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Heidi Alexander (Lewisham East) (Lab)
1. What the maximum regulated rail fare rise was in January 2013.
The Secretary of State for Transport (Mr Patrick McLoughlin)
The average increase in regulated fares was 4.2%. An extremely small number of fares will have risen by 9.2%, but those will have been offset by reductions elsewhere. The “5% flex” policy was introduced by the previous Government.
Heidi Alexander
Commuters using Hither Green station in my constituency have seen their annual season ticket rise in the past two years from £856 to £944, yet overcrowding on routes into London remains horrendous. What guarantee can the Secretary of State give my constituents that this time next year overcrowding will be less and that there will not be huge profits going to train operating companies?
Mr McLoughlin
One of the problems we face is that there is a huge demand and we have seen huge increases in the number of people using the railways. Matching that, the Government are pulling in huge investment. We have set out our plans for 2014 to 2019, as has Network Rail, which published its plans last week. I understand the concerns of the hon. Lady’s constituents, but I have to say that a lot of work needs to be done on investment.
Sir Alan Haselhurst (Saffron Walden) (Con)
If I am pressing my right hon. Friend, as indeed I am, to invest more in track capacity on the West Anglia line and to ensure that there is a purchase of new rolling stock soon, do I assist my constituents if at the same time on their behalf I ask him to peg fares, or even reduce them?
Mr McLoughlin
I am grateful to my right hon. Friend. I met him this week and he made the case very strongly for extra and faster capacity for his constituents in the feed-in to Liverpool Street. He highlights the exact dilemma: people want extra investment and it has to be paid for. The Government are prepared to subsidise the railways and are doing so, but the passenger also has to pay for extra capacity and new trains.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
Many of my constituents, whether they are using local or cross-border services on the west coast main line, are frequently confused by the times at which they can use their tickets. Would it not be a sensible step to print on the tickets the precise time when they can be used, so that we end confusion and people do not end up paying fines?
Mr McLoughlin
In some cases, those times are printed on pre-booked tickets. We are conducting a fares review, and I would like to see a much simpler ticket operating system so that people understand the fares they are being charged. The review is due to report in May, and that is one of the points I am looking at.
Sir Roger Gale (North Thanet) (Con)
The franchise agreement imposed by the previous Labour Government has meant that my constituents travelling from North Thanet have faced year-on-year increases way and above the average level. It now costs a huge sum of money to travel to London from Kent. It is an appalling service. Will my right hon. Friend seek to ensure that Railtrack and Southeastern now deliver what my constituents are paying for?
Mr McLoughlin
I have met with my hon. Friend to discuss the service in his constituency and in the rest of Kent. He has made a number of points that I will be discussing with Network Rail in due course.
Lilian Greenwood (Nottingham South) (Lab)
Very straightforward: will the Secretary of State categorically rule out “super peak” fares? A simple answer will do: yes or no.
Mr McLoughlin
As I said, the Department is undertaking a review of fares. That is not to look at a way of making fares more expensive, but to ensure that people understand how fares are delivered.
Mr Ben Bradshaw (Exeter) (Lab)
2. What discussions he has had with Network Rail on improving the flood resilience of the south-west rail network.
The Secretary of State for Transport (Mr Patrick McLoughlin)
I had a number of conversations with Network Rail throughout December about improving the flood resilience of the south-west rail network. I also visited works on the west coast main line on new year’s eve, where I was able to discuss the issue in person with David Higgins, Network Rail’s chief executive.
Mr Bradshaw
I thank the Secretary of State for that reply. Between the end of November and the end of December, Devon and Cornwall were effectively cut off from the rest of the country by rail for two periods lasting more than a week each. That is not acceptable for rail travellers or our economy. Will he impress on Network Rail the absolutely urgency of tackling the problem at Cowley bridge in Exeter, which is the cause of most of the problems?
Mr McLoughlin
The situation that people in the south-west faced over that period was unacceptable. It was the result of weather that we do not see often. I have talked to many Members who have made representations to me on that, and I have asked Network Rail to give a briefing to Members from those areas. That will take place in early February, and I hope that the right hon. Gentleman will attend.
Neil Parish (Tiverton and Honiton) (Con)
Further to the point by the right hon. Member for Exeter (Mr Bradshaw), the Tiverton to Exeter line is extremely low and will be affected by flooding not only this year, but in future years. A substantial job needs to be done on that particular track of rail, so I urge the Secretary of State to do as much as he can to get Network Rail to put a package in place.
Mr McLoughlin
I accept what my hon. Friend says and I hope that he will come to the meeting I am organising with Network Rail, which I will also attend. I am trying to break it into regions in the parts of the area served so that Members can discuss their concerns directly with Network Rail.
Mr Adrian Sanders (Torbay) (LD)
There are two other important areas within the south-west that raise potential problems for the resilience of rail services. One is the rail line between Exeter and Honiton, which also floods, but most crucially there is the coastal route between Exeter and Newton Abbot, which for decades has required a great deal of maintenance. We want certainty about the future of the resilience of our rail services in the south-west.
Mr McLoughlin
The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), and I are aware of the problems affecting the hon. Gentleman’s constituents and the area he represents. As I said, at the meeting with Network Rail, we will be able to discuss in detail all the problems that Members are facing and—I hope—come to some solutions.
Mr David Crausby (Bolton North East) (Lab)
3. What his latest estimate is of the cost to the public purse of cancelling the award of the west coast main line franchise; and if he will make a statement.
The Secretary of State for Transport (Mr Patrick McLoughlin)
I have stated that bidders will be remunerated in full for the reasonable costs of putting together and submitting their bids. As I reported to the Transport Committee on 10 January, I expect that figure to be in the region of £45 million.
Mr Crausby
I come from the world of industrial manufacturing, where incompetent mistakes get someone the sack. It occurs to me that in this Government no one gets the blame, while hard-working, travelling members of the public pay the price for the mistake through higher rail fares. Will the Secretary of State tell me exactly which Minister, if any, will take responsibility for his Government’s humiliation in this affair?
Mr McLoughlin
I think I have been very open with the House. I have made two or three statements to it about the incident involving the west coast main line, and I have commissioned two reports that have broadly been welcomed, I think, by the House. Both those who wrote the reports have given evidence to the Transport Committee, during which, Sam Laidlaw, who wrote the report on what went wrong in the Department, said that Ministers were not made aware.
Charlie Elphicke (Dover) (Con)
I thank the Secretary of State for being so open with the House about this matter. It is an issue not just about the cost to the public purse, but about the potential for franchises to be delayed. In my constituency in Deal, we want a hard-won commuting high-speed service to be made an all-day high-speed service. Will he tell us what the impact of the delay might be?
Mr McLoughlin
As I said, two reports were conducted, one by Sam Laidlaw and the other by Richard Brown. I published the latter last week, and in the near future will make a statement to the House about how I intend to implement Mr Brown’s recommendations.
Mr Speaker
As the Clerk has very originally observed, the Secretary of State has brought the matter back on track. We are grateful to him.
Maria Eagle (Garston and Halewood) (Lab)
The Laidlaw report is clear about where the blame lies for the west coast franchise fiasco—it was Ministers who decided to carry out a botched reorganisation of the Department that left no one in charge of rail, cut one third of the Department’s staff and axed external audits of procurement. Is it not a disgrace that with the well over £45 million of taxpayers’ money that the Secretary of State admits down the drain, every single one of those responsible Ministers is either still in the Cabinet or has been promoted to it?
Mr McLoughlin
There are many ways in which one can read the report. The hon. Lady means to put her interpretation on it, and whatever I say will not change that interpretation. It is quite clear in the report that Ministers were not made aware of some of the problems, and if they had been referred up, different actions could have been taken.
Maria Eagle
If the Secretary of State will not accept what Laidlaw says about ministerial responsibility, perhaps he will accept the verdict of the Brown review, which is also clear about where the blame lies. It was the mistaken decision by Ministers to move to longer franchises as the rule, not the exception, and experiment with this risky new policy on the most complex franchise route. Instead of repeatedly blaming civil servants, who cannot answer back, when will Ministers finally take responsibility for this staggering waste of taxpayers’ money?
Mr McLoughlin
I think I have been very open with the House, and I have also commissioned inquiries. Initially the hon. Lady questioned their independence. I am glad that she is now happy to abide by those reports, which were clear that, had Ministers been warned, different actions could have been taken, which is exactly what the permanent secretary said before the Select Committee on Transport.
Chris Williamson (Derby North) (Lab)
4. What recent progress he has made on the Thameslink and Crossrail rolling stock contracts; and if he will make a statement.
The Minister of State, Department for Transport (Mr Simon Burns)
We aim to reach financial close on the Thameslink rolling stock contract early this year. The Crossrail rolling stock procurement is a live procurement exercise being run by Crossrail Ltd. It is due to announce the de-selection to two bidders in spring this year, with contract award expected in spring 2014.
Chris Williamson
The Chancellor says it is essential to cut unnecessary public expenditure, but the review of the inter-city express programme by Sir Andrew Foster shows that the Thameslink rolling stock programme will cost hundreds of millions of pounds more than necessary. How can the Transport Secretary justify wasting British taxpayers’ money to create highly skilled manufacturing jobs in Germany when he could have re-run the procurement process in a matter of months, with a tender process that better ensured that this massive investment of taxpayers’ money led to manufacturing jobs in Britain? I am worried that the same thing is going to happen with—
Mr Speaker
Order. We are grateful to the hon. Gentleman; we have got the gist of it.
Pauline Latham (Mid Derbyshire) (Con)
I welcome the Government’s recent announcement on new trains for the Southern railway franchise. Can the Minister confirm what this will mean for workers in Derbyshire?
Mr Burns
I am extremely grateful to my hon. Friend. I pay tribute to her for the work she has done on behalf of her constituents and Bombardier. The announcement before Christmas is extremely good news for Bombardier. I also know that, like me, she will be pleased that Bombardier is among the suppliers who have bid for the new Crossrail rolling stock order. Southern Rail has commenced a competitive procurement process for 116 rolling stock vehicles, with an option for a further 140 at a later date. Train manufacturers, including Bombardier, are bidding for that as well.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Siemens was announced as the preferred bidder for Thameslink rolling stock in June 2011. The contract has still not been completed. One of the consequences is a delay in the cascading of rolling stock from Thameslink to the north. When will that cascading now take place?
Mr Burns
I accept that there have been delays. A part of that is because this is a complex procurement process, and it obviously has to be done correctly and within the rules. In direct answer to the hon. Lady’s question, we expect the Thameslink contract to be finalised by the spring of this year, so that things can then move forward.
Sir Bob Russell (Colchester) (LD)
5. What recent assessment he has made of the potential to increase the capacity of the railway network between Colchester and London.
The Minister of State, Department for Transport (Mr Simon Burns)
The Department has reviewed where capacity is required on the line between Colchester and London. We are also considering what capacity might be required in the period beyond 2019. There are plans to improve the rail service on the line between Colchester and London by providing additional infrastructure in the Chelmsford area, with a new station, possibly at Beaulieu Park, and possibly by increasing the speed of the line.
Sir Bob Russell
I welcome that answer. I also welcome the fact that the Government are making a record national investment in our rail network, but there is a feeling along the whole of the Greater Anglia line that there has been some neglect. Will the Minister give the House an assurance, in advance of the major investment, that in the meantime one or more passing loops will be provided?
Mr Burns
We are determined, through record levels of infrastructure investment, to improve the quality of journeys for passengers. As someone who uses that line, however, I accept that there is room for improvement, and that has been ongoing. We have seen a total upgrading of the track, we are seeing an ongoing process of replacing the overhead cables, and stations are being refurbished, but more has to be done, and that will happen.
Nicola Blackwood (Oxford West and Abingdon) (Con)
6. What progress he has made on reducing bottlenecks in the road network.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
In the 2010 spending review, the Government committed £168 million for small schemes on the strategic road network. In the 2011 autumn statement, we introduced a new pinch point fund of £217 million to address the hot spots on the network. We have committed £188 million of that to deliver 65 schemes so far. In the 2012 autumn statement, that was increased to £317 million for the strategic road network, and a new £170 million pinch point fund was established for local authorities.
Nicola Blackwood
I thank the Minister for his answer, but the A34 in my constituency is still plagued by congestion and accidents. That causes daily misery for commuters on a personal level, and it also has a debilitating effect on the local economy. If the work force are stuck in gridlocked traffic, they are simply not being productive. Will the Minister come to Oxford West and Abingdon to meet local community and business leaders to hear their concerns at first hand?
Stephen Hammond
Like my hon. Friend, I recognise that the A34 is an important, busy and strategic route. We are developing route-based strategies as a key mechanism to inform what is needed on such routes. As she says, the ability to work with the local economic partnership and to look at the benefits to the local economy are key assessment criteria. I look forward to visiting her constituency.
Ian Austin (Dudley North) (Lab)
The House, and the whole country, will agree that one of the ways of reducing bottlenecks on the roads is to get more people on to bikes. When Ministers in the Department for Transport and the Department for Communities and Local Government consider new road schemes and other major urban developments, why cannot they agree to British Cycling’s request that the impact on cyclists should be considered at the outset of all such schemes, rather than being treated as an add-on later? If that were to happen, we could avoid problems such as those at Bow roundabout and Vauxhall Cross, which have had to be put right later at enormous cost.
Stephen Hammond
I am aware that the hon. Gentleman is a keen cyclist and vice-chairman of the all-party parliamentary group on cycling—
Stephen Hammond
I am sorry—co-chairman of the group. I look forward to seeing its report, which I am sure will cover a number of those issues. He will be aware that we have committed a local sustainable transport fund of £650 million, and a number of the schemes being developed under that have exactly the cycling element that he is asking for.
Martin Vickers (Cleethorpes) (Con)
I welcome the Secretary of State’s recent announcement on the improvement of the A160 into Immingham docks. The next part of the network that needs improving to provide access to the Humber bank ports and industrial areas is the A15 between Lincoln and Scunthorpe, which is in urgent need of dualling. Will my hon. Friend agree to meet a delegation of Members from the appropriate constituencies to discuss the matter?
Stephen Hammond
I would be delighted to accept my hon. Friend’s request. I have been meeting a number of Members and groups from their constituencies to discuss the possibility of their qualifying for route-based strategies, and I look forward to talking to him about this matter.
Kevin Brennan (Cardiff West) (Lab)
7. What recent assessment he has made of the potential benefits of electrification of railway lines into Wales.
The Minister of State, Department for Transport (Mr Simon Burns)
The Welsh valley lines to Cardiff and the Great Western main line from London to Cardiff, Bridgend and Swansea will be electrified. Electrification will deliver trains that are cleaner, quieter, faster, and cheaper to operate, with more capacity for passengers. It will help to create jobs and boost growth across south Wales.
Kevin Brennan (Cardiff West) (Lab)
The Government were right not to scrap the last Labour Government’s plans for electrification. What work is the Minister doing now, in conjunction with the Welsh Government, to ensure that the Welsh economy gains the maximum economic benefit from this investment?
Mr Burns
I congratulate the hon. Gentleman on his rewriting of history and on his seeking to take the credit for what this Government have done in deciding to increase electrification. I can tell him that we are in close contact with the Welsh Government, because we are determined to help stimulate the regeneration of the Welsh valleys and the connectivity between London, Cardiff, Bridgend and Swansea. That is why we are investing this money to improve the communications. We will ensure that the deadlines laid down for this to come into operation will be met.
Stephen Mosley (City of Chester) (Con)
8. What recent progress his Department has made on securing an operator for the west coast main line franchise.
The Secretary of State for Transport (Mr Patrick McLoughlin)
Since the cancellation of the west coast competition, the Department has negotiated an agreement for Virgin Trains to continue running the service for up to 23 months until November 2014. This will be followed by a long-term contract.
Stephen Mosley
My right hon. Friend will be pleased to hear from a regular west coast main line user that, so far, the interim service seems to be of high reliability and quality. During the original bidding process, both Virgin and First Group promised substantial longer-term improvements to the west coast main line service. Will the Secretary of State encourage future bidders to be similarly ambitious?
Mr McLoughlin
I assure my hon. Friend that I am grateful for his update on the service he is receiving and pleased to hear about the satisfaction he and his constituents are getting from it. We are always looking for improvements. I hope that when we come to negotiate the next longer-term contracts, a number of improvements will be included in them, but I also hope to see some improvement on this particular line before 2014.
Bill Esterson (Sefton Central) (Lab)
What lessons will the Secretary of State apply to the west coast franchise from the experience of the not-for-profit east coast main line, not least in respect of the return of a £190 million dividend to taxpayers?
Mr McLoughlin
I am always looking to learn lessons from everything that happens on the railways. I believe that the private sector has brought tremendous growth of passenger numbers and improvements in services on the railways. Like the last Government, I am committed to seeing the east coast main line offered to franchise as well.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
9. What steps he is taking to accelerate major road-building projects.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
The Highways Agency is undertaking pilot schemes to demonstrate how four major road schemes can be delivered more quickly. So far, these have been accelerated by 18 and 21 months. We have achieved this by making widespread changes to the planning, design and construction regime.
Eric Ollerenshaw
I thank the Minister for that reply. I understand that the planning inspectorate’s report on the possible M6 link road to Heysham port around Lancaster may be on the Minister’s desk. Given that the plans for that were first sketched out in 1948, could somebody speed things up a little bit, as this will be a vital route for Lancaster, the north-west and indeed Northern Ireland?
Stephen Hammond
We received the examining authority’s report and recommendation on the scheme from the planning inspectorate on 19 December. The report is being considered carefully. We are obliged under the Planning Act 2008 to decide whether to grant a development consent for the scheme by 19 March 2013. I am looking to see whether we can accelerate that even faster.
Clive Efford (Eltham) (Lab)
When the Minister next meets the Mayor of London, I urge him to discuss the Silvertown link between North Greenwich and Silvertown on the north side of the river. More importantly, many people are concerned about the need for public transport links along that stretch of the river, so will the Minister discuss with the Mayor the need to introduce a link for the Docklands Light Railway to come to North Greenwich, as it is essential for that to be part of the river crossing?
Stephen Hammond
I regularly meet both the Mayor of London and the commissioner of transport for London. I will make sure that that subject is on the agenda the next time we meet.
Paul Maynard (Blackpool North and Cleveleys) (Con)
In 1948, the very same county plan for Lancashire—under a Labour Government, I duly note—recommended a new A585 trunk road to improve links to both Fleetwood and the northern parts of my constituency. This remains a key local priority, but what guidance has the Department issued to the local enterprise partnerships to ensure that when decisions about regional structural priorities are taken, they are evidence based rather than based on economic fashion?
Stephen Hammond
We have encouraged local enterprise partnerships to involve themselves with other local groups in order to ensure that suggestions, plans and designs for new routes take economic potential into account. Many LEPS throughout the country have taken that on board, and I trust that the one in Lancashire will do the same.
Mr Russell Brown (Dumfries and Galloway) (Lab)
In his reply to the question from the hon. Member for Oxford West and Abingdon (Nicola Blackwood), the Minister referred to the autumn statement of 2011. Will he now tell us how many of the schemes that were announced at that time have so much as seen a spade in the ground? In how many instances has construction actually begun?
Stephen Hammond
I can tell the hon. Gentleman that 90% of the projects announced in the 2011 autumn statement are under way, and that 13 have been completed.
Michael Fabricant (Lichfield) (Con)
10. What assessment he has made of the level of service provided by London Midland trains in the last six months; and if he will make a statement.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
The Department is continually assessing London Midland’s performance, and holds monthly review meetings with its senior management. As the Secretary of State announced on 20 December 2012, London Midland’s performance between September and December breached its contractual benchmark. The Department has therefore negotiated measures with London Midland to ensure that a reliable passenger service is restored, as well as a £7 million package of benefits for passengers.
Michael Fabricant
If there have been improvements, most of my constituents have not really noticed them. They have been stranded at Four Oaks—and believe me, Mr. Speaker, you would not want to be stranded at Four Oaks—hanging around for an hour and a half waiting for another London Midland train to take them back to Lichfield. How bad does it actually have to get before the Minister decides to take away the service and readvertise the contract?
Norman Baker
I shall try not to be stuck at Four Oaks, where there is evidently a problem that limits the ability to run through trains. However, we are continuing to monitor London Midland’s performance, and if it breaches further benchmarks, we will take further action. I can say now that it is expected to make losses for the remainder of its franchise period. In my view, given that it created this mess, it is up to London Midland to sort it out on behalf of the taxpayer.
Mr Speaker
May I suggest to the hon. Gentleman that his question should relate purely to the subject of London Midland trains? [Laughter.]
Mark Lazarowicz
If passengers are delayed on London Midland, and indeed on other lines—[Laughter]—they are entitled to compensation. However, when London Midland provides such compensation, it takes the form of paper vouchers, which, as a constituent of mine has pointed out, cannot be exchanged online. That is inconvenient, and it means that they cannot obtain the full benefit of lower fares. Will the Minister look into that when the Government review the fares system?
Norman Baker
I am happy to say that that point has been raised by a number of Members, and that we are looking into it. People should not be discriminated against on the basis of the method that they use to buy their tickets.
Peter Aldous (Waveney) (Con)
11. What assessment his Department has made of the role of the private sector in the UK's railways.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
Since privatisation, the number of passenger miles travelled has nearly doubled. Rail freight has increased by over 60%, the level of passenger satisfaction has risen by 10% in the last decade, and the level of punctuality has risen by nearly 14 %.
Peter Aldous
The delay in tendering for new longer rail franchises is holding back much-needed private sector investment in trains in East Anglia. Will the Government consider the proposals that have been drawn up to fast-track the provision of those urgently required new and upgraded trains?
Stephen Hammond
The Government commissioned Lord Brown to advise on the future of franchising. As my right hon. Friend the Secretary of State said earlier, his report has now been published, and the Government are looking at it. I understand that proposals have indeed been drawn up, and the Government will happily consider those proposals. I suggest that my hon. Friend should try to meet my right hon. Friend the Minister of State at the eastern rail summit, which will be held in the spring.
Ian Lucas (Wrexham) (Lab)
Do not the failures of the east coast and, now, the west coast franchise demonstrate that the policy of reusing a bad system is a bad one? Will the Minister please consider alternative models such as the mutualisation adopted by Welsh Water, which has led to increased private investment, efficient services, and reasonable charges for customers?
Stephen Hammond
Throughout the country, privatisation and the franchising model have brought huge benefits to the system and to the rail traveller, and, as I said earlier, the level of passenger satisfaction has risen by more than 10% in the last decade.
Mr John Leech (Manchester, Withington) (LD)
The best way of assessing private sector rail franchises is to have a public sector comparator. Does the Minister therefore agree that we should consider retaining the east coast franchise as a public sector comparator, and look at having a local and regional service as a public sector comparator, too?
Stephen Hammond
I disagree with that suggestion. The hon. Gentleman will remember that although subsidy was slightly lower when we had nationalised railways, underinvestment was a major feature of that era. Fares continued to rise and passenger satisfaction declined.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
12. What assessment he has made of bus fare rises in non-metropolitan areas; and if he will make a statement.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
The Government recognises that the price of public transport is an issue for many people, including those in non-metropolitan areas, and we are putting measures in place to keep down the cost of using the bus, including retaining the bus service operators grant and the concessionary travel entitlement, and encouraging more reasonably priced multi-operator tickets.
Tom Blenkinsop
Following cuts imposed by this Government, Mayor Mallon in Middlesbrough is proposing to axe the teen mover scheme that helps young people afford public transport, and Redcar and Cleveland borough council has already had to scale back its similar scheme. As a result, coupled with bus fare increases, young people risk being plunged into transport poverty. Will the Minister hold discussions with his colleagues at the Departments for Education and for Communities and Local Government to ensure that young people in Middlesbrough and east Cleveland can afford to travel by public transport?
Norman Baker
The hon. Gentleman rightly draws attention to the issue of young people and buses, and I have given considerable attention to it. I have had discussions with the industry, and there is a new website giving young people more information about bus fares and the best offers in their area. We are discussing what further steps we might take to help young people, and, indeed, I have met colleagues at the Department for Education to discuss this very issue.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Does my hon. Friend agree that community transport and concessionary fares are particularly important in rural areas? Will he therefore consider a further roll-out of the wheels to work scheme in rural areas such as Thirsk, Malton and Filey?
Norman Baker
I thank my hon. Friend for her question, and I agree with her point. We have given two tranches of £10 million to aid community transport across England. We have also funded wheels to work schemes under the local sustainable transport fund, and will continue to do so.
Yvonne Fovargue (Makerfield) (Lab)
The Government’s own figures show bus fares rising by double the rate of inflation, and many passengers face even higher increases; the Arriva Midlands annual saver ticket has increased by 20% this year. When will the Minister accept that his Government’s decision to cut local transport funding by 28% and to cut direct support for bus services by a fifth has increased the financial pressure on households who are already struggling to make ends meet?
Norman Baker
I welcome the hon. Lady to the Front Bench. She may not be aware that this is not a new phenomenon. In 2009, the retail prices index fell by 0.4% and bus fares increased by 8.6%—far more than they have risen this year. Steps are being taken to cut bus fares, and the hon. Lady may be interested to know that fares are being cut by First Bus in both Sheffield and Manchester.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Transport (Mr Patrick McLoughlin)
May I take this opportunity to thank the emergency services who responded so professionally to yesterday’s helicopter crash in London, in which, sadly, two people lost their lives? The Air Accidents Investigation Branch is continuing its investigation, and I will keep the House updated on its findings.
Since I last addressed the House at Transport questions, I have published the Richard Brown independent review into franchising, which concluded that it remains a fundamentally sound model. I will make further statements on rail franchising in due course. Over the Christmas period I also announced details of a new £170 million local authority pinch point fund, targeting the most congested points on local roads, as well as the allocation of an extra £215 million to councils to maintain roads.
Mr Thomas
The cost of travelling by train and tube from the suburbs of London into central London—for example, from West Harrow in my constituency to Westminster—has increased by 25% in the last two years alone. What discussions do Ministers plan to have with the Mayor of London about ameliorating the impact of high fare rises on those whose budgets are already squeezed?
Mr McLoughlin
The current fare regime and price increases are exactly the same as those under the last Government, and I do not remember him complaining about them then.
David Mowat (Warrington South) (Con)
T4. The new Mersey Gateway bridge will be tolled, with the risk of significant extra traffic through Warrington. The inspector at the planning inquiry stated the toll should be set no higher than that of the nearby Birkenhead tunnel. Will the Secretary of State confirm that in any evaluation of a change to the tunnel toll, he will also look at the situation of the bridge and of Warrington?
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
The Government have no plans to fund the reduction or abolition of tolls on the Mersey tunnels. Tolls on the new Mersey gateway bridge will be set by the Mersey gateway crossings board, an independent subsidiary of Halton borough council set up to manage the scheme. My hon. Friend knows that the indicative and maximum toll levels were agreed as part of the public inquiry, and were set out under the Transport and Works Act 1992.
Mrs Anne McGuire (Stirling) (Lab)
T3. A couple of days ago, Carlos Tevez, the Manchester City striker, admitted to not having a valid UK driving licence. It was said that the theory test would be difficult for him as it is conducted in English. Given that many people who are legitimately and legally in the UK need to drive after the 12-month grace period, does the Department offer the theory test in other languages? If not, why not, given that in the interests of road safety it is more important that people are encouraged to take the test, rather than have them worry about whether their written English skills are up to scratch?
Stephen Hammond
I can confirm that the test is offered in more languages in this country than it is in any other in Europe. I am, however, consulting on whether to reduce the number, because it is clear that a key aspect of road safety is involved: if people cannot understand the test in English, they might not be able to understand the road signs.
Priti Patel (Witham) (Con)
T5. Will my right hon. Friend continue to champion Essex commuters and ensure that the recommendations of “Once in a generation—A rail prospectus for East Anglia” are considered by his Department and implemented, so that our commuters can have outstanding rail infrastructure, bringing us into the 21st century?
The Minister of State, Department for Transport (Mr Simon Burns)
I thank my hon. Friend for that question, and I pay tribute to the tremendous work that she, other hon. Members and local authorities in East Anglia have done in producing that excellent document, in which I was involved before becoming a Minister. She can have my assurance that we are completely committed to investing in infrastructure, not only in East Anglia and Essex but throughout the country. I look forward to meeting her, Government Members and other Members of the House to discuss that important report shortly.
John Mann (Bassetlaw) (Lab)
T7. Bolsover district council, Chesterfield borough council, North East Derbyshire district council and Bassetlaw district council have all proposed that devolved major scheme funding should be allocated to a local transport body based on the Sheffield city region. Does the Minister agree that that is a sensible way to allocate resources in order to help regenerate the economy?
Mr Burns
The hon. Gentleman raises a very important point, although it is obviously equally important to listen to local views. My understanding is that both Derby and Derbyshire, and Nottingham and Nottinghamshire did not think it was right that they be linked with Sheffield because of different considerations in their geographical make-up and in their needs. We have decided that, in the interim, we will not link Sheffield with Derby/Derbyshire and Nottingham/Nottinghamshire, but we will leave it to the local communities to seek, in the short term, an agreement that will be mutually acceptable to all communities.
Chris Heaton-Harris (Daventry) (Con)
T6. My question is further to that asked by my hon. Friend the Member for Lichfield (Michael Fabricant) about services on London Midland trains. Staff shortages and other issues have led to an unbelievably poor service, with London Midland’s chief executive saying earlier this week that he was “embarrassed” by the service being offered. What will the Government do to ensure that London Midland improves the service it offers my constituents?
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
As I mentioned earlier, there have been discussions between the Department and London Midland, and they are ongoing. London Midland has taken steps to improve its rostering and to recruit more drivers to try to ensure that the very poor service that my hon. Friend’s constituents have had is not repeated this year. We continue to monitor the situation, and we will take further action if necessary.
Kelvin Hopkins (Luton North) (Lab)
If Britain is to see a substantial modal shift of freight from road to rail, it is vital to construct dedicated rail freight capacity capable of carrying full-sized lorry trailers on trains. Will the Government give serious consideration to practical schemes to provide such capacity?
Mr McLoughlin
I will always look at practical schemes that come forward. I am pleased to say that the amount of freight being carried on the railways has dramatically increased, and I very much hope that our plans in the near future will show that we want it to increase even further.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)
The Minister is aware of my concern about the apparent reinterpretation by the Scottish Government and Transport Scotland of the very welcome £50 million that the UK Government announced in their 2011 autumn statement for sleeper refurbishment. Will the Minister comment on his understanding of the position, and could we perhaps discuss it later in a meeting, not least in the context of the new Caledonian sleeper franchise?
Mr Simon Burns
I thank the right hon. Gentleman for that question, and I know he has campaigned vigorously for improvements to that rail service. I understand that the Scottish Government decided to reroute funding allocated for improving sleeper services to capital investment in Scottish Water—a short-term measure taken, apparently, for accounting reasons. The future funding of Scottish Water will be fully adjusted to ensure the commitment to fund the sleeper improvement programme is met, although I think it is sad that there has been this delay. I would be more than happy to meet the right hon. Gentleman if he felt that would be useful.
Graham Jones (Hyndburn) (Lab)
My constituent, Mrs Hinet, suffered the tragedy of losing her daughter and grandchild. They were pedestrians who died when a car driven by an 89-year-old who had had a heart attack at the wheel mounted the pavement. There seems to be a lack of assessment of drivers such as that 89-year-old, compared with that of those who are 70. I know that regulations are in place for drivers who are over 70, but there seems to be a problem in that the deciles of the 70s and 80s are aggregated in the data. Will the Minister look at the data and how they are collected for those in their 70s and 80s and accidents on the roads?
Stephen Hammond
I thank the hon. Gentleman for that question. We have looked at that data and at some of the evidence from some incidents, particularly a number of tragic incidents such as the one he describes. The most important thing is that the current plans and regime are backed by the evidence, and I will review that. More importantly, it is a question of experience and not necessarily of the driver’s age.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
To what extent does the Secretary of State plan to rely on private sector money to fund HS2? Have the Government approached or received any expressions of interest from potential funders, including any foreign sovereign wealth funds?
Mr McLoughlin
First and foremost, I want to get the Bill for HS2 through the House. We will make further announcements on HS2 in the near future.
Mrs Linda Riordan (Halifax) (Lab/Co-op)
Will the Secretary of State outline when the Caldervale line that runs through my constituency will get new rolling stock to replace the current Pacer units, which are unpopular, uncomfortable and outdated?
Mr McLoughlin
I promise the hon. Lady that I will write to her, bearing in mind the concerns she has just expressed.
Tim Farron (Westmorland and Lonsdale) (LD)
Electrification of the Lakes line from Oxenholme to Windermere would probably be the least expensive and most straightforward electrification project in the network. It would also provide a massive boost for the £3 billion tourism economy in Cumbria. Will the Minister meet me, rail operators and rail users to take forward this project?
Norman Baker
I am very happy for me or my colleague the Minister of State to meet my hon. Friend about this matter. We have a major programme of electrification, as he knows. It will not be finished when we have completed all these schemes, so we are looking forward to further schemes post the present programme.
Thomas Docherty (Dunfermline and West Fife) (Lab)
1. What progress the Commission expects to make in the remainder of this Session on the renovation and renewal of the Houses of Parliament.
John Thurso (Caithness, Sutherland and Easter Ross)
At its October 2012 meeting, the Commission agreed to publish the report of the previous feasibility group and ask for a full independent analysis to be carried out of the various high-level options other than the option of a new building away from Westminster. The House Committee of the House of Lords reached a similar view. The results will be available in 2014 and will provide the basis for an informed decision about how exactly to proceed.
Thomas Docherty
I am most grateful for that answer. Given the need for an informed decision, does the hon. Gentleman agree that it is vital that all stakeholders—the public, the press, those who work here and, of course, Members of both Houses—are fully engaged in the process leading up to that decision?
John Thurso
Indeed. The hon. Gentleman makes an extremely important point and the Commission is grateful to him for the part he played in advising the study group last year, together with the right hon. Member for Saffron Walden (Sir Alan Haselhurst) and two Members of the House of Lords. This will be a major project that will affect us all, and good consultation with all those involved will be vital to ensuring its success. I look forward, as I am sure the Commission does, to working with the hon. Gentleman and others to ensure that that happens.
Mr Philip Hollobone (Kettering) (Con)
If the cheapest and quickest option for a complete renewal of the fabric of the Houses of Parliament is to close the Houses of Parliament and temporarily relocate them elsewhere, will the hon. Gentleman ensure that that option is put before the House so that Members can vote for or against it?
John Thurso
The purpose of the feasibility study now being undertaken is to ensure that there is accurate information, properly gathered by outside independent experts, so that all the options are based on fact, without any optimism bias. I cannot personally imagine a circumstance in which the House would not wish to express a view on what is best, but when the decision is made, after the information is available, it will be for the usual channels, whichever they are, to work out how to do that.
Chris Bryant (Rhondda) (Lab)
If we were to move out, which I would not particularly object to if it were more cost-effective, and if, for instance, we were to move to a round chamber, such as that at Church house, where would the Liberal Democrats sit? Would they sit between Labour and the Conservatives? Would they sit to the far left or to the far right, or would they sit in the bishops’ seats?
John Thurso
I am most grateful to the hon. Gentleman for that question. That is beyond my pay grade in this role, but I assure him that wherever it was it would always be the right place.
Harriett Baldwin (West Worcestershire) (Con)
2. When he expects to receive a report from the Commission on the consequences of devolution for the House of Commons.
The Deputy Leader of the House of Commons (Tom Brake)
A report from the McKay commission is expected by the end of the current Session of Parliament.
Harriett Baldwin
I am delighted to hear that we will get the report in this Session of Parliament. Does the Deputy Leader of the House share my aspiration that by the end of this Parliament we will ensure that English-only legislation is voted on with a majority of English MPs?
Tom Brake
I am aware that my hon. Friend is pursuing this matter vigorously—indeed, she made her own submission—but it is right that we wait until we have carefully considered the arguments and options in the report before taking a view. I am sure the House will want to do the same.
Mr Nigel Dodds (Belfast North) (DUP)
Before we make any further changes, the House will know that we already have two classes of Members of Parliament—those who take their seats and are properly accountable in parliamentary terms for their expenses, and those who do not take their seats and can spend representative money on party political campaigning, with no accountability. When will the Government address that issue?
Mr David Hanson (Delyn) (Lab)
Following the question from the hon. Member for West Worcestershire (Harriett Baldwin), will the Deputy Leader of the House ensure that Members of Parliament such as me, who represent constituencies in Wales but have constituents who work in England, receive health services in England and use transport in England, also have an opportunity to vote on those matters as Members of Parliament?
Tom Brake
Again, I thank the hon. Gentleman for that question. It is appropriate, as I said earlier, that we should wait until the report has been published. Clearly, a wide range of options is available, such as the status quo, federalism and many different approaches that many Members would want to advocate.
Mr Christopher Chope (Christchurch) (Con)
3. What use the Commission is making of price mechanisms to ensure maximum utilisation of House of Commons dining rooms on Monday, Tuesday and Wednesday evenings.
John Thurso (Caithness, Sutherland and Easter Ross)
The recently endorsed Catering Services business improvement plan proposes the return of a variable tariff structure in the Members Dining Room. The Administration Committee will be consulted on the details shortly. This is in response to feedback from Members who had stopped using that service following the introduction of a fixed tariff. Catering Services has a three-month rolling marketing plan that highlights offers and promotions in all the catering outlets to generate more business. This plan will include the Dining Room.
Mr Chope
I thank my hon. Friend for that response. Last week, I dined on all three nights in the Dining Room and almost nobody else was present, but the service was fantastic because there were three servants for each person sitting down. [Hon. Members: “Servants?”] Exactly. Does my hon. Friend think that one way of engaging Members who do not use the Dining Room would be to offer them much cheaper rates when there is an opportunity for them to come along?
John Thurso
There is clearly a balance to be struck between attracting people in at the right price and prices being so low that they do not recover the appropriate cost. The House authorities strive to strike that balance appropriately. Work is being undertaken, particularly by the Administration Committee, but the key, driving factor is that the footfall in the Palace is dropping because of the change in hours, and I do not think any of us can do a great deal about that.
Ann McKechin (Glasgow North) (Lab)
4. Whether he plans to give evidence to the Procedure Committee inquiry on programming.
The Deputy Leader of the House of Commons (Tom Brake)
We have received confirmation of the Procedure Committee’s decision to undertake an inquiry into programming together with a request to set out the Government’s views. We will submit our views shortly.
Ann McKechin
Given how light the Government’s legislative programme is, does the right hon. Gentleman think that now is the time to consider whether we can debate private Members’ Bills not only on Fridays but on other days of the week, rather than having the countless pointless debates that we currently have to endure?
Angela Smith (Penistone and Stocksbridge) (Lab)
When the Leader of the House and his deputy prepare their evidence, will they consider holding the Committee stage of the Bill on equal marriage on the Floor of the House?
Sarah Newton (Truro and Falmouth) (Con)
5. What assessment he has made of the pilots of public reading stages for Bills.
The Leader of the House of Commons (Mr Andrew Lansley)
We have conducted pilot public reading stages for the Protection of Freedoms Bill and the Small Charitable Donations Bill, and an online consultation was conducted on the draft Care and Support Bill.
Following evaluation, I have today informed the House in a written ministerial statement that public reading stages will form part of a tool kit to consider legislation on a case-by-case basis. I hope we will continue to improve public engagement in the legislative process—for example, through pre-legislative scrutiny and evidence sessions in Public Bill Committees rather than by adopting a uniform approach to legislation.
Sarah Newton
I very much welcome my right hon. Friend’s response and congratulate him and his predecessor on the great innovations in this Parliament to make this place more relevant to the people who sent us here. I urge that we use the new tool in our tool kit as often as we can.
Mr Lansley
I am grateful to my hon. Friend, with whom I share an appreciation of my predecessor. Over the past two and a half years, the House has made considerable progress in engaging the public directly with legislation. We can do that through a number of routes. Sometimes, pre-legislative scrutiny on draft legislation or evidence sessions before Public Bill Committees are very effective, and public reading stages are a further option. We do not want to specify in relation to any particular legislation that all those things must be applied, but we have the mechanisms to engage the public more fully.
Charlie Elphicke (Dover) (Con)
6. What recent consideration he has given to the procedure for private Members’ Bills; and if he will make a statement.
The Deputy Leader of the House of Commons (Tom Brake)
Hon. Members will be aware that the Procedure Committee is undertaking an inquiry into the procedure for private Members’ Bills. My hon. Friend gave evidence to the Committee yesterday and raised a number of issues relating to the timing procedures and motivation for private Members’ Bills. My right hon. Friend the Leader of the House will give evidence on behalf of the Government in due course.
Charlie Elphicke
As a tool for prompting dialogue and discussion or for the furtherance of a parliamentary campaign, private Members’ Bills are really useful, but many Members think that the way in which Friday sittings work is little short of a farce. Should programming and the tools used for Government legislation be applied to private Members’ legislation, to enable votes to take place and more legislation to be passed?
