House of Commons

Wednesday 7th November 2012 Commons Chamber

Wednesday 7 November 2012

The House met at half-past Eleven o’clock

Prayers

Wednesday 7th November 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 7th November 2012 Commons Chamber

The Minister for the Cabinet Office was asked—

[Craig Whittaker (Calder Valley) (Con)]

1. What progress he has made in implementing the civil service reform plan.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

In June, we published a plan with specific actions to tackle long-standing weaknesses in the civil service, to build on strengths and to address frustrations expressed by civil servants themselves. If effectively implemented, the actions will lead to real change, which is urgently needed. The pace of change now needs to increase. Yesterday, we published the digital strategy, which sets outs how we can save money while improving the delivery of public services. That is an example of civil servants enthusiastically embracing and driving radical reform.

[Craig Whittaker]

Over the past decade, public sector productivity remained static while private sector productivity improved by a third. What steps is my right hon. Friend taking to ensure that the civil service learns best practice from business?

[Mr Maude]

After the coalition Government formed, we put in place the efficiency and reform group, which is driving a much more business-like approach to those areas of activity that run across government: the procurement of common goods and services; property; the management and oversight of major projects; and information and communications technology infrastructure, which was wholly unco-ordinated. All this is driving savings in the cost of government, but we need to do much more. The key to that is developing much more interchange between the private sector and the civil service, which the head of the civil service is committed to driving forward energetically.

[Kelvin Hopkins (Luton North) (Lab)]

Will the Minister confirm that “reform” is not just code for privatisation, outsourcing and politicising the senior civil service? Will the civil service be retained as a neutral service to government, with proper ministerial responsibility?

[Mr Maude]

There is no plan to change the basic rules of accountability, in the sense that there is a permanent, politically impartial civil service. However, there is a view, which I believe is shared right across the House, particularly by those who were Ministers in the previous Government, that responsiveness and effectiveness need to increase. That view is shared by the leadership of the civil service. One thing we are trying to do, through the civil service reform plan, is to respond to some of the frustrations expressed by civil servants themselves. They get very frustrated with the bureaucracy and the hierarchical nature of the service, as it is currently run.

[Mel Stride (Central Devon) (Con)]

13. I congratulate my right hon. Friend on his bold and imaginative reforms of the civil service, particularly the mutualisation of the civil service pension scheme. May I press him to look at other areas of the civil service where that successful approach may be adopted?

[Mr Maude]

The movement towards mutualisation of public services is very powerful and is being looked at by other Governments, as well as our own. It is powerful because it enables entrepreneurial leaders in the public sector, of whom there are many, to take control of the services, innovate, do things differently and drive out cost. It is a powerful means of driving efficiency, for the taxpayer and for the user.

[Jon Trickett (Hemsworth) (Lab)]

Today’s Institute for Government report reveals what it calls “fragile leadership” of the civil service reform programme. It is clear that the chaotic and expensive redundancy programme and the culture of blaming the service for blunders while Ministers get away scot-free is damaging morale. Even the right hon. Gentleman’s friends in the TaxPayers Alliance acknowledge that he is engaging in the costly practice of laying off staff while paying to recruit replacements. For all his bluster about savings, the Cabinet Office now has more staff than it had last year. When will he get a grip?

[Mr Maude]

Coming from the Parliamentary Private Secretary to the previous Prime Minister, who presided over a massive explosion in the size of the state and the growth of inefficiency—who presided over the decade in which public sector productivity was flat while private sector productivity grew by 30%—that is pretty rich. The hon. Gentleman refers to the expensive voluntary redundancy programme that has taken place. Under the position that his Government left—until we reformed the redundancy scheme—it would have been impossible to pursue that at all. The civil service today is considerably smaller. There are plans in Departments to reduce the size further, but productivity is already improving considerably. I just wish it had started under the previous Government.

[Mr David Hanson (Delyn) (Lab)]

2. Whether his Department has issued guidance to other Departments on the likely implementation date of a statutory register of lobbyists.

[The Minister for Government Policy (Mr Oliver Letwin)]

The plans for developing a response to the Select Committee’s report and other evidence are still under way, and we have not issued guidance to Departments yet on a timetable. However, I rather think that we will do it quicker than the 13 years in which the previous Administration failed to introduce any systematic approach to lobbying.

[Mr Hanson]

Can the right hon. Gentleman confirm that the special adviser to the Secretary of State for Work and Pensions is also the paid chairman of an outside lobbying organisation? Does that not show the need for urgent guidance and, preferably, the statutory register of lobbyists that the Government have promised but so far failed to deliver?

[Mr Letwin]

I think I can say that I disagree with every part of the right hon. Gentleman’s question. He was a distinguished Minister in the previous Government and will be perfectly aware of these things. The special adviser in question made a full declaration of what she was doing to the permanent secretary and the Cabinet Office. It is also on the parliamentary register, because she is a special adviser. It is all perfectly appropriate and the Centre for Social Justice is not a lobbying organisation but a think tank with a long and passionate record of advocating social justice.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend agree that we need to look at internal as well as external lobbyists? May I encourage him in his work to identify the very large numbers of people who are working during paid public sector working hours for trade unions affiliated to the Labour party?

[Mr Letwin]

My hon. Friend makes a very good point. The Minister for the Cabinet Office and Paymaster General is already taking steps to limit the extent of the public payroll and the taxpayer supporting people engaged in trade union activity inside the civil service. My hon. Friend also raises a wider point. Part of the evidence from the Select Committee and others in response to our proposals on the register for lobbyists showed concern that they did not cover the question of those who lobbied on behalf of firms by which they were employed. We have taken major steps to make that more transparent by ensuring that Ministers reveal who comes to lobby them about any subject, regardless of whether they are internal or external. We are considering whether we can go further in that transparency.

[John Cryer (Leyton and Wanstead) (Lab)]

The Prime Minister promised us a Bill two and half years ago and nothing has appeared. Is that because of incompetence or powerful vested interests on the Government Benches?

[Mr Letwin]

The short answer is neither. The reason the hon. Gentleman’s party failed to move on this for 13 years is that it is a genuinely complicated issue. We issued proposals not too long ago and we believe in evidence-based policy making rather than policy-based evidence making. We are therefore paying serious attention to the Select Committee of this House and to others and I would have expected the hon. Gentleman to congratulate us on doing so as Opposition Members frequently ask us to spend more time considering what has been proposed by Select Committees and others in response to our proposals.

[Charlie Elphicke (Dover) (Con)]

May I press the Minister further? There is a big difference between lobbying and the important policy formation work done by think tanks, especially the excellent Centre for Social Justice. There is also a big difference between a special adviser who is a professional and one who is vocational and passionate, like Philippa Stroud.

[Mr Letwin]

My hon. Friend is absolutely right that there is a big difference. We must consider every measure we can to ensure that there is full transparency. In this case, there was transparency—the information can be seen on the register of the House and was fully reported to the permanent secretary and the Cabinet Office.

[Robert Halfon (Harlow) (Con)]

3. What recent estimate he has made of the number of apprentices working in the supply chains of central Government departments and their agencies.

[The Minister for Government Policy (Mr Oliver Letwin)]

I am conscious of the enormous work that my hon. Friend has done to promote apprenticeships. I believe that he recently launched the apprentice card, which is a huge innovation, and I think that he is the first ever Member of Parliament to have a parliamentary apprentice. The whole House owes him gratitude for that. We do not hold figures for the total number of apprenticeships across the supply chain of Government, which is obviously vast, but we have taken action to boost apprenticeships across British business as a whole, with 500,000 additional apprentices this year.

[Robert Halfon]

Since 2011, the Department for Work and Pensions has gently encouraged, through procurement, its private suppliers to hire apprentices. As a result, 2,000 apprentices have been hired. Is there anything the Cabinet Office can do to roll that out across Whitehall?

[Mr Letwin]

My hon. Friend is right that the DWP has managed to get almost 2,000 apprentices into its supply chain through its procurement practices. The Cabinet Office fully supports such schemes where they are appropriate and consistent with providing value for money. We encourage Departments to take forward proposals that are consistent with providing value for money.

[Mr Iain McKenzie (Inverclyde) (Lab)]

Does the Minister share the views of the chairman of his party, who stated that prioritising apprenticeships and linking them to public sector contracts is “ridiculous” and “counter-productive”?

[Mr Letwin]

We are totally in favour of apprenticeships and of promoting them. My right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) was saying —my right hon. Friend the Minister for the Cabinet Office and Paymaster General has repeated this—that we need to ensure that we get value for taxpayers’ money and do not create a set of rules that militate against that. Within that, we encourage and support those Departments that promote apprenticeships that are consistent with the provision of value for money. That is why in my response to my hon. Friend the Member for Harlow (Robert Halfon) I pointed out that we support and encourage schemes such as that promoted by the DWP.

[Ms Margaret Ritchie (South Down) (SDLP)]

4. What recent progress he has made on delivering funding for big society projects.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

I am delighted to say that of the £470 million Office for Civil Society budget, we have managed to find some funding to support a pilot in Northern Ireland of the hugely popular National Citizen Service programme, which I hope the hon. Lady supports. As I have said on many occasions, it is very important to us that the Big Society Capital opportunity is UK-wide, and it is categorically open for business in respect of Northern Ireland.

[Ms Ritchie]

I thank the Minister for his answer, but could he point to any exemplar big society projects that could provide good learning for other regions, apart from the one to which he referred, for which I am grateful?

[Mr Hurd]

There is plenty of good practice to point to. However, this area is effectively a devolved matter. In the case of the National Citizen Service, we came to the Administration with an offer, saying that we think this is a valuable experience for young people and we would like to make it available to young people in Northern Ireland. To their credit, the Administration said yes.

[Richard Fuller (Bedford) (Con)]

Can my hon. Friend update the House about progress on the social impact finance project in Peterborough and assure the House that in developing social impact financing, he will look carefully at how it can be applied to other public sector projects?

[Mr Hurd]

I am grateful to my hon. Friend for his question. He takes a strong interest in the matter. The Government are ambitious to accelerate the development of social impact bonds, which create the space for commissioners to innovate and try new interventions in that space. We have already announced that we will shortly publish the details of an outcomes fund designed to do exactly that.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Four out of five small charities surveyed by the National Association for Voluntary and Community Action expect their finances to worsen in the next year as Government cuts bite even harder. Is not the truth that the Minister has so little ability to deliver extra funding for small charities’ big society projects that if he were to hop on a plane to Australia to join his hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) in the jungle, nobody in the charity world would notice?

[Mr Hurd]

Any Government cuts are the direct consequence of the fiscal incontinence of the Government that the hon. Gentleman adorned briefly as a Minister. We all know from our constituencies that this is an extremely tough time for charities and I could point to a long roll-call of initiatives taken by this Government, including new tax incentives, the gift aid small donations scheme, the implementation of the world’s first social investment bank and £50 million of matched funding for local charitable giving. This Government have a proud record of supporting the charity sector.

[Margot James (Stourbridge) (Con)]

5. What plans he has for the National Citizen Service.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

As I think my hon. Friend knows, the NCS is an enormously valuable experience for young people and we are keen to build on the success of the first two years’ pilots to make it available to every 16-year-old in the country.

[Margot James]

I visited the National Citizen Service in Dudley and I congratulate the Challenge network and the 150 students who took part last summer. Can my hon. Friend advise whether he has any plans to introduce private sponsorship so that we can widen participation in this excellent scheme?

[Mr Hurd]

I thank my hon. Friend for taking the time to visit her local project, and I thank all colleagues across the House who took the time to do so over the summer. I hope they see what I see and what independent research tells us, which is that the NCS experience is helping young people become more work-ready and employable. That is a direct benefit to business, which to date has contributed about £3 million to the costs of the programme. As we look to expand it and make it more available, I expect that number to rise.

[Jenny Chapman (Darlington) (Lab)]

Youth services in Darlington have been decimated to pay for this pet project. If, when we have an evaluation, it turns out not to have been a roaring success, will the Minister put the money back?

[Mr Hurd]

The money has not come from youth services. That is a completely separate budget. The National Citizen Service programme is proving hugely valuable to young people. We have a 95% customer satisfaction rating and, to answer the hon. Lady’s question, independent research is already telling us that the social benefit to cost ratio is 2:1, and we look to build on that.

[Dr Phillip Lee (Bracknell) (Con)]

6. What steps he plans to take to enable small and medium-sized enterprises to secure more Government contracts.

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

8. What recent assessment his Department has made of the extent to which small businesses are engaged with the process of public procurement.

[Ian Murray (Edinburgh South) (Lab)]

9. What progress he has made on making it easier for small and medium-sized enterprises to win public procurement contracts.

[The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)]

Since the general election we have introduced radical measures to make it easier for SMEs to win Government business. These will support growth and innovation. Gone are barriers like unnecessary pre-qualification questionnaires. New opportunities are published on our contracts finder website and SMEs can challenge obstruction through the mystery shopper service.

[Dr Lee]

Over the past two years, I have been contacted by more than one construction company in my constituency that have encountered difficulties in securing small business contracts from both local and national Government. Will my hon. Friend continue to press Departments to remove the burdensome procedures and bureaucracy that make it harder for SMEs, such as those in my constituency, to compete for and win both local and national Government contracts?

[Miss Smith]

We certainly will. We have appointed an SME champion in every central Government Department, all Departments have presented their plans for increasing their percentage spend with SMEs, something Labour never bothered to measure, and our mystery shopper service will continue to provide an outlet for challenging poor service and conditions.

[Julian Smith]

Many small firms are still concerned that public procurement is based solely on price. How can we ensure that quality and sustainability are also taken into account?

[Miss Smith]

The public procurement policy for central Government is to award contracts on the basis of value for money, which covers a combination of cost and quality, as my hon. Friend would expect. Our mystery shopper service provides an outlet for challenging poor selection requirements, such as those he might have experienced in his constituency. I say once again that value for money is something that the Government like.

[Ian Murray]

The Minister claims that direct spend with SMEs has increased since the general election, but will she confirm that the recorded increase at the Ministry of Justice, the Department she claims has had the highest increase, is in fact due to officials starting to include small law firms providing legal aid services? Should those not be stripped from the figures?

[Miss Smith]

I can confirm that the spend on procurement with SMEs has gone up. I say again that it was this Government who bothered to count that spend, unlike those now on the Opposition Benches, and I think that that is something we should be proud of.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Government have repeatedly indicated that they want to reduce the bureaucracy and red tape that can prevent SMEs getting contracts. Will the Minister outline what further steps will be taken over the next two and a half years to complete that task?

[Miss Smith]

I point to the fact that we are publishing for the first time a pipeline of projects and procurements that are available from the Government. There is £70 billion worth of opportunities available as of this year. That builds industry confidence to invest. I would also point to the way we are disaggregating ICT contracts, for example, which will allow them to be more flexible and cheaper for smaller firms to bid for. I note in passing that the Public Accounts Committee has said that the previous Government’s management of IT contracts was a recipe for a rip-off.

[Michael Dugher (Barnsley East) (Lab)]

In June this year the Minister for the Cabinet Office launched the Government procurement Solutions Exchange website, saying that it was

“an easy, informal way for smaller firms to find out about emerging opportunities”.

It all sounded very promising. Is he aware that for the past two months SMEs, when logging on to the website, have been greeted by the words, “Nothing available at this time”? You could not make it up. Why is that? Does not the phrase “Nothing available at this time” neatly sum up the Government’s complete lack of support for SMEs?

[Miss Smith]

I will tell you what is not available at this time, Mr Speaker: an Opposition policy to deal with any of that.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will the Government tell me how many small and micro-businesses are engaged nationally or regionally?

[Miss Smith]

I do not have the number to hand, but I am happy to write to my hon. Friend to help him.

[Dan Jarvis (Barnsley Central) (Lab)]

7. What recent assessment he has made of steps to improve transparency throughout Government.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The Government have a world-leading transparency programme, as is widely acknowledged. Open data sharpen accountability, inform choice over public services and offer raw material for a fast-growing industry of developers and entrepreneurs. As lead co-chair of the open government partnership, we are working with Governments the world over to embed transparency through stretching action plans.

[Dan Jarvis]

Does the Minister share my concern about the Government’s failure to extend freedom of information to private companies that deliver public services? Does that not make a mockery of the Government’s transparency agenda? If he does share my concern, what will his Department do about it?

[Mr Maude]

First, FOI is the responsibility of the Ministry of Justice, not my Department. Secondly, the Justice Committee recently undertook a wide-ranging post-legislative study of the Freedom of Information Act 2000—the Government will respond before too long—and, as I recollect, recommended no such change.

[Craig Whittaker (Calder Valley) (Con)]

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

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

My responsibilities as Minister for the Cabinet Office are for the public sector efficiency and reform group, civil service issues, industrial relations in the public sector, Government transparency, civil contingency, civil society and cyber-security.

[Craig Whittaker]

My local authority currently gives teaching unions £8,000 a year out of the schools budget, as well as giving Unison £27,000 in cash and paying for its offices. In the light of the differences between the private and public sectors in this area, may I ask my right hon. Friend what is being done to bring this into line across the civil service?

[Mr Maude]

Anyone who has responsibility for spending public money needs to ensure that it is spent on the front-line services on which citizens depend. In the civil service, we discovered that 248 civil servants were doing nothing but trade union work at the taxpayers’ expense. Following our consultation, we have introduced tough new controls that will more than halve the cost of trade union activity to the taxpayer.

[Mr Speaker]

Order. There are far too many noisy private conversations taking place in the Chamber. Let us have a bit of order so that Members may actually be heard—it is something to do with manners.

[Mr Andy Slaughter (Hammersmith) (Lab)]

T2. As the Minister seems to love contracting out work to the cosy cartel of G4S, A4e, Serco and Capita, does he not think that transparency should extend to those companies as much as it does to the public sector?

[Mr Maude]

We can, of course, build appropriate levels of transparency into contracts when services are contracted out. That process was taken a lot further by the previous Government, so it is not a feature of the coalition Government. I will pass on the hon. Gentleman’s concern to my right and hon. Friends in the Ministry of Justice.

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

T3. Will the Minister update the House on the launch of gov.uk and the savings he expects to make?

[Mr Maude]

We published our digital strategy yesterday and launched gov.uk recently. We will make significant savings—gov.uk will save £36 million and, ultimately, when all the Departments migrate over to it, between £50 million and £70 million a year, and that is just to provide a much better service for citizens. As more and more of the transactions that people undertake with Government are moved online, we expect to save nearly £2 billion a year, and that is for a better service for the consumer.

[Simon Danczuk (Rochdale) (Lab)]

T5. The National Audit Office report into Whitehall’s budget management showed that just 0.2% of Government spending is in the form of departmental joint submissions. There are opportunities for greater joint working and to save more money; what are Ministers doing to improve this?

[Mr Maude]

I think that every Minister in every Government I have ever known or observed would say that there is scope for much better joined-up activity between Departments. As a result of the civil service reform plan that we are now pushing through, with the strong support of the leadership of the civil service, we should have much greater interchange between Departments to break down the silos that partly cause the problem to which the hon. Gentleman rightly refers.

[Karl MᶜCartney (Lincoln) (Con)]

T4. Will my right hon. Friend update the House on the progress of the efficiency and reform group in driving savings across Government Departments?

[The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)]

After the last general election, we set up that group to deal with the monstrous waste that the Labour Government presided over. It is a tribute to the hard work of civil servants here and across Whitehall that we saved taxpayers £3.75 billion in the first year and £5.5 billion last year. We are accelerating that work and targeting £8 billion this year.

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

The civil service has traditionally been a good employer of women, black and minority ethnic staff and disabled staff. What equality measures are the Government taking to ensure that a 23% cut in staff by 2015 will have no adverse impact?

[Mr Maude]

I am grateful for the hon. Lady’s confirmation that the civil service is a good and diverse employer. I expect that to continue.

[Mr James Gray (North Wiltshire) (Con)]

T6. Government spending on advertising and consultants of all kinds is nearly always wasteful, profligate and—[Interruption.]

[Mr Speaker]

Order. This is straightforwardly discourteous. The hon. Gentleman is trying to ask a question. I want the Minister to hear it and to answer. If, instead of rabbiting away from a sedentary position when their views are of no interest or concern whatever, people were to have the manners to listen, that would help.

[Mr Gray]

Thank you, Mr Speaker.

Government spending on advertising and consultants is nearly always wasteful, extravagant and profligate. What was the annual spend of the previous Government, how much has my right hon. Friend managed to cut it by, and what further plans does he have to squeeze this kind of waste out of Government spending?

[Mr Maude]

We saved nearly £400 million a year by restricting the spend on advertising and marketing, which was wholly incontinent under the previous Government. There are sometimes good cases for using consultants, but we have cut the spend on them by nearly 70%. These disciplines will continue for the future.

[Chris Bryant (Rhondda) (Lab)]

The Minister boasts about the Government’s transparency. The Cabinet Office still holds a large cache of e-mails from Andy Coulson to Rebekah Brooks. When will the Minister publish them?

[Mr Maude]

I think that the hon. Gentleman needs to change the record.

The Prime Minister was asked—

[Mr Iain Wright (Hartlepool) (Lab)]

Q1. If he will list his official engagements for Wednesday 7 November.

[The Deputy Prime Minister (Mr Nick Clegg)]

I have been asked to reply. As the House will know, my right hon. Friend the Prime Minister is on an official overseas visit to the middle east.

The whole House will wish to join me in paying tribute to the two British soldiers who were killed in Afghanistan last week: Lieutenant Edward Drummond-Baxter and Lance Corporal Siddhanta Kunwar of 1st Battalion the Royal Gurkha Rifles. Our heartfelt condolences are of course with the families and friends of these brave servicemen. In a particularly poignant week for us all, with Remembrance day on Sunday, we are once again reminded of the remarkable job that our armed forces do to ensure our safety and security.

Furthermore, the House will wish to join me in paying tribute to David Black, the Northern Ireland Prison Service officer who was shot and killed last Thursday. As my right hon. Friend the Secretary of State for Northern Ireland said in the House on Friday, we utterly condemn this cowardly crime. Our thoughts are with David’s wife and children at this distressing time.

I am sure that the House will also want to join me in congratulating President Obama on his election victory last night. [Hon. Members: “Hooray!”] I suspect that that is the only point at which I will be cheered today by Labour Members. We look forward to continuing the Government’s work with him in building a more prosperous, more free and more stable world.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall have further such meetings later today.

[Mr Wright]

May I fully associate myself with the sincere tribute paid to the two fallen servicemen and to David Black? It is right that this House pays tribute to those who have fallen in the service of our country, never more so than in the week of Remembrance Sunday.

May I also say that President Obama will be relieved to get the support of the Deputy Prime Minister?

The former Metropolitan Police Commissioner, Lord Stevens, has said that police morale is at national crisis levels. Is he right, and why is that the case?

[The Deputy Prime Minister]

As the hon. Gentleman will know, the latest figures show that overall crime is down by 6%, that victim satisfaction with the police has gone up, that response time to emergency calls has been maintained or improved, and that crime has fallen precipitously in his own constituency. So when will he congratulate the police, rather than denigrate them, on doing a difficult job in dealing with savings, as everybody has to, while keeping the public safe?

[David Rutley (Macclesfield) (Con)]

Does my right hon. Friend agree with the Chancellor and the German Finance Minister’s call for the OECD to accelerate plans to tackle the challenge of corporate tax avoidance by multinational companies?

[The Deputy Prime Minister]

Absolutely. I am sure that everybody will warmly welcome the work that the Chancellor is now doing with the Finance Ministry in Berlin to crack down on the industrial-scale tax avoidance by large corporate entities in this country and elsewhere that was allowed go on unchecked under 13 years of the Labour Government.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

May I join the Deputy Prime Minister in expressing our deepest condolences on the death of Lieutenant Edward Drummond-Baxter and Lance Corporal Siddhanta Kunwar, of 1st Battalion the Royal Gurkha Rifles? Our thoughts are with their families and friends. At Remembrance day services this Sunday we will remember not just those who died in the two world wars, but all our servicemen and women who have lost their lives. We also send our deepest sympathy to the family of David Black of the Northern Ireland Prison Service, who was killed last Thursday.

I also join the Deputy Prime Minister in offering our warmest congratulations to the President of the United States, Barack Obama. This morning, he spoke of his determination to create more jobs, health care for all, and to tackle the scourge of inequality. We wish him well.

Lord Justice Leveson will be publishing his report and recommendations soon. The Deputy Prime Minister said that provided those proposals are “proportionate and workable”, the Government should implement them, and the Opposition agree. When Leveson’s report is published, will the Government convene cross-party talks to take it forward? We need a strong, free press, and a proper system to protect people from being, as the Prime Minister said, “thrown to the wolves”.

[The Deputy Prime Minister]

I agree with much of what the right hon. and learned Lady says about Leveson. We have not yet seen his proposals and we must wait to see what he comes up with, but if those proposals are workable and proportionate, we should, of course, seek to support them. That is the whole point of the exercise. I also agree that we should work on a cross-party basis where we can. This is a major issue that escapes normal tribal point scoring in party politics, and there are two principles, both of which the right hon. and learned Lady alludes to. First, we must do everything we can to ensure that we maintain a free, raucous and independent press. That is what makes our democracy and the country what it is. Secondly, we must ensure that the vulnerable are protected from abuse by the powerful, which happened on an unacceptable scale on too many occasions. We need to be able to look the parents of Milly Dowler in the eye, and say that, in future, there will be permanently independent forms of recourse, sanction and accountability when things go wrong.

[Ms Harman]

I thank the Deputy Prime Minister for that answer. We must have a press that report the truth without fear or favour. However, after all the evidence that came out during the inquiry, particularly, as he says, from the Dowlers and the McCanns, we simply cannot continue with the status quo, or a press complaints system in which a publication can simply walk away, or a system that is run by the press. Does the Deputy Prime Minister agree that a version of “business as usual” will simply not do? It would be a dereliction of our duty to allow the Leveson report to be kicked into the long grass.

[The Deputy Prime Minister]

I think everybody accepts, whatever their individual views about this matter, that “business as usual” is simply not acceptable. The status quo has failed, and it has failed over and over again. The model of self-regulation that we have seen over the past few years has not worked when things have gone awry. I certainly agree with that premise, and we in Government created the Leveson inquiry to seek out recommendations for change. That is the whole point of the Leveson inquiry.

[Ms Harman]

I look forward to all hon. Members having the opportunity to work together in the public interest to get this right.

This week, the Deputy Prime Minister sent an e-mail to his party members. In it, he described the task of finding child care as a “real nightmare”. Is it not clear that cutting the child care element of tax credits has made that nightmare worse for parents?

[The Deputy Prime Minister]

What has helped many people who have struggled to make ends meet and pay for child care is the fact that this Government are providing 15 hours of free, pre-school support and child care to every three and four-year-old in the country. No Government have done that before, and as of next April, it is this Government who will be providing 15 hours of pre-school support and child care to some of the poorest two-year-olds in the country. No other Government have done that before. It is this Government who are taking 2 million people on low pay out of paying any income tax altogether, and that is a record I am proud of.

[Ms Harman]

The Deputy Prime Minister’s answer has shown that he is completely out of touch. The reality is that many part-time working parents are having to give up their jobs because of the cuts in tax credit, and having instead to be on benefits. I asked him about the child care element of the tax credit, and he has not answered. Why will he not admit that the cut he voted for has cost families £500, and 44,000 families are losing out? If that was not bad enough, the Government are cutting £1 billion from Sure Start. In his e-mail, he said he would reveal—[Interruption.]

[Mr Speaker]

Order. The junior Minister in the back row—the Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry)—thinks her views are relevant, but we are not interested. [Interruption.] Order. I do not want heckling. I want the question to be heard, and it will be heard with courtesy. If the session has to be extended for that to happen, so be it.

[Ms Harman]

Thank you, Mr Speaker. I am beginning to have quite a lot of sympathy with the hon. Member for Mid Bedfordshire (Nadine Dorries) and her experience of all those rats and snakes—even before she went to the jungle.

In the Deputy Prime Minister’s e-mail, he said he would reveal—[Interruption.]

[Mr Speaker]

Order. I have made the point once, and I am going to make it only once more. Mr Jason McCartney: your heckling is not wanted, it does not help. Stop it, and stop it for the remainder of this session and in future. I have made the position clear.

[Ms Harman]

Thank you, Mr Speaker.

In the Deputy Prime Minister’s e-mail, he said he would reveal what really goes on behind those Whitehall doors. Perhaps in next week’s instalment, he will therefore tell the truth: under his Government, families are worse off, aren’t they?

[The Deputy Prime Minister]

As of next April, because of one of the most radical tax changes introduced by any Government in living memory, 24 million basic rate taxpayers will be £550 better off. That is a radical change I am very proud of. I am proud of the fact that two, three and four-year-olds will benefit from our changes. As the right hon. and learned Lady may have noticed, the much-quoted Resolution Trust report recently showed that tax credits are not the best answers for many families. Yes, I accept that we need to do more to make child care affordable, so that more women can get back into work at an earlier stage. That is what this Government are setting about doing while we are cleaning up the mess she left behind.

[Ms Harman]

The Deputy Prime Minister comes to the Dispatch Box and says one thing, but he does something completely different—he is at it again on the police. Two years ago, he made a solemn election pledge that the Lib Dems would provide 3,000 more police officers, but there are not more—there are 6,800 fewer. It is tuition fees all over again. Why should anyone trust the Lib Dems on policing?

[The Deputy Prime Minister]

At least people can trust the Conservatives and Lib Dems on the economy. Let me explain. The shadow Chancellor is not here—[Interruption.]

[Mr Speaker]

Order. The right hon. Gentleman is in danger of being heckled rather noisily and stupidly by both sides. His answer will be heard, however long it takes, so the juvenile delinquency should stop now.

[The Deputy Prime Minister]

I am used to getting it from both sides.

The shadow Chancellor is not in the Chamber, but just to underline my point, last year, in a television interview, he denied that there was a structural deficit while Labour was in power. Last month, in another television interview, he denied the denial. Now that he is briefing against himself in television interviews, how an earth will anyone ever have any faith that his lot can sort out the economy?

[Ms Harman]

People are finding that they cannot trust this Government on the economy. Because of the Government the Deputy Prime Minister supports, we have lost two years of economic growth, and borrowing is going up. I do not know why Government Members are all so cheerful about the cuts in police numbers. They might not be bothered, but their constituents certainly are. It is always the same with the Lib Dems. People cannot trust them on tuition fees or child care, and when it comes to voting next week, people will remember that they certainly cannot trust them on the police.

[The Deputy Prime Minister]

What about her promise of no boom and bust? What happened to that one? This coalition has now been in power for two and a half years. In those two and a half years, we have given 24 million basic rate taxpayers an income tax cut; we have taken 2 million on low pay out of paying any income tax; we have cut the deficit by a quarter; and we have reformed welfare. What have she and her colleagues done? What have they done? They have gone on a few marches; they have denied any responsibility for the mess we are in; and they have not even filled in their blank sheet of paper where there should be some policies. She might be hoping for some bad news to make her point: we are sorting out the mess she left behind.

[Steve Brine (Winchester) (Con)]

Q2. Moving on, as we must, I echo the Deputy Prime Minister’s comments on the US presidential election and congratulate Mr Obama on his victory. It is always good to see a leader re-elected in difficult times.Does the Deputy Prime Minister agree that, alongside new, emerging markets—including, of course, those in the middle east—Britain should seek to strengthen our economic and trade ties with the US through a new trade deal, as we seek to boost our recovery and perhaps start one across the channel?

[The Deputy Prime Minister]

I agree with the hon. Gentleman. The lesson of the presidential election is that voters’ memories are longer than Opposition Members seem to think, because when it comes to actually casting a vote, voters remember who created the mess in the first place and who has to do the painstaking, difficult and, yes, longer than we had hoped job of sorting out that mess.

On the wider issue, of course there is so much we now need to do to work with the new Obama Administration. The hon. Gentleman mentions trade: I would like to see a new EU-US free trade agreement, which could create a real spur to economic growth in both economies. I was also delighted to hear overnight that President Obama singled out his commitment to dealing with climate change—another area in which we can work very well with him.

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

Q3. The Deputy Prime Minister tells us that he supports the living wage and the increase announced on Monday. Can he tell us how many Lib Dem councils pay the living wage?

[The Deputy Prime Minister]

As the hon. Lady knows—[Interruption.]

[Mr Speaker]

Order. The hon. Lady has asked the Deputy Prime Minister a question. I hope that hon. Members will have the courtesy to listen to the answer. I certainly want to hear it.

[The Deputy Prime Minister]

As the hon. Lady knows, her own leader has said that this is a voluntary process by which we need to encourage councils and employers in the public and private sectors to pay the living wage. No one will disagree with the idea of a living wage, with people being paid a fair wage for a fair day’s work, but there is a lot of extra work to be done to make that a reality. But guess what? It is this Government’s tax changes that will mean that as of next April someone on the minimum wage will have their income tax cut by half.

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

The tragic death of Private David Lee Collins while off duty in Cyprus is a devastating blow to his mother, who is my constituent, and to family and friends across Manchester. Will the Deputy Prime Minister assure me that the Foreign Office and the Ministry of Defence are working with the Cypriot authorities to ensure that the perpetrators are brought to justice?

[The Deputy Prime Minister]

Everybody’s hearts will go out to the mother and other family and friends of David Lee Collins, who came to such an untimely death in the way my hon. Friend describes. It is obviously right for him to raise the issue on behalf of David Lee Collins’s mother, and I can certainly assure him that the Ministry of Defence and the Foreign Office will do everything they can to find out exactly what happened and bring the perpetrators to justice. I am sure that the Secretary of State for Defence, who is in his place, will seek to keep him updated as things evolve.

[Rosie Cooper (West Lancashire) (Lab)]

Q4. Homes were wrecked and much-needed crops destroyed in the devastating floods that affected my constituency last month, and there are warnings that we face another winter of floods. The Government promised to bring forward plans for a new deal on flood insurance in July, but my worried constituents are still waiting. When will this incompetent and out of touch Government actually act on ensuring that ordinary families and businesses are protected from flooding—or will this be another broken promise?

[The Deputy Prime Minister]

The hon. Lady packed every soundbite into that one. We are involved in very detailed discussions with the insurance industry precisely to provide her constituents with the reassurances they rightly seek. I point out only that that is an agreement between the Government and the insurance industry that was never reached in the 13 years when Labour was in power. We are doing that work now. It is complicated work. It is very important work. We are devoting a lot of attention to it, and I hope we will be able to make an announcement in the not-too-distant future.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Q13. Thousands of people in Syria are being killed each month, and the suffering of its people is immense. Sources within the country say that British assistance has been slow, and that the priority ought to be to support the civil administration councils so that basic water and sewerage services can be connected. What more can the Prime Minister do, in discussion with President Obama, to bring about a solution to this crisis?

[The Deputy Prime Minister]

I know that the Prime Minister, who of course is in the region right now, discusses this on an ongoing basis with the President of the United States, and will continue to do so. We are the second largest bilateral donor in Syria. Of course, the circumstances on the ground are incredibly difficult for the delivery of aid and assistance, but we need to make every effort to accelerate it, and to get it to the right people in a timely manner and to the right places. Any suggestions that the hon. Gentleman wishes to make to the Department for International Development, and to other Departments, about how we should do that would of course be warmly received.

[Lilian Greenwood (Nottingham South) (Lab)]

Q5. Official documents show that the Healthier Together review’s “best option” is downgrading Kettering general hospital’s A and E, maternity, children and acute services, and cutting 515 of its 658 beds. How can anyone believe the Prime Minister when he claims that those NHS services are safe in his hands?

[The Deputy Prime Minister]

I find it extraordinary that the hon. Lady persists in this wilful scaremongering. She plucks out the worst-case scenario when, as she knows, no decision has been taken. Instead of frightening people about what is happening in our NHS, why does she not celebrate the great work of our nurses, our doctors and other clinicians in the NHS who are delivering an absolutely world-class service for the people of Kettering, Corby and elsewhere?

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Will the Deputy Prime Minister confirm the Government’s commitment to marine renewable energy, especially in the south-west?

[The Deputy Prime Minister]

Marine renewable energy is clearly an area where the south-west has a natural advantage, and is one of the many areas of renewable energy that is reflected in our diverse approach to renewable energy generation. We have to wean ourselves off an over-reliance on one kind of energy generation, and spread our bets more fairly and sustainably in the future.

[Valerie Vaz (Walsall South) (Lab)]

Q6. Not only is it Obama day, but national adoption week. My ten-minute rule Bill in the previous Session called for equalising statutory rights for leave, pay and allowances between adoptive parents and parents whose children are born to them. That can be done by regulations, so will the Deputy Prime Minister ask a Minister or two to meet me to eliminate that unfairness?

[The Deputy Prime Minister]

I will certainly make sure that the relevant Minister meets the hon. Lady, and I pay tribute to her for her long-standing campaign to equalise the rights of parents of adopted children—for instance, on parental leave—with other parents. I certainly believe that that should be the case. The Government have been looking at the issue closely and I hope that we will be able to make an announcement in the not-too-distant future.

[Charlie Elphicke (Dover) (Con)]

Does the Deputy Prime Minister agree that the Chancellor’s initiative to get the OECD to crackdown on international tax avoidance is all the more important when one considers that non-oil corporation tax went up by just 6% in the past 15 years, while income tax receipts almost doubled?

