sham marriages between EU nationals and third country nationals. The UK noted the links between the priority areas on the road map, including the effects of visa liberalisation from the western Balkans, where the UK had detected a significant number of Albanians trying to cross the UK border illegally with fraudulently obtained identification documents. The UK was one of the co-drivers of action on abuse of free movement by third country nationals, as set out in the road map, and we continue to work with other member states, the Commission and EU partners to seek further practical progress in this area.
The presidency introduced the Commission’s third annual report on post-visa liberalisation monitoring of the western Balkans published in August. The Commission accepted that certain member states had seen an increase in unfounded asylum applications from these countries, but said if the recommendations in the report were applied correctly it would ensure effective implementation of the visa agreements. There was agreement that the revised 539 regulation (listing the countries whose nationals must be in possession of a visa when crossing the Schengen external borders) which included the long called for “visa safeguard clause” (temporary suspension of visa waiver) must be swiftly adopted. Although the UK does not participate in this visa liberalisation, it supports the measures being introduced to combat abuse of such agreements. The presidency agreed to closely monitor the situation.
The justice day began with the presidency seeking views on the scope of the powers of extended confiscation in the draft directive creating minimum standards on the freezing and confiscation of proceeds of crime. The presidency put forward four options for narrowing the scope of the extended confiscation regime, all of which attracted some support from different delegations. However, the presidency concluded that the way forward was to limit the requirements by reference to “economic benefit” and “serious crimes”. The UK has not opted in to the proposed directive but is engaging in the negotiations with a view to considering opting in at the post-adoption stage.
The presidency then sought member states’ views on ne bis in idem (namely that a person should not be pursued a second time for something on which he has already been legitimately convicted or acquitted) in the context of the proposal on criminal sanctions for insider dealing and market manipulation. The majority of member states considered that it did not require a prescriptive solution at EU level. The presidency concluded that they would proceed not to seek to “solve” the ne bis in idem issue through the operative text of the instruments. There was also a discussion on the absence of minimum levels of criminal penalties in the draft directive.
The presidency provided a state of play update on the general data protection regulation and set out its approach to negotiations going forward, while also stating the intention to seek a partial general approach in December on the thematic issues of delegated and implementing acts and administrative burdens. There was also a broader discussion about instrument type and whether a directive was in fact more appropriate than a regulation given its ability to provide harmonisation, but also flexibility where appropriate.
The Commission introduced its proposed directive on the protection of the financial interests of the EU by criminal law (the PFI directive) which it published on 23 July this year. There was discussion on the legal base of the draft directive with the Council legal service stating their view that the current one was not correct. The Commission noted that they would await the views of the European Parliament’s legal service. The first detailed discussions at working group will take place on 30 and 31 October.
Under AOB, the presidency reported that two trilogues on the European investigation order had been scheduled for November; the Commission expressed support for the European Parliament’s view that the balance achieved in the Council general approach on this instrument was wrong.
There was also a presentation on the state of the drug problem in Europe by the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA). The presidency also introduced the final report on the fifth round of mutual evaluations on financial crime and financial investigations. The presidency declared that the report would be discussed by the Standing Committee on Internal Security in November.
Over lunch Ministers discussed how protection for debtors could be improved in the European account preservation order. The majority of those intervening supported courts approving preservation orders in all cases. However the discussion was inconclusive about whether creditors should be obliged to provide security when applying for an order or whether a liability rule was needed to cover compensation to the debtor for any damage caused by an order.
House of Lords
Introduction: Lord Deighton
Flooding: Defence Programme
(12 years ago)
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Baroness Quin
To ask Her Majesty’s Government whether they have plans to reassess the flood defence programme.
Lord Beecham
In the absence of my noble friend Lady Quin, and at her request, I beg leave to ask the Question standing in her name on the Order Paper.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, the flood defence programme is prioritised to protect people and property, especially in areas of greatest flood risk and deprivation. The Environment Agency constantly assesses the projects within the programme to maintain value for taxpayers’ money with a return on investment of at least eight to one. We expect to exceed our goal of 145,000 households better protected by March 2015.
Lord Beecham
My Lords, will the Government now recognise that it was a mistake to cut funding for flood defence, particularly in the light of the fact that a number of schemes had then to be deferred? Will they now accept the National Audit Office’s advice of October 2011 and increase the funding to the Environment Agency by the £20 million it suggested, thereby protecting householders, businesses and the public purse as well as creating jobs?
Lord De Mauley
My Lords, I am acutely aware of the impact that the recent flooding has had on victims and my sympathies go out to them all. This summer was the second wettest on record. Despite hard times, we protected the flood budgets as far as possible with a 6% reduction in spend over the four years 2011-12 to 2014-15 compared with the previous four years. As a result of the investment that we are making, we expect to exceed our goal of 145,000 households better protected by March 2015. The Environment Agency will deliver real-term efficiency savings of at least 15% in procurement over the spending period and is aiming to increase the number of households receiving free flood warnings to more than 1.1 million.
Baroness Scott of Needham Market
Is the noble Lord able to update the House on the progress of talks which were being held with the insurance industry as there are now many thousands of households that face the problem of living in properties that are virtually uninsurable at prices that they can afford to pay?
Lord De Mauley
My Lords, we want to reach an agreement that ensures both the availability and affordability of flood insurance. We are in intense but constructive negotiations with the industry and further announcements will be made in due course after more discussions with it and other relevant parties.
Baroness Knight of Collingtree
My Lords, can my noble friend assure the House that in future housebuilding plans, which are now so extensive, will not be carried out on flood plain land?
Lord De Mauley
My Lords, the Government’s policy, as set out in the National Planning Policy Framework, is to avoid unnecessary building in areas at risk. New homes are not included in the funding formula, otherwise the system would encourage housebuilding on flood plains, so I agree with my noble friend.
Lord Marlesford
My Lords, does the Minister agree that while people are obviously very important, so is food production? Is he aware that in Suffolk there is a serious threat of the estuaries of the Alde, Ore and Deben rivers flooding an area which produces no less than 25% of all the vegetables grown in England? Is he further aware that local farmers are quite ready to take action themselves, and spend their own money, to improve the flood defences? Will the Government encourage this rather than leaving it all to the Environment Agency? It would save quite a bit of taxpayers’ money. I declare an interest as a Suffolk farmer, but not in the area at risk.
Lord De Mauley
My Lords, my noble friend makes an important point. Defra’s partnership funding approach provides a contribution to the economic benefits of flood and coastal erosion risk management projects, including avoiding the damage to business, agricultural land and infrastructure. It specifically allows the involvement of farmers and others from the private sector as well as local authorities. Many schemes that are justified principally on the basis of protection of households also protect businesses. Many flood management projects reduce the risk to farmland.
Lord Knight of Weymouth
My Lords, the previous Government negotiated the statement of principles with the insurance industry to guarantee universal flood insurance coverage for homes in flood-affected areas. I should declare my interest as someone whose home was flooded this summer. That statement expires in June next year. The insurance industry has warned that unless new proposals are published by the end of November this year, it will be too late to ensure that the new alternative is in place by July next year. In response to the question from the noble Baroness, Lady Scott, the Minister told us that he would make announcements in due course. Can he reassure us that that will be this month?
Lord De Mauley
My Lords, the statement of principles to which the noble Lord referred did not go to the issue of affordability. In answer to his question, we are in intense and constructive negotiations, and we will make an announcement as soon as we can.
The Countess of Mar
My Lords, does the noble Lord agree that land management, as the noble Lord, Lord Marlesford, has said, and river dredging are very important to protecting properties, businesses and farmland from flooding? In the past, some stewardship schemes have prevented landowners from dredging their ditches and streams, which has caused a build-up because the flood water gets caught in them. Does the noble Lord intend to redress this balance so that there is proper management of the waterways?
Lord De Mauley
My Lords, the noble Countess makes an important point. In 2007, I had first-hand experience of that. The Environment Agency is working extremely hard on exactly that sort of problem.
Lord Roberts of Llandudno
My Lords, what consideration is being given to the effect of global warming? Is there continuing discussion with those involved? Are there forecasts? What are we looking to expect in that direction?
Lord De Mauley
My Lords, there is constant negotiation between the meteorological forecasting organisation and the Environment Agency. My noble friend is right that we need to keep our eyes on that and we are certainly doing so.
Lord Cormack
My Lords, could we take this opportunity to extend our sympathy to those who have suffered this week in the United States from the devastating floods and storms?
Lord De Mauley
Yes, my Lords. I entirely agree with my noble friend. I think it is worth taking stock and making the point that we are seeking to learn lessons from what is going on in New York. The Environment Agency has contacted the US authorities already with a view to drawing on lessons learnt.
Lord Tomlinson
My Lords, can we be a little less selective in who we send our condolences to and include in our regrets not only the United States but also the Caribbean countries?
Lord De Mauley
I very much agree with the noble Lord. I think I said earlier, but I will repeat, that our sympathies of course remain with our own people who have suffered this summer.
Schmallenberg Virus
(12 years ago)
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Baroness Masham of Ilton
To ask Her Majesty’s Government what steps they are taking to prevent the spread of the Schmallenberg virus across the United Kingdom, particularly with regard to the development of a vaccine.
Baroness Masham of Ilton
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I declare an interest as I have a farm with sheep.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, Schmallenberg virus is carried by vectors, including midges, which are difficult to control, but infection outwith pregnancy has minimal impact and is believed to give protection from the effect on offspring in subsequent pregnancies. We understand that several pharmaceutical companies are developing a potential vaccine which will require to be licensed as safe by the Veterinary Medicines Directorate. Use of the vaccine will be a decision for the livestock keeper in consultation with his veterinarian.
Baroness Masham of Ilton
My Lords, I thank the Minister for that reply. Is he aware that two companies have vaccines which are ready to go if they can only obtain approval and licensing? Will he please make this a fast-track incident because this horrible virus has a great impact on farms, especially as regards those ewes and cows which have very deformed offspring?
Lord De Mauley
I entirely agree with the noble Baroness that the effects of this disease on young calves and lambs are horrifying. We understand that a number of pharmaceutical companies are developing vaccines which we expect to become commercially available for livestock keepers if, in consultation with their vets and considering their management practices, they think they will be of benefit.
Baroness Trumpington
I have a spray for use against bad insects which I obtained on request from the Royal Horticultural Society and which presumably farmers are using against midges. When I got it home, I discovered that it said at the bottom of the label, “deadly to bees”. Is it in general use, or in use at all, because we certainly want to protect bees?
Lord De Mauley
I agree with my noble friend. Generally speaking, midges are very widespread across the country and I think that the application of a spray would have minimal impact.
Lord Clark of Windermere
My Lords, in view of the emergence of a worrying number of animal and plant diseases, which may or may not be connected with the nuances of climate change, will the Minister give us an assurance that none of the drastic cuts being made by the Government in their own research facilities will hinder the evolution of vaccines to counter things such as bovine TB, the Schmallenberg virus and Ash dieback?
Lord De Mauley
If I may, I shall restrict my response to the Schmallenberg virus for these purposes. I assure noble Lords that the necessary funding has been made available particularly to carry out the testing which is so critical in this case.
The Minister of State, Ministry of Justice (Lord McNally)
Can we hear from the noble Lord, Lord Soulsby, first?
Lord Soulsby of Swaffham Prior
My Lords, it is good news to hear that vaccines are being developed against the Schmallenberg virus although it takes time to authenticate the vaccine, get it licensed and the rest. A short-term approach could be to delay the breeding of cattle and sheep to a time when the insect vector—the biting midge—is less active because it is only through the biting midge transmitting the virus that this infection is transmitted from animal to animal. Has the Minister information about any work that is going on as regards advising farmers to delay animal breeding until there is less midge activity?
Lord De Mauley
Yes, my Lords, I have looked into this suggestion. It is possible that delayed tupping may help. We recommend that farmers discuss this with their vets as there are many interdependencies for each farm relating to the timing of tupping and the overall benefits need to be considered. If a flock is not infected yet, delaying tupping may work only if disease infects the ewes before tupping takes place.
Lord Elis-Thomas
My Lords, will the Minister, who speaks for Defra in this House, give us an assurance that there is a high level of co-operation between Defra, the other departments of agriculture in the devolved Administrations and, of course, the Chief Veterinary Officers on this matter?
Lord De Mauley
Yes, my Lords. That is a topical suggestion, in view of the overnight reporting of the appearance of the virus in Northern Ireland. We are in very regular contact with the devolved Administrations, both through the Chief Veterinary Officer and at official level, exchanging information on our knowledge of the virus and our actions. Indeed, our deputy chief vet spoke yesterday to the Northern Ireland Chief Veterinary Officer about this specific case.
Lord Myners
I should declare that I know very little about the Schmallenberg virus, but I know that it is an insurable risk—as is flooding. I want to go back, therefore, to ask the Minister: will the Government take action to address the deficiencies of the Solvency II directive on insurance, which is significantly decreasing insurance capacity in the UK and forcing up premiums for people insuring themselves against the virus or, indeed, against flooding?
Lord De Mauley
I am sure that the noble Lord will have an opportunity to ask a question about insurance. This is not it.
Lord Stoneham of Droxford
My Lords, given that the midges that carry this virus come from the dreaded mainland of Europe, should not today, of all days, the Government emphasise the need for partnership, co-operation and trust with our European partners? Can the Minister tell us how this country is benefiting from the €3 million that the European Union has provided for research on this virus?
Lord De Mauley
Yes, my Lords. The AHVLA is working closely with similar bodies across Europe and is carrying out joint research funded by national Governments and the European Commission. We are funding research at AHVLA Weybridge into the pathogenesis of SBV and the immune response to it. This will provide valuable information of its implications and impact. We will share this information, when we have it, with our European colleagues.
Iraq: Camp Liberty
(12 years ago)
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Lord Maginnis of Drumglass
To ask Her Majesty’s Government what steps they are taking to help expedite a resolution of the status of refugees currently in Camp Liberty, Iraq.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, in response to an appeal from the United Nations, we have agreed to consider the readmission to the United Kingdom, on an exceptional case-by-case basis, of those residents of Camp Liberty who have had previous residence in the UK as refugees. This is subject to the United Nations High Commissioner for Refugees first assessing their current refugee status. We cannot judge the outcome or duration of that process, but hope that it moves forward quickly.
Lord Maginnis of Drumglass
I am grateful to the Minister. Can she tell us what the UN Secretary-General’s special envoy Martin Kobler has achieved towards helping to relocate more than 3,000 refugees forced to move from Camp Ashraf to a virtual concentration camp at Camp Liberty? Are our Government alarmed by the resignation of Tahar Boumedra, the head of the UNAMI mission in Iraq, in protest at the distortion of the facts within Mr Kobler’s reports to the United Nations? Have our Government made representations to the UN to have Kobler sacked and replaced?
Baroness Warsi
The noble Lord raises some important issues. All noble Lords may not be familiar with the background to this matter but, effectively, the Special Representative for Iraq, Martin Kobler, has been accused by his adviser—according to his view—of not being entirely honest about the conditions in Camp Ashraf and Camp Liberty. I do not agree with the noble Lord’s description of Camp Liberty as a concentration camp. He will be familiar with the fact that Iraq signed a memorandum of understanding with the United Nations Assistance Mission for Iraq, UNAMI, at the end of last year to move residents to Camp Liberty, with a view to them being assessed by the United Nations as to their refugee status and being relocated. I have concerns, which we have raised with the United Nations, but we are assured that the conditions within Camp Liberty meet the basic humanitarian standards.
Baroness Turner of Camden
Is the Minister aware, as I am sure she is, that these people expected to be under UN protection and were transferred from Camp Ashraf where the conditions were absolutely appalling? They had every expectation that Camp Liberty would at least have slightly better conditions but this does not appear to be the case. No matter what the resolution of the situation ultimately is, the people there must be looked after properly. At the moment they clearly are not so what can be done to improve their condition?
Baroness Warsi
I looked at this matter in some detail and at the situation in Iraq generally. Sadly, not all the residents in Iraq have 24-hour electricity and not all the residents have running water at all times in the quantities they require. In the backdrop, despite the fact that many individuals living in this particular camp may not be happy with the conditions, they have 24-hour electricity and 24-hour running water. It meets the basic humanitarian needs.
Lord Avebury
Although my noble friend says again that the Government are not in a position to judge the outcome or duration of the UNHCR’s verification of the applications for refugee status by the former Ashraf residents, 10 months after the process was agreed in the memorandum of understanding between the UN and Iraq, did not the UNHCR issue a statement on 13 September saying that they were now asylum seekers under international law whose claims required adjudication? Will my noble friend therefore grant the 52, who were formerly refugees here, leave to enter so that the renewal of their status here can be confirmed by the UKBA after any necessary checks for that purpose?
Baroness Warsi
I can confirm that five residents have already been readmitted to the United Kingdom. They had refugee status in the United Kingdom and had relevant documentation. A further 52 do not have current regularised documentation but have had refugee status in the United Kingdom before. We are considering those applications, but I am sure that noble Lords would agree that time has passed since these people left the United Kingdom and their coming back in. It is right that we consider what they have been involved in in the mean time to ensure that any concerns that we may have are properly addressed.
Lord Hylton
My Lords, is it not the case that this business has been hanging on for far too long and does the noble Baroness agree that the United States has a considerable responsibility in the matter, having given Camp Ashraf people protected status?
Baroness Warsi
The noble Lord will be aware that the situation in relation to this group who are members of the Mujaheddin e Khalq has been ongoing in Iraq since the mid-1980s when they moved their headquarters there. It was right that the United Nations found a solution to this matter and it is right that these people are being properly considered for relocation. We continue to urge the United Nations to act with expediency.
Lord Clarke of Hampstead
The Minister may not agree with the description given by the noble Lord, Lord Maginnis, about the concentration camp status of Camp Liberty. Why does she think all those people around the world have been protesting about the high walls, the lack of sanitation and the denial of medical facilities that are commonplace in Camp Liberty? What is the Government’s view on the duplicitous role of the Iraqi Government in carrying out the Mullahs’ wishes from Iran in getting the residents of Ashraf moved, as they were, after promising that they would get proper treatment? Whether the Minister or the Government like it or not, the facts are that it is not the case that they have been treated properly. They have been treated appallingly and it is about time that we spoke out louder.
Baroness Warsi
As I said, I have looked into this matter in some detail. Allegations were raised and it was important that we assured ourselves, taking evidence from United Nations, about the current conditions in the camp. I assure the noble Lord that there is no appeasement of the Iranian regime in any of this. He will also be aware that this group, the Mujaheddin e Khalq, is not part of the opposition movement in Iran. We saw in 2009, when the Green Movement came to the streets, that it distanced itself from the Mujaheddin e Khalq.
Scotland: Trident Nuclear Deterrent
(12 years ago)
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Lord McAvoy
To ask Her Majesty’s Government what plans they have for the future of the Trident nuclear deterrent based in Scotland.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Corporal David O’Connor, 40 Commando Royal Marines; Corporal Channing Day, 3 Medical Regiment, Royal Army Medical Corps; and Lieutenant Edward Drummond-Baxter and Lance Corporal Siddhanta Kunwar, 1st Battalion The Royal Gurkha Rifles, who were killed on operations in Afghanistan recently. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.
We plan that the UK’s independent, strategic nuclear deterrent will continue to be based in Scotland, at Her Majesty’s Naval Base Clyde. The Government’s policy remains as set out in the SDSR 2010; we will maintain a continuous submarine-based deterrent. Work on the assessment phase of the replacement submarine programme has been under way since May 2011. The final decision on whether to proceed with a replacement will take place in 2016, after the next election.
Lord McAvoy
My Lords, I join the Minister and the whole House in offering my sincere condolences to the families and friends of Corporal David O’Connor, 40 Commando Royal Marines; Corporal Channing Day, 3 Medical Regiment, Royal Army Medical Corps; and Lieutenant Edward Drummond-Baxter and Lance Corporal Siddhanta Kunwar, 1st Battalion The Royal Gurkha Rifles, who were killed in operations in Afghanistan recently. We owe them a great debt and will always remember them. Like the Minister, my thoughts, too, are with the wounded, and I pay tribute to their courage and fortitude in facing their rehabilitation.
The nuclear deterrent based in Scotland supports 6,000 jobs directly and 4,500 jobs indirectly, and also supports the local economy to the tune of £270 million. The Scottish National Party wants to remove it. As long as nuclear weapons exist, NATO will remain a nuclear alliance. The SNP states that an independent Scotland will be able to join NATO without endorsing nuclear weapons—which is complete nonsense. Will the Minister join me in condemning the reckless approach of Alex Salmond to the economic and security interests of Scotland?
Lord Astor of Hever
My Lords, I totally agree with the noble Lord. The UK Government believe that Scotland is stronger in defence terms as part of the United Kingdom within NATO, and do not believe that it would be in the interests of an independent Scotland not to be a member of NATO. However, there is no guarantee that membership of NATO would be automatic. No country joins NATO and pretends that it is not a nuclear alliance. The UK’s nuclear weapons are assigned to NATO, and an independent Scotland, if it were part of NATO, would continue to benefit from the nuclear umbrella that it provides. NATO’s strategic concept, as agreed and reiterated by all the allies at the 2010 Lisbon summit, is that its deterrence posture will consist of both conventional and nuclear forces.
Lord Lang of Monkton
My Lords, my noble friend’s answer seems to be at odds with the declared policy of the Scottish Administration. If that Administration were to remain in power and Scotland were to become a separate country, has my noble friend considered the implications for the defence of the rest of the United Kingdom, which will have to the north a small, separate country with no nuclear deterrent and inadequate conventional forces?
Lord Astor of Hever
My Lords, the UK Government are not contemplating losing the argument on Scottish independence, and are not considering the issue that my noble friend raised.
Lord Robertson of Port Ellen
My Lords, I hope the Minister will make it clear that the debate about Faslane is not simply about the thousands of jobs involved at the naval base there—which are prejudiced, of course, by the semi-neutralist policies of the Scottish National Party—but is also, is it not, about the defence of the United Kingdom? The independent nuclear deterrent—which, as he says, is an integral part of the NATO alliance—has protected us and the world from the kind of conventional war that we saw in the 20th century. It will also be a unique and irreplaceable asset for the security and safety of the United Kingdom for the next 30 uncertain, unpredictable years.
Lord Astor of Hever
My Lords, I agree with every word that the noble Lord said.
Lord Palmer of Childs Hill
My Lords, perhaps I may take this opportunity to add our sincere condolences from these Benches.
Can my noble friend clarify further the Government’s position on the Trident alternatives review?
Lord Astor of Hever
My Lords, on the alternative to Trident, the coalition programme for government is clear: it reflected both parties’ commitment to a minimum credible nuclear deterrent as well as the Liberal Democrats’ desire to continue to make the case for alternatives to a like-for-like replacement for the Trident system. As such, in order to help the Liberal Democrats consider the case for alternatives, the Cabinet Office is leading a review into whether there are alternative systems and postures that could maintain a credible deterrent. That review is consulting experts from various departments—primarily from my own, the Ministry of Defence, and the Foreign and Commonwealth Office—and is being overseen by the Chief Secretary to the Treasury, Danny Alexander.
Lord Selkirk of Douglas
My Lords, can the Minister confirm that there will be no arrangements for planning a withdrawal of Trident in advance of a referendum?
Lord Astor of Hever
My Lords, we are not contemplating losing the argument on Scottish independence and we will not pre-negotiate the loss of Scotland from the United Kingdom. We support Scotland’s place in the United Kingdom and are confident that the people of Scotland will agree. We are not making plans for Scottish independence, as I said to my noble friend earlier, and we have no plans to move the nuclear deterrent from Her Majesty’s Naval Base Clyde. There will be no negotiations of any kind with the Scottish Government on arrangements for separation before a vote.
Lord Martin of Springburn
My Lords, is the Minister aware that Coulport and Faslane are only 25 miles away from my former constituency and that there are excellent blue-collar and skilled workers there? Does he agree that those who wish to separate will have to put the case for putting 6,000 good jobs at risk? It would be a loss not only to those workers but to their families.
Lord Astor of Hever
My Lords, I agree with everything that the noble Lord said. He mentioned the 6,500 military and highly skilled civilian jobs at Faslane and Coulport at the moment. That figure will increase to over 8,000 by 2022, and we have plans in place to base all of the Royal Navy’s submarines on the Clyde by later in this decade.
Business of the House
(12 years ago)
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Lord Strathclyde
That the debates on the Motions in the names of Baroness Henig and Lord Filkin set down for today shall each be limited to 2½ hours.
Baroness Anelay of St Johns
My Lords, I beg to move the Motion standing in the name of my noble friend on the Order Paper.
Police Service: New Governance Structure
(12 years ago)
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Baroness Henig
That this House takes note of the future of the police service in the light of the new governance structure.
Baroness Henig
My Lords, in moving the Motion standing in my name I should like to declare my membership of the Independent Police Commission, my chairmanship of the Security Industry Authority, the fact that for 16 years I chaired the Lancashire Police Committee and then the Lancashire Police Authority, and that for 15 years I was first chair and then president of the Association of Police Authorities.
Policing over the past 20 years has been extremely successful. Essential partnerships with local authorities, social services, the probation service and health bodies have been very effectively forged. Neighbourhood policing, one of the biggest success stories of recent years, is delivering tangible results to appreciative local residents. Police and community support officers have added a new and important level of resilience and response. Not surprisingly, crime has fallen markedly, by up to 40% in the past 15 years and public satisfaction has risen. You could be forgiven for thinking that any sensible Government seeking to exploit this success would adopt an organic and incremental approach to sustain these major improvements and build upon them. But clearly we do not have a sensible Government. As far as policing is concerned, we have a dogmatic and destructive Government. In the past few months, this coalition has launched a veritable tsunami of revolutionary change across the policing service. National bodies have been scrapped. New entities are being created, while at the same time changes to long-standing police terms and conditions and police career structures are being forced through. Novel governance arrangements at the local level threaten to destroy not just all the good work of the past 20 years, but the Peel principles themselves, which have been the fundamental bedrock of British policing for nearly 200 years. No wonder morale among police officers is at a record low.
I want quickly to run through all the changes that are currently taking place, just to give a clear picture of their sweeping scale. The Serious and Organised Crime Agency has been abolished, and the National Policing Improvement Agency and the Police Senior Appointments Panel are about to disappear, if they have not already done so. A new National Crime Agency is being established, and some of the National Policing Improvement Agency’s responsibilities will transfer to a new College of Policing, which is currently in an embryonic state. Other NPIA functions have gone back to the Home Office and we are to see a new IT body, NewCo, emerge some time next year. At this point, we do not know much about it. There is a big question mark over ACPO, especially over its important operational activities and professional leadership role. We know that ACPO will no longer be funded nationally, but it is currently unclear what workstreams will pass to the new College of Policing, what operational work will still be carried out at the national level by senior officers, how this might be commissioned in future by the Chief Constables’ Council, and whether police and crime commissioners will put any of their or their forces’ funding towards this work. The police inspectorate, which for decades has worked closely and effectively with forces and authorities, is being changed in scope and responsibilities into a more regulatory body, headed up for the first time ever by someone who has never served as a senior police officer. Simultaneously, far-reaching changes are being forced through in police terms and conditions with minimal consultation. The second phase of proposed reforms is currently out to arbitration.
As if that is not enough change, at force level across England and Wales, police and crime commissioners are to be elected two weeks from today with wide and sweeping powers to challenge and undermine the work of their forces, and with the capacity to cut across the crime fighting partnerships that have been so carefully and patiently built up in their areas. Most, if not all, of these commissioners will be elected on a party political ticket. This is the most revolutionary change of all: the importing of a highly politicised American model of local police governance into this country. The public have made it very clear, and are still making it clear on the doorstep and in the columns of many of our newspapers, that they do not want this to happen and that politicisation will reduce their confidence in policing. This is hardly surprising when police officers in this country, despite all the events of recent weeks, are still held in far higher esteem than party politicians. It seems extremely perverse, if not downright dangerous, to put individual politicians directly in charge of police forces, with the power to undermine operational independence by withholding funding or questioning the operational judgments of senior officers and, in the last resort, by dismissing them.
No wonder the public are alarmed and so many of them will refuse to sanction this new model of police governance, by not voting in the elections. We know that turnout will be extremely low, as some of us forecast a year or more ago when we tried as much as we could to shift these elections towards next May, when at least they would have been held in tandem with other elections, which would have increased turnout quite considerably. As it is, turnout will be extremely low, with a further damaging loss of confidence in the validity of the results.
All this is going on in the face of savage cuts to police budgets of around 20% over four years—front-loaded cuts—with the inevitable loss of thousands of front-line police officers. Miraculously however, up to £100,000 has been found for this novel injection of direct democracy into policing that is taking place on 15 November and for a completely fatuous series of advertisements on local radio and TV. I do not know whether any noble Lords have heard these advertisements but I have and do not think they will do anything to boost turnout.
My concern is with public confidence and public safety. That has always been my concern in policing ever since I became involved in it. Policing should be what the public want it to be—that is absolutely fundamental and why we have to look at all these changes in the light of public confidence and public safety. I will highlight four issues that I believe will seriously erode that confidence and undermine that safety.
I have already mentioned the first issue: bringing party politics into policing, in a direct way, for the first time ever in the history of British policing. In the next few months, between one-third and one-half of chief constable posts will need to be filled. It might interest the House to know that there are currently around a dozen acting chief constables and another half-dozen chief constable posts to be filled in the next few months. Our commissioners will have a completely free hand in the appointments process. They will inevitably choose chief constables in their own image, and I fear very much that the public will begin to perceive chief constables as being in one party political camp or another. This must surely undermine public trust in the impartiality of policing.
Furthermore, with only 18% of commissioner candidates being women, and hardly any ethnic candidates, it is absolutely certain that most commissioners will be white middle-aged males with, I suspect, very strong personalities. In turn, they are likely to appoint white, male, middle-aged chief constables. As a result, we will see less diversity in senior ranks, which, again, we know will impact seriously on public confidence. There are inevitably going to be arguments and disagreements between the commissioner and the chief constable in respect of strategy, staffing and financial policies, and I cannot see how it is possible to argue—although it has been argued in this House—that operational independence will remain unscathed. There are all sorts of ways in which that independence is likely to be undermined and, again, the impact on public confidence, and possibly even on public safety, cannot be overstated.
Secondly, the PCCs will not be subject to any impartial inspection or scrutiny process, unlike police authorities. Although they will operate under the watchful eye of the police and crime panels, which may provide some sort of check on their activities, I fear it will be a much more feeble one than some of us would like to see. The performance of the commissioners, we are told, can only be fully and appropriately judged after four years, at the ballot box. So if they are slow learners, poor performers, mavericks or dangerous ideologues—and we have seen such people elected in recent mayoral contests up and down the country—the public are stuck with them. Imagine the possible damage to a force’s performance or the changes that could take place in four short years. We could see massive outsourcing to private companies to save money, without essential safeguards in place to protect the public interest. It is not difficult to predict enormous variations in policing quality and levels of service across the country, with the result, again, of undermining public confidence and public safety.
The third issue I wish to highlight is the impact of the election of commissioners on local partnerships. I have spent a lot of time in the past few months at policing meetings up and down the country, hearing about the work of local partnerships involving the police, and how successful they have been. What has been most striking is the level of police integration into a range of local networks that are delivering impressive results, which is what lies behind this sustained fall in crime. But there is considerable anxiety about how the election of commissioners will impact on existing partnerships.