Tom Brake
Many Members have experienced some frustrations regarding the private Members’ Bill process. I know that the hon. Gentleman has made a suggestion to the Procedure Committee along the lines of his question, but he will be aware that existing procedures of the House allow for a closure to be sought on debates and to impose time limits on speeches. He will be aware that sometimes when a Member presents a private Member’s Bill there will be other ways of ensuring that it is reflected in Government legislation, in the way that his proposed measures on children and families will be reflected in that Bill.
Simon Hughes (Bermondsey and Old Southwark) (LD)
7. Whether he has considered guaranteeing a minimum amount of time for the consideration of Government Bills at Report stage.
The Deputy Leader of the House of Commons (Tom Brake)
This Government recognise the value of parliamentary scrutiny of legislation. We have provided more days than the previous Administration for Report stages and, where necessary, we will provide more than one day for Report stage.
Simon Hughes
I recognise the Government’s commitment to better scrutiny of legislation, but one of the perennial frustrations, under all Governments, is that we get to Report stage and the allocated time is used up by urgent questions or statements and we end up with almost no time to do the job of the House. Will Ministers look at changing that so that we have injury time for any time lost because of earlier business?
Tom Brake
I understand my right hon. Friend’s point. The Government have sought to address his concerns by providing more time on Report, but he might want to consider making a submission to the Procedure Committee, which is looking at programming. I am sure that the Government will want to consider his submission, along with others, when the report is published.
Kevin Brennan (Cardiff West) (Lab)
8. What assessment he has made of the effect of the introduction of new sitting hours on managing the business of the House.
The Deputy Leader of the House of Commons (Tom Brake)
No assessment has been made of the effect of the new sitting hours on managing the business of the House.
Kevin Brennan
I think the Deputy Leader of the House should make an assessment but should not listen to those who are calling for private Members’ Bills to brought into the middle of the week. Would it not be a ludicrous outcome if those who argued for our hours to move to earlier in the evening were then to vote for private Members’ Bills to be discussed after 7 o’clock so that the hours were extended from 11.30 am to 10 pm instead of running from 2.30 pm to 10 pm, which is what applied before?
Diana Johnson (Kingston upon Hull North) (Lab)
9. What recent discussions he has had with his ministerial colleagues on the requirements of the ministerial code relating to making policy announcements to the House before the media.
The Leader of the House of Commons (Mr Andrew Lansley)
The ministerial code is clear:
“When Parliament is in session, the most important announcements of Government policy should be made in the first instance, in Parliament.”
I regularly remind my colleagues of this.
Diana Johnson
We know from the Government’s relaunch that they are planning to make 12 policy announcements over the next 12 weeks. Will the Leader of the House assure us that those announcements will be made first to the House of Commons, and that there will penalties if that does not happen?
Mr Lansley
I reiterate to the House and to the hon. Lady that the ministerial code is clear and that I regularly remind my colleagues of it. It is our intention and our practice that the most important announcements of Government policy be made in the first instance to Parliament. [Interruption.] The hon. Member for Rhondda (Chris Bryant) is saying from a sedentary position that I am inaccurate. I have quoted directly the ministerial code to him and to the House.
Horsemeat (Supermarket Products)
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Mary Creagh (Wakefield) (Lab)
(Urgent Question): To ask the Minister if he will give a response to the finding of horsemeat in supermarket meat products.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
This is a very important and extremely serious issue. Consumers should have full confidence that food is exactly what it says on the label. There are strict rules requiring products to be labelled accurately.
The Food Standards Agency is urgently investigating how a number of beef products on sale in the United Kingdom and the Republic of Ireland were found to contain horse and pig meat. Twenty-seven beefburger products were analysed, with 10 of the 27 products, or 37%, testing positive for horse DNA and 23, or 85%, testing positive for pig DNA. In nine of the 10 beefburger samples, horse DNA was found at very low levels. In one sample from Tesco, the level of horse DNA indicated that horsemeat was present and accounted for approximately 29% of the total meat content of the burger.
Yesterday the agency met representatives from the food industry from all parts of the UK. Industry representatives confirmed the existing processes that they follow to ensure that the products that reach consumers are of the highest standard. These include quality controls in place at all stages of the food chain. They also set out the actions that they have already taken in response to this incident.
The FSA has now set out a four-point plan for its investigation, which it will implement in conjunction with Government Departments, local authorities and the food industry. The first point is to continue the urgent review of the traceability of the food products identified in the Food Safety Authority of Ireland survey. The retailers and the UK processor named in the survey have been asked to provide comprehensive information on the findings by the end of Friday 18 January.
The second point is to explore further, in conjunction with the FSAI, the methodology used for the survey, to understand more clearly the factors that may have led to the low-level cases of cross-contamination. The third is to consider, with relevant local authorities and the FSAI, whether any legal action will be appropriate following the investigation. The fourth is to work with my Department, the devolved rural affairs Departments and local authorities on a UK-wide study of food authenticity in processed meat products.
Mary Creagh
I thank the Minister for that reply, but perhaps he could have made a statement to the House yesterday, rather than have to respond to an urgent question today.
There is understandable public anger that supermarkets have been selling beefburgers and other products containing horsemeat and pig DNA. Consumers who avoid pork for religious reasons will be upset that they may have unwittingly eaten it, and eating horse is a strong cultural taboo in the United Kingdom. It is not illegal to sell horsemeat, but it is illegal not to label it correctly. Customers must have the confidence that the food they buy is correctly labelled, legal and safe.
The UK is part of a global food supply chain. The food industry lobbies vigorously for a light-touch regulatory system from Government. Testing, tracking and tracing ingredients is expensive, but not testing them will cost retailers, processors, British farmers and consumers much more.
This is not just about the supermarkets. The adulteration scandal raises serious questions for the Government to answer about how we as a nation regulate our food. First, the adulteration was detected in Ireland, not the United Kingdom. Why was it not picked up here? Will the Minister consider introducing DNA testing of meat, as happens in Ireland, to reassure consumers that they are actually getting what they pay for?
In 2010, the Minister’s Government split the responsibility for food labelling between three Government Departments: the Department of Health is responsible for dietary and nutritional labelling, and the Food Standards Agency is responsible for allergen labelling, but the 25 staff and the budget responsible for the compositional labelling has been transferred to the Department for Environment, Food and Rural Affairs. Is that not an absurd situation, and will the Minister now review the system that he has created for food labelling in this country? How many of those 25 staff are still employed by DEFRA on those issues, and why was no national system put in place at that time to audit labelling and composition to protect consumers from this type of fraud?
The FSA inquiry will test the robustness of supermarket audit chains. How confident is the Minister that they will meet Government standards? Has the loss of 700 trading standards officers in three years made this type of consumer fraud more widespread and less likely to be detected? Is the Minister confident that the FSA’s Meat Hygiene Service can be cut by £12 million over the comprehensive spending review period without its ability to detect breaches of the law or tackle a disease outbreak being affected? These invisible regulatory services protect our consumers and our food industry and allow the industry to export all over the world.
Horses are killed for meat in this country, but there are dozens of different types of horse passport and the system is a mess. Will the Minister look at the system for horse passports?
The coalition agreement stated:
“We will introduce honesty in food labelling so that consumers can be confident about where their food comes from and its environmental impact.”
On the evidence of the past few days, the Minister still has quite a way to go.
Mr Heath
Let us be clear: the hon. Lady is right to say that consumers have a right to expect that the food they eat is what it says on the label. The cases that were picked up in Ireland are a serious breach of that principle. That is why we are taking the measures that we are taking.
The hon. Lady was completely wrong, however, in what she said about responsibility for labelling. Let us be absolutely clear: the responsibility for policy on labelling lies with the most appropriate Department, but the responsibility for checking the content of food lies with the Food Standards Agency—which, of course, is the responsibility of the Department of Health—and only the Food Standards Agency. It is the body charged with that responsibility.
Mr Heath
The hon. Gentleman does not seem to understand the difference between a policy responsibility and implementation. It is precisely because of that difference that we split it—to make sure that implementation was with the body charged with that duty.
I believe that the Food Standards Agency carries out its duties in a responsible and professional way. It takes a risk-based approach to testing, based on intelligence. It is right to do so, because that is how it gets the most effective results.
The hon. Lady asked about trading standards officers. Of course these officers have a duty to their local authorities and to the people in their area in relation to the standards that traders employ in that area, but they are not a responsibility of central Government. Local government will take the decisions on what are the appropriate levels.
The hon. Lady seems to think that there is some difficulty with horse passports. I simply do not think that that is the case. I would happily set out the difference between the route for horses going to slaughter and the routes for others.
May I make one final point that is absolutely essential? It is important that neither the hon. Lady nor anyone else in this House talks down the British food industry at a time when the standards in that industry are very high. That something has been discovered in Ireland that is serious and may lead to criminal proceedings does not undermine the serious efforts that are taken by retailers, processors and producers in this country to ensure traceability and the standard of the food that is available to consumers. She should not put that at risk by making unguarded comments.
Mr Speaker
Order. Notwithstanding the importance and urgency of this matter, I remind the House that business questions are to follow and that we then have two heavily subscribed debates under the auspices of the Backbench Business Committee. I will not be able to call everybody as I usually wish to do, but to maximise the number of contributors, I appeal to colleagues for single, short supplementary questions and to the Minister for appropriately pithy replies.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The Minister has to answer the question why this problem was picked up not in this country but in Ireland. Will he take this opportunity to explain what the role of DEFRA is in food safety and where the cross-contamination occurred? I understood that all checks on imported meat, in which we understand the cross-contamination was found, occur at the point of entry. Will he confirm what checks are conducted on meat imports?
Mr Heath
Let me make it very clear, as I have already said, that food safety is the responsibility of the Food Standards Agency. I have no reason to suppose that it does not do an extremely good job. We have a robust screening process with a network of food safety organisations. I see nothing to be ashamed of in the fact that we collaborate successfully with food standards agencies in other countries, because this is a European trade. The meat in question almost certainly came not from the UK but from a third country, to be processed in Ireland. It is not surprising, therefore, that the UK authorities would not have picked that up. However, we are investigating fully and there may well be criminal prosecutions as a consequence.
Mr Ben Bradshaw (Exeter) (Lab)
I have to tell the Minister that he is striking a very ill-judged tone. Where is the Secretary of State? Will these retailers be prosecuted? Was it not total folly to remove any responsibility for food safety or standards from the independent Food Standards Agency to his Department?
Roger Williams (Brecon and Radnorshire) (LD)
At a time when commodity prices are very high, food adulteration is likely to become a bigger problem. When we have high-priced beef and—as I understand it—low-priced horsemeat, some unscrupulous food processors are likely to take advantage. Will the Minister therefore ensure that when commodity prices are high throughout the food chain, the Food Standards Agency has responsible processes in place to ensure that adulteration cannot happen in this country, and that British food maintains its high status?
Mr Heath
We certainly need to do that—that is one of the things that is in train. I have said that the FSA operates on the basis of intelligence—it will continue to do so, because it is important that we find where adulteration takes place. However, it is important to say that manufacturers and retailers have a responsibility to establish very clearly the provenance of the food they supply. Most retailers and processers in this country do an extremely good job of exactly that, but when the system falls down, we must investigate and take appropriate action.
Barry Gardiner (Brent North) (Lab)
People trust brands such as Tesco to have precisely sourced their supply. The Minister rightly said that it is not illegal to sell horsemeat in this country, but he also rightly said that it is illegal to sell horsemeat if it is not properly labelled as such. What steps have been taken to prosecute Tesco and others for their failure to label properly the food they were supplying to their customers?
Mr Heath
I am so grateful to the right hon. Member for Exeter (Mr Bradshaw) for his advice.
The investigations will precede the prosecution process. That is the way we do things in this country. We investigate first and take prosecutions to court if it is appropriate to do so. I do not think—[Interruption.]
Mr Speaker
Order. I understand the strength of feeling on the matter and the considerable expertise of the hon. Member for Brent North (Barry Gardiner), but I would look to him ordinarily to behave in a statesman-like manner, and he fell short of the standard on that occasion. He must calm himself. Let us hear the answer.
Sarah Newton (Truro and Falmouth) (Con)
Although I welcome the fact that Tesco has today widely advertised an apology, does the Minister share my disgust on hearing the news yesterday that such a profitable and large British organisation could have let down consumers so very badly? Should not Tesco go way beyond that advert to rebuild trust with its customers and prove to us what it will do about this situation?
Mr Heath
The hon. Lady makes an extremely good point. I am impressed at the speed with which Tesco has responded to what is clearly both a very embarrassing situation and a potentially damaging one. It is essential that retailers and processors rebuild trust in the products available in this country, and that the Government do whatever we can to support that. Only on that basis can we have a successful trade.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Food manufacturing is an important part of the British economy and employs a lot of people in my constituency. The shadow Secretary of State is not undermining the industry by bringing those issues to the House; she is safeguarding its future by allowing people to have confidence in it. The Minister needs to tone down the rhetoric, tell us that you are on top of this issue, and let the British public know that they can have confidence in the regulatory system for which you are responsible.
Mr Speaker
Order. I am not responsible for these matters, but we look forward to hearing the Minister.
Mr Heath
I have set out exactly what the FSA is doing in response to the immediate problem. The point I am trying to make is this: yes, this is probably an example of criminality—we must wait and see—but it has been detected and is being dealt with. It is quite wrong to extrapolate from that and say, “This is common across the whole of the food industry.” That would be a mistake, and it would undermine an important industry.
Sir Tony Baldry (Banbury) (Con)
There are a finite number of abattoirs, slaughter houses and renderers both here and in the Republic of Ireland, so must it not be possible, in fairly short order, to discover where the horsemeat entered the food chain and react accordingly?
Mr Heath
Of course, the first responsibility for that lies with the Food Safety Authority of Ireland, which is carrying out investigations and we are assisting with them as far as possible. I think we will quickly identify where the meat came from and discover whether it was falsely labelled at the point of origin, which I suspect may be the case.
Joan Walley (Stoke-on-Trent North) (Lab)
Is not the problem fragmentation, split responsibility, enforcement, the role of trading standards officers and cuts to local government? Has the Minister had a meeting a Cabinet level, across all Departments, to get a policy that is fit for purpose?
Neil Parish (Tiverton and Honiton) (Con)
In this country, there are robust rules to separate the processing of beef and horse meat. Is that not the case in Ireland?
Mr Heath
That will be the subject of the investigations being carried out. The low-level contamination suggests that it may not have been through deliberate falsification of labelling. It may well be that it is simply cross-contamination by error, but I am sure that the Irish authorities will look carefully at this. We are co-operating with them as far as we can, and we are very eager to know the answer.
Mr Dave Watts (St Helens North) (Lab)
The Minister said, “It’s not my fault” and puts the blame back on the Food Standards Agency. He has already made cuts and is proposing £11 million more. Will he stop those cuts in order to protect the vulnerable people in Britain from having food they should not have?
Stephen Mosley (City of Chester) (Con)
There are suggestions that the future of the red tractor mark may be at threat. The red tractor mark guarantees the high quality of UK produce. Is this issue not a sign that we should be backing such schemes and increasing their use in the future?
Mr Heath
Producer-led and processor-led quality assurance schemes are a valuable tool for consumers, enabling them to know exactly the provenance of what they are eating, and the welfare conditions under which the animals, in the case of meat, have been kept. That is to be recommended to the industry and the consumer.
Fiona Mactaggart (Slough) (Lab)
This scandal illustrates the failure of one of our largest companies to ensure that its supply chain reflects the values it purports to uphold. I sponsored the Transparency in UK Company Supply Chains (Eradication of Slavery) Bill as a ten-minute rule Bill and my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) is the promoter of its Second Reading on Friday. It provides a tool for the companies themselves to ensure that their supply chains reflect the values they purport to uphold and do not include such criminal practices. Will the Minister talk to his colleagues in the Whips Office to ensure that the Government do not prevent the Bill going through, so that we can change this situation?
Kris Hopkins (Keighley) (Con)
We already have strict rules, with penalties, relating to food tracing and labelling. Should we not review those penalties to provide a greater deterrence to companies?
Mr Kevan Jones (North Durham) (Lab)
This scandal—because that is what it is—has affected supermarket chains in this country. What investigations have been carried out of the beefburgers that go into the fast food chains, and how confident can my constituents be that they are getting a Big Mac rather than a Shergar Mac?
Mr Philip Hollobone (Kettering) (Con)
Given that the FSA has responsibility for food safety, I am surprised and disappointed that a Health Minister is not at least sitting in on the Minister’s response to this urgent question. Likewise, no shadow Health Minister is present either. Will the Minister send a signal to the authorities in the Irish Republic that if there is any criminality, exemplary sentences should be handed out?
Mr Heath
The Under-Secretary of State for Health, my hon. Friend the Member for Broxtowe (Anna Soubry), who has responsibility for the FSA, has apologised, because she is abroad today. That is why she is not here. Yes, we clearly want these matters to be prosecuted and dealt with with appropriate severity, and we will continue our dialogue with the Irish authorities to ensure that whatever they do is consonant with that.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I do not eat meat, but the majority of my constituents do, and I think that looking on today they will be surprised and disappointed by the tone of the Minister’s comments suggesting that those of us standing up for consumers are somehow talking down the food industry. Will he revisit the proposed cuts to the FSA’s budget to ensure that meat hygiene inspections are not compromised?
Mr Heath
As I have explained many times, the FSA is a responsibility of the Department of Health, but I have no reason to suppose that its activities will be compromised by future budgetary constraints. I am absolutely clear—let me repeat this—that we ought to be very concerned about this matter on behalf of consumers in this country, but we also ought to recognise that it does not mean that food across the country sold by all retailers is suspect. It is not, and that is the point that I am trying to make. At such times, consumers need to be reassured that systems are in place—systems that, in fact, caught this cross-contamination in this case.
Glyn Davies (Montgomeryshire) (Con)
As a result of this serious incident, several supermarkets in Britain have removed a lot of products from their shelves as a precaution. Does my hon. Friend agree that this demonstrates a responsible attitude on the part of British retailers in dealing with this serious issue?
Mr Heath
I think that the great majority of businesses in this country take an extraordinarily responsible attitude to their duties to the consumer. That is precisely the point I am trying to make. It makes it all the more important that where we find that abuse has taken place, we act urgently and effectively to prevent it from happening again.
Kevin Brennan (Cardiff West) (Lab)
Many of my constituents, like those of other Members, rely on brands such as the Tesco everyday value brand, because of the high price of food. Does the Minister understand that his remarks and tone today give the impression that he has been captured, stunned, trussed up and served to the nation as the Minister for the producer interest?
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Is it more or less likely that this sort of food safety scandal will happen again in view of the reduction in food safety surveillance and the downgrading of food safety regulations?
Mr Heath
As I have said, I do not think that there is a downgrading of surveillance. We take the matter extremely seriously and ensure that what we do is targeted in the most effective way in order to pick up irregularities when they occur. It is very important that people recognise that. It is also important to recognise that we had here a system picking up a defect, not ignoring it.
Mrs Anne McGuire (Stirling) (Lab)
Earlier the Minister said that there was collaboration on these issues. Given that the Irish Food Safety Authority’s tests were undertaken in November, could he advise the House when DEFRA was informed of those tests?
Diana Johnson (Kingston upon Hull North) (Lab)
On such an important issue, where is the Secretary of State and when did Ministers know about it?
Thomas Docherty (Dunfermline and West Fife) (Lab)
Mr Jeff Rooker, the chairman of the FSA, is due to stand down in just a few months’ time. Will the Minister ensure that the Department of Health fills the post before June? [Interruption.]
Mr Speaker
Order. There is a lot of noise in the Chamber. I understand people’s consternation on this matter, but let us hear Mr Docherty’s question and then the Minister can answer it.
Thomas Docherty
I am most grateful, Mr Speaker. Mr Jeff Rooker, who is the chairman of the FSA, is due to stand down in just a few months’ time. Will the Minister of State ensure that the Department of Health fills that important role before June?
Mr Heath
He is actually Lord Rooker—and somebody who in the past has filled the position that I currently occupy. He is standing down—that is absolutely right. Of course the post will be filled, because it is an extremely important one, and I have no doubt that the timetable will be consonant with the time of his departure.
Mr Speaker
The hon. Lady is too late. If she had risen earlier, she would have got in. We were drawing matters to a close. I thank the Minister and other colleagues for their co-operation.
Business of the House
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Angela Eagle (Wallasey) (Lab)
Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Mr Andrew Lansley)
The business for next week will be:
Monday 21 January—Consideration in Committee and remaining stages of the Welfare Benefits Up-rating Bill.
Tuesday 22 January—Consideration of an allocation of time motion, followed by proceedings on Second Reading and in Committee of the whole House on the Succession to the Crown Bill.
Wednesday 23 January—Opposition day [15th allotted day]. There will be a debate on an Opposition motion. Subject to be announced.
Thursday 24 January—Debate on a motion relating to reducing the voting age, followed by general debate on the Holocaust memorial day. The subjects for these debates were nominated by the Backbench Business Committee.
Friday 25 January—Private Members’ Bills.
The provisional business for the following week will include:
Monday 28 January—Remaining stages of the Succession to the Crown Bill.
Tuesday 29 January—Consideration of Lords amendments to the Electoral Registration and Administration Bill, followed by remaining stages of the HGV Road User Levy Bill.
Wednesday 30 January—Opposition day [16th allotted day]. There will be a debate on an Opposition motion. Subject to be announced.
Thursday 31 January—Consideration of opposed private business nominated by the Chairman of Ways and Means, followed by business to be nominated by the Backbench Business Committee.
Friday 1 February—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 31 January will be:
Thursday 31 January—Debate on the 30th anniversary of S4C, followed by debate on the military justice system.
Ms Eagle
I thank the Leader of the House for announcing the forthcoming business. May I also thank him for the written statement today on public reading stages for Bills?
We welcome the announcement that the House will debate, on a Back-Bench business motion, Holocaust memorial day. It is right that we remember the premeditated murder of millions of people, mostly Jews, during the holocaust.
We agree with the Government’s decision to provide logistical support for the French operation in Mali. The brutal rebel regime has been terrorising the civilian population. Its links with al-Qaeda pose a security threat. The killing of two oil workers in Algeria and the kidnapping of more than 20 of their colleagues shows that the threat from al-Qaeda remains serious. This is an extremely dangerous and, for the families, deeply worrying situation. We recognise that Ministers might be limited in what they can say in public until the situation is resolved, but will the right hon. Gentleman undertake to ensure that the Government keep the House updated when it is appropriate to do so?
We are less than three weeks into the new year, and three major retailers have gone into administration. First Jessops, then this week HMV and Blockbuster. More than 10,000 retail jobs have gone or are at risk, impacting on communities across the country. The growth of online business has had a major impact on the structure of the retail economy, but the hollowing out of our high streets has a detrimental effect on local communities. The Government could support the change in the retail sector by ensuring that global online retailers paid their fair share of tax here in the UK. It has also been revealed this week that Ministers have been including unpaid work experience posts in their employment figures. So, while real jobs are disappearing on the high street, Ministers have spent their time conniving to boost artificially the employment figures. May we have an urgent statement on that from the Business Secretary?
Students at Stanford university were last week regaled by Mr Steve Hilton’s accounts of his time in No. 10. He told them:
“Very often you’ll wake up in the morning and hear on the…news”—
a Government announcement—
“…and you think…it’s not just that we didn’t know it was happening, but we don’t even agree with it!”
None of us was in the least surprised by that observation. After all, Mr Oliver Dowden, the deputy chief of staff at No. 10, said he was
“surprised on a day-to-day basis”
by his own Government’s announcements. The fact that the Government’s aides wander the world saying that No. 10 is a shambles does raise the question of who is responsible.
This week, we learned that Ministers have found someone new to blame: the civil service. The list of those the Government have blamed for their difficulties keeps on growing. We have had the weather—at different times, it has been too hot, too cold, too windy or too wet for the economy to grow. We have had Her Majesty, for having a diamond jubilee, we have had the Olympics for distracting us, and the Deputy Prime Minister has been blamed for just about everything. Next, they will be turning on each other. Oh—they are.
That brings me to Europe. The Prime Minister told The Sun in 2009 that
“if we win that election, we cannot afford to waste time having a row with Europe.”
Well, the Conservatives did not win the election, and they are having a row about Europe. The Prime Minister has decided that crossing the North sea to Holland will put sufficient distance between him and his Back Benchers to allow him safely to deliver his European speech. No doubt the Dutch people are eagerly anticipating his remarks, but will the Leader of the House suggest to the Prime Minister that he might choose to make a statement to this House?
Yesterday at Prime Minister’s questions, we had questions but no answers, so perhaps the Leader of the House could tell us this: is it the Government’s intention that the UK will be a full member of the European Union in five years’ time? The Prime Minister refuses to answer, but Cabinet Ministers have been falling over each other to offer different answers. The Local Government Secretary said that he might vote to leave; the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), thinks the idea is barking; the Education Secretary thinks that it might be a good idea to leave; and the Deputy Prime Minister thinks that it would have a chilling effect on our economy. I can quite understand why the Foreign Secretary, witnessing all that, decided to go and spend some time in Australia. Given that we had two statements on Leveson, are we now going to have three on Europe: one by the Deputy Prime Minister, one by the Prime Minister, and one by rebel Tory Cabinet Ministers? There we have it: the Government are divided, the Prime Minister has lost control, and party management is trumping the national interest. It is Maastricht all over again.
Mr Lansley
I am grateful to the shadow Leader of the House for her comments, and particularly for her welcome for the written ministerial statement on public reading stages. I also share her welcome for the Backbench Business Committee’s decision to timetable a debate on Holocaust memorial day. I am a supporter of the Holocaust Educational Trust and a member of its council, and I have been with students to Auschwitz-Birkenau, as I know many Members have done. Holocaust memorial day is an occasion on which we can commemorate and understand the nature of that horror. It helps us to understand the applications of that genocide to the issues of today, and the horrors that man unfortunately still tends to visit on other members of mankind.
The shadow Leader of the House asked about Mali. She will recall that the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Boston and Skegness (Mark Simmonds), made a statement on that matter earlier in the week. I know that my colleagues in the Foreign and Commonwealth Office and the Ministry of Defence will ensure that the House is updated on that issue, and, when it is appropriate to do so, on the events in Algeria. The Government condemn what has happened there. We are acting in concert with our allies in response. We send our condolences to the families of this and other countries’ nationals who have been killed and captured, but we will not rest from trying to recover those who have been kidnapped.
The hon. Lady asked about the high street, and she will recall the Portas review. The Government are supporting regeneration in the high street, but she and the House must understand completely that the Government cannot stand in the way of change in the economy—and changes are taking place, which will impact on high-street retailers. Some high-street retailers will succeed and prosper; others unfortunately will not. One of the key things that this Government have set out to do is always to try to ensure that we give the private sector an opportunity to grow. The evidence for that—the hon. Lady neglected to put it before the House—is the creation of more than 1 million jobs in the private sector since the general election. That is precisely what this Government are doing.
I was amused, but I was not much questioned by the shadow Leader of the House on some other issues. A former civil servant myself, I have seen press reports suggesting that the Prime Minister referred to “Yes Minister” as a documentary, but I am not aware that he did; I think I did in the House.
Mr Lansley
I am pretty sure that is not going to happen. For the purposes of “Yes Minister”, I have been both Bernard and Jim Hacker. What I can say with great confidence—I know it is true of this coalition Government—is that as my esteemed colleague Lord Fowler once said, “Ministers decide.” That is true; Ministers do decide. We take the decisions and we take the responsibility.
Finally, I do not want to chide the shadow Leader of the House too much, but once again she and her colleagues have not given notice to the House today of what the business might be for the Opposition day next Wednesday. I wonder whether they lack options. If they feel that they do, let me suggest gently, given that the hon. Lady was talking about and asking questions about Europe, that the Opposition might like to have a debate on Europe. Then we might discover the Labour party’s policy on Europe. As far as I can see, the Leader of the Opposition is willing to go on the radio and say that there are areas in which Britain needs powers back, but not to endorse the idea of a negotiation, the purpose of which is to achieve that. I thus have no idea what the Labour party’s approach might be.
Following the right hon. Member for South Shields (David Miliband) saying in a debate on the welfare benefits uprating that he was
“happy to debate priorities within”—[Official Report, 8 January 2013; Vol. 556, c. 217]—
the spending envelope, perhaps we could have a debate on that so that we can hear the Labour party’s proposals. Otherwise, we could have a debate on the elasticity of money supply, since the Labour party has made proposals for additional taxes, which would raise something over £2 billion, but appears to believe that that money is capable of matching spending pledges of more than £30 billion. Elasticity of money supply seems to be the Labour party’s approach.
Mr Speaker
Order. There is heavy pressure on time today, as I have already indicated, making it imperative that contributions from Back Benchers and Front Benchers alike are brief. Moreover, I remind the House that, in accordance with convention, hon. and right hon. Members who came into the Chamber after the Leader of the House had begun his statement or who exited during it, should not stand and expect to be called.
Mr Stewart Jackson (Peterborough) (Con)
My right hon. Friend will know that from January next year 29 million Bulgarians and Romanians will potentially have access to the UK under the free movement directive. This Government are at risk of exhibiting institutionalised torpor on this issue. There has been no proper liaison with local authorities, no proper analysis of the likely numbers coming here and no analysis of whether we can vary the free movement directive to protect our core public services and our employment market. Will my right hon. Friend ask the Prime Minister to look at this matter as a matter of urgency, because we have only 11 months left?
Mr Lansley
I can reassure my hon. Friend that the Government are actively considering the issue. Rather than adopting the last Government’s attitude to the accession of member states, we are deploying as much of the extension of transitional measures as is available to us. My colleagues in the Department for Communities and Local Government are in contact with local government representatives, and my hon. Friend the Minister for Immigration is leading a ministerial group which is considering matters relating to access to benefits and other services for those who come here. We do not want to exaggerate, as it were, the pull of this country rather than others for people exercising free movement in the European Union as a result of the differential in that regard.
Alison Seabeck (Plymouth, Moor View) (Lab)
We already know from the former policy adviser to No. 10 that the Government are not in control of some of the policy announcements that are emerging, but this week we heard from Ministers in the Ministry of Defence that they were unable to check 70 A3 pages relating to apparently low-impact cuts. Will the Leader of the House ask the Secretary of State for Defence to come to the House to explain exactly what was in those documents, and to reveal whether he is actually in charge of his Department and the decisions that it makes?
Mr Lansley
I am not sure that the hon. Lady knows my right hon. Friend the Secretary of State for Defence very well. I do, and I can assure her that he is very much in control of his Department—as, indeed, are my other right hon. Friends.
Mark Pritchard (The Wrekin) (Con)
May I join my right hon. Friend in calling for a debate on Europe? In view of the Prime Minister’s important speech tomorrow, may I also encourage him to offer the Prime Minister some advice? Will he advise the Prime Minister to ensure that the timing of a referendum is right, that the question of a referendum is right, and that the politics of a referendum are right?
Mr Lansley
I am happy to assure my hon. Friend that I have every confidence that the Prime Minister’s speech will be correct in all the respects that he has identified. Personally, I think that a lot of nonsense is being talked about this matter. The Government are undertaking a review of competences, and we are very clear about the necessity of understanding how we can create a new settlement with the European Union. The Prime Minister is very clear about that, and I entirely share his view that we want to be in a European Union, but a changed European Union. The EU is undergoing changes in the eurozone and in other areas, but this is an opportunity for us to have a better, more flexible and more competitive Europe, and that is what we will seek to achieve.
Mr Dave Watts (St Helens North) (Lab)
May we have a statement on changes in mobility benefits that will affect both children and adults, given that they were sneaked out without any consultation?
Mr Lansley
I will of course talk to my right hon. and hon. Friends at the Department for Work and Pensions about the issue raised by the hon. Gentleman, but I can assure him that I will always work with my colleagues to ensure that nothing is “sneaked out” and that Parliament and those who are affected by changes in benefit arrangements are kept informed.
Sir Bob Russell (Colchester) (LD)
A further consequence of the collapse of Jessops and HMV is that thousands of customers have been left with worthless gift vouchers. May we have a debate on consumer protection in the gift voucher market, which is worth £4 million a year? Interestingly, figures from the industry show that £250 million-worth of vouchers are never used.
Mr Lansley
I am sure that many Members will have the utmost sympathy for the people who held gift and credit vouchers, some of whom may not have been able to afford to lose them. The law provides for all unsecured creditors to be treated in the same way in the event of an insolvency, and the list of preferential creditors is kept to an absolute minimum. However, the hon. Gentleman has made an important point. He may wish to establish whether there is scope for a debate about the issue on the Adjournment, or through the Backbench Business Committee.
Mr Gerry Sutcliffe (Bradford South) (Lab)
Has the Leader of the House seen reports in the press this morning that, for the first time since 1994, Camelot is to increase the price of a lottery ticket, from £1 to £2? Will a Minister from the Department for Culture, Media and Sport come to the House and make a statement? I fear that that price increase may have an impact on contributions to good causes.
Mr Lansley
Yes, I have seen those reports. As I am sure the hon. Gentleman appreciates, after the passage of so many years the initial £1 ticket price could not possibly start rising by small increments, and it was only a question of the point at which it was appropriate for it to be adjusted substantially. Obviously Camelot and, presumably, the Lottery Commission will have to consider the potential impact on money that is raised for good causes, but I hope that the hon. Gentleman will have an opportunity to hear more from my colleagues at the DCMS, either during Question Time or on some other occasion.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
The local government settlement has just been announced. Before next year’s settlement, may we have a debate to discuss the difference between urban money and rural money? That still presents a problem, and now is the time to discuss it so that we can get it right for next year.
Mr Lansley
That is a matter of concern to many Members, including my hon. Friends at the Department for Communities and Local Government. Ministers agree that the evidence shows that rural areas are comparatively underfunded, and that a correction should be applied so that there is proper recognition of the additional costs of delivering services in rural areas. I will not elaborate on the details of those adjustments, although I could do so. Although we will want to have transitional stability in local government, the Government recognise that such costs need to be understood and reflected in the formula.
Clive Efford (Eltham) (Lab)
May we have a statement from the Secretary of State for Health on the performance of the Food Standards Agency? We have just had a poor performance from the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath), who failed to reassure the House about the FSA’s performance. There are concerns that if horsemeat can be labelled as beef and enter the food chain via supermarket shelves, other sources of meat that have been banned—perhaps because of concerns about BSE—could also enter the food chain. Will the Leader of the House ensure that we have a statement from the Department of Health, so that we can be reassured about the performance of the FSA?
Mr Lansley
It sounds as though the hon. Gentleman missed asking his question of my right hon. Friend the Minister of State. To my knowledge, my DEFRA colleagues have no plans to make a statement about the performance of the Food Standards Agency, but I will of course ask them to respond to the hon. Gentleman about that. I recall from my time as Secretary of State for Health that we exercise ministerial oversight, although the FSA is a non-ministerial department.
Nicola Blackwood (Oxford West and Abingdon) (Con)
Hundreds of my constituents spent Christmas and new year on flood alert, like many others, but now that the immediate danger has passed, they still have to cope with the worry of an uncertain future for their flood insurance. May we please have an urgent oral statement on the progress that the Government are making with the insurance companies on agreeing a statement of principles?
Mr Lansley
I share my hon. Friend’s sense of frustration that the negotiations with the Association of British Insurers have not yet reached a successful conclusion. My hon. Friends at the Department for Environment, Food and Rural Affairs and my right hon. Friend the Minister for Government Policy are actively engaged in those negotiations. I would advise my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) that it is not necessarily helpful to make statements or offer a running commentary in the midst of such negotiations. Our objective is clear: to do something that will offer the necessary protection to householders and, of course, also be fair and responsible to taxpayers.
Geraint Davies (Swansea West) (Lab/Co-op)
Bob Dylan named himself after Dylan Thomas. We in Swansea will celebrate the centenary of Dylan Thomas’s birth in 2014, and I have asked Bob Dylan whether he would be prepared to give a centenary concert in Swansea, in order that he could blend his music with Dylan Thomas’s poetry. Sony Music has come back and said that Mr Dylan is thinking very positively about the idea. Would the Leader of the House welcome such a concert, and does he agree that it would add to the reputation of Swansea, the popularity of Bob Dylan and the legacy of Dylan Thomas? Also, would the Leader of the House be interested in coming along, or is his answer “Blowing in the Wind”?
Mr Lansley
I am very grateful to the hon. Gentleman. If I can attend, I will do so, and I will look forward to it. Perhaps others will join me. Many who come from Swansea might contemplate revisiting it. My hon. Friend the Member for New Forest East (Dr Lewis) is from Swansea, as is the First Deputy Chairman of Ways and Means—and, indeed, the outgoing Archbishop of Canterbury.
Philip Davies (Shipley) (Con)
Can the Leader of the House confirm whether the Prime Minister will be making a statement in the House next week on his speech on Europe? Such a statement would give us all the opportunity to congratulate him on the fantastic speech that the Leader of the House confidently predicts and would also expose how out of touch with public opinion the Opposition are on this issue. Given that the shadow Leader of the House was leading with her chin in demanding such a statement, surely it would be a shame to disappoint her.
Mr Lansley
I am grateful to my hon. Friend for his question. It is not unusual for Prime Ministers of all parties to make speeches, and they sometimes do so in an international context. In this instance, it is important that the Prime Minister does so, because is it important that we communicate not only to the people of this country, but to the people of Europe our determination to achieve changes in Europe that enable the whole of Europe to be more competitive and more flexible. That is sought not only by this country, but by people in many other countries; this is about enhancing democratic accountability. On issues that require reporting to the House, I will, of course, discuss with my right hon. Friends whether it would be appropriate for a statement to be made and ensure that the House knows of any such statement as early as possible.
Mr Nigel Dodds (Belfast North) (DUP)
May we have a debate in Government time that allows Ministers from the Northern Ireland Office to come to the House to explain what work the Department is doing with the Treasury to assist the Northern Ireland Executive in the current serious situation in Northern Ireland, and to address issues such as under-investment in education and housing, and social deprivation? The serious cuts to the block grant in Northern Ireland are having a detrimental effect on people on the ground in Northern Ireland. Will the Leader of the House give us some assurance on that point?
Mr Lansley
The right hon. Gentleman will know that my right hon. Friend the Secretary of State for Northern Ireland is having discussions today with the First Minister, the Deputy First Minister and, I believe, the Foreign Minister of the Republic of Ireland. I have no doubt that the discussions will be very helpful. The right hon. Gentleman will note that questions to the Secretary of State for Northern Ireland will take place on Wednesday next week, which may afford an opportunity for a response, but I will of course ask the Secretary of State whether there are further ways in which she can respond to the points that he makes.
Dr Matthew Offord (Hendon) (Con)
Last Friday, I was very pleased to visit the NHS Blood and Transplant centre in Colindale to listen to the concerns of management and staff. One concern that was raised with me was the low level of blood donations from ethnic and minority groups. That is a particular problem because that blood is used to treat people with sickle cell anaemia. Will a Minister come to the Dispatch Box to advise on how the Government are trying to encourage people from ethnic minority groups to give blood?
Mr Lansley
I agree with my hon. Friend that we owe blood donors a huge debt of gratitude. Each unit of blood donated helps us to save the lives or improve the health and the lives of three people; on average, one donation helps three people. That is important and I hope that everybody will recognise it. He raises an important specific point. NHS Blood and Transplant runs regular donor recruitment campaigns, including those to encourage blood donations from black and minority ethnic donors. It works with the media, particularly those of particular relevance to those communities, and with celebrities who have support in those communities. In addition, the Department of Health has established the National Black, Asian and Minority Ethnic Transplant Alliance, which brings together organisations to tackle the issue of low donor and transplantation rates in those communities.
Alison McGovern (Wirral South) (Lab)
Can we not have a debate in Government time on the state of the high street? Now that we understand the shakiness of the Government’s jobs figures, does it not make the Leader of the House’s assertion just now that market forces will prevail look worrying indeed?
Mr Lansley
The hon. Lady may wish to go, with others, to the Backbench Business Committee to seek such a debate. The employment figures are not shaky; they are absolutely robust. They are telling us that a great deal of private sector job formation is taking place, and that is very important. It stands in direct contrast with the situation in many other countries. We know that we are suffering from the economic effects of the eurozone crisis, but in contrast with a number of countries in the eurozone we have relatively robust employment figures. That is evidence of the Government’s support for the private sector.
Andrew Selous (South West Bedfordshire) (Con)
The Bedfordshire and Hertfordshire local medical committee, which represents local GPs, has written to me and other MPs to raise its concerns about people coming to this country to access free health care. It says it wants help on this issue, so may we have an urgent debate on how we can offer that?
Mr Lansley
I understand very well the point my hon. Friend is making. The Government have concluded a major review of the rules and procedures on charging visitors for NHS care. It is important that we understand that those who are here, on whatever basis, have access to emergency care, but that there are rules about those who have access to non-emergency care or continuing care beyond primary care. I hope that Health Ministers will be able to make an announcement about the results of that review soon.