[The Deputy Prime Minister]

Yes, and that is why it is right that the Treasury and the Chancellor have been so assiduous in providing additional resources to ensure that the teams in Whitehall—Her Majesty’s Revenue and Customs and others—who crack down on tax avoidance are able to do so. The figures that we hope to be able to recoup in tax paid, which would otherwise have been avoided, are truly eye-watering. Billions and billions of pounds of tax will come into the vaults of the Exchequer which otherwise would have gone walkabout.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Q7. The newly published world prosperity index shows our Nordic neighbours, Norway, Sweden and Denmark, holding the top three spots. In the last quarter, the oil fund of our neighbour Norway grew by $29.3 billion to an eye-watering $660 billion—equivalent to £5,000 for each Norwegian family. Will the Deputy Prime Minister take this opportunity to congratulate the Norwegians on their society and their enviable prosperity?

[The Deputy Prime Minister]

The Scottish National party’s arc of prosperity keeps changing. Last time I looked, it included Iceland, but now it does not. What will the hon. Gentleman do next? Pick out Malaysia or Indonesia? Try and be a bit more consistent, please!

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

Does the Deputy Prime Minister expect to be involved in the selection process for our next EU Commissioner?

[The Deputy Prime Minister]

I will not be a candidate, however much the hon. Gentleman might hope otherwise.

[Karl Turner (Kingston upon Hull East) (Lab)]

Q8. The Deputy Prime Minister’s predecessor and mine is Labour’s excellent candidate in the police and crime commissioner elections in Humberside, but the Tory candidate describes the role as the “job from hell”. Does he agree with his Tory colleague, or does he think that he has it harder?

[The Deputy Prime Minister]

I will not try to compare notes with my predecessor on the police and crime commissioner elections. I hope that everyone will turn out to vote, but the fact that so many has-been Labour politicians and recycled ex-Labour Ministers are standing might put quite a lot of people off. None the less, I hope that people will participate in these important elections.

[Mark Garnier (Wyre Forest) (Con)]

Last week, Stephen Farrow was sentenced to life imprisonment for the brutal murder of my constituent Betty Yates and of Thornbury resident Rev. John Suddards. Will the Deputy Prime Minister join me in sending our congratulations to the police and thanking them for the speedy and successful conclusion of this case and in sending our deepest condolences to the families of both victims?

[The Deputy Prime Minister]

I am sure that the whole House wishes to join my hon. Friend in sending our sincerest heartfelt condolences to the victims’ families and friends and, as he said, in paying tribute to the police for moving very fast. It is incredibly important in heart-rending cases such as these that the public see that, where possible, justice is done and done as rapidly as possible.

[Ian Lavery (Wansbeck) (Lab)]

Q9. Will the Deputy Prime Minister explain to the House why the Liberal Democrats are fielding only 21 candidates out of 44 in the police and crime commissioner elections?

[The Deputy Prime Minister]

Because we are standing in those areas where Liberal Democrats wish to stand as candidates. [Laughter.] I know that the Labour party does not understand the meaning of the words “internal party democracy”, but it is something I am proud we have. The hon. Gentleman should try it some day.

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

Q10. After inheriting from Labour a legacy of obscene bonuses and the biggest divide between rich and poor, will my right hon. Friend make it clear that the Government’s overriding ambition is to deliver a fairer Britain, and that one way of doing that is through affordable and social rented housing that delivers both fairness and growth?

[The Deputy Prime Minister]

Yes, and that is why it is so important that we have committed to £20 billion of investment in affordable housing, generating tens and tens of thousands of more affordable homes so that families have an affordable home they can call their own. I also draw my right hon. Friend’s attention to the significance of the announcement by the Secretary of State for Communities and Local Government yesterday that we will be looking at doubling the amount of money in local authority pension funds that can be used to invest up to £22 billion of extra money into local infrastructure. That is the way to make this country fair and to get the economy moving.

[Jim Shannon (Strangford) (DUP)]

Q11. On behalf of my party, may I join in the tribute to the two soldiers, as well as prison officer David Black, who gave their lives last week? Tomorrow morning will mark the 25th anniversary of the Poppy Day massacre in Enniskillen. Twelve lives were cruelly taken and 63 people were injured when the IRA bombed the service of remembrance at the town’s cenotaph. This week, the police received a new line of inquiry. Will the Deputy Prime Minister join me in echoing the survivors’ call for justice and for new information to be brought forward?

[The Deputy Prime Minister]

I am sure the hon. Gentleman speaks on behalf of us all when he says we should pause and reflect on the terrible suffering of those who now have to re-live, 25 years later, all the memories of that terrible atrocity and those who were killed, injured or maimed. I know that the Secretary of State for Northern Ireland will be attending the anniversary event. This is an extremely difficult week for all who suffered at that time and have had to live with those memories ever since; and, yes, of course I can confirm that where there are new leads or new evidence, they will be pursued rigorously, and we will provide all support to ensure that that is the case.

[John Hemming (Birmingham, Yardley) (LD)]

Under the previous Government, officials used discretion to refuse to provide to people who were brought up in care information about their cases. Will the Deputy Prime Minister look to open the files so that people who were brought up in care can find out what happened to them?

[The Deputy Prime Minister]

I certainly think my hon. Friend is right in saying that, given the daily drip, drip effect of these horrific revelations—which seem to get worse every day—about things that seem to have taken place on a scale that was before now unimaginable, we should send out a clear message from all parts of this House to any victim who is sitting at home alone, still harbouring terrible memories of the terrible suffering they endured, that this is the time for them to speak out. This is the time for them to come forward. We will help them; we will reach out to them. We will make sure that their suffering is atoned for and that where we can find those who perpetrated these terrible abuses, they are brought to justice, even several years since those events might first have occurred.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Q12. Scotland’s First Minister has misled the public on legal advice that does not exist and rewritten the ministerial code for his own gain, and there are strong suggestions that he will ignore the Electoral Commission in the upcoming referendum. People in Scotland are losing faith in the First Minister, and this Government are in danger of being complicit in yet another muddle. Does the Deputy Prime Minister trust the First Minister to deliver a fair, legal and decisive referendum on separation?

[The Deputy Prime Minister]

I hope the hon. Lady will recognise that we have been working on a cross-party basis, particularly with those parties that believe in maintaining the family of nations in the United Kingdom, to ensure a fair, legal and decisive vote in the referendum. I certainly agree with her characterisation: the spectacle of the SNP Administration using taxpayers’ money to stop disclosure to the public of legal advice that they never sought in the first place—honestly, you couldn’t make it up. It is almost a bit like dropping Iceland from the arc of prosperity.

[Mr Alan Reid (Argyll and Bute) (LD)]

Q14. Rising prices to heat their homes and drive their cars are putting enormous pressures on people, particularly in large rural areas such as Argyll and Bute. What steps will my right hon. Friend take to make the tax system fairer and put more money in the pockets of people on low and middle incomes to help them to pay these rising bills?

[The Deputy Prime Minister]

That is precisely why the centrepiece tax reform of this Government is a radical one to lift the point at which people start paying income tax to £10,000, up from £6,400, which is where we found it when we took over from Labour. When we deliver that, it will deliver a £700 tax cut to more than 24 million basic-rate taxpayers in this country, including in my hon. Friend’s constituency. We should celebrate that.

[Mr David Winnick (Walsall North) (Lab)]

Bearing in mind that we were selling arms to the Gaddafi regime right up to the uprising, is the Deputy Prime Minister pleased that the Prime Minister is busy now selling arms to Saudi Arabia, a country where human rights are non-existent and where amputations and floggings take place frequently—and we know how women are treated there? Is that Liberal Democrat policy as well?

[The Deputy Prime Minister]

As the hon. Gentleman will know, we have the strictest controls of almost any developed economy in the world governing the conditions under which we can sell arms to other countries. Nothing that we do in promoting our arms industry, which employs thousands of people in this country, impedes our ability to tell allies and other Governments where we have real concerns about their human rights record, democratic record or civil liberties record, and that is exactly what the Prime Minister has been doing this week.

[Mr Peter Bone (Wellingborough) (Con)]

I sometimes think the Deputy Prime Minister would like to send me to a jungle in Australia for a month, but does he agree that when two different parties get together in the national interest to clear up the mess that Labour left us, we are doing the right thing, in particular by driving unemployment down? Let me just pick one constituency: in Corby, it went down 4.6% last month.

[The Deputy Prime Minister]

For the first time in my parliamentary career I wholeheartedly agree with the hon. Gentleman. Let us savour and treasure this moment, because I suspect it will be very, very rare indeed. Like him, when I heard that the hon. Member for Mid Bedfordshire (Nadine Dorries) had been sent to a jungle to eat insects, I thought that, despite the appearance of civility from our new Chief Whip, it indicated a new disciplinarian approach in our Whips Office. I totally agree with the hon. Gentleman: we are doing the great job together of fixing the economy and creating jobs for people in the future, and that is a great shared endeavour.

Petition

Wednesday 7th November 2012 Commons Chamber

Amber Rudd (Hastings and Rye) (Con)

- Hansard - - Excerpts

I wish to submit a petition on behalf of the residents of Hastings and Rye, collected by me, other local residents and the campaigner Phil Bailey. There are more than 5,000 signatories.

The petition states:

The Petition of residents of Hastings and Rye and the East Sussex area,

Declares that the recommendations put forward for local consultation by the East Sussex Fire and Rescue Authority to downgrade the service at The Ridge Fire Station in Hastings will have a negative effect on response times, and could therefore put the lives of local residents at risk.

The Petitioners therefore request that the House of Commons urges the Department for Local Government and Communities to support local residents in opposing the recommendations made by the East Sussex Fire and Rescue Authority and contained within the Hastings Review.

And the Petitioners remain, etc.

[P001129]

Family Perinatal Support and Adoption

Wednesday 7th November 2012 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:35

[Andrea Leadsom (South Northamptonshire) (Con)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to provide appropriate perinatal support to any family expecting a child who will be born on to the child protection register and for whom an adoption plan has not been made at the moment the child is entered on to the register; to require that a decision be made not later than one year after the child’s birth as to whether or not such a child will be adopted; and for connected purposes.

I am a huge advocate of early-years intervention, and of the vital importance of parents establishing a secure bond with their new baby. During adoption week, we need to recommit ourselves to ensuring that the most vulnerable in our society get every chance to achieve their lifelong potential.

Astonishingly, in the first year of life, a baby’s brain forms 1 million brain connections per second. It is the baby’s earliest experiences that will largely determine the nature and extent of those vital connections. It is a fact that the period from conception to the age of two is the most crucial time to harness a loving and secure attachment that will, in turn, have a profound impact on the baby’s capacity for lifelong emotional health.

At one level, achieving a secure attachment between baby and carer sounds simple. It is the cooing, the loving eye contact and the singing of baby songs—the things that many parents find perfectly natural—that stimulate the development of the baby’s frontal cortex. That is the part of the brain that deals with our emotional capacity as human beings. A healthy brain equips the baby to deal with life’s ups and downs, and that baby will grow up able to make friends, hold down a job, find a partner and eventually be a good parent themselves.

Forming that secure bond does not come easily to everyone, however. In fact, it is completely natural for someone to treat their own baby in the same way as their own parents treated them. Poor attachments offer miserable outcomes for infants, and they are all too often passed down as a cycle of misery through generations. I would not go so far as to say that poor attachment means that a terrible life is inevitable for such an infant, but evidence suggests that society pays a high price for not intervening early. Our prisons, our hostels for homeless people and our psychiatric hospitals are full of the evidence of poor attachment.

The point of the Bill is to recognise the urgent needs of babies who are placed on the child protection register even before they are born. During 2011, 748 babies were born on to the child protection register in England and Wales. Of the 4,190 babies under the age of one in the care system in England and Wales, 505 were referred for adoption in 2011-12, but just 77—some 15%—were actually adopted. If that pattern were repeated for babies born on to the child protection register last year, only 112 would be adopted. It is difficult to imagine how any of the 636 babies still in care could develop the secure bond with a loving adult carer that they need in order for their fast-growing brain to develop a healthy emotional capability.

Circumstances in which a baby might be born on to the child protection register include previous incidents of neglect or abuse towards children; a parent who might be involved with a registered sex offender or a violent partner; and a parent who might be heavily addicted to drugs. In all these situations, it is vital that the decision to adopt remains utterly focused on the baby’s urgent need for a loving parent or carer. Of course it is right that birth parents who are good enough are always best for their baby. That is why my Bill calls for appropriate support to be provided to parents in the perinatal period where their capacity to be good enough parents is in question.

I have been personally involved with parent-infant partnerships in a voluntary capacity for 13 years. OXPIP, the Oxford parent-infant project, delivering psychotherapy support for struggling families in Oxfordshire, and NORPIP, the sister charity in Northamptonshire, have both seen successes, working therapeutically with parents whose children are on the child protection register. Just as important, where the difficulties are huge, the assessment of a trained parent-infant psychotherapist has enabled evidence-based decisions to be made at an early stage about the ability of the birth parent to make the transition to be good enough. No one, least of all me, wants to see babies taken away from their birth parents, but the sad truth is that, currently, decision taking is just too slow for the baby’s emotional needs and not always based on sound enough evidence.

At the moment, the average age of a child who is adopted is three and a half, so those 500-plus under-ones waiting to be adopted could have a long stretch until they are finally placed in a loving home. Damningly, children are mostly taken into care after the age of 10, when all too often they are already demonstrating the consequences of poor early attachment.

We are all concerned about the human cost of babies and children taken into care, but as public servants the economic consequences should also massively concern us. The basic cost of a child in care is £45,000 a year, rising to an incredible £280,000 a year where the child has severe emotional or learning difficulties. Opening up access to appropriate early-years intervention, and at the same time committing to faster, evidence-based decisions about whether a baby should be adopted or supported with birth parents, could decrease the eye-watering costs of the care system, as well as avoid the enormous costs in criminal justice and health care that are so often incurred by those who have had a disastrous start in life.

I am very supportive of the steps the Government are already taking. We have set out plans to reduce the time it takes between a child first entering care and being adopted, and we are working to increase the number of adopters being recruited and approved. I am pleased that the Government are making “fostering for adoption” standard practice in appropriate cases, so that children can move in with their likely permanent families much earlier. I absolutely share the Government’s aspiration for a happier, stronger and more stable future for children in care becoming a reality.

However, the need for an early-years intervention model to be articulated and rolled out by Government has never been stronger. Neuroscience and the advent of neuro-imaging supports the idea that secure attachment, with the resulting healthy brain development of infants, is the key foundation on which rests the potential for lifelong emotional health. If the physical health of the nation, through the NHS, was one of the greatest achievements of the 20th century, I hope that the mental health of the nation, through access to early-years intervention, will become one of the greatest achievements of the 21st century.

Question put and agreed to.

Ordered,

That Andrea Leadsom, Fiona Bruce, Harriet Baldwin, Jim Shannon, Mr Frank Field, Mr Graham Allen, Andrew Selous, Damian Hinds, Tim Loughton, Meg Munn, Mr Gary Streeter and Robert Halfon present the Bill.

Andrea Leadsom accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 1 March 2013, and to be printed (Bill 88).

Opposition Day

Wednesday 7th November 2012 Commons Chamber

[8th Allotted Day]

Regional Pay (NHS)

Wednesday 7th November 2012 Commons Chamber

[Mr Speaker]

I inform the House that I have selected the amendment in the name of the Prime Minister.

12:45

[Andy Burnham (Leigh) (Lab)]

I beg to move,

That this House believes national pay agreements are an important part of the infrastructure that underpins a national health service; notes reports of the statement by the Deputy Prime Minister that there is going to be no regional pay system; further notes with increasing concern attempts by 20 trusts in the South West of England to opt out of national agreements by reducing staff pay and changing terms and conditions; notes with concern that an additional 11 trusts across England are considering similar moves; and calls on the Government to intervene without delay and uphold the principle of national pay arrangements in the NHS.

My right hon. and hon. Friends and I have called this debate with a clear purpose: to build support across the House for a health service that remains national in character, and to send the clearest of signals to those threatening to break it apart. National pay is part of the glue that holds together a national health service. In turn, the NHS is part of what holds our country together: a one-nation service bridging the social and economic divides of our country, uniting east and west, north and south; a service with fairness at its heart, where, from Newcastle to Newquay, patients can walk through the door and expect to meet staff with the same values, the same motivations and the same level of commitment to their employer.

The debate is not a narrow argument about levels of pay. It is about the character of our health service and the cohesion of our country. Like the BBC, the NHS is one of the country’s great unifying forces—a service that sees no differences, treating people, patients and staff with the same respect, wherever they come from, whatever their background. The “N” in NHS should be cherished, but instead it is coming under ideological attack.

[Several hon. Members]

rose—

[Andy Burnham]

I know that many Members want to speak in the debate, so I shall give way once or twice, to ensure that there is time left for others to contribute.

[Henry Smith (Crawley) (Con)]

The right hon. Gentleman is right that it is a national health service that this country enjoys. Why, therefore, is a Labour Administration reducing funding to the health service in Wales?

[Andy Burnham]

I am here to talk about the NHS in England. I will come on to the Conservative Government’s record on funding the NHS in England, so I would not be so smug if I were the hon. Gentleman.

The drive to turn collaboration into competition depends on breaking national standards—breaking the “N” in NHS. The former Health Secretary’s request to the pay review body to consider the case for “market-facing pay” needs to be seen alongside his Health and Social Care Act 2012. Breaking national pay in the NHS is an essential step towards creating the free market in health that many in the Conservative party have long wanted, and which the Liberals now seem willing to let them have.

[Mr Stephen Dorrell (Charnwood) (Con)]

Will the right hon. Gentleman confirm that the direction towards market-facing pay should also be seen in the context of the statement in the Budget presented by the previous Government in 2003 committing them to increase regional and local flexibility in public service pay systems? Did he support that when he was Secretary of State?

[Andy Burnham]

The Labour Government did introduce some flexibility, but let me tell the right hon. Gentleman my record: I spoke up, at every opportunity, for the principle of national pay underpinning a national health service. We hear nothing similar from Government Front Benchers. We built a progressive system of pay for the NHS in “Agenda for Change”, which brought fairness and stability to the system. By the time we left office, not one trust had opted out of that national system of pay, and only one, Southend, paid an increment on top.

[Mr Dorrell]

Will the right hon. Gentleman give way?

[Andy Burnham]

No, I will make some progress.

Breaking national pay is what the Government want to do, and that springs from an entirely different philosophy from the one that forged the NHS in the first place. The Government are rejecting the “one NHS” approach, whereby hospitals collaborate and the unpredictable pressures of any health service are balanced across the system. Instead, they have a vision of hospitals as stand-alone small businesses, on their own in the marketplace, with no bail-outs and free to earn up to 49% of their income from the treatment of private patients, but—as we are seeing in south-east London—finding little mercy in a private-sector-style administration process if the sums do not add up. That is a very different vision of the NHS, and it is not one to which the British people have ever given their consent in a general election.

[Andrew George (St Ives) (LD)]

I will join the right hon. Gentleman in the Lobbies on one reasonable condition: he acknowledges that the last Labour Government did not just introduce regional pay in the Courts Service, but introduced flexibilities for foundation trusts which, through employment law, could result in detriment to NHS employees. If he acknowledges that and apologises for his introductory remarks, I will certainly join him in the Lobbies.

[Andy Burnham]

I partly welcome what the hon. Gentleman has said. I have already acknowledged the flexibilities, and mentioned that only one trust in England ever sought to make use of them, because it wanted to add to the national floor that we had introduced. The flexibilities were there and I support them, but we left office with a national pay system in place. I look forward to his support later this afternoon.

We have a new Secretary of State, but those who expect a change of direction look set to be disappointed. In his first major interview, he described his mission thus:

“I would like to be the person who safeguards Andrew Lansley’s legacy”.

That must qualify as the shortest suicide note in political history. We have Lansley-lite—more of the same—but, in fact, it may be worse.

Looking at the Secretary of State’s past speeches, I could find nothing that conveyed any passion, belief or commitment to the NHS. On the contrary, I was worried when I read that he tried to remove Danny Boyle’s NHS tribute from the opening ceremony of the Olympic games. He is also one of the co-authors of a right-wing pamphlet entitled “Direct Democracy”. He may remember that pamphlet. It said:

“Our ambition should be to break down the barriers between private and public provision, in effect denationalising the provision of health care in Britain.”

Is that still the Secretary of State’s view? He has gone quiet now, has he not?

You will understand, Mr. Speaker, why NHS supporters get nervous about the intentions of this Secretary of State, but today he has a chance to calm those nerves. He can come to the Dispatch Box and send the clearest of messages to NHS trusts seeking to break from national pay. What he will learn about his job is that, if he says something with sufficient force, the NHS will respond.

The developing pay crisis in the NHS is the Secretary of State’s first real test, but so far he is failing it. As we reveal today, on his watch, the 20 NHS trusts that were threatening to break away in the south-west have become 32 NHS trusts across England. That is creating real worry for thousands of NHS staff and uncertainty for businesses, which have raised their concerns with the Chancellor. But what do we get from the Government today? A “do nothing” amendment expressing no view on the south-west issue, and inviting Government Members to sit on the fence and wait for the conclusions of the pay review body’s review. That will not do.

As the Government do nothing, national pay is being unpicked and the NHS is fragmenting before our eyes, but perhaps that is all part of the plan—it is nothing to do with them; it is all due to a local decision. The idea is to hide behind a review while national pay slowly and conveniently unravels, region by region, trust by trust. Staff facing the threat of a pay cut deserve some straight answers, but rather than getting a straight answer to the question “Does the Secretary of State support regional pay in the NHS or not?”, they are hearing contradictory statements from this shambolic Government. Not for the first time, the coalition is not speaking with one voice. I understand that the Liberal Democrat conference passed a motion opposing regional pay and that the Deputy Prime Minister was captured on film voting for it—although, as we know, being photographed making pledges does not make him more likely to keep them.

The Deputy Prime Minister has also made the following unambiguous statement:

“There is going to be no regional pay system. That is not going to happen.”

The trouble is that it is happening, under the Deputy Prime Minister’s nose and by the back door. Twenty NHS trusts in the south-west are openly defying the authority of the Deputy Prime Minister. Some 88,000 NHS staff are being affected by a unilateral drive to set a new going rate of NHS pay in the regions, which would be up to 15% lower than national “Agenda for Change” rates. The trusts are proposing to end overtime payments for night, weekend and bank holiday working, and to reduce holiday leave. They are also proposing to force staff to work longer shifts, and to cut sick pay rates drastically. That is no idle threat. The silence from Ministers is clearly emboldening them. Despite concerns raised here and elsewhere, they have built a fighting fund, set up a website, and appointed lawyers to make all this happen.

[Mr Ben Bradshaw (Exeter) (Lab)]

My right hon. Friend may not have been able to catch up with this morning’s Adjournment debate in Westminster Hall, but it is more than “silence from Ministers”. The Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry), who responded to the debate, admitted that the Department had known about the south-west cartel when it happened, and that she supported it. [Interruption.]

[Andy Burnham]

This debate is flushing out the Government’s position, is it not? The Under-Secretary of State keeps heckling from the Front Bench, but we now know—[Interruption.]

[Mr Speaker]

Order. I ask the right hon. Gentleman to resume his seat. [Interruption.] Order. Let me say once and for all to the Under-Secretary of State, the hon. Member for Broxtowe (Anna Soubry), who has been conducting a running commentary since she sat down on the Front Bench at the start of the debate, “Stop it.” I do not wish to hear it, and neither does the House. The Secretary of State will respond in due course. If the hon. Lady is dissatisfied with what has been said, her right hon. Friend will have a chance to respond. I do not want the sedentary chuntering, the finger-wagging and all the rest of it. The hon. Lady can say “pooh” if she wants, but she will accept the ruling of the Chair, and either behave or get out of the Chamber. I do not mind which it is.

[Andy Burnham]

The Government’s position was indeed made clear in Westminster Hall this morning, and perhaps we shall hear it again from the Dispatch Box in a moment.

The south-west trusts’ initial document stated that the consortium would explore

“radical changes to terms and conditions of the workforce”.

It went on to say that this would not be a negotiation, and that

“trusts would be obliged to dismiss and re-engage staff to secure such changes”.

That is disgraceful, and it is simply not possible for the Government to have no view on it. It is provocative, destabilising and divisive. However, it gets worse. In the vacuum left by Ministers, the chaos is spreading. We have identified a further 12 trusts across England that are actively considering opting out of “Agenda for Change”. There are five in the north-east, which gives rise to fears of a second emerging pay cartel. North Tees and Hartlepool has issued 90-day notices to 5,452 staff as a precursor to forcing them to sign new non-“Agenda for Change” contracts—staff who refuse to sign by March 2013 are threatened with the sack—and South Tees is considering a similar move.

[Mr David Anderson (Blaydon) (Lab)]

Will my hon. Friend give way?

[Andy Burnham]

I will give way for the last time to my hon. Friend.

[Mr Anderson]

I support what my right hon. Friend is saying. In the north-east there is real anger among people who have devoted their lives to the health service, and who are now being told that they will effectively be forced to sign new contracts, because otherwise they could face the dole. Is that any way in which to treat people who are relied on to make what are literally life-or-death decisions? It is a disgrace.

[Andy Burnham]

These are the same staff whom we were celebrating during the Olympic games, just a few months ago, for everything that they contribute to the NHS and to the care of others, but Ministers sit there and do absolutely nothing. It is disgraceful that any staff in the NHS should be treated in such a way.

This is no academic threat. These are the panic moves of an NHS that is experiencing increasing distress, in which control has been lost because it is facing the biggest financial challenge in its history. After the election, the £20 billion Nicholson challenge should have been the only show in town, but the previous Secretary of State was allowed to proceed with his vanity reorganisation of the NHS. Instead of focusing on saving money, the NHS has been busy wasting it: £1.6 billion, and rising. A full £1 billion has been spent on redundancies—1,300 people have received six-figure payouts, and l73 have received more than £200,000—while 6,000 nurses are losing their jobs. That is scandalous.

As unforgiveable is the Conservative party’s repeated inaccurate boast on NHS funding. I checked on the Conservative party website today, and in the “Where we stand” section it says this:

“We have increased the NHS budget in real terms in each of the last two years.”

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

indicated assent.

[Andy Burnham]

The Secretary of State nods, because he has made similar statements. I want to know whether he stands by those words as a truthful and accurate statement.

[Mr Hunt]

Absolutely.

[Andy Burnham]

He says he does, so let me refer him to table 1.8 of the Treasury’s “Public Expenditure Statistical Analyses 2012”. On NHS spending it shows the following: for 2010-11, a 0.6% real-terms cut; for 2011-12, a 0.1% cut. Those are the facts. How on earth can the Secretary of State say today that he stands by—[Interruption.] The figures are there in black and white. There have been two years of real-terms cuts in the NHS. If anyone does not believe my analysis, a Department of Health press release from July 2012 confirms what I have said:

“PESA figures released today show that in real terms NHS spending has reduced.”

So I ask the Secretary of State this: will he today remove that untrue statement from the Conservative party website? It is giving a false impression of what is happening in the NHS. Perhaps it is designed to give the impression that the drastic moves on pay are a local matter not of Ministers’ making. This is the real picture, however: the Government have forced the NHS to fund a £1.6 billion reorganisation it did not want—even though they promised that would not happen—from a falling budget which they still claim is increasing.

All trusts have been put in a difficult position by this Government, but that is no excuse for some taking the easy way out by taking it out on staff. If they are allowed to do that, they will damage something that serves the wider good.

The “Agenda for Change” system introduced by the last Government represented a significant step forward, and I want to set out the compelling economic, social and health policy arguments in its favour. First, it brings stability to the service. Unlike other areas of economic activity, health care depends upon certainty and predictability. As an essential emergency service, it needs to be there for people day in, day out. Volatility helps no one. All communities need a full complement of clinical grades and professions. Local or regional pay is not conducive to stable services. If one area starts seeking to poach staff from another, no one wins, as we will get instability and, over time, an inflationary pressure that is hard to control at local level.

That brings me to the second reason in favour of national pay. All the evidence suggests that a national approach to pay and conditions helps to reduce costs and risks to the NHS. Market-based systems tend to cost more, not less.

There is also the hassle and distraction factor of every individual NHS employer or regional group going through the annual process of pay negotiation and setting. Trusts rushing to break away from the national pay system forget that. They are also forgetting the risks of the pre-“Agenda for Change” days, when individual trusts would bear the full legal exposure of failure to implement equal pay legislation. It would seem that there are a few short memories in the NHS. People are forgetting that the advent of a national pay system has insulated the NHS from those risks, which have impacted on other parts of the public sector, such as by bringing more turbulence in recruitment and retention.

I do not think the 32 trusts involved in the breakaway have fully thought through the consequences of their position. For instance, national pay is reflected in the calculation of the tariff under the payment by results system, so are these trusts expecting to be paid at national tariff rates by commissioners while paying staff regional rates? I find it hard to see how that could be justified. So, in effect, they are not only pulling down the system of national pay that helps to give stability for everyone; they will also end up pulling down the national tariff system.

The third health policy reason for national pay is the most compelling. National pay helps with the recruitment of staff in the areas where they are most needed. If we follow through the logic of the argument of proponents of a broken down system of regional or local pay, it will end in a proposal to pay people less in areas where unemployment is highest and wages are lowest. The problem with that argument is that those areas are also the most deprived parts of our country where the health challenges are greatest. It is often much harder to work on the NHS front line in areas of higher health need and deprivation. We need to work hard to attract the most motivated staff to those areas, and I simply do not see how that will happen if the offer to work in the areas where the pressure is greatest includes being paid 15% less.

In the end, care is a people business and this race-to-the-bottom approach simply does not deliver the quality people are looking for. We have seen that approach in social care: a crude race to the bottom and a cut-price, minimum-wage business. That simply does not work.

It is true that pressures vary from place to place and the job is not the same everywhere, but the principle that a health visitor, a physiotherapist or a midwife should be paid broadly the same for doing a similar job is a good one. It is fair to staff, and we should stick with it.

That brings me on to the fourth reason: the social and economic case. All the evidence points to regional pay in public services causing damage to the regional economies of England. Rather than stimulate the south-west economy, it has been estimated that regional pay would take £140 million out of it.

It is not just the public sector making that argument. Some 60 academics wrote to The Times to say that, and businesses in the north-east have written to the Chancellor raising their concerns. They said:

“Now is the time for the country to unite and focus on growth, not risk a divisive and harmful policy such as this.”

They are right. An NHS with national pay is a one-nation policy. What is happening in the NHS risks cementing the regional divides and creating an unequal Britain.

Taken together, those four reasons stack up a compelling case for keeping a system of national pay in the NHS. Losing it will be bad for the NHS, bad for the economy and bad for society.

I know that the force of that argument is not only felt on the Opposition Benches. Debates such as this one usually divide Members along tribal lines, but there are Members in all parties who represent areas where the jargon of “market-facing pay” means one thing: crude pay cuts for the staff who work so hard to serve their constituents day in, day out. What I find encouraging is that Members on both sides of the House whose constituencies would be affected by these changes have had the courage to speak out against them.

It is not just Liberal Democrat Members who are doing so. I am encouraged by the fact that a number of Conservative Members have expressed serious concerns. The hon. Members for Brigg and Goole (Andrew Percy), for Stafford (Jeremy Lefroy), for Carlisle (John Stevenson) and for Hexham (Guy Opperman) have all spoken out, and I can do no better than repeat the words of the hon. and learned Member for Torridge and West Devon (Mr Cox):

“I am extremely cautious about any change that might further depress incomes in our area or that might act as a disincentive to those in the medical profession to work here.”

The Government Front-Bench team would do well to listen to those concerns, as I suspect they are widely held across this House.

The Government’s amendment does absolutely nothing for the 88,000 NHS staff in the south-west who are worried about the future. It does nothing for the businesses worried about regional divides. It ducks the issue, and lets local and regional pay creep in through the back door. If the Secretary of State has any belief in a national health service, he must step in tonight, stop the breakaway and uphold the principle of national pay in the NHS. I commend the motion to the House.

13:00

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

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“notes that the Agenda for Change pay system, introduced by the previous administration in 2004, already includes regional flexibilities, including high cost area supplements and recruitment and retention premiums; further notes that the previous administration also introduced local pay variation in the courts services; recognises that the previous administration established foundation trusts and in so doing removed the power of the Secretary of State to issue directions to trusts over matters of pay; accepts that the rt. Hon Member for Leigh had the opportunity to change this through legislation when he was Secretary of State but chose not to; looks forward to the publication of the NHS Pay Review Body report on the case for further reform to the pay system; supports the view expressed by the Chief Secretary to the Treasury at the GMB union conference that there will be no change unless there is strong evidence and a rational case for proceeding; and calls on the Government to continue to support employers and trade unions to work together for the benefit of patients and staff.”

What we have just heard is a shocking attempt to talk down the NHS and to misrepresent my views and those of the Government. As a former Secretary of State, the right hon. Member for Leigh (Andy Burnham) should know better.

I am glad, however, that the right hon. Gentleman has called this debate today, as it gives me a good opportunity to sing the praises of NHS staff up and down the country for the brilliant work they are doing. It is work that, contrary to the tone of the right hon. Gentleman’s comments, is delivering an NHS that is performing better than ever despite extremely challenging financial circumstances: an NHS where infection rates are at their lowest levels since the introduction of mandatory surveillance; an NHS where, despite what the right hon. Gentleman and his colleagues would have people believe, the number of patients waiting over 18 weeks is at the lowest ever level; an NHS where, for the first time since “call connect” was introduced, all ambulance trusts are meeting their category A8 performance measure; an NHS with more clinical staff than ever before, including 3,500 more doctors and 900 more midwives; and an NHS where performance measures on accident and emergency, cancer care, dentistry and waiting times are all being met.

Compared with the situation at the last election, we have an NHS treating almost a million more people in accident and emergency, carrying out over half a million more out-patient appointments, and conducting over one and a half million more diagnostic tests. None of that would have been possible if we had introduced the cuts proposed by the right hon. Gentleman at the last election. Instead, despite the huge pressure created by Labour’s deficit, we are actually increasing spending on the NHS by £12.5 billion.

Let me start by saying thank you to the many NHS staff who have made that possible—to more than a million people who work night and day, often in incredibly challenging circumstances. We owe them a debt, which is why the scaremongering we have heard this afternoon from the right hon. Gentleman is inaccurate at best, and downright irresponsible at worst.

[Derek Twigg (Halton) (Lab)]

One way in which the Secretary of State can express his thanks is by ruling out regional pay. Will he tell us now whether he will do so, because it is a major concern for my constituents, who have written to me in their dozens over the past two or three weeks?

[Mr Hunt]

I am coming on to say exactly what the Government’s approach to regional pay is, so I will address the hon. Gentleman’s comments.

[Mr Anderson]

rose—

[Mr Hunt]

May I just answer the question put by the hon. Member for Halton (Derek Twigg)? Let me make it clear: we are not proposing to abolish “Agenda for Change”; we are not proposing an end to national collective bargaining; we are not proposing the abolition of national pay scales; and current pay scales will not be cut. What we are doing is supporting the changes brought in by the previous Labour Government to ensure there is sensible flexibility in pay across the whole country.

[Mr Anderson]

The Secretary of State mentioned people working night and day. Does he agree with the agreement in “Agenda for Change” that people should get additional pay for working night shifts, both because such shifts are antisocial and as compensation for not only the impact on family life but the fact that people who work night shifts tend to die earlier?

[Mr Hunt]

I support the principles behind “Agenda for Change”, which were introduced in 2004 by the Labour Government of which the right hon. Member for Leigh was a member. I also support a number of other flexibilities introduced by the Government—the right hon. Gentleman supported the legislation—in respect of foundation trusts.

[Mr Bradshaw]

The south-west cartel is not about flexibilities introduced to allow hospitals to attract staff and pay them more, as they in fact did; it is about a regional pay system. The Secretary of State has to decide: is he for or against the south-west cartel? Does he say yes or no?

[Mr Hunt]

Perhaps the right hon. Gentleman will explain why he voted for the Health and Social Care (Community Health and Standards) Act 2003, which gave foundation trusts the freedom to introduce their own terms and conditions. Until he explains that, which we are simply supporting, I am afraid that his position is extremely tenuous.

[Hugh Bayley (York Central) (Lab)]

The NHS budget is actually going down. It is certainly much more constrained than it was under the previous Government, so if the Secretary of State accelerates the regionalisation of pay, it will presumably fall in low-pay areas such as mine in Yorkshire and rise in the leafy suburbs of Surrey, which he represents. Will the health budget then be transferred from poorer areas in the north of England to the high-pay places in the south?

[Mr Hunt]

Let me remind the hon. Gentleman that he supported the 2003 Act, which gave foundation trusts the power to set their own terms and conditions. Let me also remind him that this Government have increased the NHS budget in real terms—something that the right hon. Member for Leigh said was “irresponsible”. Let me say clearly that we are not changing the allocation of resources to different parts of the country, but we are allowing the flexibilities that the Labour Government introduced for local NHS managers to make sure that they get the benefit. If the hon. Member for York Central (Hugh Bayley) listened to what I said about a million more people being treated in accident and emergency, one and a half million more diagnostic tests being carried out, and about half a million more out-patient appointments being dealt with, he would understand that all our constituents are benefiting from that. That is because we have the flexibilities that that Government introduced.

[Andy Burnham]

The Secretary of State said again that in 2010-11 and 2011-12 the NHS budget increased in real terms. Is he saying that Her Majesty’s Treasury has got its figures wrong?