We know that some of the funding that went to community safety partnerships is already being redirected to commissioners, who will be able to spend this money as they choose. They will be able to commission a range of local services, and naturally they will want to make their own mark and establish their credentials, with an eye on the next set of elections. We will see them announcing their presence locally with a raft of eye-catching new initiatives, challenges to divisional commanders or local authorities—a series of high-profile activities. Can it really be assumed that there will be a smooth transition and that the commissioners will galvanise local groups into new and more productive relationships, or will they not rather undermine the effectiveness of what already exists and is delivering results? We can only guess at this stage, but establishing local priorities and giving funding to one group and not another is a complex and sensitive task, best done by a body representing a range of interests. One party-political commissioner handing out largesse at local level to some groups and not to others will be a sure recipe for public unrest and loss of confidence, with the danger that marginalised groups, vulnerable young people or unfashionable causes will be ignored.
My final concern is in many ways the most serious. How much importance will the new commissioners attach to the national and regional policing requirements that their forces currently meet? With the scale of cuts to police budgets already in the pipeline, will commissioners really be willing to see reductions in local policing services while a range of regional and national responsibilities continues to be shouldered by the force? That seems unlikely. Yet counterterrorism work, international drug-smuggling rings and slave traffickers cannot be dealt with by the new National Crime Agency alone. That body will need support and operational assistance from individual forces, and at the very least there is going to be creative tension between PCCs, chief constables and the National Crime Agency. At worst, there could be serious friction, with commissioners perhaps trying to exercise a veto over the directive powers of the National Crime Agency.
Will commissioners do more than pay lip service to the strategic policing requirement? If another round of riots were to sweep the land, can we be sure that commissioners will agree the necessary financial arrangements and force deployments so that the threats will be met by a co-ordinated national response, or will their focus inevitably be on local policing? I have made the case many times that in this 21st century we need fewer, larger forces working more closely together. The impact of elected commissioners will be to accentuate the local and parochial at the expense of the collaborative, regional and joined-up operation. That, I fear, is a serious challenge.
Too many changes are taking place too quickly, without an adequate level of co-ordination. A whole number of new jigsaw pieces have been created, but they are not being joined up and I believe that the public could be exposed to increased levels of danger as a result. Police morale is very low at the moment and that makes the problems worse. In a recent survey of superintendents and area commanders—an absolutely crucial layer of policing leadership at divisional level—44% of those who responded said they had seriously considered leaving the service in the past year. This is a major cause for alarm at a time when the policing landscape is changing so dramatically. The danger is that the service is becoming more fragmented, just when the nature of global threats requires joined-up, committed and vigorous responses.
I hope that when he comes to reply, the Minister will be able to tell the House how the Government intend to limit the damage their policing revolution is causing to public confidence and public safety, and what they are going to do as a matter of urgency to restore police morale. I beg to move.
Lord Wasserman
My Lords, I congratulate the noble Baroness, Lady Henig, on securing this debate at this timely moment in British constitutional history. It is particularly appropriate that the debate should be introduced by the noble Baroness, because I have always thought of her as someone who would make an ideal police and crime commissioner. She has a deep and sincere commitment to making our communities safer. She also has an impressive track record as an effective local politician. By this I mean that not only did she know how to win elections, but that as chairman of the Lancashire Police Authority and of the APA, she also knew how to get things done.
Those are the two personal characteristics which I regard as essential for a successful and effective PCC. First and foremost, a successful PCC must have a strong commitment to making his or her community a safer place in which to live; a safer place in which to bring up children; and a safer place for those who deserve and expect a peaceful old age. But good intentions are not enough. A successful PCC must also be able to get things done. He must be able to identify and prioritise the policing needs of all those he represents and know how to get these policing needs met. Getting these needs met efficiently and effectively will not be achieved by threatening to fire the chief constable, although of course he or she will have the power to do so.
No, a successful PCC will get things done by working with the chief constable; by setting clear objectives for him or her; and by inspiring, motivating and supporting him. But the PCC’s contribution to making his community safer will not be limited to simply tasking and encouraging his chief constable. The successful PCC will also reach out to secure the active collaboration of all the other local agencies with a part to play in fighting crime and antisocial behaviour, and will mobilise the thousands of volunteers who are ready to help. In short, the successful PCC will be the leader of a community-wide effort aimed at achieving more effective local policing and safer communities.
That is a tall order, but from what I have seen of the candidates so far, I believe that, for the most part, they will have no difficulty meeting this challenge. That is why I get so angry when I read articles bemoaning the quality of the candidates and arguing that, for this reason, this radical extension of local democracy has already proved a failure, even before a single vote has been cast. Some of these articles are, of course, simply mischievous and others are making cheap party political points. Others, however, are more depressing because they are based on a deliberate misunderstanding of the role of the PCC and, more significantly, a deep cynicism about democracy and politics.
The misunderstanding relates to the relationship between the PCC and the chief constable. No matter how often Ministers and others have made the point, there are some people who still do not understand that the PCC is not the operational head of the local police force. That is the job of the chief constable. That is what the chief constable and his management team have been trained to do and that is what they are paid to do. I can assure your Lordships, on the basis of my own first-hand experience of policing on both sides of the Atlantic, that our chief officers do not need any help from politicians on how to carry out their operational responsibilities.
To be a successful leader of a community-wide effort to make the community safer—as I describe the role of the PCC as being—the PCC does not need a deep knowledge of policing; he needs a deep knowledge of people. He needs to know how to listen, to prioritise, to inspire, to motivate and to lead. The PCC is, in the end, a leader, not a manager. He is a politician, not a police officer.
This brings me to my point about the widespread cynicism in this country about democracy and politics. Sadly, there are too many people in this country who do not like politicians. They do not trust them and they do not respect them. These are the people who complain that there are not enough former generals, police chiefs or successful businessmen standing as PCCs. These are the people who see no need for democratically elected PCCs. They are content to have their local policing needs identified and prioritised by professionals; that is, by chief constables and Home Office bureaucrats. They use phrases like “let the police get on with it” or “policing is too important to allow amateurs to get involved with it, especially politicians”.
It is these people who are attracted to so-called “independent candidates”, candidates who are running on a platform that they are “experts” whose personal judgment is unassailable simply because they are unaffiliated to any established political party, or at least not formally or openly. Their manifesto is simple: “Trust me to take care of your interests. I know best”. It is these people who believe, as someone said in a letter to the Times last week,
“I am not competent to decide who should be our local commissioner … I certainly have views on policing, but I am not competent to prioritise what should be done, and I suspect that no other lay (non-police) person is”.
I find this attitude rather depressing and, frankly, worrying.
The right to hold free elections to choose those who will govern us and the right to form groups of like-minded individuals to contest these elections as groups or parties are very precious to us. Countless of our citizens have given their lives over many generations to protect these rights.
The election on 15 November is simply another opportunity to exercise these rights. If we do not take advantage of this opportunity on the grounds that we do not like politicians, or we are not competent to choose those who will represent us in decisions about how to use that part of our own money devoted to policing, we call into question the value of the whole democratic exercise, and we will miss a chance to play an active part in making our own communities safer.
Lord Prescott
My Lords, I offer my congratulations to the noble Baroness, Lady Henig. She a said a great deal with which I agreed. They were the arguments that I used when I voted against this legislation, but, of course, the Government persevered with it, very much at the pressing of the noble Lord, Lord Wasserman—I shall come to that in a few minutes—resulting in the policy that we have today. However, I have to admit my interest as I will be fighting in this election in two weeks’ time to become a commissioner and I admit to being a white male candidate—probably old as well—but I hope that I shall be able to put the case.
My case is about whether the new police governance structure which the Motion before us today is about, and the policy that the noble Baroness, Lady Henig, was critical of, are satisfactory for us. It cannot possibly be that there was a failure in the policy that the Government inherited. In fact, that was not the case; if anything, as the noble Baroness pointed out, it was a very successful policy. It is 20 years ago that Tony Blair announced that he would be tough on crime and tough on the causes of crime. His emphasis on the causes of crime was quite important, but it was laughed at at the time. But if we look at the analysis 10 years on, we find that the rate of criminal offences that have taken place has reduced dramatically. It is not just in my own area of Humberside, where it has gone down by 40%; in every area of England and Wales, crime fell by around 40%. Whatever the judgment in this House is and whether it is a democratic one or not, I assume that it is really about reducing the incidence of crime. Then there is also the participation of the social mechanisms involved in it; the criminal side and the police and social causes are two sides of the same coin in any successful policy—and that clearly came about.
So it cannot be that the policy is failing. I think that it is because the Government think—and there are a number of reasons given for it—that it is costing a lot more than it should. That is a fair point to make; the Government have an argument. Policing in austerity, as Her Majesty’s Inspector of Constabulary said, will have an effect. That is probably true, but is the choice then to cut about 20% in resources and get rid of 15,000 police? If anyone believes for a moment that that will improve the situation or help the decline in crime to continue, they are living in another world. Indeed, it is obvious that, whatever crime statistics you take, if you take away the resources and reduce the scale of policing, there will be an increase in crime. So you have to make the judgment whether the priority is to save the resources or to keep the community safe with an active police and social policy in this area. That is a judgment that we can all make. Certainly, this new policy of reducing on such a scale will have that effect. So I need to look at other reasons.
I can understand the argument on austerity, although I am bound to say that Her Majesty’s Inspector of Constabulary made it clear that these cuts were at twice the rate that they needed to be. In my area that makes quite a difference—and I think that that is so in every area. So while not rejecting the idea of austerity, we must ask whether it has to be so deep and quick as it is at the moment. I as a commissioner would be expected to produce a five-year plan within five weeks. I do not know what the extent of the cuts will be, and we still have the public expenditure review to come. We will have £23 million in cuts and I do not think that that is the end of it. They have already cut £500,000 from the community safety management programme, so we have not stopped the cuts. Presumably, whatever the circumstances, these cuts will continue.
You have to ask yourself why this is happening, in those circumstances. To a certain extent, the public expenditure cuts are one reason—then there is decentralisation. This Government talk about decentralising and taking policing away from the Home Office, but if you look at the proposals that have just come out the very opposite is happening. The policy concentrates more and more power in the hands of the Home Secretary. The proposals are to abolish ACPO; there will now be another council of chief constables, which will presumably report to the Home Office. The proposals are to replace the Inspector of Constabulary with Mr Winsor, and the report basically threatens the confidence of the police. The National Crime Agency is a body that can overrule the chief constable and it is related to who? To the Home Secretary. That concentrates power not in the local area but in the Home Office.
Then there is the abolition of police authorities, which is supposed to give greater democratic accountability. The noble Lord, Lord Wasserman, is a great force in democracy. Looking at his background, I do not think that he ever took part in an election. He is a great civil servant, great scientist and a great adviser on both sides of the Atlantic, but absolutely useless in understanding the democratic process. Of course, he is entitled to speak as an individual—but do not give us the quote of experience, because he has got none of it. The noble Lord, Lord Wasserman, has been one of the biggest gurus in the development—is he going to get up?
Lord Prescott
I presume that was to stop me in my flow. I hope that that will be taken into account when it comes to the eight minutes.
On the democratic accountability and the election of the PCCs, November is the worst time to hold an election—everybody agrees on that—with a voting system that does not necessarily mean that you need 50%. You can have a very low proportion of the vote and still be a commissioner. No doubt there will be a question about the legitimacy of someone being a commissioner on such a low vote. No money is being given for the election candidates, or information about the candidates. Do we really accept that this Government are interested in democratic accountability? It is a load of nonsense—they never have been. To that extent, we will get a low turnout.
The PCCs have been given the opportunity to provide a plan. They have to do that in five weeks—it is already ready and agreed with the Home Office. It just gets handed to us. I will not do that; I will not accept that kind of analysis. It is not fair. It is certainly not politically accountable because it is the Home Office telling us what we do with the plan when we should be asking the people in our area what should be the priorities in the plan. We are not doing anything about that and the chance to do so is denied to us because of resources. In all these areas we are finding a loss. In Humberside it is £23 million. We have the difficulty of cutting too fast and face a basically bleak future, with crime increased.
Why did we pursue this policy? I will finish on this point. The noble Lord, Lord Wasserman, is one of the gurus—I have read more about him: this guru has been over to America and come back here, and he is an adviser to the Home Office and to the Prime Minister. God help him, he does not seem to be getting many answers right but let us leave that aside. He has given that advice and yet he refuses to appear before the Select Committee in the House of Commons to answer what this new IT company will be doing. I understand that he will be chairman of this new IT company, which recommends £500,000 be paid to the chairman—three times the amount given to a Prime Minister. Is the noble Lord going to be chairman? I hoped he would speak after me but I notice that the organisation shoved him in front so I cannot ask him that. But I will tell you what this IT company will do: it will privatise the intelligence and technology. All this is about creating space in the police force for privatisation.
We saw that the Home Office is still trying to advocate privatisation, though Surrey and Midlands have rejected that so far. In my area, Lincolnshire already has G4S in. God help them. We saw what happened at the Olympics but G4S is already in on contract. This is about privatisation.
Lord Prescott
The noble Earl must be fair: he got up before. I say to the noble Lord, Lord Wasserman: you are advocating democracy. You are adding more accountability. I read in one of his speeches that Lords should encourage people to vote. Why did he then sign an article saying that I should not be the commissioner in Humberside? Quite frankly, who the heck is he to say that and appeal to my electorate not to vote for me? I say to him: come up to my area, debate with the people as to who has the right to make that decision—advisers like him who will not speak openly, or politicians, who are accountable. I am a politician. I am accountable. Come up and debate with us instead of hiding behind your position.
Baroness Hamwee
My Lords, I think the noble Lord has stopped even if he has not concluded. I had in my head that the title of this debate was about challenges facing the police service. In fact, it has a rather more neutral title. Noble Lords on the Cross Benches will not have the experience that the rest of us have of a shoal of invitations arriving during July and August to speak at our party conferences about different topics. I was very struck in the case of the Liberal Democrat conference by the stakeholders who used the term “opportunities”. They were organisations dealing with victims and young people—of course, young people can also be victims. They generally sought debate on the role of police and crime commissioners in the context of the criminal justice system and the rehabilitation landscape. I take my cue from their attitude. Let us not talk down police and crime commissioners. Let us look for the opportunities.
Of course, the agendas will be set substantially by local communities. One of the challenges for police and crime commissioners will be to work up mechanisms to listen to the public, with things like effective public consultation arrangements—I stress “effective” as those of us who have been used to democracy as well as bureaucracy are used to seeing what is badged as consultation actually being information—including people who are likely to be victims of crime, and working out performance indicators. I am not a particular fan of targets but there is a place for indicators which properly reflect local priorities. There is also sharing performance data with the public.
Police and crime commissioners will have quite a lot of local autonomy, which they will need to use to the best effect. One mechanism, which I have seen to some extent in local government, may be to have what in the jargon is participatory budgeting. That uses the budgeting exercise as the basis of a debate with—again, I hate the word—stakeholders as to how the budget should best be spent and involves those who have a stake in it in working towards the decisions. The budgetary role of the commissioners will be one of the most important, even if it is not immediately one of the most obvious.
The local community includes, of course, stakeholders and partners. Most organisations will fall into both categories. Local authorities will be one of those. I think that I have referred before in this Chamber to the work undertaken in the London Borough of Sutton where, for the best part of a decade, the local authority has worked in partnership with the police—crucially, having set up a structure to deal with community safety that has a single line manager—and where multi-agency liaison has been worked on as part of the interface between the Safer Sutton Partnership board and participant agencies. It seems from all the figures, to refer back to performance indicators, to have been very successful. Other partners will be within the wide area of criminal justice.
Earlier this week, noble Lords discussed community sentencing in the context of the Crime and Courts Bill. There was much reference to restorative justice, which is to get its first legislative recognition, and to the importance of the understanding of that by the police. I heard quite a lot about that at the party conference meetings that I mentioned. The new structure, as the noble Baroness, Lady Henig, said, includes police and crime panels. I have said before that despite their limited statutory role, to which she referred, I hope they will be ambitious. They need good access to experts and to others who can assist them in their work, even if they cannot co-opt them. They also need access to both information and to face-to-face meetings with senior officers. Scrutiny is an exercise which I have always thought of as being pro-active, not simply reactive.
Big personalities have been mentioned. I have always been instinctively uncomfortable with personality politics but big personalities have the opportunity to act as leaders, and leadership, as the noble Lord, Lord Wasserman, said, is important in this new structure. There is nothing wrong in itself with an eye-catching initiative; if that is all it is, yes, but if it takes people forward then it may be a good thing. Leadership is important to bring to the local community things that may not immediately be obvious to it, although it should be. Trafficking is an obvious example.
We have heard about the NCA and the College of Policing. One has to admire the Home Secretary who, by sheer force of personality, seems to have brought these two things about. That is not to say that I am not enthusiastic about the National Crime Agency but, as she and others have said, these amount to a lot of change that is not evolutionary. I hope that we do not lose professional development in all this. The police are professionals and I want to keep that in the forefront of my own thinking.
I end by saying that having been defeated in my attempts to persuade the Government that these changes should be piloted, as we are going to see them across the country, that does not mean to say that these changes should not be evaluated and assessed. There should not be an expansion of the role of police and crime commissioner until that has been done. Changes are happening but let us make sure that they happen as well as possible.
Lord Dear
My Lords, I also thank the noble Baroness, Lady Henig, for focusing on this timely issue just before the country—in very large numbers, we hope, but perhaps they will not be—goes to vote for its local police and crime commissioners. As a declaration of interest, I remind the House of my service for some years in the police service.
We are here to debate the challenges to the police service in the new landscape. This is not necessarily the time to debate too deeply the rights and wrongs, perceived or otherwise, of the concept of police and crime commissioners; we have done that at length in your Lordships’ House in previous months. I personally have supported the concept; I am wary of many of the pitfalls but hope that they will not present themselves. In the short time available, I want to pick up on three issues that I think will define the whole landscape of policing as the new PCCs emerge and begin to make their mark on what is certainly a fundamental change to the whole landscape of policing as we know it. I want to pick up on the lack of a five-year plan, on the National Crime Agency, which has just been mentioned by the previous speaker, and on the whole issue of professionalism.
First, a five-year plan does not exist. Unlike the Armed Forces, which have a national defence review where every five years the whole of the international landscape is scanned, against which one then tries to measure the response that our Armed Forces may well need to adopt to counter growing threats and situations, we do not have one in this area and we never have. It has been a matter of some dismay to me that we do not. Funnily enough, the PCCs, who are essentially elected on local issues, are in a strangely privileged position to be able to address this. I hope that they will not fall into the trap of parochialism. Rather, I hope that, as they almost certainly will, they body together as a grouping of 40 or so individuals nationally every so often to discuss mutual problems. I hope, when they meet as that national body, that they will reflect on the fact that no national business, no commercial concern, with 40 or more regional divisions—that is how one might well look at the police service in this instance—would ever exist without a regular scan of the distant horizon. In business they would need to look, as indeed they do, at demographic issues, socioeconomic issues, climatic issues, the international dimension and so on. There is a need for that, and if the Home Office has not done it—no Home Office under any Government whom I know of has ever done this—then there is a role for the PCCs to do it, and to help with their own local input against the broader canvas.
The noble Baroness, Lady Hamwee, said that she was not too sure that she supported the National Crime Agency, if I understood her correctly. I understand where she is coming from as there are indeed doubts about it, but I personally have long supported the concept of it. There is a power for the National Crime Agency to direct the PCCs if push comes to shove, but I hope that that is a stick that will remain in the cupboard. I look for, hope for and probably anticipate that there will be a good deal of mutual understanding between the NCA on the one side and the PCCs on the other, seeking to fit the local issues into the national landscape.
With regard to national and international crime, the national landscape is a problem, and I shall give the House an indication of how big that problem is. Recent estimates are that 30,000 individuals, grouped together in 7,500 groups, are involved in organised crime affecting the UK and its interests. Over 50% of the 7,500 groups operating in the UK are involved in drug trafficking. Last year, Serious Organised Crime Agency-led activity recovered over £450 million worth of drugs in seizures.
The National Fraud Authority indicates that organised crime group activity has resulted in £9.9 billion-worth of fraud committed against individuals in this country. Cybercrime is confidently estimated to be in the order of £27 billion. The last figure I shall weary the House with, in order to put this into a more human dimension, is that the UK Human Trafficking Centre’s assessment is that there were 2,077 adult and child trafficking victims in the UK last year.
All that will have to be played out face to face with the local issues that the PCCs will deal with. I recognise the tensions that may exist, but I indicate my support for the National Crime Agency. It has to be with us, and I hope it will work in harmony with the PCCs.
Baroness Hamwee
My Lords, let me make it clear that I support the National Crime Agency.
Lord Dear
Finally, I turn to professionalisation in the service. We have recently received two reports from Mr Tom Winsor, who was recently appointed as Her Majesty’s Chief Inspector of Constabulary. Those reports, taken together, produce the most radical review of policing we have seen for at least 50 years. There has been opposition, perhaps understandable opposition, from the Police Federation, and the media interest on the days of the reports’ publication seemed to focus on compulsory fitness tests for police and little else. I support compulsory fitness tests, but there is much more in the reports than that. Mr Winsor seeks, quite rightly, and I support him in it, to sweep away outdated practices in the police service and attract the best recruits to it. His stated aim—and I ask the House to reflect on this—is to create a white-collar profession rather than a blue-collar job. I think that that is long overdue. He seeks to replace the Police Negotiating Board—the PNB—with a salary review body. That is admirable. The PNB has served its purpose very well over the years, but I believe that it is no longer fit for purpose. It needs streamlining; it needs to flatten the rank structure; and particularly, it needs to reward those who contribute massively to the police effort rather than those who are along just for the ride.
I shall touch briefly on two-tier entry. I have spoken before in your Lordships’ House on my support for a streamlined, two-tier entry system. Winsor talks of a three-tier entry system, but I shall leave that for another moment. The two-tier entry system deserves a fair wind because there is no doubt in my mind that we do not get a sufficient number of Russell group graduates coming into the police. The police are not seen as an obvious career of choice in that group. We need to recruit people at that level who have the essential character qualities of integrity, personal value sets, common sense and moral courage and who are leaders, not just managers.
There is one other issue I shall touch on: the college of policing, not the Bramshill staff college. I support it and hope it will see success in coming months and years. It is badly needed to set standards, ethics, style and purpose for the police in a way that has not altogether been clear before. It is something that one hopes will eventually grow to command status and respect like the Royal College of Nursing, the Royal College of Veterinary Surgeons, the Royal College of Physicians and so on. In that landscape, PCCs will have a vital role to play. They may find their role difficult at times, but I believe that they will contribute much.
Baroness Newlove
My Lords, I am very grateful to the noble Baroness, Lady Henig, for bringing this debate to the House. From the number of speakers, your Lordships can see what a popular and hot topic this is. I look forward to hearing the speeches from so many noble Lords who, from their professional backgrounds, are knowledgeable and experienced. I want to concentrate on one aspect about which I have true knowledge and I shall speak from the heart. I refer to victims and how we will be served in the light of the new policing challenges that lie ahead.
I am a huge supporter of the police. I am very honoured to be one of the judges of the police bravery awards. However, when we read reports about where policing has gone wrong, poor record keeping, lack of communication, leaving it for others to do and passing the buck feature in every one. Sadly, the Hillsborough report, the serious failings in Rotherham and the inappropriate relations with the press we have seen in Leveson have knocked the public’s confidence in the police.
Police and crime commissioners are the most significant democratic reform of policing in our lifetime. They will work with the police to cut crime, give the public a voice at the highest level, hold forces to account and help restore trust. They are an independent voice but, most importantly, PCCs will have a duty to listen to victims and champion their interests. For the very first time, victims of crime will have a clear role in determining what the police should focus on and how. This is a massive step forward in helping the police and other services do their best for victims and put their experiences at the heart of how they deal with crime. It has to be less bureaucratic as real people’s lives are being blighted. For me it is about the language we use, understanding the problem, owning the problem and, more importantly, the solution.
What is it like being a victim? I am not going to go into my full story because I think noble Lords know it, but I shall tell the House how it feels. In 2007, I lost my late husband, but before that I was an activist in my community. The police never came out. They gave you a criminal record number for criminal damage. When you constantly go to meetings to say that you have problems on your street, you do not see the chief constable, you see messengers. While they might be very good officers, they are messengers. For me, it was essential that we got the top man. If you are at the top, you work for the people and speak to the people. I never saw that. As I walked back from a community meeting, I said, “Nothing will be changed until somebody is murdered”. Sadly, that was my late husband, Garry. You are made to feel vulnerable, you are made to think that it is in your mind, you have no solutions and nobody comes to your door.
A joined-up partnership is essential to stop this. It is a silent killer when nobody gives you an answer when you daily suffer intimidation and criminal damage to property that you work damn hard to keep nice. When you are told that it does not affect your street by somebody who lives on another street, it is very irritating. PCCs have a remit to bring all agencies together. I am concerned that we do not do that now. My late husband was killed in 2007, and I have had so many insults from agencies that do not work together. At a conference that I was speaking at, someone from one agency honestly and openly said to me that he had looked at his data and said, “Oh thank God, they weren’t on my patch”. How dare an individual who is at the top of his game in an agency that is there to protect the public say to me, “I could sleep”. I could not sleep, and I lost my husband because I could not sleep. This is the reality of real life on the street.
Whitehall talks a different language. I have to admit that I do not know a lot of that language, but I am honest and will say, “Could you put in plain English?”. I have no disrespect for your knowledge or your work path, but people on the street are not interested in police budgets or in the internal bickering and infighting. They want to feel safe on their streets. At the moment, while we say that crime is down, the perception of crime is very high.
Therefore, I would say to police and crime commissioners that the public are not interested in the colour of the party they come from. They want to feel safe in their streets. PCCs should not use victims or communities as a strapline and then go away. That strapline has been broken. We need issues to be resolved. The public need to know that they have a police and crime commissioner that they can go to. He or she is the pinnacle. No one should be dismissive of anyone when they do not know who is going to be elected. No one knows what is going to happen but there will be good and bad practices. Everything is risky.
I have to say that I did not know my chief constable until Garry was murdered in 2007. In 2012, I want to know who my police and crime commissioner is and, by God, I will be knocking on his or her door to make sure that he or she makes the community safer and sticks to the manifesto. Policing has to be accountable and must have a level of governance. People’s lives cannot be used. Lives are being lost and the lives of others are being blighted.
Lord Harris of Haringey
My Lords, I declare my interest as chair of the All-Party Group on Policing, vice-president of the APA and adviser to various providers of services in the policing market. It is a pleasure to follow the noble Baroness, Lady Newlove, and to hear the powerful sentiments she expressed about listening to the voices from the community and victims. We are all grateful to my noble friend Lady Henig for giving us the opportunity to consider these matters today. The Motion focuses on the effects of the new governance landscape.
In my view, it is important to remember the scale of the other challenges facing the police service. Police numbers in England and Wales are now at their lowest level since 2003, with a fall of 5,000 in the past year alone. Overall policing budgets are being reduced by around 20% in the current CSR period with the expectation of more to follow. At the same time, the police’s partners in reducing crime—local authorities, youth services, probation and so on—are also facing substantial budget reductions. Last year’s riots demonstrated the thinness of the thin blue line.
Public respect for the police service has been damaged by the revelations in the Leveson inquiry and the report on Hillsborough. At the same time, many police officers are becoming increasingly despondent that Ministers hold them in contempt, which was all brought into sharp relief by the behaviour of the former Government Chief Whip at the gates of Downing Street. Let us not underestimate the deep disquiet felt by a large number of officers about the Winsor reforms to their pay and pensions.
Over the next few years, the pressures will become greater. We can only speculate what the impact of prolonged, slow growth will be on crime trends. We have the globalisation of crime and the burgeoning consequences of e-crime and cybercriminality, together with a speed of communication that can turn any police interaction with the public into a world-wide internet sensation in moments but can also facilitate flash mobs and the like. The consequence of this is that we face the very real prospect of a vicious cycle in our policing where fewer officers with less public support and less support from partners are facing increasing challenges. Amidst all that, the arrival of 41 newly minted, directly elected police and crime commissioners may seem like a bit of a distraction.
I strongly believe that police accountability is extremely important and that strong figures to lead this are needed. However, the flaws of the new system are significant. There are no proper checks and balances in the governance arrangements and there is a real risk of politicising aspects of operational policing that should not be politicised. I should like to illustrate that by looking at London where a variant of the new system has been operating for a while. It will not have escaped your Lordships’ attention that in London we have a directly elected mayor. Since October 2008, the Mayor of London has been able to appoint himself or another person to lead what was then the Metropolitan Police Authority. In January 2012, the authority was abolished and replaced by the Mayor’s Office for Policing and Crime.
London has already shown up some of the problems. The first is a lack of transparency. Information about the operation of the police service or about key financial decisions that was previously made available in published police authority committee papers is no longer available or is available only in very abbreviated form. The second is the lack of visible answerability of senior police officers. A few weeks ago, the new deputy mayor for policing and crime instructed Bernard Hogan-Howe, the commissioner of the Metropolitan Police, not to attend the London Assembly’s police and crime committee eight minutes before the meeting was due to begin.
The third problem is that the deputy mayor has to act on his or her own, as PCCs will have to do. As the current incumbent has commented to me, he does not have what he calls the “band width” to address all the topics that the public might expect him to pursue. It is simply impossible for one person to do so. When I chaired the police authority in London, I had 22 members to whom I could delegate matters. Those 22 members could also keep an eye on me, which meant that capricious decisions could not be taken. But the Government, in their wisdom, have declined to provide a standards framework in which PCCs or their equivalents in London should operate. The Government seem to believe that having police and crime panels will be a sufficient safeguard against misconduct.
However, the money being made available for the servicing of these panels outside London is to be just £53,000 per year, which is barely enough to cover the cost of one member of staff who has to co-ordinate the work of and support a disparate group of local councillors drawn from up to a dozen or more different local authorities. Even in London where the police and crime committee of the London Assembly has been better resourced and the 12 members all know and work with each other on a regular basis, it has struggled to get the answers that it wants. There is the potential for problems and inappropriate interventions in operational matters.
Will the Minister tell us whether he regards it as appropriate that an elected PCC should be regularly briefed about the course of a policing operation and should then, almost as a matter of routine, have contact with those who are subject to that operation, and, what is more, then fail to disclose that those contacts have taken place? Perhaps your Lordships will think that such a scenario is far fetched but I have to say that it is not. On 10 January last year, the Mayor of London was briefed by Assistant Commissioner Yates. The mayor later told the London Assembly that he could not remember the briefing in detail but acknowledged that it may well have been about Operation Weeting, the investigation into phone hacking at News International. Four days later he had lunch with Rebekah Brooks and 10 days after that he had dinner with Rupert Murdoch at his London home. Neither of those two meetings was disclosed in the published mayoral diary and they were omitted, initially at least, from the list of contacts with News International that was requested by the London Assembly. There were further briefings from John Yates on 21 April and 3 May. Remarkably, days later, the mayor had more initially undisclosed contacts with News International, including a telephone call with James Murdoch on 6 May and, five days later, with the News International lobbyist, Frederic Michel. I could go on. I have a long list of meetings and contacts.