Chris Bryant (Rhondda) (Lab)
I do not want just a statement on Europe; I want a full debate on Europe in Government time. In the old days, we used to have four debates a year before European Councils and four statements after European Councils so that the Government’s policy could be scrutinised by the House. I know that they were pretty tedious affairs, with single transferable speeches delivered time after time, not least by myself. It would be good if we could have a bell fitted behind the Speaker’s Chair, so that every time the word “Europe” is mentioned all Pavlov’s dogs on the Government Benches could start slobbering—[Interruption.]
Mr Speaker
There is nothing disorderly about that remark, but I leave Members to make their own assessments on the question of taste.
Mr Lansley
You are absolutely right, Mr Speaker—there is a distinction between what is in order and what is charming, and that was charmless. I also noted that following oral questions earlier, the hon. Gentleman did not take the trouble to apologise for being completely wrong in suggesting that I had incorrectly informed the House about what was in the ministerial code, but be that as it may.
I think it is a tremendously positive innovation that a substantial proportion of the House’s time is not in the gift of Government but is available to the Backbench Business Committee. That includes time that was previously allocated to a range of general debates for such purposes. If the hon. Gentleman feels strongly about the need for a debate on Europe, he should get together with other Members and go to the Backbench Business Committee to seek it.
Tessa Munt (Wells) (LD)
The Glastonbury road run is an established, popular and safe annual charitable fundraising event, supported with great good will by our local police and other services. Should the council choose to use the Town Police Clauses Act 1847 because the street is “liable to be obstructed”, local charities lose no funds, but if the council elects this year to use the Road Traffic Regulation Act 1984, the organisers will receive a demand for £1,000, which will have to be paid from charitable donations. Will the Leader of the House raise the matter of clarifying the regulations to separate commercial from charitable street events so that the latter are treated with reason and common sense and not as a county council fundraising effort at the charities’ expense?
Mr Lansley
I am grateful to my hon. Friend for that question and will of course raise the issue with my hon. Friends at the Department. I might be wrong, but I think that in such circumstances the local authority has the discretion to waive those fees in certain cases.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Despite a 400% increase in the demand for food banks since 2010, the Prime Minister has neglected to give clear answers to me or to my hon. Friend the Member for Rotherham (Sarah Champion) about whether he will visit one. May we have a debate on the subject of food banks in this Chamber so that we can bring the facts to the Prime Minister, if he is unwilling to go and see them for himself?
Mr Lansley
I heard the Prime Minister’s reply during Prime Minister’s questions yesterday, and the hon. Gentleman might recall that during business questions last week I made it clear that my hon. Friend the Member for Loughborough (Nicky Morgan) and I have visited a food bank. We rightly appreciate the service that is being provided by food banks and the Department for Work and Pensions operates a food bank referral service that works with them, including, in particular, the Trussell Trust. The Government are also working independently, not least through the Healthy Start scheme, which helps about 500,000 very low-income families across the UK to buy milk, fruit and vegetables as part of a healthy balanced diet.
Guto Bebb (Aberconwy) (Con)
According to TripAdvisor, the town of Llandudno in my constituency has some of the best guest houses in the world. However, if they want to increase business by offering a complimentary glass of wine to their residents as part of an evening meal, they face the disproportionate cost of acquiring a licence. May we have a debate on the Government’s proposals, as set out in the alcohol strategy, for reducing licensing burdens on these ancillary sellers of alcohol?
Mr Lansley
Yes. I am grateful to my hon. Friend. If I recall correctly, there was very positive coverage of at least one hotel in Llandudno earlier this week—
Mr Lansley
Yes. If the hon. Gentleman will allow me, I was referring specifically to Llandudno in my hon. Friend’s constituency for a second. I sometimes wonder, Mr Speaker, whether the hon. Member for Rhondda (Chris Bryant) wants to be in charge of the order of the House. It seems rather impertinent, does it not? If I were disorderly, you would call me to book. I do not need the hon. Gentleman for that to happen.
I can give my hon. Friend the Member for Aberconwy (Guto Bebb) some reassurance. On 28 November the Government launched a consultation on whether to reduce the burdens of licensing on businesses that sell alcohol only as a small part of a wider service. That includes guest houses or bed-and-breakfast accommodation that wish to provide alcohol to guests as part of an evening meal. That consultation can be found on the Home Office website. I encourage him and all interested parties to respond before the closing date of 6 February.
Jonathan Ashworth (Leicester South) (Lab)
May we have a debate on Government waste by Departments? Figures that I have uncovered show that Government Departments have produced more than 5,500 circulars, consultation documents and publications since May 2010 at a cost of over £1.3 million, including such exciting titles as “Code of Practice on Noise from Ice-Cream Van Chimes”, “Understanding the relationship between taste and value in culture and sport”, and my personal favourite bedtime reading, “Is your dog barking too much?” Is this really a good use of taxpayers’ money?
Mr Lansley
I do not have comparative data, but I suspect that under the previous Government there were at least equivalent numbers, but probably much larger numbers of consultations taking place, and the hon. Gentleman knows that perfectly well. Our responsibility is to make sure not only that we engage the public by consulting fully and adequately, but that we make effective progress with business. That is why we introduced in the latter part of last year a new structure for consultations that means that they will be conducted more expeditiously. We will make more progress more quickly and we will help business, not least as a consequence of that, to get certainty more quickly, and it will help us in the process of reducing the burden of regulation.
Christopher Pincher (Tamworth) (Con)
Some 1,080 people from Tamworth started apprenticeships last year. May we have a debate in Government time on the new traineeship programme so that we can explore how we can further help young people successfully to compete for jobs and avoid the welfare trap that all too many of them endured under Labour?
Mr Lansley
Yes, I hope we might find an opportunity, by one route or another, for further discussion of the announcements made by the Minister for Schools. Traineeships are a welcome addition to the armoury, so to speak, to ensure that all young people get access to the right skills and that all employers find young people in this country who have appropriate skills and attitudes in order to go into work. My hon. Friend is right. Since the election more than a million people have started apprenticeships. The budget has been increased, and even where apprenticeships are not appropriate, through the youth contract work experience and other support to the young people who most need skills have been growing under this Government.
Andy Sawford (Corby) (Lab/Co-op)
Will the Leader of the House find time for a debate on the uses and abuses of zero-hours contracts, which plague many people in my constituency, particularly the most vulnerable workers?
Mr Lansley
If the hon. Gentleman specifically wants to raise abuses, I am sure my right hon. and hon. Friends at the Department for Business, Innovation and Skills would be interested to hear from him. I encourage them to respond to him about the nature of those contracts. In some cases—for example, in relation to the NHS—I looked at some of those contracts, and they can play a part in the effective management of a work force and may sometimes be in the interests of workers themselves, as well as their employer. It is all a matter of what the appropriate circumstances are. The hon. Gentleman might like to look for an Adjournment debate or some other opportunity in order to raise these issues.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
In the light of the recent rioting in east Belfast, some have suggested that some of the youngsters involved feel that they are not included in the decision-making process. At what stage does my right hon. Friend think Parliament should assess progress on the Good Friday agreement, especially as far as community relations are concerned?
Mr Lansley
I further remind the House and my hon. Friend of the opportunity to raise such issues with my right hon. Friend the Northern Ireland Secretary and her colleagues on Wednesday next week.
My hon. Friend will be aware that the 1998 Belfast agreement clearly set out the constitutional position in Northern Ireland and the accountability mechanisms that follow from it. I also say to my hon. Friend that the violence and public disorder in Belfast is completely unjustifiable; I do not think it is justified or excused by reference to any issues of that kind.
Natascha Engel (North East Derbyshire) (Lab)
Has the Leader of the House had the opportunity to make a decision about bringing e-petitions fully in-House, so that people are aware that they are petitioning Parliament and not the Government? If he has not yet had a chance to make that decision, will he sit with me and construct a timetable to make sure that it can be done as quickly as possible?
Mr Lansley
As the hon. Lady will know from our discussions and a previous answer in business questions, I am keen for us to make progress on this issue. No decisions have been made, of course; in any case, I hope that such matters would be for the House.
I hope that we can get together and consider how we can take forward what has been a substantial success. There are now a large number of petitions; there have been some 8 million signatures on 40,000 petitions since the e-petitions website was created. We must not prejudice that, but we must try to make it as relevant as we can to the work of the House, and the hon. Lady’s Committee has done a great deal on that. I am very open to further discussions, and we are working on the issue now.
Mr Philip Hollobone (Kettering) (Con)
What on earth is going on at the UK Border Agency? It has never had the best reputation in the world for the timeliness of its responses to Members’ inquiries, but in the past two or three months, it seems to have got many degrees worse; many of my constituents in Kettering are awaiting replies to correspondence that is two or three months old. May we have a statement from the relevant Minister to make sure that the UK Border Agency sorts out its correspondence protocols?
Mr Lansley
My hon. Friend will recall that during questions last week and previously I said that the chief inspector acknowledges that the Border Agency still has a great deal of work to do, but that the situation has started to turn around and is now improving. However, I share with my hon. Friend and many other Members a sense that there is still a way to go. There is a huge volume of correspondence, which is why the agency is introducing a national operating model in March, under which correspondence from hon. Members will be managed through a single process. Guidance has been issued to staff, stressing the need for all correspondence to be dealt with promptly. However, I will take up my hon. Friend’s question with the relevant Minister at the Home Office.
Diana Johnson (Kingston upon Hull North) (Lab)
From the official figures, which are going to be announced next Wednesday, it will no longer be possible for Members to obtain constituency statistics on the number of jobseekers after each job in their constituencies. That is a real issue in my constituency, which has been top for many months—50 jobseekers after every vacancy. There is no legitimate reason for that statistic not to be provided, so may we have a debate on why the Government are choosing to suppress the inconvenient figures that give a real indication and insight into what is happening with local employment around the country?
Mr Lansley
I will, if I may, talk to my right hon. and hon. Friends at the Department for Work and Pensions about that. I am not familiar with the background to the hon. Lady’s point; the availability of statistics through Government Departments is normally approved through the UK Statistics Authority. I will certainly inquire through the Statistics Authority or the Department to ensure that the hon. Lady gets a proper reply, which I can see, too.
Mr David Burrowes (Enfield, Southgate) (Con)
The equal marriage Bill will be published next week. Will there be a statement to explain the rush to redefine marriage and will it address the information from the Commons Library that in the past 12 years no Government Bill determined by a free vote has been announced before the Queen’s Speech?
Mr Lansley
My hon. Friend seems to have constructed a very particular question about something that may not have occurred because relatively few Government Bills are conducted on a free-vote basis, but I will gladly look back to see what the precedents are. Let me reiterate what I said in last week’s business questions: we have not yet introduced this Bill. My hon. Friend seems to be more knowledgeable than I am. I do not have a timetable for its introduction; I know that we will do it soon but I have not established a date. When the Bill is introduced, we will of course make it very clear how it is properly to be considered.
Ian Lucas (Wrexham) (Lab)
It is
“a terrible time to have the diversion and uncertainty which build-up to a referendum would entail”.
Those are not my words but those of the Business Secretary, reported in the Financial Times as what he is going to say today. Is not the reason the Prime Minister will not come to the House with a statement following his speech the fact that he cannot speak on behalf of the Government he leads because they have no coherent policy on Europe, and that is damaging British business and British interests?
Mr Lansley
I am afraid I simply do not accept a word of that. The Government are very clear about what we are doing. We are conducting a review of competence the purpose of which is to enable this country to engage in a negotiation that would lead to a more competitive and more flexible Europe. I heard the hon. Gentleman’s leader saying on a radio programme this morning that he was in favour of a more flexible European Union and that he believed that there were powers that needed to be brought back to this country. He and his party appear to be willing the end but denying the means.
John Glen (Salisbury) (Con)
Will the Leader of the House make time for a statement on the performance of the NHS bursary unit? One of my constituents, Thomas Petch, is among a large number of students who have failed to receive the bursary to which they are entitled, causing massive inconvenience as they rely on it to fund their everyday living.
Mr Lansley
My hon. Friend makes an important point on behalf of his constituent. The changes in the NHS bursary application procedure mean that continuing students need to reapply for their bursary each academic year. A large number of continuing students did not reapply as requested, and this has led to a backlog. I know that the NHS Business Services Authority will take every measure it can to reduce and manage that backlog quickly. May I assure my hon. Friend that his constituent, Mr Petch, will receive his January payment in the next week?
Fiona Mactaggart (Slough) (Lab)
On 14 February it is an international day of preventing violence against women, and MPs from all parties have supported the notion that this House should contribute to events and debates on that day. If the Leader of the House were to make an early decision and inform the Backbench Business Committee that 14 February would be a day on which it could allocate time, it might allocate it to such a debate. Will he tell the House now that we can have that debate on 14 February?
Mr Lansley
I am afraid I am not in a position to make that announcement now, but I entirely understand the hon. Lady’s point, not least because I heard her and other Members make it to the Backbench Business Committee at its meeting on Tuesday. I will discuss with my colleagues whether we are able to meet her request and the requests of other Members and liaise with the Committee on that.
Kris Hopkins (Keighley) (Con)
On Sunday 10 March the Sue Ryder Manorlands 10 km race will take place in Keighley—an event that has raised £120,000 over the past four years. May we have a debate not only celebrating the moneys raised but on how such great events bring communities together?
Mr Lansley
Yes, I am glad to have the opportunity to share in my hon. Friend’s support for the 10 km run, the money that it raises and the good causes that it will be supporting. It is an illustration of something that Members across the House understand from their communities—that this kind of voluntary action enables people to have a great deal of fun, in this particular instance, to be healthier, and to offer a great deal of support to other people who are in need.
Kevin Brennan (Cardiff West) (Lab)
May we have a debate on the cost of ministerial travel? Further to what my hon. Friend the Member for Wrexham (Ian Lucas) said earlier, it is clear that the Prime Minister will not be making his speech in Holland as Prime Minister and leader of the coalition Government, as other Ministers have said, but as leader of the Conservative party on what the Conservatives will do in five years’ time in the unlikely event that they will be in government, so should not the Conservative party be paying for this trip?
Mr Lansley
I will say two things. First, I am afraid that the hon. Gentleman is wrong. The Prime Minister will speak tomorrow in the Netherlands as Prime Minister. [Interruption.] The position is very clear—he will speak as Prime Minister and if, during the course of that speech, he refers to the Conservative manifesto or beyond the next election, he will, of course, be referring beyond the scope of the coalition agreement. That is quite usual—there is nothing unusual about it at all.
I do not have the figures in front of me, but if the hon. Gentleman wants to have a debate about the cost of ministerial travel in this Parliament relative to its cost in the previous Parliament, we would be very happy to have it.
Glyn Davies (Montgomeryshire) (Con)
I have raised in previous business questions the potential negative impact on the organ donation system in England of plans by the Welsh Government to change the system in Wales to one based on presumed consent. Yesterday I received a copy of a letter to the Welsh Government from the UK’s foremost expert on the issue, pointing out that the consultation process adopted by the Welsh Government was fundamentally flawed. Will my right hon. Friend arrange an early opportunity for MPs to discuss this crucial issue before damage is done and it is too late?
Mr Lansley
My hon. Friend makes a very important point. These issues do not relate solely to Wales; they also relate to England, because they have direct implications for the organ donation system in England. I made that clear to the Welsh Assembly Government when I was Secretary of State for Health and I know that my right hon. Friend the Welsh Secretary will have done so, too. I do not know what opportunities there may be for a debate on the matter in this House or, indeed, in the Welsh Grand Committee, but I will certainly discuss it with my colleagues.
Yvonne Fovargue (Makerfield) (Lab)
This week the Legal Services Commission confirmed a £655,000 cut to the Law Centres Network, the Advice Services Alliance and the Royal Courts of Justice’s citizens advice bureaux service. May we have a debate on what that will mean for those organisations, the organisations they support and, most importantly, the people who will no longer be able to use them?
Mr Lansley
The hon. Lady may have an opportunity to raise that issue at Justice questions on Tuesday 5 February, but if that seems far off and she would like a response on the specific implications, I will gladly talk to my right hon. Friend at the Ministry of Justice and secure it for her.
Backbench Business
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Atos Work Capability Assessments
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Michael Meacher (Oldham West and Royton) (Lab)
I beg to move,
That this House has considered the matter of Atos work capability assessments.
I warmly thank the Backbench Business Committee for enabling me and cross-party colleagues to introduce this debate on Atos work capability assessments. There is enormous concern about the issue both in the country and in this House, as witnessed by the fact that more than 30 Members wish to speak on a Thursday. To try to ensure that they can all do so, I propose to speak for no more than 10 to 15 minutes. I hope that colleagues will accept that, for reasons of pressure on time, I do not propose to take interventions.
As knowledge of the debate has spread, I have been sent nearly 300 case histories, many of which make heart-rending reading. I cannot begin to do justice to their feelings of distress, indignation, fear, helplessness and, indeed, widespread anger at the way they have been treated. Nor can I easily contain my own feelings at the slowness, rigidity and insensitivity with which Atos and the Department for Work and Pensions have responded—or very often not responded—to the cries of pain that they have heard repeatedly. I have time to cite briefly only three examples which show how extreme is the dysfunction and malfunctioning of the Atos assessments.
The first example concerns a constituent of mine who was epileptic almost from birth and was subject to grand mal seizures. At the age of 24, he was called in by Atos, classified as fit for work and had his benefit cut by £70 a week. He appealed, but became agitated and depressed and lost weight, fearing that he could not pay his rent or buy food. Three months later, he had a major seizure that killed him. A month after he died, the DWP rang his parents to say that it had made a mistake and his benefit was being restored.
The second example, also from the Oldham area, concerns a middle-aged woman who was registered blind and in an advanced stage of retinitis pigmentosa. She was assessed at 9 points—well short of the 15 that are needed—and her incapacity benefit was withdrawn. On review by a tribunal, the Atos rating of 9 points was increased to 24.
The third case—I could have chosen from hundreds of others—also comes from the north-west and concerns an insulin-dependent diabetic with squamous cell cancer, Hughes syndrome, which involves a failed immune system, peripheral neuropathy, which meant that he had no feeling in his feet or legs, heart disease, depression and anxiety. Despite his life-threatening condition, he was placed in the work-related activity group.
Those and myriad other examples illustrate incontrovertibly that Atos’s current work capability assessment system is drastically flawed, and for several reasons. First, Atos is an IT firm and it uses the so-called Logic Integrated Medical Assessment, which is often described as “rigid” and “tick-box” because computer-based systems make it difficult for health professionals to exercise their professional judgment. Because such a mechanistic system has little or no regard for the complexity of the needs of severely disabled or sick persons, the British Medical Association and others have condemned the current WCA as “not fit for purpose”.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will my right hon. Friend give way?
Mr Meacher
Despite my hon. Friend being my colleague in Oldham, I really must keep strictly to what I said, but I very much hope that she will be called.
Secondly, assessed persons regularly felt that the opinion of their own doctor or of other specialist medical personnel who were treating them was either ignored or overridden. That is all the more serious when Atos’s practices simply do not adhere to the guidance for doctors set down by the General Medical Council.
Thirdly, because of the failure of so many initial assessments, the appeal procedure is grossly overloaded and hugely expensive. No less than 41% of decisions are appealed, of which 38% are won. At £60 million in a single year, the appeals have cost the taxpayer more than half of the £110 million that was spent on the original assessments. Moreover, the National Audit Office has castigated the Department for failing to penalise Atos for what it politely calls its “underperformance” and for not setting “sufficiently challenging” targets.
Fourthly, there are concerns about the responsibility for work capability assessments, in particular that of the Atos chief medical officer. Professor Michael O’Donnell joined Atos from the American company, Unum, formerly UnumProvident, which had a very poor reputation in the US, where it was described as an “outlaw company” by the US authorities, partly because it was regarded as a “disability denial factory”. In that situation, the responsibilities of the Minister and the Secretary of State need to be established clearly.
Against that background, it is frankly not good enough for the Minister to respond to the debate by saying that there have been three Harrington reviews, and that the Department is doing the best it can to improve procedures. The fundamental issue is this: how can pursuing with such insensitive rigour 1.6 million claimants on incapacity benefit, at a rate of 11,000 assessments every week, be justified when it has led, according to the Government’s own figures, to 1,300 persons dying after being put into the work-related activity group, 2,200 people dying before their assessment is complete, and 7,100 people dying after being put into the support group? Is it reasonable to pressurise seriously disabled persons into work so ruthlessly when there are 2.5 million unemployed, and when on average eight persons chase every vacancy, unless they are provided with the active and extensive support they obviously need to get and hold down work, which is certainly not the case currently?
I therefore want to conclude by asking the Minister five specific questions to which I want a specific answer before the end of the debate. First, it is true that Harrington has produced minor adjustments—implemented at a glacial place—but the underlying system remains largely undisturbed. The BMA and the NAO have therefore called for a thorough, rigorous and transparently independent assessment of the suitability of the work capability assessment. Will the Minister now implement that?
Secondly, will the Minister accept that the current criteria and descriptors do not sufficiently—or even at all—take into account fluctuating conditions, especially episodic mental health problems? How will he rectify that?
Thirdly, will the Minister provide full and transparent details of the Atos contract? They should not be hidden by specious claims of commercial confidentiality when Atos is the sole provider of what is clearly a public service. Better still, given that Atos has failed so dramatically, why does he not in-source the work back into the NHS?
Fourthly, how will the Minister ensure that the medical expertise of disabled persons’ doctors and related professionals is fully taken into account before assessments are completed?
Lastly, I want to provide a full dossier to the Secretary of State so that he fully understands what is being done today in his name, and to bring a small delegation to see him from some of the excellent organisations of disabled people who have heroically battled to highlight and tackle the distress and pain caused by Atos. Can I please be assured that the Secretary of State will see such a delegation?
I repeat that I am sincerely grateful for this debate, for the co-operation of colleagues from all parties, and for the detailed responses I have received from so many hundreds of victims of Atos, but I assure the Minister of this: the debate is important, but it will certainly not be the end of the matter.
Mr Deputy Speaker (Mr Nigel Evans)
Order. If everybody could resume their seats, I just want to inform the House that there are 28 Members who wish to participate in this relatively short debate. My responsibility is to protect Back Benchers’ time and get as many Back Benchers in as I possibly can. While we are starting at six minutes, you should start to think in terms of a four-minute contribution if you possibly can, so that as many Members as possible can get in.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I offer my hearty congratulations to the right hon. Member for Oldham West and Royton (Mr Meacher). He has long been known as a champion in this area. I listened carefully to what he had to say and I am afraid that my experience, and that of the people I have been talking to, mirrors much of what he is saying.
I would like to address the debate from the perspective of people with autism. There is a great deal of concern on both sides of the House, and among our constituents, about the way this process handles people with autism. The National Autistic Society, which provides advice to so many of us in this House and on which we rely a great deal, believes that the work capability assessment should be delivered differently so that it is fair and appropriate for claimants with autism.
More than 2,000 people have signed a National Autistic Society petition to Atos, which was launched following the “Dispatches” and “Panorama” investigations, with which many of us are familiar, into the company last year. The programme claimed that Atos was working to internal targets on the numbers of people being put into the work-related activity group, the support group or as being fit for work. Atos has indicated that it is open to working with the National Autistic Society and other charities, including in the context of this petition, but I have a specific question for the Minister. Will the Minister provide assurances that no such targets are in place?
There have been key concerns with the face-to-face assessment process. The work capability assessment model can certainly prove to be challenging in the context of claimants with autism. Most people with autism have difficulties with social interaction, and some will also lack insight into their difficulties. They may also have difficulty understanding the questions being asked and with communicating a response. Even travelling to the assessment centre and engaging with the process may be difficult to understand and create great anxiety. Therefore, face-to-face assessments may not always result in a fair and accurate assessment of claimants’ ability to work. The NAS has had a lot of inquiries relating to the quality and appropriateness of the WCA for claimants with autism, and that feeds into a broader picture of widespread concern.
There is also concern about the awareness of, and training for, assessors. In the cases of claimants with autism, including high-functioning autism and Asperger’s syndrome, difficulties in the workplace may not be obvious and may not become apparent in the course of a face-to-face assessment. That could be due to the hidden nature of the disability and a desire to appear more able than they really are to an assessor, or to other difficulties with this form of communication associated with the condition. It is therefore a strongly held view that it is vital that claimants with autism are assessed by professionals who have received autism-specific training. That would ensure that assessors have a better understanding of autism and routinely make reasonable adjustments as part of their assessment.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Will the right hon. Lady give way?
Mrs Gillan
If the hon. Lady will forgive me, I have only a short time to speak.
I think people are pleased that the Government have committed to having mental and cognitive champions, but I believe that people are concerned at the number of champions, their level of training and their expertise in autism. Our understanding is that there about 60 across the UK and it remains unclear what, if any, expertise they have in autism.
On collecting evidence, the NAS has consistently called for a tiered approach to assessment, both in terms of the WCA and the assessment process, for the personal independence payment under the new benefits system. I hope that the Minister, who has met recently with the NAS, Mind and other organisations, has listened carefully, and I am looking for reassurance in his response that all these points will be taken onboard.
In summary, I have a few questions for the Minister. What steps will the Government take to ensure that Atos collects existing evidence relating to a claimant’s capability to work, which would create a more cost-effective and streamlined system? Do WCA assessors receive autism-specific training? If so, of what does it consist? How many of the mental and cognitive champions currently operating at Atos assessment centres have specific autism training? How will he monitor the effectiveness of the introduction of those mental and cognitive champions?
I am sorry I could not give way to the hon. Member for Hackney South and Shoreditch (Meg Hillier), because I know she has a great track record and a special interest in this matter, but I hope that she will make her own speech. I hope that I have reflected in my contribution the widely held concern about this process among those least able to speak for themselves, and I hope that the Minister will respond positively.
Natascha Engel (North East Derbyshire) (Lab)
I pay tribute to my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and thank him for bringing this debate to the Backbench Business Committee. We were delighted to schedule it, and the number of Members present from both sides of the House demonstrates the importance of this issue mainly from a constituency perspective. I, like all other Members, have received a huge amount of correspondence about awful, tragic cases of individuals who have been badly treated by Atos during their work capability assessments.
The fault lies not with Atos, but with its employer, which, in this case, is the Department for Work and Pensions. When we look at the other employers for which Atos works, such as Royal Mail and the NHS, we see numerous cases of people who have been signed off work—not just their current work, but for any work ever again, with a recommendation that they be retired from all kinds of work—going back to Atos, but this time when it is employed by the DWP, and being assessed as entirely fit for work. They get no points and are deemed fit for work. As my right hon. Friend said, the number of people who are not just not fit for work but who die after being assessed as fit for work, is a reflection not of Atos but of the DWP. That is where the questions need to be asked.
Ian Mearns (Gateshead) (Lab)
I am sure that my hon. Friend will not be surprised to learn that in Gateshead, of the 1,400 cases taken to appeal by the citizens advice bureau, more than 1,200 were successful. I am worried about the CAB’s lack of capacity to deal with other cases that it could have taken but which have been unsuccessful because they were not advocated at tribunal.
Natascha Engel
I am glad that my hon. Friend has made that point as I want to come to that.
The proportion of original Atos decisions that are overturned is shocking—it is about 30% or 40%. I would be grateful if the Minister replied to that point. Precisely how many people deemed fit for work by Atos have their decisions overturned on appeal and are signed off work? I have asked about that in the past. The number is very high, but I would like to have the precise figure.
The welfare rights organisations dealing with the people who are being deemed fit for work—for instance, the unemployed workers centre in Derbyshire and the CAB—are swamped at the same time as they are having their funding cut. Not only are they swamped with work, but volunteers are leaving in droves because they cannot cope with the amount of work and the stress of seeing all these cases.
How many people deemed fit for work who do not take their cases to appeal then find work? As has been said, the employment situation, especially the further north we go in the country, gets worse and worse. In my constituency, there are 15 people applying for every job. Is it really for the best to sign people as fit for work when there are no jobs to be had? I would like answers to those specific questions.
We all want people to go back to work if they can, but the welfare state is there to protect those who cannot. People who are not fit for work would love to work if they could, but they cannot. The jobs are not there, but they are being signed fit for work. How many of them are getting a job, and how many of them are just being signed over to destitution?
Stephen Gilbert (St Austell and Newquay) (LD)
I join hon. Members in congratulating the right hon. Member for Oldham West and Royton (Mr Meacher), the Backbench Business Committee and my hon. Friend the Member for North Cornwall (Dan Rogerson) on securing this timely debate.
As the hon. Member for North East Derbyshire (Natascha Engel) said, we need to separate two things. The first is the principle of assessing those on out-of-work benefits to establish whether they can rejoin the workplace. As everyone in the House accepts, that must happen if we are to be responsible guardians of the public purse and if we are to help people who can work to get back into work. The second is the need to look in detail at the practice of how the assessments are being conducted.
Mr John Leech (Manchester, Withington) (LD)
I am grateful to my hon. Friend for giving way so quickly. A number of people who have been assessed reasonably recently had their incapacity benefits stopped but then reintroduced on appeal are now being reassessed and found fit for work once again. Surely people who have recently been assessed and won on appeal should not be being recalled by Atos.
Stephen Gilbert
I absolutely agree with my hon. Friend and what he says goes to the nub of the points I wish to make. This debate should focus on the practice of how these assessments are being conducted. He, like me and probably every Member, will have had scores, if not hundreds, of constituents experience a similar problem as they go through the system.
There is a consensus in the House on the principle of making assessments. The last Administration set up the WCA and the Atos contract in 2008, and it was right that in 2007 Liberal Democrat Members pressed for and secured the annual review of how the WCA was being implemented. Over the last few years, as every hon. Member will know, these reviews have revealed a catalogue of errors, and, to their credit, the coalition Government have taken action: there has been increased flexibility for assessors to take additional evidence, not least from consultants; there has been better communication with people undergoing assessment; and new standards have been implemented for descriptors. All that is having results. The numbers going into the ESA support group have risen to 26%—from 11% under the last Administration —so fewer people are now being found fit for work.
None of us can underestimate or undervalue the human effect that some of these assessments are having. I would like to read into the record an e-mail I received from a constituent. It is probably similar to e-mails that all hon. Members have received. It reads:
“They never asked about the amount of pain I have to contend with or how tired I get from coping with it. After the interview I was told I was to be disallowed ESA benefit. I could probably go down the route of appeal but I really don’t feel like fighting for a benefit that I have already been made to feel that I do not deserve, neither do I have the energy”
to appeal. If we in this House cannot give voice to these people, who are some of the most vulnerable in our society, I really do not know what we are for.
Steve Rotheram (Liverpool, Walton) (Lab)
To illustrate one of those cases, I shall cite a letter I received from a constituent, Janine, in Liverpool. Her dad was thrown off sickness benefit in November after an Atos work capability assessment and was declared fit for work despite suffering from chronic obstructive pulmonary disease. Six weeks later, on Christmas day, Janine’s father died. Does the hon. Gentleman agree that this example clearly highlights the fact that the work capability assessment, run by the DWP, is fundamental flawed?
Stephen Gilbert
As I have said, and as I am sure the hon. Gentleman would acknowledge, the point is not the principle of conducting assessments but the practice—how they are rolled out and how millions of our constituents experience them. Constituents have told me that they find the process dehumanising and degrading and that they are often seen by people who are unqualified to make an assessment of their condition. We have to get the assessment process right. That is right for the individuals concerned, but it is also the decent, moral and humane thing to do.
I am particularly concerned about those with fluctuating conditions such as ME—myalgic encephalomyelitis, or chronic fatigue syndrome—and those with lifelong degenerative conditions, who will never recover from the illness from which they are suffering but who continue to be called in for repeated assessments. The principle is the right one; the practice, however, is failing many millions of the most vulnerable people across the country. Although the coalition has made welcome efforts to get right a system that it inherited from the last Government, much more still needs to be done to ensure that we are doing things in a humane way.
Annette Brooke (Mid Dorset and North Poole) (LD)
Does my hon. Friend agree that most people were extremely pleased that Professor Harrington convened his working group to look at the descriptors for fluctuating conditions? However, whatever has happened has not solved the problem for people with ME, multiple sclerosis or mental health conditions. It is therefore imperative that the DWP get on with this and make the system work for those people.
Stephen Gilbert
I could not have put it better. This is not about the principle of assessments; it is about how they are conducted in practice. We owe it to some of the most vulnerable people across our country to ensure that we get this right.
Pamela Nash (Airdrie and Shotts) (Lab)
Nothing has shocked me more as the Member of Parliament for Airdrie and Shotts than the sheer scale of anxiety and hardship caused by the flawed work capability assessments, which is apparent in the number of people visiting my office every week. I am sure that that experience is replicated across the House and that we will hear many such stories today. I have had a frail lady sitting in my office who had only recently finished chemotherapy but had been told she was fit for work. I have had a lady who suffered 90% burns to her body—she spends every day in severe pain—and was told that she was now ready to join the Work programme. I could list hundreds of others—sadly, these are very familiar stories. These people are having their lives ruined by a system that was designed to support them.
Last year the whole country came together to celebrate the Paralympic games. I have to say that the vast majority of the country joined those booing in the Olympic park when the Chancellor took the spotlight, but he was not the only unpopular person at the games. Atos’s sponsorship was also widely condemned, leading to protests throughout the country, including by our very own Team GB. Unfortunately, the Scottish Government have not listened to the Scottish people on this. In fact, our Deputy First Minister has welcomed Atos’s sponsorship of the Commonwealth games next year. She has tried to wriggle out of it by saying that Atos is only carrying out the will of the UK Government. However, the Scottish people disagree not only with the structure of these work capability assessments but with the incompetence with which they are being carried out.
As I have such limited time today, I will restrict the rest of my comments to the recording of work capability assessments, which I have raised before on the Floor of the House. I know that there has been a pilot of recording work capability assessments as a result of Harrington review. The result was that the majority of those being assessed do not wish to have their assessments recorded. However, recording should continue to be offered to everyone being assessed, and the reason for doing this—the huge number of assessments whose results are overruled when they go to appeal—should also be explained to every claimant.
Caroline Lucas (Brighton, Pavilion) (Green)
The hon. Lady is making a powerful case. Does she agree that the Atos assessment process is not only humiliating and demeaning for those involved—and often plain wrong—but counter-productive, in the sense that it adds to the stress they are under, making sick people even sicker?
Pamela Nash
I thank the hon. Lady for that contribution. I am sure she has had the experience, as I have, of seeing people who have claimed employment and support allowance as a result of a physical disability or illness ending up with mental health problems owing to the stress of going through the system.
Wayne David (Caerphilly) (Lab)
Does my hon. Friend agree that it says a great deal about the nature of the work capability assessment that not only do many people win their appeals but that so many are appealing that this can lead to delays of up to 25 weeks for them to be heard?
Pamela Nash
I completely agree with my hon. Friend. We have heard that one in six of those claiming ESA ends up eventually winning their appeal, but in North Lanarkshire—the local authority area that I live in—60% of appeals are being won by those lodging them.
To return to the recording of assessments, the Minister’s predecessor, the right hon. Member for Epsom and Ewell (Chris Grayling), made it clear in a Westminster Hall debate last September that he felt that Atos
“should make recording available on a voluntary basis”.—[Official Report, 4 September 2012; Vol. 549, c. 42WH.]
However, not a single constituent of mine who has come to see me about work capability assessments has told me that they have been offered the prospect of having it recorded. In fact, one constituent told me that she had asked for her assessment to be filmed, following her previous assessment, which resulted in a report that bore little resemblance to that assessment. On that occasion she was found fit for work, but she subsequently won her appeal. She was informed that recording would indeed be possible, but that she would have to pay for a private, independent company to come in to record her assessment. Equipment was not made available to her. She had hoped to take a family member in to film the assessment, but was told that this would not be allowed or appropriate. How on earth is a person living on benefits—living on the breadline—supposed to be able to afford to pay a private company to record their assessment?
The Minister’s predecessor also stated in that debate that additional audio recording machines had been ordered for work capability assessments. I hope that the Minister can today update the House on the progress made on that and on whether visual recording equipment is being purchased for that purpose. I would also like clarification on the right of the claimant to request a recording. If claimants have that right, will the Minister make it clear whether Atos is obliged to provide a recording? Will Atos reschedule an assessment date if the person concerned is told that equipment is not available on the original date? In the event that a claimant refused to go through with an assessment without a recording, would they be sanctioned in terms of their benefits?
This is an important issue to raise in the House today. Not only does it affect those going through the assessments directly, but there is a huge cost for the taxpayer, as my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), who has brought this matter to the House today, illustrated in his speech. This process has cost £60 million in the last tax year, which is more than half the original cost of the contract with Atos to perform the work capability assessments.
Robert Halfon (Harlow) (Con)
I supported the right hon. Member for Oldham West and Royton (Mr Meacher) at the Backbench Business Committee and I congratulate him on securing this debate.
Briefly, I want to make three points. Britain is rightly generous to its disabled people. That is a good thing and something that unites the whole House. That said, there have always been problems with Atos. As a major contractor, it has repeatedly failed to inspire confidence and needs shaking up. Thirdly, whatever the party politics, we must clear our minds of hyperbole and focus on the evidence and the facts. People are always fearful of change. Whatever our differences on this issue, we must focus on the politics of fairness, not the politics of fear. It was suggested in the other place that disabled people were facing “ghettoisation”. I think that is a trivialisation of the real evil of the holocaust, which is why I say that how we use our language and the facts that we set out are so important.
Debbie Abrahams
Like many Members here today, I feel very strongly about this issue on behalf of the hundreds of constituents who have come to see me with heart-rending cases and told me about the dehumanising process that they have been put through. Why does the hon. Gentleman think the Department for Work and Pensions and Atos have been unable to accept the recommendations of the British Medical Association and the Royal Colleges for more specific diagnostic tests that would make the assessments more appropriate?
Robert Halfon
I am here today because I care about this issue as much as the hon. Lady does. The fact remains, however, that it was the previous Government who signed the contract with Atos that led to all the problems and started the work capability assessment. This Government have accepted in full the recommendations of the Harrington review.
The disability living allowance was first introduced by John Major’s Conservative Government in 1992 as a way of helping people with the cost of their care and mobility needs. It is partly because of that reform that we now spend £50 billion a year on support for disabled people, which is one fifth higher than the EU average. I am glad that the coalition has rapidly expanded the access to work budgets, helping more than 30,000 people to retain and enter work. By this April, the disabled worker element of the working tax credit will have risen by £285 a year since the Secretary of State started in his job in 2010. The element for the severely disabled will have risen by an extra £125 a year on top of that. The Minister has said before that Britain is acknowledged as a world leader in its support and care for disabled people, and that that is something we should all be proud of.
I have initiated and signed early-day motions on these matters, and hon. Members will know that I have been an outspoken critic of the French multinational Atos in this House since November 2010, because of its treatment of a number of my constituents in Harlow, and I will go on to talk about that in a moment. I want to emphasise that this Government are expanding on what subsequent Labour Governments did after 1997.
Robert Halfon
I want to carry on for a moment.
The Labour Government were right to introduce the work capability assessment in the last 18 months before the 2010 election. The right hon. Member for Stirling (Mrs McGuire), the shadow Minister for disabled people, was also right at the Labour conference to defend the idea of testing in the personal independence payment, when she said:
“The principle of an arm’s-length assessment is not wrong.”
Whatever party politics might be involved, there is consensus on the principles and on what our aims should be, and that is welcome.
Mr Kevan Jones (North Durham) (Lab)
The hon. Gentleman is correct in saying that the first contract with Atos was introduced by the previous Government, but why did the present Government renew and extend that contract even though they knew about all the problems that he and others have raised in the House?
Robert Halfon
This is where I agree with the hon. Gentleman. I was very disturbed when Atos got the contract for the personal independence payments.
Robert Halfon
Yes, that is what I am saying. The reasons that were given included the fact that the infrastructure was already in place, and the cost of changing the contractor.
Robert Halfon
I have given way twice; I need to carry on.
As I have said, Atos has not covered itself in glory. It was the main contractor when the coalition came to power, but the problems are significant. For example, the Atos benefit assessment centre for my constituents in Harlow is in Romford, 20 miles away, and it has been a source of complaints and genuine disappointment to many. I have met Ministers several times to make these points and, to be fair, they have listened to and acknowledged them. I have also made a trip to an Atos centre in London to try to understand what occurs there.
I welcome the changes that have been made by putting in place champions with expertise in mental, cognitive and intellectual conditions, but the objections from many Harlow people are not about the principle of testing, but about how it is done. We have to remember that whenever a disabled person goes for a test, that creates an enormous amount of fear inside them, because they worry that something that they rely on might be taken away. Their objections are simple ones, but the problems have massive implications for ordinary people.
The problems include centres that are inaccessible, and a long distance away. It can be difficult to travel to them, and there might be no parking there. There are sometimes no rails on the walls. People might have to lose a whole day’s earnings to attend, or use up a day’s annual leave. Some centres are on the second floor, with no proper lift. The testing centres can be hard for people in wheelchairs to get into. Some of my constituents tell me that they have been tested by doctors who do not even speak English properly. All of that is totally unacceptable, especially when people are going to those centres in fear and apprehension that that their benefit will be taken away.