[Mr Hunt]

No. Let me just remind the right hon. Gentleman that the budget increase in the NHS that this Government committed to and that this Government announced was something that he said would be “irresponsible”. We have ignored that, and I have been completely clear that the NHS budget went up.

We support recruitment and retention pay—an amount that can be as much as 30% of a person’s salary, and which the Opposition, if they were consistent in their opposition to regional pay, would presumably wish to abolish. We support the London weighting, which is, again, a form of regional pay that we would be planning to abolish if we listened to the Opposition’s arguments today.

[Yasmin Qureshi (Bolton South East) (Lab)]

rose—

[Mr Hunt]

The hon. Lady might want to think about her own constituents before she jumps on that bandwagon. We also support high-cost area supplements. Why should trusts not be able to offer higher packages to lower-paid staff living in expensive areas beyond the capital so that they can live nearer to where they work? If we listened to the Opposition and their trade union sponsors, that, too, would be banned. This Government support the right of local trusts to determine how best to reward their own staff, so they can recruit, retain and motivate the people whom patients rely on every single day. That includes the right of each employer to choose their own terms and conditions or to use national terms and conditions, should they wish.

[Yasmin Qureshi]

I was not in this House when the earlier legislation and policies were being put through, but the question for today is: will someone working in London be paid the same as someone doing the same work in Bolton? Will the Secretary of State reassure us that the fundamental change to that arrangement will not take place?

[Mr Hunt]

May I gently remind the hon. Lady that she stood for election on a manifesto that did not include abolishing the 2003 Act or the Health Act 2006, which gave foundation trusts the freedom to set their own pay and conditions? [Interruption.] I ask Labour Members to let me answer the question. May I also remind her that the previous Government, whom she supported, introduced “Agenda for Change”, which does not pay the same amount throughout the country for the same work? It actually includes a lot of flexibility for regional pay.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

So far, the Secretary of State is describing what he sees as the benefits of flexibility. I put it to him that if a number of regions adopt the south-west’s approach, he will eventually be confronted by the fact, as the Secretary of State, that the poorest parts of this country will not be able to attract the doctors they need. What will he do then?

[Mr Hunt]

All we are doing is supporting what the hon. Gentleman’s Government did, which was to introduce flexibilities for the people who run foundation trusts to set pay and conditions in order to get the best health care in their areas, including in his constituency, in that of the right hon. Member for Leigh and in mine. The previous Labour Government did not just support that; they legislated to require it. They introduced foundation trusts—

[Andy Burnham]

rose—

[Mr Hunt]

I am going to make some progress now. The previous Labour Government introduced foundation trusts in 2003, giving them the power to set their own terms and conditions, just like NHS trusts. Indeed that Government went further, removing the remaining powers of the Secretary of State to intervene. Then, in 2004, the right hon. Gentleman’s Government included regional pay as a firm principle of “Agenda for Change”. Then they legislated to confirm these principles in the Health Act 2006. Who was the Health Minister then? It was the right hon. Gentleman.

The right hon. Gentleman recently referred to this flexibility as a “loophole”. It is not a loophole; it was one of the central planks of that Government’s policy. Let us consider the following:

“The challenge now must be to genuinely free the very best NHS hospitals from direct Whitehall control.

We plan to do this…by removing the Secretary of State's powers of direction over NHS Foundation Trusts…

Exercising these freedoms will give NHS Foundation Trusts precisely the sort of autonomy that is commonplace for hospitals elsewhere in Europe.”

Those are not my words, but those of his colleague and former Health Secretary, Alan Milburn, when he introduced foundation trusts.

The question that the right hon. Gentleman has to answer—he has completely failed to do so—is why, as Health Minister, he legislated for these powers if he disagreed with them. If he disagrees with them, why did he not overturn them when he had a chance to do so as Health Secretary? Either he has changed his mind or the unions which bankroll his party have changed it for him. Whichever is the case, it is a pretty sorry state of affairs for a party that claims to aspire to power.

[Andy Burnham]

The Secretary of State has misrepresented the former Government’s position twice, and on NHS spending. Let me just ask him about regional pay. He said he is building on what we did. When we left office not a single NHS trust in this country had opted out of the national “Agenda for Change” system—that is a fact—because we defended the principle of national pay. He has just said to my right hon. Friend the Member for Exeter (Mr Bradshaw) that he will not condemn the cartel in the south-west, and that he wants trusts to choose whether to opt in to national pay or regional pay. Should he not tell Liberal Democrat Members and the people sitting behind him that he supports local and regional pay in the NHS?

[Mr Hunt]

That is a funny way of defending the principle of national pay: legislating to give foundation trusts the ability, for the first time ever, to set their own terms and conditions. I do not know how the right hon. Gentleman defines it, but that does not seem to me to be in any way logical.

[Sarah Newton (Truro and Falmouth) (Con)]

I represent an area with a very high cost of living. Does my right hon. Friend agree that trusts trying to balance their books should not do so at the expense of modestly paid care assistants and nurses?

[Mr Hunt]

I agree that I want local trusts to have the freedom to get the best health care for people in their areas, including my hon. Friend’s constituents. I agree that that means recruiting and retaining the very best staff and ensuring that they are highly motivated. My hon. Friend makes an important point: we must think about areas where the cost of living is lower, but we must also think about areas where it is higher. People in my constituency who work for the NHS have to commute from Portsmouth because they cannot afford to live near the hospitals and community health centres where they work. That is why an element of flexibility is a very important principle.

[Jack Dromey (Birmingham, Erdington) (Lab)]

rose—

[Geraint Davies (Swansea West) (Lab/Co-op)]

rose—

[Mr Hunt]

I want to make a little more progress, and then I will perhaps take one or two more interventions.

NHS employers have the ability to set their own terms and conditions, but the vast majority prefer to use national terms and conditions, and provided that those remain sustainable and fit for purpose, they are likely to continue to do so. I welcome the national negotiations between NHS employers and NHS trade unions, and I urge both sides to bring the negotiations to a swift and successful conclusion. Unfortunately, the time it is taking for agreement to be reached is encouraging some employers, such as those in the south-west consortium of NHS and foundation trusts, to examine alternative provision. Sadly, it appears that the people who bankroll the Opposition—particularly Unite—would rather put their members’ jobs at risk than work with employers to find an acceptable solution to help the NHS meet its financial challenge—[Interruption.] I am sorry they do not want to hear this—

[Mr Anderson]

On a point of order, Mr Speaker.

[Mr Speaker]

I hope that it is a point of order rather than a point of frustration. We will hear it and I will discover whether it is.

[Mr Anderson]

On three occasions, the Secretary of State has said that the trade unions bankroll the Labour party. A large majority of the trade unions in the health service have no links to the Labour party whatsoever.

[Mr Speaker]

I am grateful to the hon. Gentleman, but that is a point of debate that he might wish to develop further if he is successful in catching my eye. We will leave it for now.

[Mr Hunt]

I ask the right hon. Member for Leigh, rather than irresponsibly scaremongering, to do something positive by doing everything in his power to encourage his trade union friends to work in the best interests of their members, of patients and of his constituents and mine to come to a speedy resolution. I suspect he has rather more influence with the unions than I do in that regard. Even with a protected NHS budget—something that he thought was “irresponsible”—the NHS must do significantly more within its limited means, and as its single largest expense the pay bill cannot be immune to change. It represents between 60% and 70% of total expenditure in most NHS organisations and costs more than £43 billion in the hospital and community services sector alone.

[Jack Dromey]

I was involved in the process that led to the groundbreaking agreement “Agenda for Change”. It was a national agreement that contained certain flexibilities but it explicitly rejected regional pay. Regional pay is now proposed in the south-west. Does the Secretary of State support that move or condemn it?

[Mr Hunt]

I support proper negotiations between NHS employers and unions to revise, reform and improve “Agenda for Change” so that it is fit for the very different financial circumstances in which the NHS now finds itself. The vast majority of NHS trusts and foundation trusts, including in the south-west, would rather negotiate on national pay scales, but that means the unions being realistic about what is sensible in this financial climate. That is why employers need to use the system more efficiently and effectively, extending the use of high-cost area supplements when they can be justified to tackle the recruitment and retention issues that affect a particular area or region.

Like the previous Government, we want to retain the flexibility that allows individual employers to use recruitment and retention premiums and, like the previous Government, we want any changes to be introduced incrementally in full partnership with NHS employers and trade unions.

[Mr Bradshaw]

Will the Secretary of State give way?

[Mr Hunt]

I have already given way to the right hon. Gentleman once.

The greatest risk to national terms and conditions is that they will become rigid, inflexible and no longer fit for purpose. If that happens, employers will be more likely to use the freedoms given to them by Labour to abandon “Agenda for Change”, which was where those freedoms came from, and introduce local terms and conditions.

The Opposition has a clear choice. They can wolf whistle to their trade union sponsors in a hollow attempt to distance themselves from legislation that they passed, or they can prioritise the interests of low-paid NHS employees by encouraging the unions to work for constructive, negotiated improvements to “Agenda for Change”. Sadly, this afternoon’s debate shows that they have made that choice—the motion is nothing more than a shameless attempt to frighten the hard-working staff of the NHS.

The debate is scandalous scaremongering from a party that did more to introduce regional pay during its time in office than any other Government in history and outrageous opportunism from a party that wanted to cut the NHS budget. Rather than singing to the tune of their trade union paymasters, the Opposition should be telling them to get around the table and negotiate seriously on “Agenda for Change”; rather than scaring NHS employees, the Opposition should be celebrating their achievements; and rather than talking down the NHS, the Opposition should, painful though it is, be celebrating the achievements of a Government who have delivered record NHS performance. I urge my colleagues to support the amendment.

[Several hon. Members]

rose—

[Mr Speaker]

Order. In the interests of trying to accommodate as many colleagues as possible, and many wish to speak in the debate, I have imposed an eight-minute limit on each Back-Bench contribution with immediate effect. I call Mr Ben Bradshaw.

[Mr Bradshaw]

indicated dissent.

[Mr Speaker]

The right hon. Gentleman had previously expressed an interest.

[Mr Bradshaw]

That is very kind of you, Mr Speaker, but I have had my Adjournment debate this morning and taken up enough time, so I want to let colleagues speak.

[Mr Speaker]

We are extremely grateful to the right hon. Gentleman for his selfless sacrifice. I call Kerry McCarthy.

13:19

[Kerry McCarthy (Bristol East) (Lab)]

I, too, was in the Westminster Hall debate this morning and I congratulate my right hon. Friend the Member for Exeter (Mr Bradshaw) on securing it.

As we have heard, regional pay would damage our economy and the NHS. As the shadow Secretary of State said, 60 senior academics have written to The Times to warn the Chancellor that there is “no convincing evidence” to support his claims on the benefits of regional pay and that

“On the contrary, such a policy could reduce spending power, undermine many small and medium-sized businesses in areas of low pay, and aggravate geographical economic and social inequalities.”

According to research by the New Economics Foundation, the Government’s evidence of an alleged public sector pay premium

“suffers from a number of serious shortcomings”

and their statements are

“at best misconceived, at worst mischievous and ideologically driven.”

It concludes that regional pay would cost our economy £2.7 billion at best—if the private sector expanded where the public sector contracted—but that the cost could be up to £9.7 billion each year, with the loss of 110,000 jobs. Regional pay would reduce spending power in the south-west by £1.2 billion.

When we consider regional pay from the perspective of the NHS, we cannot, or at least should not, talk about private sector jobs replacing public sector jobs. The public’s response to the Government’s disastrous reorganisation of our NHS proved that patients do not want to be treated by Virgin Care or Serco, but Ministers still seem determined to remove the N from NHS.

For my constituents, today’s debate is even more important because, as we have heard, trusts in our region have been developing the NHS south-west pay, terms and conditions consortium. This morning, I asked the Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry)whether the Government knew about the consortium before it was established and whether they encouraged the trusts to set it up, and it was interesting that she said, “My understanding is we were involved”—[Interruption.]

[Alison Seabeck (Plymouth, Moor View) (Lab)]

That is a fascinating answer because it is at odds with the one I received from the Secretary of State during Health questions.

[Kerry McCarthy]

I very much hope that when the Government—[Interruption.]

[Mr Speaker]

Order. Let me say to the Minister once and for all—[Interruption.] No. I say to the Under-Secretary of State for Health, the hon. Member for Broxtowe (Anna Soubry)—perhaps she will have the courtesy to listen when she is being spoken to from the Chair—that it is not acceptable for any Member of the House to treat the debate as a private conversation between himself or herself and the Member on his or her feet. If the Minister is dissatisfied with what is being said, other people on her Benches can pick up those points. It is totally unacceptable to behave in this way and it will stop straight away. I hope the Whip has noticed it, and I will be speaking to others about the matter.

[Kerry McCarthy]

There is some confusion. When I wrote to the Health Secretary to get some clarity—

[Ian Mearns (Gateshead) (Lab)]

On a point of order, Mr Speaker. I could not help but notice that the clock did not stop during that intervention. I see that a minute has been added on, but I think it should have been more than that.

[Mr Speaker]

Allowance will be made. I am grateful to the hon. Gentleman for his service. Perhaps we can now proceed with the debate in an orderly way.

[Kerry McCarthy]

I shall try to move on. When I wrote to the Health Secretary, the response I got back was very ambiguous. It referred mysteriously to when the document was first leaked to the public, rather than saying what the Government were aware of in relation to the consortium.

In the debate earlier today, the Minister definitely said the words, “Yes, we were.” The civil servant behind her was shaking his head and saying, “No, we weren’t. No, we weren’t,” so I hope that we get some clarity on the matter and a firm answer when the Government respond to this debate. To what extent did they know about and encourage the south-west consortium to start?

The consortium, as I indicated, was initially developed in secret but since NHS staff found out about it by accident, I have received hundreds of letters and e-mails from staff who are angry and anxious not just for their own futures, but for their patients. It is shocking that they found out about that only by accident and were not consulted by the consortium.

[Yasmin Qureshi]

Does my hon. Friend agree that we were a bit surprised to hear the Secretary of State say that Labour is asking for national pay and opposing regional pay because the unions are bankrolling us? My hon. Friend said that she had received many e-mails. I am sure that, like me, other Opposition Members have received hundreds of e-mails from people who work in the health service—ordinary people, working people—who say that they do not want regional pay. That has nothing to do with any union.

[Mr Speaker]

Order. Interventions on both sides should be brief, and rather briefer than that.

[Kerry McCarthy]

It is sad that the Secretary of State resorted to the union bashing that we also heard from the Minister in the Westminster Hall debate. I have had a meeting with the Royal College of Nursing, and I have a briefing from the BMA about the case against the local and regional approach to pay. That has nothing to do with Labour-affiliated unions. Those organisations are speaking up for their staff, who are extremely worried. It is patronising to say that staff are concerned only because someone stoked them up and told them falsehoods or whatever. They are worried about the proposal because they work in the NHS and they know what impact it will have on them.

The south-west consortium’s explicit intention is to reduce costs by considering

“further more radical changes to the pay and conditions of the workforce”.

Yet to do this at a time when hospital budgets are under great strain and nurses are being made redundant, each trust paid £10,000 of public money to join the consortium. They have to appoint a consortium director, establish a consortium working group and commission legal advice, so it remains to be seen how much the added bureaucracy of the consortium will cost.

Even more worrying is the lack of transparency or accountability for that spending, given that we still do not know who is responsible for employing the director of the consortium or to whom they are answerable. Perhaps most disturbingly, the project initiation document explained that

“it is likely that Trusts would be obliged to dismiss and re-engage staff to secure such changes”,

which not only calls into doubt the validity of their proposals, but has serious cost and legal implications.

I can only agree with the BMA that regional pay is a

“costly and time consuming distraction”.

But of course this affects not only the NHS as an institution, but the individual staff on whom the whole service relies, who potentially face a 15% pay cut. The consortium proposes to cut sickness absence payments so that they are paid only at the base rate, yet for staff permanently on nights, the extra payments that they get for working night shifts are an intrinsic part of their salary, on which their mortgage payments often depend. It would constitute, on average, a 20% pay cut if they were ill and were paid just at the base rate.

Reducing annual leave entitlement not only amounts to a pay cut but means that staff who rely on their leave to balance caring responsibilities will face additional costs, if they can even continue to work. At the same time, extra child care costs will be even less affordable if enhanced payments for nights and weekends—payments which are intended to recognise their personal sacrifices and the additional costs that these workers incur—are changed.

The consortium is also considering increasing working hours. Once again, this is an effective pay cut, which ignores the fact that so many overworked staff already work longer hours. According to the Royal College of Midwives, 87% of midwives “frequently” or “always” worked more than their contracted hours, and more than half reported that none of those extra hours were paid for. These are emotionally and physically demanding jobs and the consortium risks leaving staff even more tired, or coming into work when they are really too ill to do so, in order not to lose their extra pay.

The south-west is a net importer of NHS professionals, but our trusts risk losing demoralised and under-appreciated staff to other regions where the terms and conditions are more favourable. NHS staff require the same training, dedication and commitment all around the country, so why should my constituents be paid less simply because of where they live, especially when there can be a greater demand for health services in the south-west because of our older population, and when the cost of living in many places is so high?

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

The same sort of thing happened many years ago with plant bargaining, so to speak, at a regional and a national level in the private sector. The employer did away with the national agreements, did away with the regional agreements, and the end result was people being poorly paid. The Secretary of State has no experience of that and he has the effrontery to come to the House today and foist it on everybody. It is a disgrace, bearing in mind who his paymasters are, when he talks about the trade unions.

[Kerry McCarthy]

I agree entirely. There is a danger of even greater fragmentation so that we move from national pay to regional pay to very localised pay, with everyone competing against each other—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Member for Coventry South (Mr Cunningham) said “paymasters”. I am sure that he would not want that to be on the record, and that he would want to withdraw it—[Interruption.]

[Mr Cunningham]

We were accused of being in the hands of the trade unions as paymasters.

[Mr Deputy Speaker]

Not individuals? I was worried that the hon. Gentleman was referring to individuals.

[Kerry McCarthy]

During the first two years of this Government, the south-west’s nursing work force has fallen by more than 3.5%, which is three times the national average. According to the 2011 national NHS staff survey, 11 of the 20 trusts involved in the south-west consortium are in the worst 20% for people feeling satisfied with the quality of work and patient care. The consortium arrangements will not alleviate these pressures and can only make working conditions worse.

These statistics are reflected in the often heartbreaking comments that I have received from constituents, who report on increased work loads, under-staffed wards, and friends and families they rarely get to see. They are considering leaving the south-west, or the NHS altogether. The consortium’s proposals are the last straw when morale is already at an all-time low. One constituent told me:

“I now feel as disposable as the equipment I use. Nursing is on the cusp of disaster.”

When the Prime Minister claimed to lead

“the party of the NHS”,

I do not think my constituents knew whether to laugh or cry.

Health Ministers’ answers on the consortium, like the Secretary of State’s speech today, frequently hide behind “Agenda for Change”, a framework that was agreed only after lengthy negotiations, as my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said. This prevented there being damaging competition for staff, avoided the risk of ratchet bargaining and minimised the costs of pay negotiation. It meant that nurses were no longer paid as little as £12,000 just because of where they lived. Significantly, “Agenda for Change” has largely eradicated equal pay challenges, so I hope Government Members do not want to replicate the larger gender pay gap that we see in the private sector.

National negotiations on “Agenda for Change” are now being undermined by the consortium, especially when the chair of NHS Employers, who also runs a trust in the south-west, was reportedly instrumental in establishing it. I would be interested to know what conversations Ministers have had with the chair of NHS Employers before she played a leading role in setting up the consortium. The Royal College of Nursing warns that the NHS is simply not equipped for the added bureaucracy, time and expense needed to negotiate pay on a more local basis, and that this ultimately would take the more experienced staff away from the front line.

Health Ministers have sought to defend the possibility of regional pay in the NHS by pointing to its potential under “Agenda for Change”. The inclusion of high cost area supplements and the recruitment and retention premiums, as we have already tried to explain to those on the Government Benches, were designed to help trusts recruit in high cost or low supply areas. They were not intended to drive down pay and drive away staff.

NHS staff in Bristol are having to work more, with fewer staff and when their pay is frozen. They are stressed at work and stressed at home as they try to make ends meet each month, and now there is a conspiracy to reduce their pay and conditions. My constituents need answers from Ministers. When did the Department of Health first find out about the consortium? I do not mean when it first found out that the documents had been leaked to the public. Who is responsible for appointing the consortium’s director and for its budget? Most importantly, will the Government intervene to prevent the consortium undermining the progress made under “Agenda for Change”, local health services and the NHS as a national service?

My constituents deserve to be paid according to the work they do, not where they live. The proposals for regional pay risk undermining our national health service and undervaluing the work done by those who have dedicated their lives to it. The proposals should be scrapped, and scrapped now.

13:40

[Chris Skidmore (Kingswood) (Con)]

It is a pleasure to follow my constituency neighbour, the hon. Member for Bristol East (Kerry McCarthy). I apologise for not attending the earlier Westminster Hall debate secured by the right hon. Member for Exeter (Mr Bradshaw); I will read the Hansard report to see what was said. I want to talk about the background to the debate and the south-west pay, terms and conditions consortium, which affects my constituency. We heard the right hon. Member for Leigh (Andy Burnham) and a few other Opposition Members talk of cartels. It is rather unfortunate that such language has been used, because we want trusts to work together to come up with productive solutions to the problems we face in the NHS.

I have heard from constituents, many of them nurses, who are concerned about what is happening. To be honest, I think that they are concerned because there is a lot of scaremongering and a lot of knowledge has not been put out in the open, partly because the unions that are driving the campaign are refusing to speak to the consortium and engage. We need that engagement from the unions, so I urge them to get around the table.

I wrote to the chief executive of the south-west pay, terms and conditions consortium, Chris Brown, to ask for his reasoning as to why the consortium was formed and why it has put the measures on the table—they are not definite and are there to be discussed by individual trusts. This is about flexibility for individual trusts. As has been discussed, the previous Labour Government provided that flexibility. It will be up to the trusts to decide. We should have faith in local foundation trusts to make the decisions that need to be made.

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

I am grateful to my hon. Friend for breaking down the language that has been used, because one of the worries my constituents have is that Swindon is right on the edge of the south-west region. The prospect of a wholesale regional pay structure causes them real concern. Is not the issue local pay bargaining and how local trusts run their services to the best of their ability?

[Chris Skidmore]

The debate is not so much about regional pay because, as my hon. Friend says, there are local considerations to be taken into account; it is about what is the right pay. The right pay is not about lowering pay in poor areas, but about having the right pay in all areas. The right pay is the market rate for an individual, a professional with an individual mix of skills, expertise and experience. One of the problems with the national pay structure is that if trusts want to pay someone more, perhaps an expert, they will be prevented from doing so, which I think is wrong.

[John Pugh (Southport) (LD)]

The hon. Gentleman objected to the use of the word “cartel”. In what sense is it inappropriate in this context?

[Chris Skidmore]

I believe that “cartel” is a rather offensive word to use in this context, because it has connotations that are inappropriate for health care professionals who are doing their best to ensure that the NHS survives in the long term. That is the crux of the debate. Let us look at staffing costs. The Labour Government made a significant investment in the NHS over 13 years. It would be churlish to deny that, but it would also be churlish to deny the fact that a huge proportion of those costs were soaked up in pay.

[Jack Dromey]

The hon. Gentleman has just spoken about paying people the market rate. Sadly, there is a low-wage economy in much of the south-west. That is precisely why regional pay was rejected in the lead-up to “Agenda for Change”. It would lead to the market rate being applied in much of the south-west, driving down pay and conditions of employment. Does he, as a south-west Member of Parliament, support regional pay bargaining for the south-west?

[Chris Skidmore]

What I support is south-west trusts coming together as health care professionals and working out what is best for them in order to survive financially for the future.

I want to read from Chris Brown’s reply to my letter:

“The Consortium was established in response to the serious financial and operational challenges facing the NHS, both now and in the future, and will work to identify ways in which taxpayer funding may be more efficiently used in order to protect both employment and the continued delivery of high quality healthcare.”

There is a significant point in that. I do not want redundancies in the NHS, but if we do not come up with a workable solution for the future, that is what Opposition Members will see, and it will be on their watch if they believe that we should follow the national pay structure. I do not want to see redundancies, and neither do the trusts, which is why they have come together constructively, and they should not be scolded for doing so.

Mr Brown’s letter continued:

“More than two thirds of NHS expenditure is on staffing costs. In recent years NHS organisations have largely exhausted other avenues of potential cost-saving (including reducing reliance on bank or agency staff and implementing service improvement initiatives). Monitor, the independent regulator for NHS Foundation Trusts, has also estimated that NHS organisations with a turnover or around £200m will need to produce savings of around £9m a year for each year until at least 2016/17 to remain in financial health.”

That is why the consortium has been formed. We cannot forget the financial challenge.

[Andy Burnham]

The hon. Gentleman said that the Labour Government gave too much to nurses and midwives in pay—[Interruption.] He said that we spent too much on pay. He also said that the market rate of pay should apply in his area. I want to ask him a direct question. Does he think that his constituents who work in the NHS are overpaid?

[Chris Skidmore]

No, I think that the right hon. Gentleman is misrepresenting what I said. The fact is that we have got to the point—[Interruption.] Nurses, doctors and health care professionals should be paid according to their skills. They should be paid according to what the trusts can afford. The problem we have is that, with an ageing population—

[Andy Burnham]

So they should be paid less?

[Chris Skidmore]

No, they should not be paid less. The right hon. Gentleman should stop splitting hairs. If we want a health care service that is viable for the future, where will the money come from? Perhaps he can answer that. What would he do to be able pay for the future of the NHS, given the demographic challenge we face?

[Andy Burnham]

If the hon. Gentleman gets rid of national pay in the south-west, does he think that the trusts in the consortium, or cartel, should receive a national tariff that factors in a national rate of pay, or should they be paid less for the work they do?

[Chris Skidmore]

What I find so frustrating about this debate is that the right hon. Gentleman has thrown his principles out of the window. He once defended flexibility for foundation trusts, but he now no longer trusts professionals in the way he really should.

[Mr Dorrell]

My hon. Friend asked the shadow spokesman a question as though it was academic, but actually it is not academic. When the right hon. Gentleman was responsible for these things, we know what he thought because it is there on the record. The policy was

“to increase regional and local flexibility in public service pay systems.”

That is what he thought was necessary when he had responsibility.

[Chris Skidmore]

I thank my right hon. Friend for his intervention, which is much appreciated.

The key point is that staffing costs will have to be managed for the future. We cannot get away from that fact. If I am honest in making that point, I am sorry, but we all, regardless of political parties, have to understand the financial pressures the NHS will come under in the decades to come. Staffing costs make up between 70% and 75% of NHS spend. The Nicholson challenge is absolutely vital, and it is not just over four years, as the right hon. Member for Leigh well knows; it will be for ever. We will have to commit to making those efficiency savings so that they can be reinvested in the service if we are to keep the NHS free at the point of delivery. I want an NHS that is free at the point of delivery for my children, yet to be born, and I want it to be there at the end of the century. In order to do that, we need to be responsible about where savings will be made. We are pushing savings at the moment on the outside staffing costs of 20%. The pay freeze has managed to save around £2.5 billion for the Nicholson challenge, as we have heard Mike Farrar from the NHS Confederation explain.

There is a problem, in that the NHS pay freeze will come to an end next year and will have to be renegotiated. Rather than cutting staff numbers, the NHS Confederation is pushing for us to be responsible about what is put into the NHS. That is what we have to consider. We cannot get away from this challenge. It is irresponsible to fly in the face of reorganisation. We need to make savings so that they can be reinvested for the future. That is why it is responsible for the trust and the south-west consortium to take the issue seriously, and it will be up to the individual trusts to decide at the end of the year.

I cannot see any reason why local trusts and health care professionals, who know what is best for their local areas, should not be able to take advantage of the regulations for local flexibilities set out in “Agenda for Change” to ensure that the NHS has the best possible productivity. Let us not forget that the NHS is not free; it is paid for by taxpayers, who deserve the best possible value for money. If the south-west consortium can deliver that, it should be applauded.

13:50

[Ms Margaret Ritchie (South Down) (SDLP)]

The motion in the name of my right hon. Friend the Member for Doncaster North (Edward Miliband), the Leader of the Opposition, comes at a time when public sector workers face a continued pay freeze, an increased pension age and increased pension contributions throughout their careers. It would seem that some are “all in this together” more than others. This Government’s flirtation with regional pay is merely the latest ill-advised policy that undermines the valuable work done by front-line staff in the health service and across the public sector.

A good starting point would be for the Government to clarify their position on the issue, because the current indecision will do little more than breed further uncertainty and bad feeling. Today’s debate should bring a greater degree of clarity from Ministers, but I say that more in hope than in expectation.

Although the focus of this debate is on NHS pay levels in England, it is important to point out that this could have serious ramifications for the public sector in Northern Ireland. Make no mistake: any movement in this direction will put extreme pressure for similar measures to be implemented in Northern Ireland by way of both principle and precedent and as a result of any possible corresponding decrease in block-grant consequentials.

The suggestion that the measure is being considered as a means of equalising pay between the public and private sectors is fundamentally disingenuous. What seems to lie at the centre of the argument is the misplaced notion that public sector workers are paid too much. That contention is rife with misleading comparisons between the public and private sectors, which, as the Institute for Fiscal Studies notes, often ignore factors such as age and levels of qualification, and compare highly selective samples for the purpose of making a political argument. Indeed, any move towards regional pay in Northern Ireland will likely bring the worst aspects of the private sector to our public service, while removing the social guarantees that are the bedrock of a fair system. It will be a case of equalising down rather than levelling up.

In standing up for the public sector, we should not ignore the severe problem of low pay in parts of the private sector. This is a particularly pressing problem in Northern Ireland, where in 2010-11 the pay of private sector employees was 21% below the UK average for private sector workers. The recent discussion of introducing a living wage is much more instructional and productive than any cut to public sector pay. Put simply, low private sector pay in Northern Ireland will not be helped by decreasing public sector pay through the introduction of regional pay scales.

The likely effects of such a move on our public services and our regional economy are clear. There is a strong possibility that it would lead to skills shortages in the NHS and across public services, and to a shortage of much-needed front-line staff in areas where pay is kept low, as I fear it would be in Northern Ireland. That could result in a scenario whereby regions invest in educating and training staff only to lose them to an area with higher pay. The Government have offered no explanation of how they would guard against that. Any such proposal would also remove much-needed money from our local economy. The cost has been put at about £10 billion and the corresponding cut in the Northern Ireland block, at a time when families and businesses are already struggling, would be, frankly, a step too far.

In the Income Data Services report, “Crowding out: fact or fiction?”, researchers found absolutely no relationship between public sector pay levels and private sector job creation, and that regional pay would have a greater impact on women than men. Indeed, they state that most private companies employ national pay scales.

In essence, the Government seem to be attacking a problem that does not exist, while ignoring the problem that does, namely the lack of jobs and the low growth in the economy. This can be seen as nothing more than an ideologically motivated attack on the public sector and we will oppose it. As my right hon. Friend the Member for Leigh (Andy Burnham) has said, this is important, and we in the Social Democratic and Labour party will uphold the principle of national pay agreements.

13:56

[John Pugh (Southport) (LD)]

The submission made by 25 of my colleagues to the regional pay consortium—copies are still available, if people want them—has an excellent conclusion:

“Richard Disney, an expert on regional pay at Nottingham University, has said, ‘everyone thinks it’”—

regional pay—

“‘makes sense until they try to work it out.’ The Government is no different.”

Let us be brutal: this debate is not just about regional pay, but about a set of hospitals that are desperate to save money in any way they can by cutting their wage bill and that are stupid enough to think that how they treat their staff and human capital simply does not matter. This debate is not even just about getting the Government to intervene; it is also about exposing differences between the coalition parties and about the coalition trying, to an extent, to paper over the cracks, which is what the amendment endeavours to do.

We all know that the Secretary of State does not want to intervene and that he will wait, quite legitimately, for the pay reviews to report. He cannot do that much anyway, because the guys on the Opposition Benches created independent foundation trusts—they were conned into agreeing to them in 2003, I think—which has resulted in the current situation.

To be fair, some people believe that regional pay will revive economies in the regions, that pumping extra money into areas with high housing costs will not drive up house prices still further, that it will not reduce demand in the regions and that it is a great way of ensuring that everyone gets good quality public services. They are the sort of people who believe that it will allow us to create not only more private sector jobs, but more public sector jobs. That view was expressed by the hon. Member for Norwich North (Miss Smith) when we last debated this issue.

[Ian Mearns]

Would the hon. Gentleman care to speculate on how the quality of front-line care for our patients will improve by threatening tens of thousands of hospital workers and NHS front-line staff with a further reduction in their living standards?

[John Pugh]

Some proponents of regional pay argue that teachers would work harder, nurses would be more caring and skills shortages would disappear, and that we would not squander useless time on endless boundary, demarcation and wage disputes. Bizarrely, however, those same people usually believe that this principle and its effects are applicable only to lower paid jobs, not to the top jobs. In other words, the proposal applies only to the plebs.

A prejudiced northerner such as me might be tempted to call those people, “southerners,” but the truth is that they are only a tiny subset of southerners who are upwardly mobile, found in think-tanks, male and disproportionately London-based. Their arguments will change, but no evidence to the contrary will satisfy them, because they have a Tea party-like faith and simple creed that public services should and can be run as simple markets, that people respond only to financial incentives and, most preposterously of all, that nothing worthwhile is lost by turning our great public services into markets full of acquisitive agents. That is not so much market ideology as a form of market idolatry: an unreasoning faith in the omnipotence of idealised markets of the kind that we find only in economics textbooks. Regional pay—and market-facing pay—is part of that faith, and the principle of equal pay for equal work is not part of it. In all honesty, we have to say that we have such people in our midst, some of whom are in positions of power and influence, but equally we have many colleagues around us who have a better grip on reality and the complexities of life and who question such crackpot ideas as regional pay and where they might take us.

I pity the Minister, who is probably aware—I looked this up—that house prices, wages and the cost of living in his Suffolk constituency are very similar to those in many parts of the south-west. He certainly will not welcome telling hordes of his constituents that they are a tad overpaid.

[Yasmin Qureshi]

The hon. Gentleman said that as somebody from the north of the country he accepts that there is already a north-south divide in pay. Does he agree that regional pay would make that even worse?

[John Pugh]

Absolutely.

I was enlarging on the fact that the Minister has to keep peace between sectors of the coalition, and I do not envy him that role. To be fair, many Members from the majority party are also finding this issue uncomfortably irrelevant.

So what can the Minister do, and what can we do? I have a suggestion. The south-west trust was set up by Labour as an independent providers foundation trust with, frankly, pathetic levels of public accountability. Trusts were set up to operate within a market competing with other NHS providers and private providers, and they do not in law have to consider themselves as part of the wider NHS—as part of national bargaining or “Agenda for Change”. Apparently the trusts in the consortium do not to want to so consider themselves and want to ignore national agreements. If they see themselves as independent free agents in competition with other free independent agents, then surely they cannot all form a cartel with a huge share of the health market and conspire collectively to keep wages, and so their costs, down. That is not a free market—it is market abuse. It is not even fair trading. It is the sort of thing that in the United States would lead to a class action as wage fixing.

That is why my colleagues and I are referring this issue to Monitor and the Office of Fair Trading for investigation. This misguided lot in the south-west cannot be allowed to be freebooters when it suits them and freeloaders on the NHS when asked to play by market rules. If the Government are a bit schizophrenic on this issue, the south-west consortium appears to be even more so.

[Mr Bradshaw]

The hon. Gentleman mentions referring this to Monitor and the OFT. Does he accept from me, as a former health Minister, that all it would take is a word from the Minister to say “Stop it”, and it would stop?

[John Pugh]

I do not think that that is the case, or that the right hon. Gentleman thinks so, but he ruined my punchline, which goes like this: if the South West consortium is even more schizophrenic than the Government on this, it must be made to come to its senses.

[Dr Sarah Wollaston (Totnes) (Con)]

I ask the hon. Gentleman please to withdraw his comment about this being a schizophrenic response. It is really unfortunate when people use the term “schizophrenic” to refer to very important decisions, because it minimises the impact of schizophrenia on sufferers. May I ask him to rephrase his comment?

[John Pugh]

I cannot take it off the record, but I do take the point that the hon. Lady has made.

14:04

[Mr Iain Wright (Hartlepool) (Lab)]

It is a pleasure for this pleb and prejudiced northerner to follow another self-confessed pleb and prejudiced northerner, the hon. Member for Southport (John Pugh).

Much of this debate, and the excellent Adjournment debate in Westminster Hall this morning, has focused on the south-west. I would like to focus on what is happening with regional pay in the NHS in the north-east and, in particular, in my local NHS trust. As my right hon. Friend the shadow Secretary of State said, last month North Tees and Hartlepool NHS Foundation Trust issued HR1 “advance notice of potential redundancies” forms to almost 5,500 trust staff based not only in my constituency but in Easington and Stockton. I am pleased to see my hon. Friend the Member for Stockton North (Alex Cunningham) in his place and hoping to catch your eye, Mr Deputy Speaker. The trust was asking staff to sign new contracts that specifically end the practice of enhanced sickness pay.