At the same time, the mayor’s deputy was raising, in an ostensibly jocular way, concerns that too many detectives were involved in investigating phone hacking, so much so that assistant commissioner Dick had to remind him, as she disclosed to the Leveson inquiry, that operational policing decisions were a matter for senior police officers, not elected politicians. The Mayor of London has form for this sort of thing. In February 2009, an investigation was conducted by Jonathan Goolden, a solicitor, at the request of the monitoring officers of the GLA and the MPA—roles that will not exist as far as PCCs are concerned—into the behaviour of the Mayor of London in contacting Damian Green MP at the time of his arrest on suspicion of involvement in breaches of the Official Secrets Act. Mr Goolden found that the mayor’s action in contacting a potential suspect in a criminal investigation was “extraordinary and unwise”. These contacts followed briefings that the mayor had been given about the case.
The changes in the governance of policing that the Government have introduced are ill worked through. They provide no safeguards of any substance against a police commissioner who misbehaves or persistently behaves in an extraordinary and unwise fashion. They will do nothing for transparency and little to improve accountability and they are taking place against a background of profound challenges for policing in this country.
Baroness Doocey
My Lords, I would like to focus my remarks on the specific issue of the Independent Police Complaints Commission, the workings of which are critical to the future of the police service. The IPPC was established in 2004 to oversee the police complaints system in England and Wales. Its most valuable function is to maintain public trust in the police.
Until 2004, the police themselves had sole responsibility for investigating allegations of police misconduct. Rightly or wrongly, this created a public perception of whitewash and cover-ups. The establishment of the IPCC ought to have solved this problem. Sadly, it has not because the IPCC effectively delegates most investigations into serious complaints back to the local police force concerned. This situation continues to jeopardise public trust in the police. Trust is a very valuable commodity. It is very hard to win but very easy to lose. This is particularly so for the police where allegations of serious misconduct by a few officers can undermine the superb work done on a daily basis by the vast majority of police officers.
Maintaining trust is vital for the police because of the unique nature of British policing. Our police are civilians in uniform, not a paramilitary force imposed on the people. Ever since the days of Sir Robert Peel, we have maintained Peel’s principle that:
“The police are the public and the public are the police”,
but that principle can be upheld only with the consent of the people. The recent controversy over the 1989 Hillsborough disaster, to which other noble Lords have referred, is a spectacular reminder of the harm that can be done and demonstrates why independent scrutiny of the police is essential.
When the IPCC receives a complaint, it can, at its discretion, allocate it to one of four “modes of investigation”, depending on the seriousness of the complaint. The system looks good on paper but, in practice, the IPCC is fully hands-on in only one of the modes of investigation. In the other three, the local police force concerned remains effectively free to run the investigation exactly as it sees fit. Perhaps the most controversial type of complaint about police misconduct concerns deaths in, or following, police custody. Through some freedom of information requests, I have discovered that in the year 2009-10, 17 such cases were referred to the IPCC. Of these, only five were independently investigated. In 2010-11, 16 out of 21 such cases were investigated independently, and in 2011-12, 10 out of 15 cases were independently investigated, but should not all deaths in, or following, police custody be independently investigated?
The IPCC’s own published figures reveal that during the three years 2008 to 2011, it received 837 referrals of cases of police corruption. Of these, just 2% were subject to an independent investigation while 70% were investigated locally. How can this be right? Some powerful case studies illustrate how things have gone wrong over the past eight years. I shall give just one example: the botched investigation by South Wales Police into the murder of Lynette White in 1988. The outcome of the original investigation was the wrongful conviction and imprisonment of a number of innocent men in 1990, who were not released until 1992. The investigation of the resulting complaint to the IPCC was delegated to none other than the South Wales Police themselves who had been responsible for the original investigation. It led to one senior officer being required to investigate his former boss, which is clearly unsatisfactory. Subsequently, eight police officers were charged with perverting the course of justice, but the trial collapsed in dubious circumstances concerning non-disclosure by the South Wales Police. Meanwhile, those wrongfully imprisoned continue to suffer and have not seen justice done. Another man later confessed to the murder and was imprisoned.
We cannot allow this sort of malpractice to undermine public trust in the police. We must ensure that the IPCC stops delegating to the police investigations into serious complaints. The IPCC should investigate such complaints itself and the Government should provide it with adequate resources to do so. I recognise, of course, that in a time of austerity this could mean a bigger budget for the IPCC, but it would also mean less waste on ineffective self-investigations by local police forces and it would restore trust, which is a commodity beyond price.
Lord Stevens of Kirkwhelpington
My Lords, I should also like to congratulate the noble Baroness, Lady Henig, on securing this key debate. I declare my interests as chair of the Independent Commission on the Future of Policing in England and Wales and as a former serving police officer and former commissioner of the Metropolitan Police.
As we have heard, over the past 15 years policing in England and Wales, in partnership with others, has been highly successful. If change aims to bolster this success, I, for one, welcome it. However, change must not simply be made for the sake of change. In addition, it requires the buy-in from those most affected: namely, the public, the police service and key policing partners.
I, and, I am sure, all in your Lordships’ House, accept that in a time of austerity and budget cuts, from which the police should not be exempt, change is inevitable. My concern is that the manner in which change has been implemented has been very detrimental to the morale of those working within the police service. I should point out that this is not simply my opinion but something that has been highlighted in surveys and meetings, to name but two methods, undertaken by the commission. They started in May and the next survey is due to be released imminently.
While I welcome efforts aimed at making the police service more accountable to the public we serve—I am sure we all welcome those steps—I am yet to be convinced that the elections for police and crime commissioners under the supplementary vote system, which many people in England and Wales are not fully familiar with, are best placed to deliver this. This, however, is my personal opinion and I should like to assure critics of the commission’s work that our findings in regard to this matter will be firmly led by evidence. I invite anybody who questions the independence of the commission to look at the website to see who is involved in it and to note the 23 academic institutions ranging from Harvard University and the LSE to Oxford and Cambridge Universities which are underpinning this work academically. Needless to say, there are Members of your Lordships’ House who are also on the commission, and I would not ever want to doubt their independence.
As I mentioned during debates held in this House pertaining to the passage of the Police Reform and Social Responsibility Bill, prior to it receiving Royal Assent, I have serious concerns that the term,
“have regard to strategic policing requirement”,
does not fully mitigate against the risk of local policing issues being put before national policing issues and priorities. The commission has been around the country listening to Victim Support; talking to members of the public; talking to members of police authorities, police forces and the like; and taking evidence from people in this House, including former Home Secretaries, and the head of the Independent Police Complaints Commission, to mention a few. There is a very real fear among many people about what some referred to as “headline-grabbing” policing initiatives that will improve a police and crime commissioner’s chance of securing re-election. I would be very sorry—as indeed would your Lordships’ House—to see the introduction of police and crime commissioners undermining efforts being made up and down the country to protect young women from grooming and address cases of domestic violence in a manner that continues to put the victim first. That is absolutely essential.
I also have concerns that there would appear to be a lack of measures in place preventing private security companies lobbying police and crime commissioners as candidates and when they are appointed. Furthermore, in light of comments made at a meeting yesterday in regard to police and crime commissioners, I have concern that data available to them could easily be misconstrued. As part of that, only 25% of recorded crime in their area will be subjected to independent analysis, and there is a lack of standardisation in data interpretation throughout England and Wales.
We hear claims that police and crime commissioners will facilitate chief constables in focusing on fighting crime. That is difficult to envisage at this stage. As noble Lords have heard, there has been a record 40% reduction in crime in the past 15 years. In some areas, the reduction is more. The question has to be asked, will the changes help that reduction to continue, as the noble Lord, Lord Prescott, said? I and the commission have heard from many senior officers who continue to express concern over the lack of clear understanding pertaining to the issue of corporate sole, and I reiterate that there is still a very real chance that operational independence could be affected in respect of that. We heard from my previous chairman, the noble Lord, Lord Harris, about the lack of resources going in to back up the police commissioners in their areas. I and others think that this could undermine the result of the introduction of the new policing governance structures.
From the feedback gleaned from these many meetings, which will continue until spring next year and are held as part of the commission’s evidence-gathering initiatives, it has become apparent that there is a clear lack of training for police and crime panel members. If he would be so kind, the Minister needs to take note of the guidelines in relation to the panel, which state that members must have the “skills and experience” required to function effectively. We have found out that some are having no training, and this is very much driven by what I would refer to as a postcode lottery. Although there is still more work to be done, we on the commission fear that there may well be a lack of people fully trained to take up the posts.
I should like to end by saying that your Lordships’ House needs to understand, and has the promise, that this independent commission will continue to monitor and assess the roles of the commissioners, as it will continue to take evidence from and assess those people—victims and others on the street—who need to be listened to in terms of what the future of policing will be.
Baroness Browning
My Lords, it is always a pleasure to follow the noble Lord, Lord Stevens of Kirkwhelpington, and, like others, I thank the noble Baroness, Lady Henig, for giving the House the opportunity to debate the future landscape for policing. She will not be surprised to know that I was very disappointed that in her 15-minute address to the House I struggled hard to find anything positive in what she envisaged in the future. I really would like to assist her with this. I would like her to go home today with a little ray of light somewhere on the distant horizon, knowing that in the debate, whatever people’s reservations and concerns about change, there is an awful lot of goodwill to make things work, even if people were not initially in favour of them. There has already been a sense of that in the debate, and that is positive. I welcome that, and I hope that she will find some comfort. I do not like to see her looking so disappointed.
Change is always difficult, particularly in institutions, and it requires great skill to bring about. Listening to the diverse points that noble Lords have made in the debate—people with a great deal of knowledge—there is no doubt that there is a real challenge in the future of policing. Budgetary constraints have been raised and noble Lords have acknowledged that the police should, along with other parts of the public sector, be subject to the need to pull back on the amount of expenditure. We are asking everyone else to do that. However, no one should be in any way dismissive of the difficult decisions needed to make those changes and tighten budgets.
As regards the two reports by Tom Winsor, looking at both the short and long terms, particularly in relation to the pay and conditions of police officers, I understand how contentious they are. Most of my life was spent in the private sector before I entered politics at the age of 45 and, having worked for companies, I know how dramatic changes in the private sector are difficult to bring about. However, it was often clear why those changes were needed. When we consider why there is a need for change, although we may debate its pace or the need to make many changes at once—I appreciate that there is to be a lot of change—none the less, there is change elsewhere that we should not ignore in this debate.
Whatever the successes of or concerns about policing in recent years—and I go back right across different Governments—there has been change, too, in the way that criminals operate and the type of criminality that we face, not just within our shores but across international borders. Criminals have taken advantage of the changes, and that has posed a challenge to those with responsibility to legislate, police and make sure that we as a society stay one step ahead of the criminal mind. That perhaps is the biggest challenge of all that we face in the current climate.
The riots that we saw last year have been mentioned and most people found them quite shocking. The cases that were brought to the courts were particularly shocking because, while there might have been an initial impression—it was only an initial impression—that perhaps a lot of it had developed out of social need, it was clear that by the time these cases had been through the court the situation was much more complex. It was relatively new to our country to see cities—not just London, but elsewhere—faced with public riot. On cybercrime and fraud—again the changes in what is available electronically to assist a criminal mean that we really have to recruit the best people. Our structures and management of them have to be right and we have to employ the cleverest and the best to stay that one step ahead of the criminal.
Of course, there is also the terrorist threat, which is still with us and is very real in this country. People trafficking has taken on a complete new dimension in recent years. We hear more about it and it manifests itself in different ways. When I was a girl I remember hearing about the white slave trade and we all wondered what that was. We are only too familiar with the horrors of people trafficking—not just from shores a long way away from our culture and society but within the European community. That is quite shocking and must be addressed. That, too, is a challenge.
In my very short sojourn as a Minister of State at the Home Office last year, the extent of organised crime was a revelation to me—even the extent of metal theft today, which people sometimes think is small-level crime. It has at its heart big, organised international crime. These are the policing challenges. It will not be a surprise to the House when I say that I had the privilege of taking the Police and Social Responsibility Bill through the House, to the opposition of most of the people surrounding me today. None the less, I felt that we had constructive debates at the time, and I appreciated them. Points were raised on all sides and I hope that the House feels that the Government made quite a lot of concessions as the Bill proceeded. Constructive points came from all sides of the House to try to improve the Bill. I believe that police and crime commissioners have an important role to play.
I made this point rather facetiously in a previous debate, but on some of the negative points still going round about the police and crime commissioners, I say to the noble Lord, Lord Prescott, of whom I am really secretly rather fond, that I would not worry about having a November election. The Americans have a vote in November—perhaps a rather more important one. We do not hear them complaining that it is snowing or that there are floods. If the Americans are up for it, so are we. I shall quote from some of the candidates who have put themselves forward. It would be invidious if I were to put names to them but one or two might recognise what I am about to read out. It is commendable that people have given up important, well-paid jobs to stand as candidates in these elections. There are comments on the police elections website, including that commissioners will be people who have some influence; and that priorities include cutting crime because safety for families is the public’s top concern. A Welsh speaker believes that the role of commissioner will be a bridge between the community and police. If that is the attitude of candidates and a clear recognition of the public service that they will provide, we all—the noble Baroness, Lady Henig, in particular—should take some comfort from that.
Lord Mackenzie of Framwellgate
First, I thank the noble Baroness, Lady Henig, for securing this important and very timely debate. Policing, of course, is one of the most important functions in any civilised society. If it works well—generally the police go about their work unnoticed—everybody feels good about it. However these days, as has been mentioned, the issue is rarely out of the news and the ensuing publicity can trigger a number of varying emotions. It can lead to a feeling of tragedy and grief, as with the deaths of the two young policewomen in Manchester recently. It can lead to fear, as when a police state operates outside the rule of law using death squads. It can lead to anger when corrupt police turn a blind eye, cover up or leak confidential information. It can lead to praise when heroic officers try or succeed in saving lives, such as the six officers last week who selflessly dived into the river Avon to save the occupants of a motor vehicle. It can lead to relief, as in the recent arrest of Muslim jihadists before they launched a bombing campaign in London described by one of the suspects as “another 9/11”.
In this country the importance of the policing function is recognised by the removal of the right to take industrial action, which is quite right. It is a fundamental right granted to most other workers. It follows that the management, organisation and accountability of the police service is crucial. The whole concept of the new police was laid down in 1829 by Sir Robert Peel when he established the Metropolitan Police as being unarmed civilians in uniform with very few more powers than the citizens they were policing. That principle still applies to this day and we do not have an armed police force. We have, for example, fewer officers trained in the use of firearms than when I joined the police service in the 1960s, but, of course, they are trained a lot better.
On the whole the system has worked well and most informed commentators would agree that we have one of the best law enforcement systems in the world. It has evolved, of course, and this is the best way to develop policing. We have had amalgamations and the abolition of small, corrupt watch committees. Institutional corruption in the Metropolitan Police was tackled by Sir Robert Mark in the 1960s and police authorities were established by the Police Act 1964 with a mix of governors who were elected councillors and magistrates. At present, there are allegations of institutional police misconduct in South Yorkshire during the Hillsborough disaster and also during the miners’ strike. These are, rightly, to be independently investigated. One of the important marks of a civilised democracy is the way in which a state deals with complaints against the police and investigates misconduct.
Now, of course, the coalition Government are imposing a totally revolutionary structure with the election of police and crime commissioners, to make the police even more accountable. Each commissioner will have a lot of power with the right to appoint and sack chief constables. That seems to be mirroring the American system which elects sheriffs, judges and even prosecuting attorneys in many areas of governance. If someone asked your Lordships if they have a better system of law enforcement in the United States than in this country because of this so-called democracy, I doubt whether many of you would think that they had. Giving the new system the benefit of the doubt, the jury is out and we will see in due course how it works. I have serious reservations, as have other noble Lords and I hope that the policy does not lead to political interference in policing operational matters or the appointment of political placemen as chief constables.
My concern is that I firmly believe that the police should not be dragged into the party political arena. As a former senior officer—I declare an interest as a former president of the Police Superintendents Association—I took a neutral stance and served Governments of both colours without any indication of party alignment at that time. I campaigned and lobbied Conservative and Labour policy teams, on behalf of the police service, on issues such as the setting up of a paedophile register, the modification of the right to silence and the abolition of the antiquated double jeopardy law.
The police should be politically neutral, as are the armed services and the monarchy. They serve the Crown and are accountable under the law, and this is how it should be. I fear that under the coalition’s new regime they will be politicised, and that if they do not toe the party line they could be dismissed if the elected commissioner loses confidence in them. The noble Lord, Lord Blair of Boughton, had a right to be suspicious, because that is exactly what happened to him when the newly elected mayor, Boris Johnson, took charge of the police in London. We never found out quite what happened to the position of the noble Lord, Lord Blair, but it is very difficult to work with someone who openly declares that they have lost confidence in you. I hope that this will not become common practice in future.
I differ from the noble Lord, Lord Blair, on his advice to people not to exercise their democratic vote. We should all support democracy because it has been so hard fought for. My advice is that every member of the public should exercise their vote, and that they should vote for the best candidate, regardless of party. I am very fortunate in Durham, where we have a Labour candidate who is also a former deputy chief constable of great experience—in my case, it is a no-brainer. Incidentally, the Labour candidate in Humberside is a big beast who has similar strengths and great experience, contrary to the views of the noble Lord, Lord Wasserman, whose brainchild this dog’s breakfast is.
Finally, crime is at its lowest for a quarter of a century and is still falling. It has fallen by one-third in the past decade. This is in the middle of a recession in which we have reduced police numbers, so the police must be doing something right. I believe in the old adage that if it ain’t broke, don’t fix it. I will point out one other fact. The prison population has never been higher. When the noble Lord, Lord Howard, was Home Secretary, he famously said that prison worked. He, too, reduced crime substantially. Perhaps he was right.
Lord Shipley
My Lords, I, too, thank the noble Baroness, Lady Henig, for initiating this debate. She was right; we debated the proposals for police and crime commissioners at great length last year, and many views were expressed about the nature of the commissioner’s role, the powers that would be vested in them, their relationships with chief constables and local councils, and how checks, balances and scrutiny would be preserved. We on these Benches urged that pilots should be undertaken before final decisions were made.
I do not seek to revisit all of those issues, but I will identify what is of concern to me as elections for police and crime commissioners are about to take place. These concerns relate to: the nature of the elections and the public’s engagement with them; the location and extent of powers; and the need for early and continuous review.
Polling day is two weeks away and postal votes are going out. I hope for a high turnout, because the elections need to be a success, and those elected need to feel that they have a mandate. Given what we learnt recently about Hillsborough, strengthening public oversight of policing matters greatly. However, I fear turnout may not be high. The reason is that many people do not understand what they are being asked to do, and the amount of publicity given to voters has been woeful. I have lost count of the number of people who have asked me why the elections are being held, why most candidates are party political, and why so little has come through their letterbox. I can direct people to the leaflet delivered with poll cards, but that is mostly about procedures. Voters who can access the website discover comparatively little about the candidates and about their plans if they are elected. I do not understand why a booklet was not sent to every voter, as it was with the London mayoral election. I hope that turnout will be high, but if it proves to be very low, the Government, and particularly the Home Office, should ask themselves why they have wished an outcome—namely, greater democratisation of policing—without delivering the full publicity campaign needed to ensure that it happens as it should.
Commissioners will be entrusted with great power. They will set priorities through a five-year plan, in consultation with the chief constable. They will hold the chief constable to account, set the force budget and the local precept, and, where necessary, appoint a chief constable and, if required, suspend them. They need a very clear democratic mandate to justify this degree of power. The police and crime panels that will scrutinise the commissioner remain comparatively weak. In the Electoral Commission leaflet delivered through my front door, they were not even mentioned. They cannot veto the commissioner’s police and crime plan, or the budget, or the dismissal of a chief constable. They will be consulted on the plan and on any proposal to dismiss a chief constable, but their powers do not include a veto. They will of course be able to confirm or veto the commissioner’s appointment of the chief constable, and confirm or veto the level of the council tax precept—though only with a two-thirds majority.
With good will and mutual understanding between commissioners and panels, the structure could work reasonably well—and probably will in most places because the people involved will want it to work. However, that structure could very easily cause conflict. We will start to discover quite soon what will happen, because budgets and precepts will need to be set for 2013-14. Formal plans will need to be put in place quickly to underpin those budgets and the precepts asked for. Because a number of chief constable appointments are pending, we will see very soon how the procedures for appointment will work. Above all, we must ensure three things: first, that we do not politicise the police but preserve their neutrality, even though party-political candidates dominate the ballot papers; secondly, that we do not produce conflict in electoral mandates between commissioners, panels and local councils; and, thirdly, that the allocation of resources and operational command is impartially delivered. Making sure this happens will require early and continuous review.
I understand that the Electoral Commission will report on the conduct of the elections—and, frankly, the earlier the better. I suggest that reviews are then conducted over the next few months in these areas: the success of the appointments process for chief constables where there are currently vacancies; the success over the next few months of the procedures that are followed for the creation of the policing plan, the budget and the precept; whether any changes should be introduced for 2014-15; whether the make-up of police and crime panels ensures that they represent the spread of opinion geographically and politically in their force area; and whether the training of all members of those panels is adequate. It would be helpful to hear from the Minister what research and evaluation will be undertaken, and by whom, and to what timescale, to ensure that this new governance structure turns out to be a success. In the mean time, we should urge people to cast their votes as part of this major constitutional and governance reform and opportunity.
Baroness Berridge
My Lords, quite simply but most importantly, the post of a police and crime commissioner is that of a politician in a high-visibility jacket who says to the public: “It is me you contact with your concerns about policing, and if you are not happy you can get rid of me”.
While I appreciate the concern about the involvement in policing of party politics, I, too, am saddened by the attitudes of some to this change. Emmeline Pankhurst must be turning in her grave when people are being actively encouraged not to vote. This could mean that the most is not made of what is a great opportunity: a direct line of accountability from police governance to the public.
I will focus briefly on three reasons why this direct line is vital at this time. The first reason concerns reputational issues. Unfortunately, while most police officers are hard-working and honest, the police have caught the national disease of institutional reputational slide. The Riots Communities and Victims Panel stated in its neighbourhood survey that the data indicated that a significant minority had doubts about the integrity of the police. Some 34 per cent thought that corruption was fairly or very common in the police. A ComRes poll taken in the context of phone hacking and the police found that 77% of people worried about wider corruption in the police. These results were, of course, before the Hillsborough panel’s report, so I would be very surprised if the trend has changed. I cannot remember a time when we lost two chief constables—Sir Norman Bettison and the chief constable of Cleveland—in less than three weeks to these kind of allegations of gross misconduct, namely lying. Having one person who is clearly visible and the people have chosen to hold the police to account could be a vital plug in this sapping of confidence in the integrity of the police.
Secondly, there is the matter of a swifter response to issues of public concern which are not necessarily of police concern. No, this is not a suggestion that involves the operational involvement of the police and crime commissioner—that is sacred ground which the PCC should not touch—but I hope that the presence of the PCC will mean that it will not take cases such as that of Sean Rigg where comments from the coroner have prompted a review by the Metropolitan Police Service into deaths in custody and mental health policing headed by the noble Lord, Lord Adebowale. It has been most unhelpful to the police and to public confidence in policing that such a poor perception in some communities developed around deaths in custody. A good police and crime commissioner will be taking those concerns directly to the chief constable.
Thirdly, on the issue of young people, a single point of contact with a good social media presence will be able to have a profile among young people. An imaginative PCC might think about creating a young person’s PCC role. With such high levels of young people out of work it is becoming increasingly important to keep one’s finger on the pulse of the feelings of young people. The demographics of the riots offenders has, I hope, taught us this.
However, only one person can wear that high-visibility jacket at a time, which means that the need for diversity is even more important. Here I share the concerns of the noble Baroness, Lady Henig. I know that when one repeats something which seems like an age-old mantra, some people will sigh and say, “Is that really necessary? Surely all that matters is that the police detect crime and that they are honest, firm and perhaps personable”. I think that that is not all that matters, not because it is politically correct to think otherwise but because some of Peel’s seven principles tell us so. Those principles were outlined by Charles Rowan and Richard Mayne—the first and joint Commissioners of the Metropolitan Police—but I shall cite only two: namely, always to recognise that the power of the police to fulfil their functions and duties is dependent on public approval of their existence, actions and behaviour and on their ability to secure and maintain public respect; and, perhaps most famously, that the police are the public and the public are the police. If that is the case and if democracy is to be legitimate, the PCCs must be representative of the population they serve and police.
So, what are the scores on the doors now that nominations are closed? The following mathematics is my own, as I could not find a current break-down of statistics anywhere. First, I note that 28% of the candidates are independent. Of the 192 PCC candidates, 13 are from ethnic minority communities—that is 6.7% of the total. It is sobering for all the main political parties to note that nearly two-thirds of those candidates are standing as independents. Only 3.6% of candidates standing under any party-political label are from black and minority ethnic communities. I remain concerned about the message that will be sent by the PCC’s equivalent of the G20 leaders photograph after these elections. It is unlikely that members of the police and crime panel will have a public face in policing, but I expect that the deputy PCC will have such a role—even if it is only when the PCC is on holiday—and so the selection of those candidates is vital.
Let me sound a couple of cautionary notes before I close. The success of this role will be determined not so much by voter turnout as by the professionalism of the police and crime commissioners. Some candidates are former chairs of PCCs, such as Fraser Pithie in Warwickshire and Bishop Derek Webley in the West Midlands, but some have little background in policing. It is a shame that there will be no centrally funded and organised training for the new PCCs. With a professional body on policing being recommended, what about professional standards for PCCs? I always remember my friend, who has been head of the Royal College of Veterinary Surgeons, asking a senior MP, “So, politicians do not have to do continuing professional development? We’ve been doing it for decades”. Perhaps confidence in politicians generally would be increased if we adopted an ongoing training scheme which is standard practice in virtually every profession nowadays.
Secondly, let me sound a cautionary note on unheard voices. Only today, the C S Lewis Twitter feed which I follow stated:
“I have learned now that while those who speak about one’s miseries usually hurt, those who keep silent hurt more”.
With the rise of professional lobbying and vocal, often middle-class voters, the PCC will need to be ever more mindful of those who suffer in silence—those who do not reach for the Twittersphere and would not think of going to their MP or PCC. The voiceless are often victims of crime and anti-social behaviour in certain areas; often they are hidden, sometimes they are elderly, and sometimes they are people who are just too busy keeping their lives together that making a complaint to the PCC would be that one thing too many.
I hope that in a few years we will see PCCs who have surgeries like MPs, who have the most Twitter followers locally among young people, who will be a critical friend to the chief constable and who will be the key person facilitating probation, CPS, social workers and other agencies to work together. I hope that these elections and the role of the PCC will be like the Olympics. We looked at that event with doom and pessimism but surprised ourselves with the success of the risk that we took and what we all achieved.
Baroness Smith of Basildon
My Lords, like other noble Lords, I thank the noble Baroness, Lady Henig, for initiating today’s debate. It has been extremely useful and shows the House at its best and the degree and depth of knowledge and experience among your Lordships.
The noble Baroness, Lady Henig, rightly criticised the Government for not building on the success we have already seen in fighting crime, including the partnerships. She outlined the sweeping and wide-ranging changes in governance, organisations and structures. I shall not repeat the detail that she gave but lack of funding to help make the transition to these changes and a lack of clarity in many areas about what is involved have caused enormous concern.
I wish to look specifically at the creation of the National Crime Agency, the abolition of the National Policing Improvement Agency and the police and crime commissioners. During the debates on the Crime and Courts Bill, which will shortly continue, we raised our concerns about the lack of clarity and the lack of detail. Far too often it seems that policy is made up on the back of an envelope and is then coloured in with the detail later. At the last election, one of the Government’s flagship policies, as we have heard, was the election of police and crime commissioners, and yet, despite the rhetoric, the Government seem determined to undermine this office.
As your Lordships know, and as we have heard today, we opposed the creating of those positions. Not only is it expensive at a time when the Government are cutting to the bone but there remains a woeful lack of clarity and understanding about how the relationship with the chief constable, the Home Secretary and the new National Crime Agency will work. The noble Baroness, Lady Henig, highlighted the problems that could occur from what could be seen as a politicisation of our police force. Despite the spirited and committed defence of the policy by the noble Lord, Lord Wasserman, it was flawed by not recognising the existing role of local councillors, local partnerships and local community partnerships, which work and are very successful at present. The noble Lord, Lord Harris of Haringey, asked specific questions around those relationships and operations which I hope the Minister will be able to answer today.
If the Government’s initial rhetoric about PCCs being at the heart of the community and the voice of policing is to be believed, surely that would lead to them wanting the highest possible turnout and participation in these elections, and yet, unlike with mayoral and many other elections, there is no free postal delivery of candidates’ information to voters. So not only is it difficult for the public to have any information on the candidates, it also makes it harder for those standing as independents to let the public know what they stand for. Indeed, it makes it difficult for any candidate, given the huge areas that they intend to represent. Moreover, the idea that holding stand-alone elections in November would somehow help turnout is ludicrous. I noted the comments of the noble Baroness, Lady Browning, about America, but I think that at the moment most Americans, particularly those on the east coast, would not exactly welcome November elections.
The Government’s response that information is available online is really quite insulting and inadequate. The Electoral Reform Society has estimated that turnout could be as low as 20%, and the Government have taken no serious or meaningful action to address that. I concur entirely with my noble friend Lady Henig’s comments about the appalling adverts that are somehow supposed to increase enthusiasm and anticipation for people to vote in these elections. The ones I have seen—there may be others—show one example of fly-tipping and numerous examples of young people attacking older people. Dealing with those problems is not the only role for police and crime commissioners and it undermines the very serious role they will play. Despite all this, we have some really able and committed candidates who will do an excellent job as PCCs. They will certainly try their best, but they are being let down by the Government and they deserve better.
Alongside these new positions, we have seen so much change in the structure of how the police operate. I will not repeat the excellent analysis made by my noble friend of the range of changes and the effect that they may have. What worries me is the lack of detail that has been made available. We all want the new National Crime Agency to be successful, but throughout our debates in Committee on the Crime and Courts Bill, we were never able to conduct any meaningful scrutiny of the National Crime Agency because the framework document—the fundamental document setting out what the NCA will do and how it will do it—has not been available. The Minister’s response at the time was that it might be available for the Report stage, but if it was not, it would be available for when the Bill reaches the Commons. Again that is completely inadequate, and I hope that the Minister will be able to give us an assurance today that when we reach the Report stage later this month, he will have ensured that the framework document is available for discussion.
The National Policing Improvement Agency has been abolished before the legislation has even been passed, and yet still there is no complete clarity on where all the functions of the NPIA, its responsibilities and its staff, will be allocated. It is starting to look like another back-of-the-envelope policy where the colouring still has to be added in. It takes no account of the changes and reforms that the agency had already made.
Finally, I turn to the significant changes. The Government have now announced that they are minded to opt out of all the pre-Lisbon policing and criminal justice measures where we co-operate with other European countries. Earlier this week I attended a conference in Berlin of the European Confederation of Police, the umbrella organisation for organisations such as the Police Federation. Senior members of its committee were discussing various issues, including that of policing across borders. How can we expect our police effectively to fight cross-border serious crime such as terrorism, sex abuse and the trafficking of drugs and people without European co-operation? How would the British police have been able to co-operate with the French police to return Megan Stammers to the UK and her family if we were not part of the European arrest warrant system? Yet again we have proposals for further changes that do not seem to have been fully worked out.