I accept that, because of the contractual history, it is difficult to unwind the arrangement. What matters, however, is that we should learn lessons from what has happened to people who have been tested by Atos and use that information for the future. It is essential that those people who are tested for the new personal independence payment should go to a local centre and not have to travel far. I can understand why people should not be tested by their own doctor, but I do not understand why they cannot go to another surgery in their area to be tested. It is unacceptable that they have to travel so far, as those journeys take up an enormous amount of time. I urge the Government to look at radical localisation, and to consider the use of spare rooms in local buildings, including jobcentres.
The people who bring their complaints to me do not have an axe to grind. They just expect a public service to be as good and professional as the private sector. Given the experience of my constituents, it seems that the system that Atos has set up is still not good enough.
Mr Deputy Speaker (Mr Nigel Evans)
Order. The time limit on Back-Bench speeches is now five minutes.
Mrs Madeleine Moon (Bridgend) (Lab)
My caseworker, like those of many Members, is inundated with cases that are tragic and heart-rending. The telephone line to my office is often clogged with crying people. They often ring several times a day, as they are unable to cope with the stress that they are facing. Many have mental health problems, and are unable to cope with the paperwork. They are unsure what to do with it, and they ring me to ask for help in the most tragic and personal way.
Meg Hillier
My hon. Friend raises the issue of people with mental health problems. Does she agree that that is an area of great concern, along with other conditions that can fluctuate, such as HIV and AIDS? Such conditions are difficult to assess in a 15-minute interview. Does she also agree that it is the framework of the assessment that is at fault, and that Atos might have something to answer for as well?
Mrs Moon
It is absolutely clear that the framework of the assessment is unable to clarify realistically whether someone is able to work. The assessment is not valid for the purpose for which it was set up, unless that purpose was deliberately to deny people access to benefits.
Kevin Brennan (Cardiff West) (Lab)
The head of Atos was recruited from Unum in the United States. Is it not disturbing that the lieutenant governor of California has stated that Unum was operating “claims denial factories” for working men’s compensation? Does not that disturb my hon. Friend?
Mrs Moon
It disturbs me a great deal. Quite honestly, the lieutenant governor was right to say that, because that is what we have found in this country too.
I want briefly to describe some of the cases that I have been dealing with. I shall start with 53-year-old Mrs E, who was employed as an accounts officer. She was a very able and capable woman. She suffered a vicious sexual attack, and was diagnosed with post-traumatic stress disorder. Her health problems caused her difficulties with working, and she was forced to take redundancy. She started claiming employment and support allowance, and attended her Atos assessment. The doctor who saw her is well known to me. I have received many complaints about him. I regularly receive complaints about his rudeness, arrogance and total lack of compassion towards the people whom he is assessing. He made unprofessional remarks to Mrs E, and bluntly told her carer to shut up, saying that he did not want to hear from him.
An official complaint was made, but Mrs E was found fit for work. An appeal judge overturned the decision maker’s decision and she was placed in the support group. Three months later, she faced another Atos medical, and it was decided that she would be fit for work in six months. She was then placed in the work-related activity group. A month later, because of the stress, her mental and physical condition had deteriorated, and medical advisers told her to apply for disability living allowance. DLA was refused because of the original Atos report. When it was pointed out that the report was negative, but had been overturned on appeal, a reconsideration was requested. The DWP insisted that the information from the first Atos assessment was sound and that the only option was to appeal to the first-tier tribunal.
My constituent then faced two tribunals. We should remember that this is a lady with post-traumatic stress disorder. She faced two appeals. The first was for DLA. The decision to award the lower rate for mobility and care was backdated. Since then, another DLA application has raised the mobility and care components to the higher rate. The second appeal tribunal was for the employment and support allowance. She was placed in a support group and her benefit was backdated.
That was not the end of this lady’s trauma. Her mental health had deteriorated to the extent that she attempted to take her own life. Her carer has to remain constantly vigilant. A few months later, she received a letter saying she had been transferred back to the ESA work-related activity group from the support group. Payment for the ESA support component was stopped. Following some investigation, the DWP apologised and said that that was a random “administrative error”, but it affected the lady very badly and her mental state became even more fragile.
Despite that, incredibly, on Christmas eve last year the same “administrative error” occurred. My office was contacted, and I have to say that we were extremely angry. The additional stress was placing this lady in a suicidal position again. The application process started again, and yet again there has been an apology for an “administrative error”. This lady is being hounded by the state: there is no other way of describing it. There is no excuse for this behaviour. This is a company that is not playing fair by this country’s most vulnerable people.
Mrs Moon
I am afraid I cannot; I have only a short time.
Atos received £112.8 million in 2010-11 for its DWP services. About 60% of all claims are judged fit to work; 41% of those people appeal, and 38% of those appeals are successful. Last year, appeals cost £54 million. How can that be seen as value for money? How can this be seen as evidence of a supportive and caring Government in action?
Here are my questions to the Minister. We are told that specific support staff for mental health will be provided. Are they in place? Are they aware of the trauma of post-traumatic stress disorder? Is sensitivity training available, because it has certainly not been made available to the ex-GP who works as an Atos assessor in my area? Has the DWP looked at the cost—to Members, to citizens advice bureaux and to welfare rights organisations—of fighting this iniquitous system?
Annette Brooke (Mid Dorset and North Poole) (LD)
I rise to make just a few comments, particularly on fluctuating conditions. I have received many representations from people with mental health conditions, as have other Members. Some of the individual cases and stories that sometimes come from mothers with adult daughters about what has happened during the assessment process have been absolutely heartbreaking.
Let me read out a few comments from one of my constituents, who says:
“I do not believe that the WCA is working for people with mental health problems. Too many people are found fit for work when they are not, and are becoming trapped in a distressing and expensive cycle of appeals and reassessments. Too much of the decision making is inaccurate and too often the WCA and related processes worsen people’s mental health.”
Mr Watts
Does the hon. Lady agree that, given that everyone in the House knows that Atos is not fit for purpose and given that we know the Government have taken no action on it, we can believe only that the Government are supporting Atos as long as lots of people are getting signed off and put back into work?
Annette Brooke
I think we are here today to point out that there certainly are problems, and I await to hear the Minister’s response to them. We need to remember that a great deal of improvements to the system have been made since the Labour Government set it up in the first place. That does not mean, however, that the situation cannot be improved. I think it is right and proper for us to point out where we feel improvements should be made.
Margot James (Stourbridge) (Con)
I have visited my local Atos and have sat in on an appeal at the local tribunal, but I do not share the universal condemnation of Atos that I have heard in this House. Does my hon. Friend acknowledge that Professor Harrington reviewed the system three times with particular reference to mental health and that he concluded that the improvements were starting to have an impact so that, in his view, no fundamental reforms were needed to the current work capability assessment?
Annette Brooke
I thank my hon. Friend for her intervention, and reiterate that it was a positive move by the coalition to ask Professor Harrington to do this work.
I would like to refer briefly to the issue of ME—myalgic encephalomyelitis. I understand that although the discussions on ME were very productive, the changes that we all want are not coming through individually. What we are looking for today is a means of unlocking some of the frictions that are causing the individual problems.
I am chair of the all-party parliamentary group on ME, so I have obviously received many representations on this matter. I would like to draw the Minister’s attention to a survey on the work capability assessment carried out by the charity, Action for ME. It had 203 responses. I commend the report to the Minister and hope he will read all the conclusions. I shall refer only to several of them as I do not want to take up too much time.
The conclusions included one to the effect that
“all face-to-face interviewees should be automatically given a copy of the Atos medical report”,
which I understand is not always happening. That is an area where the Minister could intervene to make sure that it does happen. Another conclusion was that
“more efficient communication is needed between the DWP and Atos”—
and that is almost certainly true. I believe we can have a positive and constructive debate when we look at those sorts of points. One further conclusion was:
“Atos healthcare professionals who carry out the face-to-face assessment should receive specialist training about fluctuating conditions, developed in consultation with organisations that support people with M.E. Training needs to be as frequent as the staff turnover at Atos requires”.
Those are really important points to which I would like the Minister to pay some attention.
We had a meeting in the House this week, but it was not possible to get a Minister to attend it. I would like to request that the offices of the all-party group be used for a meeting to talk about ME, the work capability assessment and fears about the personal independence payment in the future.
Valerie Vaz (Walsall South) (Lab)
It is always a pleasure to follow the hon. Member for Mid Dorset and North Poole (Annette Brooke). I also pay tribute to my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and the hon. Member for North Cornwall (Dan Rogerson) for initiating the debate, and to the Backbench Business Committee for agreeing to it.
We are all here today because constituents have come to us and told us their stories. Constituents have come to me in their wheelchairs with their carers because they have wanted me to know about the difficulties that they are experiencing. They cannot understand why, in the face of overwhelming medical evidence, they are still being called in for interviews. Some cannot understand why they have been told “If you make it to this interview, you must be fit for work.”
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend share my utter despair at the sheer amount of money that is wasted on calling in people whose well-documented histories clearly show that they suffer from conditions which, sadly, will not improve in any way, rather than being spent on trying to find ways of helping those who are in a better position to go back to work?
Valerie Vaz
I agree with my hon. Friend.
My constituents cannot understand why, although 40% of appeals are upheld, the Minister’s predecessor said that the system works. When I asked him, in a written question, how many people in Walsall South had been declared “not fit to work”, his response was:
“Please note that constituency information on the work capability assessment process is not available.”
It is no wonder that the Government have no idea why my constituents are suffering, but I will tell them now.
SD has cancer and is undergoing radiotherapy; she has been declared fit for work. SH suffered seven strokes, and also suffers from type 2 diabetes and a liver condition; she has had to appeal against a decision. KH was placed in a work-related group; she has incontinence of bowel and bladder as well as diabetes, and is partially sighted. CS has received zero points despite having a spinal disc prolapse. SA suffered a stroke and is blind, but has still been declared fit for work. LM has arthritis of the spine, and has had to appeal against a decision. Stephen Nye was so angry that he came to see me on behalf of his father, and said “I want to let you know what is going on. Sick people are being persecuted: the assessment system is flawed, and they are being harassed by the jobcentre.”
Meg Hillier
Does my hon. Friend agree that the tenor of the debate about “strivers and skivers” says a great deal about what the DWP intended when it set up the assessment system—as do my sheaf of papers relating to constituency cases and the list of cases that she is reading out?
Valerie Vaz
I entirely agree, and I do not subscribe to the “strivers and shirkers” nomenclature.
MD came to see me with her husband, who is blind and deaf. They told me that the work capability assessment did not take account of the issues faced by blind and partially sighted people. I wrote to the Minister’s predecessor, who replied that Professor Harrington had had considerable engagement with the Royal National Institute of Blind People, Sense, and Action on Hearing Loss. However, that was only at the time of the professor’s third review—it should have happened before the assessments had even been devised—and only at the time of his second review did he suggest the introduction of sensory descriptors and an additional descriptor addressing the impact of generalised pain and/or fatigue.
I am pleased to say that, at their annual conference, GPs called for the scrapping of the computer-based work capability assessment. They should know: they make the medical assessments every day, and they see the sick and the vulnerable every day. There is no common sense in these assessments, and there is no humanity or dignity for the most vulnerable members of society. I urge the Minister to listen to those who have to undergo these assessments, and to instruct Atos to start again.
Jeremy Lefroy (Stafford) (Con)
I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) on securing the debate, and the Backbench Business Committee on enabling it to take place. I am pleased that the Minister is present, because I entirely agree with his statement last year that there must be
“continuous improvements to the process to get the right outcomes for claimants”.—[Official Report, 5 September 2012; Vol. 549, c. 136WH.]
I want to mention a few improvements that I should like to see implemented immediately—I am glad that the Minister is listening to this—all of which were brought to my attention by constituents. The first relates to the frequency of recall for people with long-term medical conditions. Last year the Minister wrote to me:
“A claimant for whom a return to work is considered unlikely within two years will be reassessed after two years.”
I want to be sure that these decisions are being monitored, and that people are not being recalled more frequently even than the DWP has suggested.
Secondly, as we heard earlier from my hon. Friend the Member for Manchester, Withington (Mr Leech), there are cases in which people have had to wait for up to a year before winning appeals and then immediately face another work capability assessment, so the whole process starts again. Why cannot such people be given at least a considerable period of grace? Surely that would be possible.
Andrew Stunell (Hazel Grove) (LD)
Would not speeding up the appeal process also relieve stress and bring about certainty much more quickly?
Jeremy Lefroy
My right hon. Friend is absolutely right.
Thirdly, there is a category of people who are being considered fit for work although they have had, for instance, a severe stroke or are awaiting a back operation. One constituent was told that if people could move an empty cardboard box, they could go to work. Do the health care professionals employed by Atos always take account of the fact that people have to get to work in the first place, or that, while they may be able to perform an action once, they may not be able to perform it repeatedly when it causes severe pain?
Mr Charles Walker (Broxbourne) (Con)
Does my hon. Friend share my fear that the reputation of Atos may be so damaged that it can never really be effective? Perhaps the time has been reached when we need to park Atos and move on in a different direction.
Jeremy Lefroy
The Minister has definitely heard what my hon. Friend has said. I would only add that even if that is not the case, Atos is in the last chance saloon.
Fourthly, as the right hon. Member for Oldham West and Royton pointed out in his excellent opening speech, there are people whose conditions fluctuate. They may be all right on one day, but completely incapable on the next. At least two of my constituents have made that point.
Fifthly, there is the disregarding of expert medical opinion. I understand that there are marginal cases, but I have seen cases—as, I am sure, have all Members—that bear absolutely no relation to the WCA reports. Because I always make a point of visiting constituents at home if they have a problem with Atos, I see for myself that in some cases the reports bear no relation to the reality. I believe that appeal tribunals that overturn such reports should highlight blatant instances of that, because it clearly constitutes a misuse of public money when the reports are written so badly.
Finally, there are people who are not considered fit for work—for instance, those who are awaiting operations with no idea of the time scale—and who are put into the work-related activity group although they cannot work. That strikes me as a contradiction in terms.
Jeremy Lefroy
I hope that the hon. Gentleman will forgive me if I do not. I am about to end my speech, and I know that others are waiting to speak.
I know from past experience that the Minister certainly listens. I welcome his willingness to make those
“continuous improvements to the process to get the right outcome for claimants”,
and I urge him to do so.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Atos and the work capability assessment should be seen in the broader context of the UK Government’s assault on, and demonisation of, disabled people. We have seen first the reduction in the disability living allowance and then its replacement by the personal independence payment, about whose workability we have grave concerns.
Many disabled people’s groups say that the reductions in benefits have had a catastrophic effect on recipients, and there have been a number of reports of suicides and untimely deaths brought on by immense distress. In my surgeries, I have heard several harrowing and very sad accounts from constituents who have been subjected to impersonal and inhumane work capability assessments by Atos. One has been diagnosed with an aggressive brain tumour, which cannot be completely removed because that would leave her paralysed. In August and September of last year she had radiotherapy to slow down the growth of the tumour, but in October she was told that it would grow back even more quickly, and that she would have to have further radiotherapy or she would die. I should add that this lady also has polyarthritis and asthma. Why has this lady been placed in the work-related activity group? Her doctors and consultants have specified that she should be placed in the support group as she is fighting for her life. Her only concern should be winning that battle.
Robert Halfon
The hon. Gentleman said the disability living allowance has been reduced. Can he explain that, because benefits went up by over 5% last year and are not subject to the 1% increase this year?
Jonathan Edwards
I was speaking about my constituents’ experiences, and I think I should concentrate on that in the limited time available to me.
Another constituent contacted me who had been ill for two years and was eventually diagnosed with cancer following a serious bout of pneumonia. Prior to her illness, she had an unblemished employment record. She was certified as unable to work by her GP and had attended many DWP hearings about the employment and support allowance, with the final one being in April 2012. She won her tribunal hearing against the Atos decision. She had not received a single penny in state benefits from before April 2012 until she died at the end of November. She faced immense distress and was denied any financial assistance at a time when she was vulnerable and in desperate need of assistance.
As with a lot of current UK Government policy, this is a matter of completing the job left by the last UK Government; it is another example of the Labour-Tory tag team in action. Labour introduced WCAs in 2008 and signed up Atos. As a Welsh nationalist and a socialist, I believe an independent Wales would choose a different path, where Governments do not offer contracts to private companies to make profits from inflicting misery and suffering on the most vulnerable people in our society. We would treat people who need support with the dignity and respect they deserve.
Dan Rogerson (North Cornwall) (LD)
I pay tribute to the right hon. Member for Oldham West and Royton (Mr Meacher) for leading the effort to secure this debate. I was happy to accompany him and the hon. Member for Harlow (Robert Halfon) when they appeared before the Backbench Business Committee, and I am grateful to the Committee for having found time, in what is a busy schedule, for a debate on this issue. It is of great concern to many Members and, more importantly, to those who have been assessed under the WCA system and those who work to support them and are inundating us with case studies.
We have heard a lot about the history of this issue, so I will not rehearse what has been said on that. I am pleased that an annual review of the system is in place and that it is highlighting the concerns, which we are then able to address in this House. The coalition Government have moved to tackle some of the concerns, but they need to do more, such as by addressing the issues raised by Professor Harrington.
I remember a case that arose during the last Parliament—when this system was introduced—involving a constituent of mine from one of the north-coast villages. He was told he had to attend an assessment, and printed information on how to travel to the assessment venue by public transport was sent to him. The suggested journey involved an overnight stay on a railway platform. It was hardly helpful to send such a suggestion to someone who was travelling to attend a WCA.
We have moved on a little since then. As we have heard, however, people attending WCAs are often nervous and fail to get across all the points they want to make, and they frequently feel that, as a result of the process, they are railroaded into responding in a certain way. As we heard from the hon. Member for Bridgend (Mrs Moon), the people who accompany them are sometimes shut out of the process, too, even though they can perform the valuable role of giving their companion the confidence to represent themselves thoroughly.
The hon. Member for Airdrie and Shotts (Pamela Nash) raised the important point that the process is recorded. As we all know, telephone calls to many organisations are routinely recorded and people, including those undergoing WCAs, should realise that the recording of proceedings is for their benefit as well as that of the organisation concerned. Those undergoing WCAs can get a copy of that recording, too. That point was raised with me by a woman whose son had to wait for seven months to get his assessment, which serves to highlight that we must also speed up the process. Work needs to be done to help Atos understand the problems that might be leading to those delays.
Sarah Newton (Truro and Falmouth) (Con)
Does my hon. Friend agree that we must make Atos understand that in remote rural constituencies such as those we both represent some people have to travel long distances? That problem is leading to a lot of no-shows at the Truro Atos centre, which in turn is leading to lots of delays in assessments, thereby causing a great deal of anxiety.
Dan Rogerson
That is also a common problem in respect of visiting district general hospitals. I have repeatedly asked hospitals to make sure that people travelling long distances are seen in the middle of the day, rather than early in the morning. Sensible decisions like that would help.
A constituent who would rather I did not reveal her name also raised the issues of delays and recordings, and others have mentioned the lack of expertise. If Atos has practitioners with different areas of expertise—some in physical disability, others in mental health issues, for instance—it should arrange assessments in such a way as to utilise that.
The language that is used and how people are treated are also important issues—some Members of this House could probably moderate the language they use in discussing this subject.
Ian Lavery (Wansbeck) (Lab)
We are, in effect, trying to put a sticking plaster on a gaping wound. Atos and the WCA are not fit for purpose. Does the hon. Gentleman agree that we should bin them both, and start again with the idea of looking after disabled people, rather than the opposite?
Dan Rogerson
The problem with that suggestion is that all the people who have been through the process and have won appeals will have to go back to square one. I am therefore in favour of improving the current system. Every time we renew a system, we go back to square one. Those who have been through an assessment and an appeal and have finally got the right result should not be sent back to square one. The hon. Gentleman articulates the anger that is felt, and there are clearly problems with the process, but I do not think scrapping it and going back to square one is the best way to proceed. Professor Harrington has not suggested that course of action, either. What he has said is that there are problems that need to be resolved.
Dan Rogerson
No, I want to conclude so that others can have a chance to speak.
There are certainly questions to be asked about the company operating this process. The hon. Member for Stafford (Jeremy Lefroy) said it was drinking in the last-chance saloon. We have heard in other contexts that people can remain in that saloon for a long time, however, and this debate serves to show the Government that we are taking this issue very seriously.
There is another issue, too. Those who are found capable of work even after an appeal should be supported into work. We must do that properly. I hope we will address that issue on another day, as it is the second part of this process and there are problems to be solved.
Mr Iain McKenzie (Inverclyde) (Lab)
I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this important debate. There is a huge groundswell of discontent about Atos and the work capability assessment. It is deplorable that our sick and disabled constituents are experiencing immense hardship after being deprived of benefits having endured an Atos WCA. We all recall last year’s television programmes exposing the way people are treated across the country by Atos, and I have heard from a number of my constituents who have been badly treated—treated without care, compassion or understanding.
Ian Mearns
I am sure that, as a Scot, my hon. Friend will share my concern about the fact that Atos will now be carrying out the personal independence payment assessments as well. The Government have already determined the outcome of those assessments. The Minister for disabled people, the hon. Member for Wirral West (Esther McVey), told this House that by October 2015 560,000 claimants will have had their assessments, and 160,000 will get a reduced award, 170,000 will get no award, and 230,000 will get the same support. How can we know the assessments are valid when we have had such a prediction?
Mr McKenzie
I could not agree with my hon. Friend more. The accuracy of assessments is essential, as I will go on to discuss later.
Let me outline briefly some of the cases that have been brought to my surgeries, on the back of a recurring issue now being referred to by my constituents as the “Lazarus letter”. This is a letter they receive instructing them to make their way to Glasgow for assessment and containing many connotations about what will befall their benefits. A constituent who suffers from severe cerebral palsy and could not travel was refused a home visit and told to go to Glasgow to be tested. Another constituent who was recovering after being seriously injured in an accident was advised to attend an Atos assessment in Glasgow. Both those constituents could not possibly travel because they were in so much pain, and I had to get involved and ask for a home assessment for them. It does not end there because they then had their benefits cut or stopped because Atos sent the assessment forms to the wrong address. If it cannot get the address right, what chance does it have with assessments?
Clearly many of my constituents have not been treated with the fairness and decency they deserve. Although I realise that we need to see whether people can work, we need a system that is humane and fair, not one that causes fear and loathing. It is time the Government realised that they are driving many sick and disabled people into poverty. What does the Minister think of Citizens Advice’s detailed year-long study “Right first time?” on the controversial work capability assessment run by Atos, which has revealed evidence of widespread inaccuracies in the medical reports that help to determine whether individuals are eligible for sickness benefits? Citizens Advice also tracked a group of people through the process of claiming employment and support allowance and looked at how their claims were handled. The report’s conclusions are stark: 37 individuals were tracked and had their reports examined, with serious levels of inaccuracy revealed in up to 43% of the reports. That level is significant enough to have an impact on the claimant’s eligibility for benefits—surely our sick and disabled deserve better than this.
The low rate of accuracy is worrying because the reports are used in deciding entitlement to other benefits. Is it not better to have an accurate, fair and just system of medical assessment, one that claimants know will treat them fairly and with the humanity they deserve, rather than a system that is, frankly, unfit for purpose and that uses a company, Atos, that instils fear and loathing in people, resulting in a system where people are continually appealing against decisions? We have already heard that the success rate against the decisions is about 60%.
Pamela Nash
Although the Department has made much of the fact that Atos does not actually make the decisions, with that being done by decision makers in the job centres, I have never seen evidence of the decision makers taking account of any evidence apart from the Atos assessment and the questionnaire, unless the case goes through appeal or reconsideration. Does my hon. Friend agree that decision makers should in every assessment be seeking the opinion of the person’s GP and of other professionals who are offering the person care at that time?
Mr McKenzie
I thoroughly agree with my hon. Friend on that point. It is ridiculous to have people making an assessment based on a tick-list that looks like it should be used for an MOT on a car.
We need to ensure that the people who are going through the system are treated well, justly and fairly. The British Medical Association has called for the work capability assessment to end immediately and be replaced with a system that does not cause harm to some of the most vulnerable people in society. I call on the Government to change course and look again at this process.
Bob Blackman (Harrow East) (Con)
It is an honour to follow a thoughtful contribution from the hon. Member for Inverclyde (Mr McKenzie). It is fair to say that the mark of a civilised society is how it treats the most vulnerable people who live within it, so it is important that we have this type of debate in order to review how we are treating vulnerable people. I add my congratulations to the right hon. Member for Oldham West and Royton (Mr Meacher) on securing the debate and to the other hon. Members who have contributed so far.
In 2006, I was serving on the Greater London assembly and we carried out a report and review on the huge number of people consigned to permanent disability—they were written off by the previous Government as not being capable of working. The one key issue is the sensitivity in determining whether someone is capable of work and therefore should be employed or seeking employment, or is clearly not able to work and is therefore in need of the maximum support.
Sheila Gilmore (Edinburgh East) (Lab)
It is important that we acknowledge that we now have to look at how this test is working. After all, it is not good enough for us just to trade insults and say that the previous Government left people to rot, because the system was actually introduced by the previous Tory Government. We could therefore pass these comments backwards and forwards, but the important thing is to ensure that if we are going to test people, we get it right.
Bob Blackman
I share that view, and I was coming on to discuss some of the issues raised in my constituency about the tests and some reforms that we could reasonably request the Minister and Atos to implement.
My constituency has a relatively low unemployment rate, but I have received a succession of complaints from constituents who have been put through the work capability assessments and clearly believe they have been treated unfairly—I agree with many of them. My hon. Friend the Member for Stafford (Jeremy Lefroy) described how he visited his constituents at home, and I have had a similar opportunity to visit some of my constituents at home to see the position they are in and the lives they lead. These people are and should be entitled to full disability benefits, yet they have been denied them.
I want to discuss one specific example, that of a constituent who came to see me in late 2011 to make a complaint against her employer. She suffered from a degenerative spinal condition and struggled to stand for long periods of time. She had asked her employer to split her two eight-hour shifts into three four-hour shifts so that she would be able to continue to work. After some discussion, her employer eventually consented to changing her shift pattern. The point is that this woman was committed to work for as long possible and in a job that she could clearly do. After receiving higher rate mobility allowance and lower rate care allowance for several years, my constituent had her claim reviewed as part of these reforms. Following an Atos work capability test, all her benefits were suspended and she spent the following year appealing the decision. She got full support from me and my office, and I am delighted to say that after the appeal process and a successful tribunal she had her benefits fully restored. Of course, the pain and suffering for a full year was outrageous.
It is worth pointing out some of the medical conditions from which my constituent suffered. She has had a disc removed from her spine, and I understand that its removal caused a mid-posterior annular tear. Those conditions have brought a lifetime of mobility problems and associated side effects, amounting to a debilitating spinal injury. When we add that information to my previous comments about her keenness to work, we see that this is not someone who seeks fraudulently to claim benefits; she seeks only what she is entitled to. At the original work capability assessment my constituent was assessed by a physiotherapist. I have no doubt that the physiotherapist was reputable and qualified, but as an assessor they were clearly not sufficiently qualified to understand the complex medical needs of my constituent. Having had the opportunity to review some of the cases brought to me, I can say that it is clear that Atos and its employees do not have the required expertise.
Ian Lavery
I totally agree with the hon. Gentleman. We have a situation where the likes of physiotherapists are assessing people with acute mental health problems. Does he agree that that is wholly unacceptable?
Bob Blackman
I agree. One reform we could quite reasonably ask the Minister and Atos to introduce would involve ensuring that the assessor was qualified to assess the type of problem from which the individual suffers. That could take the form of a referral by the Atos assessor to a proper medical professional in a given field where there was expertise. That would save the individuals from the trauma of the appeals process and would save money as it would mean that the medical professionals could properly undertake an appropriate assessment. I urge the Minister to consider that as a way of improving the system.
It appears to me that there is a tick-box mentality among the Atos assessors. I could refer to a stream of cases in which people have conditions that come and go and have good days and bad days. When Atos assessors make the assessments, those people can often be having a good day and the tick boxes do not allow the right decision to be made.
Bob Blackman
I will not, because I have given way twice and I want to conclude.
The clear point is that there needs to be a fundamental reform of the process. It is right that we should assess people to see whether they are capable of work, but the people subjected to horrendous trials and tribulations as a result need further support and deserve to have the whole process reconsidered so that it can be improved for the benefit of all.
Austin Mitchell (Great Grimsby) (Lab)
The number of MPs who want to speak today and the passion that has been shown are testimony to the fact that the system has not worked, is not working and ought to be scrapped. I hope that the Minister is listening, because that is clearly a strong concern on both sides of the House.
The key weakness of the system is the perfunctory, mechanical, inhuman and rushed process of assessment. I have to point out to the Minister that as the system has been handed to the private sector, the more perfunctory the process of assessment, the greater the profit made by Atos and the assessors.
Meg Hillier
Other Members have raised the issue that Atos is a private company. I am sure that my hon. Friend will agree that it would be helpful if the Minister could reveal the profit margin, as this is public money being spent by a private company, which one would expect to make a profit. Would it not also be useful if the Minister could tell us whether there has been any change in the profit in the years for which Atos has been doing the assessments?
Austin Mitchell
I am grateful to my hon. Friend for that intervention. That was one of my concerns as a member of the Public Accounts Committee and it was to have been part of my passionate penultimate ringing declaration when I intended to ask the Government to tell us how much profit has been made, but I can now omit that from my speech.
The system is perfunctory and totally inadequate. I will not repeat the cases that have come to my surgery after the assessment—that has been done brilliantly by some of my colleagues—but it is clear that the assessment fails patients with mental health conditions, particularly schizophrenia, which are very difficult to assess and treat. It fails when conditions are intermittent and emerge one day only to fade away the next. It fails on degenerative conditions, too. The system of assessment does not take into account any of its own inadequacies in those areas.
In the Public Accounts Committee, I was able to voice a suspicion that there was a quota for the number of disabled people that should be shaken out in what appears to be an enormous attempt to do that rather than to provide them with the support and help that they need and with encouragement to go back to work. The process is more concerned with shaking them off benefit than with treating their cases properly. We were assured by Atos and the Department that there was no quota, but I think we can guarantee that any medical assessor for Atos who finds that the total or a high proportion of the number of people he is examining are not fit for work will not advance his career in assessment, his career in Atos or his contact with the Department. Inevitably, there are those pressures on the assessors.
As our Committee was told, 38% of the cases that go to appeal—I advise all my cases to go to appeal—are successful in reversing the verdict. That demonstrates its inadequacy and the enormous cost in the reassessment process at appeal, a cost that is not taken into account in the Government’s estimates of the savings produced by the system. Those reassessments are usually done with the help of the patient’s own doctor, so I do not see why their doctor’s view cannot be invoked and used at an earlier stage in the process. After all, the Government are giving more power to the doctors and claiming that they represent the patients. The doctors know the long-term conditions—they are treating the patient—so why are their views not taken into account by Atos at the start?
Our PAC report on the system was pretty damning—one of the most damning we have done. Our concerns included the rate of profit, as my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) has mentioned. The Minister should tell us the rate of profit made by Atos and what efforts the Department is making to reduce that and to ensure a more efficient service and more efficient assessment processes. We were concerned, too, that this is a monopoly contract with no great risk to Atos. The monopoly is continuously reinstated and Atos is put back in power. Monopoly processes go slack, and if such tasks are going to go to the private sector—I do not think that they should—the companies should be subject to competition and to more regular reviews. The weakness of the assessment system shows that Atos is not working effectively. There should not be a long-term monopoly in this area.
If the Minister reads Twitter at all, as I do avidly—normally to see people abuse me—he will see the widespread concerns about people’s treatment by Atos. If he listens to this debate, he will hear the same. If he listens to the disablement groups, he will hear the same. Instead of backing an inhumane system and refusing to change it or tighten the terms and conditions under which Atos operates, it is time that the Minister showed some concern and changed the system.
Guto Bebb (Aberconwy) (Con)
I was not expecting to be called to speak, Mr Deputy Speaker, but I shall say a few words.
The debate has been very valuable and there has been cross-party consensus, which shows that there is a great deal of concern about how Atos is performing against its contract. That is not to say that all the language used today is acceptable, and I feel that some of the constructive changes that have been implemented have been ignored. For example, when I was on the Welfare Reform Bill Committee, one of the key issues of concern for me was how the work capability assessments would deal with cancer patients. It is a fact that more cancer patients now qualify for unconditional support than ever before, yet we have had no mention of that. In the midst of making constructive and, in many cases, justified criticisms of Atos, it is important that Members are careful not to frighten people listening to this debate who might be cancer patients and might feel that they have no hope whatever of a fair hearing from Atos. I also want to highlight the fact that more people—double the number from two years ago—now qualify for unconditional support.
Those two points—about cancer patients and the number of people getting unconditional support—are important reasons why the proposal made by some Opposition Members that we should simply throw the whole system out and start again is dangerous. It does not take into account some of the constructive changes that have been implemented.
Sheila Gilmore
I do not deny that there have been some improvements—although one speaker said that they had happened at a glacial pace, which was probably a fair comment—but we must bear it in mind that the unconditional support is not available without the person being re-subjected to an assessment. One complaint is about the frequency of reassessment, even for people whose conditions are so serious that they have been put in the support group but who sometimes, a year later, still have to come back and go through the whole process again.
Guto Bebb
The hon. Lady’s point is important, because although we all subscribe to the principle of a review, when a condition has been assessed as demanding unconditional long-term support there is a question about whether an annual review is justified. That is an issue that a constituency MP who takes case work seriously would not ignore, so I take her point on board.
There are a couple of aspects that I welcome, but about which I still have concerns. One is the way in which the system deals with patients who suffer from mental health problems. Mental health services are often the Cinderella service of the NHS, but when it comes to people who have difficulty accessing work and feeling confident to do so, the way that Atos deals with such patients has been less than acceptable. I understand that the Department and Atos are putting in 60 champions, but given the number of issues that I have seen in my own constituency, I question whether 60 will be sufficient for the whole of the United Kingdom. The way in which we deal with people with mental health problems is not acceptable in the health service and it is not acceptable at this point in time in Atos, even though the problem has been recognised and work is being done to try to deal with it.
The other matter, which has been touched on by several hon. Members, is the issue of people with chronic long-term illnesses. The problem that I have seen in my constituency surgeries is that quite often somebody may turn up at an assessment centre and on that particular day would be capable of a certain type of work, but the situation could be completely different the following day. The problem with the system that we have put together is that it does not take into account those long-term chronic conditions that could result in somebody occasionally being able to take on work, but not on a long-term basis. That is another weakness in the system.
Meg Hillier
Does the hon. Gentleman agree that people with HIV/AIDS, where the side-effects can cause many day-to-day problems, are not properly assessed in the work capability assessment?
Guto Bebb
I entirely accept that point. The same is applicable to cancer patients, for example. However, there is a counter-argument that often people who suffer from HIV/AIDS or who are dealing with cancer would enjoy the opportunity of working. My father, who passed away owing to lung cancer, was working until three weeks before he died, and there is no doubt that being able to work for such a long period was a contributory factor to the way in which he fought the disease. We need to make sure that we do not categorise everybody who has a long-term chronic illness as incapable of any type of work.
On a specifically Welsh issue, despite the promises made by Ministers in the Welfare Reform Bill Committee when I tabled an amendment to allow assessments through the medium of Welsh, I have encountered numerous examples where assessments have been requested through the medium of Welsh but that service has not been provided. An excellent example was that of a young woman in my constituency who had a stroke at the age of 42, I believe. As a result, she largely lost the ability to communicate through the medium of English. Despite numerous requests for the service to be provided in accordance with the promises made by the Department, as yet we have not been able to ensure that she has that service through the medium of Welsh, which is her right under the Welsh Language Act 1993.
I subscribe to the general views expressed in the debate that the system is not performing as it should and that there are real concerns about the way that Atos is performing. However, I believe that what the Government are trying to do is right, as it is important that we recognise that we have a higher number of long-term unemployed in the United Kingdom than any comparable western state in Europe, and we need to question why that is so.
I do not think it is necessarily wrong, harsh or unreasonable to say that people who could work should be supported into work, but we need to do that in a way which recognises the dignity of individuals going through the system. Despite my support for the welfare changes that this Government are making, the examples that I have seen in my own constituency surgery leave a lot to be desired. We should not throw out the baby with the bathwater, but we need to make sure that the recommendations that have been made time after time are implemented as soon as possible. We owe that to the constituents we represent.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Today we have heard a litany of problems with the work capability assessment, not least the problem that it persistently reaches the wrong outcomes in assessing people’s ability to work.
Aberdeenshire was part of the pilot scheme for the work capability assessment, so ever since I was elected, I have faced a steady stream of sick and disabled constituents, distraught, worried and in some cases angry about the process that they have had to endure. These are not anecdotal or isolated instances. The citizens advice bureau has kept close track of the issues brought by clients over many years, and it has documented the sharp increase in demand for advice and help on matters related to work capability assessments. In the past year alone the Turriff citizens advice bureau in my constituency has seen a 60% increase in this type of case, on top of a sharp increase last year. I suspect that we are seeing only the tip of the iceberg.
In spite of three reviews by Professor Harrington, the work capability assessment still is not working well enough. Too many decisions are being appealed, and 38% of those appeals are successful, rising to a 70% success rate when people are supported by the CAB and other advocacy groups. That system failure is costly not only in financial terms, but in human terms.
One of the things that has disturbed me most over the past couple of years is the way in which disabled people have found the process an assault on their dignity. I am also disturbed by the failure of the Government to take remedial action and manage the contract with Atos more effectively. Public money is being spent on these assessments. There is a substantial body of evidence to show that they are failing to deliver, yet the Government continue to hide behind commercial confidentiality in declining to make public the details of their relationship with Atos. That lack of accountability is not good enough.
As an MP, I am dealing with increasing numbers of constituents who are distressed and desperate because they have been told that they are fit for work when they manifestly are not. The very first constituent who came to me for help and who had been found fit for work was a man who could not climb the stairs in his own house to go to the toilet. He came to one of my surgeries which had disabled access, but he needed help from relatives to do so and it was quite an ordeal. His GP rather euphemistically told me that the man had “a poor prognosis”, and the man has absolutely no prospect of getting back into the labour market. He successfully appealed against the decision, but it emerged in that process that no account had been taken of his GP’s documentation or of the evidence supplied by his hospital consultant.
I have encountered incontinent patients being asked to make four-hour round trips on public transport. I have also encountered constituents who have had to make very long journeys by public transport only to find that their appointment is not double-booked, but triple-booked. My biggest ongoing worry, though, is about people who have found themselves placed in the work-related activity group with very little realistic prospect of finding a job. I think of one constituent, disabled since birth, who has wanted nothing more than a job since she left her special school. Now in her 30s, she has been on endless training courses. She has enthusiastically embraced work placements but she has never had a mainstream job, despite her efforts. Possibly, she could work, with the right support in place.
In Aberdeenshire we enjoy levels of employment much higher than the average. It is probably easier to find a job there than anywhere else in Scotland, but jobs still do not grow on trees. Many of the jobs that new entrants to the labour market might have a chance of getting are physically demanding. They require strength, dexterity, co-ordination and a degree of endurance. My constituent could not stand on a food production line. She does not have the balance or the motor skills to work in a retail outlet. Her speech impairment would make telecommunications work difficult. She can type, but not nearly fast enough for a modern office. She will lose her benefit in a few months, even though she has always sought work, and is just looking for someone to give her a chance.
I worry that, instead of becoming independent, my constituent is going to become even more dependent on her ageing parents, who are themselves in failing health. They are not a wealthy family. Bringing up a disabled child often impairs a family’s wealth and erodes their assets and their ability to cope with setbacks. I am worried about the impact of increased caring on her family and on their health and financial well-being.
Finally, I want to say a quick word about the situation facing people with serious mental health problems and long-term fluctuating conditions. There is a world of difference between being potentially fit for work, given the right support, and being an attractive prospect to a potential employer. The elephant in the Chamber today is the fact that many employers will think very long and hard before taking on a member of staff with a serious long-term or fluctuating health condition. Anyone with a chequered work history knows that they are perceived as a risk to prospective employers. Many employers will admit this in private but will not come out and say it publicly. I do not think the Government are being realistic enough about the stigma attached, for example, to degenerative conditions or mental illness. These hurdles are not insurmountable, but we must admit that they exist if we are to challenge them. I hope that today’s debate will inject a dose of realism into the Government and that they will stop hounding and persecuting disabled and sick people for their disabilities.
Heather Wheeler (South Derbyshire) (Con)
I apologise for not being in the Chamber for the beginning of the debate, owing to another commitment. Mr Speaker kindly put my name towards the end of the list for today’s speeches.
Interestingly, the scheme has worked relatively well in South Derbyshire. We have quite a high level of returners-to-work as a result, but equally, issues have come to my surgery and I have had occasion to write to the Minister and his predecessor. I welcome the Backbench Business Committee’s decision to hold the debate.