I am very concerned about the tactics employed by the trust, which can be seen only as hostile, intimidatory and confrontational. Through the issuing of the HR1 forms, the trust, in effect, said to staff, “Sign this or be sacked.” In its last annual report, published earlier this year, North Tees and Hartlepool NHS Foundation Trust stated that

“our most valuable and important resource…our staff. The value of our staff cannot be over-emphasised. Quality, value and recognition are the themes which run through all our activities, to enable us to attract, retain, reward and develop our current and potential future staff.”

I could not agree more with those sentiments, and I want to put on the record my tribute to all the hard-working NHS staff all over the country, but especially in my north-east constituency, who work valiantly on behalf of my constituents. However, I do not think that the 5,500 trust staff issued with HR1 forms feel particularly valued or recognised at the moment.

Staff who are most affected by those proposals comprise the lowest-paid in the trust, such as band 1 nurses, porters, domestic and catering staff and midwives. However, the proposals will affect all employees. I understand that staff who are new starters, those who might gain promotion and those who are changed on to flexible working for whatever reason—whether it be that they are looking after a child or a sick and elderly relative—were automatically put on to the new contract as of last Thursday, without consultation.

The specific issue—enhanced sickness pay—could and should be resolved amicably through negotiations between unions and management on a national basis. I understand that the matter is subject to national negotiations as part of “Agenda for Change”, but, as regards my trust, I am concerned about what is coming next for workers’ terms and conditions.

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

I think we know what is coming next, whether it is in North Tees and Hartlepool or in the south-west—cuts to pay and reduced employment benefits. In my part of the country, and I am sure in the hon. Gentleman’s, this does not have public, patient or political support.

[Mr Wright]

The hon. Gentleman makes a pertinent point. I am about to come to the financial condition of my trust, which I imagine is true of other trusts.

A total of £40 million needs to be cut from the trust’s budget in the three-year period from 2011-12 to 2013-14—so much for real-terms increases in NHS budgets, as put forward by the Secretary of State at the Dispatch Box. Given that pay costs represent over 68% of the trust’s total income, it seems inevitable, given the financial pressures that the Government are putting the trust under, that there will be a need to cut pay costs still further, whether through redundancies, recruitment freezes or changes to terms and conditions.

The change on sickness enhancement pay is the first of many, and I suggest to the Minister that we must see it as the thin end of the wedge. The proposal on sickness enhancement pay will go through, and then, as the hon. Member for St Austell and Newquay (Stephen Gilbert) said, there will be changes to or cancellations of increments for staff, cuts in overtime, and further pay freezes for lower and middle-paid staff, leading to less money in the local economy. The actions of North Tees and Hartlepool NHS Foundation Trust on sickness enhancement pay simply amount to regional pay through the back door.

As a result, we will see a steady deterioration in pay and other terms and conditions for NHS workers in my constituency relative to other areas and other trusts, even within the north-east. I do not want a race to the bottom with regard to health care in my area. I am concerned that recruitment and retention of staff in North Tees and Hartlepool NHS foundation trust will become an issue because pay will be higher elsewhere, even within the region. Staff may want to move elsewhere, or may not want to work in the trust in the first place, which will lead to a deterioration in quality health provision.

[Ian Mearns]

Will my hon. Friend give way?

[Mr Wright]

Before I give way to a fellow regional MP, let me point out that my constituency has huge health inequalities and low life expectancy, and we therefore need the best possible health provision and the best possible staff.

[Ian Mearns]

I have an additional concern. Eroding morale within the NHS and hospital trusts to such an extent that staff turnover increases, will lead to an inherent increase in costs due to the additional training required when new people replace those who have left, at a lower rate.

[Mr Wright]

My hon. Friend makes an important point. As the shadow Secretary of State will know from when he was in office, we have had debates, concerns and anxieties about the future of health and hospital services in Hartlepool and north of the Tees for many years. That has not helped staff morale, recruitment or retention. I think that this is the thin end of the wedge, and regional pay through the back door will make matters in my area even worse.

In his response, will the Minister comment on what is happening at North Tees and Hartlepool NHS Foundation Trust and explain why, if NHS spending is increasing in real terms, it has to find £40 million of savings? Why is regional pay being pushed in through the back door? Does he think that the ideas put forward by the trust are good, and what impact will that have on recruitment, retention, morale, and ultimately health care provision in the NHS in areas such as mine?

I will conclude with a broader point about the economic rationale—or rather, the lack of it—behind regional pay. If the national economy’s major problems are caused by a lack of demand, an erosion in the confidence of consumers, households and businesses, and structural imbalances in regional economies—in the north-east especially, relative to London and the south-east—I cannot emphasise enough that it seems economically ludicrous to contemplate policies that widen the regional imbalance, restrict demand still further, and result in further private sector austerity in regions such as mine. That is precisely what Lord Heseltine argued against in his review on growth published last week. We must ensure balance between the regional economies, so that the great potential of areas such as mine can be fulfilled. Regional pay in the NHS, or elsewhere, is not the way to do that.

The 5,500 people employed by the North Tees and Hartlepool NHS Foundation Trust live in my area and contribute to the sub-regional economy. They buy things such as cars; they might add a conservatory to their house. That will all stop as a result of regional pay, which will strip out money from the north-east economy to the tune of £0.5 billion a year, according to the TUC. That will result in reduced economic activity in the private sector, and increased private sector unemployment in an area that already has the highest unemployment and the lowest wages anywhere in the country. That is economic madness. We cannot say, “Public sector work over here, private sector enterprise over there”. Modern economies simply do not work like that.

If the Government wish to rebalance the economy geographically—as I think they should—regional pay and a race to the bottom is not the way to do it. The national health service needs a national pay agreement. I strongly support health care provision and health care workers in my area, and on that basis I support the motion.

14:13

[Guto Bebb (Aberconwy) (Con)]

It is a pleasure to follow the hon. Member for Hartlepool (Mr Wright), although I am concerned about his claim that regional pay is being introduced by the back door. The Government have made no change to the legislation, so I suspect that the change taking place is a result of policies and Bills passed by the previous Administration.

I speak in this debate as a Welsh MP—perhaps my red plaster cast gives that away, although I stress that I have it because the plaster technician at my local hospital wanted to give a Conservative MP a red cast in which to go to the House of Commons and make an impression.

I must take issue with the right hon. Member for Leigh (Andy Burnham), who stated that he was responsible for the national health service in England. I accept that devolution has changed and complicated the situation, but when my constituents in north Wales think of the national health service, they do not think about what happens in Wales and what happens in England, because that is not how it works. The health service in north Wales is regularly dependent on specialist services offered in north-west England, and when we think of the health service, we think of it as one body.

There is no doubt, however, that the differences between what is happening in England and in Wales should be taken into account. It is all well and good to carp that figures suggest that spending on the health service in England is more or less flat in real terms—that was the claim made by the right hon. Member for Leigh—but that should be contrasted with actual and significant cash cuts to the health service in Wales that are being implemented by the Labour Administration as a choice. Those cash cuts would have been implemented in England too if the right hon. Gentleman and his party had won the last election.

When trying to ensure best value for money within the NHS, it is crucial to take into account that the health service in England is facing real challenges while maintaining a position that takes inflation into account. In Wales, however, the hospital staff who serve me, my family and my constituents are facing significant cuts as a result of decisions by the Welsh Assembly Government. That is the context and it is important to make that point.

The hon. Member for South Down (Ms Ritchie) made the important point that public sector workers have recently been facing difficult situations due to a pay freeze and increases in pension contributions. Those two provisions, however, were implemented in an equitable manner throughout the United Kingdom. People may disagree with the changes to pension contributions in the public sector, but there is no doubt that workers in Wales, Northern Ireland and south-east England have been treated in the same way. People might complain about the freezing of public sector pay, but that too has been done in an equitable manner throughout the United Kingdom.

There is real concern in constituencies such as mine that a change to regional pay—which is not being implemented by the coalition Government, merely consulted on—would be inequitable. Somebody in my constituency would be paid at a different rate from someone doing exactly the same job 40 miles down the road in Chester, for example. That is the difference between the pay freezes in the public sector and the pensions changes—those were difficult choices but were implemented in an equitable manner throughout the United Kingdom—and moving forward with regional pay, which would be damaging.

[Jim Shannon (Strangford) (DUP)]

I appreciate this opportunity to make a quick intervention. As the hon. Gentleman rightly said, the four regions of the United Kingdom have parity and equity. Will he explain what will happen when it comes to retrospective payments? In Northern Ireland, a number of retrospective payments have had to be made. Are the same retrospective payments applicable in Wales as in Northern Ireland, for those who have been upgraded and should therefore get more money?

[Guto Bebb]

I am not sure whether I am qualified to answer that question in detail, but perhaps the Minister will respond from the Dispatch Box in due course.

The changes in the south-west are taking place under current legislation and without any changes to the law, and we must be careful. We are proud to have a national health service and national public services that we take seriously. Although sacrifices are asked of people in the public sector, it is important that they are requested on the basis of equality throughout the United Kingdom. Ultimately, I am concerned that we are discussing a Labour motion that contradicts a lot of what has happened over the past few years.

I recently took part in a television debate on regional pay in Wales with a Labour Member who said that the changes to HM Courts Service pay rates were not about regional pay but about zonal pay. As it happens, zonal pay in Wales is lower than in other parts of the United Kingdom. I am sure that workers in Wales were cheered that they were subject not to regional pay in that context, but zonal pay, which made it all right.

There is a degree of opportunism from the Opposition Benches in initiating this debate at this time, and there is no recognition that many of the issues that have given rise to concern are a direct result of policy changes that the Labour party implemented when in power. I accept, however, the need to ensure we get the best possible value for money for the taxpayer from public services, and it is important to look at the degree to which we can be flexible in the way we deliver public services, whether in England or Wales. My view is that a person should not be discriminated against in pay if they are doing a similar job in the same manner as someone within 40 miles of them. The Government should take that extremely seriously.

The economic argument for regional pay is difficult to make by a party that claims to believe in the Union. One advantage that a rural, low-pay area such as mine derives from the relationship with the UK is the transfer of money from richer to poorer parts of the country. We could argue for a stronger regional policy and that we need to do more in that respect, but it would be difficult for me, as someone who believes that the Union brings a great deal of benefit, to argue that workers in my part of the world should be given a different degree of support from the state from workers doing exactly the same job in other parts of the country.

I find it difficult to disagree significantly with the motion, but I welcome the Government amendment. The one thing we can say about the coalition Government is that they are willing to throw difficult, controversial matters out into the open—that often creates problems for MPs because we need to sell those policies on the doorstep. I feel comfortable with the amendment. Ultimately, when Members are elected, they have a responsibility to look into issues carefully, to read around them and take on board the evidence. The amendment states:

“there will be no change unless there is strong evidence and a rational case for proceeding”.

I can live with that—it is great deal better than the Labour motion. Labour Members are basically hiding behind a discussion in the coalition. The fact is that the changes are happening as a result of legislation they proposed and voted for, and now regret.

14:21

[Alison Seabeck (Plymouth, Moor View) (Lab)]

It is a pleasure to follow the hon. Member for Aberconwy (Guto Bebb), who very openly mulled over some of the problems posed by regional pay.

The unfairness, irrationality and economic illiteracy of the proposal made by the south-west cartel, as highlighted by the hon. Member for Southport (John Pugh), who is no longer in his place, are stunning. The upshot of the documents that have been leaked to the public has been an outcry in my region. I, too, have received hundreds of e-mails and letters from local people who are concerned about what they see as an unfounded and unfair attack on hard-working Plymouth families.

The south-west proposals are tacitly supported by the Government. When questioned in the House, they washed their hands of any responsibility for the action being taken by the 20 trusts in my region. Why is that? Is there something about the south-west? Did the Government believe that the south-west would be supine because there are lots of Government MPs in the region? Did they think they would try regional pay in the south-west and put their toe in the water and perhaps that nobody would notice—after all, it is a long way from London? Did they think, “We now have regional pay in the south-west. It’s a good idea, so we’ll roll it out in the rest of the country”? The response from people across the party divide in the south-west, including those working in the NHS, has put the proposal firmly in its place. We will not accept it or take it lying down.

[Dr Wollaston]

Does the hon. Lady agree that there are concerns in the south-west that regional pay will impact on the ability to recruit in certain key specialties?

[Alison Seabeck]

The hon. Lady speaks from a wealth of experience of working in the NHS. She is absolutely right on that point, which I will make more of later in my speech.

The public have a right to know what the Government’s position is, but as with so much else, confusion reigns. The Deputy Prime Minister has said at times that he is not in favour of regional pay, but it will be interesting to see how he votes today. The Chancellor of the Exchequer is clearly in favour, but the Prime Minister says nothing. The Secretary of State for Health has not helped to clarify matters today. The amendment, which is in the name of the Chief Secretary to the Treasury, is interesting. It states that the Government will not go down the route of regional pay

“unless there is strong evidence and a rational case for proceeding”.

How will the Government consult and gather the evidence to decide whether there is a rational case for regional pay? When will the Minister make the evidence available to Members of the House?

The Government must understand that the proposal is causing huge concern. The debate is not just about public sector pay restraint. Labour Members have accepted that there needs to be restraint in the public sector. We are not saying that that should not happen in times of austerity, but there is a need for equal pay for equal work. It is wrong if a nurse in Plymouth, working the same hours, doing the same job and providing the same high-quality care, is paid less than her counterpart in a hospital in Peterborough or Preston.

[Chris Skidmore]

Does the hon. Lady therefore disagree with the concept of London weighting, which has been around since the 1920s? There are 44 London MPs in the London area, so I would be interested in her views on London weighting.

[Alison Seabeck]

The hon. Gentleman dug an enormous hole for himself earlier, and I think I will leave him in it. As hon. Members know, London weighting has been around for quite a long time.

Even NHS employers in the south-west have admitted, in their submission to the consultation that the Government are allegedly carrying out, that the breaking up of national pay systems could jeopardise the progress made in delivering equal pay for women, a hard-fought right being all too easily diminished. “Agenda for Change” was a challenge for the NHS when it was introduced, but it has been a driver for change and fairer pay.

Although the Government are unlikely to listen to questions of principle, it is normally incumbent on Governments to look at evidence to understand the history of a policy that they are considering introducing or broadening. NHS regional pay was tried over a period of about a year in the 1990s. When the evidence was looked at, the differentials across the region were so small that it was put to one side. Regionalised pay is not an idea whose time has come; it is an idea whose time has long since passed. It should be left to lie in peace.

However, as the Government have chosen to resurrect regional pay, perhaps it is worth questioning why they think it is a good idea. The Chancellor claims it is good for the economy, but all the evidence speaks to the contrary. It would be nice if we had a Government who were willing to accept the facts. Instead, their plan is to introduce pay cuts for nurses while introducing tax cuts for millionaires. They are looking to make savings by hitting people throughout the health sector. Regional pay is not just about nurses—the paperwork from the consortium is clear about the impact on doctors and consultants as well as people on lower pay grades.

The Government are ignoring the impact that regional pay would have on living standards and the private sector. It risks a brain drain from the regions. I had an e-mail from a man, now in his 70s, who told me that he had voted Conservative all his life, and that he had even campaigned and canvassed in south Wales for the Conservative party, which takes some courage. The issue that moved him was regional pay. I went to have a chat with him, and while I was there, his daughter—a nurse—came in. I asked her about her experience and how morale was, and she said, “I’m already looking for jobs outside the region. I went to a jobs fair in London, where I spoke to the people from Devon NHS. They did not tell me about regional pay and were not up front about the fact that it’s being discussed.” She found that absolutely shocking. She has considerable experience, but she is looking to move out of our region.

Can the Government look hard-working families in the south-west in the face and tell them that their food bills are lower than anywhere else? Can they claim that south-west gas and electricity bills are not going up in the same way as those in the rest of the country? No. Would they dare say that water bills in the south-west are the same as for everybody else in the country? No. They certainly cannot say that housing is cheaper. The mortgage to income ratio in the south-west is exceeded only by that of London and the south-east. If rising living costs are having the same pernicious effects in the south-west as elsewhere, why should the south-west be singled out for the policy of regionalised pay cuts? Once again, the case simply fails to hold together. By not opposing this policy, the Government are, by stealth, supporting it.

The Government also claim that they need to address the differences in pay in the private and public sectors. Higher pay in the public sector is supposed to be skimming off the best talent and holding the private economy back. They work hard to pit worker against worker, but the evidence shows that 55.8% of public sector workers have a degree, diploma or equivalent, compared with only 28.5% in the private sector. That is comparing apples and pears. People in the public sector are better qualified and can quite reasonably expect to be better paid. Many hon. Members have experience of the law, and barristers and others would certainly expect to be paid better because they have their qualifications.

We also see a skewing with unskilled workers. In the private sector, we often see corners being cut—unfortunately —and very low levels of pay, whereas in the public sector, we expect unskilled workers to be paid a decent wage. It is not yet always a living wage, but that is a separate debate—and one that we certainly need to have.

Is it fair that a nursing graduate in Plymouth, with a degree and £30,000 of debt, should, if she wants to stay in the area and work for the NHS—a job for which she has been training for many years—have to take a pay cut? That does not work for me.

The issue of foundation trusts has been raised on many occasions. Foundation trusts have members, and they all encourage people to join and become members. Plymouth Hospitals NHS Trust is no exception. I suggest that people who have very strong views on regional pay might want to consider becoming a member of a trust, because that will give them a direct line to the chief executive and chairman of the trust, and the board, and they can make their views very firmly felt.

We should support the motion tonight. I hope that Members from across the region who have publicly opposed the measure will join us, and we can put an end to the nonsense of regional pay once and for all.

14:32

[Dan Rogerson (North Cornwall) (LD)]

It is a pleasure to follow the hon. Member for Plymouth, Moor View (Alison Seabeck). She was, at times, at pains to say that we were all largely speaking with one voice across the far south-west of the United Kingdom on this issue. The right hon. Member for Leigh (Andy Burnham) introduced this debate and framed the discussion as though, when the Government took office two years ago, Nye Bevan had just left the Dispatch Box, the NHS was as he set it up, and we had a national health service based on a monolithic central structure. Of course that is nonsense. What we had—as my hon. Friend the Member for Southport (John Pugh) pointed out—was a very different NHS, one of foundation trusts. In my town, over my back garden wall is an NHS treatment centre operated by Ramsay Health Care, employing people who do a great job in providing services but who are not NHS employees. At the time, they were given a contract which basically said, “Here’s a chunk of money. Off you go. If you perform some procedures, that’s good, but if you don’t, it doesn’t matter, you still get the cash.” Fortunately the set-up is now different.

[Andy Burnham]

We could have a debate about foundation trusts, their powers and their freedoms, and there is an argument that some of them have improved in recent times, especially the big city trusts, but that is for another day. Will the hon. Gentleman at least do me the courtesy of acknowledging that during our time in government not one NHS trust broke away from “Agenda for Change”, and only one sought to add an increment?

[Dan Rogerson]

Absolutely, and of course the process of trusts becoming foundation trusts was just under way—it has gathered pace over the last two years—and they were bedding down. It is likely—especially given the challenges of efficiency savings that his party would still have imposed if they had won the 2010 election—that the same set of circumstances would have prevailed. In fact the managers in those trusts who are taking those decisions are the same people who would have been in post had Labour won. It is nonsense to say that because the coalition is in power, those people woke up one day and made those decisions. Those things would have happened anyway. To be fair to the right hon. Gentleman, perhaps we should say that we cannot know what would have happened because we are not in that world. We are in the world in which his party lost the last general election. However, the NHS that he left behind is the one that is allowing this to happen, and it is the one that we have to deal with.

We have private providers next door to the NHS treatment centre I mentioned. Bodmin hospital is full of great staff. It was built under a PFI contract and is now staffed by Peninsula Community Health, a community interest company on the social enterprise model. It had to move those nurses into the private sector—or the social enterprise sector, depending on how one views that form of body—on the basis of the provider/commissioner split in the primary care trusts that was set up by the right hon. Gentleman’s Government.

We also have the issue of funding, which is the background to much of this debate. It is no accident that trusts in Cornwall are looking at this. I disagree with them, and I agree with the hon. Member for Plymouth, Moor View about the process they are engaged in, but one of the reasons they are doing it is that the “distance from target” for NHS funding was massive for trusts in the area under the last Government. I have to say that I am not satisfied that our coalition Government have tackled that problem either. The problem also existed under the previous Conservative Government—health funding in our region has been lower than it should have been for decades. Trusts such as the Royal Cornwall Hospitals Trust are having to deal with the problem of funding for those historic reasons. It is not something that has suddenly been invented.

[Sarah Newton]

I am sure that the hon. Gentleman is proud, as I am, to be part of the coalition Government who have put lots more money into the NHS in Cornwall, so that the distance from the England average has really shrunk. Like him, I will not be happy until we hit the target, but it is now just 2% less. Under Labour, it was a maximum of 7%.

[Dan Rogerson]

I agree with the hon. Lady up to a point, in that there has been a narrowing in the “distance from target” figure. Of course, it is much easier to get closer to target when there is more cash around and more money is being put into the NHS—in the good times. That is when the distance from target should have been tackled. We are obviously very much not in the good times in terms of the economic circumstances, for reasons that all parties would agree with.

If the trusts continue down this path, and create efficiencies by doing so—as well as making life much more difficult for their valued employees—we run the risk of what I call the boa constrictor approach. Snakes that kill by constriction wait until their victim breathes out and then tighten up, so they cannot breathe in again. My worry is that if trusts in Cornwall make these changes first, before other areas, they will make it easier for the distance from target funding to continue. The view will be, “Well, they don’t need the cash now, because they’ve dealt with the problem.” But the burden will have been borne by NHS employees, and that cannot be right.

I think this process is wrong because, as hon. Members on both sides have pointed out, there is an existing process for NHS employers and employee representatives to engage in to examine terms and conditions and pay levels, and see where savings can be made.

[Alison Seabeck]

Does the hon. Gentleman agree that the document that became public contains clear reference to the fact that the consortium had already been working with those staff-side organisations effectively to find some changes? We need to build on that rather than pursue this policy.

[Dan Rogerson]

That is exactly the point that I was going to make. Given the history of the two sides of the House, it is interesting to note that the motion tabled by the Opposition does not refer to the role of the trade unions in these negotiations. However, the amendment calls on the Government

“to continue to support employers and trade unions to work together for the benefit of patients and staff.”

I very much agree with that. I do not think that the approach set out by this consortium—or cartel, as others have called it—goes along with that, and that is why the amendment would send a powerful signal to those employers to get back round the table with the representative organisations, the trade unions. I do not join in the trade union bashing—talking about Labour’s paymasters and so on. Having met trade union representatives here, as the hon. Member for Plymouth, Moor View and others have, I know that some give a certain amount of cash to the Labour party and that others do not. That does not matter. They are local representatives representing their staff and doing the job that they are there to do. I have always supported, and continue to support, officials having time to do that job, as it actually saves the public sector a great deal of money. There will be accord from some parts of the House on that issue, too.

This is about market-facing pay versus a top-down, imposed regional pay structure. The Deputy Prime Minister has said that we will not have that. I am delighted that he said that, and I support him. I think that all hon. Members on these Benches—including many of our coalition partners—would say that that is not the way to go. We are not going to have a regional structure that mandates a different level of pay in different parts of the country. However, there is a risk with the market-facing approach, of which the hon. Member for Kingswood (Chris Skidmore) seems unfortunately to be a fan, that that could happen via another route.

The argument has been made repeatedly that public sector pay somehow holds back private sector employment. That is absolute nonsense. The idea that the widget factory next door to the hospital is struggling to employ people, and that if we pay nurses less they might suddenly all decide to go and work in the widget factory, is absolute rubbish and I hope we can knock it on the head right here and now. However, if there are challenges facing the NHS, as there are in other public services, as a good employer it should get around the table and look at ways it can defend jobs and make sensible changes that have the support of the work force. Local government has done that in a lot of places. The challenges facing local government have been great, but in a number of areas that process has protected jobs, so it is possible. There is a national process under way to deal with that, as other hon. Members have said.

I am opposed to the process that is going on independently of national pay bargaining. The motion effectively states that the current system is encouraging that process and that the Secretary of State needs to step in and stop it. I would like a stronger message from the Secretary of State—do not get me wrong about this—and I hope that the Minister will listen to remarks from all parts of the House about the message that we would like the Department to be sending to the trusts. However, if I look at the motion and the amendment, it is the amendment that mentions the continued role of staff, employers and trade unions working together, and that is what I will be supporting tonight.

14:42

[Hugh Bayley (York Central) (Lab)]

It would be a good thing, when debating the future of the health service, to talk a little more about the work done by health service professionals. If a woman has breast cancer and consults the oncologist, and he is working out what the best chemotherapy would be, she would want him to be as well qualified and skilled whether he lived in Plymouth or in a part of the country where wage levels were higher. She would expect her doctor to be as well remunerated. Exactly the same would apply for a nurse planning a care and rehabilitation regime for an elderly stroke victim. A number of colleagues made the point that a nurse in Plymouth should get the same rate of pay as a nurse in the City of London. The reason why they should receive the same rate of pay is that we, as their patients, want the same level of care, the same level of service and the same likelihood of survival if we have an illness.

My remarks are based on my experience before I joined the House. We heard a number of Conservative Members trashing the trade unions. I spent seven years as a full-time trade union official for the National and Local Government Officers Association, now part of Unison, negotiating pay and conditions in the national pay bodies for nurses, midwives, ambulance officers, and administrative and clerical staff. I put the interests of the health service and patients very high on my agenda when I did that job. I spent a number of years as a health economist, working at the university of York, advising health authorities and trusts on how best to use their budgets. I spent time as a member of York health authority—they were called health authorities in those days—which would now be the equivalent of being a non-executive member of a trust board. Before the debate, I consulted senior NHS managers, finance directors, chief executives, a trust chair, and Professor Alan Maynard, a professor of health economics who was an adviser to the Health Committee, and my remarks reflect what they told me.

I can tell hon. Members from real experience that negotiating pay and conditions is a slow, painful and labour-intensive task. There is an opportunity cost. If health service managers spend time determining pay on a regional or local basis, that removes them from focusing on something else—driving up productivity, improving care outcomes or developing new prevention services, perhaps. There is a cost if more effort is put into regional pay negotiations, because less is done on something else. Regional pay would divert hundreds of managers from thousands of hours of managing the health service into doing something that they currently do not need to do. The Labour Government permitted a measure of local flexibility, but we specifically did not go for the introduction of regional pay.

[Dan Rogerson]

The other approach that, unfortunately, the consortium seems to have taken is putting aside money and employing consultants to come up with a model for it. That has the potential to be even worse than the approach the hon. Gentleman describes.

[Hugh Bayley]

I am grateful to the hon. Gentleman for enhancing my argument. As has been pointed out, the limited flexibility that was introduced by the Labour Government has been used by only one hospital to date, Southend, and in that case it was to raise, not reduce, pay.

Abandoning a national pay framework for the NHS is likely to be inflationary for NHS pay. Let us start with doctors. We know from experience that doctors are tough negotiators—[Interruption.] I can see the Under-Secretary of State for Health, the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) smiling. When GPs were negotiating with the previous Labour Government about the cost of the change in out-of-hours services, they—let us be blunt about it—did extremely well out of the agreement. Why did they do well? Because they have immeasurably high leverage. If they were to withhold their services, in whole or in part, from patients, the consequences would be dramatic.

If we had regional pay, the charge would be led by groups, such as doctors, in the highest-cost areas such as London, and they would be in a position to leverage large increases in pay. What would then happen? Doctors would inevitably be drawn away from areas of the country where they are paid 20% or 30% less. What would happen in an area such as mine, which would lose doctors to high-cost areas in London and the south-east of England? Of course, my area would have to raise pay to attract people back. There would be a general pressure, raising wage costs across the NHS, not just in the medical profession, but in other health professions too.

If the Department of Health loses control of pay in the NHS, which accounts for 70% or 75% of its budget, it would blow the Nicholson challenge straight out of the water. The Government have set the NHS the challenge of finding £20 billion of efficiency savings. If regional pay is introduced, they have no prospect whatever of achieving that because of the inflationary pressures of the change that they are making. Fragmentation and liberalisation of pay regimes only reduce pay where there is a surplus of labour—where the employer has the economic power and the leverage.

The health professions are highly regulated, however, and the professionals are extremely skilled workers who train for a long time, which makes it an inflexible labour market, and that gives health professionals immense bargaining power—a power that, as we know from experience, is used. If the Government really want a levelling down of pay in the NHS, they should train more doctors, nurses, physiotherapists and radiographers, so that there are 10% more than we need, which would have two advantages: first, the NHS could get rid of poor performers, and secondly, there would not be the same inflationary pressure on pay.

If we had regional pay variations, there would be an impact on quality of care in those regions that paid less, because the best clinicians would go to the best jobs paying higher salaries in high-cost areas. It would inevitably divert resources from poorer regions of the country to richer regions, which would fly in the face of the “No Stone Unturned” plan for growth produced for the Government by Lord Heseltine.

I want to respond briefly to the Secretary of State’s statement that under this Government spending on the NHS has increased in real terms. If he or other Members were to consult Her Majesty’s Treasury’s public expenditure statistical analyses of 2012, in table 1.8 they would find that expenditure on the NHS in 2009-10—the last year of the last Labour Government—at 2011-12 prices was £105.1 billion. In 2011-12—the first year of the coalition Government—it fell to £104.4 billion, and last year to £104.3 billion. That is a real-terms reduction in expenditure on the NHS. In comparison, under the Labour Government, we had on average a 6.2% increase each year. That shows why the NHS is in such a parlous financial position now.

14:52

[Mr Geoffrey Cox (Torridge and West Devon) (Con)]

It is never pleasant not to be in complete concurrence and happy harmony with one’s own Front Bench, but I hope the Minister will not ignore the fact that, despite voicing concern about the Government’s position, I strongly deplore the Labour party’s behaviour in taking a position that can only be described as cynically opportunistic. It is simply untenable for the right hon. Member for Leigh (Andy Burnham) to contend that he can, like Pontius Pilot, take his hands off the situation and wash them clean of what is going on in the NHS in the south-west today.

It is precisely the implementation of the freedoms granted under the right hon. Gentleman’s stewardship that these consortia are operating. He is in exactly the same position as the householder who opens the door to the burglar, and then complains when he walks in and burgles the property. He opened the door with his changes. It was his policy that introduced flexibilities, and to suggest that he was blind to the probability that trusts would exploit it by introducing differentials in pay up and down the length of the country is not merely naive but wilful irresponsibility and will be judged by people listening to this debate. The people in the low-wage areas I have the honour and privilege to represent will not be fooled by the Labour party’s position.

On the other hand, it is perfectly fair to say that the introduction of regional pay in the NHS would be a retrograde and wrong step. The fact is that low-wage areas, such as those I represent, are already suffering: 26% of families and homes in Torridge are on the edge of poverty. Only two constituencies in Cornwall, an area that receives special help in the form of objective 1 money from the EU, are in a worse position than those in Torridge and West Devon.

[Andrew George]

I represent one of those constituencies. In view of the hon. and learned Gentleman’s comments about the right hon. Member for Leigh (Andy Burnham) and his criticism of regional pay—a stand I entirely agree with—would he acknowledge that the Conservatives voted in favour of the legislation that brought in foundation trusts and flexibilities, and does he regret that? I recognise, of course, that he was not in the House at the time.

[Mr Cox]

I do not believe that any party can take its hands off and claim to be not responsible for measures that allowed trusts to exploit the ability to drive down pay by forming such consortia. The Labour party cannot disavow responsibility, and neither, if it voted for it, can the Conservative party.

I want to say something about regional pay. I hope and I am sure that the Minister is listening. I have already written to my right hon. Friend the Secretary of State. In areas such as Torridge and West Devon—areas that depend on public sector pay to create the spending and buying power that puts at least some life into its economy—the concept that pay could be even lower than it is now is unconscionable and inconceivable to those of us who represent them. I hope that the Government will think again in this review. I am comforted by the Secretary of State’s words when he says that they are committed to national pay scales. I hope that those words can be counted on.

I, for one, could not support a measure that introduced regional pay as formal NHS policy, unless I was satisfied that there were sufficient safeguards for the low-wage areas I represent. People often associate rural areas such as Torridge and West Devon with prosperity, but that is a grossly inaccurate caricature. In Torridge, 26% of households are on the edge of poverty, wages are in the bottom 5% of all areas in the country, and West Devon is not far behind. It is simply inconceivable for me, as its representative, to agree to a proposition that would further depress incomes in those areas.

Having said that, it is clear that the NHS has to do something about the pay bill, which is 70% of its budget, and the only appropriate way of dealing with it is for the unions and all parties, including all political parties, to tackle it at a national level. I am disturbed that those national negotiations are apparently not taking place. I hope that the right hon. Member for Leigh will encourage the unions to take part in those discussions, because we all have to accept that there is a major national problem with the burden of the NHS pay bill.

[Mr Bradshaw]

Those discussions are taking place. Does the hon. and learned Gentleman think that a parallel process, as undertaken by the south-west cartel, is helping or hindering a successful outcome of the national negotiations?

[Mr Cox]

To be blunt, I am not happy about what I am seeing in the south-west in relation to those 20 trusts, whom I encourage to engage with staff and the unions, as my hon. Friend the Member for North Cornwall (Dan Rogerson) said, and to engage in a process that tries to reach some form of consensual agreement.

To answer the right hon. Gentleman’s question, however, I suspect that those 20 trusts have joined together only out of desperation at the static and stagnating nature of the discussions at national level. They are desperate to manage their budgets. Many are in extremely difficult financial circumstances. I see my hon. Friend the Member for North Devon (Sir Nick Harvey) in the Chamber. I will be meeting the chief executive of Northern Devon health trust shortly, and I know the budgetary pressures that it is facing. He will tell me that it cannot wait for the slow convoy of the national negotiations to take place. I urge it to do so. I hope that we can re-engage at a national level and that there are serious and mature discussions going forward. The truth is—nobody can doubt it—that the pay bill in the national health service needs to be tackled. That is why I say again to the right hon. Member for Leigh that the position adopted by the party he represents is not responsible. What he should be doing is calling for national negotiations to take place as swiftly as possible.

[Andy Burnham]

But all the evidence says that a national pay system is more cost-effective because it does not lead to inflationary pressure around the system, so ours is not an irresponsible position. The hon. and learned Gentleman began with a very trenchant criticism of the foundation trust legislation, which has been echoed on the Liberal Democrat Benches. At the same time as that legislation was enacted, Labour was bringing forward the most ambitious ever programme to overhaul national pay in the NHS, called “Agenda for Change”. He needs to give us some credit for doing that.

[Mr Cox]

I hope I have been as balanced and fair as I can. I am not suggesting that the right hon. Gentleman has been stewarding the national health service while trusts have taken these actions; I am saying that, like the householder, he opened the door to the burglar. He cannot say now, when he has opened the door, that he deplores the fact that the burglar has gone in and robbed the property. The truth is that he presided over it when he opened the door, and he must have known that that would happen.

There are two things that the Labour party should do now. If the right hon. Gentleman left aside parliamentary games, which we all know he has engaged in, he could offer to try to tackle these grave problems at a national level by encouraging the unions to engage. He should not seek to exploit the situation by scoring political points in the way that he currently is. I say to him and to Ministers on my Front Bench that I very much hope that the outcome of the review will not be that regional pay is recommended as the way forward. I would oppose it. I cannot in conscience sit in this House, representing thousands of people on the edge of poverty in a rural economy that is sustained largely by expenditure that those on public sector salaries in the national health service receive, and preside over a situation where their incomes are further depressed.

15:02

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Like many right hon. and hon. Members in this and earlier debates—we are lucky to have two debates today—I am against the Government’s move to regional pay in both the NHS and other parts of the public sector. I am a little less clear about the speech of the hon. and learned Member for Torridge and West Devon (Mr Cox), who talked a lot about the pay bill. If we were not spending £1.6 billion on redundancies or £3 billion on an unnecessary NHS reorganisation, the pay bill would not be quite the worry to the NHS that it is—but let us leave that aside.

One of the most important reasons for opposing regional pay is that, as we have heard—I think the hon. and learned Gentleman was saying something similar—regional or local market-facing pay is bad for the economy not only in the south-west but in the north-east, Yorkshire and the north-west. Public sector workers are already suffering. They have had a two-year pay freeze and have suffered greatly from budget cuts and redundancies. The TUC believes that local or regional pay would effectively mean a further freeze, holding back public sector pay for years. That would take even more demand out of our regional economy, with staff having even less income to spend in the local shops and businesses that the hon. and learned Gentleman mentioned. In the north-west, which has 780,000 public sector employees, a 1% reduction in earnings would take almost £190 million out of the regional economy.

A key point is that any reductions would particularly affect women, who account for around two thirds of public sector jobs on average, although the figure is higher in some parts of the north-west. For instance, the neighbouring authority to my local authority of Salford is Bolton, where female employment in the public sector is over 71%, and a number of my constituents work in Bolton hospitals. Proposals that would cut public sector pay would therefore be a further attack on the living standards of women, who we know are already being hit hardest by the recession and the policies of this coalition Government. Figures from Personnel Today show that since May 2010 the number of qualified nursing, midwifery and health-visiting staff has fallen by 6,588, as my right hon. Friend the shadow Secretary of State said earlier. Indeed, between June and July this year, a further 808 posts were lost, which is serious.