As my noble friend Lady Henig made very clear in her comments, there have been too many changes made with too little co-ordination. Also, all of these changes and potential changes have to be seen against a background of cuts in budgets and resources—and as my noble friend Lord Prescott pointed out, it is not just the Government making cuts. Crime and disorder partnerships and other partnerships have been cut by local authorities.
The new National Crime Agency will take on the roles of SOCA and the Child Exploitation and Online Protection Centre, and it will have increased responsibilities around the issues of border control and revenue and customs. Your Lordships will know that no change is ever cost free. The election of police and crime commissioners, the abolition of the NCA and the creation of new bodies such as the new National Crime Agency are all taking place at a time when resources are precious and deep and unprecedented cuts are being made. I am seriously worried about effecting deep and fundamental change without ensuring that the resources are available to ensure that it works. We know that resources are tight and we know the pressures that the police are operating under. We also recognise that cuts would have been made under a Labour Government, but the difference is one of scale and size. Her Majesty’s Inspectorate of Constabulary made it very clear that cuts over 12% were unsustainable and would lead to a worse service. The Government have ignored that advice and have instituted cuts amounting to around 20%. In my county of Essex, we are losing one in 10 of our front-line police officers. We no longer have any 24-hour police stations and a number have closed completely. That is not unusual as other noble Lords have told the same story from where they are.
But this is not just about abstract numbers and concepts. It can really make a difference, and I think that the noble Baroness, Lady Newlove, did this House a service by focusing on how victims are being impacted by these policies. Noble Lords may have seen press reports of the murder in Southend in Essex of Jeanette Goodwin, following harassment and threats made by Martin Bunch which had already led to several arrests and a conviction for battery. Reading through the reports of this case show that it is clear that there were a number of failings along the line in the criminal justice system, although no criticisms were made of the police until that final day. Laura Smith, of the local newspaper, the Echo, after reading reports and interviewing serving police officers, identified serious problems with staffing on that day. A number of officers were sick, another had to provide constant supervision for a prisoner in the custody block and one was sent to the operations management unit at police HQ to deal with appointments there. The result was that there was an acting sergeant and five constables on duty. They were extremely busy because of another 999 call to a violent domestic incident. The police have admitted that even if the final call that Jeanette Goodwin ever made had been classified as urgent, there still was not anyone to attend. The reports make it clear that the man in question was intent on causing her harm. One call handler said that when she arrived on her shift, there were more than 100 incidents on the “open list” and many had not even been allocated. There were a number of other failings across the criminal justice system as a whole, but despite those other failings, there must always be the question that had the police responded immediately with a patrol car, had they been up to full strength on that day, and had they not had to absorb such a high level of cuts, would Jeanette Goodwin still be alive? I do not know the answer, but if we fail to ask the question and continue just to talk about processes and procedure, we fail in our duty to the public and to victims.
When I have asked about cuts in services, I have been disappointed with Ministers’ replies. They say that cuts are the responsibility of chief constables, but Ministers set the budgets within which chief constables have to operate. However good a police and crime commissioner is, he or she can only act within the budget that is to be given to them by the Government. I hope sincerely that the Government do not say, “It is not our responsibility, it is for police and crime commissioners”, because they are acting within the Government’s budgets.
The public must have confidence in the police; it is something we all want to see. We want the public to have respect for the police, and in turn we want the police rightly to earn that confidence and respect. My fear is that the Government’s obsession with changing structures and governance, often not fully worked out and often not having fully understood what was already in place, ignores the serious underlying issues and concerns. The public have not been set alight by the PCC elections and they are not queuing up to vote. However, we want them to do so because for these provisions to be successful, we need to see a greater buy-in from the public. But if the Government really believe in their policy, they are facing a lost opportunity. They need to stop obsessing about structures and look instead at resources, commitments and a whole range of factors that will make policing in this country a success story that we can be proud of.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, I share the gratitude expressed by all noble Lords to the noble Baroness, Lady Henig, for tabling this debate. I also thank noble Lords for their contributions, which have ranged from passionate to thoughtful, but none without conviction. All those who participated in this debate have brought their experience to bear on what is an important subject in contemporary politics. I do not share the downbeat views of some noble Lords opposite, and I reflect particularly on the comments of the noble Baroness, Lady Smith of Basildon. Listening to some speeches, once or twice I thought, “Heaven forfend that these changes should be a success”. I am at one with my noble friend Lady Berridge on this issue. Policing has a great future in this country and there are opportunities to change it so that we really have a policing system fit for our times.
We have embarked on the biggest reform to the policing landscape for 50 years. This is being achieved alongside changes to the funding settlement that are challenging for the police service, but they have been shown by the majority of police forces to be manageable. At the same time, we have confounded those who suggested that emergency response times would increase; they have actually held up. Most important of all, as most noble Lords have acknowledged, we have continued to meet the challenge of reducing overall levels of crime. Under this Government, recorded crime has gone down by 10%. This is across key crime types, with recorded violence down 13%, burglary down by 7%, criminal damage 22%, vehicle crime 15%, robbery 5% and knife crime 9%. All have come down. Noble Lords will be pleased with that achievement, of which the police can be particularly proud.
We are meeting the challenge of delivering better value for money and reducing crime while delivering a programme of radical reforms to the policing landscape. Future generations will look back on 2012 as a year when our country was at its best and we had significant legacies set into our history books through the magnificent Olympic and Paralympic Games and the Diamond Jubilee. It will also be a year in which future generations will see another lasting legacy being born, with the most significant reforms in policing being laid by the first direct elections of police and crime commissioners, the emergence of the National Crime Agency and the establishment of the police college.
The single most significant change to policing, as many noble Lords have commented, comes in exactly two weeks’ time, on 15 November, when the public outside of London will elect their first police and crime commissioners in England and Wales. Despite the doubts that people have about awareness of these elections, all the surveys show that 85% of the electorate will have had an opportunity to see information about them. As of last week, 62% of the electorate knew about the elections. I do not know how many noble Lords have been out campaigning—one noble Lord certainly has and there may be others—but I am sure that they have found that there is a widespread appreciation of the elections and of their importance. Noble Lords misunderstand how the electorate perceive this opportunity to vote.
The noble Lord, Lord Shipley, is concerned that we learn lessons from the way that these elections are run. The Government are clearly going to take note of that, and it would be very useful to have his input to discussions after the elections. Meanwhile, I hope that all noble Lords will encourage people to be involved in this extension of democratic influence and encourage their favourite candidates to succeed in the elections.
Noble Lords will be familiar with the famous words of Robert Peel, which were repeated by my noble friend Lady Berridge:
“The police are the public and the public are the police”.
The police have always accepted that they should be accountable to the public, and the election of PCCs is the logical conclusion of that belief in accountability to the public. The introduction of PCCs will introduce greater transparency and accountability to a service of which we are rightly proud but which can sometimes be too distant from the public it serves and can fail adequately to reflect their concerns and priorities. These reforms are about democratic accountability and putting power in the hands of local communities. PCCs will drive value for money, deliver cost savings, reduce bureaucracy and prioritise the front-line services that they know the public want and, more importantly, which the public have every right to expect.
I know that there has been some discussion between my noble friend Lord Wasserman and the noble Lord, Lord Prescott, on the efficacy of this process. However, I am sure that the outcome of the elections will be a more effective policing service and a greater accountability to, and closer relationship with, the public at large. After all, if a PCC fails to represent their community and deliver on their priorities, the public will be able to tell them what they think of them at the ballot box—by voting them out if they need to. The noble Lord, Lord Mackenzie of Framwellgate, made a generous speech despite his reservations about the policy. I believe that the noble Lord shares in the essence of what this policy is about, which is the need to make policing a community activity.
Some noble Lords think that having an election in November is a bad idea; but this will not necessarily happen next time, because there will be the opportunity to have the election in May. It may be a more seasonal time of year to have elections, but as noble Lords have pointed out, the vote was not achieved easily, and I am certain that we will find people wanting to participate in these elections in future.
The noble Lord, Lord Prescott, made an extremely passionate speech and I am sure he is sincere in wanting to make a success of his candidature in these elections. However, it will be for the noble Lord, if he is successful, to write, set and implement his plan. It will not be the Home Office writing the plan or implementing it. The PCCs will have the responsibility.
As this House will know, the police and crime panels—the PCPs—will also form a key check and balance in the model. As a result of amendments that this House argued for, PCPs will both challenge and support PCCs in making good their important role. This balance was emphasised by the noble Lord, Lord Harris of Haringey, who has enormous experience on this matter. The noble Lord, Lord Stevens of Kirkwhelpington, who is an extremely experienced policeman, emphasised how important it is to have this check within the system. This system is working very well. It would be disingenuous to say that the system in London was without some teething problems but the service is now working well and in the interests of the citizens of London. The office of PCC has a statutory monitoring officer in the chief executive, who exercises controls over contact and whose post is politically restricted.
Fortunately, we have all 41 PCPs in place. They represent all local authorities within the community, not just county authorities as used to be the case. That means that PCP members will be engaging with their councils and their local expertise to hold the PCC publicly to account.
It is encouraging to see a rise in the number of people who are prepared to get involved in protecting their communities, a powerful example of which are the special constabulary and police support volunteers. I am delighted to note that the number of special constables is now more than 20,000—a rise of 10% from last year.
The Government are alert to the need to communicate with the public—a point made by my noble friend Lady Newlove in a very emotive speech—and to ensure that policing policy puts victims first. We are taking a new approach by setting out proposals in our White Paper, Putting Victims First, for faster, more flexible and effective powers that will provide a real deterrent to perpetrators and better protect victims and communities.
With these measures, we are taking a local response to local problems, recognising that these cannot be solved by central direction from Whitehall. This will leave the Home Office to refocus on its proper role, to ensure that this new, radical model is put to work, and in particular to secure a more effective response to national threats and to co-ordinate strategic action on issues of public interest.
In July, we published the strategic policing requirement, which sets out the most important national threats to which PCCs and chief constables must have regard. This will ensure that the national response is rooted in local policing, with local forces playing their part in both regional and national issues.
One of the key national threats is that posed by serious and organised crime, as brutally demonstrated by the recent shootings in Greater Manchester. Around 30,000 people and 7,500 gangs are involved in organised crime in the UK, at a cost of £40 billion to our economy every year. Last year, we launched the first ever cross-government organised crime strategy so that we can bring to bear the full power of the state and its agencies against organised criminals. We are already seizing more criminal assets than ever before. From next year, PCCs and chief constables will work closely with the new National Crime Agency, which will be responsible for spearheading action against serious and organised crime.
It has been suggested that police forces are facing cuts of 20%. No police force has faced cuts at this level. The police service nationally receives around a quarter of its income from the police precept elements of council tax, and the exact proportion varies from force to force. The level at which it is to be set in future will be a matter for individual PCCs to decide.
We are delivering these reforms alongside a drive to deliver better efficiency and value for money. The Government have been very clear that reducing the budget deficit is our number one priority. All public services must constrain their spending, including the police. The Home Office has been doing its bit. We are setting up a police ICT company, which will improve police systems and save money in procurement. We are also helping forces to enjoy economies of scale in the purchase of other goods and services.
We have also been prepared to step in to mandate co-operation between forces. The creation of the National Police Air Service, for example, will provide a better service for forces across the country at a lower cost to the taxpayer. This new police-led, government-supported scheme will keep 98% of people in England and Wales 20 minutes or less away from police air support and will save up to £15 million a year.
The police service must also do its part. At the start of the spending review, the service was spending more than £14 billion a year. It is therefore only right that the police make their contribution to the savings that are needed, while ensuring that the service that the public receive is maintained and, where possible, improved. This can be done, and it is being done. By changing the way police forces work, getting officers out of the back office and on to the front line, and stripping out bureaucratic processes, officers can be freed up to do the job they joined up to do—to fight crime and protect the public.
We are also taking action to improve standards across all aspects of policing. From December, the new College of Policing will be driving professionalism across the whole of policing, in the public interest. Professionalism was rightly mentioned by the noble Lord, Lord Dear, and lies at the heart of improvements within the police service. My noble friend Lady Hamwee made very much the same point. The opportunity is now there for the College of Policing to become the guardian of professional standards, shaping and maintaining the ethics and values by which they are delivered. It will also set the professional development framework for policing, ensuring that all officers and staff have the right knowledge and skills to do their job effectively.
My noble friend Lady Doocey mentioned the importance of the Independent Police Complaints Commission. We are looking to expand the powers of the IPCC to ensure that it can function effectively as the policing landscape changes. In the light of many high-profile occurrences, which go to the heart of the public’s anxiety, it is important that we maintain the integrity of our police service. In such circumstances, the IPCC has a clear and important part to play.
We are delighted to have appointed Alex Marshall, the chief constable of Hampshire Constabulary, as the chief executive officer of the new College of Policing. Mr Marshall has an impressive track record of driving down crime, supporting innovation and cutting bureaucracy—all skills that will be integral to the College of Policing.
Half way through the Parliament, we have made great progress in our programme of police reform: PCCs elected later this month; the College of Policing about to be launched; the NCA operational next year; wasteful spending reduced and efficiency savings achieved. Taken together, these reforms add up to a realignment of policing in this country that will free up the police from central targets and bureaucracy and place power back in the hands of local people.
We believe that the public should be in charge of how their communities are policed. Although crime maps, beat meetings and neighbourhood policing are all crucial in this respect, the election of PCCs is the change that will truly give the people their voice. From 15 November onwards, any development in crime prevention, policing and criminal justice will need to engage PCCs and they will be key to its implementation. This puts the public at the centre of policy-making, and at the centre of policing. The end result will be a trusted, responsive and professional police service that will be continually improving to cut crime, but with its priorities rooted in the needs of local communities.
I believe that these reforms will be seen as one of the great achievements of this Government. I am confident that this is something that Sir Robert Peel would have recognised and would have approved of.
Baroness Henig
I thank all noble Lords who have spoken in the debate and the Minister for his response. As the Minister has said, there have been many notable contributions—from the noble Lord, Lord Wasserman, at his most super-optimistic to my noble friend Lord Prescott at his battling best. No wonder so many chief constables are nervously awaiting the election of all-powerful commissioners. We have had important speeches: from the noble Baroness, Lady Newlove, on the victims of crime; from the noble Lord, Lord Dear, on professionalism; from the noble Baroness, Lady Doocey, on the IPCC; and from the noble Lord, Lord Stevens, on the work of the Independent Commission on the Future of Policing. I was particularly interested in the issues around diversity, or rather the lack of it, that the noble Baroness, Lady Berridge, raised. We have also had a worrying reminder from my noble friend Lord Harris about the dangers of politicising operational activities with reference to phone hacking and the Metropolitan Police.
I listened carefully to what the Minister said about the elections in a fortnight’s time. I have been asking everyone that I have met in the past month whether they are going to vote. I accept that this is a rather imperfect survey, but it was the best one I could have. I asked everybody, “Are you going to vote in a fortnight’s time?”. I have to tell the Minister that nine out of 10 people I have spoken to have said no. They have said that because they do not know about the elections—some have said that—or they said, “These elections have nothing to do with me”, or they have said no because they do not approve of bringing party politics into policing. In a way, that last group of people should concern us most. These are people who have voted in every election, local and national, and yet have said to me, “We are not voting. We do not believe that voting is appropriate for police commissioners”. The Government may not like that, but that is the reality. That is what people are saying to me. That is what is being reflected in newspaper columns.
I take the reproof of the noble Baroness, Lady Browning. I take her point that she feels that I am being too pessimistic in my assessment of what is happening in policing. I would respond to her by saying that it is very easy to stand in this Chamber and welcome change and to be optimistic that it will all work out. My interest is in those people out on the front line up and down this country; people in communities who actually have to implement these changes, and do so effectively. My point is that if you bring in so many disparate and disconnected changes simultaneously, it undermines people’s ability and capacity to join everything up at the local level. That is my fear.
I have never been against change which is organic, or change which builds on what is already working. However, what I am against is wholesale revolutionary change which can be damaging and very dangerous. That is what I was trying to draw attention to in this debate.
The challenges facing policing now are unprecedented in their scale, compounded as they are by the savage financial cutbacks. For me, nothing could be more damaging to the fight against crime than a wholesale loss of public confidence in the policing service. It is for this reason that I tabled this Motion for debate today. My hope remains, despite what has been said from the opposite Benches, that the Government will start to realise how much damage their policies are causing to the police service and will engage constructively with the leaders of that service in a way which restores public confidence and police morale. If they do not do this urgently, my concern is that that thin blue line will become so demoralised and badly stretched that it will snap, with incalculable results for all of us.
House of Lords: Working Practices
(12 years ago)
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Lord Filkin
That this House takes note, in the light of the Government’s decision not to proceed with the House of Lords Reform Bill, of the options for making better use of the skills and experience of its Members in performing its core functions of scrutinising legislation, holding the Government to account and providing a forum for public debate.
Lord Filkin
My Lords, I am delighted to see how many people are in the Chamber wishing to speak on this Motion. Unfortunately, noble Lords will pay a price in the amount of time that they will have to do so.
I will argue how crucial it is now that we look afresh at how we make better use of our talents and the skills of our Members, fundamentally better to fulfil the functions of the House as set out on the Order Paper. I will argue that it is timely to do so. We know now that fundamental change to the composition of the House is off the agenda, at least for the immediate future. You can make your own guess, but I would expect that the present incumbents, if we are fortunate, may well be here in 10 years’ time. That therefore increases the necessity of looking at our processes to see whether we can improve them.
Next, it is right to look at this again because there is unfinished business. The Leader helpfully set up a Leader’s Group, chaired very ably by the noble Lord, Lord Goodlad, but many of those recommendations, some of the most important ones, have not yet come before the House for discussion and decision. It is timely for many of them to do so.
Lastly, there are wider issues, and none of us will be able to resist some of the temptation of straying into them. However, the fundamental issue should be about completing the Goodlad business that was started and is not yet at its end.
I turn to what was in the Goodlad report. My apologies to the noble Lord, Lord Goodlad, for using the abbreviation; he will know what I mean by that. The report looked at the scrutiny of legislation. That matters. We spend most of our time on it; it is our most important function. The volume and complexity of legislation have increased enormously over recent decades. We do not do a bad job, but we do not do a good enough job either. That is not always helped by the fact that Governments of whatever party have a persistent disease of rushing Bills into the House before they are properly ready and prepared.
There are two fundamental recommendations in Goodlad which would have helped to address that. The first was establishing a presumption that there should be pre-legislative scrutiny on all important Bills, particularly those which made major policy shift and/or had not had full consultation via Green Papers or White Papers. The second was a test of legislative preparedness before a Bill had its Second Reading to ensure that some basic process tests had been fulfilled. This may sound tedious and unnecessary, but I ask noble Lords to reflect on the Health and Social Care Bill that came into this House. I hope that the Health and Social Care Act works because, for most of us, the improvement of the NHS is fundamentally important to the cohesion, health and well- being of our society. But it was an object lesson in how not to proceed. I do not make that as a party-political point. The Government of whom I was a Minister was, at times, guilty of similar failings. I argue that a fundamental change like that needed the fullest consultation before the Government had firmly made up their mind. That is why pre-legislative scrutiny matters: because Governments are more flexible before they and their officials have committed themselves in that way. If we had had pre-legislative scrutiny, and if we had had tests of legislative preparedness, I am confident that the Health and Social Care Bill would have had an easier passage, probably a quicker one, and I would have expected that it would have been a better Act at the end of the process.
The Goodlad report also recommended that we should change some of our processes. The primary recommendation was that most Bills should go into Grand Committee. I will not go on in detail about that; we have debated it. However, the Goodlad proposal was not of course the proposal on which the House voted. I hope that at some stage—not in the near future but at some stage—we will come back to the proposal that most Bills should be scrutinised in Grand Committee. The process of scrutiny is evidentially better there than it usually is on the Floor of the House.
On secondary legislation, Goodlad recommended what had been recommended by the Wakeham commission previously: that the convention on secondary legislation that the House does not usually strike down and defeat SIs would be better replaced by a convention that essentially said that the House should use a power to defer and ask the Government to think again. That is absolutely consistent with what we do on primary legislation, and the benefits of doing it on secondary legislation are for the once or twice a year when there are manifestly failings in an SI brought before the House, either because its policy or processes are unclear or its consultation has been poor. The Government would be invited to think again about such an instrument and bring it back in a month’s time with amendments or with a better argumentation as to why that SI should stand. We would have better SIs as a consequence because officials and Ministers would be aware of this potential delaying power and would therefore do their homework better. That is not to imply that the quality of SIs is generally poor, because it is not; it has improved.
Those are some of the changes on legislative process that this House has within its power to make relatively simply, at relatively little cost. The public would be better served if we did so.
This House is an important forum for debate and inquiry. We do not get that much attention in the wider world. Sometimes, that is the media’s fault; sometimes, it is our own. The question for us, though, is how we make better use of our time and skills to be an effective forum for debate and inquiry. I shall make three simple points.
First, Goodlad argued that the process for choosing Back-Bench debates was somewhat arcane—some of us would say asinine. Essentially, the Government can table a debate on a topic that they think is important, relevant or even urgent at any time they wish to do so. Back-Benchers are not able in this House to do that. The only mechanism by which they can do so is if they win the lottery, which is what, of course, the ballot is, and there is no guarantee that the name that comes out of the hat will meet the test of being important or topical. Alternatively, they can put their name down for a Question for Short Debate. We are now debating issues on Questions for Short Debate that were tabled five months ago. Therefore, it is impossible by that mechanism to use QSDs to raise timely and urgent issues. There is something fundamentally flawed in the way in which we select topics for Back-Bench debates. Goodlad recommended a very simple, very low-cost process for doing so, whereby the Back-Bench Members of this House control that process. I very much hope that we will discuss that before long.
Secondly, recommendations that Goodlad made that have been introduced, and I was delighted to see them, were to establish two ad hoc sub-committees. They were not introduced in exactly the way that Goodlad recommended them, but it could well be that the Leader of the House was right on this occasion, as he often is, to recommend that they be short and sharp rather than standing or long-standing. Two are under way, on SMEs and on public service and demographic change, and they will report by Easter. There will be two new ones next year. Therefore, it is clear that we should focus on that issue and try to ensure that we have two excellent topics for the successor committees. I hope that, in time, we will recognise that this is one of the best possible ways of harnessing the talent in this House and that we have more such ad hoc sub-committees. However, that will depend on whether we can demonstrate that there are good topics that need to be so debated.
Thirdly, we need to find ways of getting on with debates on Select Committee reports. It is not healthy that a committee works very hard to produce a report and that it has then to wait sometimes weeks and months before there is a debate on it.
Transparency was touched on in Goodlad, although perhaps with not quite that language. Transparency is an objective of this Government and I commend them for it. It is healthy for public life and public policy if most of our processes are more transparent and thereby accessible to the public and the wider world. However, public understanding of and involvement in the House of Lords, while they have improved, are still not good enough. Members’ own understanding of its processes and decisions is often shaky and weak—I think, after 10 or 12 years here, I begin to understand how it works, but I would not like to sit a GCSE on the subject.
One illustration—I am not just teasing the Front Benches on this—is the way in which the usual channels work. The processes of the usual channels are necessary—I do not think that the usual channels are malign, or at least not usually—but it is clear that many Members do not understand how they work. Goodlad argued that it would be healthy if the Leader looked at how we could make the workings of the usual channels more understandable and thereby accessible to the wider membership of the House. That is necessary and I hope that it happens before long. It would also be helpful to the wider public.
I say with tact that the usual channels are extremely influential in the way in which they manage the business of the House and are extremely influential in the major committees of the House. The consequence can be, no doubt unintentionally, that they have quite an influence on how Back-Bench issues are addressed as well. The House should take ownership of its own Back-Bench business within the time that is allocated to it as a fundamental principle. It does not always feel as if that occurs. I shall illustrate the point by mentioning again the two new ad hoc committees that will be set up next April. How many Members of the House are aware that there will be two new ad hoc committees? How many Members of the House are aware of any process by which they can put forward suggestions? Some Members are, but very many are not. How many members of the public are aware that two new ad hoc sub-committees will be set up next year? There is nothing wicked here, but it would be a cleaner process if the wider world and ourselves were aware that there were two slots for ad hoc sub-committees next year. They would thereby be well sighted on the potential for putting in argumentations for them and aware of the criteria that will be used for selection of those and where the decisions will be made. Nothing is wrong with what is happening at present, but that would certainly be a better process.
I shall touch very briefly on wider issues. The elephant in this Chamber, which you can all see, is that this House is too big. It frustrates the ability of new Members and many older Members to participate and it damages our credibility to some extent. It is self-evident that, if we are meant to be a House of expertise doing good scrutiny, we need to refresh and bring in new talent. Those two objectives are in conflict and the way of resolving them is obvious to us all: there has to be some process of retirement. Such a process will not be easy or even possible unless a government of the day are prepared to introduce legislation. However, it is necessary, as otherwise the House will clog up and become discredited, or we will fail to bring in sufficient new talent, which is clearly necessary.
If the scrutiny of legislation is our fundamental task, are the resources available to opposition Front Benches, of whatever party is in power, or to Members sufficient to do that? I have taken part in the scrutiny of legislation, and your Lordships know as well as I do the process. It is almost impossible unless you are lawyer to engage in the amendments and their processes without external support. That can be helpful and it involves the wider world, but it can also lead to risks. I also hope that we will as a House recognise that we have to champion Back-Bench interests, not in the interest of Back-Benchers per se but in the interest of better scrutiny, better debate and a better holding of the Government to account.
In conclusion, I am arguing that the priority is to make the case for a Back-Bench debates committee as soon as possible, and bring that before the Liaison Committee when we have completed making the case; in time, to bring in a process for a legislative standards committee; to review the transparency of our processes with a view to improving them; and, lastly, I urge all Back-Benchers, and even Front-Benchers, to persist in the important task of improving the processes of this House, because we have an obligation to the public we serve to do so.
Baroness Anelay of St Johns
My Lords, it might be helpful if I point out that this is a popular debate. There are 24 Back-Bench speakers to follow, with four minutes for each. When the clock hits four, I am afraid that four minutes are actually up.
Lord Goodlad
My Lords, I congratulate the noble Lord, Lord Filkin, on this timely debate and on his very wide-ranging speech on a subject which, as he said, is sufficiently important to your Lordships’ House to attract an attendance today on all sides.
I shall perforce be brief. We spend the majority of our time on the scrutiny of legislation. Our role is quite different from that of the other place. We seek to address points of principle and of details, drawing on the knowledge and experience of your Lordships. We seek to conduct our affairs in a timely way, while paying special attention to those parts of Bills that have not been scrutinised in detail in the other place. Therefore, I turn first to the case for a legislative standards committee, to which the noble Lord, Lord Filkin, referred, which was made last year by the Leader’s Group, the Hansard Society, the Better Government Initiative and others. The House of Commons Political and Constitutional Reform Committee has been asked by the Liaison Committee to examine the proposal, whereafter I hope that my noble friend the Leader of the House may seek your Lordships’ views.
The case for a legislative standards committee, preferably a joint committee with the other place, is this. The past few decades, as the noble Lord, Lord Filkin, said, have seen a vast increase in the volume of legislation, both primary and secondary, put before Parliament by Governments. There is intense competition between departments for parliamentary time. The resulting workload on Parliament has led to serious consequences; the other place’s capacity for proper scrutiny has been all but overwhelmed. Amendments have been routinely accepted without debate in your Lordships’ House towards the very end of parliamentary sessions, not in response to argument or evidence but under pressure of time and to avoid the alternative of Governments of the day losing entire Bills. There was an answer to a Question by the noble and learned Lord, Lord Butler, earlier this year, showing that a vast number of measures have not been put into effect in the past few years for that very reason.
We rightly pride ourselves on what we do, but the fact is that much legislation is worse than unsatisfactory. There is a massive waste of time and resources—financial and human—in both Parliament and Whitehall. The proposed business standards committee would help the Government as a whole, particularly the business managers, to ensure that legislation brought before Parliament was validly and properly prepared. Its role would be to ensure Bills’ technical and procedural compliance with agreed standards of Bill preparation, rather than to scrutinise policy or drafting. The discipline which such a system would impose would be wholly beneficial, enormously cost effective and widely welcomed by the overworked occupants of both Whitehall and Westminster. As I have said, it would be manna from heaven to the business managers, but benefits would be felt not only by government, Parliament, the judiciary, legal practitioners—whose pain I admit is frequently greatly eased—and stakeholders, but above all by the citizens, who would be relieved from the frustration, bewilderment and worse inflicted on them by what many see as the ever-growing tsunami of amateurishly prepared legislation. The volume of delegated legislation continues to grow, as does its importance. Parliament accepts the concept of unamendable secondary legislation nearly every time that it passes an Act, but there must be a limit somewhere.
Baroness Anelay of St Johns
Perhaps I had better remind my noble friend that his four minutes are up.
Lord Goodlad
I speak in the hope that my noble friend will take seriously the points being made in the debate—or the two that I have had time to raise.
Baroness Hamwee
My Lords, I have realised how different the focus of the working group chaired by the noble Lord, Lord Goodlad, was from some previous working groups. We were rather less, although still quite a lot, inward-looking, and more about the “what”. When we were talking about the “how”, it was directed to outcomes and clarity. I am particularly grateful to the noble Lord for so directing us.
The report was to the Leader of the House, and it was quite proper that he should have dealt with it as he saw fit, but we have been dependent on an individual Member of the House for securing this debate. There are no other mechanisms. Again, I am grateful to the noble Lord, Lord Filkin. This is a matter of governance and, although there is no time today to go broadly on that, I shall mention one aspect.
The public seem to hold the House of Lords in high regard. This is not a point about composition. The greatest accolade that I often hear is that we talk sense. To unpack that, I think that it is about experience and skills—as in the title of the debate—including life experience, judgment and wisdom, if that is not all too pompous. The public expects those to be used, and so do our Members. It is notable how many inquiries are now held by all-party parliamentary groups, which meet a demand for the type of scrutiny and investigation that our Select Committees cannot do, and fulfil a need. There is something of smoke and mirrors about this, because they are not really parliamentary reports that are presented at the end of these inquiries, but they are received as such—and I am very glad that as Members we manage to do them.
If we do not use our Members and they are not fulfilled, they will not contribute, or at least as not as fully as they could. As Back-Benchers, they—or we, as I have always been very lucky in having some sort of role—are, in the jargon, stakeholders. That is why I support the establishment of a Back-Bench committee of the type mentioned by the noble Lord, Lord Filkin, especially to contribute to the programming of topics for debate. It is a matter of transparency, effectiveness and efficiency. My preference is for more focused committees and, if necessary, a reduction in general debate, if resources go that way. Obviously, it is important to be able to follow through the committee work in debate. I am particularly pleased that we have now a structured post-legislative scrutiny committee on adoption legislation. I am lucky enough to be a member of it. I hope that there may be an opportunity to assess how it worked, when it has finished its work. Stopping to evaluate will be important, given that every Government have a predilection for passing legislation that is never implemented.
In every area of life, one has a responsibility to use one’s skills. It is a matter of responsibility and personal fulfilment, and we must find the best ways in which to do the right thing. I, too, look forward to completing the Goodlad business, to pick up the phrase used by the noble Lord, Lord Filkin.