I have had conversations not only with my local citizens advice bureau but my jobcentre, which has highlighted a few points that I hope the Minister will take on board. I hope that he will answer them in his winding-up speech. I heard about a number of harrowing cases—not from the CAB, interestingly, but from the jobcentre, whose staff see people coming back into training and what have you after the assessment. Those staff are incredulous at times at the cavalier approach of Atos to people’s health conditions.
Long-term disabled people have come back into the work arena; unbelievably, within three months of being told that they are perfectly fit for work, they have dropped down dead. I would not like that on my conscience, and I find it surprising. I am sure that such cases are relatively rare, but when do they happen? If the Minister does not know the answer, perhaps he will be kind enough to write to me.
Does anybody go back through the files to check on what happened with Atos? There needs to be a review. Folk in the Chamber know that I used to be the leader of a district council. Our job was to put out contracts and make procurements, but we always had penalty clauses, clawback arrangements and the ultimate option of getting rid of a firm if it was not performing.
One of my early letters to a previous Minister asked about the point when we say that the system is not working; frankly, I have not had an adequate reply. When someone drops down dead within three months of being assessed as being perfectly capable of going back to work, what is the review process for Atos?
We have heard about the Harrington report and the need for mental health champions. Only last week, a constituent, who, frankly, did not know what time of day it was, went through the process. Not only were they not allowed to have their carer with them, but no mental health champion was there.
Mr Kevan Jones
I am sorry, but I do not think the hon. Lady understands the notion of mental health champions. They are not for the clients but to advise the health care professionals doing the assessment.
Heather Wheeler
I do get that point; I am saying that the champions ought to be there when the interviews are taking place. I find the juxtaposition astonishing—according to Professor Harrington’s report, people need that extra bit of care. I find it interesting that we have just heard that there will be 60 champions in the country. Patently and obviously, that is not enough. Perhaps the Minister will advise us that that number represents a pilot and, notwithstanding what we are saying in this debate, it will be increased in short order.
Sheila Gilmore
In Scotland, there are mental health champions in only Edinburgh and Glasgow. This is not a pilot; the Minister has previously said that he has implemented Harrington as far as mental health champions are concerned.
Heather Wheeler
I am sure the Minister has heard every word that the hon. Lady said.
I finish on two final points because time is short and many people want to speak. People have mentioned the tick-box nature of the interview; my constituents find it hugely frustrating that they cannot expand on an answer. After all this time, perhaps the interview process could be tweaked to allow that. My last point is about the absolute frustration of GPs and consultants who feel that no account whatever is taken of the fact that they take their time to write the letters. That is desperately frustrating and a huge waste of public money.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
We do ask GPs and consultants to provide medical evidence; we send a form to them. Only 37% of those are returned in time.
Heather Wheeler
I thank the Minister for putting that on the record. I will gladly go back to my GPs and consultants and say that they will be taken into account if they please return the forms on time.
I will finish now, because many hon. Members want to get in. I am delighted that we are having this debate because I genuinely feel that there is an opportunity to get the issue right. The people deserve it.
John McDonnell (Hayes and Harlington) (Lab)
Someone said that what we are debating is a party political issue. Let me be clear: I opposed the system when it was introduced by the last Government and I oppose it now—for the same reason. I see it as a brutal attack on the weakest and most vulnerable individuals in our society and an exercise by private companies to profiteer at those individuals’ expense.
I started raising the issue in Parliament early on. My first constituency involvement was like that of many other hon. Members: it involved someone who was mentally ill, went for the assessment and had a nervous breakdown. That had an impact on the whole family—the mother, in particular.
I was then contacted by a range of organisations, which came together and produced the Spartacus report. I urge Members to read it. In the last debate on this issue, in Westminster Hall, we read some of its case studies into the record. They are horrendous examples of human suffering and what can only be described as abuse by the system itself.
I also refer Members to Calum’s List, which has a website. It is a list of people who have died, including by suicide, as a result of, or where there has been a contribution from, the loss of benefits. The first example on the list was that of Paul Reekie. Some Members may have known Paul, an award-winning writer and poet in Leith, Scotland. He did not leave a suicide note, just two letters on the table beside him. One was about his loss of housing benefit and the other was about his loss of incapacity benefit. He died.
The other example is that of Mark and Helen Mullins from Bedworth. They could not access their benefits. They were walking 10 miles a day to a Salvation Army soup kitchen. They committed suicide together because they could not access their benefits. Read Calum’s List, which has example after example of the brutal effect of the system.
This is at least the sixth debate that we have had on the issue. The concern expressed by Members about an issue of public administration in all those is unprecedented in recent decades. There is example after example of human suffering on a scale unacceptable in a civilised society. That is why 117 Members of Parliament have so far signed our early-day motion calling for the scrapping of the system.
I have read Mind’s briefing for today’s debate and I urge other Members to do the same. It has put forward what is wrong with the system. Yes, it has recommended improvements, but one of the key factors coming out of its survey of people facing the work capability assessment process was that 51% of them said it made them have suicidal thoughts. Any system involving that level of risk is irretrievable and unreformable. That is why I believe it should be scrapped and why the British Medical Association has said it should be scrapped.
I say the following, and I do not say it lightly: we now know that the system does not work. We know the human suffering that is occurring. The responsibility is now on us to do something about it. We will be to blame for every injury, harm, suicide and other death as a result of the system if we do not scrap it now and bring in something that is fair and based on proper medical knowledge—assessment by a person’s own GP, reinforced by expertise. We need something that gives advice and emotional support for people when they go through the system, not something that leaves them at risk.
John McDonnell
If my hon. Friend does not mind, I shall not give way as other hon. Members want to speak.
I conclude by saying that we all have a responsibility to say, “Let’s end the system now, start again and make something fair.” We will be to blame for all the injury and harm if we do not.
Mr Kevan Jones (North Durham) (Lab)
It is a pleasure to follow my hon. Friend the Member for Hayes and Harlington (John McDonnell), and I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this important debate.
The system is not working for those suffering from mental health conditions. My hon. Friend the Member for Hayes and Harlington has just mentioned the Mind survey. Some 87% of those surveyed said that the system caused distress and 75% said that it had worsened their mental health condition. As my hon. Friend rightly pointed out, 51% said that they had suicidal thoughts as a result of it.
My right hon. Friend the Member for Oldham West and Royton referred to the deaths of people who have been through the Atos system. Through a freedom of information request, I understand that the DWP keeps a figure for the number of people who have died but does not record the causes and how they died. It has been asked to record the suicide cases, for example, but has not done so. As my hon. Friend the Member for Hayes and Harlington eloquently demonstrated, there are a number of well-publicised cases where people have taken their own lives because of this system. It is not too putting it too strongly to say that this coalition Government have blood on their hands for the deaths of those individuals.
Like my hon. Friend the Member for Bridgend (Mrs Moon), a lot of constituents come to see me at my surgery about this, and I should like to give an example. I also referred to several cases in the mental health debate on 14 June. I suggest that people look at the Mental Health Matters website, which gives some very heart-rending examples of people in the north-east with mental health conditions. The individual I mentioned is a 59-year-old who suffers from severe schizophrenia. He failed the Atos interview and is now being told by the DWP that he should be retrained as a security guard because that was the last job he did 10 years ago. What a waste of resources. This is despite his GP writing a letter on his behalf, which I have seen. I know his GP, because he is my GP as well.
Much has been made of the Harrington reviews, and we have heard a lot about the mental health champions, but they are there not to help applicants but to give advice to the health care practitioners. There are only 60 of them, and there are some 140 assessment centres throughout the country. Paul Farmer, the chief executive of Mind, who was on the scrutiny panel, resigned because the system was clearly failing people with mental health conditions. The Minister’s predecessor then tried to rubbish him by saying that he had been asked to resign because Mind had a conflict of interest in a legal case, but it did not. Mind is very clear that the system is failing.
The system is also costing the taxpayer money, not only through the additional health care provision for those with mental health conditions but through the extra work load on GPs, the tribunal system, which is at breaking point, and the reassessment system. The other week a 60-year-old nurse with osteoporosis, who has spent 38 years in the NHS, came to see me. She failed the work capability test. She is 61 in April and is now being told that she will be retrained for a new career until she is 62, when she gets her pension. What on earth is the point in wasting money on individuals like that? There are also cases such as the 21-year-old young lady who ended up in the local psychiatric hospital because she failed the Atos interview. What is the cost of that to the NHS?
I raise serious questions about the capability of the individuals who are doing the Atos assessments. We see from today’s very welcome briefing from the BMA that it is concerned about the turnover of GPs. Let me tell people—I do know a bit about mental health—that GPs are not experts on mental health. It is wrong to get someone who has no training in mental health to assess these cases. We need a new start for people with mental health conditions. We need to take them out of the system and we need a separate work stream for dealing with them. They should be assessed by people who are qualified psychiatrists and people who understand mental health. If we do not do that, we will continue to have the torture—I will use that word—that people are going through in this system and the deaths to which my hon. Friend the Member for Hayes and Harlington referred. If the Minister can have that on his conscience, so be it; I do not think that I could if I were in his shoes.
Helen Goodman (Bishop Auckland) (Lab)
I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this very important debate.
Over 5,000 of my constituents are on incapacity benefit or employment and support allowance and they are facing this terrible system. I should like to give a few examples. Mr H, a double-leg amputee, was told to undertake an 80-mile round trip for his work capability assessment. Mr W, who has serious mental health problems, had a panic attack and was physically sick during his WCA but was told he was fit for work. His wife believes that he is being victimised by Atos. Mrs D, a district nurse who broke her back at work, was told that she is fit for work. Mrs M, who was treated for cancer in July 2010, was deemed fit for work before the results of the operation came through. Her appeal will not take place until next month. Mr E, who is one of the people the RNIB is worried about, had been completely blind for 16 years and forced to give up work, but was told by Atos that he was fit for work.
As the shadow Secretary of State, my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne), has said, we need fundamental reform of the system, including the descriptors. There are problems with the descriptors not only for mental health but for physical health, in every category. I will read out the conditions that have a score of 9, which means that people with all these conditions are deemed capable of going to work. A person who
“Cannot mount or descend two steps unaided by another person even with the support of a handrail”
is deemed fit for work; a person who
“Cannot, for the majority of the time, remain at a work station, either…standing unassisted by another person…or…sitting…for more than 30 minutes, before needing to move away in order to avoid significant discomfort or exhaustion”
—fit for work; a person who
“Cannot pick up and move a one litre carton full of liquid”
—fit for work; a person who
“Cannot use a pencil or pen to make a meaningful mark”
—fit for work; a person who
“cannot use a suitable keyboard or mouse”
—fit for work; a person
“Unable to navigate around unfamiliar surrounding, without being accompanied by another person, due to sensory impairment”
—fit for work; a person
“At risk of loss of control leading to extensive evacuation of the bowel and/or voiding of the bladder, sufficient to require cleaning and a change in clothing, not able to reach a toilet quickly”
—fit for work. And only scoring 6, a person who
“At least once a month, has an involuntary episode of lost or altered consciousness resulting in significantly disrupted awareness or concentration”
—also fit for work. As the RNIB points out, it is possible for a person to have an epileptic fit once a fortnight and be deemed fit for work. As it happens, Mr Deputy Speaker, my husband suffers from epilepsy, and last time he had an epileptic fit he had the headache and the hangover for several days, so the notion that anybody can do a job if they experience this once a fortnight is completely absurd.
Also supposedly fit for work is someone who
“Cannot learn anything beyond a simple task, such as setting an alarm clock”,
or whose
“Reduced awareness of everyday hazards leads to a significant risk of…injury to self or others; or…damage to property or possessions such that they frequently require supervision”.
The situation is not even safe for their colleagues, but somehow they are deemed fit for work. The same applies to someone who
“Cannot cope with minor planned change”,
such as a change to lunchtime, or a person who
“Is unable to get to a specified place with which they are familiar, without being accompanied by another person.”
A person in the following category is also deemed fit for work if:
“Engagement in social contact with someone unfamiliar to the claimant is always precluded due to difficulty relating to others or significant distress experienced by the individual.”
This is a cynical exercise and Ministers know it. In the current situation, none of those people are ever going to find work. It is a cruel and demeaning system and it should be changed now.
Mr Iain Wright (Hartlepool) (Lab)
It is an honour to follow my fellow north-eastern MPs, my hon. Friends the Members for Bishop Auckland (Helen Goodman) and for North Durham (Mr Jones).
Like my hon. Friend the Member for Bishop Auckland, I want to demonstrate to the House, through a series of examples from my case load, the crass, degrading and unprofessional way in which my constituents are being treated. A constituent of mine—let us call her Mrs J—is 51-years-old and suffers from diverticular disease. This leads to a compacting of her bowels, which means that she soils herself on a daily basis, requiring a change of clothes. Often she requires hospital treatment because when her bowels are heavily compacted she is unable to deal with the matter without medical intervention. She was on contribution-based ESA, but was allowed to be on it for only 365 days, and that period expired in 2012. She asked to be reassessed on the basis of her condition, and her assessment stated that she was fit for work. She appealed against this decision, but the appeal was declined. She had to go down the tribunal route but, as she told me in an e-mail last September:
“So I’m now faced having to go to a tribunal which I was told today will take months. I’ve got no representation. I’m unable to go to the CAB as when I attempted to do this I’d soiled myself on route so ended up going home in tears. What can I do? I’ve not got a penny to my name. I’ve borrowed just to survive since April…I’m now faced with another 3-4 months with a tribunal decision again without money…I don’t know what to do and cannot carry on like this. Surely this isn’t how you expect people who legitimately cannot work. And the likelihood is I’ve failed my appeal just because I’ve not worded my appeal correctly when clearly my medical records and specialist have stated otherwise. Please, please help before I end up on the streets.”
A gentleman in my constituency—let us call him Mr D—served in the forces for many years and is now in his late 50s. In the past 18 months, he has undergone extensive surgery to the brain, following a tumour, and in November 2011 he was informed that he required further surgery, this time to his neck, to remove the growing tumour. At the same time—in precisely the same month—Atos assessed Mr D as being fit for work. That assessment was undertaken by someone who was not trained as a doctor at a time when Mr D was going to assessments with a gaping wound in his head and still undergoing treatment. Does it not make an entire mockery of the whole process if that is allowed to happen? Does it not cast real doubt on the effectiveness and accuracy of the whole system? Most ominously, does it not reveal the system’s true intention?
Several of my constituents—far too many to be isolated incidents—have told me that they were asked by the person carrying out the assessment whether they just sat around all day watching Jeremy Kyle. I expect uninformed, unprofessional and crass comments from the likes of the Chancellor of the Exchequer, but not from medical professionals with the serious task of determining whether a person is fit for work in, presumably, an objective and non-prejudicial manner.
Another woman in my constituency—let us call her Mrs M—left school at 16 and worked diligently for 33 years. She paid her taxes. She was made redundant a couple of years ago at just the time that she was starting to suffer from ill health. Mrs M suffers from Crohn’s disease, which has led to severe diarrhoea, incontinence and abdominal pain. She has had surgery to remove a large section of her bowel, but the symptoms are getting worse. As Members may know, there is no cure for Crohn’s disease. Mrs M will not recover. There will be a gradual and irreversible increase in the severity and frequency of her symptoms. Mrs M is a proud and dignified woman who is embarrassed by her condition. She wants to do nothing more than work, but is unable to do so. She suffers from about two bouts of diarrhoea a day, for which she has no more than a second’s notice, and she cannot leave the house unaccompanied.
Mrs M was assessed as having 15 points with limited capability for work. Her assessment and appeal were degrading, insensitive and unprofessional. She was described throughout her appeal notes as a man. Incorrect dates and fictitious telephone calls were placed on her files—in other words, lies. Mrs M was told that she could wear a nappy for work. What sort of country have we become? What sort of ethical values do the Government have, if that is the degrading and crass way in which decent, law-abiding constituents of mine are being dealt with?
I believe that everybody who can work should be entitled to work and that the role of the state is to help achieve that, but all the evidence in my constituency demonstrates that the system is not working and the most vulnerable and ill constituents in Hartlepool are paying the price. The Government are treating my constituents like dirt and that needs to change.
Kate Green (Stretford and Urmston) (Lab)
Last week I held a meeting in my constituency for a number of disabled constituents, their carers and family members, and the organisations that support them. I want to highlight to the Minister two or three messages that build on some of the things that have been said this afternoon.
First, and most importantly, the Minister needs to understand how totally discredited this whole system has become. My constituents told me categorically last week that they believe that the whole system was deliberately designed and operated to trick them—to make them incriminate themselves and to catch them out. They firmly believe that the system is deliberately designed, not to assess and then help them into work if they are fit for it, but simply to stop paying benefits wherever possible. I regret that they continue to believe—I know that this is not the case—that Atos is paid to bring that about.
Whether or not the system is deliberately designed to trick them, it is clear that there are far too many instances of trickery and misleading people and of distorting what they have done, said and reported and drawing conclusions from that. That is happening far too often. It is an absolute disgrace that we should run a public assessment process in such a discredited way.
Kate Green
I will not, because others wish to make speeches.
The Minister has to either sort out the process or address the fundamental scepticism and mistrust of the system. Many Members have already said that we do not believe that that is possible unless the system is scrapped and we start all over again.
I say to the Minister—because I think I know what he will say in his response to the debate—that I understand that this is an occupational assessment, not a medical assessment. I understand why it is not just doctors, but other occupational health professionals who can carry out the test, but it is disgraceful when those professionals have no understanding of the underlying medical condition and can arrive at such distorted judgments on a person’s fitness for work.
I also want to report to the Minister that, of the couple of dozen constituents I met last week, about half of them had no idea that they could take a companion to the assessment process. They said that they had not been told. Of those who did know that they could take a companion and who had sometimes done so, that companion was not made to feel welcome and was not able to assist them. Someone who suffers from autism is likely to behave in a particular way when responding to the questions asked—by trying to please and to give the answer that they think is wanted, rather than accurate—so I am sure that the Minister will appreciate that a companion who can support them and, if necessary, intervene is very important indeed. This bit of the system is not working and the Minister needs to look at it very carefully.
When the work capability assessment was introduced, we knew that it would be difficult and that we were trying something new. We built in the review process that led to the appointment of Professor Malcolm Harrington and some of the early improvements, which I think we all welcomed. Today, however, we have to face up to the fact that it is no longer possible to make the kinds of improvements that would make the system viable.
I get the impression—perhaps the Minister will correct this—that the Government have moved from trying to improve the system to either defending it or, to be frank, washing their hands of it. I honestly do not believe that that is a good enough response. If the Minister intends to say that there is not a problem, that improvements can continue and that these are simply still early days teething troubles, I say to him that the extent of the reports from throughout the House and the country of repeated, systemic problems means that it is time to look again.
I am sure that the Minister and many Members will remember—I most certainly do—the last time we had such a failure, whatever the intentions, of public policy implementation: the Child Support Agency. It took us 20 years to realise that the design that had been put in place simply could not work. Please let us not wait 20 years to realise that this system cannot work and must be started again.
Mr David Anderson (Blaydon) (Lab)
As a member of the Backbench Business Committee, I was delighted that we scheduled this topic for debate. I believe that it is an example of the exact reason why the Committee was set up on the insistence of people who were Members way before us. This is about Parliament doing business. It is not about petty, party political point scoring; it is about issues that face thousands of our people every day. Those issues might one day face some of us or our family members. The issue also impacts on this country’s taxpayers, who are not getting value for money. It is about a system that has failed.
The Prime Minister said in May 2010:
“The test of a good society is how you protect the poorest, the most vulnerable, the elderly and the frail.”
I agree with the Prime Minister on very little, but I certainly agree with him on that. That is the test that should be held today.
People say that the jury is out on Atos, but it is not —it has been out and has come back in, and the evidence is that Atos is failing miserably. We have already heard that 40% of appeals are successful. Evidence published this week has shown that, when people are represented, 70% of appeals are successful. The system is broken. This is not just about the financial cost of appeals; the human cost and suffering of people waiting to go through appeals is drastic.
I will not go through individual cases. I want to draw the Minister’s attention to evidence from those who represent people. First, I ask the Minister whether he has read “The People’s Review of the Work Capability Assessment”, which was produced in November 2012. It contains 67 pages of indictments of the system. It was supported by people across this House and by professionals inside and outside the system.
I asked my caseworker, Sheila Stevenson, how the work capability assessment was affecting people in my constituency. She said, “How many people do you want me to tell you about?” I asked her to give me her view. This is a woman who for seven years was a legal officer for the Union of Construction, Allied Trades and Technicians and has worked for me for four years. She said that about every third call is about benefits—mainly about ESA and people being found fit for work. People are being found fit for work despite an NHS GP, a consultant or psychiatric reports saying that they are not. Atos does not seem to take medical reports into account when deciding on someone’s capability. About 90% of my work is now benefits-related, whereas two years ago the figure was about 20%. As the citizens advice bureaux and jobcentres cannot cope, they refer cases to their local MP.
Recently, the all-party parliamentary group on coalfield communities, which I chair, heard evidence from Keith Lamb from the Durham Colliery Mechanics Trust and Mick White who works for the Yorkshire miners about their experiences from decades of representing people at work. They have had a huge increase in their work load and a very low success rate in overturning these decisions. They talked about how people have been failed. Doctors have made a number of mistakes. Assessors have been used whose first language is not English, so they cannot discuss clearly with claimants what their problems are. Claimants have signed medical reports and doctors have filled them in afterwards, when they were not even present at the medical. Claimants have been told that they do not have a disease.
I will give a classic example of the last point which the Minister should know about because, like me, he comes from a part of world where diseases such as pneumoconiosis cripple people. The Americans call it “black lung”. It is where somebody has a lung full of coal dust. People who have pneumoconiosis never improve and there is no way of getting better. And yet, people who are inexperienced are saying that people with the disease are no longer suffering and are capable of work. That is utterly out of order.
I spoke last night to Dave Hopper, who is the general secretary of the Durham Miners Association, an organisation that has represented people in this country for almost 200 years. He said:
“The system is breaking down.”
He told me that decades of close, professional relationships that had been built up between the association and the examiners and the chairmen of the tribunals are being undermined by the aggressive attitude of the people from Atos. He said that claimants are in dread of examinations and many refuse to appeal because of their initial experience. Surely that has to be wrong.
We are told in this House time and again that we need evidence-based policy. The Minister has today heard evidence from both sides of the House of where the system is breaking down. I suggest that he takes the evidence on board, listens to the people out there in the real world who are dealing with this matter day in and day out, gets them to sit around the table with Professor Harrington, and puts the system right. The system has failed, we need to put it right and we need to do so now.
Julie Hilling (Bolton West) (Lab)
There is so much to say and so little time. Let me start by congratulating my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this important debate.
The Government have many questions to answer about the way that work capability assessments are being carried out and about Atos. The way in which decisions are made on the ability of disabled people to work is nothing short of scandalous. The attack on people who are unable to work, in which they are labelled as skivers and scroungers, has demonised them in the eyes of the public. Yet fraud in disability benefits is very low—so low that it is not even under continuous review. Why are Atos and the Department for Work and Pensions cruelly finding people fit for work or putting them in the work-related activity group when they are clearly unable to work?
About 40% of appeals against the assessments are successful. Interestingly, the figure rises to 70% for claimants who are represented by a benefits expert. Of course, the success rate is only half the story because some people are too ill to appeal, others decide to resubmit their application from the start, and still others die before they get to the tribunal.
There are real questions about Atos and the Government. If I had a contract with anyone who failed in 40% of their decisions and cost me a lot of money, I would not continue to use them. However, the Government have just given Atos the contract for the personal independence payment, so they cannot be dissatisfied with its performance. There are questions to answer. Are the Government giving targets to Atos, either covertly or overtly? Have the Government discussed their expectation of reducing the number of people on benefits or is Atos doing that of its own accord? Everybody says officially that there are no targets, but workers report a different story.
When Dr Steve Bick went undercover for the “Dispatches” programme, he was told more than once that the process is meant to take people off benefit, and that if he did not find enough people fit to work, his assessments would be monitored. He was also told that if he found more than 12% or 13% of people unfit for work, he would be told that his rate was too high.
My surgery is full of people who have been cruelly treated by the DWP and Atos. I wish that I could tell all their stories, but I will tell just a few. I have changed their names. Sylvia’s husband came to see me because she was too ill to come. She had a subarachnoid haemorrhage four years ago, but aged 41, has now been found fit for work. She suffers blackouts, cannot dress herself, cannot self-medicate, cannot climb stairs by herself and cannot go out alone because she cannot remember where she lives or where she is going. Three to four times each month, she gets hemiplegic migraines, which last between two and six days, and mean that she becomes paralysed on her right side and loses her speech. Despite that, she has been found fit for work. The jobcentre, however, will not sign her on because it says that she is not fit for work. Needless to say, the stress sets off her migraines. One wonders what is the matter with her assessors.
Susan, a sufferer of fibromyalgia and hypermobility syndrome, told me that she felt like she was on trial for benefit fraud at her assessment. Bill, a former long-distance lorry driver, had chronic obstructive pulmonary disease, heart disease and diabetes. He thought the fact that he could not breathe would be reason enough to find him unfit for work, but of course he was wrong. He did not tell the assessors about his cerebral brain ascension, which means that he has terrible memory problems, because he is ashamed of having the condition. Of course, he has now had to tell them. He waited for nine months and then the decision was overturned.
There are many more people I could talk about, but I will finish with Clare, who has severe mental health issues and scoliosis. She scored 15 points and was placed in the work-related activity group, even though she will clearly never be able to work. She appealed the decision and had to wait for 12 months, which made her condition far worse. She was then put in the support group.
People being placed in the work-related activity group is the next scandal. When people score 15 points and are found not fit for work, but are put in the work-related activity group, they will lose their benefit after 365 days. Is that another way of saving money, but one that also puts disabled people into abject poverty and causes them terrible stress?
There are so many questions. Why do the assessors give more weight to work capability assessment descriptors than to professional medical assessments? Why do they reassess people who have just won their appeal? Why do they not record the number of people who die through illness or suicide when being rejected for disability benefit? Why do they not track people who have been found fit for work and people who no longer receive benefit? How much do all the botched assessments cost us?
We believe that we have a contract with the state. We work and pay our national insurance and tax in the belief that when we can no longer work, the state will look after us. The Government seem to have broken that contract. Surely the Minister cannot accept this cruel and heartless treatment of ill and disabled people. What is he going to do about it?
Sheila Gilmore (Edinburgh East) (Lab)
Like everybody else, I thank my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) for securing this debate and the Backbench Business Committee for agreeing to it. Clearly, we could have done with double the time or even more. Most of us could probably speak for at least an hour on these issues.
Getting the system right is hugely important for individuals. People have spoken about the effects on people’s mental state and their well-being, but I will mention some of the financial effects, which the last speaker began to touch on, for people who go into the work-related activity group. If that decision is not right, those people lose their contributory benefits after a year. The people who suffer the most from that are those who have a working partner—that partner may only work part time—and who have built up some savings, because they cease to get any benefit. If they want to get their national insurance credits, they still have to go through the assessment or they will not get the credits that will help them in the future with their pension. They may not be getting any money, but they are still going through the assessments.
Depending on the prognosis that is given in the recommendation—we are told it is not a “decision”—by Atos, many of the people in the work-related activity group will be mandated into the Work programme. That happens if the prognosis is that they might be fit within six months, but we are told that that will shortly be increased to 12 months. That means they could experience sanctions if things go wrong with the Work programme. If something goes wrong, perhaps because they have a learning disability or a mental health problem, and they do not turn up or are deemed not to be co-operating, they could be sanctioned. I have a constituent in that position who was sanctioned for six months for that reason. The people in that group are the ones who are most affected by having only a 1% increase in benefits for the next three years, although it must be said that people in the support group are in large part also affected, contrary to what has been said.
Getting it wrong can mean that people slip off benefits altogether. Research commissioned by the previous Government, which I understand is not being continued by this Government—the Minister might reassure us on that—found that 43% of those found fit for work were neither in work nor in receipt of an out-of-work benefit a year later. We must ask where they are. What is happening to them? We should know and we should care. It is not good enough for Minister to say, “We have reduced the number of people on out-of-work benefits,” and to imply that those people are happily in work when that is almost certainly not the case.
The Minister will probably say that things are improving, but the work on the descriptors shows that the pace is glacial. In November 2011, Professor Harrington suggested that new descriptors be tested. The Government said then that they would look at the suggestion in early 2012. The current position is that the testing has only recently begun, and we will be lucky if we get a full response and report on it by autumn 2013, which is nearly two years since Professor Harrison made that suggestion.
Another problem—this has already been touched on by others—is that some people are falling into a hidden trap. They are found fit for work, but are told that they cannot sign on for JSA, which is the only benefit for which they are eligible, because they are not fit for work and hold a medical certificate. Potentially, people in that situation get no benefit. I am not sure whether Ministers are even aware of that procedural issue.
On appeals, finally, after a lot of pushing, tribunal judges are giving limited information on their reasons, but it is not good enough—it is too general. But that information is being used by Ministers, and it was used by Atos in a briefing that I presume was sent to all MPs, to say that all is well, because it was found that Atos was found to be at fault in only 0.5% of cases. That is very misleading, because people are winning their appeals on the basis of new oral evidence.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
It is a pleasure to follow so many passionate speeches this afternoon and to say a few words on behalf of some of the constituents who have contacted me. Like many hon. Members, I have held meetings in my constituency. I have also met Parkinson’s UK and the local branch of the Multiple Sclerosis Society, and received representations from many cancer patients. I hope the Minister can say something about their situations and about how descriptors affect cancer patients.
However, I want briefly to highlight other issues. There is a perception—notwithstanding what Atos or the Department for Work and Pensions says—that there are targets for placing numbers of people in the various groups. One constituent got in touch with me when he found out about this debate. He states:
“Getting a copy of the ESA85 report…to which everyone examined is entitled was like getting blood out of a stone.”
The man was found fit to work despite being on crutches and in constant pain at the time. He said:
“When I eventually received a copy I found that the examiner had stated clearly that I was found unfit for any kind of work and would remain so for at least two years.”
He tells me that when he tried to follow that up via the DWP, he was left with the distinct impression that staff had been advised, encouraged or instructed that everyone was to go into one of the employment support groups rather than be deemed completely unfit for work. I am sure the Minister will be able to comment on that.
Another issue that people frequently raise with me is about consultants. People who have seen consultants for medical conditions for a number of years feel that their consultant and general practitioner know their condition well, but they suddenly find that the Atos examiner takes a very different view. I have one example of a gentleman who was brought to my constituency office by a neighbour. He had had his third WCA in May 2012 and was zero rated. On the previous two occasions he appealed, and his appeals were upheld on the basis that the tribunal decided that he had reduced awareness of everyday hazards, leading to a significant risk of injury to him or others, and was therefore not fit for work.
That gentleman was brought to my office in August 2012 because he was awaiting his third appeal and was distressed by the process. Obviously, we gave him advice. On 8 October, the neighbour contacted me to say that the gentleman had passed away. We have heard a few such examples in the debate, but I hope the Minister realises the stresses and strains and the problems caused to family and friends when people are waiting for extended periods for their appeals.
I should briefly mention mental health, which was mentioned by a number of hon. Members, and again quote a constituent who contacted me this week. He says:
“I have been treated by my GP for over seven years for this illness, he is aware of the ups and downs, and the debilitating effects I am subject to. How can a registered nurse make a decision on my mental health in 41 minutes, most of which was asking questions about my physical health? This is what happened at my Atos WCA…There must be a change to the way people with mental health problems are dealt with by the system. I have spent the time since my WCA in June in misery, and the weeks leading up to the tribunal hearing in a mix of terror and stress. I was terrified at the tribunal itself.”
That is no way to treat people in a civilised society. The gentleman says that he is
“part of the last generation of ‘stiff upper lip’ and ‘put the best face on it’ people.”
He says that that “works against” him because he does not fit what he describes as the stereotype of someone with a mental health problem.
We need a system that is sophisticated enough to deal with those situations, but also one that is fair enough to ensure that people who are in the last weeks of their lives are not left in misery while they await tribunals.
Stephen Timms (East Ham) (Lab)
We have a heard a large number—26, I believe—of extraordinarily powerful speeches in the debate. There is no doubt that the current WCA arrangements are causing immense problems and anxiety for people for whom all hon. Members want anxiety to be minimised.
In opening the debate, my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) mentioned the distress, indignation, fear and anger that have been caused. His assertion was amply supported by contributions from both sides of the House. We should not allow the system to continue. It needs fast and fundamental reform. I put it to the Minister—this struck me as I am sure it did him—that calls for such reform have come from both sides of the House, which does not often happen. It certainly happened today.
Part of the background to the debate is that a very small proportion of people who are placed by the WCA in the work-related activity group of ESA are getting into work. The invitation to tender for the Work programme said that the minimum performance standard would be that 5.5% of new applicants for ESA get into sustained job outcomes within one year, but the data published in November show that the proportion was 1%. The Work programme has performed terribly for the group of people we have spoken about in this debate.
What has gone wrong? The structure of the employment and support allowance is right. In the 1980s—my hon. Friend the Member for Edinburgh East (Sheila Gilmore) was absolutely right to remind the hon. Member for Harrow East (Bob Blackman) of this—thousands of people were encouraged to move from unemployment benefit to invalidity benefit in order to reduce headline unemployment. People who worked in benefit offices at that time have explained to me how staff were given incentives to encourage people to make that shift. Once they had gone on to invalidity benefit, later incapacity benefit, that was it—they were abandoned. No further support beyond the cash benefit was provided. It was only in 1997 that that began to change. It was recognised that the vast majority of people in receipt of incapacity benefit would prefer to be in employment, if they could be. Starting with the new deal for disabled people and later with pathways to work, new ideas were developed. Nothing previously had been done to practically support people with serious health impairments into work. The approach can be summarised as: work for those who were in a position to work, and support for those who were not.
Out of that experience was drawn the design of the employment and support allowance. From that, the work capability assessment was designed to allocate people into the three groups: fit for work, work-related activity group, and support group. That is the right structure and architecture for the benefit, but it is the assessment—the topic of this debate—that is now in doubt. The key problem is that very soon after the election, the Government announced that they would reassess the entire incapacity benefit case load on a very fast timetable. At that time, the WCA had been introduced less than two years previously. Problems were still being ironed out and the organisation had not properly bedded down, yet on to this still developing system was placed the enormous burden of reassessment. Atos tells us it carried out 1 million work capability assessments last year. The load has just been too much, resulting in the problems that we have heard about, and which have been expressed so impressively in this debate.
The Minister will be aware of a good deal of concern among disability rights organisations about the Employment and Support Allowance (Amendment) Regulations 2012. They were laid before Parliament just before Christmas on 17 December, and come into force on 28 January. They include the changes that will allow people recovering from cancer to go more frequently into the support group—a welcome change that was referred to by the hon. Member for Aberconwy (Guto Bebb). He said that the changes had already happened, but in fact they will take place on 28 January. A lot of people are worried that the regulations appear to give Atos permission to take account of non-existent, imaginary adaptations or medication in the assessment, and introduce a false distinction between physical and mental impairments. There is a lot of concern and I am sure the Minister is aware of it. Will he be able to say anything to address it?
The Government have recognised that the WCA needs modification. However, as we have heard from a number of speakers, they have gone about the task in an extraordinarily leisurely way, which has been described as “glacial” by a number of Members. I hope that the Minister can encourage us and tell us that the Department will now get a move on. I want to put to him a number of specific points. When will the changes to the descriptors for fluctuating conditions and mental health conditions, which were recommended months ago by the disability organisations, be implemented? He answered a question that I tabled last week on this, and there still seems to be a terrible, lackadaisical approach. He said:
“The Evidence Based Review (EBR) remains a priority for the Department and work is continuing at pace. The final report is due in 2013.”—[Official Report, 7 January 2013; Vol. 556, c. 180W.]
That was the first alarm signal, because his predecessor, in an answer on 25 June 2012, had told me that the final report would be due in spring 2013. Now the Minister is saying it will be in 2013. My hon. Friend the Member for Edinburgh East suggested that it will not be until autumn 2013. If that is right, that is another six-month delay. We really need to get a move on.
In his reply to me last week, the Minister said:
“We have undertaken extensive work with these charities throughout the summer”—
that was an answer last week, and the summer was the season before last. What happened in autumn?—
“to ensure that the ‘alternative’ WCA assessment combines recommendations from both the mental functioning and fluctuating conditions groups, and that the descriptors are suitable for testing.”—[Official Report, 7 January 2013; Vol. 556, c. 181-82W.]
The mental health descriptors were signed off by the charities in March last year. I really hope that the Minister will get the Department to get a move on and not just try these things out, which is what the evidence-based review—when it finally happens—will do, but introduce the changes that are clearly so urgently needed.
On progressive conditions, does it make sense to push everybody with a progressive condition, such as Parkinson’s disease, through regular reassessments when we all know that those conditions are only going to move in one direction and get worse. My hon. Friend the Member for Llanelli (Nia Griffith) made that point in an intervention. The Minister answered a question from me recently about this. He said:
“Around 360 people with Parkinson’s disease in the Work Related Activity Group have undergone a repeat assessment following their initial assessment…Of these, around 20 people…were found Fit for Work at their first repeat assessment.”—[Official Report, 15 January 2013; Vol. 556, c. 725W.]
No doubt some of them will have appealed and had their appeals upheld. Is it really worth putting 360 people with Parkinson’s disease through reassessments in order to find that perhaps 20 should be fit for work—although, as I say, a number of those would no doubt have been overturned? I also asked how much the reassessments were costing. As a number of Members pointed out, the Minister simply will not answer any questions about cost, on the grounds of commercial confidentiality. This is public money, and we need to know where this money is going and how it is being spent.
We need to make better provision for people to be able to supply their own supporting medical information in their assessment—a point made by my right hon. Friend the Member for Oldham West and Royton in opening the debate, and by the hon. Member for Stafford (Jeremy Lefroy) and my hon. Friend the Member for Bridgend (Mrs Moon). The application form should be amended to invite people’s own supporting medical information, and Atos assessors need to be more open to being informed by that information.
Atos assessors should be told why previous assessments were overturned on appeal—a point raised with me by Atos itself some months ago. We have heard how often people have won their appeal, gone back to Atos and immediately been found fit for work again. Part of the problem is that Atos was never told why a person’s appeal was upheld. I believe that changes are in hand or perhaps have been introduced to assess that problem. My hon. Friend the Member for Airdrie and Shotts (Pamela Nash), however, was among those who referred to the seriousness of this revolving door problem. It needs to be addressed. I was also troubled by what she said about the difficulties people had getting their assessments recorded. That was supposed to have been sorted out, but her comments, and those of others, suggest otherwise.
Sheila Gilmore
Is my right hon. Friend aware that although tribunal judges are giving brief statements of reasons, these are not enough to help the decision makers or Atos understand?
Stephen Timms
My hon. Friend makes a telling point. That information needs to be provided.
The architecture of ESA is sound, but the assessment system is clearly not up to the load it is being asked to bear. That is why we need fundamental and much faster reform, with a much greater sense of urgency than we have seen from Ministers so far.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I also congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) on securing this helpful debate. It gives me the opportunity to address some of the concerns expressed on both sides of the House about this process.
“For too long, too many long-term sick and disabled people have been written off by the welfare system to a life of dependency, entirely reliant on benefit and devoid of experience of the labour market.”—[Official Report, 9 January 2007; Vol. 455, c. 246.]
Those were not my words, but the words of the right hon. Member for East Renfrewshire (Mr Murphy) when he was employment Minister on Third Reading of the Welfare Reform Bill in January 2007. The hon. Member for Bishop Auckland (Helen Goodman) was a DWP Minister at the tail end of the previous Government, so I am sure she made her concerns known at that time to her ministerial colleagues—or perhaps not. This measure was introduced by the previous Government. The argument of the right hon. Member for East Renfrewshire was right then, and it is right now.
Helen Goodman
Government Members are constantly asking Opposition Members to say sorry. Actually, about the way this has run, I am sorry.
Mr Hoban
I welcome the hon. Lady’s candour. It would be good if more of her colleagues expressed similar candour.
One aspect of the Welfare Reform Act 2007 that has been referred to frequently throughout the debate is the establishment of the independent annual review. The last three have been undertaken by Professor Harrington, a distinguished occupational physician. What evidence has he put forward? In his first report, he stated that he did
“not believe that the system is broken or beyond repair”.
In his second report, he noted that the WCA had
“noticeably changed for the better”,
and in his third report, he said that
“real progress has been made”
and stressed that
things are beginning to change positively in the best interests of the individual.”
It is important not to lose sight of that.
Mr Hoban
I want to make a bit more progress, because a lot of detailed points were raised and I want to address as many of them as possible.
Despite the improvement, it is clear—today’s debate reinforces this—that the WCA continues to generate heartfelt and passionately held views, but some of the worry experienced by claimants is a result of adverse media coverage and risks being fuelled by incorrect anecdotal information and—indeed—total myth. We have heard some of those myths today, and I want to set the record straight. This is an opportunity to address the facts behind the process and to set out what is happening in the Atos process.