That fall in the number of front-line nurses, midwives and health visitors has been clear in my local area for some time, due to the level of efficiency savings being forced on to the NHS to pay for the reorganisation. Figures in The Guardian show that Central Manchester University Hospitals Foundation Trust has announced that up to 1,400 jobs are to go, with Salford Royal Foundation Trust announcing a reduction of 750 posts—including 146 nursing posts so far—Wrightington, Wigan and Leigh Foundation Trust planning a reduction of 533 posts between 2010 and 2014, and Bolton Royal Foundation Trust planning to make a reduction of 248 posts, with two thirds of the first 61 posts removed being nursing and midwifery posts. Even our regional cancer hospital, the Christie, plans a reduction of 213 posts between 2010 and 2015, including, sadly, 43 posts in nursing. That means a total of more than 3,100 jobs going at just five foundation hospital trusts in the Greater Manchester area over three to five years. These are the jobs and careers of my constituents, and we know that women’s jobs are disproportionately affected, because women account for 80% of the jobs covered by “Agenda for Change”. It is in that context—the attack on women and their standard of living—that regional pay in the NHS is a cause for further concern.

The British Medical Association believes that the move from national terms and conditions for NHS staff would have a significant negative impact on the NHS because, as a number of Members have said, the national pay system in the NHS provides benefits for both staff and employers. It has maintained good industrial relations, prevents the duplication of negotiating efforts and has helped to support the recruitment and retention of staff. The Royal College of Nursing believes that any move towards local and regional pay would lead to damaging competition between trusts for staff, because it would entrench low pay in certain areas. There is great concern that places such as Cheshire, which could perhaps offer higher pay, would attract staff from Greater Manchester. That would entrench low pay in areas that are already deprived, such as parts of the north-west, where it would become difficult to attract and retain staff. Regional pay would therefore be unfair and bad for the economies of regions such as the north-west, as well as hitting women harder than men.

The TUC also argues that the case for regional pay is not backed up by evidence, and it makes some important points. As we have heard, comparing public and private sector pay is not comparing like with like. Half the employees in the public sector have a degree, compared with only one in three in the private sector. Importantly, the public sector has a smaller gap between top and bottom pay, and a lower gender pay gap, both of which are welcome. We want to hold on to those. The RCN argues that a move to replicate the pay structures of the private sector would also lead to the replication of inequalities in the private sector, which would be a backwards step. Indeed, I want to challenge the notion put by advocates of regional pay that the public sector somehow crowds out the private sector. In my constituency, there are six people chasing every job vacancy, which is more than the national average. In some parts of the country, such as Hull, as many as 30 people are chasing every job vacancy. It is the lack of growth, jobs and demand in our region that is causing the problem. Budget cuts and redundancies in the public sector, which have already hit our local economy, would be made worse by regional pay.

It is argued that local pay is what the private sector does. However, I worked for many years in the IT industry. I worked in London, the west midlands and Manchester, and we did not have different pay arrangements in those places; in fact, my company would not have been able to persuade people to move from place to place if it did. Of course there is London weighting; that has been with us for a long time. Regional pay would be unfair and bad for the economy of our regions. The arguments are not backed up by evidence. Regional pay is not what the private sector does and it would hit women harder than men. There is no reason a nurse in Salford should be paid less than a nurse in another part of the country. As my hon. Friend the Member for York Central (Hugh Bayley) said, it is important that the NHS should have a work force of the same quality in different parts of the country.

Let me make my last two comments. A nurse in my constituency wrote to tell me that she was against the move from national pay because it would

“pit…employers against each other in bidding wars for staff,”

and would also be completely unfair. A midwife in my constituency told me:

“I have, like all other NHS staff, received no annual pay rise for three years now despite the cost of living rising. The cost of raising four children (one of whom has profound disabilities) on one wage is challenging, as my husband provides 24/7 nursing care. Basic pay for a nurse or paramedic should be the same whether they are saving lives in Preston, Peterborough or Plymouth. Anything else is unfair.”

I support the motion tabled in the name of my right hon. Friend the Member for Leigh (Andy Burnham) on behalf of nurses and midwives such as those.

15:10

[Andrew George (St Ives) (LD)]

It is a pleasure to follow the hon. Member for Worsley and Eccles South (Barbara Keeley), a fellow member of the Health Committee. I endorse her comments. She, like many others, has emphasised the reason it is so important that the House rejects the concept of regional pay and urges unions and employers to accelerate the process in order to reach a speedy conclusion on national pay bargaining. This is a serious issue, and it deserves a serious response from all parties in the House. It should not become a subject to be kicked around the playground of an Opposition Day debate in an opportunistic manner, as has so often happened—before the election as well as after it, to be fair. A matter as serious as this should not be debated in that way.

I intervened on the right hon. Member for Leigh (Andy Burnham) to ask whether he would acknowledge that we are where we are today because of the freedoms the previous Government created for the cartel in the south-west, or in any other part of the country. We are aware that other trusts are looking closely at what is happening with that cartel. The previous Government should be applauded for introducing the “Agenda for Change” and attempting to introduce a rigorous and effective method for agreeing pay and conditions at national level, but they also legislated to introduce foundation trusts and the new freedoms that went with them. The Liberal Democrats opposed that legislation at the time.

[Andy Burnham]

rose—

[Andrew George]

I was going to go on to talk about employment law, but I am happy to give way to the right hon. Gentleman.

[Andy Burnham]

This subject has featured a lot in today’s debate. I would encourage the hon. Gentleman to go back to the speeches made by Ministers when that legislation was being introduced. They were clearly saying that there could be occasions when flexibility would be needed at the margins to deal with a particular short-term pressure or problem. Such an arrangement was used once, in respect of Southend, to put pay up. It is important to understand that there was no suggestion that pay could be reduced across the board in a co-ordinated, orchestrated move to undercut the national pay system that was being brought in at the same time. That argument has been put today, but it simply does not hold water.

[Andrew George]

That might have been the stated intention, but the effect is being seen through the cartel’s actions. What is happening is not the result of any coalition Government legislation; it is the result of an opportunity having been made available under employment law. This is not within the parameters of “Agenda for Change”. It is a result of the freedom given to foundation trusts to step outside those agreements and to use employment law to seize the opportunity of certain flexibilities, to the detriment of the employees in their pay. That might not have been the intention behind the legislation, but it has been the effect of it, whether the previous Government appreciated that or not.

If the right hon. Gentleman is really so concerned about this, and given the fact that he can now see the effects of his legislation being played out by the cartel in the south-west, perhaps the shadow Minister, the hon. Member for Copeland (Mr Reed), will acknowledge, in summing up the debate, that that was not the intention behind the legislation. Will he, having noted what is now going on as a result of that legislation, commit to rescinding that element of it if Labour were to come to power, to put right the weaknesses of it? If so, we would know that Labour Members were genuine and sincere in their intent, and that they acknowledged that weakness, which they had not anticipated at the time but which is now being exploited.

I strongly support my hon. Friend the Member for Southport (John Pugh) and congratulate him on his characteristic breathtakingly brilliant contribution to the debate. He was most entertaining, and there was disappointment across the whole House when he resumed his seat without having used all the time available to him. He made many insightful comments about the situation we are in today, and the weaknesses of it.

I also thank my hon. Friend the Member for North Cornwall (Dan Rogerson) for pointing out the significant weaknesses in the legislation and the impact they are likely to have on NHS staff. I am pleased to see my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) in the Chamber today. We are all aware that the Royal Cornwall Hospitals Trust’s involvement in the cartel is creating deep concern across Cornwall. The hon. Member for Truro and Falmouth (Sarah Newton) made a telling intervention earlier when she said that Cornwall has some of the highest costs of living in the country, while perpetually being at the bottom of the earnings league table, pretty much since records began.

One of the drivers behind the problem is the cherry-picking in the NHS. The private sector is already offering the easiest procedures. A private provider in Cornwall carries out the easiest procedures for the fittest patients with low anaesthetic risk and those who are the least likely to suffer complications following orthopaedic procedures. It is now extending its services into areas such as cardiology, hernias, haemorrhoids and endoscopy. If any complications occur, it will simply pass the patient across to the Royal Cornwall Hospitals Trust to deal with any difficulties or emergencies. It therefore has no need to invest in all the facilities necessary to provide the kind of wrap-around service that we want the NHS to provide. The fact that such private sector companies are able to vary wages, terms and conditions for their staff is undermining the NHS. The foundation trusts are having to compete with those companies, and that is one of the pressures that is driving their agenda. All parties need to recognise that fact, and Ministers need to acknowledge that this continued cherry-picking by the private sector is fundamentally undermining the capacity and ability of the NHS to respond adequately.

We must also ask why we are in this situation in the south-west. In regard to resource allocation, only two years ago Cornwall was getting £56 million a year less than the Government said that it needed to provide the necessary services. If there is a significant gap between the funding actually provided for the local health community and the amount that the Government say is the target funding, it is no wonder that local trusts find themselves having to make extremely challenging decisions.

I urge the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), when he winds up the debate, to acknowledge that resource allocation still needs to be addressed. Members of Parliament from across the south-west and I have arranged to hold a meeting with him on this matter, and I hope that it will take place soon so that we can have an opportunity properly to address the issues.

15:19

[Alex Cunningham (Stockton North) (Lab)]

It is impossible to underestimate the importance of this afternoon’s debate. It is of enormous national significance, but also, of course, of acute interest to my constituents. The idea of regional pay is very simple at its core—that an NHS worker in my Stockton North constituency should get significantly lower pay than an NHS worker in another part of the country for doing exactly the same job. The same applies to fire fighters such as my constituent Tony Dorling, whom I met a few minutes ago. He is worried about the cuts to his service and the impact of regional pay on his work, too.

With that in mind, I am surprised that this Government would see regional pay as a viable policy. In my view, that is the heart of the matter. Try as they may, I cannot believe that the Government could ever claim that it would be fair, and it seems that few people, if any, think it would be anything other than unfair, divisive and counter-productive.

How can we really expect a skilled NHS worker, hit by a pay cut, to continue to work in a busy hospital or clinic in a deprived area when a quieter health centre in a more affluent area offers a much better paid position 30 miles away? The reality of regional pay in the NHS is a brain drain away from the areas that need quality and dedicated staff most towards areas with better health outcomes, with the inevitable knock-on effect on health equalities.

Several colleagues have referred to the north-east and Teesside. Because of the impact it is having on my community and on our hard-working staff, it particularly distresses me that this Government have forced the North Tees and Hartlepool NHS Foundation Trust to slash another £40 million off its budget over the next two or three years. I am also distressed that that has led to a move to vary terms and conditions for its workers’ sick pay and even to a threat to sack them and re-employ them on different terms and conditions if the changes are rejected.

I am a former member of the board of the North Tees and Hartlepool trust. A couple of weeks ago, my hon. Friend the Member for Hartlepool (Mr Wright) and I met the chairman and the chief executive to find out exactly what was going on. Both gentlemen assured us that they did not support regional pay, but wanted to make a change in national terms and conditions, which they claimed had the support of staff—something very much disputed by the Royal College of Nursing. I saw why they chose that particular change, but I pleaded with them to think again and stick to nationally agreed terms and conditions to ensure that our needy area did not lose its staff to other areas. The people at North Tees and Hartlepool want a national agreement, and I would like to see health employers get back to the table with the trade unions to negotiate on that particular issue. We should totally avoid policies that widen health inequalities—coming from an area such as mine, I know about them—but this policy falls into that category.

Implementation is another issue. If we were to move towards a system of localised pay, negotiations would take place locally and those would take up a greater amount of the time of both managers and union representatives in different places all over the country. The NHS in its current form is not equipped to manage local pay negotiations and, frankly, lacks the skills to do that. This is just another disruptive set of changes that the NHS could do without, particularly during the implementation period of the Health and Social Care Act 2012. According to the RCN, the proposed policy, ostensibly designed to save money, will actually see the cost to the public purse increase.

I am proud to be a member of Unison, a campaigning union on behalf of employees and patients. Its head of health, Christina McAnea, sums up regional pay perfectly when she says:

“Regional pay would be a massively expensive, bureaucratic nightmare, designed to cause huge disruption and conflict.”

The British Medical Association is also opposed to any moves away from national terms and conditions, saying that such a move would have

“a significant negative impact on the NHS, staff and patients.”

The Government have yet to make a convincing case as to why a regional system of pay is preferable to the current national one. The current “Agenda for Change” works by setting a basic pay floor, which no health authority can go below with regard to pay. The BMA has said:

“A national approach to contract negotiations for NHS staff is both efficient and fair.”

Where a sufficient case can be made, the system allows for minor variations through high-cost area supplements and recruitment and retention premiums. Those provisions make sense for areas that are particularly high cost, such as inner London, but what the Government are proposing would explode the system of sensible divergence through levelling-up, and replace it with one that relentlessly levels down to the detriment of health workers in the areas with the highest need and demand.

The argument that cutting pay in the public sector will help to stimulate growth in the private sector is undermined by the group of 60 regional economic specialists who wrote to The Times to say that they could find

“no convincing evidence within these reports to support the Chancellor’s inference that such regionally or locally determined pay could boost the economic performance of regional economies. On the contrary, such a policy could reduce spending power, undermine many small and medium-sized businesses in areas of low pay, and aggravate geographical economic and social inequalities”—

even more inequalities. They go on to say:

“Moreover, for government, the medium and long-term economic and social costs could increase.”

If the NHS wants to continue to attract a work force of similar quality in different parts of the country, we need to continue with a national system for pay and reward within the current provisions of “Agenda for Change.” I would urge the NHS pay review body to reject outright any moves towards regional pay.

I am also concerned about the impact that moving towards a system of localised and regionalised pay would have on local economies. One of the things that has held us back in combating our stagnant and shrinking economy is low private sector pay. The Governor of the Bank of England has observed, in relation to growth, a clear link between a real fall in wages and consumer spending.

The TUC has argued that reducing public sector wages by 1% would hit local economies by at least £1.7 billion a year. I am not sure, even if regional pay were a good idea, that such a loss to the economy would be a price worth paying, and I am not convinced that the private sector in areas such as mine would welcome a local decline in disposable income.

Regional pay in the NHS would cost, rather than save money. It would widen health inequalities. It would disadvantage deprived areas, create a bureaucratic mess and damage the economy. I have tried, during my short speech, to express what is wrong with regional pay, but I cannot put the case any better than my fellow north-east MP, the hon. Member for Hexham (Guy Opperman), a Conservative, who said:

“I…believe that regional pay is divisive and manifestly unfair.”—[Official Report, 20 June 2012; Vol. 456, c. 960.]

The Government would do well to listen to him.

15:27

[Mr David Anderson (Blaydon) (Lab)]

I know it is unusual in this place to listen to anyone who has experience of the real world, but I will try yet again. I worked in the coal industry for many years—in fact for decades. In 1966, a national agreement was reached to bring parity to the system. It took six years for that to be applied across the industry. The main reason why that was done was that people thought it unfair that people who worked in some of the worst conditions in coalfields were historically disadvantaged because they did not produce as much coal as people who worked in coalfields where it was easier to get the coal out. It was the right thing to do. It was based on the principle that applies to this debate—that people should be paid for what they do, not for where they do it. That is the principle that should guide us today.

I had the privilege of presiding over the Unison national conference that agreed “Agenda for Change”. Unison was the last and most reluctant union to sign up to it because it saw some of the problems that it would bring in. We are now seeing those problems. People are exploiting “Agenda for Change.” They are exploiting some of the freedoms intended for families and trusts. Some employers will exploit almost anything. Seeing where we are today and some of what is going on across the country makes me believe that some of the concerns expressed were right.

Today’s debate cannot be separated from what is going on in the rest of the country. We are seeing an anti-worker attack, which is being driven to some extent by this Department but mainly by No. 11 Downing street. Let us look at what is going on. Let us reflect on the background: 750,000 jobs are to be lost in the public sector, while people are having to pay more for their pensions, work for longer and get less pension when they retire. Then there is the pay freeze.

A point was made from the Government Benches about getting the pay burden down, but health service staff will see a reduction of at least 10% in their living standards during the period of this Government. If that is not an example of the workers doing their bit—all being in this together—I do not know what is. Incremental freezes are being introduced, health and safety legislation is being watered down, job security is being weakened, and employment rights and access to industrial tribunals are being changed. There are changes to benefit rules that, officially, are about making work pay, but really mean that people have to go to work for as little pay as employers can get away with. We are back to the future—back to the low-pay, low-skill economy of the 1980s, when people were frightened to stand up for themselves because of the problems they were facing; when compulsory competitive tendering destroyed the conditions of manual workers whose roles were intrinsic to the safety of the national health service.

No one should be surprised to find out that some will be exempt from the regional pay proposals. Who are they? According to the Department of Health submission to the pay review body, the only exemption will be for highly paid managers working in the new bodies established by the Health and Social Care Act 2012. While the people being employed to privatise the health service will not be subject to the regional pay proposals, there will be an impact on the lads and lasses on the front line who look after our constituents day in, day out. That is the unfairness of the situation, and people will focus on the problems at that level in the current negotiations.

The Secretary of State said that he supported proper negotiations, but is it proper that North Tees and Hartlepool NHS Foundation Trust has served redundancy notices on people? That is no way to have proper negotiations. Is it proper that South Tees Hospitals NHS Foundation Trust is thinking about doing the same? City Hospitals Sunderland is trying to freeze increments without consultation or negotiation. Tees, Esk and Wear Valleys NHS Foundation Trust is also freezing increments, while all the trusts in Tyneside, which I represent, have said they will not introduce regional pay. That is one of the problems. Where it is easy to travel from one part of the region to the next, people will travel; people who are not getting a good deal in Hartlepool, Sunderland or Middlesbrough will travel to Gateshead, Durham or Newcastle. National terms and conditions are key, so that people are paid the same no matter where they work. Otherwise, recruitment and retention will become a huge issue.

It is clear that the majority of people who have spoken in the House and outside oppose regional pay. Ten north-east firms have urged the Government not to introduce regional pay, because reducing the spending power of public sector workers in the region will have a hugely detrimental impact on their businesses.

I raised a point with the Secretary of State about trade unions, but let me refer to the BMA, the RCN, the Royal College of Midwives and the Chartered Society of Physiotherapy. None of them is affiliated to or the paymaster of the Labour party, but all of them say, “Don’t do this.” But it is not just them saying it. The hon. and learned Member for Torridge and West Devon (Mr Cox), the hon. Members for Hexham (Guy Opperman), for Brigg and Goole (Andrew Percy), for Stafford (Jeremy Lefroy) and for Carlisle (John Stevenson)—all Conservative Members—are all against the proposal. A raft of Liberal Democrats—the hon. Members for North Cornwall (Dan Rogerson), for St Austell and Newquay (Stephen Gilbert), for Torbay (Mr Sanders), for Manchester, Withington (Mr Leech), for Southport (John Pugh), and for St Ives (Andrew George), and even the Secretary of State for Business, Innovation and Skills—are opposed to it. The Deputy Prime Minister is also opposed to regional pay, as was his party conference. How on earth can the Conservative party try to force it though?

[Mr Bradshaw]

My hon. Friend says that the Liberal Democrats have said they are opposed to it. Will not the test be how they vote in a few minutes’ time?

[Mr Anderson]

I have always appreciated my right hon. Friend’s talents, but I ask him please not to steal all my thunder.

Who wants regional pay? The Department of Health, but even more so, the Chancellor of the Exchequer, as it is part and parcel of an attempt to drive down workers’ conditions and undermine the work force for ideological reasons. He is putting the NHS at risk for the sake of party political advantage. It is a disgrace.

How will the Liberal Democrats vote tonight? I have read the amendment—I used to write amendments —and it is the easiest thing in the world to fudge your way around something, but this is a point of principle. Let us make no mistake. The people out there—the nurses, the midwives, the doctors—will read the weasel words of the amendment as exactly what they are. The basic principle is in the motion. We want the Government to tell the employers that there is a national pay bargaining agreement, and they should stick to that.

[Andrew George]

If the hon. Gentleman really believes that, and the motion does say that the Government should intervene, is he aware that his Government gave foundation trusts such freedoms that in fact the Government cannot intervene?

[Mr Bradshaw]

Of course they can.

[Andrew George]

They cannot.

[Mr Anderson]

Clearly, there are issues about foundation trusts, but the Government can do what they want—or they can as long as the Liberal Democrats help them. Tonight, however, the Liberal Democrats have a chance of stopping the Government doing what they want, by doing what their party wants, and what the people they represent want—by throwing out the proposal, and voting on the clear principle that national pay bargaining should happen in the national health service, and nothing should be done to undermine it, including supporting the amendment.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Sir Nick Harvey, who should resume his seat no later than 3.40.

15:36

[Sir Nick Harvey (North Devon) (LD)]

My right hon. Friend the Secretary of State was right to make the point that the legal right and freedom of manoeuvre that enables the south-west trusts to do what they are doing is derived from legislation that was passed by the previous Government. In my view, however, he was wrong to depict what they are doing merely as offering premiums to assist with recruitment and retention. If that is all they were doing, frankly, we would not have spent this afternoon discussing the issue, and our postbags would not be filled with hundreds of letters from concerned constituents.

My hon. Friend the Member for Kingswood (Chris Skidmore) suggested that the whole thing had been scaremongered up by the unions and the Opposition, but I do not believe that is fair. If we look at the letters from trusts who are members of the consortium to hon. Members who have expressed concerns, they spell out that, far from offering a premium to “Agenda for Change”, they want to alter the terms in “Agenda for Change”, revisit sick pay rates and holiday pay rates, the amount of holiday entitlement, and the bonus for working unsociable hours. Understandably, that fills the work force with horror, and we should rightly oppose it. If we look at the leaked document from the consortium in its early days, we see that it knew it would run into a political and publicity storm. If it can get away with this, it will want to come back to the issue of regional pay.

My hon. and learned Friend—and neighbour—the Member for Torridge and West Devon (Mr Cox) seemed to be under the impression that all this was happening because no national negotiations were taking place. That is simply incorrect: national negotiations are taking place, and I have talked to representatives of the trade unions that are part of the process. It is clear to me that they are showing flexibility, that they understand that there must be some change, and that they are willing to explore the possibility of change in some of the arrangements.

I appeal again to the trusts that make up the south-west consortium to await the conclusion of an orderly process that is perfectly capable of addressing some of their concerns. The alternative is seeing regional pay coming in by the back door and the breaking up of the national framework of our national health service.

My constituency is very similar to Torridge and West Devon. It has very low wages, some of the lowest in the country, but very high house prices. We will not continue to attract health professionals to our hospital—and we are already finding it difficult—if they know that coming to work in north Devon will mean worse conditions than they experience elsewhere. We will struggle to retain some of our best people if they know that going elsewhere will enable them to enjoy better pay and conditions and lower housing costs.

When the report from the pay review body is in the public domain, we must debate it again, but the message must go to my colleagues in Departments throughout Whitehall that there is no majority support for regional pay in the House, and that the idea must be given a decent burial.

15:40

[Mr Jamie Reed (Copeland) (Lab)]

NHS staff are among the most valued and respected members of any work force, public or private. Like so many public sector workers—the police, firefighters, teachers, social workers, and many more—they make a crucial and often critical difference every day to the real lives of ordinary people in communities throughout our country, wherever they may be and whatever their wealth. In so many ways, these universal services and the values that they both represent and live by are our national values. They support us, they strengthen us, and they bind us as one nation.

The values of the national health service were celebrated as an article of faith in what it means to be British by Danny Boyle during the opening ceremony of the Olympics. When the eyes of the world were upon us, we showed the world that the NHS and the values that underpin it are part of what makes us British—not Cornish, not Cumbrian, not Lancastrian, but British. It is little wonder that the new Secretary of State tried to have that tribute removed from the ceremony. He knew what it meant then, he knows what it means now, and his support for regional pay in the NHS—revealed at the Dispatch Box today—shows that he is determined to fragment the service.

Since the Government came to power, NHS staff have been marginalised, trivialised and ignored. Reorganisation was imposed upon them with no mandate, no support and no warning. Since then more than 6,000 nursing posts have been lost, and billions of pounds have been taken away from the NHS front line to pay for redundancies and a reorganisation that nobody wanted—a reorganisation that was hidden from the electorate before the election.

Despite all that, these people still achieve remarkable results in the most trying of circumstances every single day. They continue to succeed, despite the incompetence of the Prime Minister and his Health Ministers. NHS workers can surely be forgiven for having had enough of the Government being on their backs; but, not content with being on their backs, the Government now want to be in their pockets as well.

Regional pay is demotivating, demoralising and wrong. It will harm the NHS in the parts of our country that are most in need, not only in the NHS and not only in local NHS services, but in the local economies where those NHS services are located. The London Evening Standard’s city editor, Russell Lynch, wrote last week that the regions

“still account for more than three-quarters of the economy. And if I were in Middlesbrough, Manchester or Leeds right now, I’d be more worried about the mugging that’s on the way from the Chancellor over regional pay in the public sector.”

Of course he was right, and the fear is palpable. That is why this is so important. That is why the Government must intervene, stop regional pay taking hold, and uphold the principle of national pay agreements within the NHS.

As we have heard, 60 academics recently wrote to The Times damning the Government’s regional pay proposals. Let us examine why. The public sector wage bill last year was £162.5 billion for the employment of approximately 6 million people. The aim of the Prime Minister, the Chancellor and, I assume, the Health Secretary is to remove what they claim is an 8% disparity between the wages in the public and private sectors. As usual, that is a heavily disputed figure with no real basis, but let us assume that it is correct. If the Government succeed in removing the difference that they imagine exists, 6 million people will have a cumulative £13 billion less to spend. That is almost 1% of our total economy.

In an age of austerity, when the parts of our country that already rely heavily on public spending are feeling the cuts most acutely, what madness it is to take even more money away from those economies, those homes and those families. Talk about killing demand in the regions! This will not just hurt the public sector and damage local economies; it will bludgeon local private enterprise—those who work in partnership with the public sector, who have contracts with the public sector, who trade with the public sector, and who sell their products to local people paid by and working in the public sector. The insidious desire to divide and rule ignores the fact that one nation has one economy.

Let us consider what regional pay in the NHS could mean for the future of NHS services. The Government have encouraged privatisation to run amok in the NHS, deliberately and ideologically. Whereas we used the private sector in a targeted, limited and structured manner, the Conservatives want to let it run riot like the Bullingdon Club in a china shop. It is no wonder that private health care provides so many funds for the Conservative party.

One of the more flimsy Treasury claims about regional pay is that it would stop private firms being crowded out by the public sector, but how is this applicable to the NHS? Is the real purpose of the NHS regional pay proposals to allow the Government to facilitate faster privatisation of NHS services by hollowing out NHS terms and conditions? Unless the Government intervene —as they should—to halt this development, it will appear that part of the agenda underpinning regional pay is, indeed, to enable the easier privatisation of NHS services. Instead of seeing NHS staff for what they are—the best partners any Government committed to improving the NHS could ever have—this Government see them as surplus to requirements in too many parts of the country, with terms and conditions that the Government see as acting as a roadblock to further privatisation.

[Sarah Newton]

Will the hon. Gentleman give way?

[Mr Reed]

I am afraid I do not have enough time.

Let us concentrate on the impact of regional pay proposals in the south-west. Because the Government have given their clear approval through their submission to the NHS Pay Review Body, 20 trusts across the south-west have already each committed £10,000 to form a consortium—a cartel—designed to reduce staff pay and to break away from the established NHS terms and conditions. That is money that should be spent on patient care. Is the Secretary of State satisfied with that state of affairs? Some £200,000 is being spent in an effort to reduce the pay and conditions of NHS staff in the south-west—one of the lowest paid areas in England—against the backdrop of almost 1,000 nursing posts being lost in the south-west since this Government came to office.

It is barely credible that this Government should use the south-west as a laboratory in which to experiment with regional pay. It is a Liberal Democrat stronghold. The Liberal Democrat leader has said that regional pay will not happen, yet it is happening. It may call itself a coalition, but this is a Conservative Government in all but name, and with NHS regional pay they are treating south-west England in the same way that the last Tory Government treated Scotland with the poll tax. I know Members from the south-west see that, and I hope that they will vote with us to stop this gruesome experiment in its tracks.

Regional NHS pay is not being introduced only in the south-west, however. It is also being proposed by a series of trusts across the north-east, which is another region that cannot afford to let this Government pick its pocket. NHS trusts in Oxford, Birmingham, Cheshire and Manchester are also threatening to break away from the national pay agreements established under “Agenda for Change”.

This Government have lost financial control of the NHS, unless it is to cut it. They are now refusing even to try to control the demoralisation of NHS staff as their terms and conditions are denigrated. That is shameful. Why is this happening?

All roads lead back to the Government’s hated Health and Social Care Act 2012, with a £3 billion reorganisation at a time of an already unprecedented financial savings challenge. As trusts are plunged into financial turmoil, they are forced to look at opting out of national pay structures. And that is not all. The Treasury’s own figures show that real-terms NHS spending has been reduced under this Prime Minister year on year, as broken promise follows broken promise.

Regional pay in the NHS is opposed by the Royal College of Nursing, the Royal College of Midwives, NHS Employers, the British Medical Association and more. More importantly—[Interruption.] All Members would do well to listen to this point. Surveys show that 2 in 3 voters across the political spectrum believe that regional pay should be dropped: over 70% of Labour and Liberal Democrat voters and just over 50% of Conservative voters believe that.

That opposition is mirrored across this House. The Deputy Prime Minister claims to be against it—we will see—but Liberal Democrat MPs for Manchester, Withington, for Southport, for Torbay, for St Austell and Newquay, for St Ives and for North Cornwall are against it, and Conservative MPs for areas such as Torridge and West Devon, Hexham, and Brigg and Goole have also spoken out against these ruinous proposals. I commend the argument put forward by the hon. Member for Hexham (Guy Opperman). He has said:

“Our current pay system, which sets a base pay rate, already allows for adjustments in high cost areas like London”,

and

“I do not believe reducing public sector pay will help stimulate private economic growth.”

He added:

“I am very concerned that regional pay would lead to a reduction in the pay packets of some public sector workers in the North East.”

I share that view entirely, and the same can be said for communities across England.

Let none of us forget the disproportionate effects of regional pay on women, because this is also a gender issue. Not for the first time, working women around the country will be asking themselves just what this Prime Minister has against them. Do they all have to lend him a horse before he offers them some protection? Women make up 65% of the public sector work force and they account for more than 80% of NHS staff covered by “Agenda for Change”. Regional pay will hit women disproportionately. That is not right or fair. It is being done knowingly, and the Prime Minister will pay a heavy price if these proposals are not stopped.

We again find ourselves in the midst of a slow-moving disaster that the NHS can do without. We find ourselves having to deal with a Government who command no trust on the NHS, whether from the public or from health professionals. It is a disaster of the Government’s own making. As usual, the areas that can least afford to, and, most importantly, NHS patients, will end up paying the price for this ineptitude. The Secretary of State knows that regional pay will damage the NHS, he knows that the country is opposed to it, and he knows that he should intervene to stop it. A refusal to do so will demonstrate a failure to understand the values, principles and purpose of a truly national health service, and will illustrate his desire to undermine those very values. I commend the motion to the House.

15:50

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

It is a great pleasure to respond to today’s debate. I am pleased to start on a consensual note, in that we have heard some genuine concerns expressed by Members on both sides of the House on behalf of our NHS staff. All hon. Members very much value the dedication and hard work of all staff who work in the NHS on a daily basis. They often go above and beyond the call of duty to look after patients, and I would like to echo the comments made in that regard.

We have heard good contributions from the hon. Members for Blaydon (Mr Anderson), for South Down (Ms Ritchie), for Bristol East (Kerry McCarthy), for Hartlepool (Mr Wright), for Plymouth, Moor View (Alison Seabeck), for York Central (Hugh Bayley), for Worsley and Eccles South (Barbara Keeley) and for Stockton North (Alex Cunningham); my hon. Friends the Members for Kingswood (Chris Skidmore), for Southport (John Pugh), for Aberconwy (Guto Bebb) and for North Cornwall (Dan Rogerson); my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox); and my hon. Friends the Members for North Devon (Sir Nick Harvey) and for St Ives (Andrew George). The contributions from the hon. Member for York Central and my hon. and learned Friend the Member for Torridge and West Devon were particularly thoughtful, putting on the record their genuine concerns for the NHS staff who work in their constituencies. Those contributions encapsulated the support that all Members of this House wish to show for the hard work that NHS staff do every day.

However, I was disappointed by the intervention from the right hon. Member for Exeter (Mr Bradshaw). I have looked at the Hansard record, and it is worth picking up on this. I have here the details of the exchange involving the hon. Member for Bristol East (Kerry McCarthy), and I want to set the record straight for the House now. She asked:

“When did the Department of Health first find out about the formation of the consortium?”

The Under-Secretary of State for Health, my hon. Friend the Member for Broxtowe (Anna Soubry), replied that she was not aware—the Department was not aware—but that she would

“make further inquiries of …officials…and write to the hon. Lady”

to clarify that. It is clear that my hon. Friend has been misrepresented in this debate. That is in Hansard, it is on the record clearly, and I hope that hon. Members will accept the correction and withdraw their remarks. I wish to make it very clear, for the record, that we were made aware of the south-west consortium’s plans when its project document was leaked. That is when the Department became aware of the plans. We did not encourage the consortium in any way and it has the freedoms in respect of its own employment conditions that were given to it by the previous Government under their legislation.

It is worth stressing that Opposition Members, particularly those on the Front Bench, have made many attempts to rewrite history. The speech made by the hon. Member for Copeland (Mr Reed) bore little resemblance to reality when he talked about the involvement of the private sector. The right hon. Member for Leigh (Andy Burnham) said that breaking national pay frameworks is the first step towards the marketisation of the NHS. Yet, as one of his colleagues said later, it was the previous Labour Government who introduced the private sector into the NHS in the first place, who paid the private sector more than NHS providers for providing the same services, and who allowed those private sector providers to cherry-pick the best services from the NHS, to the detriment of NHS patients. Through the Health and Social Care Act 2012, this Government will be stopping that by having more of an emphasis on joined-up and integrated care for all health care providers.

It was the Labour Government who introduced the pay structure about which Opposition Members are so concerned into the NHS. It was the Labour Government who introduced regional pay into the NHS through incentives and London weighting. It was the previous Labour Government who endorsed the flexibility of local employers to set their own terms and conditions. It was the Labour Government—the Government of the right hon. Member for Leigh—who gave greater freedoms to employers to set their own terms and conditions when they created foundation trusts.

Let me set the record straight and make things perfectly clear. We cannot rewrite history. The right hon. Member for Leigh wants a change of direction, but does he mean a change of direction from the pay flexibility that he and his Government gave to the NHS when they were in power? The Government recognise that in some parts of the country it is important to have pay flexibility in the NHS. We believe that it is right to reward London workers with a £6,000 London weighting because the cost of living is much higher. Does he want to withdraw that flexibility?

[Andy Burnham]

On our watch, no trust opted out of the national pay agreement in the NHS, but on the Government’s watch, 32 trusts are trying to undercut it. The hon. Gentleman is in the Government—what is he going to do about it?

[Dr Poulter]

The right hon. Gentleman cannot rewrite history. He cannot stand at the Dispatch Box and say that he no longer agrees with the pay flexibilities he gave local NHS employers or with the “Agenda for Change” document that his Government put in place. That document recognises that in parts of this country premiums of up to 30% need to be paid to employees. It also recognises that the cost of living in London is much higher and gives a £6,000 premium to NHS workers who work in the centre of London.

In our amendment, the Government are pleased to support the comments made to the GMB by my right hon. Friend the Chief Secretary to the Treasury. That highlights the Government’s support for NHS and public sector staff and recognises implicitly that in some parts of the country—as the previous Government’s “Agenda for Change” makes clear—we need pay flexibility to recognise when the cost of living is greater.

Importantly, the Government have also made clear our intention to retain national pay frameworks and national collective bargaining while they remain fit for purpose. That is why we are encouraging NHS employers and the trade unions to come together at the NHS Staff Council to negotiate a settlement that remains fit for purpose so that we can continue to endorse national pay frameworks. That is the stated position of the Government and it is a shame that the Opposition are attempting to politicise an issue of their own making.

It is worth putting it on record that despite the financial challenge faced by the whole public sector, we have put an extra £12.5 billion into the NHS during the life of this Parliament. That is not to say, however, that there is no financial pressure, and the Opposition were right to highlight the Nicholson challenge and the need to cut away bureaucracy and waste in the NHS in order to put more money into the front line. We endorse that. The Government are meeting the Nicholson challenge, and the NHS reforms we have put in place will put the NHS in a much better place to do that in the future.

[Mr Reed]

Does the Minister agree that everyone in this House should pay close attention to the fact that another set of terms and conditions for public servants is being negotiated now, and that if Members of Parliament vote for regional pay in the national health service they should accept regional pay for Members of Parliament?

[Dr Poulter]

The hon. Gentleman needs to be brought back to reality for a second. His Government introduced regional pay in the NHS through “Agenda for Change”, so he cannot stand at the Dispatch Box and rewrite history, saying that he is desperately concerned for the workers. “Agenda for Change” needs to remain fit for purpose, and it is the Government who are standing up for NHS workers. We will protect not just patients but jobs and workers in the NHS by ensuring that we support NHS employers and the trade unions as they come together to protect jobs and ensure that “Agenda for Change” remains fit for purpose in the future.