Lord Luce
My Lords, the noble Lord, Lord Filkin, is to be congratulated on this timely debate, since it is very much the right time to talk about pragmatic improvement to the quality and work of this House. I want to focus on just one proposal, produced by the Leader’s Group, which the noble Lord, Lord Filkin, mentioned—the proposal for a Back-Bench committee, which I think could be appropriately described as a Back-Bench debates committee, to select topics for debate.
We all agree that there is a major priority in this House to play the role of a revising Chamber. The case has been made time and again. However, we are also a forum for debate and inquiry. Opportunities are there to challenge the Executive and debate issues of importance. I was lucky enough to have one on the Government’s policy towards Indian Ocean piracy last week. I am very glad that in the debate last year on working practices, on 11 June, the Leader of the House demonstrated a very open mind on this proposal, saying that it might be possible for Back-Bench Members to pick debates that are sufficiently topical, varied and of general interest, with a possibility of providing a sifting mechanism for that purpose. The choice that we have is between what has been described as “intelligent selection”—a rather Darwinian way in which to express it—as opposed to a lottery system. We are covering balloted debates for Back-Benchers, which take place once every month for 2.5 hours, Questions for Short Debate, which could be on the Floor of the House for up to 90 minutes maximum, or in Grand Committee, taking three or four at a time.
Although our practices are very different, we can learn something from the Commons’ procedures. Its new procedure of a Back-Bench Committee, established in 2010, seems to have worked well in deciding debates for up to 35 full debating days in every Session of Parliament. I think we can learn from that. The proposal is that we should have a committee of something like 12 Peers picked by the different parties and groups, including Cross-Benchers. The committee in this House could be of a smaller number, but whatever number it is, Members would be able to apply to that committee in open procedures. Then the committee would decide in private whether that topic should go forward for debate. This debates committee should obviously develop its own criteria but it is fairly obvious that debates in these circumstances would have to be limited in scope and either topical or long term. The level of importance would have to be decided, perhaps taking into account, for example, the representations of NGOs and voluntary bodies of one kind or another. The committee should be non-partisan.
It is interesting to note that in the House of Lords Business and Minutes of Proceedings of last Monday, 29 October, there were 57 Questions for Short Debate and 35 Motions for the next day for balloted debate. That shows the level of demand for this kind of procedure. The details can of course be refined but we would see improvements in our procedures by doing this. We would make better use of scarce time in the House and it would not necessarily involve substantial expenditure. It would be a good, pragmatic, transparent and coherent way of managing Back-Bench debates. I hope it will be taken seriously.
The Lord Bishop of Ripon and Leeds
My Lords, I am grateful to the noble Lord, Lord Filkin, for his persistence in seeking to achieve the most appropriate means by which this House can pursue its primary purposes. As far as wide, public debate is concerned, an important part of that is the contribution of the Cross-Bench Peers and the Members of these Benches. Among them are those who can bring particular regional concerns to the House as well as their own specialisms. Everything that can be done to give good notice of debates is particularly welcome to those of us who have no London base and whose diaries are based on our regional duties. Equally, there needs to be clarity about the process of legislative scrutiny, such that those with specific contributions are enabled to be present to make them. In this, the weekly business documents have been of considerable help.
I am very grateful for the encouragement given to Members of these Benches to take part widely in the work of this House. A distinguished predecessor of mine, John Moorman, who was Bishop of Ripon in the 1960s, regretted his duty weeks here as a week in London simply for 25 minutes’ work in reading prayers. None of us now feels restricted in that way. Bishops welcome the opportunities to serve on the committees of this House, as for example the right reverend Prelate the Bishop of Durham does on the Parliamentary Commission on Banking Standards and the right reverend Prelate the Bishop of Norwich does on the Communications Select Committee. I greatly value the encouragements of your Lordships to take part in both debates and legislative scrutiny, and the support given to me in that whether or not noble Lords approved of what I was saying.
It remains crucial that we pursue the reform of this House. Surely experience shows that that reform has far more likelihood of success if it is modest and incremental. We need to pursue proposals such as those of the noble Lord, Lord Steel of Aikwood, in following the good example of these Benches in allowing for retirement as well as in tightening the disciplinary procedures of the House to suspend or expel those convicted of criminal acts.
In this respect, I re-emphasise the point made by the noble Lord, Lord Filkin, that there needs to be further attention paid to the size of this House. If political appointments are made to reflect the balance of parties in the House of Commons following each general election then this House will inevitably continue to increase in size. As long ago as the 1830s, the Government froze the number of bishops sitting in this House so that not all diocesan bishops were Members and bishops did not become dominant here. It is time that we followed suit for other groups within the House by allowing retirement, capping the size of the House and self-restraint from the political parties—or, indeed, by all three of these means. There are plenty of ways in which this House can reform its processes for the benefit of its work. I hope the noble Lord the Leader of the House will give an indication that we will move to do just that.
Baroness Seccombe
My Lords, I add my thanks to the noble Lord, Lord Filkin, for securing this debate, giving us the opportunity to look at our role in Parliament. We have just been through an unsettling and miserable period so now is the time for us to take stock and look at our procedures, never forgetting that our role is to scrutinise legislation, sending back to another place any matters this House believes should be looked at again.
I will make two points. First, we have in this House a distinct character and we are different from the other House. We are a part-time House of non elected Peers. We sit at different times from the other place so that those who have continuing work experience and expertise are able to share their knowledge with the House, whether it is in legislation, debate or in the important reports of the Select Committees, to name just a few. The last thing I would wish us to become is a replica of the House of Commons, with a House entirely made up of full-time politicians. We must retain that difference and concentrate on the essential role we play.
Secondly, during my time in your Lordship’s House I have seen an increasing amount of time spent on legislation. For instance, in Committee we have Second Reading speeches with the proposer of an amendment taking up to 15 minutes in opening. That should easily be achieved in five minutes by not going into all the surrounding issues but instead concentrating on the narrower point of the particular amendment. Third Readings also seem to grow longer when the same arguments are made yet again. I thought the rules for Third Reading had recently been tightened and that that stage was only for the purpose of clarifying any remaining uncertainties, improving the drafting and enabling the Government to fulfil undertakings given at earlier stages of the Bill. Somehow we seem to take more and more time, sometimes even a whole day.
Of course, there are many other issues that we could debate but my main concern is that we continue doing the real work of this House: scrutinising legislation. That is why the other place respects this House and did not vote for an elected second Chamber. That is why we are here today.
Lord Campbell-Savours
My Lords, I begin by thanking Nicola Newson in the Library for her excellent paper and the Labour group of Peers for giving up without dissent its political debating slot in favour of a debate on House business. In taking that decision, the group reflected opinion across the House on the need for a carefully introduced programme of modernisation. I also take heart from the minutes of the Procedure Committee of 2 July, where in reply to a question from me, the noble Lord, Lord Strathclyde, said that, given the House’s current uncertainty around Lords reform, he would not seek to take forward any recommendations until there was greater clarity about the future of the House. We now have that greater clarity.
I concentrate my remarks on recommendation 3, which deals with Leader of the House Questions and those paragraphs which relate to what is described as the Back-Bench business committee. Recommendation 3 expresses a real problem: we have no mechanism for raising concerns over House business during sittings of the House. During exchanges between the noble Lord, Lord Barnett, and the Leader of the House on 19 July on the use of Written Ministerial Statements, the noble Lord, Lord Strathclyde, said that the noble Lord, Lord Barnett, knows that the House,
“does not have points of order and that if he needs to raise a question, it has to be on a relevant Motion. It is a gross discourtesy to the Lord Speaker for the noble Lord not to have put down a PNQ … It is also a discourtesy to the House for him to break the rules in this way”.—[Official Report, 19/7/12; col. 344.]
Well, we do not want points of order; we do not want another Commons chamber; we do not have sitting time to allow for debates on procedural wrangles. We need a procedure that allows the House to vent its concerns on House matters. That is the background to recommendation 3.
I turn now to the Goodlad proposals for a Back-Bench business committee, which should be more appropriately described as the Back-Bench debates committee. The problem with these recommendations, of which there are seven, are the words “Back-Bench business committee”, which suggests a Commons-type model for control over Back-Bench business. Not so; the Goodlad proposals would be confined to selecting subjects that are important, timely and of interest to Members and the public. Members would have to make their case for a debate to an open committee comprising 12 members but the committee would not follow closely the Commons model.
For example, where in the Commons there was originally a requirement that the committee’s members be elected without reference to party group proportions, the Goodlad proposals do not even require elections at all. Whereas in the Commons it was proposed that any enhanced committee would ultimately secure greater control over government business, Goodlad refused to go down that route. Whereas the business determined by the Commons committee has precedence over government business, apart from in exceptional circumstances, Goodlad again refused that approach. Finally, the hours of the House given over to Back-Bench business in the Lords are far fewer than in the Commons. It therefore follows that the proposed committee’s influence would be commensurately less.
I have concentrated my remarks on a very narrow but important part of the Goodlad agenda. My concern is to secure for Members greater influence over what we discuss. While recognising the need for the Government to secure their business, we would be a more democratic House if we were to make these small changes proposed in the Goodlad report. I appeal to the noble Lord, Lord Strathclyde, to move by stealth through a piloted process of reform.
Baroness Thomas of Winchester
My Lords, my contribution to this very welcome debate concerns the debating of statutory instruments and, in particular, draft affirmative instruments. I have the honour to chair the Delegated Powers and Regulatory Reform Committee. Soon, I hope that time will be found to debate the committee’s special report on strengthened statutory procedures for the scrutiny of delegated powers. What I am about to say is not explicitly part of that report but is hinted at under the heading “New Opportunities”. I should make it clear that I am speaking entirely on my own behalf and not as chairman of that committee.
I start from the premise that the scrutiny and debating of statutory instruments by Parliament is extremely important and that the more often Governments of all persuasions use secondary legislation for major changes to the law, the more important is Parliament’s role. Yet there is general frustration about the House’s role because, as we all know, SIs cannot be amended so there is a take-it-or-leave-it mentality built into the whole debate. That frustration is manifest in the increasing number of Motions to regret, or even to deplore, which have been tabled in recent months.
I do not disagree with the Goodlad suggestion on voting, but my proposition would be less drastic. I start with the word “draft”. In the outside world, draft documents can be changed before being finalised. Yet in the world of SIs, “draft” before the words “affirmative instrument” means only that the instrument has to come before Parliament to be agreed before it comes into effect, unlike negative instruments. What I believe the House would welcome in the case, say, of a major change in government policy is that the first appearance of the SI would be a genuine draft—not set in stone at that preliminary stage. Perhaps it could be called a consultative draft. It would then be debated in the Chamber and Peers could table and vote on advisory amendments, or even vote it down altogether, knowing that they had voted against only a draft document. If the Government lost such a vote, they would know the strength of feeling in the House. The Minister might well decide to change the final version rather than risk it being lost.
I well understand that in some cases, and I think in many, the Government genuinely consult MPs and Peers as well as outside bodies about the detail of certain important and potentially contentious instruments, such as the one bringing in the PIP criteria in what became the Welfare Reform Act. This is extremely welcome but it is done behind closed doors. There is much important detail in this suggestion that there is no time in this debate to explore, such as the parliamentary timetable and the impact on procedures in the Commons. However, I suggest it as a forerunner to the debate that I hope we shall soon have on the report I mentioned about the enhanced scrutiny procedures of SIs, which are laid down in various Acts.
Lord Bichard
My Lords, during the past week I have been receiving up to 300 e-mails a day as a result of questions that I asked during a Select Committee being represented as my views on pensioners and work. They are not my views but I have to tell the noble Baroness, Lady Hamwee, that not everyone holds this House in as high regard as she has suggested. I have been told that we are out of touch, elitist, out of date, self-serving and irrelevant—and those are just some of the comments that I can share with your Lordships today. Many others clearly believe that having seen off one attack, we are going to see off every attack and any attempt to change the way in which we do things. Those are the reasons why I believe that this is absolutely the time to show that we are determined to make this place more effective in how it carries out its responsibilities and more relevant to the issues that people are grappling with in their everyday lives.
In a fast-moving world—I am sorry about the cliché—we need stable institutions such as this, but even stable institutions have to embrace change. There has of course been some change but not, I would suggest, sufficient to address adequately, as others have said, the recommendations of the Leader’s Group on working practices or, indeed, the suggestions that have been made by the noble Lord, Lord Steel, or by the noble Baroness, Lady Hayman, in previous debates. We do not yet have a legislative standards committee, so the need for new legislation remains insufficiently scrutinised. We do not yet have sufficient post-legislative scrutiny to take a hard look at what has happened as a result of previous legislation, in spite of the fact that we know that much of that legislation has not even been implemented. As a result of just those two issues, we have a crisis. We have unnecessary, poorly drafted legislation that is often not implemented and rarely properly evaluated. This House could play a really important part in resolving that crisis.
As others have said, neither do we have a fair and transparent process for deciding what debates take place in the House, or even which Select Committees we decide to establish. We have a House which is too large and we have not found a way of dealing with that issue. I could go on. Your Lordships will have your own suggestions and other priorities but I would like to make a suggestion. We should reconvene the Leader’s Group and commission a full report on the various proposals on the table, now that the reform Bill has been lost. I also suggest that that group reports back to this House so that we can have a proper debate on all these proposals, which is something that we never managed to do following the Goodlad report.
Baroness Wheatcroft
My Lords, I am delighted to have the opportunity to speak after the noble Lord, Lord Bichard. I hope that I can cheer him up a bit because some of the people who I have listened to are amazed at what goes on here—but in a good way. A fortnight ago, there was a debate in this House about excellence in education and, among others, we heard from a former president of the Royal Academy of Engineering, a former Chief Inspector of Schools, a businessman whose generosity is helping to create a string of new academies, the current master of Trinity College, Cambridge, and a theatrical impresario. That does not sound irrelevant to me. Some things that go on here are slightly arcane. I treasure the moment when it was explained to me when it would be okay to sit on the knee of a bishop. I have not done it yet—perhaps I should take the opportunity now.
I support my noble friend Lady Seccombe in saying that the membership of this House creates an extraordinary institution that we should try to preserve. However, no institution is perfect and this one certainly has scope for improvement. We need to get more topical debates on to the Floor of the House and faster, while they are still topical. We also need to ensure, when our committees do so much wonderful work, conducting reports into so many different and important issues—everything from child trafficking to auditing—that their reports are debated on the Floor of this House much sooner, while they are still relevant and while the outside world is going to be interested in what we have to say.
That must mean clearing some other stuff out of the main Chamber. We have already heard the proposals for doing that by making far more use of Grand Committee in the Moses Room. That must make sense for non-controversial or moderately specialist legislation. Too often we see legislation going through in this Chamber with a handful of people involved in the debate. They are the right handful of people and they are really interested in what is going on, but for this entire Chamber to be used for that purpose seems to be a wasted opportunity when we could bring more topical debate into the Chamber. Quite how we decide what debates should be debated in here I am not sure; there is already a suggestion in the Goodlad report and there may be others. If we had more time, though, we could get more done here.
There are other means of dealing with legislation. I sat on a special Public Bill Committee, dealing with a proposal that had come from the Law Commission. It was a relatively non-controversial proposal—not a debate that drew great crowds, it must be said, but it was quite important. It was to do with the way that trustees can deal with the funds that they have and the division between preserving capital and generating income. We took expert evidence and got the Bill through remarkably quickly, and there must be scope for doing more of that. There is room to improve our processes, speed up what we do and get more topical debates on to the Floor, but do not let us change the basics of what remains a unique and very effective institution.
Lord Haskel
My Lords, I agree entirely with my noble friend’s opening remarks about how we can do better. Indeed, I also think that we must look beyond our own internal arrangements. Fortunately, the constitution unit at University College has turned its mind to this, and I am grateful to it for its briefing.
I agree with other noble Lords that the key to this is to get a grip on our numbers. We have to cap the size of the House and to have a timetable for a gradual reduction in size. How do we do that? We do it in two parts, one requiring legislation and one not. Without legislation, the Government could announce a numbers cap and a reduction timetable, reduction being achieved using the same procedure as we used when the hereditaries left. At the same time the Government would introduce a formula for sharing out new appointments between the parties and the Cross-Benchers, all of this to be managed by the House of Lords Appointments Commission. It would call on parties for nominees as and when vacancies arose. Yes, that would mean that the Prime Minister and party leaders had to give up some of their powers of patronage. The Appointments Commission would be responsible for ensuring not only political balance in the House but that there was regional, gender, professional and minority balance too.
All that could be done without legislation. However, legislation would be required to end the hereditary by-elections and to limit future appointments to the House to, say, 15 years with a possible additional five. Legislation would confirm the right of Peers to retire. Legislation would also be required to remove those convicted of serious offences—a reform long overdue.
Controlling our numbers would not only help to inform the other changes that noble Lords have been discussing but would refresh the House in an orderly way. All this, though, is not enough because it looks inwards and serves ourselves. We are not here to serve ourselves; as my noble friend Lord Filkin pointed out, we are here to serve the public, and surely a crucial part of doing that, especially for an unelected House, is to inform, to explain and to be transparent, as the Government are trying to be.
Who knows that the third week in November is Parliament Week? How many of us are going to participate? Yes, 40 of us are going to visit schools on that Friday, but is that enough? Surely, in a modern unelected House, every noble Lord has to be involved in explaining and informing.
My noble friend is right to ask how we can do better. The answer lies not only in internal change but also in external change. For your Lordships’ House, the two must go hand in hand.
Baroness Tyler of Enfield
My Lords, I congratulate the noble Lord, Lord Filkin, on securing this debate and on all his efforts to maintain momentum on the much needed modernisation of the working practices of your Lordships’ House. I speak as a relative newcomer to this House and, after just under two years, hope to add the perspective of someone who is still able to view its often rather arcane and mysterious workings through fresh eyes.
It was clear to me that it is important to view the recommendations in the Goodlad report as a coherent package that needs to be addressed in the round. I was therefore encouraged when the Leader of the House in our debate last year said:
“I … intend to ensure that a large number of the group’s recommendations are considered promptly by the relevant committees of the House so that the House may take a view on them at the earliest opportunity”.—[Official Report, 27/06/11; col. 1552.]
As we have heard today, some of those recommendations have been addressed and indeed accepted by the House, and I welcome that, but to me the response has felt rather piecemeal. To the best of my calculations, and I am more than happy to be corrected on this point, roughly half of the recommendations have yet to be addressed. One good example of that is what I felt were the very good recommendations for pre-legislative scrutiny and post-legislative scrutiny and the establishment of a legislative standards committee, which I strongly support as part of the package. In my view, a legislative standards committee would provide a powerful incentive to improve the quality of legislation coming forward and ensure that legislation was being used for the right purposes and was capable of being implemented.
My almost 20 years as a civil servant in Whitehall taught me that hurriedly drawn-up legislation often backfires, and nothing has more forcibly underlined that to me than the many hours I spent with others debating all stages of the Health and Social Care Act. It was the first Bill that I had scrutinised in depth, and something of a baptism of fire. I am conscious that the Bill left this House in a very different shape from that in which it came in, which in my view is very much to be welcomed, but I am also conscious that after the myriad amendments that were passed there was no proper opportunity to look at it in the round and ask whether it all hung together sensibly. I have to ask myself whether that is a sensible, let alone optimal, way to make the laws of the land.
I also strongly support the proposal for a Back-Bench debates committee to help with the choice and scheduling of debates. I hope that it would be able to use criteria such as topicality, interest to the wider public, variety, coverage of key subject areas and the opening up of the process to much-needed transparency.
I welcome the setting up of two additional ad hoc Select Committees and have the privilege to sit on the new Select Committee on Public Service and Demographic Change. This is an excellent example of taking a longer-term view of some very cross-cutting issues; indeed, I can hardly think of a more pressing social challenge facing this country. We should have more such committees to allow others to contribute their expertise, and perhaps fewer of some of our more traditional types of business.
There are many other issues that I would have liked to have talked about, not least how the House’s highly unpredictable nature impacts on part-time Peers, colleagues like me from all Benches, who are still active in their professional and external lives—with one foot in the outside world, you could say—in a way that helps to ensure that the much vaunted virtue of this House, expertise, is indeed up to date.
I shall conclude with a suggestion that I suspect some will find rather barmy. Most modern-day institutions have regular satisfaction surveys to gauge the views of their members or their staff. We have surveys, but they are generally to do with the satisfaction or otherwise with the services and facilities of this House. I would like to see a survey sent to all Members asking how satisfied they are with the way that business is currently conducted and what else could be done to make better use of their skills and expertise. I recognise that this would be quite an innovation but I ask my noble friend the Leader of the House to give it serious consideration. As an incentive, should one be needed, I am more than happy to offer my services in suggesting what questions we should be asking.
Lord Maginnis of Drumglass
My Lords, I congratulate the noble Lord, Lord Filkin, on initiating this debate, although one has to wonder whether the overall system of government that I found when I first came to Parliament almost 30 years ago has been damaged beyond repair. Our Chamber cannot look at itself in isolation. I was introduced to a system where Ministers were responsible for departmental outcomes, and when a Minister got it wrong, a resignation was considered necessary and appropriate. Members of Parliament, by and large, had come from business, the professions, the mines, the factories or the armed services and had previously done a real job, developing the skills and experience to which the noble Lord, Lord Filkin, referred, and which would seem essential if one is to act in the nation’s interest.
Parliament functioned on the basis that the law of the land was based on something that we now seem unwilling to acknowledge and articulate: moral values and common law. Perhaps I am a wimp for daring to use such unsophisticated language, but my sole comfort is that it is here in this Chamber that I can still see the remnants of those values. We have made one fundamental error in the fairly recent past, and that was when we created a third legislature—the expensive and unaccountable Supreme Court. The law of the land has, until recently, always belonged to the people. The people have elected their legislators to the Commons, and this Chamber has utilised its skill and experience to fine-tune and to be the peoples’ final arbiter through the Law Lords.
Now we have, like most aspects of government, abjectly surrendered—some probably call it delegated—every aspect of responsibility to unidentifiable, unanswerable and unaccountable individuals cocooned in some detached monastic environment. That is why Question Time is no longer answer time but has deteriorated to become a fairly futile discussion interlude. Ministers may try to do their best, but they are disadvantaged simply because they are no longer in control. We saw it here last week during the Statement on the Gary McKinnon extradition case. That 10-year injustice has not been resolved. Justice has again been put on the “long finger” by a Home Secretary who has effectively said, “I will delegate the matter, without time considerations, to the courts”. Hence, a once 35 year-old with autism spectrum disorder—now 45 years old—is tossed in life’s dustbin for, what, perhaps another 10 years, and that is justice?
Today, I shall not take further time of the House to ask whether the United Kingdom has lost or is losing its way in its relationships with the United Nations, NATO, the European Union and so on. Suffice it to say that I think that the UK has abdicated, or is incrementally abdicating, its authority. If the Government cannot even implement a rail franchise, and it is obvious that they do not know where that went belly up, then the noble Lord, Lord Filkin, belatedly or otherwise, has posed the right question here today. Am I wrong when I perceive Cabinet to be a caucus and government increasingly to be delegated to and—effectively or otherwise—run by proxy bodies? In the past 20 years I have seen deterioration in parliamentary competence and responsibility, and I am grateful to the noble Lord, Lord Filkin, that today he has sought to alert us to a better possibility which would mean that my next 25 years here could be made more rewarding.
Lord Higgins
My Lords, I join all those who have congratulated the noble Lord, Lord Filkin, on initiating this debate. I am very glad that the Leader of the House is to reply since much of the debate has centred on the report of the working group on which he took the initiative in setting up. I also congratulate the House of Lords Library which has produced an outstandingly good brief. Appendix 1 provides the agenda the noble Lord opposite referred to a moment or two ago and gives an indication of what needed to be done, how much has been done and how much still remains to be done.
I find it quite extraordinary that in the summary by the Library, in the debate today and in the Goodlad report no one refers to what has been the most obnoxious and fundamental change that has taken place in our proceedings in relation to the scrutiny of legislation by Parliament: the programming of debates in another place. This is in no sense a criticism of another place. The reality is that it has been prevented from working as it should by successive Governments, first Mr Blair’s and, regrettably, now the present Government, despite assurances that the incoming Government would not programme legislation in another place. We have almost ceased to be a revising Chamber. In many ways, we have become the primary legislative Chamber. On top of all that, we find that when we have passed amendments, they are then programmed in another place so that the time allocated in the Commons for discussion of our amendments, on which we had important, complex legal arguments a short time earlier, has been less than the time we took going through the Division Lobbies in passing those amendments. This has to stop. I hope that my noble friend the Leader of the House will carry out urgent discussions with the new leader in another place and also, if necessary, raise the matter in Cabinet because we ought not to go on in this way. It is an indication of how much we are doing that should be done by the other place that we pass very often many amendments, all of which are immediately accepted by the other place. At the same time, there are one or two controversial issues for which time is not allowed for proper debate in the light of the discussions which have taken place in this House. Much more important than many other issues that we have discussed is that the balance between the two Houses should be restored.
In the little time I have left, I shall say something about the size of the House. It is absolutely clear that the proposal that the membership of this House should reflect the result of the previous election is bound over time to lead to a bigger and bigger House. It was a mistake to agree to that in, I believe, the coalition agreement and it should stop now. We cannot go on having more and more Members.
There have been many proposals on how we should reduce the size of the House as it now stands, including age, length of service, party selection, votes in the House and so on. Proposals about the usual problem of removing the people who do not come does not make any difference to the number of people who attend. That is an intrinsic problem. My feeling is that there are a number of Peers who would be prepared to retire but that it requires a degree of incentive. The proposal that perhaps by way of incentive one might offer the amount by the individual Member claimed as expenses in a previous year, excluding travel allowances, might provide a reasonable and sensible sort of an incentive. An inquiry as to what extent that might produce a number of people who might be prepared to retire, or might think it appropriate to retire, might solve this problem, which otherwise will be very difficult and troublesome to resolve in any other way. I am out of time, although I have dozens of points to make which will have to wait for another occasion.
Lord Hughes of Woodside
My Lords, I congratulate my noble friend Lord Filkin. Perhaps I may pick up on one simple point made by the noble Lord, Lord Higgins. I share his view about the timetabling of Bills. Of course, I have to remind him that that did not start in the Blair years. As far as I know, the timetabling of government Bills was available in the 1970s, although it was called the guillotine Motion at that time. The guillotine Motion was massaged to become a timetabling Motion, which was a much more respectable way to put it. But that is neither here nor there.
I should like to refer to a few matters as regards what we should do in this House. First, although the House of Lords voted down, by 233 votes to 169 votes the proposition that the Lord Speaker should take over the role of the Leader of House in terms of arbitrating at Question Time, I believe that that is worth looking at again. At the time, some people said that that would mean the end of self-regulation. I do not think that that is the case. If the Lord Speaker were to take over those responsibilities, it would require even more discipline from Members to make sure that her decision was accepted swiftly, promptly and with grace.
Secondly, the experiment carried out by the previous Government to have a dedicated, say monthly, Question Time for three Questions to be put to a particular Minister of a department was a valuable exercise. In terms of accountability and keeping the House and the public informed, it is something which we should pursue. I hope that the Leader of the House will regard that as a modest but nevertheless important part of things that we might do.
The noble Lord, Lord Filkin, referred to the way in which legislation is rushed and comes to this House—in effect, to Parliament—without proper scrutiny. In the old days, most legislation was preceded by a White Paper. People said that that was not enough and that there should be more consultation; so we had the Green Paper, which was fine. I do not know what has happened to that process because it seems to have disappeared entirely.
One of the most serious problems that we face in Parliament is that problems require instant solutions. All Governments are concerned about the little items at the end of the news, which may say, “Problem solved; problem solved”. But if it says, “Problem not solved”, they worry that that will bring disgrace on the Government. That will not do. The media have a lot of responsibility for this.
Finally, inevitably, the question has arisen about the size of the House. Those who think that there will be an incremental change are like the ostriches with their heads in the sand. There is no possibility of agreement on major reform and I do not think that any political group in this House will give up its share of the House. My noble friend Lord Haskel suggested that legislation would be necessary. That may be so but if we start off on the basis of trying to get a regional balance, a national balance, an ethnic balance and so on, it will be an unending process. A lot of ideas have come forward in this short debate. I end on perhaps a novel note regarding the size of the House. Several Members have said that the House is too large. It struck me that maybe the House is not too large: perhaps we simply have too many active Members.
Lord Kirkwood of Kirkhope
My Lords, it is a pleasure to follow the noble Lord, Lord Hughes of Woodside. I enjoyed his speech. I agree with him on two things. Certainly, the role and functions that we invite the Lord Speaker to oversee and moderate need urgent reconsideration. I do not have time to develop that point but I believe that the Lord Speaker, whoever it may be—it is an elected position for which we can all vote—should have the overriding responsibility to protect the institutional reputation of this House because in my view no one else holds that position at the moment. No one else exclusively looks after the interests of the wider concept of the House of Lords and its Members. The Chairman of Committees and the Leader of the House have other overriding priorities. That is something we need to address.
I am sorry that the noble Lord, Lord Bichard, has just left as I was about to say something nice about him. I do not believe what I read about him in the papers. He is correct that we should take this opportunity to make a suggestion to the Leader of the House. It may seem quite soon to do so given the recent work carried out by the Leader’s Group. I commend those Members who performed that extremely valuable service for the House. People forget that we now have a planning date. It might not hold because politics is never certain but we have until May 2015. After that, things will change as we enter a new Parliament. We should use that time sensibly to plan what we want to happen in the new Parliament when it starts in 2015. The vexed question of elections is off the agenda for that period.
I pick up a point made by the noble Lord, Lord Campbell-Savours, who referred to the importance of piloting change. I am an enthusiast for change and I think that there is a majority for change. However, as the right reverend Prelate the Bishop of Ripon and Leeds rightly said, we want to make sure that it is incremental. I think that we should pilot it. I absolutely agree with him that to give comfort to those who are nervous—one or two colleagues have made perfectly valid and powerful speeches about hastening slowly—we should adopt as a matter of course piloting of any change that we introduce into this place. That would give comfort to some and would mean that we could try things and if they did not work we could revert to our previous practices. This is a very important debate and a very important time. We must not waste the next two years.
I have a suggestion for the usual channels, which have more influence in this area than they often imagine. As a Back-Bencher, I think that we need to try to open up the usual channels and make them a little bit more accessible, as someone said earlier. After my participation in the most recent major piece of legislation in which I have been involved, the Welfare Reform Bill, it occurred to me that three or four of the active participants in that process could have sat down with both sets of Whips and held a debriefing on our experience of the legislation. The seminars promoted by the Minister were very valuable. The Committee stage of the Bill was held upstairs, which I thought was extremely good although it had been a controversial question. A lot of the Commons clauses had not been debated when they arrived in this House and the use of financial privilege as a way of rejecting House of Lords amendments was unconscionable. Earlier, we heard that we needed to look at secondary legislation again because we cannot amend it. It needs to be more flexible. Therefore, perhaps we should have a sweeping-up process so that we can share experience on that.
As chairman of the Information Committee I believe that we need to make more use of information and communications technology in order to help our processes and improve the service offered to Members of this House. There are advantages and cost savings to be made in that direction. I hope that the Leader will bear that in mind as well.