Several hon. Members suggested that Atos had targets for finding people fit for work or placing them in a particular group. Let me be absolutely clear—let nobody in or beyond the House be in any doubt—there are no such targets. There are no targets for who should be put into which group. Instead—hon. Members would want this—there are quality-control checks. We want the right decisions to be made for our constituents and we want to ensure consistency between physicians and practitioners, and assessment centres. That quality control —saying that we should all be familiar with things we do and come across in our daily life—is not the same as a target. Atos has no targets to recommend that people go in particular groups.
Mrs Gillan
I am grateful for that assurance, because it is a matter of great concern. Will the Minister go a step further and say whether he is aware of any internal targets? Will he give us an assurance that there are no internal targets at Atos?
Mr Hoban
There is nothing in the contract with Atos to suggest that there should be any targets for whom they recommend gets placed in particular groups. I want to be absolutely clear: there no targets and it is absolutely right that there should be no targets, because what all of us want, whichever side of the debate we are on, is to ensure that we get the right people in the right groups for the right support. We cannot do that with targets. We have to treat everyone individually. That is the dignity that we should accord the people going through the process. They should know that they are going to be treated with dignity. There are no preconceived targets.
Julie Hilling
The question then is not whether the Government are putting targets in place, but whether the Minister is 100% convinced that Atos does not set targets for any of its work force in any way, because that does not seem to be the evidence coming out. Is he utterly convinced about that and if not, will he investigate whether that is the case?
Mr Hoban
No, I am not going to give way. I want to make some more progress and the hon. Lady raised some questions that I want to address.
It has also been suggested that Atos health care professionals make decisions on benefit entitlement. They do not. Those decisions are made by DWP decision makers. They take the ESA50—the form people complete when making an ESA claim—any further medical evidence produced by a GP, consultant or health practitioner with whom the claimant is working, and the Atos assessment, but they look at all that evidence. The decision is made by DWP decision makers, not Atos. That is why there are a number of cases where the DWP decision maker’s decision has been different from any recommendation made by Atos. It is up to the DWP—the decision is made by the Department, not Atos—to decide who goes into which group.
Mr Hoban
Let me make a bit more progress.
People say that the number of appeals overturned at tribunal is evidence of poor Atos reports—a point raised by the hon. Member for Edinburgh East (Sheila Gilmore). When we asked judges why they overturned DWP decisions, they said that an error in the Atos assessment was the primary reason for an overturn in only 0.3% of cases. However, although it happens very rarely, I agree with her on one point: I would like to get more information from the judges.
Mr Hoban
The hon. Gentleman says that I am a Minister, but the judges are independent—one of the strengths of our system. I hope that the judges have heard the comments that have been made—not only in this debate, but in other debates—about the need for more detail. To get the system right we need better feedback from the judges, but let us not forget that where we ask judges for the reason for an overturn, in a large proportion of cases they say it is the presentation of fresh evidence. They are very explicit in saying that the primary reason for overturn in only 0.3% of cases is the Atos assessment.
Sheila Gilmore
I am grateful to the Minister for giving way, because this is an important point, especially as it has been briefed on so often. What I want to know—the Minister has to ask this question too—is this. I suspect that the question of overturns is simply one of some fairly simple error in the form, but according to the same judges, in 40% of cases they made their decision because they disagreed with the presentation of the case. That still suggests something wrong with the initial assessments—whether because the people concerned did not present them well or because the Atos assessors rushed them through. In 40% of cases the judges came to a different decision.
Mr Hoban
Just because the statistics do not suit the hon. Lady’s argument does not mean that they are wrong. A lot of this debate is about constituency casework and experience. Sometimes we also need to look at the overall stats and figures behind this issue to put those cases in context, which is why I made the point about the overturn rate.
It has been suggested that GPs should make the assessment. The British Medical Association has been prayed in aid. Let me quote what the BMA said about that idea:
“However, it is not part of the GP’s role to provide any opinion…on the patient’s capability to work as part of this process. It is vital that these two roles are kept separate and that GPs are not asked to provide an opinion on their patient for the purpose of receiving the Employment and Support Allowance; doing so could damage the doctor-patient relationship.”
It has also been said that the work capability assessment does not take full account of mental health conditions. Let me say a bit about that important issue. We have sought to improve the process and the support for the health care professionals who are undertaking the assessments. All Atos health care professionals receive specific and additional training in assessing mental health conditions—
Mr Hoban
We do ensure that those professionals receive the support that they need to assess those conditions.
Following Professor Harrington’s recommendation, Atos has 60 mental health function champions in place to spread best practice. My right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) asked whether they had specific training in autism. I can assure her that that is the case. She also asked, as did other hon. Members, whether we could review the effectiveness of the mental health champions. It is not for me to dictate the work that Professor Harrington’s successor will undertake as part of the fourth review, but I think that that is a good suggestion. We need to look at the effectiveness of the recommendations that Professor Harrington has made.
Mr Hoban
I am going to make some progress, as I have only a few minutes left to speak before the next debate starts.
In March 2011, we also implemented the recommendations of a Department-led review of the work capability assessment, which included the expansion of the support group to cover more people with certain communication problems and severe disability due to mental health conditions.
Hon. Members have suggested that the assessment does not take account of fluctuating conditions, but that is not the case. It gives people with a fluctuating condition the opportunity to explain how their condition varies over time. It is not a tick-box assessment, as some have suggested. There is a discussion between the health care professional and the person making the claim for ESA to determine how their condition varies over time. The questionnaire that customers are sent has been redesigned for that purpose, and people are now asked to give more details about how their fluctuating condition affects them as an individual. If a person cannot carry out a function repeatedly and reliably, they will be treated as unable to carry out that function at all. We all recognise that the capacity of people with a fluctuating condition can change, and it is important that proper regard should be given to that fact.
I want to pick up on a point made by the right hon. Member for East Ham (Stephen Timms). We have committed to a review of the descriptors for fluctuating conditions, and we are working closely with charities on that. We also need to ensure that any new descriptors are as good as, or better than, the existing ones, for the purpose of assessing someone’s condition. That work is going on at the moment.
Mr Hoban
I know that the right hon. Gentleman is keen to find out when that review will be published, but let me just say this. We want to make changes, if there is evidence to support such changes, and we need to ensure that that evidence is gathered and evaluated. I am as keen as he is to ensure that changes are made as quickly as possible, and that we make the right changes and the best changes to improve the process. I am not in any way seeking to delay the process—we want to ensure that it happens—but we have had to work quite hard to get the right descriptors that will provide the evidence on functional ability, and we are now assessing them.
Mr Speaker
Order. The Minister is most courteously attending to the issues, and he refers to three or four minutes. I know that he will be leaving at least two, if not three, minutes for the right hon. Member for Oldham West and Royton (Mr Meacher) to wind up at the end. I think that we are clear on that.
Mr Hoban
I have only four minutes left and I want to address some more questions.
Let me deal with the issue of Atos’s capability. Atos deals with 100,000 cases every month and it consistency meets the quality thresholds. Only 3.6% of assessments are below standard compared with a threshold of 5%. It receives complaints about only 0.6% of assessments. DWP decision makers return to Atos assessments that are inadequate for reaching a decision in only 0.2% of cases.
The hon. Member for North East Derbyshire (Natascha Engel) asked about the appeal rates. Let me be clear about the rate of successful appeals. Of all the fit-for-work decisions taken by the Department, only 15% are overturned on appeal. Only 15% of all the decisions we take, then, are overturned on appeal, which I think demonstrates that while we need to ensure that there is a proper appeals process, we should not be bandying around figures that misrepresent the level of successful appeals.
Mr Hoban
No. I have two minutes left and I want to make some more comments.
My hon. Friend the Member for Stafford (Jeremy Lefroy) talked about quality. The tribunal service can refer substandard reports back to Atos as an appeal for further action. It has exercised that right only 23 times in the past year. Rigorous checks are in place to ensure that quality applies.
Much has been said about employment and support allowance not working—that is untrue. What we are seeing is people coming off ESA and getting into work. The number of working-age people on ESA and incapacity benefit in February 2012 was 2.56 million—the lowest level since the introduction of IB in 1995. Early estimates to September 2012 suggest that overall numbers for this benefit are falling and will for the first time be below 2.5 million.
Finally, although there are many other myths, the last one I shall address today is the myth that the WSA is not fit for purpose. Professor Harrington has made it quite clear that the WSA, designed as a first positive step for work, is the right concept for assessing people who need our support. There is a need to improve it. No one doubts that, which is why we have implemented Professor Harrington’s recommendations. The assessment we inherited needed refinement. That is why we accepted and have largely implemented more than 40 of his recommendations over the past two years. That is why twice as many people have gone into the support group in comparison with when ESA was introduced.
Overall, the proportion of people with mental health conditions being awarded ESA has risen from 33% to 49%. We are seeing improvements and more will be introduced later this month on the categories of cancer treatment that allow people to go straight into the work-related activity group. These changes are happening. We should recognise that change is important and that it is happening. This is the right approach; demonising the work capability assessment does not help our constituents and does not address their concerns.
Mr Meacher
I cannot remember attending such a compelling and powerful debate, combining passion, analysis and a very powerful demand for radical reform. It is absolutely clear that the consensus of the whole House is that the current Atos system has failed irretrievably and needs to be replaced by a wholly new and fair system.
I have to say that the Minister’s response just now was extremely disappointing. He gave no assurance whatever that the present failed, mechanistic, tick-box system used by Atos will be replaced, or that the evidence of GPs and other medical personnel who know the disabled person will be taken into account. He could thus give no assurance that the original decisions will be made any more accurate or fairer. As a consequence, the appeals system, already overloaded, is going to remain choked.
My hon. Friend the Member for North East Derbyshire (Natascha Engel), the Chair of the Backbench Business Committee, made the forceful point that when Atos works for another employer, such as the NHS or Royal Mail, it produces very different results in terms of fitness for work—which strongly suggests the very uncomfortable truth that perhaps the DWP is entirely prepared to accept the results that we all deplore if that is only way of getting hundreds of thousands of people off benefits.
That is not just the view of the Opposition. I think that the mood of the House was caught by one of the Minister’s very senior colleagues, who said—I noted it down at the time—that the reputation of Atos was so damaged that it was necessary to park it to one side and move off in a different direction. That is exactly what is needed.
This issue is a test of the Government’s accountability to the House. In my opinion, the incontrovertible message conveyed by today’s debate is that until the Government and the DWP listen to, and act on, the unanimous view that has been expressed today—I have never seen such unanimity across the Benches—and introduce a wholly different system, the House will not let the matter go.
Question put and agreed to.
Resolved,
That this House has considered the matter of Atos work capability assessments.
Nuclear Deterrent
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
Interest in this debate has led me again to impose a six-minute limit on each Back-Bench contribution.
Dr Julian Lewis (New Forest East) (Con)
I beg to move,
That this House has considered the matter of the nuclear deterrent.
The motion stands in my name, and that of the hon. Member for Newport West (Paul Flynn).
Obtaining the debate involved a genuinely collaborative effort across the political divide. Part of the beauty of the Backbench Business Committee process is that it compels people who disagree profoundly about issues to work together to ensure that those issues are brought to the Floor of the House. No fewer than two dozen colleagues representing both sides of the argument supported our application for the debate at various stages. They are too numerous to list, but representations were made to the Backbench Business Committee by—as well as the hon. Member for Newport West and me—the hon. Members for Islington North (Jeremy Corbyn) and for Brighton, Pavilion (Caroline Lucas), and my hon. Friends the Members for South East Cornwall (Sheryll Murray), for Crawley (Henry Smith), for Woking (Jonathan Lord), and for Wellingborough (Mr Bone). Others who were particularly supportive include the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), the hon. Member for Cambridge (Dr Huppert), and my hon. Friends the Members for North Warwickshire (Dan Byles) and for Broxbourne (Mr Walker).
I know that several of those Members, as well as others—not least the former Defence Secretary, my right hon. Friend the Member for North Somerset (Dr Fox), who is participating in a broadcast on this very subject this afternoon—regret that Committee meetings and other inescapable commitments prevent them from attending today’s debate. I am grateful to them all, and I hope that the tone and content of our debate between now and 5 pm will justify the effort that they all put into encouraging the Backbench Business Committee to select this important topic.
Given that we must fit some 20 speeches into just two hours, I shall endeavour to make my own remarks as brief as possible. I wish to outline just five military arguments and four rather more political arguments in favour of our retaining the independent deterrent. The first of the military arguments is the most important argument of all: that future military threats and conflicts will be no more predictable than those that engulfed us throughout the 20th century. That is the overriding justification for preserving armed forces in peacetime as a national insurance policy. No one knows which enemies may confront us during the next 30 to 50 years—for that is the period that we are discussing, when the next generation of the nuclear deterrent will be in service—but it is highly probable that at least some of those enemies will be armed with weapons of mass destruction.
Henry Smith (Crawley) (Con)
I greatly regret that, owing to a prime ministerial meeting with GPs from my constituency, I shall be unable to take part substantively in the debate.
Does my hon. Friend agree that our independent nuclear deterrent has helped to keep the peace in Europe for the past six decades, and that, because we effectively bankrupted the Soviet Union, it has led to the freeing of millions of people in eastern Europe?
Dr Lewis
I am sure that will be a central topic in our debate, and I entirely agree with my hon. Friend. I hope some of the later points in my list of nine arguments will serve to endorse what he has said.
My second argument is that it is not the weapons themselves that we have to fear, but the nature of the regimes that possess them. Whereas democracies are generally reluctant to use nuclear weapons against non-nuclear dictatorships—although they did so against Japan in 1945—the reverse is not true. Let us consider what might have happened if in 1982 a non-nuclear Britain had been facing an Argentina in possession of even just a few tactical nuclear bombs and the means of delivering them. Would we then have dared to use our conventional forces against its inferior conventional forces?
The third military argument is that the United Kingdom has traditionally played a more important and decisive role in preserving freedom than other medium-sized democracies have been able, or willing, to do. Democratic countries without nuclear weapons have little choice but either to declare themselves neutral and hope for the best or to rely on the nuclear umbrella of their powerful allies. The UK is a nuclear power already and is also much harder to defeat by conventional means than many other democracies because of our physical separation from the continent.
Paul Flynn (Newport West) (Lab)
Is the hon. Gentleman arguing for every independent country in the world to possess nuclear weapons?
Dr Lewis
Absolutely not. I am saying that those countries that do not have nuclear weapons already often have other reasons that make it difficult to defend their borders, whereas, fortunately, we find it easier to do so because of our physical separation from the continent.
The fourth argument is that our prominence as the principal ally of the United States, our strategic geographical position—to which I have just referred—and the fact that we are obviously the junior partner might tempt an aggressor to risk attacking us separately. Given the difficulties in overrunning the UK with conventional forces in comparison with our more vulnerable allies, an aggressor could be tempted to use one or more mass destruction weapons against us on the assumption that the United States would not respond on our behalf. Even if that assumption were false, the attacker would find out his mistake only when it was too late for all concerned. An independently controlled British nuclear deterrent massively reduces the prospect of such a fatal miscalculation.
The fifth of the military arguments is that no quantity of conventional forces can compensate for the military disadvantage that faces a non-nuclear country in a war against a nuclear-armed enemy. The atomic bombing of Japan is especially instructive—not only because the Emperor was forced to surrender, but also because of what might have happened under the reverse scenario. If Japan had developed atomic bombs in the summer of 1945 and the allies had not, a conventional allied invasion to end the war would have been out of the question.
Caroline Lucas (Brighton, Pavilion) (Green)
I want to follow on from the question from the hon. Member for Newport West (Paul Flynn) and press the hon. Member for New Forest East (Dr Lewis) on the logic of his argument. How can it be right for us to claim that we should have nuclear weapons, yet lecture every other country against trying to acquire them? If we are saying that the UK depends on nuclear weapons to be safe, does it not logically follow that every other country has the right to make the same argument?
Dr Lewis
The answer to that is catered for by the point I made earlier: it is not the weapons we have to fear but the nature of the regimes that have them. I have no desire to lecture other democracies on whether or not they should have nuclear weapons, as that is a question for them and it is about whether they feel they can afford to do that. It does not bother me if democracies have nuclear weapons, but I do reserve the right to lecture dictatorships, and preferably to try to thwart, baulk and deter them from having such weapons, because they are the threat, not the weapons themselves.
Dr Lewis
I will give way, but it will be for the last time as otherwise I will be in danger of taking too much time. [Interruption.] I thank my hon. Friend for his courtesy in resuming his seat.
I wish briefly to make four political points. The first political argument is that when people are asked whether it is safer for this country to continue to possess nuclear weapons as long as other countries have them, a large majority of the population consistently take the view that we should do so and that it would be unwise and dangerous to renounce them unilaterally. We can ask different poll questions that seem to point to a different answer, but when that question is asked, the answer is surprisingly consistent.
The second political argument is that in the 1980s, under cold war conditions, two general elections demonstrated the toxic effect of one-sided disarmament proposals on a party’s prospects of gaining power. The third argument is that it was and remains widely believed—this refers to the intervention made by my hon. Friend the Member for Crawley (Henry Smith) a few moments ago—that the nuclear stalemate of the cold war enabled all-out conflict between the majors powers to be avoided for 50 years, despite their mutual hostility and in contrast to what happened in those many regional theatres where communists and their enemies could and did fight without fear of nuclear escalation. The final political argument is that the ending of the east-west confrontation has not altered the balance of public opinion on this question. First, that is because a danger could easily re-emerge of a reversion to a confrontation of that sort. Secondly, it is because even today there are unpleasant regimes, such as Iran’s, on the point of acquiring nuclear weapons and some, such as North Korea’s, that have already done so.
The role of our strategic nuclear force remains what it has always been: to deter any power armed with mass destruction weapons from using them against us, in the belief, true or false, that nobody would retaliate on our behalf. The use of our deterrent consists of its preventive effect on the behaviour of our enemies. The actual launching of a Trident missile would mark the failure of deterrence and would presuppose that a devastating attack had already been inflicted on our country.
Because strategic nuclear deterrence is largely irrelevant to the current counter-insurgency campaigns with which the British Army has been involved, some senior Army officers have been suggesting that we must choose between fighting “the war” of the present and insuring against the more conventional prospect of state-versus-state conflict in the future. I say that that choice is unacceptable, and that the underlying message that the era of high-intensity, state-on-state warfare is gone for good is a dangerous fallacy. Every sane individual hopes that such warfare will never return, but to rely on that in the face of past experience would be extremely foolhardy. The lesson of warfare in the 20th century, repeated time and again, was that when conflicts broke out they usually took their victims by surprise. Obvious examples are: the failure to anticipate the first world war; the follies of the “10-year rule” from 1919 to 1932; and the entirely unanticipated attacks on Israel in 1973, the Falklands in 1982, Kuwait in 1990 and the United States in 2001. Conversely, and on a brighter note, the speed with which the Soviet empire unravelled from 1989 left even its sternest critics largely nonplussed.
Dr Lewis
I will not, because I am about to finish. I hope the hon. Gentleman will forgive me.
Our current counter-insurgency campaigns are very important indeed, but they cannot be compared with battles for the very survival of the United Kingdom homeland. Such existential threats confronted us twice in the past 100 years and, if international relations deteriorate, they could easily confront us again.
My final remark concerns the alternatives. I can see only three possible alternatives to renewing Trident other than getting rid of the nuclear deterrent completely. The first is that suggested by the Liberal Democrats of putting cruise missiles on Astute class submarines. I have said in the past and say again that that would be more expensive and less effective, would put the submarine at risk because of the shorter range of the missiles, which would bring the submarine closer to shore, and could start world war three by accident because no one would be sure whether the launched missile had a conventional or nuclear warhead. Apart from that, it is a great idea.
The second alternative is to come off continuous at- sea deterrence, to put the nuclear deterrent on stand-by and to say that we will reactivate it if things get worse. That is an extremely dangerous suggestion as having a part-time deterrent is probably as dangerous as, if not more dangerous than, having no deterrent at all.
The final suggestion is that we could perhaps combine our deterrent with that of the French and therefore have fewer submarines. All I can say about that is that our deterrent is strongly connected with the excellent working relationship we have with the United States, which would not admit of such a solution.
I hope that I have given people plenty of food for thought. We have an hour and three quarters left and I very much look forward to hearing both sides of the argument in the time that remains.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
I congratulate the hon. Member for New Forest East (Dr Lewis) on obtaining this debate. He knows that we have disagreed on this subject for decades and nothing has changed today.
One of the questions that is never adequately addressed in such debates is why people believe, as the hon. Gentleman does, that there could be a nuclear threat uniquely directed at Britain. The 2006 White Paper that argued for a continuation of Trident described three threat scenarios: the re-emergence of a major nuclear threat; new states acquiring nuclear capability; and state-sponsored nuclear terrorism. On the first scenario of the re-emergence of a major nuclear threat, can anyone think of a plausible reason why a future Russia, having enjoyed the fruits of capitalism and democracy, albeit that it is limited, would threaten to attack the UK and just the UK? On the contrary, Russia’s interests depend on a peaceful and prosperous Europe.
The second scenario is the potential threat from new states acquiring nuclear weapons, and Iran is the country most frequently cited. Embroiled as it is in middle east politics with a nuclear-armed Israel on one side and a nuclear-armed Pakistan on the other, Iran’s ambitions are regional. Condemnation of Iran might unite us all, but that is no reason for not asking why on earth Iran would uniquely target the UK.
The third scenario, sponsored nuclear terrorism, deserves the closest attention. The White Paper explains how deterrence should work. It states:
“We make no distinction between the means by which a state might choose to deliver a nuclear warhead…whether by missile or sponsored terrorists”
and goes on to say that a state identified as the source of the material could expect a proportionate response. The threat of retaliation must be credible for deterrence to work, so how will we determine which is the sponsoring country? Remembering George Bush’s conviction that Iraq was responsible for 9/11, we will not be relying on politicians. No, the nuclear material will be sent to the Atomic Weapons Establishment at Aldermaston to determine where it came from. A decision will then have to be taken.
Let me remind members of Trident’s power. The Hiroshima bomb killed more than 100,000 people and injured thousands more. Just one Trident submarine could target up to 48 cities, with each warhead having eight times the effect of the Hiroshima bomb. Does anyone believe that in the cold light of day, after the Aldermaston analysis, a British Government would give the order for nuclear retaliation which would wipe out a nation of innocent people and leave an environmental legacy for many generations? This is not a credible threat.
In my view not one of those three scenarios stands up to scrutiny, but they share a further fundamental flaw. The hon. Member for New Forest East seems to forget that in reality Trident is assigned to NATO. Its purpose is not to deter a unique threat to the UK. Does anyone honestly believe that the UK could use its nuclear weapons unilaterally? Of course not.
In the world we now inhabit the greatest threats to the UK are climate change, international terrorism, cyber attack, global economics, health epidemics and competition for scarce resources. It is received wisdom that every one of these challenges can be addressed only by international co-operation, the building of trust, diplomacy, peacemaking and development. In all these fields the UK under successive Governments has made a positive contribution.
There are far better ways to protect the people of these islands, and in an age of austerity there are far, far better ways to spend the £25 billion capital and the £2.5 billion annual costs of the Trident programme. When our conventional forces—of course we need them, and I have never been a pacifist—are so stretched, when our hospitals, fire stations and police stations are closing, where is our real security? Not in Trident. It is an obscene waste of the public’s money and of our precious skills and resources, which we desperately need to put this country back on its feet. We need to face the truth. British nuclear weapons have no utility. The scenarios for use are not plausible, and if Trident cannot be used, it cannot deter.
Sheryll Murray (South East Cornwall) (Con)
I start by thanking my hon. Friend the Member for New Forest East (Dr Lewis), the hon. Member for Newport West (Paul Flynn) and the Backbench Business Committee for ensuring that we have this important debate today. Members will know of my special interest in the Royal Navy, as the mother of a serving Royal Naval officer, although my daughter assures me that she has no desire to serve aboard one of the four Vanguard class submarines.
I am pleased that the Government are committed to maintaining the UK’s nuclear deterrent. The Government have also approved the initial gate investment, and selected the submarine design for the successor nuclear deterrent. Contracts have been signed for the first 18 months of work on the assessment phase of the successor submarine programme.
Trident has provided a massive amount of employment for my constituents in South East Cornwall. Repair, refuelling and refit of the Vanguard class submarines is carried out in the D154 submarine support facilities at Devonport. The expertise and experience that Devonport now has should be utilised in any future programme. As a local county councillor at the time, I will never forget standing by the banks of the River Tamar in Mount Edgcumbe park, and watching the first Vanguard submarine edge her way around Drake’s island and into Devonport dockyard for refit. I was pleased that my right hon. Friend the Secretary of State announced that the £350 million contract to refit and refuel the nuclear missile submarine HMS Vengeance had been awarded to Devonport in March last year. It will safeguard up to 2,000 jobs.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Does my hon. Friend accept that that is also an important part of our skills base, and that if it were to go, we would see a significant diminution in our skills base?
Sheryll Murray
My hon. Friend is right.
Maintaining a continuous at-sea deterrent is essential. It sends the positive message that the UK is always prepared to respond instantly. There is the additional advantage of a moveable location, which assists security against any possible threats. The Government have excellent principles to abide by when considering nuclear arms. These include the use of nuclear weapons only in extreme circumstances of self-defence, a commitment to a minimum nuclear deterrent, and not to use any weapons contrary to international law. In other words, the highly powerful weapons would be used only as a last resort.
It is important to retain nuclear weapons. I was concerned at our going into coalition with partners who stated in their last election manifesto that they would be saying no to like-for-like replacement of the Trident nuclear weapons system. Given the reports in The Independent on 19 July last year, I am still concerned that they might scale down our vital nuclear deterrent in increasingly uncertain times.
We need to remember that the UK’s nuclear deterrent contributes towards our collective security as part of NATO. If the UK did not have an at-sea deterrent, NATO’s collective security would be weakened, leaving the UK dependent on the US and France.
Damian Collins (Folkestone and Hythe) (Con)
Does my hon. Friend agree that major wars tend to start when dictators believe that democracies are too weak to stand up to them? For democracies such as Britain to give up their nuclear deterrent would send out entirely the wrong message about how we seek to protect others and ourselves.
Sheryll Murray
That is exactly true.
The UK has a permanent seat on the UN Security Council. We were awarded that position because our nation was one of the most powerful in the world following world war two. The UK’s membership of that exclusive club could be called into question without the continuation of our nuclear deterrent.
A British at-sea nuclear deterrent has served us well for 60 years; it can and should serve us well into the future. I hope that refitting work on any future submarines will continue to provide much-needed employment opportunities for my constituents in Saltash, Torpoint and throughout the rest of South East Cornwall.
Paul Flynn (Newport West) (Lab)
There are two mindsets in this debate: there are those on the other side who are locked in the permafrost of the fear of cold war thinking and there are those who have hope for a better and safer world.
The hon. Member for New Forest East (Dr Lewis) mentioned the 1980s. I vividly recall what the historian E. P. Thompson said at that dangerous time, when the world had enough nuclear weapons to kill humanity 57 times over and we were in deadly peril because the geriatric fingers on the nuclear buttons belonged to Andropov, who was on a life support machine and virtually dead from the neck down, and to President Reagan, who was dead from the neck up.
The likelihood of a nuclear war does not come from design, plans or escalation but from accidents. What the hon. Member for New Forest East, who introduced the debate, is arguing—there is no denying it—is for every country in the world to have its own nuclear insurance and nuclear weapons of mass destruction.
Things are changing. George Shultz, Henry Kissinger, William Perry and Sam Nunn, the four titans of American foreign policy, have all called for a world free of nuclear weapons and so has their splendid President. That gives a new momentum to the idea and hope that have become the centre of the policy debate—“They are the past and we are the future on this.”
Like my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock), I have repeatedly asked for anyone to give a plausible future scenario in which nuclear weapons could be used independently by the United Kingdom. There is no such scenario. We are carrying on being comfortable with the policies of the past. We should go back to the vision of previous Governments. In 1968, a UK Foreign Affairs Minister urged the United Nations to sign up to the newly negotiated non-proliferation treaty. He promised United Kingdom support and added:
“It will, therefore, be essential to follow the treaty up quickly with further disarmament measures”.
That was 45 years ago. There was a clear vision and hope of declining stocks of nuclear weapons throughout the world.
The continued possession of nuclear weapons of mass destruction has a pernicious effect on our economy, with resources that could have been invested in research for the NHS, in education or improving our environment being squandered on high-tech killing machines.
Coming into the House today, I met a former Member—a distinguished Committee Chairman who stood down at the last election—and told him what we were doing today. He said, “That was the most difficult decision. I needed a Whip behind me with an arm lock to get me into the Lobby to vote for Trident”, and the Whip had told him beforehand, “I don’t believe in it either.” Ministers give the party line and the deterrence fiction when they are at the Dispatch Box, but we see a remarkable turnaround when they stand down and have an epiphany. Last Friday, Michael Portillo said that Trident was
“completely past its sell-by date”,
and added:
“It is neither independent, nor is it any kind of deterrent because we face enemies like the Taliban and al-Qaeda, who cannot be deterred by nuclear weapons...I reached the view after I was defence secretary.”
So we have nonsense when they are in power, when they can do something, and the truth comes out with their realisation afterwards. Why is good sense invisible to politicians in office but monumentally obvious outside office?
However, there is a glimmer of hope. Even our own Prime Minister is perhaps approaching a moment when he will change. Last October, he said that
“if we are to have a nuclear deterrent, it makes sense to ensure we have something that is credible and believable”.—[Official Report, 17 October 2012; Vol. 551, c. 319.]
Trident is neither credible nor believable. It undermines our credentials on non-proliferation, which is the best hope for a safe future. Its replacement should be cancelled, and then we could use the existing stocks of weapons of mass destruction—
Adam Afriyie (Windsor) (Con)
We should be proud of our role in the non-proliferation treaty and the fact that the nuclear deterrent has helped us to avoid wars in the past and is an insurance policy for the future. The hon. Gentleman seems to be arguing for unilateral disarmament. In that scenario, which other country would disarm because we had disarmed?
Paul Flynn
I am not arguing for unilateral disarmament because it is not a practical possibility; I do not believe that it is attainable. When the hon. Gentleman intervened I was about to say that we can use the weapons we have as part of our bargaining to achieve disarmament and to make the nuclear non-proliferation treaty a practical one. How can we say to other countries, “You can’t have nuclear weapons but we’re insisting on ours”? That way forward will not be possible.
The problem is the return of the mindset that our country is somehow very special. We are going back to the 19th-century view when we had an empire, insisting that we are powerful and determine world peace. That is a very damaging view. We saw it this week in relation to the fact that we have to join almost every war that comes along. It was said here on Monday that by joining the war in the state of Mali, even if there is no mission creep we have already exposed ourselves to the possibility of terrorist attacks. That was pooh-poohed by Ministers, but the attack has happened, a life has been lost, and others are under threat. That is the position we are in.
To some, Trident is a virility status symbol; to others, it is a comfort blanket. The Foreign Secretary of the moment will often say that we have to have it because the UK must punch above its weight. Punching above our weight means spending beyond our interests and dying beyond our responsibilities.
Mr John Baron (Basildon and Billericay) (Con)
Most Members will be aware of this, but for the record I should like to state that I firmly believe in our nuclear deterrent. In this uncertain world where countries that are not necessarily friendly to the west have nuclear weapons, it is an unfortunate fact of life that we need them as well to guarantee Britain’s safety. However, that does not stop us also working towards arms reduction. When President Obama launched his global zero initiative, I very much welcomed it. We also owe a debt of thanks to the Royal Navy and our Vanguard submariners, who are always on patrol, for safeguarding the country and providing the essential British contribution to NATO.
I want to suggest that our commitment to our nuclear deterrent should not just be about the current capability and future plans. There is a legacy from the dawn of our deterrent that we have still not yet fully recognised. We have to acknowledge a debt of gratitude to another group of people, who also deserve our recognition and thanks, without whom Britain would never have joined the top tier of nuclear powers. They are, of course, our nuclear test veterans.
In the 1950s and 1960s, in the largest tri-service operation since the D-day landings, 20,000 service personnel participated in British nuclear weapon tests in the south Pacific and Australia. These men’s service was unique. When they took part, the science was largely unknown. Pre-test precautions were primitive and inadequate and failed to protect individuals fully from the effects of heat, blast shock and ionising radiation. Many veterans believe that their health was adversely affected by those tests, a view substantiated by scientific research undertaken in New Zealand by Professor Rowland that was peer-reviewed and accepted by the then New Zealand Government.
Some years ago, following an inquiry from a constituent, I became involved with the British Nuclear Test Veterans Association and I am now its patron. After a long campaign, the BNTVA and I succeeded in persuading the Ministry of Defence to undertake a health needs analysis of all surviving veterans. It showed that 84% of them believed that their main health condition was caused by radiation. If anybody thinks that that was an easy task and analysis to accomplish, they have not dealt with the MOD, but I thank it for taking that on.
Mr Baron
To a certain extent, yes.
Many helpful, practical measures are now being introduced as a result—for example, small but important things such as markers denoting veteran status on NHS records.
Following the success of the health needs analysis, the BNTVA and I recently started a new campaign with three objectives. The first is to secure a lasting legacy for these men and their descendants. There is still much to learn about the effects of exposure to radiation and how we can continue to make nuclear energy safe. The second is to secure public recognition from the Prime Minister of our debt to these veterans. That could include recognition through the medal system by adding a clasp to the general service medal. The third is to establish a benevolent fund courtesy of Government, the suggested figure being £25 million. This would support atomic veterans and, more importantly, their descendants, who have also suffered medical setbacks that can be attributed to their fathers’ exposure.
Mrs Madeleine Moon (Bridgend) (Lab)
I am very pleased to hear the hon. Gentlemen’s speech and endorse every word he has spoken. I am a member of the group that he has set up and I, too, have been horrified to hear from my constituents about the effects on grandchildren as a result of the tests in which the veterans took part. He is absolutely right: we must not forget the part that those veterans and their families continue to play.
Mr Jones
I am grateful to the hon. Gentleman for giving way. I was pleased to put in place the health study, against the opposition of a lot of the civil service, when I was a Defence Minister. A generous settlement proposal was put to the lawyers—I got the Treasury to agree to it—but it was rejected. That was an opportunity missed for veterans to get some compensation.
Mr Baron
I recognise the part that the hon. Gentleman played in the health needs analysis. However, let us be absolutely clear about a confusion that is all too readily accepted by the MOD: the BNTVA has never participated in the legal cases that some individual veterans have brought. That is a vital distinction to make and I ask the House to take it on board.
Although £25 million sounds like a lot of money, we should set it in the context of how other nuclear countries have treated their veterans. The US gives each veteran £47,000 plus a further £47,000 for any secondary attributable illness. No causal link is required between the cancer suffered by the veteran and the fact that they were there. If they were at the tests and they have cancer, they automatically get the compensation. Canada pays more than £15,000 in addition to money, from pensions and compensation legislation. The Isle of Man makes an ex gratia payment of £8,000 to any resident test veteran.
In all three cases, the service personnel in question have access to free health care provision. The MOD argument that veterans in this country have access to the NHS therefore does not stack up. The fact remains that this country’s nuclear test veterans are almost at the bottom of the scale in the international comparisons going by how they are treated by this country. I hope that the House will accept that that needs to be put right. Against those comparisons, the campaign for £25 million, which works out at about £6,000 per veteran, is modest.
I should at this stage repeat what I said to the hon. Member for North Durham (Mr Jones) and make it clear that the BNTVA has never participated in the legal challenges brought by some veterans.
We have had several meetings at the MOD with successive Ministers for veterans. I wrote to the Government in November to set out the details of our campaign. Despite chase-ups, I still await a response. No doubt the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), will carry that message back to the MOD. Meanwhile, I have written to all Back Benchers requesting their support for our campaign for recognition. As the hon. Member for Bridgend (Mrs Moon) mentioned, many have been kind enough to write back positively. I will be taking the matter further in due course.
In conclusion, as the Government are on the verge of commissioning the next iteration of our nuclear deterrent, it is right that we remember those who first created it and finally, after so long, repay the debt that we owe them.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
I apologise to the House for the fact that I will not be able to stay until the end of the debate, due to a prior commitment. I am grateful to you, Mr Speaker, for calling me.
After Labour was massacred in the 1983 and 1987 general elections because of its advocacy, under a charming but useless leader, for unilateral nuclear disarmament, I was appointed by Neil Kinnock to review foreign and defence policy for the Labour party. As a result of that review, Labour became eligible for re-election and was re-elected at long last in 1997.
If Britain did not have nuclear weapons, I would not advocate our acquiring them, but history has bestowed them upon us. Let us not forget that it was a Labour Government in time of peace who decided that the United Kingdom should acquire nuclear weapons.
Mr Crispin Blunt (Reigate) (Con)
I am grateful to the right hon. Gentleman for reviewing the history of the decision making. Would he say that the conclusion that he came to was about politics or policy?
Sir Gerald Kaufman
The hon. Gentleman’s question requires a yes or a no, but it is not as clear as that. We are prisoners of history. That history decided that a medium-sized power that was pretty well bankrupt at the end of the second world war should possess nuclear weapons. We are a medium-sized power, and, for better or worse—it is worse in many ways—we would not be listened to any more than anybody else, including Italy, Spain, Greece or Germany, without the unwanted legacy of possession of nuclear weapons.
This is not a question of how we acquired them; the fact is that we are in possession of them. Owing to that fact, unlike those other western European countries and other countries in different parts of the world, we are eligible to participate in international nuclear disarmament. That is essential. We should take into account that it is 58 years since the end of the war. It is remarkable how few other countries have acquired nuclear weapons. India, Pakistan, North Korea and Israel have acquired them, but even Iran—an aggressive and objectionable power with foul internal policies—has not yet done so. We have a voice on the international front that exists to try to prevent nuclear proliferation. If we did not by accident of history possess nuclear weapons, nobody would listen to us on nuclear disarmament. For that reason, we should use the result of that accident of history to take part in international negotiations to reduce, and eventually to eliminate, all nuclear weapons owned by any country.
Incidentally, I have a great affection for my hon. Friend the Member for Newport West (Paul Flynn), but Reagan offered the Soviet Union a major internationally agreed nuclear disarmament. He might not have been the greatest President in the world, but at the same time, being there and having what he had, he was able to make the offer. It is deeply unfortunate that the Soviet Union did not grab that offer.
That being so, I say clearly that I do not want nuclear weapons; I am not happy we have got them, but we have got them. Divesting ourselves of our nuclear weapons would be regarded by many as an act of self-indulgence. We can use our possession of them to persuade others not to use them—there is always a danger that India, Pakistan and Israel will use them—and to take part in international negotiations to reduce and abolish them. That status comes to us by chance and by history. We should use our status.
Sir Nick Harvey (North Devon) (LD)
The UK must decide by the middle of 2016—just three years from now—whether to proceed with a like-for-like replacement of the Trident nuclear deterrent. I do not believe we need a further generation of nuclear weapons based on the scale we thought we needed in 1980 at the height of the cold war, and I do not believe we can afford to have one. I do not believe that national security assessment and strategy suggest we need it, or that our defence posture can stand it—our posture would become lop-sided if we were to commit to another generation on the same scale. In addition, I believe that the opportunity cost of committing so much money and manpower, and such a large proportion of our equipment budget, would have a malign effect on our general military capability.
In 1980, at the height of the cold war, we had a known nuclear adversary—the Soviet Union. It had British targets in its target set, and we had Soviet targets in our target set. There was a logic—I do not say that I necessarily subscribe to it hook, line and sinker—to having continuous at-sea deterrence, because we had a known adversary. Today’s circumstances are very different. At that time, we computed that the only way to fulfil the classic definition of deterrence—to put into one’s adversary’s mind the certainty that we were capable of inflicting damage that would be unacceptable to him—was to maintain the capability of overcoming Moscow’s nuclear defences and being able to flatten that city. Moscow was where the Soviet elite hung out and the only things that they valued, and to which they considered damage would be unacceptable, were themselves and their regime. The Russia of the 21st century, for all its imperfections, is very different. It is perfectly possible to deter modern Russia from a nuclear attack on us by a variety of other means, and there are other ways of inflicting on them damage that they would consider unacceptable.
Mr Kevan Jones
Why then have the Russians recently upgraded their anti-ballistic missile protection in and around Moscow?
Sir Nick Harvey
I did not say that they would be willing to see Moscow flattened—most certainly they would not. I am saying that there are other ways of inflicting damage on Russia that it would consider unacceptable.
I mentioned that there will be a vast opportunity cost to be paid if we decide to commit these funds, which, let us refresh our memories, in today’s money will be approximately £25 billion to £30 billion on the capital investment in a further generation of submarines. On top of that, we have to factor in the running costs of a nuclear deterrent on this scale for 30 or more years of through-life costs—more than £3 billion a year in today’s money. Beginning to total that out and factoring in decommissioning at the end, we are talking about an expenditure of more than £100 billion. We need to look closely at whether that is justified in the context of the size of our defence budget, and what we are able to make available for other forms of defence and security in an increasingly dangerous and changing world.