In conclusion, it is clear that the Opposition want to rewrite history, but it is time to cut the propaganda and get real about the debate. We all want to see individual employers given autonomy based on agreed national frameworks, but we want to make sure that “Agenda for Change” stays fit for purpose. In the end we must deliver high quality care for patients, and we understand that that also means looking after staff. That is why it is so important that the national pay frameworks remain fit for purpose, and that on both sides of the House we encourage NHS employers and the trade unions to negotiate a settlement within those frameworks.

The Opposition must stop attempting to play politics. They must support the NHS staff, as we on the Government Benches are doing. The Government are standing up for the NHS, its staff and its patients. That is why I urge all hon. Members to support the amendment and reject the motion.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

16:00

Division 95

Ayes: 226

---

Labour: 210
Democratic Unionist Party: 5
Conservative: 3
Social Democratic & Labour Party: 2
Independent: 2
Scottish National Party: 2
Alliance: 1
Green Party: 1
Plaid Cymru: 1

Noes: 292

---

Conservative: 248
Liberal Democrat: 44

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

16:15

Division 96

Ayes: 291

---

Conservative: 246
Liberal Democrat: 44

Noes: 220

---

Labour: 207
Democratic Unionist Party: 5
Scottish National Party: 3
Social Democratic & Labour Party: 2
Independent: 2
Alliance: 1
Green Party: 1

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House notes that the Agenda for Change pay system, introduced by the previous administration in 2004, already includes regional flexibilities, including high cost area supplements and recruitment and retention premiums; further notes that the previous administration also introduced local pay variation in the courts services; recognises that the previous administration established foundation trusts and in so doing removed the power of the Secretary of State to issue directions to trusts over matters of pay; accepts that the rt. Hon Member for Leigh had the opportunity to change this through legislation when he was Secretary of State but chose not to; looks forward to the publication of the NHS Pay Review Body report on the case for further reform to the pay system; supports the view expressed by the Chief Secretary to the Treasury at the GMB union conference that there will be no change unless there is strong evidence and a rational case for proceeding; and calls on the Government to continue to support employers and trade unions to work together for the benefit of patients and staff.

Criminal Injuries Compensation Scheme

Wednesday 7th November 2012 Commons Chamber

16:25

[Sadiq Khan (Tooting) (Lab)]

I beg to move,

That this House affirms its commitment to the blameless victims of violent criminals who suffer physically, emotionally and financially from the injuries inflicted upon them; recognises that the Criminal Injuries Compensation Scheme is the fund of last resort for much needed compensation for these blameless victims and is relied upon by many thousands of victims each year; and that in the opinion of the House the draft Criminal Injuries Compensation Scheme 2012, which was laid before this House on 2 July, should not be approved.

The Opposition are asking the House not to approve the changes passed by a narrow majority in Committee last week, and to reconsider. However, let me say up front that we are willing to work with the Government to see whether there are ways to reduce the Ministry of Justice budget while continuing to help blameless victims of crime. We do not believe the two are mutually exclusive.

It is worth beginning by setting out basic principles and an understanding of the criminal injuries compensation scheme. A non-statutory compensation scheme for victims of crime was first introduced in 1964. Not even the previous Lord Chancellor, the Minister without Portfolio, was a Member of the House then, but he and the right hon. Member for Wokingham (Mr Redwood) were members of a Cabinet that introduced a statutory scheme in the mid-1990s in the form of the Criminal Injuries Compensation Act 1995.

The current guidance to the 2008 scheme stresses that it is designed to compensate

“blameless victims of violent crime”.

The scheme recognises that the award can never fully compensate for all the injuries suffered, but an award is recognition of public sympathy for the blameless victim. Those basic principles, which are based in primary legislation, are important. If a person is not blameless, they do not get any compensation. If a person is not the victim of a violent crime, they do not get any compensation. If a person is a minor victim, they do not get any compensation.

Under the draft scheme, nearly 90% of those who have received compensation would have had their compensation slashed or cut totally. Of around 40,000 eligible cases annually, some 50% would no longer receive any compensation whatever and another 40% would have their compensation severely reduced. Compensation would remain the same in only around 10% of cases. Compensation in most cases is not a large amount of money—a couple of thousand pounds in many cases—but it is crucial for people whose livelihoods might have been interrupted as a result of their injuries. We know from our constituency surgeries that bills rack up and need paying. Compensation also plays a part in giving recognition for the pain and suffering of the victim, as well as providing a degree of closure after an attack. But for many thousands of future victims of crime the benefits of receiving compensation will no longer be available.

Those who will no longer receive any compensation include those with injuries such as permanent speech impairment; multiple broken ribs; post-traumatic epileptic fits; and burns and scarring causing minor facial disfigurement, including the many victims of vicious dog attacks, many of them young children or postal workers doing their jobs.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

More than 6,000 postal workers a year suffer injuries as a result of dog attacks. For example, Paul Coleman of Sheffield required multiple operations on his leg after a vicious attack. People like him will no longer get compensation if this proposal goes ahead. Is that not a devastating verdict on the work done by postal workers in this country?

[Sadiq Khan]

I thank my hon. Friend for that one example of the “blameless victims”—the language in the legislation—who will no longer be eligible for any compensation.

[Mr Crispin Blunt (Reigate) (Con)]

The right hon. Gentleman began by referring to basic principles. Surely it is a basic principle that ideally it should be the offender who pays compensation to the victim, not the state? I am looking forward with some interest to the saving suggestions that he mentioned.

[Sadiq Khan]

There are many words that I would use to describe the former Justice Minister, but “ignorant” is not one of them. He will know that people are eligible for this compensation only if the offender cannot pay the compensation because he has not been found or has no insurance. I will come to that point shortly, and the hon. Gentleman will be able to rectify the error in what he has just said.

The compensation cut will cover injuries such as significant facial scarring, punctured lungs, permanent brain injuries affecting balance and fractured joints that lead to continual significant disability. Those are not minor scrapes, as the Government Front Bench would have us think—far from it. Some 60% of the victims of the 7/7 attacks who received compensation would be subject to these reductions. Only 9% of them would have their compensation protected under these plans. Government Members know this. Indeed, at the delegated legislation Committee that initially discussed the changes, the right hon. Member for Wokingham, who deserves credit for being part of the Cabinet that put this scheme on a statutory footing, said:

“I have never been shy about saying that I would like us as a Government to spend less overall, but I have never once thought that it had to be done by cutting something so sensitive or giving a worse deal to the disabled, the poor or the most vulnerable. I hope that the Government will think again.”

He also said:

“I want Members to understand that the last place I would look for savings would be benefits and payments to the vulnerable, injured and incapacitated—indeed, I would not look there at all. If anything, we should be more generous. I did not come into Parliament to see those things cut.”—[Official Report, First Delegated Legislation Committee, 10 September 2012; c. 19-22.]

To be fair to the right hon. Gentleman, I should say that he also suggested where savings could be made in the administrative costs of the scheme—as one would expect from him.

What about the hon. Member for Ealing Central and Acton (Angie Bray)? She said that

“rowing back on compensation for postal workers seems strange”.—[Official Report, First Delegated Legislation Committee, 10 September 2012; c. 5.]

If the hon. Member for Cardiff North (Jonathan Evans) will forgive me, I will not read his entire speech, but, with his permission and the indulgence of House, I will read two paragraphs:

“The aspect of the greatest concern to me is dog attacks, certainly upon postal workers but particularly upon children. I will mention just one case, which relates to a Labour councillor in my constituency, Councillor Dilwar Ali—the hon. Member for Llanelli probably knows him, as he is very active in Welsh political circles. His young son was the victim of an horrific dog attack that has been the subject of widespread press and television attention. Reconstructive surgery was needed on this poor young child’s face. The person in charge of the dog did not set the dog on the child but failed to exercise any sort of control over it, and he was subsequently sent to prison. He will therefore not be in a position”—

the hon. Member for Reigate (Mr Blunt) may want to listen to this—

“to be sued in the civil courts. Criminal injuries compensation is the only resource available to that child. I say to my hon. Friend the Minister that I do not want to be asked to vote today in favour of a change that says to that child, ‘From now on, because of the difficulties of the deficit, you’re not going to get any compensation.’”

The hon. Member for Cardiff North went on to say to his Front Bench:

“I have the greatest respect for my hon. Friend, and I congratulate her on her appointment, but she has just assumed the post and this is an inheritance—some would say a hospital pass—from her predecessors in the Department. I ask her and the Secretary of State to reconsider the proposal and examine the points made in this debate.”—[Official Report, First Delegated Legislation Committee, 10 September 2012; c. 19.]

[Jonathan Evans (Cardiff North) (Con)]

May I just say to the right hon. Gentleman that I have never sat in the House and heard somebody from the Opposition Benches quote me with approval at such length? Let me make it clear to the House that I do not withdraw a word of what I said. I stand by every one of them. However, I am sure that he would not want to mislead the House either. In the course of my remarks, I made it clear that I was prepared to accept the Minister’s arguments regarding the need for a change in the scheme and for a more efficient system. I also made it clear that the budget currently bears no relation to the number of people who would be eligible for compensation. It was for that reason that change was necessary. The Opposition’s motion, as I understand it, would result in no change.

[Sadiq Khan]

The hon. Gentleman has been very fair. At the outset, I said that I accept that there should be a reduction in the budget and that I am willing to work with the Government if they reconsider the draft scheme, which, as he knows, is identical to the one that gave him so much difficulty.

[Mr David Burrowes (Enfield, Southgate) (Con)]

The right hon. Gentleman has not quoted the following:

“The scheme does not aim to provide individually tailored compensation packages covering each and every type of damage...Anybody who thinks that it does misunderstands the nature and purpose of the scheme.”—[Official Report, First Delegated Legislation Committee, 14 July 2008; c. 13.]

Those are the words of the hon. Member for Garston and Halewood (Maria Eagle), when the compensation scheme was last considered in 2008. Does he agree with that and does he recognise the context?

[Sadiq Khan]

Of course I do. At the outset, I set out the basic principles of the scheme. Of course it is the case that with 25 tariffs we cannot expect to compensate every single victim for every single injury they have suffered. It is compensation of last resort. Let me say this. What was the reward for the honesty and candour shown by those three Members for speaking up for vulnerable witnesses and for their constituents? They were sacked from the Committee, which subsequently reconvened on 1 November to debate the draft scheme, and now the ministerial team is peddling myths about the scheme. We have heard a couple of them already. I have the letter that the Justice Secretary wrote to Liberal Democrat and Conservative MPs—not to Labour MPs, I hasten to add—on MOJ letter-headed paper claiming that only minor injuries will no longer be covered. That is nonsense: the criminal injuries compensation scheme at the moment makes payments only for injuries that have a disabling effect for at least six weeks. No payments are made for cuts and grazes, as has been suggested, unless they are serious enough to leave a permanent and visible scar.

[Helen Jones (Warrington North) (Lab)]

Does my right hon. Friend agree that the Government have to explain why someone off work for six weeks—the minimum period under the scheme—who, even on the minimum wage, would lose £900, if they were on statutory sick pay, should then be plunged into further debt and poverty? Why should a victim of crime, as well as enduring the crime, be plunged into debt as a result?

[Sadiq Khan]

To be fair to the Government, I will assume that this is an unintended consequence of their obsession with cutting budgets without considering the consequences of legislation on blameless victims. We will hear shortly from the Minister, who will have to respond to my hon. Friend’s important example. We all have examples from our own constituencies of where blameless victims will suffer as a consequence.

Conservative and Liberal Democrat MPs were also told in the letter that the scheme was financially unsustainable, but the Government’s own figures in their impact assessment do not back that up. The average cost of the scheme over the past four years has been £192 million—this out of a departmental budget of more than £8 billion. We also hear that the scheme is too generous and that the taxpayer can no longer afford it. Well, the tariff payments were not generous in 1996, when they were first introduced, and there has only been one 10% increase in the intervening 16 years, even though inflation has reached almost 50%. It is also worth remembering that, in 2010, 79% of all compensation paid out was for awards below £5,000. Nor is it right to accuse the scheme of being poorly policed. In 2009-10, only 57% of applicants received any compensation. Ineligible applicants are weeded out.

The Government also claim that the scheme is not needed, because people can get compensation elsewhere —we heard that said by the former Justice Minister—but that is also wrong. The scheme only makes awards to those who cannot receive compensation from any other source—for instance, if no assailant has been apprehended or claims on insurance are not possible. Also, we should not believe the propaganda claim—I am not sure whether you received the letter, Mr Deputy Speaker—that the scheme is collapsing under the weight of ever-growing numbers of applications. The data are clear: over the past 10 years, the number of eligible applications has remained broadly stable, at about 38,000 to 39,000 a year. Nor is it right when Ministers claim that this is about refocusing resources on the most serious injuries. There is no refocusing. This is a plain and simple cut.

[Mr Blunt]

The right hon. Gentleman’s speech is devoid of context—the £750 million of debt associated with the scheme, the three-year backlog of payments and insufficient money to fund it. That context would have been helpful, but I am sure that the Minister will provide it. At the end of the process, however, the Government and offenders will be spending more money on victims of crime than when we started. That is the right place to be. More money will be being spent on victims at the end of this process. The right hon. Gentleman needs to put the scheme in the wider context of the Government’s victims policy.

[Sadiq Khan]

I can understand why the hon. Gentleman is so emotional about his legacy, which I will come to shortly. More money will not go to victims as a consequence of the Government’s plans. More money will be wasted on commissioning services for victims around the country, but more money will not go to victims.

The £50 million cut arising from the draft scheme is not being added to compensation for the most serious injuries. Not a single award is increasing. Even the hon. Member for Westmorland and Lonsdale (Tim Farron)—the president of the Liberal Democrats, who is not in his place—who sat on the most recent Delegated Legislation Committee, repeated the myth. He is wrong. He said:

“Many of us feel that it is fair to redistribute money within the pot to the victims of crime with the most serious injuries,”

so that most of it goes to those

“who have suffered the most incapacitating injuries with the longest lasting impact.”—[Official Report, Seventh Delegated Legislation Committee, 1 November 2012; c. 19.]

That is another example of somebody being misled by the myths from the Front Bench.

[Jonathan Evans]

Will the right hon. Gentleman give way?

[Sadiq Khan]

I want to make some progress, because others want to speak.

We know what the spreading of these myths and untruths is really about: building up a narrative that says that cuts must be made to the scheme if it is to survive, but those cuts are nothing to do with the sustainability of the scheme. Rather, they are part of a wider political narrative pursued by this Government—one that is as far from the “We’re all in this together” line that they espouse as we can get—in which, as has been demonstrated, innocent victims are left without support to see them through the difficult times after serious and violent crime.

The hon. Member for Reigate talked about his legacy for victims, so let us talk about it and about what the Government have done since May 2010. We have had the aborted attempts to introduce 50% sentence reductions for early guilty pleas, simply to reduce the prison population and save money. Then we had the abolition of indeterminate sentences for the most serious and violent offenders at greatest risk of reoffending. The Government have failed to accept the previous victims commissioner’s recommendation for a victims law. We have also seen the role of the victims commissioner left vacant for more than twelve months and cuts to support for victims. It is hardly surprising that the hon. Gentleman gets so emotional when these things are brought to his attention, and today we have cuts to compensation for innocent victims of crime.

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

My right hon. Friend is right to lead the charge against these disgraceful cuts to the criminal injuries compensation scheme, but he is also right to point out the need to enshrine the rights of victims in statute in a better way. Is that not why he proposes to introduce a victims law?

[Sadiq Khan]

Absolutely, and I look forward to working with the Government—if they really believe they are on the side of the victims—to ensure that that happens soon, rather than waiting for 2015.

Victims and potential victims up and down the country must have thought that the entire Justice team being sacked by the Prime Minister in his reshuffle would lead to a change in direction by the new Ministers. On 10 September, when the first Delegated Legislation Committee met to discuss the criminal injuries compensation scheme, the hon. Member for Maidstone and The Weald (Mrs Grant), then newly appointed as a Justice Minister, brought proceedings to a premature end by claiming:

“I have listened very carefully to what hon. Members on both sides of the Committee have said today about the scheme. I am a new Minister and, having taking some advice and thought very carefully about everything that has been said and the importance of the scheme to people whom we all care about, I have decided not to move the motion on the criminal injuries compensation scheme”.—[Official Report, First Delegated Legislation Committee, 10 September 2012; c. 25-26.]

“Hurrah!”, one might think, “Common sense prevails!” For just one minute, let me be generous to the Minister. Let us assume that the reason for this sanity was not because the excellent new Justice Whip—the hon. Member for Bexleyheath and Crayford (Mr Evennett), who is not in his place—could add up and had worked out that the vote would be lost, but because the Government were genuinely going to listen to concerns.

However—it upsets me to say this—I am afraid that the good faith and good will towards the new Minister from Opposition Members has evaporated very fast indeed. She might have listened, but she did not hear, because exactly the same draft order was tabled four weeks later. Not a dot or comma had been changed: it was exactly the same legislation that the Minister said she was going to reconsider. One can understand why the previous Justice Minister, the hon. Member for Reigate, is so emotional, because no changes were made—although I acknowledge the change to the non-statutory element of the scheme, with the establishment of a £500,000 contingency fund for special circumstances, but no commitment has been given on how long it will be available for; there is nothing in the draft scheme about that. That fund is a smokescreen and it could be cut at any time, without the need for parliamentary approval. It represents just 1% of the £50 million that is to be cut, and it will probably help just a few hundred innocent victims of crime, at most, compared with the 34,000 who are going to see their compensation either slashed or cut totally as a result of the proposals. The fund is a drop in the ocean, and it would be misleading to refer to it as a concession.

We have also seen wholesale changes to the delegated legislation Committee. Last week, the Government stuffed the new Committee with their loyalists and—it pains me to say this, Mr Deputy Speaker; you know that I am a polite man—with lackeys. The right hon. Member for Wokingham and the hon. Members for Ealing Central and Acton and for Cardiff North had been sacked and were no longer available to sit on the Committee, and they were replaced by three—yes, three—Parliamentary Private Secretaries, and a vice-chair of the Tory party for good measure.

It is a sad state of affairs when the Government have to wheel out the payroll to support them in a delegated legislation Committee, even though they have a built-in majority. But don’t worry, the president of the Liberal Democrats—whom I e-mailed today to say that I would be mentioning him in the debate—was there to join Labour Members in being the advocates for blameless victims. Or so one would think. What did he do? How did he show whose side he was on? The president of the Liberal Democrats did exactly as we would expect: he abstained. Had he voted with us last week, that legislation would not have been passed.

The whole new Justice team had a small window of opportunity, during which we might have given them the benefit of the doubt. After all, their predecessors left behind what the hon. Member for Cardiff North has described as a number of “hospital passes”. The Under-Secretary of State for Justice, the hon. Member for Maidstone and The Weald even raised our expectations, and we hoped that the cuts to the criminal injuries compensation scheme might be re-examined. She was even made Minister for victims in the intervening weeks. Minister for victims! You really could not script it, given that her first task as Minister was to gut the criminal injuries compensation scheme, which was a big slap in the face for the innocent victims of violent crime. Despite claims that she would listen, we have seen nothing but the merest tokenism.

Victims do not usually have someone to speak on their behalf. The victims commissioner post has been vacant for more than 12 months; she is no longer around to speak up for them. However, Victim Support, the Police Federation, the Association of Personal Injury Lawyers, trade unions such as the Union of Shop, Distributive and Allied Workers and the Communication Workers Union, the Legal Services Agency and parliamentarians who are in touch with hard-working people are united in believing that the Government’s proposals are flawed and need to be reconsidered.

In that earlier Committee sitting, the right hon. Member for Wokingham spoke for many of us—and when did we last hear a Labour Front Bencher say that? Many of us agreed with him when he said that we did not come into Parliament to see small amounts of compensation for innocent victims of crime being slashed and cut. I look forward to testing whether that sentiment will be borne out in the Division on our motion.

16:53

[The Minister for Policing and Criminal Justice (Damian Green)]

I rise to oppose the motion. I should like to start, as my hon. Friend the Member for Reigate (Mr Blunt) suggested, by outlining the overall context of services for victims of crime, of which the criminal injuries compensation scheme is just a part. The Under-Secretary, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), has pointed out throughout the important debates on this subject that support for victims and witnesses is a high priority of the Government.

At the beginning of this year, the Government launched a consultation, “Getting it right for victims and witnesses”, which set out a wide-ranging and ambitious reform package that will see us move from the previous one-size-fits-all model for supporting victims, with priority being given instead to the victims of serious crime, to the most vulnerable and to the most persistently targeted. Our reforms will also see police and crime commissioners using their local knowledge to ensure that victims get the services they need. There will, for example, be an increase in the use of restorative justice. There will also be a new victims code setting out clearly what victims should expect from the criminal justice system—not least that they should always be treated with dignity and respect.

[Helen Jones]

How is it treating a victim with respect if the children of a homicide victim, for example, could lose their compensation if the parent had worked all his or her life and then been out of work for a short period in the three years before the crime?

[Damian Green]

I shall come on later in my speech to the individual criticisms made of the changes, if the hon. Lady can be patient.

To return to the overall context, more victims will have the opportunity, through greater use of the victim personal statement, to tell the courts how crime has affected them. There will be compensation for victims of overseas terrorism and, following the recent announcement by my right hon. Friend the Secretary of State, there will be a new victims commissioner—directly to address the point of the right hon. Member for Tooting (Sadiq Khan)—who will present the views of victims clearly, with integrity and with force to Westminster, to Whitehall, to the media and to the public at large.

On top of all this—and more, such as putting funding for rape support centres on a sustainable footing and opening new centres, with more to come where there are gaps in provision; and such as ensuring better support for the victims of human trafficking through a contract let last year with the Salvation Army—we will raise up to £50 million extra from offenders to pay for more and better services for victims. The changes to the victim surcharge came into effect on 1 October, which means revenue will start to be received next spring, building on the success we have had over the past year in raising money for victims through the Prisoners’ Earnings Act 1996—some £800,000 so far, with more to come.

The consultation also set out proposals to reform the criminal injuries compensation scheme. It announced that for victims of overseas terrorism, there would be a scheme for existing victims going back to 2002 and another scheme for future victims. We published the Government response to the consultation in July. In sum, this record demonstrates that we are determined, as we said in the consultation, to get it right and ensure that victims of crime get the help they need to cope with, and recover from, the effects of crime. That is the context.

[Yasmin Qureshi (Bolton South East) (Lab)]

rose—

[Damian Green]

I was about to come on to the criminal injuries compensation scheme, but I will of course give way to the hon. Lady.

[Yasmin Qureshi]

I thank the right hon. Gentleman. As we understand the criminal injuries compensation scheme, 90% of people who could currently qualify for compensation will no longer do so under the proposed regulations. If that is not correct, will he assure us that all the people who can gain compensation currently will still be able to do so?

[Damian Green]

Certainly not all of them will, but I am distinctly dubious about the 90% figure. Let me explain why. There are two problems with the scheme as it stands: the policy rationale, which is flawed, and the scheme’s affordability. The policy problem is that the scheme is not currently clear just what a crime of violence is. It allows awards to be paid to people, for example, who have themselves committed violent crimes and to people who, perhaps many months previously, had already recovered from the minor injuries they had received. The Government are clear that in some circumstances where someone has, through no fault of their own, been a victim of a violent crime, it is right to provide financial assistance. That is, I think, something that Governments of all parties have maintained over recent years; we certainly want to do so. We also need to be clear, however, that where people have sustained relatively minor injuries, from which they will recover fairly quickly, small sums are not the best way to help them. Our investment in services, which I set out at the start of my speech, means that quality provision will be available to support victims at the point of need.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

On Monday, the all-party group on human trafficking met the chief judge to the tribunal, who said that someone with a broken jaw or a slash to the face that was not considered severe would not be allowed any compensation under the Government’s proposals. How can anyone who has suffered such injuries, particularly a woman in a domestic violence situation, be excluded from compensation under the Minister’s changes?

[Damian Green]

That would not be the case, under circumstances that I shall explain.

We believe that compensation should be focused on those with serious injuries, and that for relatively minor injuries such as sprained wrists or temporary—I emphasise “temporary”—whiplash, small amounts of compensation many months after the event are simply not an effective use of taxpayers’ money. If a victim who has such injuries still needs practical and emotional support, they will be able to access it.

The draft scheme has been debated in a delegated legislation Committee twice. On both occasions, criticism was levelled at the proposed changes, and it was clear that the criticism was based largely on a misunderstanding of the scheme and its purpose.

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

Does the Minister accept that getting rid of tariffs 1 to 5, as proposed by the scheme, will mean that 48% to 50% of victims who currently get compensation will no longer get it? Victims who would be affected would include those with injuries such as fractured cheekbones, dislocated knees, several broken ribs—a result of being kicked while lying on the ground—perforated eardrums, partial deafness, and so on.

[Damian Green]

The hon. Lady is making the honest mistake of assuming that it is the classes of injuries, rather than how long those injuries persist in causing problems—that is my basic point—that have led to the changes. I will deal with the details of the tariff changes in a moment.

[Several hon. Members]

rose—

[Damian Green]

I will give way for the last time, and then make some progress, as I am conscious that many Members want to speak.

[Sadiq Khan]

I do not want to intervene on the Minister when he is in full flow, but is it not correct that there are 17,700 cases a year in bands 1 to 5, none of which will be eligible for the criminal injuries compensation scheme under the proposals? He calls such cases minor, but they include permanent speech impairment, deafness lasting more than 13 weeks, multiple broken ribs, post-traumatic epileptic fits, and burns and scarring causing minor facial disfigurement. All the people with such injuries will no longer be eligible for the criminal injuries compensation scheme.

[Damian Green]

I can only repeat to the right hon. Gentleman what I have just said to the hon. Member for North Ayrshire and Arran (Katy Clark): if the injuries are serious and long lasting, people will still be eligible for the scheme. There is a genuine misunderstanding. [Interruption.] Let me get on to the bands in a moment, and I hope I will assuage the concerns of the right hon. Member for Tooting.

[Mark Durkan (Foyle) (SDLP)]

Will the right hon. Gentleman give way?

[Damian Green]

I have been generous in giving way. I will make some progress now, and give way later.

Apart from the policy problem, the scheme does not live within its substantial budget. In recent years, the CICA has been provided with an annual budget of about £200 million. However, the budget has on a number of occasions been topped up at the end of the year to enable claims to be paid when they are due. That practice simply cannot continue. Secondly, we are still resolving claims that were made under the pre-tariff system operating before 1996. Although we have made extra funding available to pay these older claims, pre-tariff liabilities stood at about £150 million at the beginning of the financial year. Thirdly, overall scheme liabilities— including existing tariff scheme liabilities, an estimate of cases that are likely to fall due in the future, and the remaining pre-tariff cases—are in excess of £500 million. Although the scheme will always have an outstanding liability, I am sure that Members on both sides of the House will agree that the figure is indisputably too high and must be reduced. The scheme must be put on a more sustainable footing if it is to continue to offer timely compensation to victims and provide a set of fair and realistic expectations.

[Angie Bray (Ealing Central and Acton) (Con)]

My right hon. Friend will be aware that for some time many of us on both sides of the House have campaigned for a better deal for victims of dangerous dog attacks. I appreciate that those with more serious injuries will still be able to receive compensation under the scheme if they have no other source of compensation, but what about those with more minor injuries? Will they have access to the new discretionary reserve fund, so that they can at least make their case for some compensation?

[Damian Green]

Some of them undoubtedly will be covered by the new hardship fund, to which I intend to refer in a moment. I thought that the right hon. Member for Tooting was uncharacteristically churlish in describing it as a smokescreen. It was set up because the Under-Secretary, the Secretary of State and other Ministers listened—

[Mr Andrew Smith (Oxford East) (Lab)]

Will the Minister give way?

[Damian Green]

May I respond to the previous intervention first?

The people to whom my hon. Friend refers will certainly have access to the hardship fund. As she knows, the purpose of the fund is to compensate those who have suffered as a result of a crime, and in the case of some attacks by dogs a criminal offence will not have been committed. The right hon. Member for Tooting mentioned a case in which someone had gone to prison, so clearly a crime had been committed in that case, and it ought to be covered by the scheme. However, I recognise my hon. Friend’s concern, and I hope that it has been addressed.

[Mr Smith]

I am grateful to the Minister. How will access to this very meagre fund be rationed, and what will he do if it runs out during the course of the year? Will he undertake to top it up, or will he deny assistance to further applicants once it has been exhausted?

[Damian Green]

I am pleased to be able to tell the right hon. Gentleman that a written ministerial statement will be published shortly giving details of the scheme. I can also tell him that there will be a £500,000 fund to establish the scheme, and that it will be aimed at people who are temporarily unable to work as a result of their injuries and are not in receipt of statutory sick pay or an equivalent employer-provided scheme.

[Katy Clark]

Will the Minister give way?

[Damian Green]

The hon. Lady has had a go already. I should like to make some more progress. First, let me make a final point about the issue of dogs, which has been raised by Members on both sides of the House.

It is inaccurate to say that all postal workers who had suffered dog bites would be eligible under the current scheme, which makes payments when dogs are intentionally set on victims and in a small number of other cases. Some of the figures that have been bandied around do not reflect the reality.

Let me now return to the expenses involved in the scheme. The cumulative effect of the reforms will deliver savings of about £50 million a year, but that is not to say that the Government are aiming to reduce the amount available to victims. We are determined to get the balance right, so that the burden is shifted from the taxpayer to those who commit crimes.

The new victim surcharge arrangements were implemented on 1 October. Along with other financial impositions, they are intended to raise up to an additional £50 million per year to be spent on victim services. That is how it should be. Offenders who have caused harm to victims and to society as a whole should have to put their hands in their pockets and pay for the services for which they themselves have created a need. At present, out of a total central Government spend on victims and witnesses of about £66 million, only about £10 million comes from offenders. That means that the burden rests too heavily on the taxpayer. With the money that we are taking out of the scheme and the money that we are raising from offenders, we are changing that balance.

[Sadiq Khan]

How much of the victim surcharge, which the Minister expects to amount to £50 million, will go directly to compensate the victims of criminal injuries?

[Damian Green]

As I have just said, the money will be spent on victim services. [Interruption.] I am interested to note that the Labour party does not seem to regard victim services as important. They are hugely important, as I have said on several occasions.

[Sadiq Khan]

Why can’t we do both?

[Damian Green]

The right hon. Gentleman is in danger of enticing me to draw attention to the present Government’s fiscal inheritance. We simply cannot—[Interruption.] The right hon. Gentleman said in the responsible part of his speech that he was prepared to look for savings in the budget of the Ministry of Justice, but judging by his remarks from a sedentary position all he wants to do is increase spending in every area.

Tariff payments will continue to be available to those who are most seriously affected by their injuries, and to the victims of the most distressing crimes. What that means in practice—

[Several hon. Members]

rose—

[Damian Green]

Let me explain first, and then I will give way to those Members who have not yet intervened.

What that means in practice is that bands 1 to 5 of the current tariff, which contain the more minor injuries such as short-term sprains, will be removed. Bands 6 to 12 are to be subject to a graduated reduction of between 60% and 24%, but bands 13 to 25 are to be protected in their entirety at existing levels.

There has been much talk about injuries in bands 1 to 5 possibly not being minor. However, many injuries already appear more than once in the existing tariff and are ranked according to their seriousness and recovery time. Those injuries in bands 1 to 5 that we are removing may, therefore, appear again in band 6 or above, if the recovery time is longer or the injury is more complex. Where an injury has an ongoing impact, therefore, it will generally still be included in the draft scheme.

[Mark Durkan]

The Minister says the reformed scheme is intended to help victims of the most distressing crimes. Human trafficking must be one of the most distressing crimes anyone can suffer, but it is clear that no account will be taken of the trauma and utter denigration suffered by the victims of human trafficking. They will be assessed only on the basis of whether their injuries happen to score on the scratch-card under the new scheme. The all-party group on human trafficking recently heard an unhysterical briefing from judges on the implications of the new scheme for such victims.

[Damian Green]

If people have injuries that qualify, and if they are resident in this country, they will still qualify—although things might depend on how long they had been in the country. As I hope the all-party group would accept, the overall package of services for the victims of trafficking—which I know a bit about from my previous life as Immigration Minister—is considerably better than it was in the past.

[Jim Shannon (Strangford) (DUP)]

Over the last month or so, we have learned about some truly horrendous past sexual abuse of children. Many of those offences took place up to 30 or 40 years ago, so many of the perpetrators are now dead and gone. The victims who 30 years later are coming to terms with the trauma of what happened to them need to be assured that the CICS is available for them. Can the Minister assure us today that they will be able to claim?

[Damian Green]

The hon. Gentleman makes an extremely important point, especially given the current circumstances that he describes, and I am able to give him that assurance: the claims officer will have the discretion to consider claims that may have been delayed for a very long time for precisely the reasons the hon. Gentleman sets out.

There has been criticism of the removal of the possibility of compensation for victims suffering from post-traumatic epileptic fits. Critics need to know that where there is a continuing disability—including where the victim’s condition is controlled by medication—an award may still be made.

The right hon. Member for Tooting spoke about the removal of awards for those who have suffered scarring. That is an important point, but it needs to be understood that if the level of visible disfigurement is anything other than minor, the victim will still be eligible to make a claim. The rationale behind the removal of the lower bands is that they are the least serious injuries in the tariff and victims tend to recover from them fairly quickly.

[Katy Clark]

rose—

[Damian Green]

I have given way enough, and I know how many Members wish to contribute to the debate.

Those who sustain injuries of a more permanent nature will generally still be able to claim, because if an injury has a lasting impact it usually appears again further up the tariff. Let me also restate the point I partially made to the hon. Member for Strangford (Jim Shannon): tariff awards for sexual offences and patterns of physical abuse will remain at their current levels wherever they currently apply in the tariff. That will enable better protection for victims of domestic violence, for example, who very often are subjected to more than one assault. We have certainly defined the eligibility more tightly so that only those direct and blameless victims of crime who fully co-operate with the criminal justice system process obtain compensation under the scheme, and I think that is right.

Various points have been made about dogs, but the one that cannot be repeated often enough is that under our charges the authority will pay only where the dog was set on the victim by its owner—in other words, where it was used as a weapon—because this is meant to be a compensation scheme for criminal injuries. As I explained, the ability of victims of sexual offences to apply for compensation needs to be preserved, and we have done that.

One point that I have not yet addressed relates to loss of earnings. The scheme has never compensated the actual value of lost earnings, but these payments still account for a large part of the cost of the scheme. The payments are intended not to put the applicant back in the position they were in prior to the injury but to provide a safety net. There are, of course, other benefits provided by the state for which applicants may be eligible, but in making our changes we are no longer reducing loss of earnings payments to take account of those other benefits.

I have briefly mentioned the hardship fund. We recognise that some very low earners, be they employed or self-employed, may, as a result of the removal of bands 1 to 5, find themselves in real and immediate financial hardship. They will need short-term assistance, so we will make payments for up to four weeks’ absence from work, which will enable those most in need to keep their heads above water while they recover from their injuries. The fund will be administered by the Criminal Injuries Compensation Authority, at no additional cost, with a referral function provided by Victim Support. Applications will be processed quickly and payment made promptly, ensuring that debt is not accrued.

[Helen Jones]

rose—

[Damian Green]

I said that I would not give way again, but the hon. Lady has been very insistent.

[Helen Jones]

As I pointed out earlier, even those on low pay who are receiving statutory sick pay can be plunged into debt. In the past, their compensation in the lower bands has at least gone some way to relieving that debt. The Minister has to answer the question: why does he believe a victim of crime should be plunged into debt that they cannot get out of simply because they have been a victim? Offering them support services, however good, does not pay their bills.

[Damian Green]

As I have explained, the whole point of the hardship fund is precisely to address the problems of those most likely to be affected. Of course, the hon. Lady will know that many other avenues of civil recovery and so on will enable people to obtain compensation.

I began this speech by talking about the context and summarising the package of reforms contained in the consultation. The fact is that difficult decisions have to be made, but these are the right ones. The current scheme is not only unaffordable but illogical. The policy rationale is flawed, with thousands of awards being made for minor injuries that will have minimal lasting effects and thousands of payments being made to convicted criminals.

[Michael Connarty]

The Minister is putting forward his case on minor matters. He did say that people who had suffered sexual assault would still be eligible for compensation. I read that children under the age of 13 would automatically be eligible, but those between 13 and 15 would not have automatic access to criminal compensation and each case would be considered. How can he justify saying that people under the age of 15 should not be eligible automatically for compensation?

[Damian Green]

They are not “not eligible”; each case will be considered. [Hon. Members: “Why?”] Because it is sensible to allow discretion in those periods. [Interruption.] We cannot and will not simply continue pouring out taxpayers’ money to little effect. I must again emphasise that the Government are committed to improving support—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. It is impossible to conduct a debate if Front Benchers, supported by Back Benchers, shout at the Minister all the time. We cannot follow the points being made, so I would be grateful if it stopped.

[Damian Green]

Thank you, Madam Deputy Speaker.

We cannot simply continue to pour out taxpayers’ money to little effect. The changes are meant to ensure that the money spent on supporting victims of crimes of all sorts is spent in the most effective way.

[Gloria De Piero (Ashfield) (Lab)]

Will the Minister give way?

[Damian Green]

I am sorry, but I have given way often enough and I know that many hon. Members wish to speak.