Lord Ramsbotham
My Lords, like other noble Lords, I thank and congratulate the noble Lord, Lord Filkin, on obtaining this important debate. I also thank Nicola Newson for her outstanding Library report.
I shall mention two experiences this year and draw observations from them. The first echoes what the noble Lord, Lord Higgins, said about the fate of legislation that has gone from this House to the other. I refer to the poorly drafted Legal Aid, Sentencing and Rehabilitation of Offenders Bill, which left the Ministry of Justice under that title and emerged from No. 10 into this House as the Legal Aid, Sentencing and Punishment of Offenders Bill. We spent hours and hours improving that Act, using the skill and expertise of this House, including that of people such as my noble and learned friend Lord Woolf. We sent a string of amendments down to the other place, which almost invariably were rejected on the ground that money was involved. If the other House had paid proper attention and scrutinised the amendments, it would have discovered that they did not involve spending money but saving money. Because the other House did not give them proper consideration, I felt that the skills and experience of this House were being misused by Parliament. Therefore, my first hope is that some way will be found of putting that right, so that the skills and expertise really can be put to better use.
My second hope relates to an inquiry that I am currently conducting into the death, under restraint, of a deportee in an aircraft at Heathrow when he was under forced removal from this country. During the course of this inquiry, I have discovered a vast number of practices in the UK Border Agency that could be put right to prevent this sort of thing. Earlier this year the Home Affairs Select Committee in the other place conducted an inquiry into the governance of enforced removals, and I discovered that none of the things that we have found that could have been put right were included in its report. I have been trying now to find some way of getting the committee to accept the recommendations of my inquiry that refer to the use of statutory bodies to help the UK Border Agency. It struck me that one of the most successful committees in this House is the Joint Committee on Human Rights, which was formed in 2000 by the Liaison Committee. I wonder whether, to make better use of the skills and expertise in this House, it is not worth examining whether joint committees on other subjects such as justice should be created, bearing in mind all the expertise that is here. I put that forward as a consideration for the Leader of the House to take on.
Lord Butler of Brockwell
My Lords, I welcome the Motion’s implication that those unexpectedly reprieved have a special duty to make good use of the extra lifespan allocated to them. I warmly congratulate the noble Lord, Lord Filkin, on the superb way in which he introduced this debate.
In the short time available to me, I want to concentrate on the recommendations of the Leader’s Group on ways designed to improved the quality of legislation presented to Parliament. I am a member of the Better Government Initiative, which, before the last election produced a report entitled, Good Government. On 12 November, the BGI is to produce a report on how the Government have performed in relation to the recommendations in that earlier report. As might be expected, it is a mixed picture; but even the best friends of the Government would have to admit that many of their policies and too much of their legislation have been introduced in haste and are being repented of at leisure, and not only by the Government themselves.
As others have said, the instrument that the Leader’s Group recommended to put pressure on the Executive to improve the legislation presented to Parliament was a legislative standards committee. The role that it would perform would be to test each Bill introduced by the Government by whether they had explained the purpose of, and necessity for, the Bill presented, by whether the Government had consulted those who would be affected by the Bill and who would have to implement it, and by whether the Government had taken account of their advice. At the end of the previous debate, the noble Baroness, Lady Henig, on this very issue, made a strong point about the police Bill, now an Act, recently passed by Parliament. Legislation would be judged by whether there had been pre-legislative scrutiny—and if not, why not?
As the noble Lord, Lord Goodlad, said, the Liaison Committee, which is composed of Select Committee chairmen in the House of Commons, has thought sufficiently well of this proposal to ask the Commons Political and Constitutional Reform Committee to investigate and report on it. The Better Government Initiative has given evidence to that committee, as has the Hansard Society and other supporters of the proposal. We are hopeful that the committee will report favourably on it.
The Leader of the House is, understandably, waiting to see what the Commons makes of this proposal before putting it to your Lordships. My question to the Leader today is: if the House of Commons Committee supports the proposal of the Leader’s Group will he look favourably on its introduction in your Lordships’ House? I suggest that it would be quixotic not to do so. We devote as many as three Select Committees to scrutinising in one way or another the preparation of statutory instruments. It is odd that we do not put similar effort into pressing the Government to prepare legislation properly. From the contributions to this debate today, I am confident that this recommendation of the Leader’s Group would have the support of this House.
Lord Faulks
My Lords, I, too, congratulate the noble Lord, Lord Filkin.
On arrival in your Lordships’ House two years ago, I was given a mission statement by the Clerk of the Parliaments. Although I did not feel that he was altogether happy with the expression “mission statement”, the contents of the document were, as you would expect, clear and cogent. The statement and the helpful talks about the way in which the House of Lords worked helped me and a number of other new Members to get to grips with the potentially rather mystifying ways in which your Lordships’ House proceeds. One thing that struck me particularly about those procedures was their essential fairness to all Peers in the sense that any Peer of any party, or none, could become involved in any issue and there was not the customary crush of seniority which besets so many institutions.
That brings me to one of the three short points that I should like to make. Although I understand well why the suggestions for a Back-Bench committee have been well received—I have been greatly reassured by some of the comments during the debate this afternoon—I have some slight reservations in the sense that those who may not be on the committee, or who may not have the ear of the committee, may feel the danger that they are being excluded, even if it is only a perception. Those who are not particularly keen on being organised may feel a little unease about that. I hope that those fears can be allayed in due course.
My second point relates to Third Reading, and here I very much echo what my noble friend Lady Seccombe said. As a lawyer, of course, I look to the rules and the practice deviates very considerably from the Companion in terms of Third Reading. It is noticeable that speeches are lengthy and if one wishes to respond to a speech that has gone on for 10 minutes it is difficult to do that in one minute, so speeches proliferate. The result is that some quite valuable votes do not get taken, and there is some arbitrariness about the ones that are taken. I hope that there can be a self-denying ordinance about this, if nothing else.
I hope that my third and final point will not be regarded as one of special pleading. It relates to expertise. It is axiomatic that your Lordships’ House is a House of experts with a pretty thick veneer of expertise. It struck me how genuinely diverse the House is; there is no such thing as a typical Peer. However I put in a plea for current expertise. The accumulation of wisdom is extremely important, but there is something to be said for being able to report from the front. As a barrister, I am particularly aware of the many distinguished lawyers who decorate this House and who keep up to date with relevant developments. I regret that we will no longer have in the House former Law Lords and former Supreme Court judges. Those of us still in practice are aware of the everyday issues and can bring something valuable to debates. I, as a veteran, like the noble Lord, Lord Ramsbotham, of the LASPO debates, would sometimes have welcomed others who were constantly dealing with the sort of issues that your Lordships’ House had to wrestle with in that very long and difficult Bill. I hope that whatever changes are made in your Lordships’ House, the practices of the House will enable those of us who wish to maintain current practice but nevertheless contribute to debates to do so.
Lord Judd
My Lords, like others, I put on record my appreciation to my noble friend Lord Filkin for having introduced this debate. He and others who pursue these matters with so much diligence seem to be like dedicated engineers who are determined to keep a vintage car functioning and performing well.
I am sure that I am not alone in finding it unsatisfactory to be trying to weigh up our effectiveness in the absence of a constitutional settlement that makes it absolutely clear if and why we need a second Chamber—and, if we do, what its purpose is. We are toiling in the engine room, but where is the person on the bridge who is deciding where we ought to be going with our constitution?
Against this background, there are issues on which we ought to concentrate. The first is that I am convinced—again, I am sure that I am not alone in this—that what makes up a society like that of the United Kingdom is the matrix, the interplay of different groups, interests and activities that enables a nation to succeed or fail. This House must be representative of the matrix, otherwise it is nonsense. If it is just another place that numerically represents a certain proportion of the electorate by copying the first Chamber, it is an irrelevance. We must bring a different element into parliamentary procedures. If we foster this, it will do a great deal to restore public confidence in the relevance of politics to the lives of ordinary people. I am certain that a very large number of ordinary people throughout society see politics as a closed game, played by a closed group of full-time politicians who have very little involvement in the realities of life. So the matrix is important.
The second thing to remember is that it is the quality of the advice that we offer to the Commons, and the quality of consideration that we bring to wider debates that we initiate about issues facing the nation, that matter. Here, the Select Committees are crucial. I never understand why we do not give more prominence in the main business time of the House to debates and deliberations on what the Select Committees put forward.
My other point is that in its relevance to society as a whole, pre-legislative scrutiny is very important. We can provide a very good way of ensuring that the wider public get drawn in to consideration of legislation that is put before us, before we get caught up in the detail of finalising it. I was very interested by what the noble Lord, Lord Higgins, said. In my first, formative years in the House, one thing that I came to appreciate tremendously was that there was no automatic majority; you had to work at generating and ensuring one. That is good for the quality of consideration, and it also brings an emphasis that is different from what happens in the other place. If we just ape the other place and follow all its procedures, and if our priority is to expedite business, as distinct from ensuring the quality and depth of consideration that is desperately needed in our national affairs, we will fail. I am very grateful to my noble friend for initiating the debate on this tremendously important issue.
Baroness Hayman
My Lords, I join others in congratulating and thanking the noble Lord, Lord Filkin, for introducing this debate. The noble Lord, Lord Judd, referred to him as a dedicated engineer. I was grateful for that, because it is much better than the phrase I was going to use, which was “terrier-like”, to describe his devotion to improving the working practices and the quality of the work that is done in your Lordships’ House. That of course is part of a wider, bicameral agenda to strengthen Parliament—an agenda that I believe is extraordinarily important.
It may be that those of us in the two Houses want to put behind us everything that went wrong in the disaster of the parliamentary expenses scandal. However, it permeated public consciousness very deeply. I felt at the time, and still feel, that in order to regain respect and trust, we need not only to put our financial houses in order—which we have done—but to strengthen Parliament, and to do our job better so that it serves the public better. In that way will we regain respect. That is why I agree with others who have said today that this is a very important time to take on this particular agenda. It is an opportune time because we now have a gap, a moratorium, on the big bang proposals for election to your Lordships’ House. There is no longer the argument that we will put everything right when we have the big, all-singing, all-dancing Bill. We are not going to have that. It is incumbent upon us therefore to take our fate into our own hands in the ways that we can and to make things better.
Luckily, there have been very good speeches already about three proposals that I should like to endorse, so I can do so very briefly. One is about using the device of a Back-Bench debate committee to inject more topicality into the agenda of the House. It is a real weakness when an issue is on the front pages and everyone is talking about it in their offices or the pub or wherever but we are not talking about it in Parliament. We could do better on that.
Given the volume of secondary legislation, we need to look at how we have not a take-it-or-leave-it situation but an opportunity to influence secondary legislation better. The proposals in the Leader’s Group and those of the noble Baroness, Lady Thomas of Winchester, were extremely interesting. The Legislative Standards Committee, to which the noble Lord, Lord Butler, referred, is tremendously important. I put in a plea for it to be bicameral. We have to improve the performance of Parliament as a whole, as others have said. We do not want to ape the lower House—we want to be complementary to it—but we do not want to pretend that we are not part of the same institution doing the same job. That is tremendously important.
On the other area of taking control of our destiny, I shall end with a couple of sentences about issues of composition. I believe there is a threat to this House—not in being too large but in having too many active Members. I became a grandmother this week. This has made me think about a lot of things, including the ageing process. It is tremendously important that in this House we have a balance, a range, and that that range does not become top-heavy with too many of us who are too elderly and too detached from the current experience that the noble Lord, Lord Faulks, spoke about.
We have to look seriously at the difficult issues of reducing the size of the House. The proposals in the coalition document, as my questions show, are phrased about representing the proportionality of those who voted in the last election. However, it is possible to produce proportionality and fairness when reducing as well as increasing the size of the House.
Lord Cormack
My Lords, I am delighted to add my congratulations to the noble Lord, Lord Filkin, and to congratulate the new grandmother. I speak as a grandfather.
If we had more time for the debate we could develop these points at greater length. I want to take up the point, however, made by the noble Baroness, Lady Hayman. The prime purpose of Parliament is to hold the Executive to account, and we are failing as a Parliament adequately to do that. Indeed, there is time for another Dunning’s motion, moved in the other place more than 200 years ago. Then it was:
“The power of the Crown has increased, is increasing, and ought to be diminished”.
Today it is the power of the Executive that has increased, is increasing and ought to be diminished.
One of the things that we could profitably do is to co-operate more sensibly with the other place. The Executive consists of the Ministers of the Crown. We have some admirable ones in this place and they serve this House and the country very well indeed. But, understandably, the bulk of the Cabinet comes from another place. I am not one of those who believe that Ministers should come to this House from the other place and speak from this Dispatch Box. That would be wrong. But once a month a Cabinet Minister should come to the Moses Room and a group of Members, using the expertise and breadth of experience that is represented on these Benches, should question that Minister. They could make suggestions that are good for the country as a whole.
My noble friend Lord Higgins talked about the programming of Motions. Of course, part of holding a Government to account is improving the legislative proposals they place before Parliament. We are light years ahead of the other place in how we do that, but we could still do better. I agree that pre-legislative scrutiny should be automatic. Post-legislative is arguably even more important, and we should devote proper attention to it. I believe that an admirable opportunity has been presented to us by the reprieve, to which the noble Lord, Lord Butler, amusingly referred, to improve our act and to do that in co-operation with another place. That is because together we are the two Houses of Parliament. In a country where the Executive are drawn from the legislature, it is more difficult than in a country where there is a separation of powers. Inevitably one sees things differently from the Opposition Benches than from the Government Benches; I have experienced that in the other place and, to some degree, in here. But if we could do away with the great gulf between the two Houses, we would be serving Parliament.
One of the things that has struck me over the past two years, and particularly during recent debates, is that far too few people in the other place understand what this House is all about, and far too few people in this House who have not served down at the other end of the Corridor fully appreciate the pressures on Members at that end. So I hope that we could have more Joint Committees and a monthly session in the Moses Room. I hope that we can do other things that will bring Parliament together for the benefit of the people because that, after all, is our fundamental role and task.
Baroness McIntosh of Hudnall
My Lords, it is quite rare to participate in a debate and find that you agree with practically everything that everyone has said. That being the case, it is tempting to do the generous thing and sit down immediately, but I am not going to do that. I am sorry. I added my name to the list of speakers mainly in order to support my noble friend Lord Filkin. He has now been compared to a terrier and to an engineer, which suggests a sort of particularly enthusiastic Jack Russell, digging away furiously. However, I think his approach to these issues is a little more sophisticated than that suggests and I want to express my personal gratitude to him for the huge amount of time and energy he has put into keeping alive the issue of how we improve our working practices. He has set out our agenda today with admirable clarity and so much better than I could that I certainly do not intend to try to emulate that.
I have had the privilege over a decade or so of being a Member of this House of looking at its work from a number of different standpoints. I have been a member of several Select Committees, of domestic committees, of pre-legislative scrutiny committees and of Private Bill Committees. I am a Deputy Speaker and I hope that I have participated to the best of my ability in the Chamber in terms of Questions and debates. What I see is a House that is, in depth, formidably strong. It is particularly so, as has been said by many other speakers, in the cross-party work that goes on in our widely respected Select Committees. However, at present there are two issues. The first is that there is not enough of this work to satisfy the ambitions of Members to participate and to make proper use of the expertise that is available. Secondly, this kind of work is woefully underreported, which allows a false impression to perpetuate of what Members of this House actually do. For example, that much-used website theyworkforyou.com completely ignores all the work in committee and only gives as metrics the appearances that noble Lords make in the Chamber. You can literally stand up and say, “My Lords”, sit down again—because you do not get in on a Question for example—and that gets recorded as participation in a debate. That is a bit bonkers. It unfortunately gives a very misleading impression. We need to address this and many other issues.
I share the disappointment expressed by a number of other noble Lords about why so much of the admirable Goodlad report, which did just that and is nearly two years old, has yet to be brought forward to the whole House. I hope we can hear from the Leader of the House, whose excellent initiative it was, whether he intends to give us a chance to talk about some of the issues in the report, now that the issue of wholesale reform has, for the moment, been set aside.
As the noble Baroness, Lady Hayman, said, the fact that it has been set aside is both a threat and an opportunity. We can do something to reform ourselves using our own mechanisms and without legislation. If we do not, the pressures that are built into our current system will inevitably result in further damage to our effectiveness and reputation. We have the opportunity to be active and creative about our future, and to look at refining our contribution to political life, not only in the interests of Parliament but in the interests of the nation as a whole. We are repeatedly reminded that we are self-regulating. I hope that this debate will be a first step towards using that strength to do for ourselves what we know we can do, and what needs to be done, rather than allowing the initiative to be taken from us.
Lord Tyler
My Lords, I very warmly thank not only the noble Lord, Lord Filkin, but the noble Lord, Lord Goodlad, and the noble Baroness, Lady Hayman, without whom we would not be having this well-informed debate, and indeed the Leader of the House, who set up the group in the first place.
I will make two very quick, simple points. First, as has just been said, we pride ourselves on being self-regulating. We say it very often, but it is only,
“Up to a point, Lord Copper”.
I will quickly give two recent examples. Today we are allowed only four minutes to make our speeches whereas speakers in the previous debate had eight minutes. Who made that decision? That was not self-regulation. It was presumably made by the usual channels, which I will come back to. Secondly, yesterday a major Bill was suddenly withdrawn from the House. That was not self-regulation. Who made that decision? The word “self-regulation” is so often repeated that it is rather like the 18th century concept of a “conceit”—a well-used, very popular and convenient way of disguising a fiction.
When we elected a Lord Speaker a few years ago many of us felt that self-regulation was going to be adjusted to meet a new circumstance. Frankly, however, the forces of political gravity have moved back into that space very rapidly and the usual channels are as effective as they ever were. I used to be a member of the usual channels down the corridor and have to tell you that the system is much more effective in your Lordships’ House because it is more elusive and incestuous and not so visible as it is down there. This brings me to a specific recommendation, number 52, of the Goodlad team:
“We urge the Leader of the House to consider ways in which the work of the usual channels could be made more accessible to the House as a whole. There should be a more clearly defined role for the Convenor of the Crossbench Peers, and also a role for the Chairman of the Backbench Business Committee”.
I very much hope that we are going to see some action on that point.
That brings me to my second and perhaps even more substantial point. There are still 18 major recommendations of the Goodlad team that have not been discussed or considered by a committee, let alone by the whole House. It has been piecemeal, or worse than piecemeal, as we have not even started on that process. As has been said all through today’s debate, we appointed very talented and skilled people to this group. I think that that is what the noble Lord, Lord Filkin, referred to when he talked about making use of talent and skills. They came forward with unanimous and comprehensive recommendations for improving our work, but we seem to lack what I think the lawyers call “due process”. In my life outside politics, in the real world, I cannot imagine circumstances where you would send away a group of people to do work like that and not have a process for properly considering, in a holistic way, all their recommendations.
As yet, we have collectively failed to examine systematically the package of proposals. Indeed, that complete package has yet to be presented to a committee, let alone to the whole House, and we should all be ashamed of that lack of due process. If I was a cynic, I would say that this is an example of divide and rule. I think it is more accidental than that but we should all be ashamed of how we have treated those in that group who gave us such good advice.
Lord Bilimoria
My Lords, since I joined your Lordships’ House more than six years ago, we have debated House of Lords reform inside-out and upside-down. As we have heard throughout this debate, the latest attempt by the coalition to go for drastic reform has thankfully resulted in major reform being shelved for the moment, particularly in terms of an elected House. It has been kicked into the long grass, but my worry is that at the next election we will see the major parties, once again, in a frankly populist way, putting an elected House of Lords in their manifestos. Perhaps the Leader of the House can answer that.
However, that is a red herring because the most important part of this debate is to ask: what do we do and how? What is our role? As the noble Baroness, Lady Hayman, said, this is the time; this is the opportunity—and congratulations to her on becoming a grandmother. I have always seen our role first and foremost as a sort of guardian of the nation. Ironically, this unelected House is a cornerstone of democracy in our country, with the amazing depth and breadth of experience and expertise that we have. In those terms, we sit head and shoulders above any other upper House in the world, but do we use this experience and expertise enough?
We have an unwritten constitution that has evolved, that is delicate, and we have the best of the best people in this House, not in a prescriptive way—no one has told us, “You have to have so many scientists, engineers, lawyers and former Cabinet Ministers”. It has evolved; it has happened. In this House we have the best of the best in every field. No party list system would ever deliver that.
I thank the noble Lord, Lord Filkin, for initiating this debate. The noble Lord said that this House is too big. Perhaps we need to reduce our numbers but we have to take into account that to keep this depth and breadth of experience and expertise, and to get the attendance levels that we now have, we need quite high numbers. Unlike in the other place, we are not full-time employees. We do not get a salary. We do not get a pension. We are expected to hold outside appointments and jobs. I still run an international business. Those of us who have retired bring their experience here. Nobody has brought this point up today, but in terms of bang for buck, this House is phenomenal value for money—very different from the other place.
How do we make more of this expertise? I do not think that we make enough of it. In the House of Commons, there are departmental committees in every field, which have the power to scrutinise Secretaries of State, whereas in your Lordships’ House we have far fewer committees and they do not have nearly the same remit or powers as in the other place. We need to redress the balance of power between the two Houses. This is the time to do that. The committees in the House of Commons have these powers but they do not have the experience that we have. Just imagine some of our Members sitting on those committees and how much value they would add.
I did a comparison with other Parliaments. In the UK we have 43 Commons committees and only 16 Lords committees and seven Joint Committees. In the USA there are 21 House committees, 22 Senate committees and six joint committees. In Canada there are 24 House committees, 18 Senate committees and two joint committees. We are missing an opportunity here, and even if we do not go that far, maybe we should consider that Members of the House of Lords could sit on existing committees and add their expertise to make those committees that much more effective.
We have had a great debate. The essence of this debate is not just evolutionary reform, as the right reverend Prelate suggested. We need that, but we also need to take this opportunity, as the noble Lord, Lord Cormack, said, to make Parliament much more effective on the whole.
Lord Hunt of Kings Heath
My Lords, as the noble Lord said, this has been a very good debate indeed. I thank my noble friend Lord Filkin, and, indeed, I thank the Labour Back-Benchers for agreeing to give up their own debate to allow us to have this fascinating discussion.
It seems that there is a general consensus that, whatever one’s views on the Government’s attempt to achieve substantive reform, any real progress in that direction is some years ahead. We could sit here and wait for the next Bill to come in a few years’ time, or we could take up the opportunity, as the noble Baroness, Lady Hayman, says, to take fate into our own hands and really get down to making improvements in the way that we do our business. I appeal to the noble Lord, Lord Strathclyde, to take note of the sentiments expressed in this debate this afternoon. The noble Lord, Lord Bichard, suggested a reconvening of the Leader’s Group. I hope that the noble Lord, Lord Strathclyde, will listen to that very seriously indeed. I can assure him that the Opposition will co-operate with him if he is able to allow us to take this step forward.
There is sufficient consensus around your Lordships’ House on a number of the important issues raised regarding working practices and procedures to suggest that there could be a successful outcome which would, as noble Lords reminded us, enhance the role of this House in the scrutiny of the Executive and of legislation, thereby serving the public interest as effectively as possible.
In the past decade we have, of course, seen various changes and improvements to the way in which we do our business. These include new Select Committees such as the Constitution Committee and the Economic Affairs Committee. Perhaps the most successful innovation, I say with all due modesty, has been the creation of the Merits Committee, now known as the Scrutiny Committee, which has considerably enhanced the way that we deal with secondary legislation. In some ways, we have made decisions and changed others. We agreed some years ago to increase the number of Oral Questions to six, and then decided that that was not a very good idea and came back to four. We have also tried out pilots. We are making greater use of Grand Committee for Committee stages of Bills. In place of the Lord Chancellor we now elect our own Lord Speaker, although, of course, the role of the Speaker in the Chamber is somewhat limited because the House remains self-regulating. As the noble Lord, Lord Tyler, implied, “self-regulation” can often mean that which the noble Lord the Leader of the House suggests the House ought to do. There is remaining business to be done regarding the role of the Speaker, particularly during Oral Questions. We have seen two revised procedures for Questions for Short Debate, although I think that noble Lords feel that we need to make further progress there, too.
We have made some improvements, which shows that we can incrementally enhance our effectiveness. Many other proposals have, however, bitten the dust. That is why it is right to ask the noble Lord, Lord Strathclyde, to seriously consider reconvening a Leader’s Group in the light of the fact that substantive reform will not take place for some time.
Noble Lords have discussed legislation in the context of a sense that the other place is not as effective as it might be in the scrutiny of legislation. One of the main complaints about the way in which the Commons does its business is that whole chunks of Bills are often not considered in Committee. This means that when the legislation comes to your Lordships’ House, that is the first time that the detail of many of the clauses is put to the test.
I very much agree with the noble Lord, Lord Cormack, and the noble Baroness, Lady Hayman, that we need to look at a bicameral approach to the way in which Parliament does its business, and more liaison between Members of both Houses would be very helpful as well. In the end, however, we can do much more ourselves to improve the way that we deal with legislation. The argument for pre-legislative scrutiny, or a business standards committee, is persuasive. In the absence of pre-legislative scrutiny, I have always favoured public evidence hearings before Bills go into Committee in your Lordships’ House. I hope that that might also be given further consideration.
We have debated post-legislative scrutiny on many occasions. I am sorry that the noble Lord, Lord Norton, is unable to be here today. He would press us, I think, to include that with any package of measures of reforms.
I also share the view of the noble Baroness, Lady Seccombe, about the length of speeches when we debate amendments to Bills. I have to say that Ministers, too, could be advised to speak in rather a less lengthy time than they often do. I remember the late Lord Carter as Chief Whip advising me when I first became a Minister to read out every other page of my wind-up because, he said, no one would ever notice. If Ministers responded to the points raised in debate rather than felt they had to read out page after page of script written for them by officials, they would find the House much more sympathetic to the arguments they put forward.
If we had less legislation, there would be more time for debates on Select Committee reports. I have to confess as a former serial offender, having introduced many Bills to your Lordships' House, that I am a sinner who now repenteth. Indeed, I remember that the fourth NHS reform Bill that I brought to your Lordships’ House seemed to do away with lots of the clauses that I brought in with the first NHS reform Bill. However, I think that I am not the only offender there.
On secondary legislation, my noble friend Lord Filkin suggested that this House could have more influence if, instead of having the veto option, which it always hesitates to use, it could delay legislation. I hope that that will again be considered in any discussion on how we can improve legislation. At the moment, the situation is unsatisfactory; the House is not able to pursue the issues in secondary legislation that it would wish to; and there is a strong case for the delaying powers.
My noble friend Lord Filkin wanted to know how the usual channels worked. I am not sure that he would find it entirely illuminating if we tried to describe that to him, but I think that behind that was a plea for more explanation about why decisions are sometimes made in relation to business management. I look to the noble Lord, Lord Strathclyde, to comment on that.
Finally, I come to the size of the House—“the elephant in this Chamber”, as my noble friend Lord Filkin put it. We are a large House in terms of numbers and we threaten to become larger still if the Leader is determined to flood the House with yet more of his own supporters. I look forward to him saying in his wind-up that he recognises that it would not be right to increase the numbers in your Lordships' House until we have resolved issues around its size, the length of terms and retirement.
I hope that the Leader will also say that the Government have given further consideration to whether they will support the Bill of the noble Lord, Lord Steel, in the other place. The significance of that Bill is in Clause 1, which says:
“A peer may retire … Retirement may not be rescinded”.
I put it to the noble Lord, Lord Strathclyde, that enacting that legislation would provide the foundation for your Lordships’ House to start talking about a scheme of retirement. I detect a growing consensus among Members of your Lordships’ House about the need to work together to see whether we can come up with a sensible approach to the size of the House, the representation of the different parties and the Cross Benches, and schemes of retirement. It would be all too easy for the Government to say, “We are not going to do that in the absence of substantive reform”—and I acknowledge that Governments of different colours have said that in the past—but the fact is that, realistically, substantive reform is now some years away. The argument for looking at issues to do with size and the way we proceed, therefore, becomes ever more persuasive. If the Leader were able to respond constructively to the comments made by noble Lords today, he would find enormous support for the work that he could do. I strongly urge him to consider setting up a Leader’s Group to take any work forward.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, I am bound to say that I, too, am grateful to the noble Lord, Lord Filkin, and to other Members on the Labour Back Benches, for giving us this platform for today’s debate, and to all noble Lords who have taken the time to contribute. I am rather a fan of these debates with four-minute speeches. They work extremely effectively; we get a lot of Peers in and it concentrates the mind. I have the luxury of having a little bit more time, which I shall use.
Perhaps the most consistent theme running through successive debates in this House on the Government’s proposals for reform has been our reputation as a revising Chamber, a reputation that Members on all sides take great pride in—and it is right that we should. Just over half of the Back-Benchers who have spoken today have had experience in the House of Commons as MPs. I make no particular point about that except to say that we should always remember that this House is very different from the House of Commons. Because the Executive have such an overwhelming and overpowering majority in the House of Commons, and can therefore do virtually what they like, they need the power of the Speaker to help to control that, and to give the voice of the Back Benches. The Executive in this House have no majority. We have a powerful Opposition, and the purpose of the usual channels—although everybody has poked fun at them—is to represent the interests of the whole House. In the end, the House can overturn decisions of the usual channels, although I hope that it will not do so.
I discovered to my horror, while sitting here musing away, that I have been a member of the Procedure Committee for 20 years. You get less for murder. It is an extraordinary thing. But like the noble Baroness, Lady McIntosh, I am greatly encouraged by the tone of the debate. I did not agree with everything that every Peer said, but I found something to agree with in bits of what every Peer said. We do our job very effectively in this House, through our committees, including the committees that sit off the Floor of the House, through the reports that we make, and by the standing and reputation of individual Members of this House.
Why were we not reformed by the elected House? In the end, I think that there are two reasons. First, there was a perception outside this House that we do the job that we do extremely well. Therefore, there was not that motivation for a great change. Secondly, I believe very strongly that the more the House of Commons looked at proposals for electing this House, the more it feared that we might end up doing our job rather better than it did. That was one reason why I was rather keen on it; I was ambitious for this House. The noble Lord, Lord Bilimoria, warned us that political parties might find a populist measure, by which he meant further plans for reform of the House. All I can say to him is that I would not tempt them too much on that; they really do not need it.
What does this extraordinary Chamber do? It assists without threatening the primacy of the other place. It discharges its core duties in a manner that seeks to complement, not compete with, the House of Commons. Why does it not compete? Because we do not have the authority of the people as the other place does, and without the authority that direct election of Members might confer it remains the case that the influence that we exert on another place and on the Government of the day rests mainly on the force of the arguments that we deploy and on recognition outside these walls of the experience and expertise that Members of this House possess, individually and collectively. That is what I think the noble Lord, Lord Judd, was getting at when he talked about his matrix. I very much agree with what the noble Baroness, Lady Hayman, said about strengthening Parliament. With both Houses together, we should seek to do that, and to some extent this Government have done that. That reputation is the currency on which we trade. It is therefore only right that we consider, as we have done this afternoon, how best to protect and enhance our reputation and to be able to do our jobs even better.
My noble friends Lord Higgins, Lord Kirkwood and Lord Cormack, and the noble Lord, Lord Ramsbotham, made important passing references to the way in which the House of Commons does business. I will not spend any time discussing the House of Commons. It works out the way it does its business best. It has programming and we do not. On the whole, that is an advantage for this House. The House of Commons has selection of amendments and we do not. Here, every Back-Bencher has the right to put down an amendment to any Bill and it must be heard and responded to by a government Minister. That is extraordinarily empowering for Members of this House.