Mr Jenkin
My hon. Friend has started to talk about 20, 30, 40 years ahead. Would he like to describe the strategic context in which we might be operating a nuclear deterrent in 20, 30, 40 years’ time, or indeed find ourselves operating without one? What is it going to be like then?
Sir Nick Harvey
The truth of the matter is that none of us knows. If we retain a nuclear deterrent of any description and any scale, it is an insurance policy against the unknown. I am saying that the current nuclear deterrent is scaled specifically to overcome the threat that we believed the Soviet Union posed in 1980. As we look to an unknown future over the course of this century, we have to decide what proportion of our defence spend and effort should go into this one part of our defence livery, and the opportunity cost of doing that.
Mike Gapes (Ilford South) (Lab/Co-op)
Does the hon. Gentleman agree that if we move to some form of cruise missile-based nuclear weapons system, that would be destabilising internationally and positively dangerous?
Sir Nick Harvey
I am waiting for the Trident alternatives review, which is being conducted by the Cabinet Office and is looking at exactly those sorts of issues. When it reports, I look forward to coming back and debating them with the hon. Gentleman. As a considered study of exactly these sorts of issues is nearing its conclusion at the moment, the time to debate those details will be when the report has been published.
I want to look at the pressures that will face Defence Ministers in the years when the large capital expenditure that I have described would have to be spent. In the same period of time, we will have to put the joint strike fighter aircraft on to the two new aircraft carriers and build the Type 26 frigate. Whatever the next generation of remotely piloted air systems and whoever we do that with, it will fall in the same time frame. Bearing in mind that HMS Ocean is due to leave service in 2018, any future generation of amphibious shipping will have to be paid for in exactly that time frame; and whatever we equip the Army with for the 21st century—it has been the poor relation in the equipment budget for many years—and bearing in mind how little seems to be left of the original future rapid effect system, as conceived by the previous Government, again, it will fall in that time frame. If we decide to give the nuclear deterrent a bye and think it has some magic claim on the money, an opportunity cost will have to be paid across the rest of our defence systems.
I listened to my hon. Friend the Member for South East Cornwall (Sheryll Murray) talking quite rightly about the part that Plymouth plays in the nuclear deterrent, but I put it to her and my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) that if we commit all our money to one system, the opportunity cost will be felt above all else by the Royal Navy. The Royal Navy might fight—and win—to keep the nuclear deterrent on its current scale, but the price will be paid in the scale of the conventional surface Navy, which, in my view, is already trying to do far too much with far too little.
The UK has a sensible range of military capabilities at the moment, and with that we can take part in international operations. We have global interests and ambitions, and uniquely we have the will to use military power when we need to in pursuit of those interests. Ours is still the fourth largest defence budget in the world. Our place on the top table does not depend on our being a nuclear power; we are there in our own right, and besides which any change to the line-up of the UN Security Council would require the UK’s assent, which we could simply withhold.
We must make a contribution to disarmament. That is an obligation we have under the non-proliferation treaty. We must wait and see whether the Trident alternatives review can find another system that offers us a way of sustaining a credible deterrent. It would not have the same capability, but there might be a way of doing something at a lesser cost. We should keep an open mind about trying to do that.
John Woodcock (Barrow and Furness) (Lab/Co-op)
It is a pleasure to follow the hon. Member for North Devon (Sir Nick Harvey). I am glad that he did not repeat his assertion that the world would be a better place if my constituents were sacked and sent to the Bahamas with the money from the deterrent in their back pockets. It is also good to be back speaking here again for the first time since I banged my head. All will be fine, but if at any point, Mr Speaker, I look confused and ask what all these people are doing in my bedroom, please intervene and reassure me—no, I am not that bad.
The devastation of nuclear war would be an affront to nature itself, which is why I have said on many occasions that, if we could genuinely be confident that the UK disarming would make this horror less likely, that should come ahead of even the many thousands of jobs that the industry supports in my constituency and across the country. I am proud that the last Labour Government shifted Britain’s nuclear policy for the first time towards the aim of a global zero, but we should advance non-proliferation in a way that will maintain the security of the UK and, most of all, in a way that will make a nuclear catastrophe less likely, not more so.
That is one reason why I am wary of a party that up until now has been grossly irresponsible on the question of nuclear weapons and has suddenly be given access to the levers of power. It is one thing to be a fringe concern, making up positions that sound good on the doorstep. “When money is tight”, say the Liberal Democrats”, “Let’s have a mini-deterrent”—the nuclear-tipped cruise missiles on the Astute class submarines already being built in my constituency. “They would cost less”, they say, “providing more money for schools and hospitals, and they would be much less destructive than those awful Trident missiles to which the main parties are wedded. Vote for us!”
If that policy becomes a genuine possibility that could be enacted by a party of government, it will be put under scrutiny in the run-up to an election and its fundamental weaknesses exposed. The apparent savings evaporate when considered against the enormous cost of procuring new missiles—probably without a cost subsidy from the Americans this time—building new warheads from scratch, making considerable adaptations to the Astutes and writing off the £3 billion that will already have been spent on the successor by then. When the operational capacity of this “mini-deterrent” is scrutinised, we will come up against the points that the hon. Member for New Forest East (Dr Lewis) made so adeptly in opening this debate. All in all, this option is not a winner.
Bob Stewart (Beckenham) (Con)
It is really delightful to see the hon. Gentleman back in his place. The problem with using cruise missiles is precisely that they are vulnerable. The whole point of deterrence is that there should be an invulnerable system. Cruise missiles are vulnerable, which destroys the concept.
John Woodcock
The hon. Gentleman is absolutely right. Most of all, such cruise missiles are indistinguishable on an enemy radar from conventional cruise missiles, raising the chilling prospect that in the confusion of battle, a conventional attack by the UK could trigger nuclear retaliation against British cities.
Sheryll Murray
Does the hon. Gentleman agree that if we took up this idea, we could see another tuition fees scenario?
John Woodcock
I certainly know what the hon. Lady means—I am reluctant to compare tuition fees to the ultimate deterrent, but in political terms she is absolutely right.
To those looking to the latest review into the future of the deterrent and hoping that a major—and needed—push on global non-proliferation could make it possible for the UK effectively to wait and see before committing to renew, I put two questions. First, is it really realistic to expect a breakthrough within the next few years in global security—involving not just the former Soviet Union and America, but the whole world—that would give us sufficient hope that a hostile nuclear power could not plausibly threaten the United Kingdom 20, 30 or 40 years hence? That is the judgment that we have to make now. Secondly, what would be the industrial and financial consequences of a further delay, on top of the already significant increase in cost caused by the coalition Government’s delay, which enabled them to kick the main gate decision on a successor into the next Parliament?
Industrially, we must think in terms of jobs now and over coming decades. Let us not forget that we are talking not just about 5,000 or 6,000 jobs in Barrow shipyard, critical to the regional economy though they are, but about the 4,000 jobs and rising in the nuclear submarine supply chain, stretching right across the country. We must also consider the UK’s prized capacity to manufacture submarines of any kind. We rightly say that, for security reasons, we should not procure from abroad, but if we leave another gap in production like the one in the 1990s—the Astute programme is still suffering from the attempt to recover from that—we could lose those highly honed skills from these shores for ever.
Of course we should always examine new evidence, but so far all credible evidence has pointed to the same place: that like-for-like renewal is the most effective—and the most cost-effective—way of maintaining the UK’s minimum independent deterrent and that the decision to renew should be kept at arm’s length from our profound moral obligation to pursue a world free from the threat of nuclear war.
Mr Crispin Blunt (Reigate) (Con)
It is a pleasure to see the hon. Member for Barrow and Furness (John Woodcock) back in his place. He put the case extremely well on behalf of Barrow-in-Furness for the current policy remaining in place and being renewed. I welcome the fact that we are having this debate, and I congratulate my hon. Friend the Member for New Forest East (Dr Lewis) on securing it. We have been brothers in arms on defence, one way or another, for quite a long time. He has really distinguished himself on these issues, and I congratulate him on encouraging the Backbench Business Committee to hold this debate. His position is in the ascendancy and it speaks to his intellectual depth and courage that he is prepared to put his ideas to the test in the Chamber. I also want to congratulate the former Minister of State for the Armed Forces, my hon. Friend the Member for North Devon (Sir Nick Harvey), on his contribution to starting, and initially leading, the review of the alternatives to Trident. We owe it to ourselves to think rather more deeply about this matter than we have done in the past.
It was interesting to hear the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) explaining how the Labour party had moved to its present position. Those on the Opposition Front Bench are no longer allowed to think about this issue, because the politics of 1983 were so appallingly scarring. Labour Front-Benchers are now frozen in a position in which any sense of doubt about the continuation of the present policy would be seen as politically catastrophic, and they are not allowed to go there. The only expressions of doubt that we will hear today will come from the old stagers of the 1980s who fought and lost the battles on disarmament at the time. I believe that it was quite proper that they lost those arguments.
We are now in a completely new era, and we owe it to ourselves to review the policy properly, and as openly as we can. That review is now being carried out under the leadership of the Chief Secretary to the Treasury, and it will report to the Prime Minister and the Deputy Prime Minister, but I am concerned that there has been no undertaking to publish it, and that there will therefore be no opportunity for us to examine the costings.
Sir Nick Harvey
If my hon. Friend studies the coalition mid-term review document that was published last week, he will see that, for the first time, there is an explicit commitment to publish the review. I understand that the review will be concluded in March, and that publication will probably be in May.
Mr Blunt
I am delighted to be corrected on that point.
This is the hub of the issue. We are being invited to engage in an insurance policy that is going to last about 40 years and cost between 5% and 6% of our defence budget. Will that insurance policy ever be cashed in? My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) would probably suggest that it is being cashed in all the time, owing to the fact that it exists. In that sense, the deterrence is eternal.
We need to get into the minds of the likely decision makers who might attack British interests in a way that would engage the use of our deterrent. We also need to get into the minds of our leaders who might then have to contemplate the use of the deterrent in response. There has been a change in the debate on how states conduct these affairs. The question of whether it would be a matter for the International Criminal Court if a leader chose to eviscerate millions of wholly innocent people in pursuit of their state’s policy is one that ought to engage us, particularly as we no longer live in a bipolar world consisting of one alliance taking a position against a competing ideology. The world has changed.
I do not pretend to have an answer to this question, but I want the House to have as much data as possible so that we can begin to make as informed a decision as possible. It is the position of the Government—and, I believe, of those on the Opposition Front Bench—that paying a premium of 5% to 6% of the defence budget for the 40 next years would be worth it because of what it would buy. Well, would 10% or 15% be worth it? How solid are the figures of 5% to 6%? Why should that cost be coming out of the defence budget, given the cost of the equipment that is going to the soldiers, sailors and airmen who are carrying out the other tasks that we ask them to undertake? Should the cost be found from outside the main defence vote?
David Rutley (Macclesfield) (Con)
My hon. Friend is making a compelling case. Given the importance of the deterrent, does he share my concern about what a potential yes vote to Scottish independence would mean, and does he share my hope that the Scottish people will see this as another reason for staying part of the United Kingdom?
Mr Blunt
It could work the other way. It could provide a reason why the Scottish people would vote to leave the United Kingdom, as they could then dispose of having to host the deterrent and of the threat of counter-measures for the people living immediately around the area.
I would like to be exposed to more data about the vulnerability of the future submarine systems. My hon. Friend the Member for Beckenham (Bob Stewart) intervened to say that what was required of the system was that it be invulnerable. Well, I do not know how he can predict the efficacy of surveillance systems in 40 years’ time, just as my hon. Friend the Member for Harwich and North Essex said that we have no idea what the international situation will be in 40 years’ time. It is perfectly possible that satellite observations and surveillance of the sea would make it pretty straightforward to trace a submarine in 40 years’ time. I do not know, but I would be grateful for the best data available so that we can test whether or not we will need to spend this eye-watering amount of money on something that will do what it says on the tin, to use a current phrase, in 40 years’ time.
I believe that we are owed the results of the review instigated by the hon. Member for North Devon. This House needs to be informed about these questions. We need to understand where we are through a cost-benefit analysis of the replacement Vanguard submarine system with Trident missiles, which will mean getting the data on the re-engineering of the Trident missiles and the new engines they might need during the course of their next deployment, alongside an understanding of issues around the use of tactical nuclear warheads on cruise missiles. In any scenario planning I did when I was engaged as a special adviser in defence and foreign affairs, the only conceivable situation I could see for using the missiles was for taking out pinpoint targets of rogue states or rogue terrorist groups equipped with missiles that had the capability to launch weapons of mass destruction at us—and for that we would want a small pinpoint weapon, not a strategic weapon that would wreak massive and unacceptable collateral damage in the process.
I am extremely grateful for the debate and for the review, and I think we should keep an open mind until we can reach a proper decision on this matter.
Mr Speaker
Order. I am looking to each of the two Front-Bench speakers to take no longer than 10 minutes —20 minutes in total—if we are to accommodate Back-Bench Members who wish to speak. I am afraid that for them, the time limit will have to be reduced to four minutes from now on. My apologies to colleagues, but I am keen to get people in and I know the Front Benchers will want to take account of that.
Mr Kevan Jones (North Durham) (Lab)
I start by paying tribute to members of our armed forces and their families for the work they do. In the context of this debate, I particularly commend members of the Royal Navy who work on our independent nuclear deterrent. I congratulate the Backbench Business Committee on securing this important debate about the cornerstone of our nation’s security.
The security landscape today is both uncertain and unpredictable. New threats such as cyber-warfare and biological terrorism exist alongside the conventional threats. In response, we must have a broad, advanced equipment programme that enables us not only to detect, but to deter and tackle the whole spectrum of threats we face as a nation.
We on the Labour Benches are clear that an independent nuclear deterrent is in our national interest. It has been argued, and it has been repeated today, that our nuclear deterrent was a cold war legacy. It is correct that many of the old divisions of the cold war have gone, but they have been replaced with new uncertainties: the recent unrest in Pakistan, advanced missile testing in North Korea and the intractable problem of Iran. Although it is impossible to predict the future, the one thing that is certain is that it is unpredictable. All that shows how important it is for the United Kingdom to retain an independent nuclear deterrent.
In 2007, Parliament took the view—supported by the Labour Government of the day—that a submarine-based system with ballistic missiles provided for the minimum credible nuclear deterrent, and was the most-effective model to meet our strategic needs. It is also our stated objective to play an active and constructive role in international efforts to achieve a world free of nuclear weapons. There is no evidence that a unilateralist posture would advance that goal.
The United Kingdom is a proud and prominent signatory to the treaty on the non-proliferation of nuclear weapons. That treaty has three pillars, through which we must view our nuclear deterrent: non-proliferation, disarmament, and facilitation of the peaceful use of nuclear technology. That is why I am proud that the last Labour Government reduced the size of the nuclear stockpile. We cut the number of operationally available warheads from 300 at the time of the 1998 strategic defence review to fewer than 160 by the time of the 2010 general election, reduced the number of warheads carried per submarine from 96 to 48, and withdrew the WE177 nuclear capability from service. I believe that it should be a cross-party priority for the UK to continue on that path towards nuclear disarmament, alongside our international allies.
It is essential for our decisions on the future of the deterrent to be based on evidence and on what is in our national interest rather than on any political-party interest. We are therefore committed to examining any new evidence rigorously in order to establish whether there are alternatives to the conclusions of the last review in 2006. That examination must feature two priorities, capability and cost: they must be our guiding principles. We want the UK to have the minimum credible deterrent, in line with our national security needs and our international obligations, and we want to ensure that we achieve maximum value for money. All options must be examined, and we look forward to close examination of the Government’s review of alternatives. I consider that to be a responsible and rational approach.
While we must insist on rigorous policy-making, we fear that the review is an exercise in Liberal Democrat and Conservative party management rather than the management of our national interest. We question the validity of a review that has lasted more than two years, and whose conclusions the Prime Minister rejected before it even began.
The president of the Liberal Democrats says that he wants to make the review an election issue, so why is it being run from the Cabinet Office at the taxpayer’s expense? Can it have any credibility, given that the Liberal Democrats opted out of ministerial responsibility for defence and foreign affairs, and given that the person in charge of the review, the right hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), does not even have a pass allowing him to enter the MOD’s main building?
The real test of the review, however, should be not whether it allows the Government parties to indulge in a strategy of differentiation, but whether it explores in sufficient detail and depth what is—as has already been explained—an inherently complex and technical subject. If it appears to promote an alternative as an end point in itself, it will have not just failed all those who seek a genuine debate, but punctured the Government’s claim to have credibility on this vital issue.
There are a number of potential alternatives to the current nuclear deterrent, which I hope the review will explore. Let me briefly comment on each of them.
The first option is an air-based system. It was considered to be the most costly option of all in the 2006 review, requiring the procurement of new aircraft, a new missile and new operating bases. In addition, its visibility would increase its vulnerability. The estimated cost of the second option—a land-based silo system—is double that of the current submarine-based system. It has also been questioned on strategic grounds, as it is immobile and unconcealable, and therefore vulnerable to attack. Any review would also need to address where the system would be located. I am not sure there would be many volunteers to have that based in their constituency. Thirdly, any consideration of a surface ship-based system would also need to cast aside doubts about vulnerability and detectability. Fourthly, the review will need to focus on a submarine-based system armed with nuclear-tipped cruise missiles. The costs of this option will need to be examined closely, including the cost of developing a new warhead independently from our US allies. Also, Astutes would have to be adapted or another platform would need to be procured, which could result in a lessening of our current hunter-killer capability. Concern has also been expressed that arming submarines with dual-use cruise missiles could prove escalatory during a crisis, as our enemies would not know whether the submarine was a conventional or nuclear-armed vessel.
International factors must also be considered, such as compliance with the nuclear test-ban treaty, the nuclear non-proliferation treaty and the USA’s 2010 nuclear posture review. If we were to go down the cruise missile route, we would need more warheads in order to penetrate targets and it could be argued that that would break one of those treaties.
I do not have time to cover every detail, but we do need to have a meaningful discussion—a function today’s debate is fulfilling. This is a delicate topic that sparks strong passions, even within parties. That is why an evidence-based approach free from political positioning is so important. We will consider the technical, military, security and financial issues, and look closely at all the details of the Government’s alternatives review. For Opposition Members, the facts that support our national security needs will always be our focus.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
I welcome this opportunity to speak about such an important element of the nation’s defence capability, and I thank my hon. Friend the Member for New Forest East (Dr Lewis) for securing this debate and for making so many cogent arguments in his speech. The House has not debated the need for a strategic deterrent for some time, and it is right that we do so.
I echo and welcome my hon. Friend’s strong support for the Government’s unwavering commitment to retain an operationally independent nuclear deterrent, based on Trident and operating on the basis of continuous at-sea posture. I also welcome the support of the Opposition Front-Bench spokesman, the hon. Member for North Durham (Mr Jones).
As many Members are aware, our continuous at-sea deterrence patrols under Operation Relentless have been operating without pause since 1969. It is the UK’s most enduring military operation. I pay tribute to the crews of our submarines and their families, and all the men and women, both military and civilian, whose support has been essential to this operation, and I thank them for their unwavering dedication.
Whether we like it or not, we live in a nuclear age, and have done so since the first atomic weapons were tested in July 1945. We cannot put back the clock and un-invent nuclear weapons. Most of us in this House are not, as was alleged by the hon. Member for Newport West (Paul Flynn), locked in the permafrost of the cold war, but we do recall the bipolar stand-off between the west and the Soviet Union. They were dangerous and often tense times, but in contrast to the uncertainties of the present, the cold war years now, almost paradoxically, appear to have been more stable, as we knew then who our adversary was. We are now living in a period of increasing threat of nuclear weapons proliferation. Other states, not all well disposed towards us or our allies, located in highly unstable regions are on the verge of owning these weapons. That makes the current era far less predictable. It is a sobering fact that, although our nuclear arsenal, like those of our allies and Russia, has reduced significantly since the early 1990s, the reductions have not encouraged states that are seeking a nuclear weapon capability to cease their attempts to cross the nuclear threshold.
In April 2009, President Obama said that
“the threat of global nuclear war has gone down, but the risk of a nuclear attack has gone up.”
I see no reason to disagree with the President’s remarks. We live in a perilous world. North Korea has tested nuclear devices and ballistic missiles, in defiance of the international community, and it maintains a threatening stance towards its neighbours in north-east Asia. Iran is determined to continue producing highly enriched uranium, in excess of any conceivable non-military need, and it continues to develop a ballistic missile capability and maintains a hostile stance towards both the west and many of its immediate neighbours. The actions of those countries reinforce my view that Britain needs a nuclear deterrent to protect us from nuclear coercion, nuclear blackmail and nuclear attack.
NATO has been the bedrock of our defence and security since 1949. At a time when the United States—its main contributor—is shifting focus from the north Atlantic to the Pacific, a non-nuclear Britain would weaken an international organisation that makes a crucial contribution to global peace and security. Would the world be a better place with a weakened NATO—with a NATO that may become less certain of its role and purpose? I do not think it would.
Given those circumstances, it would be an act of supreme folly to abandon unilaterally the nuclear deterrent that has served us, and our allies, well for more than half a century. To disarm unilaterally would send entirely the wrong signal. It would undermine our credibility as a reliable partner and NATO’s credibility as an alliance. NATO is a nuclear alliance, and its recently agreed new strategic concept makes it clear that our nuclear forces, including those based in Scotland, contribute to its overall deterrence and security.
We share the vision of a world without nuclear weapons, but only if that is achieved through multilateral disarmament. We take the disarmament commitments of article VI of the nuclear non-proliferation treaty very seriously. We therefore fully support multilateral nuclear disarmament, when the conditions are right. That is a long-term process which will take many years, although we have taken a leading role in arranging and participating in P5 conferences since 2010. We have already reduced the size of our deterrent considerably since the end of the cold war, and in the strategic defence and security review we committed to reducing it further, as has been identified by the hon. Member for North Durham. It will decrease from a stockpile of about 300 warheads in the mid-1990s to no more than 180 by the mid-2020s. Under SDSR 10 we undertook to reduce the number of operationally available warheads to no more than 120 by the mid-2020s. That means that we already have probably the smallest arsenal of the P5 powers, and are the only P5 power to rely on a single delivery system. Our disarmament credentials are second to none, yet all this progress has not been matched by emerging nuclear states. It is simply wishful thinking that any further UK disarmament would be a catalyst for disarmament elsewhere.
It has sometimes been argued by hon. Members that we face new security threats in the 21st century for which the nuclear deterrent is not relevant, but nobody has ever claimed that nuclear weapons are an all-purpose deterrent. We have a wide range of capabilities to deal with the wide range of potential threats that we face.
The fact remains that we cannot pick and choose which threats we should face. Not every capability is suitable for every threat and the nuclear deterrent is the only secure way to deter nuclear threats. In making it clear to potential adversaries that they cannot infringe our vital interests without risk and in providing reassurance to our allies, our deterrent helps prevent major war and provides a backdrop that enables us to pursue a foreign policy that seeks to enhance international trust and security and to promote conflict resolution.
The abandonment of the nuclear deterrent would deprive us of the means to counter the most extreme threats from adversaries armed with weapons of mass destruction. It would leave us vulnerable to blackmail, coercion and attack from those adversaries. For all those reasons, I wholeheartedly support the decision of the Government to maintain a continuous submarine-based deterrent and to replace the current Vanguard class submarines when they leave service in the late 2020s.
A continuous at-sea deterrent also has considerable diplomatic utility. Let us think of the impact, if we did not have continuous at-sea deterrence, of a decision the Prime Minister might have to make to provide an order to put an intermittent deterrent to sea. That act alone could exacerbate an already tense international situation. Operating the deterrent on an intermittent basis might well require additional conventional military assets to enable the deterrent to put to sea, assets that are not required in the routine of a continuous posture.
By being continuously at sea, the deterrent maximises our political freedom of manoeuvre in crisis. A submarine-launched ballistic missile system offers invulnerability, range and endurance. All promote the credibility of this ultimate safeguard for national security. It is a permanent factor for a potential aggressor.
Hon. Members have also charged that the renewal of the deterrent is an extravagant use of resources at a time of great financial stringency and fiscal uncertainty. The first duty of any Government is to ensure the security of the nation, its people and their vital interests. This Government do not and will not gamble with Britain’s national security. We recognise that people wish to be reassured that the money will be well spent and the hon. Member for Barrow and Furness (John Woodcock)—it is a pleasure to see him in his place—rightly highlighted some of the reasons Trident is the most cost-effective delivery mechanism available within the necessary time scale. That is why the Government scrutinised the procurement programme for the successor to ensure value for money and will continue to submit it to rigorous scrutiny in the run-up to the main-gate investment decision in 2016. We are talking about maintaining a capability of service until the middle of the century and it is essential that we can protect the UK against future uncertainties that might arise 15 to 50 years from now. I challenge any advocate of unilateral disarmament to predict what threats we might face over that period.
Mr Speaker
Order. Some time ago, I imposed a limit of four minutes on Back-Bench speeches. I am about to call the right hon. Member for Newcastle upon Tyne East (Mr Brown), and if all nine hon. Members who wish to speak are to get in, nearer to three minutes is what is required. I am in the hands of the House and I know that the House will try to help itself.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
It is a pleasure to make a very short contribution to the debate. I congratulate the hon. Member for New Forest East (Dr Lewis) not only on having secured it, which is a triumph in itself, but on how he argued the case for Britain’s independent nuclear submarine-based deterrent. It was the strongest series of arguments that I have heard made in one place for the renewal of the Trident platform. I do not agree with those arguments, but they were strongly made and the hon. Gentleman drew together all the different points that can be made.
Let me make two points back to the hon. Gentleman. First, we are purchasing something we cannot use, and secondly, we are doing it with money we have not got. They seem to me to be two pretty strong arguments to weigh in the balance. The hon. Member for North Devon (Sir Nick Harvey) referred to the cost and the impact on the defence budget. Frankly, we should think about the impact on the public finances more generally. We are in danger of sleepwalking into a commitment of some £80 billion to £100 billion, with a deployment cost of £1 billion a year, without properly discussing it in this place, so I congratulate the hon. Member for New Forest East on having secured this short discussion.
I ask all hon. Members in what conceivable circumstances in the world today they could envisage the United Kingdom taking the decision unilaterally to use nuclear weapons against another nation. It is very difficult, if not impossible, to envisage such circumstances. An independent nuclear deterrent does not address the security demands or the realities of international instability which the United Kingdom faces. This is not to argue that we do not face international threats in the 21st century. Of course we do. What I am arguing is that they are more complex and sophisticated and require a more intelligent response than a big 20th century bomb—a weapon of the cold war whose time, if it ever existed, has most certainly passed.
International terrorism is not combated or deterred by an independent deterrent. Trident does not counter the ever increasing number of cyber attacks on our nation’s digital infrastructure. It does not address political, socio-economic or environmental injustices that lead to global instability. These are the pressing issues that the United Kingdom faces and we hamper our ability to deal with them by focusing our defence priorities and spending on a cold war weapons system.
I am in favour of our membership of NATO. We make a strong contribution to the alliance and we should trust it and rely upon its possession collectively of a strategic deterrent, if there is an argument for the strategic deterrent at all.
In summary, this is a weapons system that we cannot use. The cost is disproportionate to the hard-to-identify benefits and it makes no sense in terms of our alliance with other friendly nations, of our international obligations or even as a response to the security threats faced by the United Kingdom.
Mr Speaker
A model of pithiness, which I know the hon. Member for Beckenham (Bob Stewart) will want to emulate or better.
Bob Stewart (Beckenham) (Con)
Thank you, Mr Speaker. I shall be as quick as I can.
I was a cold war warrior, as was my hon. Friend the Member for Reigate (Mr Blunt), and I spent many of my early years in Germany with tactical nuclear weapons. I also studied nuclear deterrence at university and I came to the conclusion that tactical nuclear weapons were too incredible for us ever to use. I was delighted when we got rid of them. That left strategic nuclear weapons.
I believe that the strategic nuclear deterrent does deter, and for that reason we must keep it. It can work only if it is invulnerable. As far as we can tell, the most invulnerable system involves a submarine. That submarine is currently being renewed. I support the renewal of an independent nuclear deterrent because we have no idea what will happen in the future of our world, and when there is great risk I prefer to have an insurance policy that maintains the status quo.
Mike Gapes (Ilford South) (Lab/Co-op)
Reference was made earlier in the debate to the period of the Reagan-Gorbachev Administrations. General Secretary Gorbachev in the 1980s called for a nuclear-free world by 2000. Remember that? Of course, the Soviet Union ended and the world we live in, as many speakers have commented, is much more complicated now than it was at that time. None of us knows where we will be in 30 or 40 years, and the decisions that are to be taken make assumptions about a future that we cannot predict.
We have heard references in the debate also to the continuation of NATO. I am a member of the NATO Parliamentary Assembly. I have serious doubts whether in the next 20 or 30 years the United States will give Europe a global commitment of extended deterrence in the way it did at the height of the cold war.
Nobody has so far mentioned China in the debate. China is modernising its military assets significantly. It has nuclear weapons. At some point this century it will become a global power with projection all round the world, not just within its own coasts and the seas off its coasts.
If we are looking at the future of the world, I do not think any of us can be very confident about what the outcome will be. What we do know is that the non-proliferation regime is under serious threat, not just from countries such as North Korea, which have left the NPT, but from countries that are still within the NPT, such as Iran, and other countries that will follow any decision to weaponise a nuclear capability by the Iranians at some point. In 15 or 20 years’ time, there could be 10, 15 or 20 more countries with nuclear weapons. The world that we are going into requires international action. My right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) mentioned the Labour party’s policy review in 1989. I was the secretary of that review, which changed our policy to deal with the realities that we were confronting at that time rather than the debate that had gone on theologically in the past.
We now need to make renewed efforts, and I wish the Minister and shadow Front Benchers would talk a little more about what role we can play with our nuclear weapons in facilitating new international disarmament negotiations, because they are not happening now. Despite President Obama’s Prague speech in 2009, the vision of a nuclear-free world is blocked because the Russians are not interested so long as missile defence is on the agenda. There is the danger of a proliferation of warheads to overcome missile defence if it is ever deployed. I conclude there to give others a chance.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I commend the hon. Member for Ilford South (Mike Gapes), who has just made a powerful contribution to the debate, and my hon. Friend the Member for New Forest East (Dr Lewis) for securing it. I congratulate the Minister on delivering a model speech, which in a short time went through all the key arguments that justify the Government’s spending the money.
We need to lay more emphasis not just on how we might imagine the weapons system could be deployed but on the fact that it is in use every single day, shaping the global security environment that we enjoy today. It is no coincidence that the advent of nuclear weapons on the international scene has led to the longest period of peace among the superpowers and major powers of the world that we have ever seen.
War between super-states is now unthinkable because of nuclear weapons. That is rather a good thing and certainly an argument for our maintaining our inherited role of acting as a major democratic, friendly, benign, positive influence in global affairs, with our international role enhanced by nuclear weapons.
The issue is the sort of country that we are and that we want to continue to be. We are a country with global reach, global influence, global interests and the ability to enhance global security—not just for the world as a whole, but for the security of our own people.
Were we, irresponsibly, simply to dispose of our nuclear capability, we would be upsetting a balance that we may not even understand. We are down to fewer than 200 nuclear warheads. China, which has been mentioned, is increasing its number of warheads pretty dramatically with two new intercontinental ballistic missile systems and a new submarine-based intercontinental ballistic missile system. Russia, with its thousands and thousands of warheads—far more than it could possibly want—is building new nuclear weapons systems and new nuclear submarines for the delivery of those systems. We are not living in a world that is disarming, despite the incredibly generous gestures that our country has made. The next move downwards is not for us, but for others. If others will not make those moves, we must continue to guarantee our security and that of our allies.
I end on one fundamental point. Much is being made of the cost of Trident. I respect the view of those who over the years have been proved wrong but nevertheless carry on with their campaign to disarm our nuclear weapons. However, nothing is less honest than the idea that there is some cheaper system that will maintain the deterrent effect of our nuclear weapons or that somehow our current weapons system is vastly overspecified because of the Moscow criterion, to which completely obscure and mad reference has been made. That has nothing to do with the capability that we deploy today. It is totally irrelevant and a means of spreading disinformation about the credibility of our system so that the Liberal Democrats can get rid of our nuclear weapons system.
The Liberal Democrats know that there is no cheaper system. Just how cheap is it? It represents 0.1% of GDP over the lifetime of the system. I challenge anybody to produce any defence expenditure that can produce so much global influence.
Pete Wishart (Perth and North Perthshire) (SNP)
I have three minutes to put the case for a peaceful, non-nuclear Scotland liberated from the menace of Trident.
When we secure the levers of power and we have the responsibility for defence, we will not have Trident in Scotland. That is not just the view of the Scottish National party but the desired will of the Scottish people. Opinion poll after opinion poll has found that the Scottish people do not want this menace. The Churches do not want it, the Scottish Trades Union Conference does not want it, and the overwhelming majority of Members of the Scottish Parliament do not want it, as they said when tested in a vote in 2007. Scotland is not going to have it—with independence we will shove it out of our country and it will not be in our waters.
Trident is emerging as an iconic issue in the Scottish independence referendum; in fact, it is probably one of the main issues. Is it not therefore sad and depressing that not one Labour Back Bencher has spoken in this debate? It took an hour to find one to come and inhabit those Benches. Is that not an absolute and utter disgrace?
Pete Wishart
I cannot give way; the Whips told me not to.
This is not just about retaining these abhorrent weapons, as the UK is the only country in the world that is indulging in unilateral nuclear rearmament. The hon. Member for North Devon (Sir Nick Harvey) rightly pointed out that Trident will cost, over its lifetime, £100 billion—an almost incomprehensible figure. It is a weapon designed for another age. It is designed to take on not the Bin Ladens of this world but the Brezhnevs. Yes, there are new threats in the world, as we are now seeing in Algeria and in Mali, but nothing would delight those insurgents more than our threatening them with nuclear weapons. While Trident is perhaps the least equipped weapon possible to deal with the challenges of the modern world, we are in the middle of a triple-dip recession. We are told that we have to ensure years and years of Tory austerity and that household incomes are going down month by month, yet we have to spend billions and billions of pounds on a weapon that we hope will never be used, and that is a moral abomination.
We will get rid of these weapons. An independent Scotland will make decisions that reflect Scotland’s interests and values. We will use our share of the cost of Trident to create jobs that meet the defence, economic and public service priorities of an independent Scotland. Our percentage share of the cost of running Trident is £163 million per year. Let us imagine what we could do with that money in rebuilding our public services and creating the conventional defence force that Scotland needs. [Interruption.] Here we go—every time we get to our feet we are heckled by Scottish Labour Members, and this is another example. They just cannot keep quiet—it is so typical. [Interruption.] They are still at it. I do not know if the cameras can pick it up, but it is always the same in these debates.
The Scottish people have a great opportunity to rid themselves of this evil weapon: if they want Trident out, they can vote yes for Scottish independence. The case for Scottish independence is compelling, and being able to rid Scotland of these evil weapons of mass destruction just helps that case.
Penny Mordaunt (Portsmouth North) (Con)
I want to speak in support of continuous at-sea deterrence—CASD—and explain why it is still relevant and required. Those who disagree tend to mischaracterise the threat in terms of their assessment of the behaviours and future intentions of specific nation states, or underestimate the threat from hostile non-state organisations, or conclude that CASD is a redundant concept because there may be emerging threats that it cannot effectively deter. Such arguments often hinge on the premise that one or more of the necessary conditions for credible deterrence is missing, those conditions being that the aggressor we are seeking to deter has rational political leadership, that the behaviours to be deterred must be a genuine threat to the vital interests of the UK, and that there is a concept of use—an identifiable capability and a declared policy of intent. Opponents of CASD say that there will be no re-emergence of a major direct threat, otherwise known as Russia. They say that other hostile states, such as Iran, fail the rationality criterion to justify the retention of the deterrent, that CASD is of no use against a non-state terrorist organisation whose identity might be unknown and, even if it is known, that there may be no target against which to retaliate.
I say—this is at the heart of the issue—that it is not possible to predict with absolute certainty the intentions or future actions of countries such as North Korea, or what might happen if China, for example, fell under the control of a malign regime. To dismiss Iran’s foreign policy as irrational is also a mistake. It might be unpredictable and it is certainly obnoxious, but that is not the same as irrational. To reject the deterrent—which works in most scenarios—because it does not work in all scenarios is also illogical.
Finally, Russia’s behaviour towards NATO is becoming increasingly aggressive. Last year, Russia’s chief of general staff spoke openly about a first strike against US missile defence installations in Poland and Romania, and Putin shunned both the Chicago summit and the G8. Most commentators are pointing towards growing instability in Russia, a country that, we estimate, today has 12,000 warheads, 4,650 of which are active. We cannot dismiss the possibility of Russia being a real threat over the lifetime of the next generation of the deterrent.
That is the world we live in and it is the world we must prepare for when we renew our capabilities. If we reject CASD, we ought not to kid ourselves that it is not just the UK’s status and influence that we would lose, or that we would successfully achieve our prime duty as parliamentarians and as a Government to protect the United Kingdom, including those who live in Scotland.
Caroline Lucas (Brighton, Pavilion) (Green)
I am grateful to be able to speak in this debate, but sad that I have such a short time in which to do so.
I want to start by considering the overall concept of security and deterrents. I believe that we need a mix of tools for deterrence and security, rather than investing blind faith in voodoo defence based on a cold war weapon that cannot deter, but that certainly can obliterate all of us.
The greatest security threats that we face today are related to climate change and international terrorism. Those are things that nuclear weapons cannot help us with; rather, they deter and take resources away from addressing those issues.
When the leaders of our armed forces and security services balked at the Chancellor’s plans to charge the Ministry of Defence the full cost of replacing Trident, they exposed their own lack of faith in the notion that nuclear weapons give us deterrence and security. In a letter to The Times, three of those leaders—Field Marshal Lord Bramall, General Lord Ramsbotham and General Sir Hugh Beach—said:
“Nuclear weapons have shown themselves to be completely useless as a deterrent to the threats and scale of violence we currently, or are likely to, face—particularly international terrorism; and the more you analyse them the more unusable they appear”.
If Trident really fulfilled the deterrence myths and claims that underpin the Government’s case for spending billions on its replacement, those responsible for our security would surely consider it well worth the money, but they do not. They know full well that Trident is political vanity and irrelevant to our real security needs.
It is time we stopped calling Trident “the deterrent,” as if that were its identity. That was a public relations euphemism from the early days of the cold war. It was meant to cut off debate by making nuclear weapons sound as if they were safe and sensible, so it was made impossible to ask the real questions, such as: does the deterrent deter? If we ask that question, we will soon come to the conclusion that it is short-sighted and dangerous in the extreme for Britain to rely on a weapon of mass destruction which, if launched, would put our own survival at serious risk, as well as that of many others.
If we are seriously to debate deterrence, let us do so honestly and recognise the complex relationship that requires us to understand the fears, threat perceptions, needs and values of others, and to communicate carefully and effectively. The best deterrence of all is to work with other nations to solve global threats such as fossil fuel-induced climate disruption, transnational trafficking in weapons, and the poverty and desperation that fuel hunger, conflict and violence cause around the world. Calling Trident “the deterrent” does not confer on it the capability to deter any more than calling a cat a dog would give the cat the ability to bark.
Secondly, I will touch briefly on the upcoming inter- governmental efforts to ban nuclear weapons. The Government of Norway, who have worked closely with the MOD and Atomic Weapons Establishment Aldermaston on projects to verify nuclear weapons, are hosting a major international conference in Oslo in early March, where the humanitarian consequences of nuclear weapons will be addressed by more than 100 Governments. I am pleased that the Foreign and Commonwealth Office has told Norway that we will send a delegation to that important conference, but I plead with the Government to play a constructive role. As the focus is mainly on the humanitarian consequences of detonating nuclear weapons, I ask the Government what studies of nuclear weapons and their humanitarian effects they have undertaken that they will be sharing with their colleagues.
The expert studies on the short and longer-term effects of nuclear detonation are shocking. Let us consider the environmental, climate, agricultural and medical effects. If just a fraction of today’s nuclear arsenals were detonated, in what is termed a “limited nuclear war”, the studies point to climate disruption, widespread radioactivity and global famine. In other words, if the Trident weapons that are carried on just one British submarine were launched at Moscow and nearby cities, the effect would be a worldwide humanitarian disaster. That is immoral and obscene, and it should not be done.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I congratulate my hon. Friend the Member for New Forest East (Dr Lewis) on securing this debate.
I support maintaining a nuclear deterrent because it is the reason for our seat on the United Nations Security Council, it is the cement in our relationship with the United States of America, and it helps us to play a key part in NATO. This is an important debate. The nuclear licence is vital to my constituency. It is our stake in the ground and we must ensure that lots of work comes out of it. The Prime Minister has made it clear that he is very supportive of Plymouth remaining a strategic naval port. Some 25,000 people in my constituency and travel-to-work area are dependent on the defence industry for their jobs.