I must emphasise that the Government are committed not only to improving support for victims and witness but to improving practically the overall package of victim support so that they will have better services in future. The protections that remain in the compensation scheme will be aimed in particular at those who suffer the most serious crimes and at those who are most vulnerable to suffering serious hardship. I would be surprised if Opposition Members did not recognise that those ought to be the two biggest priorities of the scheme. That is what the compensation scheme should achieve within the financial boundaries it is required to keep. The draft scheme provides a coherent and fair way of focusing payments towards those most seriously affected by their injuries within an affordable budget and I ask the House to reject the motion.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. A number of Members want to take part in the debate. I will not set a time limit at the outset, but I ask each Member to try to speak for 10 minutes or less and to be mindful of the fact that interventions from Members who subsequently come into the Chamber will take time from those who are patiently waiting to speak.

17:19

[Mr Andrew Smith (Oxford East) (Lab)]

The Minister’s speech was a weak defence of the Government’s proposals, and that is because they are literally indefensible. Like my right hon. Friend the Member for Tooting (Sadiq Khan), I was shocked that the Government, who withdrew the statutory instrument from the Committee in recognition of the concerns on both sides of the House as well as among the general public, brought it back after changing the content not of the measure but of the Committee. Government Members must see how wrong that is and I appeal to them to consider carefully what is at stake.

Despite the argument that the Minister attempted to make, we are talking about compensation being taken away altogether from nearly half the victims who are presently eligible in tariff bands 1 to 5. Although those tariff bands are at the lower end of the scale, as we have heard, they cover quite serious and permanent injuries, such as permanent speech impairment, partial deafness and minor facial disfigurement. The 35% of victims who are even more seriously injured, often with permanent disability, will see their compensation in tariff bands 6 to 12 severely reduced. I do not believe most Government Members really think it is right to cut by £1,500 to £2,000 compensation to people with permanent brain injury, penetrating injury to both eyes or a collapsed lung. The House should remember that, as my right hon. Friend said, the cuts would have affected more than half of the victims of the 7/7 terrorism attacks.

The measure also means that payments for loss of earnings will be drastically cut, with payments of only £85 a week, the level of statutory sick pay, being paid rather than the victim’s average earnings. Compensation for loss of earnings will be limited to those who can never work again or to those who can work only in a very limited capacity. What is more, it will be denied to any who have a broken work record in the previous three years. Government Members must see that that is penalising people who have been unemployed but have got themselves back into work. Despite all the rhetoric we hear from the Government about getting people off welfare and into work, they are penalising the very people who have made the effort to get out of unemployment into a job but who then suffer injury.

The cuts to and conditions on loss of earnings compensation will also apply to dependants of victims of murder or manslaughter, drastically reducing the payments that they receive. We are talking also about compensation being taken away from thousands of victims who have been viciously attacked in the course of their work. Often, those people were on low wages. They are going to feel that, having been degraded once by their assailant, they are being degraded again by this attack from the Government.

[Gloria De Piero]

My constituent was a self-employed business man when he was subjected to a vicious knife attack. He lost everything when he was attacked. There were two years of form filling before he got a small amount of compensation—an extremely stressful process. Should we not be talking today about improving the system for blameless victims, rather than making it worse?

[Mr Smith]

My hon. Friend makes a very good point. Of course we should be doing that. The Labour Front-Bench team has offered to have talks. There should be talks between Opposition and Government. Let us get the scheme right so that it genuinely helps victims of crime, rather than withdrawing modest sums of money, often from people who have suffered serious injuries.

I am proud to have been a member of the shop workers union USDAW for more than 30 years, and I know just how vulnerable many shop workers, along with other workers serving the public in the postal, transport and other public services, are to attack. I recently met Frankie, a customer services adviser aged 28, who was attacked on a woodland path on his way to work in a large supermarket on the south side of Glasgow. Frankie suffered two stab wounds and was left with eight scars on his face, hands and forearms, after one of his attackers held him down while the other slashed at him with a sharp object before robbing him. His assailants were never identified. He has been told that if they are caught they will be charged with attempted murder.

Frankie was off work for almost a year and says that the incident, understandably, turned his life upside down because of the trauma. He still gets anxiety and panic attacks. He was diagnosed with post-traumatic stress syndrome, for which he has received counselling. Under the proposals in the scheme, the £2,500—that is all—that he received in compensation would be reduced to £1,000, which he says would have left him homeless in the circumstances that he was in. I cannot believe that in their heart of hearts Government Members really think it is right to deny the likes of Frankie £1,500.

[Ian Murray (Edinburgh South) (Lab)]

My right hon. Friend is making some powerful points. He mentioned that he was an USDAW member for 30 years. Is it not ironic that this week of all weeks is USDAW’s respect for shop workers week? Many shop workers who were injured at work and became victims of crime would not be compensated under the scheme.

[Mr Smith]

My hon. Friend makes a good point. The irony will not be lost on hundreds of thousands of USDAW members and other trade unionists.

The Government have argued, and we heard it from the Minister, who has now left—[Interruption.] I beg your pardon. He is still here. He has moved to the Back Benches, but perhaps not permanently just yet. He argued that the compensation scheme was financially unsustainable, but that is not borne out by the Government’s own figures or the impact assessment.

Over the past four years, the cost of the tariff scheme to the Ministry of Justice has averaged £192 million, which is both remarkably stable and within the current budget of £200 million. The cost of criminal injuries compensation as a whole was higher in 2011-12 because the Government made payments totalling £237 million on 78 cases that arose before the tariff scheme was introduced in 1996. The majority of those cases involved children, where a final assessment of their ongoing need could not be concluded until they reached adulthood. Total liabilities under the scheme are inflated by the cost of historic cases, including pre-1996 cases yet to be settled.

[Damian Green]

As I understand it, and I suspect this may be an argument that appeals to the right hon. Gentleman from his time at the Treasury, he thinks the system is fine and solvent as long as we keep delaying payments to victims, which is what has been happening for many, many years. Surely when he thinks about that, it is clearly an unacceptable way to ration public spending.

[Mr Smith]

I want the liabilities to be settled and the victims to get the money to which they are entitled. To be fair, some progress has been made on those cases. Earlier in the autumn there were 73 pre-1996 cases still to be settled, at a predicted cost of £148 million, but the figure has now come down to 33 cases, probably at a cost of £100 million, so the backlog is being addressed and is not the rising burden that the Ministry is trying to claim it is.

Furthermore, if the Secretary of State’s argument is correct, why does the Government’s own impact assessment state:

“The current scheme costs around £212m per year—£52.5m per quarter—and we assume that in the absence of reform this would continue”?

That is the cost to both the Ministry of Justice and the Scottish Government. The impact assessment does not state that in the absence of reform the costs would rise or get out of control; it states that the level of spending would continue. The problem is that the Government are choosing to cut the budget for the scheme.

I appeal again to Government Members. In making the victims of crime pay the price of these cuts, they have picked the wrong target. We know that difficult choices have to be made. I understand the pressure of party loyalty they feel under, but there are times when we have to put the interests of vulnerable members of the public first. If Government Members consulted their constituents and party associations about this, I feel sure that they would say, “Don’t cut criminal injuries compensation.” Above all, if they listened to the victims of crime, they would reject the measure and support our motion.

17:31

[Mr Crispin Blunt (Reigate) (Con)]

The speech we just heard from the right hon. Member for Oxford East (Mr Smith) in many ways mirrored the shadow Secretary of State’s rather narrow speech and failed to look at the context in which the Government have had to assess the scheme. As I was the junior Minister responsible at the time, I can explain the problems we were presented with. The scheme was £750 million in debt and it was taking years to get people paid properly.

The right hon. Member for Oxford East referred to some of the payments that have been made to address the backlog. Those payments could be made because other savings were found in the Ministry of Justice, under the excellent director of finance, Ann Beasley—one of the ways we can spend money quickly within the departmental budget is to take any left at year-end and put it into the criminal injuries compensation scheme to address the backlog. That was a priority because victims of crime are a priority for this Government.

We were faced with a situation in which the scheme was massively in debt, payments were horrendously late and, as the right hon. Member for Oxford East might have spotted, there was no money. The Ministry of Justice is trying to cut its budget by £2 billion a year over the course of the comprehensive spending review period. I noted the shadow Secretary of State’s opening comments about wanting to work with Ministers to help to look for savings, which he agreed have to be made. I listened, but I am afraid that I heard not a single suggestion for where other savings might be made in order to deal with the backlog.

The challenge for Ministers was to put the scheme into financial order, which meant taking some difficult decisions, and that, of course, is what we did. We had meeting after meeting to look at the bands, reductions that could be made and different ways of assessing it. That received the highest attention, including from the Prime Minister, who took an interest in it, because it is extremely important to get it right. But we are faced with the fact that savings have to be made, so the scheme proposed here is the one that has come forward. Of course uncomfortable decisions have to be made, as the right hon. Member for Oxford East acknowledged, but it is a pity that the Opposition never try to suggest what those difficult decisions should be or explain what they would do.

[Sadiq Khan]

Does the hon. Gentleman now accept that his Front Benchers are wrong to give the impression that the reason for the cuts is that they want to provide services for victims, because he has been honest and said that the reason for the cuts is that they want to make cuts?

[Mr Blunt]

The right hon. Gentleman is right: cuts have to be made to the departmental budget that we inherited and the scheme was, to all intents and purposes, bankrupt. That had to be addressed properly and in a hurry. Savings had to be made throughout the rest of the Department, so it was extremely difficult to include compensating expenditure in the scheme in order to rescue it.

The Government’s proposals will put the scheme in sensible order. As my right hon. Friend the Minister for Policing and Criminal Justice has outlined—as did the new Under-Secretary of State for Justice, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) during the two Statutory Instrument Committees—they will get rid of bands 1 to 5 and make sure that victims of sexual crime and the most serious crimes are protected.

We then looked at the whole context of what we ought to do about victims of crime. Frankly, I am proud to say that we pushed to examine how we could stretch the victim surcharge so that we could get offenders to contribute to victims’ services. Under the proposals made, not in the statutory instrument, but in parallel with it, at least an extra £50 million will be raised from criminals for victims. Surely it is a basic principle that offenders should fund victims’ services and, indeed, compensation, which is an issue to which the shadow Secretary of State alluded, and which I will come on to later.

[Karl Turner (Kingston upon Hull East) (Lab)]

The hon. Gentleman said during an exchange with my right hon. Friend the shadow Secretary of State that more money is going to victims’ services, but is it not true that the powers and discretion will be devolved to police and crime commissioners, and that that money will not be ring-fenced?

[Mr Blunt]

Police and crime commissioners will be accountable to their local electorates, as we will find out on 15 November, and they will get the victims’ services budget for all of the services that are not best dealt with at the national level, such as rape and murder.

[Karl Turner]

That is a yes, then.

[Mr Blunt]

Of course—that is what happens when we do not ring-fence. I would have thought that that was straightforward. It is about local accountability. The PCCs will get a much enhanced budget in order to provide services for victims of crime, and that is an extremely healthy place to be. That is only part of the story. In addition, we are raising £50 million from offenders for victims’ services.

[Mr Andrew Smith]

Will the hon. Gentleman give way?

[Mr Blunt]

Let me first put this in the proper context, if I may.

That is the first part. Under this Administration, victims of crime will receive at least the same amount of fiscal compensation or services as they do at present. The hon. Member for Kingston upon Hull East (Karl Turner) and I sat on the Legal Aid, Sentencing and Punishment of Offenders Bill Committee together, and he will remember that we changed the requirement and duty on sentences, so that the first thing that must now be considered is the duty to impose a requirement of compensation on offenders.

I may also be able to answer the shadow Secretary of State’s argument that there is no way of doing that because some offenders are sent straight to prison and do not have any means. Some of the more serious changes mean that they will have means. If they do not have a job or income, they are likely to be in receipt of benefits and pensions for a very long time. The Government have announced a change that will allow an attachment against benefits not of £5 a week, but of £25 a week, which will lead to serious numbers and compensation, even if some offenders will have to pay it over a significant period. That money can be taken off them and paid out at the same kinds of levels as those under bands 1 to 5, which the scheme will get rid off.

[Mr Smith]

I am grateful to the hon. Gentleman for giving way. Given his role in developing the proposals, will he tell the House how the figure of £50 million was settled on? We all want to get more money from offenders and it is notoriously difficult to do so. If the actual money that comes in ends up being less than that, will the Government top it up to £50 million, and, if the scheme brings in more than £50 million, will the extra money go to victims?

[Mr Blunt]

I am no longer responsible for policy, so the right hon. Gentleman will have to ask my colleagues on the Front Bench about what will happen in future. [Interruption.] I am of course the architect of the policy, and I can say what I would have done. We looked at what were reasonable levels of victim surcharge to place on the whole range of offences, including road traffic offences, and the sentences, including community sentences, that followed. Those additional levies amounted to £40 million to £60 million; that was the first estimate we received. I am reasonably confident that the figure will exceed £50 million.

However, that is not the whole story. The Minister mentioned the earnings from the Prisoners’ Earnings Act 1996, which is producing £800,000 this year. We are beginning a very substantial programme of work in prisons that is designed to create an income from having prisoners working in some form of commercial way. The businesses involved will not be paying the prisoners the minimum wage. If my concept is continued by my colleagues who are now in charge of these matters, prisoners will continue to get their prisoner allowance but they will also be working in businesses. Any money that they might earn towards their own future rehabilitation should then be matched by money that goes into victims’ services. If work in prisons can be got to scale, this can amount to a substantial amount of resources, with direct compensation going from offenders, as it should, to services for victims of crime.

[Michael Connarty]

rose—

[Mr Blunt]

I have already spoken for 10 minutes and I do not want to prevent other right hon. and hon. Members from getting in.

The shadow Secretary of State presented this proposal shorn of any context. Of course the statutory instrument is problematic, because we are having to make difficult decisions in order to address the Department’s budget. We had to sort out a scheme that was £750 million in debt on a turnover of £200 million a year. At the same time, we have managed, with rather more imaginative thinking on victim surcharge, duties on compensation and attachment against benefits—we are raising that fivefold—to begin to create a system in which meaningful compensation will go from offenders to victims. That comes within a culture of restorative justice that this Government are implementing. All this will significantly improve the position of victims, hold offenders responsible, and reduce the burden on the taxpayer. Frankly, I cannot understand why the whole concept should not commend itself to all Members of this House.

[Michael Connarty]

The hon. Gentleman is being very candid and straightforward in trying to justify this; the Minister failed to do so. The logic of taking from people who have committed crime money that goes to the victims can probably be supported by everyone in the House. However, if some of that money is taken and put into victim services at the same time as reducing levels of, and access to, compensation for many people, victims will be paying for their own services out of what should be their compensation. The Government should provide the services while the perpetrators provide the compensation.

[Mr Blunt]

Let us be quite clear: tough decisions have to be taken, as the right hon. Member for Oxford East—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Mr Khan, I have already said that there will not be shouting from the Front Bench. Believe it or not, that applies to you as well. Please stop it.

[Mr Blunt]

Thank you, Madam Deputy Speaker. Bless him—three times he said I was being emotional and then we have these interventions.

Difficult decisions have to be made, and obviously changing the scheme in this way involves such decisions. However, in the context of our whole wider victims policy, we have made matters, and are making matters, very much better for victims and tougher for offenders, whom we are going to hold properly to account. We are putting in place the mechanisms by which those offenders can pay compensation to victims of crimes in cases where they have not done before. I thoroughly commend the statutory instrument to the House, not least because much of it was my idea.

17:44

[Karl Turner (Kingston upon Hull East) (Lab)]

I am grateful to be called to speak in this important debate, and to follow the hon. Member for Reigate (Mr Blunt). He worked hard when he was in the Ministry of Justice; I did not always agree with him, but I know that he was committed to his brief.

I received briefs from all sorts of organisations in preparation for this debate, one of which was the RMT. Its general secretary, Bob Crow, is a very good friend of mine, but I did not expect to be reading a brief from the RMT and imagining a situation in which Bob Crow agreed with the right hon. Member for Wokingham (Mr Redwood). It beggars belief because the right hon. Gentleman is not known for his left-wing tendencies.

It was disappointing—although not surprising—that on 1 November a motion on the Draft Criminal Injuries Compensation Scheme 2012 was passed by a narrow majority in the Seventh Delegated Legislation Committee, despite many Tories having rejected those cuts some weeks before. Tories on the First Delegated Legislation Committee—which included, as I have said, the right hon. Member for Wokingham—accepted that taking compensation away from innocent victims was a line too far. Sadly, however, the Government simply rejected that advice which, as I said, came from across the political spectrum. They went away promising good things, but, in my respectful submission, that was only so they could beef up the Committee with loyalists and Parliamentary Private Secretaries.

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

On that point, Government Members who sat on the First Delegated Legislation Committee yet supported the Opposition have disappeared from the Chamber. Of those who sat on the Seventh Delegated Legislation Committee last week, the only ones on the Government’s side who are left are the Minister, the Whip and the Parliamentary Private Secretary, the hon. Member for Ilford North (Mr Scott). Everyone else has flown the scene of the crime.

[Karl Turner]

I am grateful to my hon. Friend, and do not think I need to comment further as he has made the point perfectly well.

The statutory instrument was brought back to Committee unchanged, but presented to a less vocal composition on the Government side. Without any shadow of doubt, that was simply to ensure that it went through under the radar. It is disappointing to think that the Minister, a family practitioner who has practised law and is bound to have come across victims of crime, would behave in such a terrible way. As right hon. and hon. Members know, the criminal injuries compensation scheme is the very last resort for innocent victims of crime, and I understand that it helps between 30,000 and 40,000 victims every year who genuinely have no other recourse to compensation.

I will restrict my remarks to reiterating what the Government proposals will do. Terror victims, people injured in violent dog attacks and many hard-working shop workers will lose out on compensation that is intended to put their lives back to where they were before any injury or loss. Almost half the victims who apply for compensation for crimes in bands 1 to 5 will no longer be eligible for a compensatory award. Bands 1 to 5 include injuries such as permanent speech impairment, partial deafness that lasts more than 13 weeks, multiple broken ribs, post-traumatic epileptic fits, and burns and scarring causing minor facial disfigurement.

To be ready for the Government’s defence, I today spoke to a colleague in civil practice to check whether that is the position, and was told that it is—according to that solicitor, we are certainly not talking about the least serious injuries. Rates for bands 6 to 12 will be slashed by between £1,500 and £2,500, or 60%. Injuries in that category include significant facial scarring, permanent brain injury resulting in impaired balance and headaches, and serious injury to both eyes.

I also spoke today to Mr Andy Parish, a postman and constituent. He is concerned about postal workers who have been attacked by dogs, many of whom are scarred and disfigured for life. He told me that many have lost fingers in terrible, unprovoked attacks by dogs. I am very worried that those workers, who have been permanently injured while trying to make a living, will no longer be able to receive compensation.

[Katy Clark]

My hon. Friend makes a powerful point on injuries suffered by postal workers who are attacked by dogs. In fact, the majority of victims of dog attacks are children. Does he therefore agree with communication workers that compulsory insurance for dog owners should be introduced, to ensure that compensation is available when people are attacked?

[Karl Turner]

I am grateful to my hon. Friend for making that point for me. She is absolutely right: dog attacks do not happen just to postal workers; children are often the victims. In fact, the impact assessment carried out as part of the consultation identified that the highest proportion of such victims were children. Many of the attacks are caused by irresponsible dog owners who do not have the financial means to pay any compensation whatever. I urge the Government to consider the calls to introduce compulsory third-party insurance, as my hon. Friend suggests.

Another problem is that people will have to pay £50 for their medical records, including physical and psychiatric records—any medical assessment that needs to be carried out to evidence their injury will need to be paid for. That will present financial and practical difficulties for many at the worst time, when they have experienced, for example, a terrible dog attack. They are not working, but will have to come up with that money.

I am dismayed that the Government have failed to listen not only to Opposition Members but to their Back Benchers. In my submission, these are heartless cuts to compensation for innocent victims of crime. The Government will not get away with it when it comes to the general election.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. It is necessary to have a time limit on speeches. I am imposing a time limit with immediate effect of seven minutes on each Back Bencher. May I remind hon. Members who rose that they need to have been in the debate for both opening speeches in order to catch my eye?

17:54

[Mr David Burrowes (Enfield, Southgate) (Con)]

I am pleased to follow the hon. Member for Kingston upon Hull East (Karl Turner). We are both lawyers and have an interest in this area—I was a criminal defence practitioner. I also have form as a shadow Justice Minister, and was one of the Members who considered the last revision to the scheme back in 2008. The right hon. Member for Tooting (Sadiq Khan) accused me of peddling myths when I simply quoted the then Under-Secretary of State, who, when the scheme was last considered, said:

“The scheme does not make the state liable for injuries caused to people by the acts of others. It is a recognition of the public feeling of sympathy and solidarity with blameless victims of violent crime. Since 1964, the state has sought to provide a monetary award on behalf of the community that is not compensation for all of the injuries suffered, but a recognition of that solidarity, fellow feeling and sympathy.”—[Official Report, First Delegated Legislation Committee, 14 July 2008; c. 13.]

I am sure that all hon. Members would want to express their solidarity with those who suffer injuries as victims of crime. It is one thing to express solidarity, but it is another to jump on a bandwagon on the backs of victims of crime.

The right hon. Member for Oxford East (Mr Smith) accused the Government of degrading the victims of crime, and that is a very serious charge. I remember that during my years as a shadow Justice Minister I spoke to many families of homicide victims and the associations standing up for them who regaled me with accounts of how they had been let down by the criminal injuries compensation scheme, having to wait for months and months. They were already victims, and then they were victims all over again—victims of an inefficient scheme that left them without recourse for months and even years. They did feel degraded and yes, there is a need for reform.

What did the previous Government do? They consulted, as they did a lot in those days, publishing “Rebuilding Lives - supporting victims of crime” in 2005, which considered the issue of refocusing the scheme more on serious crimes. They decided not to do that. Instead, they decided to make the scheme more administratively efficient to address the fact that it was grossly oversubscribed and there was not enough money in the pot. As was typical of the previous Government, they ducked the issue. They ignored it and did not address it. As we know, the issue of administrative efficiencies continues, and it is not possible to deal with the money available in an efficient way.

[Karl Turner]

I am sure that the hon. Gentleman will be rewarded for his loyalty to the Government, but as a criminal defence solicitor would he not do better just to accept that this is about making cuts? That is the reality—cutting the budget of this very important compensation scheme—and he should admit it.

[Mr Burrowes]

I am a very patient man, but this issue has dragged on too long and people’s patience has been exhausted as they have waited for some compensation from the criminal injuries compensation scheme. The reality is that the scheme cannot be afforded. Last year, the authority was provided with additional funding and a total of £449 million was paid to victims, the largest amount in a single year. Despite the cash injection, total liabilities currently stand at some £532 million. This Government will not ignore the historic underfunding of the scheme. We will not hide behind administrative efficiencies. We are facing up to this difficult issue. We want to express solidarity, but we are not jumping on the bandwagon. We cannot simply have a sustainable scheme if it has to go cap in hand to the Treasury every year asking for a top-up. That does not do justice to the cause of victims. It must be sustainable and on a stable footing. We need a decent, open and transparent way to deal with compensation.

[Sadiq Khan]

Can the hon. Gentleman confirm that Dod’s is up to date—is he still a PPS?

[Mr Burrowes]

Yes, that is the case.

[Sadiq Khan]

Thought so.

[Mr Burrowes]

Fair enough, although I am sure the right hon. Gentleman will acknowledge that all Members have a right to speak up about issues concerning victims. Opposition Members certainly do not have a monopoly on that. As the right hon. Gentleman himself mentioned, this Minister, like previous Ministers, has had to pick up the legacy from previous Governments in terms of compensation for victims. That only £30 million was paid by offenders in court-ordered compensation is not acceptable, given that the criminal injuries compensation scheme costs more than £200 million a year. Like others here, I remember going into court as a defence practitioner. After a defendant was convicted, sometimes a request would come from the court for the application for compensation but there would be nothing in the Crown Prosecution Service file. The information would not be available, and applications would just go by the board.

When a victim impact statement comes through, there is no information about the details of compensation, so they have to go down the long, laborious route of making a civil claim or pursuing criminal injuries compensation. We are saying that they should get the justice and compensation they deserve in court. As one of the architects, I encouraged that approach, and it was followed through quite properly. We now have a proper statutory duty to order compensation, not just in terms of what the Government have sought to do with the victims’ surcharge for those who have fines imposed, but in serious cases involving those who have community penalties and have served prison sentences. I remember too many clients who felt that they got away with it in the sense that there were no victims. The person who gets shut out is the victim.

We have quite properly introduced what was a legacy of the previous Government. We remember many a piece of legislation from the previous Government—one that was on the books in 1997 was the Prisoners’ Earnings Act 1996, which was not implemented by the previous Government. Why was it not implemented? Because the advice the Government apparently received from the Home Office was that they would never find the work in prisons for prisoners to do to make it viable. We are not simply going to accept that; we will make sure that offenders pay for their crime and pay when they are in prison. That is what we are doing.

Despite the cowardice of the previous Government when it came to victims of crime, we are now ensuring that £800,000 each year will go to victims of crime through court-ordered compensation. That will avoid the labyrinth of compensation schemes and avoid the concerns expressed by the hon. Member for Kingston upon Hull East (Karl Turner) about local commissioning. The compensation will go directly to victims when it is ordered, as it should be ordered, by the courts. We are picking up a legacy and that is why it is important to consider the issue in its proper context.

Not only is the victim surcharge being extended in terms of the 1996 Act and court-ordered compensation, but we are removing the £5,000 cap on orders to offenders to pay compensation in magistrates courts. I remember victims having to wait months, if not years, for the opportunity to get redress, with offenders having gone off to the Crown court. That is being changed. The cap is being removed to allow compensation in magistrates courts.

Recently, a constituent visited my surgery who was concerned because she had never received any compensation. She was the subject of a serious burglary. Months later, the offender was found, the offence was taken into consideration in a clear-up, and he went to court, but the victims were not even told so no application for compensation was made. That happens time and again. We need to ensure that offenders pay for their crime. That is what victims want. They want justice. They want redress. We recognise that the scheme has a part to play, but a contributory part. Compensation is perhaps a misnomer when we are talking about wanting to deliver justice properly. That is what we are doing. We are delivering that to ensure that £50 million—let us try and get more—goes to victims. Let us ensure that we are on the side of victims. We will not jump on a bandwagon; we will make difficult decisions to ensure that the scheme is sustainable, fair and just.

18:03

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

It is interesting to follow the hon. Member for Enfield, Southgate (Mr Burrowes), because it is clear that he does have an understanding of the historical background of the scheme. However, yet again, he has chosen to conflate the figures for the Criminal Injuries Compensation Authority, which was introduced in 1998, with the Criminal Injuries Compensation Board, the previous scheme, which was introduced by previous Governments. I attended both delegated legislation Committees on this matter, and I am here today. I have listened carefully to the financial arguments that have been put forward by those representing the Government.

It is clear that the finances of the Criminal Injuries Compensation Authority are stable—it costs just under £200 million a year. In trying to justify the proposed change—the draft scheme has still not been put before all MPs—Government Members have used historical figures from the Criminal Injuries Compensation Board, which ran the previous scheme. However, the CICB awarded far higher levels of compensation because it calculated compensation in a similar manner to civil cases. Instead of the tariff system used by the CICA, it attempted to work out the losses to the victim.

[Mr Blunt]

Whatever merit there is in the hon. Lady’s argument—I do not accept it, because I would run the two schemes together to assess the MOJ budget—she has to suggest where the money should come from if she wants to continue the scheme in the way she proposes and pay off the backlog in the previous scheme.

[Katy Clark]

I would suggest introducing progressive taxation, but perhaps we can have that debate on another occasion. We have this valuable opportunity to debate the changes that the Government have been trying to sneak through, and I will not be pushed in another direction, because we need proper scrutiny.

A number of CICB cases have been dealt with recently, which has led to additional funds being paid out, as the former Minister, the hon. Member for Reigate (Mr Blunt), is well aware. The reason for that is partly the policy under the criminal injuries compensation scheme to delay payment in many types of cases, particularly those relating to children, such as shaken-baby cases, and other cases in which people have suffered injury. The authority’s policy is to wait and see how the person recovers and what the long-term implications of the damage are.

[Jim Shannon]

The hon. Lady touches on the issue of children. Is she aware that children whose lives have been wrecked as a consequence of illicit drug taking and alcohol abuse by their mothers during pregnancy will not be able to claim? Is there not something seriously wrong there?

[Katy Clark]

The hon. Gentleman makes a powerful point. At the moment, such children are entitled to compensation, but they will not be so under the new scheme. Most people who look at the new rules will feel that again the Government are targeting the most vulnerable in order to make savings in the Justice budget, but that is definitely not the place where we should be looking for savings.

I was interested to hear what the former Minister had to say. Some of his arguments today were not put before either Committee. In the last Committee, on 1 November, Labour Members had the opportunity for the first time to elicit some detail about the £500,000 hardship fund that the Government have announced. Unlike my right hon. Friend the Member for Tooting (Sadiq Khan) on the Front Bench, I have not seen the letter sent to Conservative and Liberal Democrat Members about the fund. In reality, of course, it is a meagre fund, and, from what the Minister said in Committee, I understood that it would be focused on those who had suffered loss of earnings.

The Minister needs to outline in detail what the criteria will be for applying to that fund. Government Members seem to have suggested today that victims of dog attacks, for example, might be entitled to make an application. That information was not put before the Committee when we discussed the matter previously, yet the facts today are exactly the same as they were last Thursday. Almost half of those who currently get compensation under the scheme will no longer be entitled to it. Several hon. Members have mentioned a range of injuries that will no longer entitle someone to compensation.

The Minister’s response was that if an injury led to long-term damage, the individual concerned could qualify under a different tariff, but if they were entitled under a different tariff—the higher tariff—that is how the compensation would have been claimed in the first instance. It was a spurious point, made simply to provide some explanation of why half of those currently eligible will no longer receive any compensation. For example, those suffering from what are called needle stick injuries—that is, where somebody is stabbed—which might be sustained during their employment if they work in a hospital, normally receive the lowest amount of compensation, but they will now no longer be entitled to any. Indeed, a number of categories have simply been taken out of compensation. The hon. Member for Strangford (Jim Shannon) mentioned children who have suffered as a result of their parents’ alcohol or drug abuse, particularly by the mother. They will no longer be entitled to compensation, but in the original consultation only those who had suffered from foetal alcohol problems were affected. There has been no consultation whatever on drug abuse, which is also part of the scheme.

If Government Members decide to go ahead with the proposals, they will live to regret it. As constituents go to see them with the practical problems associated with the changes, they will come to believe that mistakes have been made. My hon. Friend the Member for Kingston upon Hull East (Karl Turner) mentioned that applicants would now have to pay £50 for their medical notes, and they will also have to obtain them physically. That will be a major problem for many people who want to claim from the scheme. Those of us who have been involved with such matters know that obtaining medical reports, hospital records and so on is not the most straightforward thing to do. Individuals will face practical difficulties in obtaining those records, particularly when they are at their most vulnerable.

The Minister has said that the new reporting requirements will have no impact on those claiming as a result of sexual abuse, particularly historic abuse. However, all the legal advice on the new definition and the more restricted requirement of reporting to the police suggests that this will be a major problem. The Minister needs to come back with more detail on that if she is seriously contending that the changes will make no difference.

Let me draw to a conclusion, because many others want to contribute. I urge Government Members to look into these changes in detail, because the more we have done so, the more concerns many of us have had.

18:12

[Nick de Bois (Enfield North) (Con)]

It is a pleasure to follow the hon. Member for North Ayrshire and Arran (Katy Clark). I listened carefully to her contribution.

Perhaps I should declare an interest. I am not a Parliamentary Private Secretary, nor have I been a shadow spokesman—

[Sadiq Khan]

Yet.

[Nick de Bois]

I thank the shadow Minister for his confidence, but I fear it will be a very long time before that happens.

I came to this debate for the same reason I sought election to the Select Committee on Justice, which was that, with no legal training or legal background whatever, I felt I could occasionally take the perspective of an ordinary citizen. It is with that in mind that I want to focus on what I think is the response of many to being a victim of crime, of which I have sadly had far too many in my constituency. From those who have come to see me, I am confident that—I am sure Members will understand this—the immediate, default position is not about compensation, but about justice and the ability to cope with the shock and emotional effect of being a victim. Of course there are different degrees of that, and some people deal with it extremely well.

One thing that has perhaps not been identified as one of the most important facets of the proposal is the victim surcharge. People look for justice and support, and I believe they think that the offender should compensate. That is true.

Early in my parliamentary career, I was fortunate enough to be able, with the support of my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), to introduce what became known—by us, anyway—as Enfield’s law. It requires that anyone aged 16 or over who uses a knife in a threatening or endangering fashion should receive a mandatory jail sentence.

Sadly, I have met too many victims of knife crime in my constituency. When they come to see me, it is not to discuss the frustrations caused by the bureaucracy of the compensation scheme but to talk about the emotional support that they need or, sometimes, the remoteness of the Crown Prosecution Service and the judicial system when dealing with prosecutions. They always speak very highly of the victim support organisations. I support the new legislation for many reasons, but the overriding one is that it will direct funds towards those all-important organisations.

I want to bring a case to the House’s attention. The two younger brothers of an Enfield resident had been abused by their grandfather for approximately 16 years. The case highlighted the shortcomings of the criminal justice system, including the lack of engagement of the victims in the process. They felt that they were left alone. Unlike the scenes that we see in television programmes such as “Law and Order”, my constituents had no contact with the CPS until the day of their Crown court appearance. They were told that any other arrangement could compromise their case. They were even told by their CPS barrister that the case would have to finish on the upcoming Friday morning as he was going on holiday the following day.

However, my constituents drew massive support from Victim Support, of which they could not speak highly enough. The charity was with them every step of the way throughout the trial. They were not concerned about compensation at that point. The problem that would have confronted them would have been the need to go through a difficult and bureaucratic process to claim it. The measures are therefore welcome; they have been undersold and understated, but they will improve the situation.

[Sadiq Khan]

Does the hon. Gentleman not accept that improving the services that victims receive and providing blameless victims with compensation are not mutually exclusive?

[Nick de Bois]

The point that I am trying to make is that there is a difficult economic context, and that we must take into account the failure of the system in the past. I want to see more effort put into raising money and directing it towards the necessary emotional and practical support. I think that it was the hon. Member for North Ayrshire and Arran who spoke about asking our constituents about this. The question of emotional support is what confronts me more and more, compared with what are, in most cases, relatively insignificant levels of compensation. To answer the right hon. Gentleman’s question, I would like the money to go in the direction of providing such support. That is why I like the idea of raising the money not from the taxpayer but from elsewhere, including from the offenders, to help to fund that vital work. If we can do anything to strengthen the victim support organisations, I will support it.

I do not want to leave the impression that all is well in this regard, however. Frankly, we do not know whether that is the case. We are embarking on a new scheme. I hope that the proposals will be seen as a living document, although perhaps not in the strictly judicial sense. I seek an assurance from the Minister that the Government will commit to a firm review period. If there are any flaws or shortcomings, the House should not be inflexible. We should be prepared to re-examine the issue in good faith and determine whether any areas need improvement. I am sure that we will hear about any such shortcomings in our constituencies, even if the Minister does not hear about them.

I want to raise a couple of technical points on which I would like clarification. Will this be a reciprocal scheme in the context of the European Union, and will it be used as such? Also, will the proposed scheme be open only to UK nationals and not to those from outside the EU, should a reciprocal agreement exist?

At the end of the day, while I may be touching on what some Members think are the slightly softer issues, I do not find anything wrong with shifting as much of the responsibility for funding compensation from the taxpayer to the offender. That is something with which I hope the whole House would agree, even if some Members would disagree over the means to do it. That is why I wholeheartedly support the reform, albeit in the hope that we will always be open to reviewing it if any shortcomings become apparent.

18:20

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to follow the hon. Member for Enfield North (Nick de Bois), who touched on a number of issues, although they were not all relevant to what we are debating today. Earlier this week, a Government Back Bencher—I cannot remember who—quoted Barack Obama’s adviser as saying

“Never let a good crisis go to waste”.

The problem we have had with this Government for two and a half years is that they have clearly decided not to let a financial crisis, the causes of which we disagree about, go to waste, as they have made all kinds of incursions into our various forms of social justice provision.

I think that Ministers must have been given a template that goes something like this: first, set up the straw man, creating so-called facts that usually run along the lines of “It’s too expensive”. The cost is exaggerated in two ways. First, one year of particularly high spending is thrown in as “normal” and then, as my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) eloquently put it, an historic scheme is mixed up with a current scheme to provide a notion that the scheme is unaffordable.

The second part of the argument is to say that the policy is flawed and targeted on the wrong people. Some Members might see where I am going with this. Those of us who have been involved in debates on various aspects of welfare reform will have heard exactly the same language being used. We are told, for example, that a benefit is “too easy to get”—even if that is not necessarily true. We have heard it all before with disability benefits, for example: they are “flawed”, “too expensive” and “targeted on the wrong people”. The Government then say that they are going to concentrate on “those in greatest need”. It always sounds quite plausible, until it is actually examined in detail.

[Stephen Lloyd (Eastbourne) (LD)]

Does the hon. Lady share my concern that people with brain injury will, under the proposals, lose 25% of their compensation? I am sure that Members will know that there is no such thing as a minor brain injury—brain injury is always significant—so does the hon. Lady share my concern?