As the noble Lord, Lord Filkin, set out in his Motion, part of the answer to all this must lie in harnessing the skills and experience of our Members and ensuring that they are deployed to best effect. Like the report of the Leader’s Group before it, the Motion identifies three core functions of the House: scrutinising legislation, holding the Government to account and providing a forum for public debate. There is also being topical, as my noble friend Lady Wheatcroft suggested. I slightly regret that the Motion does not make explicit mention of the revision of legislation, which is in my view the chief function of this House and the cornerstone of our reputation. If you ask anybody what the second Chamber does, almost all will say that it revises legislation. That is an important thing.
One of the most frequently rehearsed complaints in this House is that it is asked to consider too much legislation and that the level of preparation and consultation that precedes the introduction of specific Bills is inadequate. I suspect that that complaint has been made for several hundred years. Certainly, I can remember it being made in the 1980s, 1990s and the last decade. It was made again today. That does not mean that we should not take it seriously or find ways of making life easier.
Let me deal with some important issues to do with the Leader’s Group. The noble Lord, Lord Bichard, and my noble friends Lady Tyler of Enfield and Lord Tyler said that all the recommendations in the original report deserved to be debated by the House. They certainly do. That is why a debate on the report and the recommendations contained therein was arranged on 27 June 2011. That was in addition to the debate on working practices held at the very start of this Parliament, in July 2010, prior to the establishment of the Leader’s Group, and the debates of 9 November last year and 26 March this year that informed the decisions taken by the House in respect of specific recommendations. Again, there is this debate today.
The other complaint was that only a few of the Leader’s Group’s recommendations have been brought to the House for decision. I fundamentally disagree with that point. The implication is that only a few of the Leader’s Group’s recommendations have been taken forward. That is a myth. The 55 recommendations amount to 43 specific proposals, because some just affirm the status quo and others spread one idea over many paragraphs. Of those 43, 25 have been put to a domestic committee and another four have been partially put forward or have confirmed the status quo and been implemented. By setting up the Leader’s Group and inviting the domestic committees of the House to consider taking forward the majority of these recommendations, I have probably done more as Leader to bring about change to the working practices of this House than any of my recent predecessors.
There are some proposals that have not been put forward, partly because there seemed no inclination for them to be agreed and partly because there were disagreements within the Leader’s Group and within the Procedure Committee. No fewer than six members of the Procedure Committee went on to vote against the report on Grand Committees. Of those Members who voted against the report—the House will remember the amendment tabled by my noble friend Lord Cormack on the Procedure Committee report—some are exactly the same noble Lords who now say that we should debate and agree all the proposals, such as that on the Grand Committees, which was extremely controversial when we dealt with it on the Floor of the House a few months ago.
I am pleased to say that in one respect at least we may be turning the tide of decades because the Leader’s Group observed that, leaving aside a brief period around 2002, the number of Bills or clauses of Bills published in draft had remained low and the number scrutinised by Select Committees, whether Joint Committees or Commons-only Select Committees, had been lower still. All that has changed over the past two and a half years. In the previous Session, the Government published 11 Bills or clauses of Bills in draft for pre-legislative scrutiny and in this Session we are on course to publish at least nine in only one year. That is good news. At the Government’s instigation, moreover, we have seen a resurgence in the number of Joint Committees conducting pre-legislative scrutiny. There were four in the previous Session and we expect five to be set up in this one. Those trends are no accident: we have deliberately set aside the resources to support an additional pre-legislative scrutiny committee this week.
We have also made progress, as was noted by my noble friends Lady Hamwee and Lord Cormack and by the noble Lord, Lord Hunt, in relation to post-legislative scrutiny in response to concerns that, once legislation is passed, insufficient attention is devoted to its implementation and effects. For the first time, we have appointed a dedicated Select Committee to conduct post-legislative scrutiny of the legislation relating to adoption in England and Wales. The committee is due to report before the end of the Session and the intention is that it should be the first of a series of post-legislative scrutiny committees, each looking at a different area of the law with a membership tailored to the Acts under scrutiny, so as to make flexible and targeted use of Members’ expertise.
Although we have made considerable progress on those fronts, enhancing the quality and reach of our scrutiny at the beginning and end of the legislative process, I know that there are still some in the House who are interested in a legislative standards committee. Many noble friends mentioned this: the noble Lord, Lord Butler of Brockwell, my noble friend Lady Tyler and the noble Lord, Lord Bichard, who I am glad to hear has been receiving so many comments by e-mail—he is no doubt enhancing his reputation by replying to each of them in detail. The Political and Constitutional Reform Committee of the House of Commons is currently considering the proposal for a legislative standards committee as part of a broader inquiry into ensuring standards in the quality of legislation. Two Members of this House—the noble Lord, Lord Butler, and my noble friend Lord Maclennan of Rogart—have given oral evidence to that inquiry and my right honourable friend the Leader of the House of Commons is due to follow suit. Without wishing to pre-empt either his evidence or the Government’s response to any recommendations resulting from the inquiry, I make the following observations.
There is in my view a tension between this House’s role as a revising Chamber and the idea that one of its committees, composed of a small group of Members, should recommend that a government Bill progresses no further. The analogy with secondary legislation and the Secondary Legislation Scrutiny Committee is not apt. Secondary legislation cannot be amended, whereas the very purpose of a Bill’s passage through Parliament is to provide an opportunity for improvement and revision. In that sense, the House is itself a legislative standards committee; that is our primary and principal function. Denying a government Bill that has already passed through the House of Commons a Second Reading on the recommendation of a legislative standards committee would be an extraordinary step. Were the committee’s remit to be restricted to Bills starting in the Lords, it could have the unintended consequence of reducing the number of Bills that start in this House. Even if there were to be agreement on a Joint Committee, as recommended by the noble Baroness, Lady Hayman, I would remain uneasy at the prospect that a Government in command of a majority in the House of Commons would henceforth need to present a business case for their legislation before Parliament would consider it.
Lord Butler of Brockwell
It would be extraordinary if, on the basis of a recommendation from a legislative standards committee, the House were to decide not to allow a Bill to proceed. That would be the nuclear weapon, and I should be very surprised if it ever happened. Of course, the case of the Bill to abolish the post of Lord Chancellor was a very rare occasion when the Government decided to refer the Bill to a Select Committee. I would expect the committee recommending that a Bill should not proceed to be an equally rare occasion. The point is that if there were criticism of the standards to which a Bill had been prepared, I believe, and I think that other contributions have supported this, that that would have a very beneficial effect inside the Government on the standards to which legislation was prepared, without ever reaching a point where Parliament decided to refuse to allow a Bill to proceed.
Lord Strathclyde
My Lords, I join the noble Lord in always wanting to find ways to improve the quality of legislation. Sometimes, though, we need to be able to decide what has gone wrong, not just in the past decade but probably in processes over the past 40 to 50 years, and find out why legislation has changed so much and why it has got so difficult and complicated. We have seen this week, in having to pass an emergency piece of legislation correcting something that was not done properly 10 years ago, some of what goes wrong. Whether a legislative standards committee would make very much difference, I am not sure. Like the noble Lord and probably the rest of those who have spoken today, I look forward to the report from the House of Commons before we can take this further.
One question that has been raised by noble Lords and was posed by the Leader’s Group is whether we might make better use of our time in the Chamber. In order to free up time on the Floor of the House, the group proposed the introduction of a rule that most government Bills should be committed to Grand Committee and suggested that we might extend the sitting hours of the Grand Committee by introducing morning sittings. A variant of those proposals was put to the House by the Procedure Committee last March, only to be rejected emphatically. That is the point that I was making about members of the Procedure Committee, as well as members of the Leader’s Group, voting against that recommendation. In due course, I am sure that we will have to look at that again.
The next key question that many speakers raised was the attraction of a Back-Bench business committee—or a debates committee, a description mentioned by, I think the noble Lord, Lord Luce—in the expectation that a sifting mechanism for Back-Bench business might increase the topicality and profile of our debates and might serve the House better than the ballot and waiting-list mechanisms through which we currently select topical questions. My noble friend Lord Faulks pointed out some of the difficulties with this idea. It is not that the Back Benches would be deciding; it would be that some Back-Benchers would be deciding. We would have to go with care to decide whether or not this was actually an improvement. Of course we already have a sifting mechanism for most Thursday debates, which are selected by the political parties and the Cross-Bench group. Our debate this afternoon was selected in that way by the Labour group. We therefore already have some degree of intelligent selection, if one can call it that. It is interesting that at its next meeting the Procedure Committee is going to consider whether we should stop having a queueing system for Starred Questions and replace it with a ballot, so ballots clearly have their uses somewhere.
As for Questions for Short Debate and some of the Thursday debates, I see the ballot as a useful complement to the debates selected by the parties and groups. They provide Back-Bench Members with an alternative outlet for securing debates on subjects that, for whatever reason, did not appeal to their party or group. We have only to consider that a few weeks ago my noble friend Lord Maclennan led a balloted debate on the potential break-up of the United Kingdom and my noble friend Lord Lexden secured time for a QSD on the treatment of homosexual men and women in the developing world. They served to showcase the House at its best.
My main concern is that a Back-Bench business committee would in practice place a new obstacle in the way of Back-Bench Members wishing to secure time for a debate. Rather than Members walking into the Minute Room to table their Motion and then waiting their turn or taking their chance in the ballot, they would, if we were to follow the Commons model, find themselves filling in application forms and arranging to appear in person before a committee to plead their case. If they failed to persuade the committee, that would be that. We would have removed the last remaining vehicles for Back-Bench Members to get their debates on to the Order Paper directly and, in all likelihood, all we would gain in return is to become a mirror image of the Commons, debating all the same subjects. I urge noble Lords who are keen on this to come forward with a proposal that the Procedure Committee can examine.
As others have mentioned, one area in which we have taken major steps to make better use of the skills and experience of our Members is in the appointment of Select Committees. We have now established the new quick-fire, in-depth examination, annual, extra, cross-departmental committees. I think that they are an excellent addition. The government Chief Whip has recently told Conservative Peers that they should consider choices for next year’s Select Committees, and I urge the Opposition, my noble friends the Liberal Democrats and indeed the Cross-Benchers to do the same. I think that these will be really good committees. Over a five-year Parliament, we should be able to deal with 10 committees. That will strengthen our reputation for scrutiny.
I hope that my remarks this afternoon have served to illustrate that we have made considerable progress since the start of this Parliament. We have taken forward a majority of the recommendations from the Leader’s Group and, although some of them have been turned down by the House, I believe that I have done more to change the working practices of the House than any of my recent predecessors. I therefore see the withdrawal of the House of Lords Reform Bill not as a turning point in that process but rather as a milestone.
Talking of House of Lords reform, I noted that the noble Lord, Lord Haskel, the right reverend Prelate the Bishop of Ripon and Leeds and many others talked about the size of the House and how it should be reduced. I know that bishops retire at 70, but I think that most noble Lords in this House would regard that as a little young. There are possibly ways that we can find to encourage Peers to retire, but Peers ought to be careful what they wish for. They may discover that culling Peers is more popular than culling badgers. The Steel Bill remains in the House of Commons. Let us see where it goes. As the noble Lord knows, I have no in-principle objection to the Steel Bill, and I think it does some perfectly valid things, but the House of Commons has recently voted for an elected House, although it could not quite follow through.
This has been a useful and interesting debate. I have gone beyond my time, for which I apologise. I will try to pick up some of the other issues that have been taken up. I shall finish with this point: one of the most interesting and senior committees of this House is the Procedure Committee. It has a remit to look at and examine proposals that are laid before it. Any Back-Bench Member can put forward proposals to the Procedure Committee and I suspect that in the next few months we will see a lot more representations being made.
Lord Filkin
In rising to thank all Members who have taken part in the debate, I shall do my utmost to be charitable, as it is nearly the end of our working week. First, I shall try to be charitable to those Members who have persistently and roundly insulted me by describing me as an oily mechanic or a mongrel. I have seldom had to suffer so much in silence in my career until now. I shall also, with no difficulty, seek to be charitable to the Leader of the House, because I believe that he had largely written his speech before he had listened to the debate that we have had in the past two and a half hours. I say that with good grace, because I have seldom heard such feeling around the House that we ought now to make sensible progress on reforms of this House. The Leader gave his usual eloquent and urbane reason that we had done all that we sensibly could and had better let sleeping dogs lie—or, as a councillor once said to me, had better leave lying dogs to sleep, which is slightly different.
Nevertheless, the Leader of the House has given us some pointers. First, a number of us are bound to wish to have a discussion with him. Without doubt, with his usual good grace, he will give us time. Our discussion with him will be about on which elements of the changes that have been strongly supported from all corners of this House we can move forward. As he implies, ultimately, it is not what I think or even he, from his eminence, thinks; it is what this House thinks that it wants to do on some of these issues. We will discuss with him the procedures that are there for us to explore how some of these things can be fairly, without too much manipulation, brought before the House in the ways in which they were expressed in the Goodlad report and, no doubt, informed by good guidance about what is practical. I think that the House would welcome it if we did that in a sensible and measured way. I thank again all who have spoken so strongly and supportively of the need for sensible, progressive change.
Arrangement of Business
Baroness Garden of Frognal
My Lords, before we start the final debate, perhaps I may draw your Lordships’ attention to the fact that this is a timed debate. The timing is very tight. In order to ensure that the later speakers have their allocation, please would all Back-Bench speakers make sure that they sit down as the clock turns to six minutes, or even perhaps a few seconds before.
Armed Forces: Reserve Forces
(12 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freeman
To ask Her Majesty’s Government what plans they have for the future role of Her Majesty’s Reserve Forces.
Lord Freeman
My Lords, on behalf of many noble Lords, I am pleased to raise the issue of plans by Her Majesty’s Government for the Reserve Forces of all four of Her Majesty’s forces, which is an extremely important issue. I am very grateful to the noble Lord, Lord Astor of Hever, for his unfailing interest in the Reserve Forces, for his courtesy in briefing colleagues on plans, and for his presence this afternoon. I am also very grateful to him for replying to this debate, which is most important for many of those who have served in what used to be called the Territorial Army but also the Reserve Forces of the Royal Navy and the Royal Air Force.
I think that my colleagues on all Benches look forward to hearing from my noble friend an indication of the publication of the Green Paper, which was talked about some months ago, on the future of the Reserve Forces. Of course, that would lead inevitably to the proposal for legislative changes—certainly a White Paper—in due course. In the past few weeks and months, we have been somewhat delayed. I am all in favour of careful consideration of the issues that have been raised by colleagues both on these Benches and on other Benches about what has been discussed over the past few months concerning the future of the Reserve Forces.
My qualification is fairly modest for leading on this Question and I notice three noble and gallant Lords, and others, who know far more than I about the role of the Reserve Forces. I know that some, if not all, will be contributing to the debate. However, I served as the Minister responsible for the Reserve Forces under the late George Younger, who, in my judgment, was one of the most distinguished Secretaries of State for Defence. At his request, for the past 10 years, I have served as president of the Reserve Forces’ & Cadets Associations, which seems to have gone in a flash. I worked very closely with His Grace the Duke of Westminster and I pay particular tribute to the contribution that he has made, although he has now stepped down to help in other charitable causes. However, in my brief contribution, I speak for myself alone.
If your Lordships will forgive me, I shall concentrate on the Army. However, I pay particular credit to the Royal Navy and the Royal Air Force for the work that they have done in the contribution being made by the Reserve Forces, which may be small in comparison to the total numbers that we used to have in the Territorial Army if you go back 10 or 20 years. Nevertheless, the changes that have been made are creditable, sensible and useful.
I welcome the planned increase in Army reserves to 30,000 trained reserves over the next few years to augment the reduced number in the regular Army, once more than 20,000 of the latter come back from bases in Germany. Therefore, we need an increase in recruitment to the Army reserves, as the Government have indicated. We need particularly to recruit younger reserves; that is, those leaving school or coming up to university. That for me is extremely important.
In the time available to me, I want to comment briefly on six key issues which I believe are essential for successful expansion and the doubling of trained Army reserves by 2016, which is just round the corner. We should concentrate especially on younger recruits. First, as regards employer support, I defer to my noble friend Lord Glenarthur and shall listen to his comments. I pay tribute to the helpful work that he has done in the area of employer support. It is important that we begin to focus on larger companies and universities to help in the career development of younger recruits coming into the Reserve Forces.
Secondly, over the coming years we need to focus more specifically on recruiting those with special skills, such as people with a background in, or interest in qualifying in, areas such as the health service, logistics, cybersecurity, communications and engineering. This is where the Army reserves can make a real contribution not just to one part of the Army but to its overall effectiveness.
Thirdly, as regards countrywide cover, in recent years, the regular Army has for obvious reasons been concentrated in fewer major barracks and centres. One can understand that for reasons of not only expense but training and facilities. The footprint of the Reserve Forces around the country is extremely important. I am now talking specifically about the Army. I know that His Grace the Duke of Westminster feels particularly strongly about that. We do not want unused drill halls but, as far as I am concerned, the bigger the footprint of the Reserve Forces around the United Kingdom, the better.
Fourthly, I believe in training the regular Army with the reserves. This means having to use facilities at the weekends, because if you are in the reserves and have a full-time job Monday to Friday, it is easier to participate with your colleagues in regular Army units at the weekend. At the moment, some of our training facilities are not open at the weekends.
Fifthly, I think that what I am about to mention is already happening and I pay tribute to what the Army command has achieved in this respect. It is very important that reserve units in the Army are posted as a unit which includes the senior NCOs and the junior officers. In the past five years, for obvious reasons, partly because of the size of the regular Army, we have had what I believe the Navy calls trickle posting. I would like to see reserve units which are being trained together brigaded with and working with regular Army units. When there is an emergency, either civil and abroad, they should move as a unit.
Finally, will the Minister say when the Ministry of Defence will indicate what the ORBAT—order of battle—might be in the future; that is, how individual Territorial or reserve Army units might be brigaded with regular Army units to deal with an emergency not only in this country but abroad? I look forward to listening to the debate.
Lord Lee of Trafford
My Lords, I pay tribute to my noble friend Lord Freeman for securing this debate and for all the work he has done with the Reserve Forces over the years.
To achieve the challenging reserves target, we need to do two principal things—first, to raise the profile and esteem of the reserves and, secondly, to bring employers on board in a positive way. We need to think somewhat outside the box. Regarding raising the profile and esteem, the name, the TA, is somewhat dated and old hat. I suggest something more exciting—perhaps something along the lines of “Royal Volunteer Reserve”. It would be marvellous if a specific member of the Royal Family could act as champion for our new reserves, with perhaps an annual event at Buckingham Palace to thank those who have given outstanding support.
Locally, the high sheriffs could play a role across the country. I was a high sheriff and, in my year, I could easily have devoted a substantial amount of my time to the promotion of the reserves in my county of Greater Manchester. After all, they had a historic role in raising forces in the old days. We should consider extending the Armed Forces covenant. I am not too hopeful, but the Treasury should adopt a certain generosity of approach to the expenses of reserves, particularly things such as travel expenses for those who come from a rural community. I would like the Tickets for Troops scheme to be extended. Perhaps the reserves should have some form of national discount card. There should be a unit in the Ministry of Defence focused on the reserves in terms of media and PR, liaising and in partnership with regional and local media.
We need to endeavour to demonstrate to employers the benefits that reserves will bring to their businesses in terms of skills and leadership. Perhaps the state might consider paying employers’ national insurance contributions. I suggest some form of kitemark, or something similar, for good practice. As part of a company’s CSR, corporate social responsibility, it should indicate in its annual report—particularly larger companies such as plcs—its attitude to the Reserve Forces and the number whom they employ. Similarly, large professional firms could adopt this approach. We should encourage professional bodies, government departments and local authorities to publicise that information. I accept that it is much more difficult for smaller firms to release key personnel, and I therefore hope that we adopt a policy of more generous—particularly more flexible—compensation along the lines of the very successful Australian approach. On the legislative front, we will probably need to make it an offence to discriminate against reservists in recruitment.
I should like to ask my noble friend a number of questions, to which he may well wish to reply in writing. Does he agree with the Duke of Westminster, who stated that from his experience, overseas employers—he mentioned the French, Japanese and Americans—have a more encouraging attitude to reservists than UK employers generally have? Does he further agree that decisions on the future of individual TA centres should be made in consultation with the Reserve Forces and cadets associations, not just by Defence Estates? Will my noble friend comment on the progress of the review of the National Employer Advisory Board, which we were told should be completed later this year? When will we be informed of the outcome? Will he also update the House following the Prime Minister’s announcement, as part of Armed Forces Day, on the progress of the plan to open 100 new cadet units in state-funded secondary schools by 2015? Clearly, cadet units are an obvious and natural pathway for young people towards our Reserve Forces.
Finally, is the Minister aware—this is my understanding—that although we have a significant flow of inquiries to join the reserves, there is actually relatively little enlistment because of a number of bureaucratic blockages?
Lord Stirrup
My Lords, reservists have a long and distinguished history in this country and have been key to securing the security of these islands and the interests of this country’s peoples over many years, but nothing stays the same. The means of protecting our security and interests necessarily evolve over time, which means that reservists, along with their regular counterparts, need to evolve too. They have done so. It would be wrong to think that the reservists of today are the same as those of the Cold War. Far from it—the idea that they are somehow weekend warriors is completely out of date. Over the past several years reservists have served and sometimes, alas, died and been wounded alongside their regular comrades. I for one deprecate the suggestion that “Dad’s Army” is still alive and well and I salute the courage and fortitude of those reservists who have served their country so well in recent times.
That is not to say, however, that all is as it should be in the Reserve Forces or that there is no scope for further change and improvement. Much needs to be done, and the recent review of reserves is an important step in that direction. I have been fortunate enough to have reserve units under my command. I was privileged to be the honorary colonel of a TA Royal Engineer regiment for several years, and during my time as Chief of the Defence Staff I saw at first hand what a magnificent contribution our reservists made to operations in Iraq and Afghanistan. As a result of these experiences I also became acutely aware of the scale of the challenge that our reservists face and the difficulties that we must tackle if we are to improve the situation. Recruiting has always been an issue, but poor retention has exacerbated the problem. All too often new recruits have fallen by the wayside because their initial enthusiasm was not matched by the effort that went into their training. They spent long periods, sometimes stretching into years, waiting for places on the relevant courses. Meanwhile, they could not be used for the purposes and in the roles that attracted them to the reserves in the first place, and as a consequence many of them left.
If we are to do better with our Reserve Forces, we will need to be prepared to put in the necessary resources—not just to deliver the appropriate training to everyone but to deliver it in a timely manner. This is not just about man training days; it is also about the right number of instructors and other training resources, none of which comes cheap. Even if we have the right numbers with the right training we have to be able to employ them effectively. I welcome the review of reserves’ focus on the “whole force concept” and its emphasis on the better use of scarce skills in key areas, but this means reservists who are used on a regular and continuing basis. Meanwhile, most of those people have civilian jobs, through which they provide for themselves and their families, build for the future and provide for their retirement. No amount of enthusiasm for their military roles can make them forget that, so the future model for the use of reserves must take account of these needs. It is not just about being able to go back to their civilian roles; it is about sustaining their wider career aspirations while serving in the reserves.
The review of reserves goes some way to recognising that by highlighting the need for legislative changes, better employer protection and greater recognition of employers. Having grappled with this thorny issue over a number of years in partnership with some other noble Lords who are in their places this afternoon, I do not believe that the review goes far enough. In my view what is required is nothing less than a cultural shift in this country. We need a mindset where having reservists in the workforce is not just something to be tolerated but something to brag about. We need a situation where a civilian employer who does not have reservists in the workforce feels rather uncomfortable, or at least rather regrets the fact. That reserve service must be seen as a badge of honour for the employer as well as for the employee. I do not think that a kite mark by itself, useful though it may be, will take the trick.
Cultural shifts are possible, but they are notoriously difficult to achieve. They require sustained leadership over an extended period. By “sustained” I mean over the course of many years, not just a few months—and they need that leadership at the highest level. They also require the necessary investment of resources over that period. Even with these, success is not guaranteed—but without them, failure is certain.
The review of reserves sets out an imaginative road map for our Reserve Forces, and a bold plan for sustaining and improving their effectiveness in the complex world of the early 21st century. It provides a sound theoretical underpinning for the proposals in Army 2020. My concern is about whether the plan will be delivered in practice. Will successive Governments have the political determination and staying power to deliver the necessary cultural change to make the proposals work? Will they sustain the necessary levels of investment to deliver a trained capability of the right size? Or will our Reserve Forces be left, as they were so often in the past, to make do and mend as best they can when the initial enthusiasm for the current initiative has faded? I hope that the Minister will reassure us on that score. I know that he feels—as I do—that our reserves deserve much better.
The Lord Bishop of Wakefield
My Lords, the loss of two more soldiers in the past two or three weeks—to whom I pay particular tribute—reminds me of the price that the people of Yorkshire in particular have paid in terms of losses in Afghanistan. Scenes of grieving families outside our cathedral in Wakefield before and after military funerals have become all too frequent. In the light of this, I am particularly proud that two priests in the diocese of Wakefield are reservists. I hope that the noble Lords, Lord Freeman and Lord Lee, and the noble and gallant Lord, Lord Stirrup, will consider the Church of England to be a model employer in these circumstances. Each priest has served a three-month tour in Afghanistan, and one is likely to serve there again in the not-too-distant future. I have kept up with issues of morale and resources through one of the priests; he briefs me regularly. He is involved in training reservists at York, Catterick and elsewhere.
The strategic defence and security review, with which I engaged previously in this Chamber, has already had an impact in these areas. There is an understandable pressure on reservists to play an ever more important role in the UK Armed Forces by providing a greater and more integrated proportion of total manpower. This means that there ought to be an urgent strategic review of the welfare, healthcare and support needs of both serving military personnel and their families. Not long ago, I attended an excellent briefing by the Ministry of Defence on our military reservists and on the strategy for the future. I give particular thanks to the Minister for arranging that and a number of other excellent briefings over the past two years.
Clearly, the Future Reserves 2020 report is central to the plans of Her Majesty’s Government for increased reliance on reservists. It makes crucial reference to increasing welfare support to these people and their families while they are engaged in operations. However, it provides virtually no plan or strategy for precisely what is required or how it should be achieved. This stands in contrast to the conclusions of the 2009 Ministry of Defence report on the strategic role of reserves, where again the argument about the need for improved support was made.
It is perfectly clear that we will need to rely more and more on people giving freely of their time in the naval, Air Force and Army reserves. Our resources are stretched severely because of the fragility of the international situation in any number of different theatres. I hope that as a result of this important debate—for the securing of which I thank the noble Lord, Lord Freeman—Her Majesty’s Government will assure us of a proper level of support such as that for which I have argued, and also of proper resources and back-up for the operations in which they are to be engaged.
We owe all of our military an enormous debt at this time, as ever. Furthermore, our reservists, of course, give of their time entirely through their own generosity. Theology has had a bad name among politicians going even back to the time of Harold Wilson’s premiership, so I have avoided theology thus far. However, I must describe this extraordinary and courageous generosity as an outpouring of grace. I wish to give thanks unreservedly—excuse the pun—for the graciousness of these people and their continuing demonstration of that through their service.
Lord Phillips of Worth Matravers
My Lords, I am grateful to the noble Lord, Lord Freeman, for the important Question that he has tabled. I was introduced into this House in 1999. Some might think that I have allowed an inordinate length of time elapse before making my maiden speech, but there has been a reason for this. I was introduced as a Lord of Appeal in Ordinary and as a fervent believer in the separation of powers. Rightly or wrongly, I considered that it was not compatible with my judicial duties to take part in the legislative business of the House. Parliament agreed with that view when, by the Constitutional Reform Act, it disqualified the justices of the new Supreme Court from sitting or voting in the House.
On 1 October I was released from this purdah. I sought a topic on which to break my lengthy abstinence and on which I might be qualified to contribute. The noble Lord has provided this. I am one of the diminishing number in this place, and certainly of those making a maiden speech, who were required to do national service. This I did in the Royal Navy. To do so I had to join the Royal Navy Volunteer Reserve as an ordinary seaman, and it was as an ordinary seaman that I began my national service in 1956. After my basic training I applied, with some confidence, to train as an upper yardman, which would have led to a commission. The selection board rejected me and I was sent off as an ordinary seaman to join HMS “Maidstone”, a submarine depot ship. Conditions on the lower deck, I found, had not changed much since Nelson’s day. You still slept in a hammock, so close to the next man that when he turned over he woke you up and began a chain reaction right the way down the line.
National servicemen were a rarity in the Navy and I would endorse the emphasis that the noble Lord, Lord Freeman, placed on training reservists with regulars. Most of my shipmates were regular sailors who had nautical skills, and other skills, that I could not match. They tolerated my incompetence with a gentle benevolence. My experience during the year I spent on the lower deck was, I think, more valuable to my development than my subsequent year as a midshipman and the most junior officer in a minesweeper. The officers in these little ships shared a number of duties. I was correspondence officer, assistant minesweeping officer and atomic warfare officer. The latter two posts were of somewhat academic significance as we spent our time patrolling Cyprus, boarding and searching vessels in an attempt to prevent gun-running to the EOKA terrorists. So far as I am aware, no arms were ever intercepted.
I doubt whether my service was of great value to the nation, but it was certainly of great value to me. I went in as a callow youth and came out with a maturity and a knowledge of navigation and seamanship that provided a firm foundation for a career that started at the Admiralty Bar and led eventually to this place. That perhaps is not a reason for commending Her Majesty’s Reserve Forces. This place can be quite crowded enough, although not on this occasion.
The point I wish to make is that service in the reserves is not merely of direct benefit to this country. It is of benefit to those who serve in them and thus also of considerable indirect benefit to the country. The Ministry of Defence website accurately states that being a reservist is as rewarding as it is challenging. It is gratifying that the review promises an increase in that challenge and that reward.
This contribution has been somewhat shorter than it might have been had I not been informed yesterday by the Whips’ Office that I would have to restrict my remarks to three minutes, but brevity is, I suspect, on this occasion a virtue.
Lord Craig of Radley
My Lords, it is my great privilege and pleasure to congratulate the noble and learned Lord, Lord Phillips of Worth Matravers, on his maiden speech. He has entertained us well and, I think, rather modestly left out some other judicial appointments in his magnificent career. He was of course Master of the Rolls and Lord Chief Justice of England and Wales in between the times he served here, first as a Law Lord and then as the Senior Law Lord, before moving on to the Supreme Court. He obviously learnt from his time in the Royal Navy. Whether it was all good or all bad, I think we can judge that he enjoyed it, and I am certain that we are going to enjoy his contributions to this House. We welcome him and thank him for speaking today.
I congratulate, too, the noble Lord, Lord Freeman, on his choice of topic. He is right to focus our thoughts on the future of the reserves. Much thought has been given and effort put into this as part of the major restructuring of the Armed Forces following the strategic defence and security review. I am myself a firm supporter of the value of Armed Forces reserves that have real operational worth and are not seen by those outside or within the reserves as weekend chancers playing at being soldiers or, indeed, sailors and airmen. Happily, thanks to the important changes that were introduced for the reserves over the past decade, and the large number of reservists who have been on active operations in Iraq and Afghanistan, there is far greater public understanding of the key value of reservists, some of whom have made the ultimate sacrifice.