[Sheila Gilmore]

That certainly is one of our concerns, so I hope the hon. Gentleman will vote with us in the Lobby.

We have gone through the straw man and the “concentration on the people in the greatest need” argument, although in fact many people who have very great needs are being left out. The third step that usually arises at some point in the discussion is: “We will set up a hardship fund”, which will then be presented as the answer to everything. The parallels with other legislation are apparent. We have heard it before in debates over welfare reform. A discretionary housing fund, for example, was said to be the answer to everything, so people did not need to worry. Here we have it again: the Government are going to set up a hardship fund, but it barely replaces 1% of what is actually being cut out. On top of that, the parameters of the hardship fund are vague—we still do not know what they will be—but the bottom line is that the hardship fund does not compensate for what is being taken away. That is the template within which Ministers have obviously been asked to operate, and we see it time and again. If one starts with flawed logic—a straw man that does not stand up to close examination—one comes to the wrong conclusions.

It is unfair and unreasonable to counterpoise compensation under the scheme with the setting up of good victim support services. Good victim support services are important, although many have declined as they are often funded through local government. If we can improve victim support services by taking money off criminals, that is good, but it should not be counterpoised against compensation. It should not be a question of one or the other. Nor should it be suggested as a substitute for the compensation that people have received previously. We support an increase in court-ordered compensation, but the proposal would take compensation away from people under the scheme before the availability of such money had been established. There might be success in getting more direct compensation from criminals to victims through the courts, but the people affected would not be eligible under the scheme, so the best way to save money might be through beefing up such mechanisms. However, let us do that first before we go any further. I urge those Members who have qualms about the proposed scheme to vote against it.

00:00

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

I want to speak on one narrow point of the proposal with regard to railways. I represent a railway estate in my constituency that traditionally housed railway workers and their families, and I chair the National Union of Rail, Maritime and Transport Workers parliamentary group. I have dealt with constituents who in their working lives have tried to intervene to protect passengers and in so doing have become victims of assaults, and who have been witnesses to the tragic suicides at my local station and across the country. In the past five months, my local station has seen four suicides in which an individual has stepped in front of a fast train. That has an immense traumatic impact on not just the family of the victim, but on the driver and other staff who were witnesses, and on those who deal with the aftermath of the incident.

I was, therefore, extremely concerned that the proposal, which has been considered by two delegated legislation Committees, is described by the impact assessment as

“Clarifying eligibility for the scheme and changing the scope of the scheme to no longer make payments for mental injury to those who…are employed on the railways and witness (or are involved in the aftermath) of an injury resulting directly from an offence of trespass on the railways”.

That goes back to the 1980s when we campaigned and won a recognition that there should be some form of compensation for those workers who were traumatised by the experience of suicide, largely as a result of their train hitting the victim, or seeing it from the platform. Initially, the House of Lords did not accept that suicide was within the remit of the compensation scheme, but in 1990 a Conservative Government did accept that, and so compensated those who were victims of such trauma. The proposal is, therefore, a significant step backwards, which will impact on a large number of people who suffer in such a way

My right hon. Friend the Member for Oxford East (Mr Smith) quoted one example of what had happened to a shop worker, so may I quote an example provided by the RMT of what happened to Karen Jordan, from Barnet, who has been driving trains for 10 years and has twice had her train impact with a suicide victim? The last occasion, the RMT says,

“was a routine journey but as the train rounded a bend she spotted what she thought was a tarpaulin on the track. When her train hit the object she saw a pair of shoes, socks and lower legs. Even if she had been able to apply the emergency brakes she would have been powerless to stop it hitting the man.”

The driver saw that person cut in two. She was traumatised, and experienced flashbacks and nightmares. She was eventually allowed to retire on medical grounds, but during the period concerned she was off sick. Yes, she received sickness benefits, but under the new compensation scheme arrangements she would not have satisfied the criteria for eligibility for the emergency fund for that very reason. Had the incident occurred today, she would have received no compensation whatsoever.

The loss of any form of income on any scale will have a significant impact on many workers receiving relatively low pay. According to the findings of an HSBC survey that were reported in the newspapers over the weekend, a third of all households have less than £250 in the bank, and among those in their 40s the proportion is 42%. Previously, someone who had had an accident at work and received sickness benefits, thus experiencing a significant loss of earnings, would be tided over by the £1,000 or £2,000 provided by the criminal injuries compensation scheme, and prevented from—in the words of HSBC—falling into destitution.

We will not vote on the scheme today. The formal vote may take place next week or a couple of weeks later, which means that we have time to iron out some of the anomalies. People will suffer if the scheme is accepted in its current form, and I think they will believe that the House has not protected their interests.

We are all committed to ensuring that victims are protected, and we all want to see the perpetrators pay more. What we are saying is that there are problems with the scheme that is being proposed at present, and that further discussion is needed. If it is possible for that discussion to take place on a cross-party basis, and if we can reach a consensus, let us at least attempt that before we rush this measure through and have such a severe impact on people’s lives.

18:31

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

It is an honour to follow my hon. Friend the Member for Hayes and Harlington (John McDonnell), who made a powerful speech.

Last night, as I was thinking about what I would say in the debate, I heard about someone who had been awarded €2,000 in compensation for a delay in the hearing of an appeal in the criminal court, on the basis of his pain and suffering. The award was made to a convicted killer—a man who had been convicted of murdering a young shop worker in the constituency I now represent—and it was made by the European Court of Human Rights. I do not wish to initiate a debate on that issue; I raise the case simply to illustrate why members of the public will not understand why the European Court of Human Rights deems it reasonable to award such a sum to someone who is serving a prison sentence, at a time when the House is considering cutting compensation payments for people who are victims rather than perpetrators of crime.

I have no problem with the idea of making offenders pay. Indeed, I would support anything we could do to ensure that a man who had been awarded that amount of compensation in such circumstances was immediately made to pay it into a fund to help victims of crime, and I hope that Ministers will give serious consideration to such an arrangement.

We have heard some powerful speeches today. For instance, we heard from my right hon. Friend the Member for Oxford East (Mr Smith) about a young man from Glasgow—another shop worker—who had suffered an extremely serious attack. I, too, heard the testimony of that young man. He was not out late at night, on the town; he was simply going home at lunchtime to see his young daughter, and he was the victim of a most horrific crime. He talked about flashbacks. He talked about going out in the street, and, every time he saw someone’s face, imagining that it might be the face of his assailant.

That young man’s message to us was that our job is to cut crime, not to cut compensation to victims. I cannot believe that Members who came to this place to represent their constituents, whatever their party, ever thought that they would not see it as their job to represent the interests of victims first and foremost in such circumstances. I know in my heart of hearts that there are Members on the Government Benches who believe that and who do not want to vote for these measures.

I want to continue in the spirit of my hon. Friend the Member for Hayes and Harlington, so let me stress that there is time to change this. There is time to work on a cross-party basis. We have now been through delegated legislation Committees, and we have had a chance to express our view that this is not an appropriate way forward. There have been Opposition offers to work with others, too. Let us take that opportunity. We must not send the message to the victims of crime that we do not care about or understand their pain and suffering.

On the victims of sexual abuse, there have been many warm words in the past few weeks, but I have to say that I was horrified earlier when we got no answer from the Minister to this question: in what circumstances would a child under the age of 15 who had been sexually abused not automatically be deemed eligible for compensation? I hope the Minister who responds to the debate will make it clear that all such children will be treated as victims, and that compensation will be payable. Anything else would be a disgrace.

I shall conclude in a few moments, as I genuinely want to hear what the Minister has to say. Let me comment on the cost of this scheme, however. Ministers have been at best obfuscating and at worst have, perhaps, used different figures at different times to suit their arguments. We had some clarity today from the former Minister, the hon. Member for Reigate (Mr Blunt), about the real motivation behind the scheme, however. The suggestion that because there is a backlog or legacy of cases to be dealt with, the amount of money allocated to the scheme should be cut does not make sense. The cost of the scheme has been stable over the years. The Government should ensure the legacy cases are cleared, but they should also ensure that future victims of crime do not suffer as a result of the length of time it has taken to resolve the legacy cases.

We do have time to put this right, but we must today send out the message that the entire House—not just one party or some Members—cares about the victims of crime and that it is not going to force through these measures. I know that many on the Government Benches do not agree with them. It is time that they stood up for their constituents now and in the future.

18:38

[Robert Flello (Stoke-on-Trent South) (Lab)]

Throughout the debate, we have heard a catalogue of problems and failures in respect of the scheme, as well as some cases of terrible suffering. We have heard the Minister state how important victims are to the new Justice Ministers, and we have heard about a back-of-the-envelope hardship fund that will help perhaps 1,000 innocent victims, instead of the tens of thousands of blameless victims who are being denied financial support by the cuts these same Justice Ministers are forcing through.

Very few Conservative and no Liberal Democrat Back Benchers have spoken in defence of these cuts. The architect of the scheme, the former Minister, the hon. Member for Reigate (Mr Blunt), told us that the real reason for what is happening is to make cuts, rather than to help to support victims or provide more resources. He has told us the truth today. We also heard from a Department for Environment, Food and Rural Affairs Parliamentary Private Secretary, the hon. Member for Enfield, Southgate (Mr Burrowes), and a single, solitary Tory Back Bencher. Conversely, from the Labour Benches we heard from my right hon. Friend the Member for Oxford East (Mr Smith) and my hon. Friends the Members for Kingston upon Hull East (Karl Turner), for North Ayrshire and Arran (Katy Clark), for Edinburgh East (Sheila Gilmore), for Hayes and Harlington (John McDonnell) and for Kilmarnock and Loudoun (Cathy Jamieson).

We have heard plenty of contributions about the real impact of these cuts, so let me explain simply to the House what Justice Ministers are proposing. Let us suppose a thug mugs the little old lady who lives on our street. If the thug breaks her finger, her jaw or her ribs, or puts out a cigarette on her, or if she suffers impairment to her speech from the callous battering the thug metes out—or if she endures all of those—under this scheme she will be entitled to zero criminal injuries compensation. Is that really what Government Members came into politics to do?

What happens to the have-a-go hero Dad who races out of his home to protect his son from being beaten up—or worse—by the local louts but instead finds himself on the receiving end? He may be stabbed in the ensuing scuffle and be rushed to hospital, where dedicated NHS staff save his life. When he applies for financial compensation to cover the lost wages while he has been off work, he will find that, because he has been made redundant a few times during the past three years and has had a few weeks out of work while seeking a new job, he will receive no compensation for loss of earnings from the scheme. Is that what Government Members came into this House to do?

I recall the Justice Secretary talking about the young soldier beaten up by hoodlums. What happens to serving soldier Mr Kent who suffered a fractured jaw with a single punch from a yob after a disturbance last year in York and required repeated hospital surgery? Under the Justice Secretary’s new scheme, Mr Kent would be entitled to zero financial recompense following the mindless attack he suffered—so much for the Justice Secretary’s concerns about our soldiers. Surely Government Members must be starting to realise that what Justice Ministers are doing is wrong.

What happens to the young child savaged by a neighbour’s dog? Children under the age of 10 are more likely than any other age group to suffer severe injuries after being attacked and to require plastic surgery. What happens to six-year-old Rebecca who was mauled by a dog while playing near her home in Byker, Newcastle? She was left terrified and pouring with blood. She was rushed to hospital and had surgery for wounds around her eyes, nose, cheek and mouth. Under the new scheme, irrespective of the seriousness of the injuries—even if the victim dies—there is no financial help from the scheme for victims of dog attacks, unless the dog was used deliberately. Perhaps that is what Conservative and Lib Dem Members came into politics to do.

A judge from the Criminal Injuries Compensation Tribunal has commented on the proposals, using phrases such as:

“potentially brutal and will lead to gross injustices.”

Another phrase used was:

“I confidently predict”—

that they will—

“lead to a substantial increase in challenges to decisions and gross unfairness.”

The judge has also called the proposals “astonishingly vague” and said:

“If the government believes it is saving money...it is gravely mistaken.”

Finally, the judge said that the proposals were

“perverse and grossly unfair to victims of crimes of violence.”

That is what an expert has said about the proposed new scheme.

Between the end of the year and the 2015 election, on average, in each constituency, more than 100 seriously injured victims of crime will see their criminal injuries compensation abolished or severely cut if the Government’s proposals are passed. Every MP meets, and is sympathetic to, victims of crime who have suffered. Do Government Members really want to have to explain to more than 100 seriously injured constituents and their families why their desperately needed compensation payment was targeted, as we have heard, by the Government for cuts?

Let me spend a moment dispelling any myths that might have been fostered in the minds of Government Members. We have heard that the scheme is unsustainable and unaffordable—that is untrue. The tariff scheme is sustainable and stable at current budget. The high cost in 2011-12 was for 78 victims from the pre-1996 scheme—so their cases really have to penalise 90% of future victims? The pre-tariff liabilities have been reduced to 35 cases as at 30 Sept 2012, with estimated liabilities under £100 million, and will soon be cleared. Tariff bands 1 to 5 are supposedly there to deal with minor injuries that do not need compensation—that is not the case. They are there for injuries that have a disabling effect for at least six weeks and are therefore not minor. We have heard that money will be focused on the most seriously injured—that is not the case. No victim of crime will receive a penny more from the new scheme. Many of those most seriously injured will lose out the most, because of drastic cuts to compensation for loss of earnings, the exclusion of dog attack victims and the tighter conditions on reporting and co-operating.

We have heard that £50 million will be provided by offenders for victims, but there is no link between offenders contributing more and this scheme. Government Members need to appreciate on what we will vote this evening. Will they vote to defend the defenceless—those blameless victims injured through no fault of their own —or will they vote to wipe out payments on tariffs 1 to 5, to cut loss of earnings payments and to punish children who are subjected to horrific dog attacks?

[Mr Blunt]

The shadow Minister must come back to basics. If he does not support the statutory instrument and wants the full expenditure to continue—I assume that he also wants all the other victims’ money that we are having to find—he will have to suggest what else will go. Otherwise, he will have to do the same as the hon. Member for North Ayrshire and Arran (Katy Clark), who was honest enough to say that taxes will have to go up.

[Robert Flello]

Perhaps the hon. Gentleman could explain why 90% of future victims will have to lose their compensation because of the 35 pre-1996 cases. Is he suggesting—[Interruption.] If the hon. Member for Bexleyheath and Crayford (Mr Evennett) wants me to answer, he should give me a chance to do so rather than heckling from a sedentary position.

The hon. Member for Reigate was the architect of this appalling scheme. He has confessed to the House today that it is about cuts and nothing else. We heard from him about the financial situation, and he asked where the money will come from. It is quite simple. We will work alongside the Government to look at ways to address this—[Interruption.] Will the hon. Gentleman allow me to finish? To put it quite simply, saying to some of the most innocent, blameless and hard-up members of our communities that they must dig into their pockets to pay for this is outrageous. We have heard the hon. Gentleman’s view, so let me return to what Government Members must do.

Before they vote this evening, Government Members must think carefully about whether, in good conscience, they can oppose the motion. If Members, like those on the original Committee, feel that victims of violent crime deserve better and that cutting payments to the vulnerable, injured and incapacitated is wholly unacceptable, they should be brave enough to vote with their conscience. This is a shameful scheme, hellbent on adding financial insult to injury.

We are talking not about figures and statistics but about real people who will be significantly affected by today’s decision—people in our constituencies who are seriously injured and look to us to help them through the criminal injuries compensation scheme. We heard from colleagues on the Opposition Benches that compensation for loss of earnings will be reduced from a maximum of £750 a week to just £85 a week. We heard about Frankie, who was stabbed and robbed, and about the counselling that was needed. We heard about the financial stability of the scheme. We heard about Andy Parish, a postman, and the issue of dog attacks, and we heard that victims of crime will have to find £50 of their own money to obtain medical records. Somebody who has been attacked and been out of work as a result will now have to find £50 even to start the process—incredible. The few Government Members who took part—only one of whom is not part of the payroll or had not formerly been part of the payroll—kept muddling some of the issues.

We heard Members ask where the detail of the hardship fund was. That is a good question. Where is the detail? As my hon. Friend the Member for Edinburgh East said, it all fits into the Tory template: exaggerate costs, mix the issues, use some standard language about floors and targeting and then set up a hardship fund.

In the words of Lord Dilhorne, “Sympathy is not enough.” We will work with the Government, but I urge Members from all parties to reject this appalling scheme and vote for the motion this evening. In doing so, they will send a message to Justice Ministers that paying off the deficits from the pockets of the poorest, most vulnerable and most blameless is not acceptable and not what right hon. and hon. Members came into Parliament to do.

18:48

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

I have listened with great care to the points made by hon. Members in today’s debate and I shall respond in a moment to some of them. In his opening speech my right hon. Friend the Minister for Policing and Criminal Justice set out the principal reasons for reforming the scheme. He made it clear that proper support for victims and witnesses is a very high priority for this Government.

The public expect the criminal justice system to have at its heart the interests of those who have suffered. That includes paying compensation in certain circumstances, but the question for any responsible Government is what those circumstances should be. My right hon. Friend sought to set our changes to the criminal injuries compensation scheme in the context of all the changes we are making to the support that we provide for victims and witnesses. It would be foolish to consider them in isolation. The key point that the Government want to make is that we seek broadly to maintain overall spending on victims, not to cut it, but to change its composition so that money is used more effectively.

As to the criminal injuries compensation scheme itself, there are two main problems, which were highlighted so eloquently and clearly by my hon. Friends the Members for Reigate (Mr Blunt), for Enfield, Southgate (Mr Burrowes) and for Enfield North (Nick de Bois). The first is that it is in financial difficulties. I know that Opposition Members have made much of their disagreement with us over this, swallowing whole the briefings provided by trade unions, but the fact is that the scheme does need to be put on a sustainable footing.

[Mr Andrew Smith]

Will the Minister give way?

[Mrs Grant]

The second point is that the design of the criminal injuries compensation scheme is inadequate and the policy rationale flawed. Compensation is in many cases poorly targeted, with millions of pounds spent on relatively minor claims such as sprained ankles. Worse than that, over the past decade, nearly £60 million has been paid to 19,000 claimants who were convicted criminals. So, instead of taking money from an unaffordable scheme and using it to give cash for minor injuries months or even years after the event, our plans seek to make a structural change in the nature of the help that we give to our victims.

[Mr Smith]

Will the Minister give way?

[Hon. Members]

Give way!

[Mrs Grant]

The scheme will be focused on the most serious cases involving innocent victims, reducing the burden on the taxpayer by £50 million. Linked to this, spending on victims services will be increased by a similar amount, but with the money—crucially— coming from the pockets of the criminals themselves. A major step in that direction was the implementation on 1 October of the statutory instrument giving effect to changes to the victim surcharge. The money raised from offenders will pay for more and better services for victims, providing the practical and emotional support they need. We believe as a matter of principle that that is a better response than compensation for lower-end injuries.

Reform is necessary and it will protect the criminal injuries compensation scheme in the future. I explained last week why we are making changes to the tariff of injuries. Tariff payments will, in future, be available to those most seriously affected by their injuries and those who have been victims of the most distressing crimes. The right hon. Member for Oxford East (Mr Smith) and the hon. Members for Kingston upon Hull East (Karl Turner) and for Hayes and Harlington (John McDonnell) all raised concerns about the tariff. I know they will not be persuaded by our removal of bands 1 to 5 or the graduated reduction we have made to bands 6 to 12, but the rationale does, notwithstanding their assertions, stack up. It is wholly consistent with our policy of focusing on those most seriously affected by their injuries—

[Katy Clark]

Will the Minister give way?

[Mrs Grant]

A policy that not only sees bands 13 to 25 protected in their entirety, but sees awards for sexual offences and patterns of abuse protected at their existing levels, wherever they currently appear in the tariff.

[Hon. Members]

Give way!

[Mrs Grant]

The hon. Members for Strangford (Jim Shannon) and for Kilmarnock and Loudoun (Cathy Jamieson) raised the issue of late reporting in these cases, but I can confirm that the new discretion introduced into the scheme—

[John McDonnell]

On a point of order, Mr Speaker.

[Mr Speaker]

I hope that it is a point of order, not a point of frustration.

[John McDonnell]

It is a point of order. The Minister for Policing and Criminal Justice referred earlier in the debate to a letter being circulated about the compensation scheme relating to the legislative proposal, but it was circulated only to Conservative Members and not to Opposition Members. Therefore, we want at least either to see the letter or to have the Minister explain it to us. That is why Members are seeking to intervene.

[Mr Speaker]

I am grateful to the hon. Gentleman, but I do not think that engages the Chair. The point has been put on the record, but the Minister will wish to continue her speech.

[Mrs Grant]

In the Delegated Legislation Committee last week, I said that, although we saw no merit in making further changes to the scheme, we were nevertheless persuaded that something ought to be done for certain low earners who were temporarily unable to work due to their injuries and who would no longer fall within the scheme. I announced a hardship fund that aims to meet a pressing need for people who might well find themselves in real financial difficulty.

Opposition members of the Committee were critical of the lack of detail I provided on that occasion. However, the Minister for Policing and Criminal Justice provided details today in his opening speech, and it is a great shame that the shadow Secretary of State, the hon. Member for Stoke-on-Trent South (Robert Flello) and the hon. Member for Edinburgh East (Sheila Gilmore) seem unable to acknowledge the fairness and decency of the fund and recognise that it will help some of the very poorest people in our country.

[Sadiq Khan]

Will the Minister give way?

[Mrs Grant]

No. I have been very generous in taking interventions in three debates so far, so I will make my points and will not waste any more time.

Moving on, we have defined eligibility for the scheme more tightly so that only the direct and blameless victims of crime who fully co-operate with the criminal justice process obtain compensation under the scheme. That is surely right. Those with unspent convictions will not be able to claim if they have been sentenced to a community order or been imprisoned, and those with other unspent convictions will be able to receive an award of compensation only in exceptional circumstances. Not only that, but applicants will need to be able to demonstrate a connection to the UK through residency or other connections.

The hon. Member for North Ayrshire and Arran (Katy Clark) and many others have been critical of our approach to dangerous dogs, because in future the Criminal Injuries Compensation Authority will pay only where the dog was set upon the victim by its owner. A similar approach already applies to injuries caused by motor vehicles; in order for the applicant to be eligible, a car has to have been deliberately driven at him or her. Contrary to our critics’ assertions, that will not have much of an impact on claimants because awards for dog attacks are few. That said, aggressive dogs of course present a serious and growing problem, which is why the Government are active in that area, with work going on at the Home Office, the Department for Environment, Food and Rural Affairs and elsewhere.

The last major element of the scheme is special expenses. As is consistent with our policy of focusing payments on the most seriously affected, we have retained the vast majority of those payments in their entirety. However, we have made it clear that the scheme should be one of last resort in relation to special expenses and that payments will be made only if the claim is reasonable.

Finally, we have made some changes to the process of applying for compensation in order to make the scheme easier for applicants to understand. For the first time, for example, the evidence required to make a claim is being included in the scheme, which is a simple but plainly very helpful change. The Government believe that the draft criminal injuries compensation scheme provides a coherent and fair way of focusing payments towards those seriously—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

18:59

Division 97

Ayes: 209

---

Labour: 204
Plaid Cymru: 2
Democratic Unionist Party: 2
Social Democratic & Labour Party: 1
Independent: 1

Noes: 289

---

Conservative: 248
Liberal Democrat: 40

Business without Debate

Wednesday 7th November 2012 Commons Chamber

Delegated Legislation

Question put.

Social Security

That the draft Benefit Cap (Housing Benefit) Regulations 2012, which were laid before this House on 16 July, be approved.—(Mr Swayne.)

Madam Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 21 November (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Children and Young Persons

That the draft Protection of Freedoms Act 2012 (Disclosure and Barring Service Transfer of Functions) Order 2012, which was laid before this House on 15 October, be approved.—(Mr Swayne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Church of England (general Synod) (measures)

That the Church of England Marriage (Amendment) Measure (HC 671), passed by the General Synod of the Church of England, be presented to Her Majesty for Her Royal Assent in the form in which the said Measure was laid before Parliament. —(Sir Tony Baldry.)

Question agreed to.

Ridge Fire Station (Hastings)

Wednesday 7th November 2012 Commons Chamber

11:30

[Amber Rudd (Hastings and Rye) (Con)]

I wish to submit a petition on behalf of the residents of Hastings and Rye, collected by me, other local residents and the campaigner Phil Bailey. There are more than 5,000 signatories.

The petition states:

The Petition of residents of Hastings and Rye and the East Sussex area,

Declares that the recommendations put forward for local consultation by the East Sussex Fire and Rescue Authority to downgrade the service at The Ridge Fire Station in Hastings will have a negative effect on response times, and could therefore put the lives of local residents at risk.

The Petitioners therefore request that the House of Commons urges the Department for Local Government and Communities to support local residents in opposing the recommendations made by the East Sussex Fire and Rescue Authority and contained within the Hastings Review.

And the Petitioners remain, etc.

[P001129]

Planning and Localism

Wednesday 7th November 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Swayne.)

19:17

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

I am most grateful to the House for granting this debate. A commitment to localism was at the heart of the Conservative campaign in 2010, so much so that the Conservative party manifesto was entitled “Invitation to Join the Government of Britain”. Our meaning was clear: in government, Conservatives would trust local people to make decisions about the things that mattered in their communities.

In the manifesto section on planning, we promised specifically that

“people in each neighbourhood will be able to”

choose

“what kind of development they want”;

that

“new housing estates, will have to be designed through a collaborative process”;

and that planning inspectors with no stake in the decision will no longer be able to rewrite local plans. Like many of my colleagues, I stood in village hall after village hall and sold that vision of a better politics.

Why is localism important? It is important because the closer the decision is to the people whom it affects, the better it will be. Why? That is because of accountability. If I or my councillors make a decision, we know we can be held accountable, not only at the ballot box but in the street. My constituents will see me at surgeries and the supermarket, or perhaps enjoying a glass of orange juice in one of Stratford’s very fine public houses. If they do not like a decision, they can stop me and tell me why. Therein lies the strength of British democracy. We came into government because we wanted to undo the damage wrought by arbitrary target setting, anonymous officialdom and centralised control. We came into government to do away with the dictatorship of the clipboard-wielding jobsworth, yet time and again Members of the House and the people of this country have been let down by localism.

We had just such a decision last week in my constituency—the Secretary of State’s decision to endorse an inspector’s report on 24 October approving 800 new units on greenfield land on the edge of the town of Stratford-on-Avon. In a single stroke, the decision shattered my constituents’ belief in the Government’s commitment to localism. It grants permission for a village-sized development to be welded to the edge of this important, historic town and to build a new link road directly behind the cottage in which William Shakespeare’s wife grew up, which is a significant tourist attraction. Anne Hathaway’s house is a grade I listed building, it has a registered listed park and garden, and is the location of Shakespeare’s second-best bed, an item he famously bequeathed to his wife in his will. History is silent, of course, on who got the best bed. Anne Hathaway’s cottage is an integral part of the Shakespeare story, which itself is an integral part of the story of our island, our culture and our language. It is no less a piece of this country’s heritage than

“The cloud-capped towers, the gorgeous palaces, the solemn temples”

of this nation’s capital. Anne Hathaway’s cottage has survived the English Reformation, the civil war, the industrial revolution and even 13 years of Labour. The question for my constituents is whether it will survive the careless stroke of a planning inspector’s pen.

This is not about a modest conservatory extension to Anne Hathaway’s cottage. It is a decision that will create a permanent scar on the landscape, breach a historic town’s boundary and begin an urban sprawl into what are currently open fields. In the planning inspector’s own words, there will be “harm” to Anne Hathaway’s cottage and, moreover,

“a degree of adverse effect on tourist numbers cannot be ruled out.”

Some, such as my hon. Friend the Minister, might say that opposition to this development is just nimbyism, but they would be plain wrong. Stratford district council is doing the right thing. It knows that the area needs more housing. It has already planned for an increase of 15.6% in housing numbers. That is 500 more homes than the regional spatial strategy demanded and makes a total figure of 8,000 new homes in a relatively small district. What it had not planned for, however, is 10% of the 8,000 total being placed in one wholly unsuitable location.

In effect, this decision was a test case—the old system of centrally imposed targets and top-down decision making versus bottom-up planning and locally determined, evidence-based housing targets. There are no prizes for guessing on which side a planning inspector, an individual whose very existence relies on the top-down approach, came down. It is, however, deeply disappointing that a Secretary of State who has been so keen on promoting localism chose simply to rubber-stamp this decision and accept its flawed logic. Despite the inspector’s view, if we subscribe to localism there is no question about a five-year land supply in the district. There has never been any suggestion that this land, adjacent to a historic property and on the special landscape of Bordon hill, would ever be considered acceptable for development.

I am sure that my hon. Friend the Minister will tell me that as the council’s local plan review contains the land west of Shottery, it has, as the inspector put it,

“accepted that the harm created was acceptable”.

However, if that is the case then the Minister, like the inspector has failed to recognise that the land was only included as a result of a top-down imposition. The location in question was introduced by a planning inspector in 2005, following an examination of the local plan review. When the council voted to reject its inclusion it was told by the inspectorate that it would have no adopted plan unless it was included. So in 2005 an inspector overrode the wishes of elected members and rewrote the local plan. In 2010, we promised that inspectors would no longer have that power, but two years later this Government used the land’s inclusion by a bureaucrat, against the wishes of elected members seven years ago, to override a locally determined decision that was in line with locally determined emerging policy.

Thanks to this decision, Stratford district has again found that an inspector has effectively rewritten its local plan, imposing an increased housing target that is over and above that defined in both the local plan review and the draft core strategy. According to the inspector, the council’s housing target must now be between 11,000 and 12,000 houses, a 25% increase over current numbers. Thanks to the continued power of an unelected inspector’s recommendation, the council’s chance of having that figure overturned, regardless of its evidence base, is slim, and it is now having to re-do much of its core strategy weeks before it was due to be submitted. This is not the localism that we were promised.

Again, I am sure that my hon. Friend the Minister will have an answer. He no doubt buys into the inspector’s view that there is no evidence for the council’s 8,000 figure, but the very same evidence report that the inspector references for the arbitrary 11,000 to 12,000 figure also provided evidence for the 8,000 figure, stating that a figure in this range has “the least environmental impact” and—importantly—is

“the option likely to do the most to preserve the character of the District.”

That character is relied on heavily for the tourism trade on which Stratford so depends.

The alternatives that the council’s independent consultants put forward were described in their report as scenarios in which

“the environmental impact is high”

or

“the impact on the district’s character is hard to judge”.

However, that would certainly be “higher” than if the council adopted a target in the lower 8,000 range.

The inspector wrongly declared that officers had recommended a figure of between 11,000 and 12,000, but that only happened in the dreams of the developers, not in real life. Even if it had, of what importance would it be? It should be elected representatives who make policy decisions, not unelected officials. Otherwise, we might as well do away with councillors, and, by the same thinking, Secretaries of State, in favour of letting the bureaucracy at the centre run the country. That is the central issue here. Either we believe in localism and trust the people to make the right decision, or we do not.

That is not to say that localism is easy. Not every local plan will succeed. Some will undoubtedly fail, but central Government cannot have it both ways. Either we believe in the capacity of local people to make good decisions about the future of their communities, or we admit that localism was just a vote-winning slogan and that people cannot be trusted. I believe, however, that we are quick learners. If one area is making decisions that benefit it significantly more, then similar decisions elsewhere will not be far behind. That is basic human nature and that is why localism, given a chance, will work.

I am extremely grateful that my right hon. Friend the Secretary of State has stayed to listen to my speech, and I am hopeful that the planning Minister will stand up and revoke his decision and allow the people of Stratford to have their choice. If he does not, however, I would like him to answer some specific questions. When will the west midlands regional spatial strategy be revoked? How does he defend his use of an outdated local plan review to justify housing being approved on a site when elected members expressly voted against the site in question, only to be told by an inspector rewriting their local plan that it must be included? When was the decision on Shottery made? If it was made in late October, how can this decision, which rewrites the housing numbers, not be premature in the face of a local plan that was to be submitted less than a month later? If it was made earlier, when the core strategy was, in the words of the inspector,

“at a relatively early stage”

rather than weeks away from submission, why was it not announced then?

How can the Secretary of State defend the newly imposed figure of 11,000 to 12,000 houses when there is, in the council’s view, no more evidence base provided for that figure than the 8,000 figure put forward by the council? How can the Minister defend an inspector effectively rewriting a local plan when we expressly promised that that would no longer be the case? Finally, what is his answer to those who say that this kind of decision sets a precedent for the next tranche of localism, namely police and crime commissioners, and suggests that if the centre deems fit, it will simply overrule any local decision?

19:28

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

I congratulate my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) on securing the debate on a subject of such great importance to his constituents. He is not just my hon. Friend, but I hope, even after the strength of feeling that he has expressed tonight, my friend—and he is not just my friend, but one of the great talents and one of the most effective constituency representatives to be elected alongside me in 2010. Madam Deputy Speaker, I am sure you remember—I certainly do—his speech in May when he moved the Loyal Address. The whole House was moved when he talked of his family arriving in Britain with £50 in their pockets, refugees from tyranny in Iraq. He talked of his pride in representing Stratford-on-Avon, one of England’s most beautiful and historic towns. He paid tribute to another self-taught, self-made and self-created man: William Shakespeare, in my view the greatest Englishman who has ever lived.

I can understand my hon. Friend’s determination to protect Stratford-on-Avon from inappropriate development and his disappointment at this recent planning decision. I hope that he will appreciate that I cannot comment on the details of the decision, because it is still open to legal challenge by the authority or, indeed, anyone else. It would be wrong for a judge to comment on his or her court judgments, and in this capacity the Secretary of State acts in a quasi-judicial role. The reasons are set out fully in the decision letter.

I would like to reassure my hon. Friend about the Government’s commitment to localism in planning, while also illuminating the responsibilities, as well as the powers, that localism entails. The last Government believed that they could solve Britain’s long-standing and severe housing crisis through regional spatial strategies and centrally imposed housing targets. Whatever the merits of the original concept, the facts are clear: they failed miserably. They infuriated local communities, such as Stratford-on-Avon and many others, and infuriated and undermined the councils that represented them. Those councils, quite understandably, responded by dragging their feet in making plans and doing their best to challenge and evade those regional housing targets.

What was the result for house building? It stalled during an economic boom, so when this Government came into office, we embarked on a different approach. We decided to give local authorities, representing local communities, the power to plan and the responsibility to provide housing to meet housing need in their areas. We encouraged them to adopt local plans, and communities —those that wanted to—to adopt neighbourhood plans to reflect local views about how their places should develop. We also decided that regional strategies would go.

We are trying to make as much progress as we can, within the law, to get rid of those regional strategies, but thanks to our old friend, the EU directive, this has taken longer and been more painful than we had hoped. But we are making good progress. Today we published the consultation on the strategic environmental assessment of the north-east plan, which means that we have now published consultation papers on five of the outstanding plans, and we hope to be able to respond to the consultation and all the comments it attracts shortly—and by that I mean months not years. We are making progress and there is light at the end of the tunnel, although we all wish that we had reached the end sooner.

I could take the easy way out and blame the Shottery decision entirely on the regional spatial strategy—that nasty hangover from a dictatorial Government—but it would not be wholly honest to do so. The regional spatial strategies came up with numbers for a region’s objectively assessed housing need. Local plans need to determine equally objectively assessed local housing need in a local authority area. I want to help local authorities, not just in Stratford-on-Avon, but elsewhere, to understand both the powers and the responsibilities enshrined in the national planning policy framework, so that they can equip themselves to prevent such decisions in future.

England has a chronic and severe housing shortage, and we will fail the next generation of hard-working people if we do not build more homes for them to raise their families in. The national planning policy framework is therefore clear that councils must estimate their housing need based on an objective assessment of all available evidence and identify five years’ supply of deliverable, developable sites.

If an authority has an up-to-date local plan, with identified sites to meet five years of objectively assessed need, it has all the powers it needs to resist speculative applications for development on sites that lie outside the local plan. Such an authority need fear nothing from the Planning Inspectorate or even clipboard jobsworths such as me. However, if an authority does not have a plan or even a draft plan that contains an objective assessment of housing need and identifies five years of developable, deliverable sites, it runs the risk of its decisions being overturned on appeal, as happened in the case of Shottery. I know that Stratford-on-Avon has been working on a draft plan and has commissioned a housing options study to inform it. I welcome that, but the regrettable truth is that rates of housing supply in the district of Stratford-on-Avon have been lower than those in Warwickshire and England as a whole. Like many authorities, therefore, Stratford-on-Avon still has much work to do.

The good news is that the Government’s approach of devolving power and responsibility to local authorities is working. Forty-eight local plans have been adopted since May 2011, and 65% of councils have published a plan for public consultation. We also have 100 neighbourhood plans up and running, and we are supporting more than 200 communities to take control of the future shape of their towns and villages. I am delighted that Stratford-on-Avon’s neighbourhood plan is making progress, and I would like to offer my hon. Friend all my support and that of my officials to help to achieve the truly local control of planning that he and his constituents seek. I know that the answer I have been able to give this evening will not satisfy him or his constituents fully, but I hope that he and they understand that this Government have put in place that power and responsibility, which will enable the people of Stratford-on-Avon to take control of their town and preserve it for many generations to come.

Question put and agreed to.

19:37

House adjourned.