To concentrate on the future, I hope that the Minister will give the House a better understanding of the Government’s expectations of reaching the numbers and mix of reserves that they are now pursuing, and the risks if they are not achieved. As it is well understood, a variety of factors will influence this outcome. First, of course, there are the individuals who have to be attracted, motivated and committed to volunteering and remaining within the reserves structure so as to become worthy and effective members of their units. If trained from scratch, it is essential that the individual is prepared to serve for a number of years in order to “amortise”, as it were, his or her training costs.
Then, as has already been mentioned, there are the employers. While the country is involved in operations overseas, the profile of the Armed Forces is much enhanced in the public mind. Employers react to this by wishing to be as accommodating as possible in releasing employees for reserve activity and retaining them on the payroll after service. But as we move, we hope, beyond the past decade or two of wars of choice—that is, choice by the Government of the day to commit forces into sustained expeditionary operations—will the reduced prominence of the Armed Forces still be a good recruiting sergeant for the reserves, and will they be as readily accepted by employers as they are today? I am not clear what proposals or suggestions the Government will pursue to encourage and, indeed, to reward employers who agree to have and release reservists when they are required for training or for operations. More will need to be done in this regard.
I am also concerned that the Government’s expectations in terms of achieving their recruitment and retention targets are overambitious. Even for the Royal Air Force, which has a good blend of reserve units and is standing up further elements in other geographic areas, such as Liverpool and Northern Ireland, to expand areas for recruitment and provide or sustain an RAF regional footprint, forecasts have not lived up to expectations. I recall mentioning in 2008 in a debate on the reserves the serious dip in recruitment that had been experienced by the RAF Auxiliaries earlier that decade and that it was estimated that full strength could not be reached before 2013-14. A quick look at the figures shows that the trained strength is now forecast not to be reached before 2016. In other words, expectations have not been fulfilled.
Why are the Government so confident that this time around, with far greater ambitions for reserve numbers, the targets can be reached? What evidence do they adduce from past figures? What will have changed so dramatically in the next five to six years that trained strength targets will be reached and sustained? I hope that the Minister can reassure the House on this critical point. Or will he be frank and say that while their aspirations are to get to 100%, 75%, say, may be more realistic?
Lord Glenarthur
My Lords, as my noble friend Lord Freeman forecast, I will confine my remarks principally to the matters of employers and employer support. As I think some of your Lordships know, I spent seven years as chairman of the National Employer Advisory Board. Indeed, I worked a lot over that period with three of the noble and gallant Lords who are sitting opposite.
I wholly support the notion that reserves should be usable. It is far better to have 30,000 fully trained, fit and deployable members of the TA than a higher number of whom only a proportion are fit and qualified enough to be deployed. The same goes for both the naval and the Air Force reserves, albeit in their smaller numbers. From what I have read about what is proposed to appear in the Green Paper shortly, I must ask whether the Government have really thought through how these reservists are going to be used in the future. Have the Government taken serious advice so far from employers and employers’ organisations and understood what their reaction is likely to be? Have they consulted the CBI, the EEF, the chambers of commerce and the Federation of Small Businesses? I sincerely hope so.
At a time of considerable economic strain, employers face considerable difficulties. Whatever the fine words—and I have used them myself in the past—about wanting to establish a new relationship between employers and employees, individuals, families and reservists, I urge the Government not to imagine that their aspirations for greater utility of the reserves should appear to be at the expense, in some form or other, of civilian employers of reservists. I find it hard to be enthusiastic about the diminution of our Regular Forces and some of the capabilities that we are losing. If the Government want—as they should—adequately trained, experienced, properly equipped and resolute servicemen, whether regular or reservist, who can be deployed with confidence, somehow the funds have got to be found to pay for it. The employer should not be the person who faces an undue burden.
Having said that, employers have been remarkably resilient for many years with both Iraq and Afghanistan. As I discovered during my time as chairman of NEAB, intelligent mobilisation worked extraordinarily well but we should not allow this success to lull us into a false sense of security. Mobilisation for manifestly operational tasks is one thing; and mobilisation of reservists, even to release Regular Forces from a more mundane role so that those regulars can be deployed operationally, may be acceptable, as was shown when reservists played a role in Cyprus. However, if it is a gleam in the eye of the Government to use reservists for some more regular standing commitments, either by individuals, groups of individuals or formed reserve units, they should be cautious. Employers might not so readily understand or accept mobilisation of employees for extended overseas deployments and other activities that fall short of operations, however those ideas are dressed up. Whatever the nature of the understanding of the benefits to the deployed individual, and the benefits they can bring back to the employer, as my noble friend Lord Lee said, what otherwise is in it for employers? At the moment it seems that there is precious little in it for them.
What new measures are going to be brought forward to help support employers, on whom increased demand is going to be placed? What thought has gone into a package of measures to make it worth while for employers, especially SMEs, to derive some practical benefit or advantage? In my time at NEAB, I long argued that SI859, the relevant statutory instrument, has to be substantially changed so as to provide a strong tangible incentive to employers; otherwise, there is the risk that this would be perceived, rightly or wrongly, as defence on the cheap. Some will argue that the country cannot afford a fully fledged regular defence effort so it has to rely on the good will of employers who are often struggling to keep their businesses afloat.
As well as the tangible efforts that SI859 might produce, what about, for example, accreditation of skills from one element to another, from the reservist to the employer? I would have quite some difficulty and some tough questions as an employer if an employee aspired to spend large amounts of time away on military training and deployments—and I am a supporter of the whole concept. Even if I knew that he or she would bring back excellent soft skills from that experience, which could be put to good use in the workplace, I would want to know why as an employer I should have to bear all the expense and inconvenience, however loyal I felt.
The Government should be very wary indeed of contemplating anti-discrimination legislation that would make it illegal for companies to deny employment to those who rightly declare that they are reservists. We should not add to the red tape burden that employers already face. In any case, employers will find a way of getting round it and it would be seen as hugely negative by smaller companies in the private sector, as SaBRE research shows. We have an enshrined military covenant for regular reserves. What about an enshrined covenant for the employers of reservists?
I hope that my noble friend will ensure that the work of SaBRE and those other organisations that have worked so well to date is not changed in a way that confuses the employer and the employee. It has worked well. Let us develop it but let us not change it massively.
Lord Addington
My Lords, this is one of those debates when I get the impression that everybody is singing from a very similar hymn sheet.
The first document I got from the Library was Future Reserves 2020, the opening paragraphs of which are headed: “Our Reserve Forces are in Decline”, “We have failed to modernise Reservist Roles”, “We are not exploiting the potential of our Reserves” and “We are not using the Reserves efficiently”. I do not think anybody in this debate has disagreed with any of those sentiments and I have not heard anything anywhere that contradicts them. So effectively we are saying it is broke and we have to fix it.
The Government have come up with an approach that seems to have potential. As has been pointed out by many people in this debate, the will to follow through and support this very interesting cross-section of people involved—employers, employees, the military and all those bits of government and outside government that are brought into that interlocking experience—is going to be vital.
As I was going through the briefing pack and listening to this debate, I came up with one central theme for all those involved: “What is in it for me?”. If the military can get units that are deployable, highly trained and ready to go into action at a moment’s notice, particularly if they are locally based and may well be able to take on emergency response activity, that is very important for the military structure. But when it comes to individual reservists and their employers, my noble friend is quite right to draw attention to the fact that we have got to address this and see how the Government can help, in both hard and soft ways.
My noble friend Lord Lee started with the point of how you recognise and reward people. Oddly, the Olympics probably displayed this. If you give somebody recognition and a sense of purpose, people will take that on board. That is a great deal of what seems to inspire the Reserve Forces. They do it because they want to. They feel that it gives them a sense of duty, a sense of purpose and a sense of support. That should be enhanced and polished by the implements of the state: the forces themselves. There is a real duty upon the command structure to make sure that these groups, who are volunteering and assisting, not because it is their profession but because they choose to give of their spare time and potentially risk their lives, should receive full recognition. It has also been suggested in this debate—I was going to make this point anyway—that the military covenant should take account of what a reservist does.
What is in it for the employer? Sticks and carrots and other clichés come to mind, but the danger is that you end up hitting people with a carrot and trying to bribe them with a stick. What are we going to do? You can get at a big employer quite easily. You can say, “Your corporate responsibility duties are taken into account. Here, you can have access, bigger government contracts. Are you helping us?”. All of this can be done in certain ways, hard and soft.
With the smaller employer, you are going to have to be more proactive and give support in various ways to encourage them to come forward. If you want specialist skills, many small companies are involved in the field of anti-cyberterrorism and anti-cyberattack; I am chairman of one. We may have in my own company people who would be ideal for these military roles. How are you going to help support and fill those gaps when they are required? It is a real question which has not yet been fully answered.
It would be unreasonable to expect the Minister to do it now, but we must take away an idea of the consideration and work that is going on here. Let us face it, the traditional TA was a very good target for the odd joke; Billy Connolly’s sketch about his own experiences made me laugh. But if you do something out of duty and respect, because you should and believe that it is your role, and if people put you through that without building you up and saying, “Yes, you are important” and making sure that you can maintain a job, it does not matter what scheme you put down on paper, it simply is not going to work.
Lord Dannatt
My Lords, I am conscious that I am echoing the comments of other noble Lords who have spoken in this debate before me when I acknowledge and pay tribute to the dedication and commitment of our Reserve Forces, without whom the Armed Forces could not have done what they have done over the past 10 years—principally, but not exclusively, in Iraq and Afghanistan. As is widely known, typically, 10% of every brigade group deployed, previously to Iraq and now in Afghanistan, have been mobilised reservists. In defence medical units, this percentage has often been much higher. So there is no doubt about the critical role that our Reserve Forces play, especially as part of our land forces, in which I include the Army, the Royal Marines and parts of the Royal Navy and the Royal Air Force.
However, it is the future role of our Reserve Forces that your Lordships are debating today, but the role of the Reserve Forces can be debated properly only in the context of today’s strategic and financial environment and the policy choices and decisions that Her Majesty’s Government have made in the past two years. The consequences of some of those decisions have undoubtedly produced risk: risk to the defence of the realm; risk to the safety of our citizens; and risk to the well-being of the Armed Forces. Reducing the size of the regular Army from 102,000 to 82,000 is a significant risk. There is no other way to describe that. But risk itself is not a problem provided that it is identified, acknowledged and then well managed. Mitigating the risk of a too small full-time Army by significantly increasing the number of part-time soldiers is a perfectly reasonable risk management strategy, but one with its own inherent risks. We have heard about many of them already this evening. Will the Reserve Forces be able to attract a sufficient number of volunteers to fill the ranks? Will enough resource be made available to train those volunteers to a sufficiently high standard? Will the roles and training opportunities being made available to the volunteers be sufficiently challenging and satisfying to motivate and sustain them—here, I think especially of officers and senior non-commissioned officers? Will sufficient civilian employers be willing to let the volunteers—their employees—take significant periods of absence to be able to join units on major training or operational deployments?
These, and more, are all legitimate questions that are being asked and must be asked. For this initiative to succeed, the answer must be yes to all of them. There must also be an absolute determination to substantiate a positive answer; otherwise the risk identified will translate from being just a risk to our security to being an actual danger to our security.
Notwithstanding our withdrawal from Afghanistan in 2014 and apparent lack of appetite for further foreign interventions, a glance at the insecurity of the world in the past decade and the insecurity of the world today fills me with no great optimism that the decade to come will be any less demanding for our Armed Forces than the decade just past. We may think that we are better at predicting the future than past generations, but strategic shocks happen, as the Falklands and 9/11 testify.
Yet it would seem that the judgment has been made either that the world will be a more secure place in the next decade or that we wish to play a lesser role within the world in the next decade, because, unless these plans for the greater utilisation of our Reserve Forces come fully to fruition, there is no doubt that we will have less military capability than in the past and no option other than to play a lesser role in the world, which would constitute a policy change forced by circumstance and not decided by debate.
Do my comments constitute a precursor to an attack on the Government’s defence policy and priorities? The answer to my own question is no, or at least not now. Despite the significant risks about which I am concerned, I take some comfort from the stated government intention to hold a major defence and security review once in every Parliament. Clearly, this Government cannot guarantee what any future Government might do after the next general election but, frankly, no right-thinking person would wish to see a repeat of the 13-year gap between the formal defence reviews of 1997 and 2010.
I look forward to the next defence review, set properly against the strategic circumstances of two or three years’ time and, of course, mindful of financial issues, but only mindful of, not driven by, financial issues. If an open, honest and thorough analysis of our strategic circumstances is made, set against a similar debate about our national ambition, we will reach proper judgments about the military capabilities that we require and their quantum. Should my fears about the capabilities and quantum of our land forces as currently envisaged be substantiated, then the mechanism for remedy exists, even if that would mean a modest reprioritisation of spending across government and not just within defence.
For now, I support the plans to increase our Reserve Forces, and, with others, will do whatever I can to help those plans succeed, but should those plans not come to fruition, I take comfort in the context of the next defence review and the formal chance that it will provide to think again.
Lord Sheikh
My Lords, at the outset, I thank my noble friend Lord Freeman, for securing this debate and for his excellent speech. As we begin the period leading to Remembrance Sunday, the contribution of all members of our Armed Forces, past and present, is very much in our minds. Reserve Forces have fought in every recent operational theatre, alongside regular personnel. As we remember the sacrifices of the past, we need to look to the future in a spirit of sober reflection.
When we look at the future role of the Reserve Forces, we cannot do so without considering the wider defence context. The Strategic Defence and Security Review provides the backdrop for these important decisions. I welcome the fact that these reviews will now be held every five years. Before 2010, the last Strategic Defence Review was held in 1998; and the previous one in 1992. As we look towards the end of our military commitments in Afghanistan, now is an opportune time to think about the future shape of our Armed Forces. What is clear is that we will need greater flexibility in both Regular and Reserve Forces. I welcomed the Secretary of State’s announcement, on 5 July, that the Government accepted the broad thrust of the review of our Reserve Forces.
To increase operational flexibility, reservists can expect an increased role, with greater integration alongside Regular Forces. That will require an increase as well as a change in the nature of the role of reservists, and it sits well alongside wider defence reforms. We need to recruit reservists with specialist skills and expertise. By redefining reservists’ role, there will need to be more predictable scales of commitment, particularly for enduring operations. This raises some potential issues. The Government, as an employer, have set a good example by demonstrating how they will encourage civil servants’ participation in future; civil servants can look forward to 10 days’ paid leave to conduct Reserve Forces training. However, as was explained to me recently, when reservists are deployed in theatre, the tour may last six months, but the time away could be more than that. With my background in business, I know that this could have serious consequences, particularly for small businesses. A balance is difficult to strike; employers can ask at an interview whether someone is a member of the Reserve Forces. I hope that the Minister will be able to update your Lordships’ House on what support is being made available to businesses as well as potential recruits.
I congratulate the All-Party Parliamentary Group on the Territorial Army for its work on this. I welcome the Partnering for Talent initiative between the Ministry of Defence, the Department for Work and Pensions and private enterprise. This pilot started recently, identifying business benefits for employers supporting reservists. These are early days, but I would welcome the Minister’s observations on progress.
Reserve Forces have sometimes been at a disadvantage when returning from theatre. Their period in decompression can be less than for Regular Forces, and the level of support available can be harder for them to access. The Armed Forces Act 2011 enshrined the military covenant in law; this agenda has been picked up enthusiastically all across the country and captured the public imagination. I welcome the Government’s commitment to the military covenant, including for reservists.
I now press the importance of the contribution of people of all ethnic groups to our Armed Forces. In this regard, I raise two points. First, there is a shortfall of about 20% in the recruitment numbers from ethnic minority communities; secondly, there is the issue of retention. On the latter, it is important that the skills of the ethnic-minority personnel are fully recognised and that promotions are based on merit. I am reliably told that there is some disquiet among serving personnel and we need to look at why there is dissatisfaction. I would appreciate the Minister’s views on the two points I have raised.
I add that I encourage ethnic minorities to join the Armed Forces and have spoken on this subject many times at meetings and events. Our Armed Forces have always been strongest when drawn from the widest possible pool of manpower and talent. To conclude, this debate has rightly celebrated our Reserve Forces and their increased contribution to our continued security.
Lord Walker of Aldringham
My Lords, after many years of involvement with and command of the TA, I have always held our reserves in singularly high regard, but that regard is dosed with a good dollop of realism and an understanding of the art of the possible for Army volunteer units. I stress Army because I do not know the Royal Naval and Royal Air Force Reserves as well.
Against that background, I have a number of concerns about the proposals in the report, Future Reserves 2020. Of course, there is not time to discuss them all today, so I will confine myself to just two: recruiting and roles. These are self-evidently linked because if we do not recruit sufficient volunteers there will be gaps in the Army’s order of battle and if the roles are not exacting, exciting or attractive enough then volunteers will not bother to join.
Recruiters for the Regular Army judge that about 20% of recruits are so-called “army barmy”. In other words, these are people who have passionately wanted all their young lives to join the Army and have done so. Clearly, a number of territorial reserves feel the same. These are not the people I am talking about because they will probably join whatever the Government of the day do to reform the service. The fact is that there will never be enough in this category alone to fill the ranks of either the regular or the TA elements of the Army.
To my knowledge, since the 1980s the Territorial Army has never been recruited above 80% of its full established strength. Indeed, its current unreformed strength is well below that at around 50%. There is as yet little evidence to indicate that this phenomenon will be different whatever the size of the force. Indeed, the smaller the critical mass, the less likely it will be able to keep its strength up. Nor should we underestimate the extent of the disincentive from the rationalisation—in other words, the significant reduction—of the TA estate. I would compare the impact of that on recruiting to what would happen if coffee drinkers found that Starbucks reduced its number of coffee outlets. If a Starbucks is to hand, people will go and buy their coffee there. If they have to travel some 10 miles to get to the nearest Starbucks, they will go somewhere else. That is also the case for those who might join the TA but take proximity to one of its centres into account. It is particularly the case for those who live in rural areas and may have to travel 20, 30, 40 or more miles to attend an evening or weekend session.
There is then the paradox of why people join the TA. Some who join are used in their professional specialisation. Doctors, dentists and chaplains are classic examples and there are many others. But many join to have a complete change from their professional skill. Lawyers, teachers and bankers love being riflemen, gunners and engineers, for example. They genuinely do not want to be used in their professional capacity and would probably not join if they were forced to do so.
However, my experience has been that we have gained the most effective use of the territorials by employing them in uniform to use their specialist professional skills. In Bosnia, I had a TA infantry officer who was, in civilian life, a High Court judge. He was an absolute wizard at translating the small print of the Dayton agreement into practical instructions for the warring factions. In that capacity, he made a far greater contribution to the overall operation than he would have done in his capacity as an infantryman. In Iraq, several teachers and bankers were diverted from their primary roles to help develop schools and banking systems. Indeed, our experience on recent operations is that we need people who understand the media, construction, politics, law, economics and all manner of areas for which the Army is never the first port of call. Balancing this with those who aspire to be straightforward soldiers and the needs of the total force is a delicate task: get it wrong and the volunteers will vote with their feet, even more so than the regulars because for them it is by and large a secondary job.
We also need to look at the terms of service for these folk. The EU part-time workers directive makes it clear that a part-time worker must be treated no less favourably than a comparable full-timer. That means that unless employers can objectively justify exclusion, part-time employees have to be provided with access to pension schemes on a basis no less favourable than for their full-time counterparts. I have no doubt that the clever clogs in the MoD will find some objective justification to gain derogation from this and there is no mention of it in the report. But if it is to be an integrated Army, and on moral grounds, surely we should make volunteer service to the Armed Forces of our nation pensionable. Of course the smaller the Army, the more often its component parts are likely to be used. Employers, as we have heard, are generally good people and their track record in supporting the deployment of their workforces to operations is commendable, but we must ask ourselves whether, if such deployments become routine rather than in the event of national crisis, this willingness to be supportive will continue.
Finally, my purpose in identifying these issues is not to kick dust in the face of the reforms, for I very much hope that all comes good, but it would be wrong of me to say that I agree with the outcome of the latest defence review. I regard it as a dangerous dismantlement of our Armed Forces for short-term gain in the face of years of historical evidence and at a time when global instability is rife and there is a plethora of asymmetric risks to our national security. The report Future Reserves 2020 recognises that there is risk in the proposals it contains for our part-time force. My own experience tells me, sadly, that that risk is highly likely to materialise.
Lord Rosser
My Lords, it is clear from this debate that there is unanimity on the importance of the Reserve Forces to our regular Armed Forces, to our national security and to the communities in which they are based. Reservists act as something of a bridge between the military community and the country as a whole. They balance their family and civilian commitments with their military duties, which often involve courageous acts. Thousands of members of the Reserve Forces in total have been deployed in Iraq and Afghanistan, in the Balkans and in Sierra Leone. They also participated in operations in Libya. As the noble and learned Lord, Lord Phillips of Worth Matravers, made clear in his thoughtful and interesting maiden speech, our Reserve Forces make an invaluable contribution and are prepared to make the ultimate sacrifice. A number have done so in the service of our country. We all owe them our deep admiration and an enormous debt.
The Government are going down the road of a significant increase in both the number and the role of our Reserve Forces. That is in large measure to meet the requirements of Army 2020, relating to the future structure of the British Army. The volunteer Army reserve will be expanded to a trained strength of some 30,000 with more predictable scales of commitment. The Government have said that they are now recruiting reserves for all three services. The Reserve Forces will be expected to commit to specific amounts of training and, for the Army mainly, to accept a liability of up to six months’ deployed service plus pre-deployment training in a five-year period, dependent on operational demand.
We support the expansion of the role of the Reserve Forces. It is important that we ensure that those with special skills—whether, for example, in engineering, in IT or in the medical field—are able to use them in the context in which they are deployed militarily so that the effectiveness of their contribution can be maximised. However, the reality is that some 15,000 additional highly competent part-time reservists cannot fill the gap created by the loss of 20,000 full-time regulars. Defence planning assumptions have stated that our Armed Forces could undertake one major and two lesser operations at the same time. Does that capability commitment apply to the regular Army of 82,000, that now being its intended strength?
Under the envisaged role of our enhanced Reserve Forces alongside a Regular Army of 82,000, will there potentially, or actually, be greater involvement in front-line operations, with the distinction between members of the Reserve Forces and the regular Army narrowing considerably? Will members of our Reserve Forces face significantly increased risks as a result of the enhanced role that they will be playing in future?
Will the Minister give a guarantee that the Reserve Forces (Safeguard of Employment) Act 1985, which protects reservists’ employment rights, will not be scrapped? The direction in which the Government appear to want to go in employment generally is to weaken the legal rights and protection for people at work. Is that also going to apply to the increasing numbers of members of our Reserve Forces in both their regular civilian employment situation and their role as members of our Reserve Forces?
The Government’s intention is that members of the Reserve Forces will be undertaking their military role for longer periods of time than at present, with a much firmer commitment than now to being available, ready and prepared to carry out that role when called on to do so. How, however, do the Government intend to ensure that the trained reservist manpower will be available when it is really needed, as the scale of the change being embarked upon will need the support of many, particularly employers? For those in civilian employment, there will be pressures likely to affect their willingness to take on the enhanced commitment that will be required from reservists in future, as that extended commitment, with more time away, could well affect their main wage-earning or salary-earning career and their prospects of promotion and progression. Yet the ability to physically recruit and train sufficient numbers for our future Reserve Forces, and then retain them, will be critical, and it is far from clear how that will be achieved.
Equally critical to the delivery of the Government’s plans for the future of our Reserve Forces will be the availability of quality, full-time Reserve Forces support personnel at a time when some reserve unit permanent staff posts important for reservist recruitment, training and administration appear to have been withdrawn under cost-saving initiatives. Can the Minister say any more about the Government’s intentions and objectives in respect of bringing forward legislative proposals to protect the regular employment position of reservists called up for duty under the proposed new enhanced level of commitment that they will be required to give to ensure that they are not disadvantaged or discriminated against in their regular employment, either before undertaking a period of mobilisation as a reservist in the service of our country or indeed on their return? What action do the Government intend to take to ensure that employers are encouraged and incentivised to have and keep more reservists on their staff who are likely to be away from that civilian employment for more time than at present?
I am aware that the Government have said that they intend to publish a consultation paper—this autumn, I think—setting out their detailed proposals. Nevertheless, I hope that the Minister can say something about their thinking on how they intend to achieve their objective for the future role and numerical trained strength of our Reserve Forces. Statements of objectives are relatively easy; it is the delivery of those objectives that can be difficult, and sometimes very difficult indeed.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, I am very grateful to my noble friend Lord Freeman for securing this debate. Like others who have spoken, I pay tribute to him for all that he has done for the Reserve Forces.
I very much welcome the excellent and witty maiden speech by the noble and learned Lord, Lord Phillips. I also join my noble friend Lord Freeman in paying tribute to the Duke of Westminster, who, after 42 years of service within the Territorial Army, has recently retired.
The Reserve Forces have made a major contribution over recent years. Like the noble and gallant Lord, Lord Stirrup, I salute all those who serve and have served in the reserves. As the noble Lord, Lord Dannatt, said, the Regular Forces could not have done their job without them. Almost 25,000 reservists have served in a variety of roles in Iraq and Afghanistan since 2003. In doing so, sadly, 29 have lost their lives. Reserves have and currently are serving in Africa, the Middle East and Cyprus as part of our worldwide defence presence. In this country, they provided assistance in Gloucestershire and Cumbria in the wake of the flooding in 2009 and, more recently, in support of the London 2012 Olympic and Paralympic Games. This provided an opportunity to interact with the wider public as part of the combined military effort, but reaching out and working within the community has always been an integral part of the Reserve Forces ideals. The links between the military and local communities are often strongest where there are reserve units providing a vital connection between those in the military and the general public.
For all their success, there have been concerns in recent times regarding the health of the Reserve Forces. The independent commission report of July 2011 identified a number of concerns saying they were too small; there were not enough opportunities for high quality training; equipment must be modernised; and that the talents and skills that reservists had gained in civilian employment should be more actively used. In response, in his Statement this summer, the Secretary of State gave his full commitment to addressing those concerns. We are investing an additional £1.8 billion over the next 10 years in our Reserve Forces. This is already having an effect. Reservists are receiving the up-to-date equipment they need to train with, such as Bowman radios and opportunities to use the Husky, Mastiff and Buffalo vehicles. There are now increased opportunities for overseas training and for joint regular and reserve exercises.
Additionally, the structure of the reserve is also being reviewed. Army 2020 set out the road map for further integration and co-operation between regular and reserve units. This is part of the overall commitment for reserves to be an integral and integrated element of the whole force on deployments at home and overseas offering a range of skills and capabilities that complement each other in providing a formidable military force. This is known as the whole force concept. To ensure that this can be delivered effectively, a Green Paper will be published early this month which will start a public consultation exercise. It will seek the views of employers, reservists, the public and private sectors and all those who have an interest in supporting the Reserve Forces. What will be at its heart are proposals to strengthen the relationships between defence and the civilian employer and between defence and the reservist.
Through the consultation process, we will ensure that the views expressed are heard. Any subsequent changes will recognise these positions, and we will ensure that the reserve is fit for purpose. The increase in the size of the Reserve Forces is an essential component of this. The trained strength will increase. The maritime reserve will increase to 3,100, the Army reserve will increase to 30,000 and the Air Force reserve will increase to 1,800. This will allow reservists, who often offer key skills that are not held and cannot be easily maintained within the regular force, to strengthen the military effort. For example, reservists who in their day jobs are doctors, nurses and specialists within the NHS can provide the care that troops on operations may require. Likewise, as we face the challenges and threats that come from cybercrime and terrorism, we must recognise that to respond to a new threat requires new skills. It is the current and future IT graduates and industry specialists who are most equipped in this area, and through membership of the Reserve Forces they can provide the expertise needed for future operations. In this area, it is easy for both defence and the employer to see the value of the reservist as part of an integrated force.
None the less, the impact that a reservist’s service can have on their employer is recognised. Measures are already in place to address this. Notably, an employer can raise an appeal, requesting that the reservist’s service is deferred or delayed to a more convenient time to minimise the impact of their absence. When the reservist is serving on operations, an employer can claim up to £110 per day to cover additional wages for a replacement employee and to meet expenses, such as agency fees and advertising costs.
Crucially, we must not focus only on the impact for the employer. There can also be significant benefits. Reservists receive extensive leadership and communications training which independent research values at £8,000 per person. They will have proven ability to deal with high pressure situations, rapid changes and dealing with difficult parties. Additionally, individuals may well be using and further developing their specialist civilian skills while in uniform. Having an integrated force of reserves and regulars provides the most effective means to deliver a military force equipped for the range of diverse challenges ahead.
In the short time that I have, I will try to give as many initial, possibly somewhat basic, answers as I can. I have been asked some very valid questions and I undertake to write to all noble Lords with much more detailed answers. I will copy in all noble Lords who have spoken in this debate. My noble friend Lord Freeman asked about ORBAT. We expect to be able to make detailed announcements on organisations in the spring of next year.
My noble friend Lord Lee asked about the progress of the cadet unit. We are working closely with the Department for Education and everything is on track. My noble friend also asked if overseas employers adopt a more encouraging attitude to reserves than we do. Reserve Forces have been ably supported by a number of organisations, both UK-based and those from overseas. Our goal is to improve relationships with all employers.
The noble and gallant Lord, Lord Stirrup, asked for confirmation that we will continue the sustained delivery and investment in the reserves. As I said earlier, the whole force concept is at the heart of our vision and delivery of Future Reserves 2020. We are fully committed to making that work.
The right reverend Prelate the Bishop of Wakefield mentioned the welfare provision for reservists. When on operations, reserves receive the same standard and access to care as regulars. The Armed Forces covenant applies to the reserves and we aim to meet that need. The noble and gallant Lord, Lord Craig, and the noble Lord, Lord Dannatt, asked whether we are confident that we can reach the reserve numbers. We are investing an additional £1.8 billion over 10 years to make that work and we are confident.
My noble friend Lord Glenarthur asked a number of questions and I will write to him with detailed answers. He specifically asked about how reservists will be used, whether we have taken advice from employer groups and what new measures we are planning. I will cover all those in my letter. But the desire is to establish positive, mutually beneficial relationships between employers and defence wherever possible. Increasingly, we will look to take account of the needs of specific employers of reservists, particularly those that are micro-small or medium-sized enterprises.
My noble friend Lord Sheikh asked some very important questions about minorities. I will look into this in some detail and write to him with a detailed response. The noble and gallant Lord, Lord Walker, asked about the TA strength. The greatest threat to numbers is the lack of investment and support, and a lack of a meaningful role. The decline in the past reflects that. We are investing in and focusing on the reserves and giving them essential roles that are integral to the whole force. The noble and gallant Lord also asked about changes to pensions and reservists’ eligibility for Armed Forces pensions. The new Armed Forces pension scheme creates one scheme for all, including reservists. There are currently several different Armed Forces pension schemes. Reservists on operations or undertaking full or part-time commitments will all be included within the new pension scheme, should they choose to be so.
The noble Lord, Lord Rosser, asked some detailed questions about employers and reservists. I undertake to write to him with detailed answers to his questions as I am running out of time.