I want two things out of today’s debate. First, I want a commitment that the Labour party will not do a deal of any description with any potential coalition partner—whether the Liberal Democrats or any other party—on giving away the nuclear deterrent. Secondly, I do not want any more money to be spent in Scotland until it has worked out whether it wants to be part of the United Kingdom. In that way, we can ensure that we hold on to our nuclear deterrent and send the simple message that Nelson’s sailors used to give as a toast: “Confusion to the enemy!”
Jeremy Corbyn (Islington North) (Lab)
I will have to be very brief.
We must be clear that nuclear weapons are weapons of mass destruction and can only kill indiscriminately millions of civilians. We have enough nuclear capability in our 48-warhead submarines for a nuclear kill 384 times greater than that in Hiroshima in 1945—the only time when nuclear weapons have been used.
To replace the Trident system and procure new warheads would cost us £100 billion over 25 years. I dread to think that any Government in 2016, of whatever party, faced with all the social problems of this country—with the stress on housing, health, education, employment and infrastructure—would commit us to £100 billion-worth of weapons of mass destruction. That would achieve precisely what? It does not protect our position as a member of the Security Council of the United Nations. It does not give us moral authority around the world. It has the opposite effect. I ask the House this question: when issues are raised in the world’s councils, who has greater moral authority—South Africa, which gave up its nuclear weapons specifically to ensure that there was an African nuclear-free zone, or Britain, which seeks to rearm unilaterally in order, apparently, to protect its status around the world? It does not defend us. It does not protect us. It does nothing but cost us a great deal of money.
I aspire to live in a nuclear-free world. It has been achieved in Latin America. It has been achieved in Africa. It has been achieved in central Asia. It has been achieved in Antarctica. There is real hope that, with the assistance of the Finnish Government and the UN, we will eventually achieve a nuclear weapons-free middle east, when Iran and Israel are brought together to the conference table to bring that great aspiration about. We live in a time when we can take a huge step forward. Our country can take a huge step forward by saying, “We do not see weapons of mass destruction as a defence; we see them as a threat and a danger. Accordingly, we will not replace the Trident nuclear weapons system, but will instead support the nuclear non-proliferation treaty to ensure that that happy day comes about.”
The MPs around the world who have signed the Parliamentarians for Nuclear Non-proliferation and Disarmament network statement to bring about nuclear weapons-free zones are to be commended. World opinion is against nuclear weapons, which is also to be commended.
I finish with a point echoing that made by my Friend—
Kevin Brennan (Cardiff West) (Lab)
On a point of order, Madam Deputy Speaker. Is there any way we can get a Minister from the Department for Education to the Chamber to explain the extraordinary attack in The Spectator blog this afternoon on the former Minister with responsibility for children, the hon. Member for East Worthing and Shoreham (Tim Loughton), by senior sources at the Department, who have described him, among other things, as
“a lazy incompetent narcissist obsessed only with self-promotion”?
I have informed him that I am raising this matter on a point of order. Should not the Secretary of State come to the House to explain whether that vicious attack is his view of his hon. Friend and erstwhile ministerial colleague?
Madam Deputy Speaker (Dawn Primarolo)
The very short answer is no, I cannot. That is not a point of order—I think the hon. Gentleman knows that. A point of order has to be a matter for this Chamber, but he has his point on the record, and I am afraid he will have to be satisfied with that.
Jeremy Corbyn
On a point of order, Madam Deputy Speaker. I am sorry to intervene on a point of order, but we have just had a good and interesting debate on nuclear weapons, and the time obviously had to be reduced. Some hon. Members did not get in and others withdrew from the debate because they were not going to do so. Could we invite the Backbench Business Committee to look favourably on having another debate on the subject in the foreseeable future, because there is far greater parliamentary interest than was anticipated when the debate was called for by the hon. Member for New Forest East (Dr Lewis) and the number of hon. Members who supported him?
Madam Deputy Speaker
Mr Corbyn, I think you know that that is not a point of order either, particularly seeing as the Backbench Business Committee’s determination of business in the House is not a matter for the Chair. I am sure that when the Committee reads Hansard, it will take his remarks as an early bid, particularly if he has greater support for such a debate.
Mike Gapes
Further to that point of order, Madam Deputy Speaker. Given that the Government will publish—at least internally—and consider their review on the alternatives to Trident, perhaps the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), who is in his place, will give the House a commitment that we will have the chance to debate the review in this House very soon.
Madam Deputy Speaker
Well, Mr Gapes, perhaps the Minister could do that, but I do not think he will. That is not a point of order. I would like to make progress with business, because I am sure there are not any other relevant or pertinent points of order to take this afternoon.
Street Lighting (Residential Areas)
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andy Sawford (Corby) (Lab/Co-op)
I am grateful for the opportunity to raise in Parliament an issue of great importance to people in my constituency of Corby and in East Northamptonshire. The earliest street lights were used by Greek and Roman civilizations. They were used in Egypt more than a thousand years ago. They were common in the UK by the time wax candles turned to electric candles. Electricity transformed the efficiency and effectiveness of street lighting, which for well over 100 years has illuminated our towns and cities. From the Romans to the Victorians to today, street lights have been a civilising force in our communities. They help us to move about more safely, whether on foot or cycle, or in our cars or on public transport. They help us to be safer from crime, whether that is crime on the person, vehicle crime or burglary. In short, they are essential to our safety and security.
Street lights give us a greater sense of well-being; they give us more confidence as darkness falls; and they help us to go about our business, whether going to or returning from work, including those who work shifts. They help us when we are going to a social club, a pub, a church group, a gym, or when we are visiting family or friends or popping to the shops. Most of us, most of the time, for most of our lives, have taken street lighting for granted, but suddenly, in many communities in the UK, it is not there.
Let us imagine the iconic scene, if you will, Madam Deputy Speaker, of Gene Kelly under a lamp post. He is about to sing in the rain, except that he cannot because he cannot see to dance and we cannot see to watch him—his council has switched the street lights off. So it has been in Corby and East Northamptonshire for the past 18 months. A darkness has fallen across our towns and villages; a dark age, rolling back time, as though we live in a time before civilisation, before electricity, and before councils and local government and all the good that they can do to make our places liveable and our communities strong, safe and vibrant.
In 2011, Northamptonshire county council turned off more than 30,000 street lights. The off switch was pressed on approximately half the lights in the county. The general pattern was every other light. In some places, more were off. There was little consultation, precious little listening, and even less consideration of the implications, both generally for people’s safety and well-being and specifically about those highways, alleyways and pathways where the arbitrary turning off of street lights would have a particular impact.
Two reasons were given. The first was to save money in the face of drastic cuts from central Government. Let me say that I do not support that scale and pace of the introduction of those cuts to our councils. They have been hugely damaging to our communities and our economy, all part of an approach that has plunged the UK into a second recession and stopped the economy growing. Perhaps the Minister and I can leave that debate to another day and accept that councils need to make efficiencies. They need to ensure that their budgets are balanced.
Local authorities have many important responsibilities and one is street lighting, which at pre-cuts levels in Northamptonshire cost just 0.08% of the council’s budget. I will put that more simply and in language that I, and everybody I represent, can understand: it costs each household £1.14 a year to have decent street lighting. That is a very small price to pay for adequate street lighting, and I think all the residents in Corby and East Northamptonshire would see that as good value for money. The council tells us that its cuts had an environmental rationale—to replace the lights with more energy-efficient, cost-efficient and effective lighting. I think that is right in principle, but let us look at what it did in practice.
The council should have had a plan for switching over to newer, more energy-efficient lighting that did not involve turning off half the lights first for several years. It should have had a plan that did not involve putting people’s safety at risk. A nine-year-old boy was taken to hospital after being hit by a car at a pedestrian crossing on Oakley road in Corby. The street lights had been turned off near a pedestrian crossing. The county council stated that because the road has a 40 mph limit
“this meant it required fewer street lights to be left on”.
The boy was treated and he recovered. The council did not take responsibility, but the lights were turned back on. It should not take an accident before the council acts properly and sensibly in the public interest.
When the streetlights were first turned off people said, “There will be an accident there before long”, and so it proved: prangs and bumps, trips and falls. However, for many more, the fear of accidents prevented them from going out at all, as did the fear of crime. When the county council started turning off lights, more than 1,200 people signed up to the “Corby Street Lights” Facebook page. Across Northamptonshire, people protested. Stefano in Raunds pressed the council to turn street lights back on in Primrose Hill, where elderly residents feel unsafe. Sonia, a mum of three in Corby, told the Northamptonshire Telegraph, which is represented in the Gallery today for this debate:
“The main thing is a complete lack of consultation. I have been a victim of crime myself. I have had wing mirrors kicked off and car windows broken. Come winter it is going to be dark at 4.30 pm and it is like imposing a curfew if you are old or infirm.”
Those people in my constituency are supported in their concerns and first-hand experiences by much evidence that the Minister will no doubt be aware of. A systematic review by the Home Office on the effects of street lighting on crime found that
“improved street lighting led to significant reductions in crime...with an overall reduction in recorded crime of 20 per cent”
in towns across the UK. I think that the Minister will agree that something that results in a 20% reduction in crime is a good thing.
The Institute of Lighting Engineers believes that
“the many benefits street lighting provides the community far outweigh the limited returns that can be achieved by switching off or removing lighting”.
Cambridge criminologist David Farrington said that
“improved street lighting should continue to be used to prevent crime in public areas. It has few negative effects and clear benefits for law-abiding citizens”.
Paul Watters, head of policy at the AA, said that turning off the street lights
“may save money in terms of energy, but then you have to look at the cost in terms of security, safety and accidents and it may actually be more”.
Michael Ellis (Northampton North) (Con)
I am a fellow Northamptonshire MP. Does the hon. Gentleman agree that there has been considerable consultation on this matter? The county council has indicated that it consulted via its YouChoose website, comment cards available at libraries, tweeting, e-mails and contacting the local press and other representative organisations. Does he also agree that a lot of the measures that the county council has had to take are because of the profligate spending of the previous Labour Government?
Andy Sawford
I do not agree. If that is the best that the hon. Gentleman has to offer on his constituents’ concerns about street lighting, I am very disappointed in him. The things he describes are an example of what people in my constituency call “nonsultation”—when people consult but do not listen. That is what happened in this case.
Let me tell the hon. Gentleman—[Interruption.] Let me tell him, if he will listen, about the case of Gary Tompkins, a 25-year-old man in Milton Keynes who died after being hit by a car. Let me tell him what the coroner said—the Minister will be interested in this, too. The coroner found that turning off of the road lights contributed to this death, and that
“no formal risk assessment was carried out by the council before the decision was made”.
I am not aware of a proper risk assessment taking place in Northamptonshire, and that is why people such as the nine-year-old child in my constituency were injured.
In Dorset, street lights are being turned back on following a spate of arson attacks on cars. Through these cases, in my constituency and many others, a pattern emerges of councils playing “street light roulette”. They over-eagerly turn them off without sufficient risk assessment and proper consultation, someone gets hurt or property gets damaged and the council looks again at the street lights and starts to turn them back on. That is no way to ensure public safety.
The Highway Electrical Association will publish research next month that, following a comprehensive review of switch-offs across the UK, will recommend the following approach for councils to take. First, it will recommend that the local authority should carry out a detailed risk analysis of lighting provision and particular areas of concern, and secondly that the local authority should then determine what can be done with the existing lighting. Lots of councils around the country have looked at whether they can switch of, or dim, the lights at certain times of the night, and they have looked at areas where the lighting is less important to public safety. I think we can all support that as a sensible approach.
Thirdly, the report will advise that local authorities, before taking any action, should consult properly with residents and other stakeholders. Those three steps, which were not taken in Northamptonshire, seem to make good sense. I hope that the Minister will agree and endorse this approach. That is one positive outcome that could come from this Adjournment debate.
If Northamptonshire county council had acted properly, I would not have heard from Mr Robson, who contacted me to tell me that
“when he and his co-workers finish after midnight, they face walking along Willowbrook road. Part of the path here goes into the woods, where all the lights have been turned off”.
Neither would I have heard from Ann Leonard, the secretary of the Corby co-operative women’s guild, who tells me that the group leave all together and help each other into their cars, because they are afraid. Darren Melville told me that he has had to stop going on his regular runs. Not only did he find it difficult to see where he was stepping, which led to a couple of falls, but he no longer felt safe.
Many right hon. and hon. Members, particularly on the Opposition Benches, know how Mr Melville feels, because they too have walked the streets of my constituency. During the by-election, our teams used head torches to get around, and on doorstep after doorstep they met residents who raised concerns about street lights. That is why it is one of my top priorities and remains so.
On Saturday, I was out campaigning in Irthlingborough in my constituency. I met residents on Meadow walk, a road of old people’s bungalows, where all the lights are out. People there not only feel afraid to go out, but feel trapped and afraid in their homes. This becomes even more pertinent in the depths of winter, and not just because of the long nights and short days. My constituent Matthew Reay said to me that
“it is particularly worrying that lights are off during a period in which most paths and roads are covered in ice”.
Northamptonshire county council has not properly addressed the concerns. People have been told, “You need a security alarm”, or, “Get yourself a torch”, when they have complained to the council about specific problems. There is a better way. Sheffield city council has shown a better way of investing in white LED lights, which are better and brighter, and Salford city council has done the same. Looking ahead, I want to see the street lights being turned back on in Corby and investment in more energy and cost-efficient lighting, but we need our street lighting now, in the interest of public safety, and we need a programme of replacement that does not compromise that safety as we go forward.
Perhaps even in the dimly lit corners of Eland House, where the Parliamentary Under-Secretary toils, some thought and consideration is being given to the proper way in which councils should conduct their business. I ask him to use the power of the Dispatch Box this evening and the power of his pen tomorrow to prevail on Northamptonshire county council to light properly the towns and villages of Northamptonshire once again.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I congratulate the hon. Member for Corby (Andy Sawford) on securing this evening’s debate. I am pleased to be responding to what I believe is his first Adjournment debate since becoming a Member of Parliament last November, on what is clearly a subject of great importance to him. I also congratulate him on his speech. He started with a number of clearly well researched historical facts. He could have easily answered the question “What have the Romans ever done for us?”, although I was greatly pleased that he resisted the temptation to sing and dance.
It might be helpful if I begin by saying a few words about the background on street lighting in residential areas more generally before I talk about the specifics of the hon. Gentleman’s case. Street lighting is often taken for granted, but it is an important service for local communities. Most residential street lighting in England is the responsibility of local highway authorities. Local authorities, such as Northamptonshire county council, which covers his constituency, have a duty under section 41 of the Highways Act 1980 to maintain the public highways in their charge. That duty covers street lighting. That said, authorities do not have a duty to light any particular parts of their networks, but where lighting has been provided, the authority has a duty to maintain it. It is therefore for each local highway authority to decide what level of service it wishes its street lighting network to deliver. It is also up to the authority to decide on the appropriate technical solution to ensure suitable lighting of its highways, as well as deciding what level of funding is appropriate to maintain its lighting networks.
I am aware that many councils are now taking a proactive approach, looking at a number of ways to reduce their overall funding programmes. Some councils are thinking innovatively about how to deliver their services, and that thought is indeed being inspired by the Ministers at Eland House. I, of course, toil at Great Minister House as opposed to Eland House, which is where the Department for Communities and Local Government resides. I know that my hon. Friends who reside at Eland House are encouraging local authorities up and down the country to look at new and innovative ways of delivering services to their communities.
As the hon. Gentleman said, many authorities are looking at ways of delivering their street lighting commitments. Many are implementing a policy of dimming street lights between midnight and 6 am or even turning them off during those hours. Some, such as Northamptonshire county council, have taken further steps and decided to turn some lights off completely. Let me be clear: central Government have no powers to override local decisions in these matters, nor should it be the job of bureaucrats or Ministers in Whitehall to dictate to local government how it determines local solutions.
Let me turn to Northamptonshire’s street lighting policy. I am aware that when considering its budgets—in light of the challenge to everybody after the profligate spending of the last Labour Administration—the county council’s cabinet considered a proposal in 2010 to make £1 million of savings by changing the county’s street lighting policy. As part of that exercise, including the consultation, the council made it clear that its intention was not just to make savings, but to respond to a growing recognition in many parts of Northamptonshire that the pre-switch-off policy had been somewhat over-engineered and was not as energy efficient as it could be. The county council also stated that it wanted to reconsider street lighting as part of its overall environmental agenda.
Michael Ellis
Does my hon. Friend agree that this is not only a question of energy efficiency and energy savings, but—as usual—of hearing the Labour Opposition reject any form of savings without offering any ideas on how they would save instead, in times of austerity that are due largely to Labour overspending for many years?
Stephen Hammond
I certainly agree with my hon. Friend.
I shall touch on a solution that Northamptonshire county council offered to Corby in a moment. The council decided in January 2011 that it should find an additional £1 million saving from its street lighting, bringing the total amount of savings that it wished to achieve to some £2 million per annum. The council undertook a consultation on its proposals, which was promoted in the local press as well as on the council’s website. I know that many of the hon. Gentleman’s constituents had concerns about that process, and felt that it was not sufficiently widespread.
The council commenced switching off lights in April 2011, and the process continued through to August of that year. Out of the council’s asset of 67,000 street lights, almost 30,000 were switched off. In Corby, 3,681 of the 8,275 lights have now been switched off. The hon. Gentleman will be aware that, in response to some of the criticisms of the consultation process, a further consultation was carried out with county councillors.
Andy Sawford
I am slightly confused by the Minister’s approach. He says that it is not his position to direct the local authority, but I have not asked him to do that; I am a localist. I have, however, asked him to advise me on the Government’s position, in the light of all the research that I have highlighted, including that of the Home Office. He seems to be reading from a brief from the county council, which can well speak for itself, rather than setting out the Government’s position on this matter.
Stephen Hammond
The hon. Gentleman has made his speech, and if he will forgive me, I am now setting out the Government’s overall responsibility and the liabilities and duties of county councils. I am setting out the situation, as he did, and if he will wait a few minutes longer, I will make some comments on the Government’s response. It is important to set out the case, so that we can understand it and so that we can all agree on what is actually happening. That is what I am attempting to do.
I have just made the point that, in response to criticism, the county council carried out a further consultation. The chief executives of all of the county’s borough and district councils were sent letters and invited to meetings on street policy. Written responses were received from three borough councils in Northamptonshire, including Corby, which asked that the lights be put back on in crime or accident hot spots. I think that the hon. Gentleman would acknowledge that the county council has addressed some of those concerns, and that changes were made to the policy as a result, specifically in regard to the reduction of repair times, as well as to switching the lights back on.
During the switch-off period across Northamptonshire, the public were invited to submit appeals if they felt that the proposed policy was not being correctly applied. In theory, that appeal period was due to end in September 2011, but in practice it was extended until December 2012. During that period, the council considered some 4,000 appeals and, as a result, nearly 1,000 street lights were turned back on.
I understand that the leader of Northamptonshire county council met the leader of Corby borough council—I am not sure whether the hon. Gentleman was present at that meeting—to try to come to some arrangement on the street lights in Corby, and offered to switch back on any lights that the borough council wanted to be kept on, so long as the borough provided a 50% funding contribution. I also understand that, although the borough council has made a certain amount of noise, it has not yet taken up that offer.
Chris Heaton-Harris (Daventry) (Con)
My constituents were affected in the same way as Corby residents, but a number of parishes across my constituency pay for their own street lighting. I have thus received almost as many letters complaining that people were having to pay twice for street lighting across the county as I did from those complaining about switching off the lights in inappropriate places.
Stephen Hammond
My hon. Friend makes an interesting point.
Before I leave Northamptonshire, it is worth saying—and it is important to point out—that the reduced energy usage that the change in policy will have yielded by the end of March 2013 is expected to be approximately 10,500 tonnes of carbon saving, and there will be annual savings in excess of 5,000 tonnes in the future.
Andy Sawford
Given that the Minister has chosen to focus many of his remarks on local research about how Corby council responded, let me remind him that my constituency covers two local authorities. I have mentioned examples in Raunds and Irthlingborough in another local authority. In the interests of balance, those people might be interested to know the Minister’s views on how their local authority responded, the number of lights turned off in their areas, and so forth. That would be very interesting.
Stephen Hammond
I am happy to come back to the hon. Gentleman with the numbers, but my point is that Corby did respond and it was made an offer. [Interruption.] I am saying that Corby did respond to the leader of the county council, who then made an offer to respond to Corby council’s demands. So far, Corby council has not responded.
Let me say a few words about the Government’s policy on street lighting. It is, of course, right that local authorities, not central Government, consider—in the interests of cost-saving and the environment—whether lighting can be sensibly dimmed or switched off, consistent with proper safety assessments. We are aware that a number of local authorities around the country have commenced similar lighting projects to deliver energy savings and carbon usage reductions. Guidance produced by the Institution of Lighting Professionals is available for any local authority that wants to adopt such a scheme. We are aware that a number of local authorities are taking the decision, following traffic incidents, to switch some lights back to an all-night operation at certain locations, as the hon. Gentleman said. It is, as I have said, the duty of the local authority to ensure that street lighting is maintained if it has chosen to provide it.
The hon. Gentleman raises perfectly reasonable concerns about possible increases in crime. That is understandable, and the reduction of street lighting might cause some people to question their safety and security. However, evidence to date from authorities up and down the country that have adopted switching-off policies between midnight and 6 am, or have switched off lights permanently, shows no relationship at the moment between reduced street lighting and increases in crime levels. That has been backed up by a number of police authorities, which have made statements to confirm that crime levels have not increased since councils adopted the policy of switching off lights between midnight and 6 am.
The Department is aware of work undertaken last year by Warwickshire county council, which contacted 30 local authorities to see whether there was any measurable impact on crime or road safety. The evidence is not conclusive, but from the monitoring undertaken by the county council and by these authorities so far, no significant increases in either crime levels or road accidents have been reported. There will be individual cases, and I offer my sympathy to the young gentleman who was knocked down, but nationally recognised research papers, including Home Office research, are similarly inconclusive on this point.
The Government would, of course, advise that any authority should work closely with the emergency services, community safety and other key partners when considering the street-lighting needs of local people. We also advise local authorities to monitor the impacts following implementation of any street-lighting changes and to ensure they have provision for reversing any of the changes, should the need arise.
So, in conclusion, remote monitoring, dimming, trimming and switching off of street lights can play an important part in reducing energy costs, light pollution and carbon emissions. That is clearly a matter for local authorities.
I listened carefully to what the hon. Gentleman said. He made a powerful case on behalf of his constituents, and I note the concerns that were expressed. I suggest that he should continue to raise them directly with the county council.
Question put and agreed to.
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(11 years, 10 months ago)
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Tax (Developing Countries)
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Sir Malcolm Bruce (Gordon) (LD)
The Select Committee on International Development is extremely grateful for the opportunity to debate two of our reports. The first is on tax in developing countries, and the second is on Afghanistan. We think both issues are important, although they are obviously completely different in their scope.
The Committee has long recognised that when British taxpayers put substantial resources into supporting developing countries, it is important that those countries raise their own tax base so that we are effectively working in partnership to develop their economies and services. Of course we recognise that the tax base in poor countries is inevitably low, and that the last thing that many people on very low incomes need is to be harried for tax. Nevertheless, almost every country has a variety of ways in which money can legitimately and properly be raised from different aspects of its economy. I will first mention the internal issues affecting developing countries and the role that the UK Government can play in addressing them. Members of our Committee often hear, as a mark of frustration that in many developing countries, willingness to pay tax in the sector of the population who have the capacity to do so is rather low. It is difficult to set a good example if Presidents, Prime Ministers, MPs and leading business people make little or, in some cases, absolutely no contribution to their own Exchequer. Before we consider the international dimension, it is worth putting on record that the Committee says, right at the start, that we should ensure that people who can pay tax in their home countries do so. Performance is variable; I am not suggesting that all countries are the same or equally bad.
Of course, many non-governmental organisations and campaigners focus on tax paid by national and international corporations. I will certainly come to that, and it is extremely important, but equality of treatment seems relevant. If we are to say, as we should and must, that national and international corporations operating in developing countries should pay their full share of tax, it is helpful if, for example, the local directors of those companies also pay their share of tax, and that the approach is seen to be equitable.
Having said that, I want to consider the issues affecting the tax paid by corporations operating internationally, and to make it clear to the House that although we examined tax in developing countries worldwide, we took Zambia as our case study because we felt that it had a growing and diverse tax base, with which we could perhaps test what could be achieved. We had a good visit to Zambia, which I will discuss a little later.
We made numerous recommendations in our report. The Government did not readily accept all of them, but they did accept some, and there are some that we hope they will work on. Indeed, developments in our own domestic circumstances in recent weeks have sharpened the debate and perhaps given the British Government pause to think that some of our recommendations are just as relevant to the UK as to poorer developing countries.
We recommended that the Government introduce legislation, similar to the American Foreign Account Tax Compliance Act, that would require tax authorities automatically to exchange information regarding UK citizens and corporations. The Government did not accept that, saying that there were difficulties—although the US seems to have managed it—but I think that more recently they have softened their line a little.
A number of our recommendations were designed to improve information exchange and transparency. The problem for all tax authorities is that if they do not have basic information about what individuals or companies are earning, it is pretty difficult to tax them fairly or at all. The classic practice for international companies is to move their earnings around to where they can secure the lowest taxation impact, or none. A lot of that might be legitimate, in that international corporations have international transactions that are not really attributable anywhere, although they should be taxed somewhere.
However, when serious, very identifiable economic activity is plainly taking place in an economic jurisdiction but little or no tax is being paid, something is obviously not right. When we engaged with the Zambian authorities, particularly about the taxation of their minerals and especially their copper industry, we got into the nitty-gritty of that. The copper industry in Zambia has operated for about 70 years. It dates back to colonial times and has been under different ownership; at one point it was owned by the state Government of Zambia, who frankly did not make a very good fist of it and ended up losing money on the copper mines. The timing was not good, and the operational management was probably not good either, so the mines were subsequently returned to private ownership.
That has been a good thing for Zambia. Copper prices have risen, the tax base has risen and taxes are being paid, which is making a significant contribution, but there is a degree of frustration and unhappiness. The Zambian authorities feel that the full amount of tax that could or should be paid on the basis of the economic activity within Zambia is not being paid, mostly due to the practice of transfer pricing. Exploring the debate reinforced our view that transparency of information is key to getting the tax base right.
If I give an example of the extreme view, it is easy to understand the issue. If a company had a very large productive mine—an obviously profitable commodity—in a developing country but paid a substantial amount of tax, albeit on a low rate on earnings, in the Cayman Islands, most people would understand that the Cayman Islands is not rich in the minerals on which the company was being taxed and that that was therefore an inappropriate redistribution of the accounts. It becomes more complicated, of course, when companies have many operating bases and lots of different activities, but the principle is nevertheless the same. We are trying to ensure that companies pay a fair tax on the activities that they conduct in any given geographical area to the Government of that country. That is corporation or related tax.
Zambia has gone through numerous different ways of doing things. It had an excess profits tax and a variable corporation tax. We discovered that the problem with all those approaches was that the licences under which different mines operated had been issued at different times by different Governments on different terms, all allowing companies to claim tax breaks, loss offsetting and so on, which enabled them to pay little or no tax. The resolution to that situation, which has not been entirely popular with the industry but which we understand and broadly support, has been to move to a system of royalties, set at 6% of turnover based on the company’s declared tonnages, knowledge of the ore quality and the prices set per day on the London Metal Exchange. The net result of that for those companies that complain is that it is something that is easy for the Zambian authorities to administer. It might be rough justice, but companies must come up with a credible alternative, which they have not done, if they argue that there is a better way of doing it. It looks as though that is likely to lead to a steadily rising revenue base for Zambia. I conclude from that that, on the whole, Zambia emerges as a pretty good case study.
On the copper belt and copper production, we had an extremely good exchange with Ministers and civil servants in Lusaka about the rest of the tax base. There is a ready recognition that, as Zambia’s economy grows, it should not be totally reliant on copper for its public finances; it wants instead to expand the tax base. It was looking for advice and help on how to do that. In other words, what can they tax efficiently, fairly and not counter-productively and how far down the earnings scale is it sensible to go? Clearly, it is neither administratively sensible nor economically wise to tax people at the very bottom. That made us realise that there was scope for the UK Government to do a lot more in partnership with developing countries to enable them to improve their revenue-collecting capacity. I can quote examples—good and bad—where that is happening. I have already mentioned Zambia. We have evidence that similar success has been achieved in Tanzania where the dependence on UK and other forms of development assistance is falling as a proportion of its overall budget because its tax base is rising. It is absolutely true of Rwanda, which is spectacularly successful in this area.
Interestingly, the head of the revenue authority in Burundi, who was previously in Rwanda and who is a British national with a strong Irish connection, has demonstrated a singular capacity to raise the revenue base in Burundi, which is a very poor country. For the Minister’s benefit, let me say in passing that it remains stubbornly the view of the Committee that Burundi should continue to receive UK aid. Whether or not the decision to close down the programme was misjudged, the case for continuing it is strong, and we will continue to make it.
The Committee took evidence this morning on Pakistan, where the position is depressingly unsuccessful. I should probably first mention Afghanistan, which we will be debating later. Thanks largely, but not exclusively, to the support of the UK Government, the tax base in Afghanistan has risen from almost nothing—3%—to 11% in the last few years, and the potential to raise it further is clearly evident. I can promise my hon. Friend the Member for Mid Derbyshire (Pauline Latham), who was a bit disgruntled because she did not hear a lot of the presentation we were given, that the content was good in that it showed how much the revenue base had risen, how much more potential there was and how valuable the UK Government support was. All that was achieved by officials working inside the Ministry to help get a handle on the figures.
The revenue collection in Pakistan is under 10%, which is awful for a well established country. Although it is classified as a lower-middle income country, it is, none the less, a middle income country. Bluntly, the figures are such because the leaders of Pakistan do not believe that taxes are a club they wish to join. Some 80% of MPs and the President pay nothing, so the will to collect tax is almost non-existent. Obviously, the Committee must deliberate further, and we will take more evidence from the Secretary of State next week and then produce a report. We are likely to say that Pakistan cannot go on expecting to receive unconditionally the bounty of the international community while not addressing the issue. That is simply not morally acceptable, economically sensible or fair. I can predict that we will come out with something fairly hard on that issue.
My point is that collection can be improved, and where that is done, it makes a difference. Where it is not being done, it needs to be done. Much more transparency is needed and information should be published on a country-by-country basis. I urge the Prime Minister, through my hon. Friend the Minister, whom I am delighted to see in her position and whose response I look forward to hearing, to look into the matter. What has happened in the UK in the past few months has possibly sharpened the focus of the Government. We will be chairing the G8 and, in that context, we are told that taxation will be a central issue. However, I suggest to the Government that while it is understandable that such an issue is driven by a degree of public anger against companies such as Amazon and Starbucks—Starbucks has been shamed into changing its stance on this—it should be recognised that if it is a problem for us, it is a much bigger problem for very poor countries, which might have a very limited amount of economic activity that is controlled and owned by overseas companies. I urge the Government to ensure that in the process of trying to raise the commitment to get an international agreement on tax, the interests of poor and developing countries are given special attention.
It has been recognised that, at a time of recession when Governments are clearly struggling with deficits, the knowledge that tax, which could or should accrue to a country’s Exchequer, is not doing so perhaps causes more anger than it would in normal times. Of course it is right that companies that are operating within our jurisdiction should pay their fair share of taxes. Perhaps it is because we are hurting that developing countries will benefit from a policy initiative that might not otherwise have taken off. We should try to get an international agreement that all countries will ensure a standard of accounting that makes all the relevant information clearly available in the public domain, so that revenue authorities can fairly assess where tax should accrue and where it is liable.
In Zambia, we were told that quite a lot of information is available, but it is not quite as easily available to the ordinary Zambian. It is very easily available to any sophisticated westerner with a credit card, but a person with no access to computers or to credit and who does not understand the system has a very small chance of finding such information even though it is available to them. We need to improve that and make information more accessible.
We hope the Government will take on board our recommendations and think about them a little more. We agree, I think, on the capacity to do more. We have suggested that the Government consider a more proactive partnership with our own Revenue and Customs. Where appropriate, of course it should be collecting our taxes, but, where we can, we should second people or support the Revenue to work alongside revenue authorities in developing countries to build up their capacity for tax. It is in the interests of donors, the people in the country, and the international community to ensure that that happens. We hope and understand that the Government are actively considering that matter, but it would be good to hear from the Minister what progress is being made.
The issue of tax has clearly caught the imagination of some of the NGOs, who are making 2013 a big year for tax justice. I am not here to be the mouthpiece of Christian Aid or the NGO consortium, but I am happy to record their views. As it happens, a number of our constituents were visited by the Christian Aid bus over the summer. It certainly rolled up in my constituency—I wonder why! I had a good meeting with both local activists and senior NGO members, who very much welcomed our report. Perhaps not surprisingly, they focused very sharply on the corporate issues that I have been discussing. However, I said that they should not just target the international economic players; it was really important that they also joined the campaign to ensure that rich elites in developing countries accept their responsibilities, because the interconnection between the two is inescapable.
Christian Aid has said that it wants to tackle the issue, that it wants the Government to tackle the issue and that it wants to shine a light on it. It highlights information that may or may not be true, but the figures that are given are huge. It says that as much as £13 trillion of potential taxes are locked up and “hidden in tax havens”. Whether that is true or not—£13 trillion is an awful lot of money, so even if the true figure is half or just a fraction of that, it is significant.
Again, I do not put too much credence on the figures per se, but Christian Aid also talks about a figure of $160 billion annually that developing countries are losing in tax, which is far, far more than the entire flow of overseas development assistance to those countries. I am not suggesting that to solve that problem we can cut the development budget, but clearly there is not much point in handing out development aid if we are not getting access to the resources that should be credited to the countries concerned, which are entitled to them.
To conclude on this report on tax, I will talk about two simple things—certainly one of them is simple and the other is not as difficult as it perhaps has appeared before—that the Government could and should do. Actually, the Government are doing the first thing, and I just want to hear that they are doing more of it. That is making raising the tax base one of the key components of our bilateral programmes, particularly where we are engaged in-country, and putting real resource alongside the Governments with whom, we are working, both to get those Governments to show the political will to raise taxes and to give them the capacity—through revenue collection—to secure the revenue. The second thing is to be prepared to take a lead, I guess, and for the UK to be more transparent and to demonstrate, by example, that we can be more open. Certainly, we must also encourage international agreement to get as much transparency as possible.
I mentioned the subject of minerals earlier when I discussed Zambia. There was one particular issue that was raised with us that the Government did not reply to directly in responding to our report, which is membership of the extractive industries transparency initiative. The EITI was actually a UK Government idea; effectively, it was Tony Blair’s idea. It is a good idea, and the initiative has been signed up to by many countries, including developing countries, but it has not been signed up to by the UK. We understand that the argument against our signing is that it was not considered that the UK was mineral-rich. Well, I represent a constituency in the north-east of Scotland and I think that we are quite mineral-rich still, actually. Mineral extraction may not be a huge proportion of our GDP, but in absolute terms minerals are not an insignificant resource for us. However, that is almost beside the point, Mr Gale—Sir Roger. I beg your pardon. It happens to me all the time, and it happens to you, too.
I ask the Government to seriously consider signing up to the initiative, because it would demonstrate that we are serious about the issue, too. If the argument against our signing is that we do not have a huge mineral base, then it should not be very difficult for us to comply. As I say, however, the Government kind of avoided answering that particular question on the EITI. I do not know whether my hon. Friend the Minister is in a capacity to commit the Government to do something; if she is not, I hope that she will report our Committee’s view that signing up would be a good step for the Government to take.
With that, Sir Roger, I must say that I am grateful to the House for letting us have this opportunity to debate the issue. I genuinely commend the report. I think that it is about a very important part of what our development relationship with countries should be. We have made good progress, but there is a lot more that we can do.
Sir Roger Gale (in the Chair)
Thank you very much, Sir Malcolm. I think it is one-all—I owe you an apology as well.
I also apologise to Members for the fact that I had not really grasped the implications of there being two debates this afternoon with no time separation between them. I now propose to deal with that issue, and to explain what I think we will try to achieve.
There is no time limit on this first debate, but obviously there is a limit on the totality of time available in Westminster Hall today; the sitting must end at 4.30 pm. So it really is up to hon. Members to decide how they wish to split that time. I propose to call Mr Burden, Mrs Latham, Mr Stunell and Mr Lefroy, and then the Opposition Front Bencher and the Minister. I will then allow, as I think is traditional, a couple of minutes at the end if the Chair of the Committee wishes to wrap up the first part of the debate. However, we will treat this as two separate debates.
I suggest at this stage that although we do not know how we will run for time, the Opposition Front Bencher and the Minister might consider taking about 10 minutes each, if that is adequate.
I hope that is clear.
Richard Burden (Birmingham, Northfield) (Lab)
Thank you for calling me to speak, Sir Roger. As always, it is a pleasure to serve under your chairmanship, and I will address another knight to say that it is a pleasure to follow the right hon. Member for Gordon (Sir Malcolm Bruce), who is the Chair of our Committee.
The report that we are debating now is, as all our reports have been so far, the product of a cross-party consensus. There is a huge amount of cross-party agreement on the Select Committee about the importance of, and the issues raised by, the subject of this report—tax in developing countries.
A few months ago, Birmingham was one of the cities and towns that were visited by the Christian Aid bus for tax justice, and I was pleased to join a number of local faith leaders, activists, local NGOs and others in welcoming it. It was good to see people from the constituency there as well. They were concerned that, as the Chair of our Committee has already mentioned, Christian Aid estimates that there could be up to $160 billion annually in taxes that developing countries arguably should be receiving but are not. Whether or not that figure is precisely right, the money involved is big. In short, it can mean the difference between children going to school or not, hospitals and clinics being built or not, and jobs and opportunities being created or not.
There are all sorts of reasons for those missing tax billions, and all sorts of issues raised by them. However, if we are going to tackle this issue, transparency is absolutely the key to doing so; the Committee was also united in that respect. If there are companies that are playing off financial rules and prices in one country against those in another, there is a problem if we do not know about that situation and we will not be able to tackle the issue. If we then “stir in” the use of tax havens, in which NGOs have estimated that up to $13 trillion is stored, we are talking about big, big money.
In relation to tax havens, some people say, and it has been put to our Committee, that they can be an efficient use of money, to ensure that money that is raised can then be used and moved around productively to create jobs and opportunities, and in some cases to boost services, in developing countries. That is okay, but when tax havens are a means of avoiding obligations it is a very different thing indeed.
In just a little while, I will say something about global rules and especially about the need for transparency. Before I do so, however, I will say a word or two about the context, which the Chair of our Committee has already referred to. It is really important that the development that takes place is sustainable.
I am fully behind the UK’s commitment—it is a cross-party commitment—to stick to the 0.7% target on aid; as I say, I am fully behind it. However, in the long term the future of development will become, and should become, less and less about aid, and more and more about ensuring that developing countries have the means and the ability to sustain economies of their own. That must mean that there are tax systems and tax laws that work. In addition, it certainly means that, as the Chair of our Committee said, the leadership of those countries themselves accept an obligation to pay tax—the evidence from Pakistan in that regard is very concerning—and it also means that they need assistance. The UK has been active, and I welcome the Government’s contribution to this, in giving assistance to develop tax systems and so on, providing the kind of capacity-building and technical assistance that can be so very important.
However, we cannot avoid the fact that it is important that those countries still receive the tax that should be morally due to them. That should be an important matter not only for people who are interested in development, such as everyone in Westminster Hall today, but also for some of the media commentators and critics of the 0.7% target. That is because, when it comes down to it, if people are aid-sceptics then it has to be even more important for them that they should be tax justice enthusiasts if the problems of this world are going to be addressed. The issue is important to developing countries, but as the Chair of our Committee said, it is also important for us domestically. Tax dodging by major companies not only depletes developing countries’ resources but has an impact here.
Our report, which is some months old now, was welcomed by the NGO community—by those interested in development. I do not think that I am letting any secret out of the bag, though, by saying that on hearing that the International Development Committee had produced a report, many people across the country probably did not rush to open it up and read it—it passed a lot of them by. The debate on tax justice and morality, however, has been transformed, as the Chair of our Committee mentioned, by the recent high-profile cases of Starbucks, Amazon and others. All credit to the Public Accounts Committee and its Chair, my right hon. Friend the Member for Barking (Margaret Hodge), for bringing the issue so firmly into the public focus and highlighting that this is the tip of a very large iceberg of creative accounting in the multinational corporate world, which is less than creative as far as the public good is concerned, in the UK and in the developing world.
None of us likes to pay tax, and approaches to taxation and tax policy divide parties, but there is now greater recognition than I ever remember that taxation holds society together, globally as well as in the UK, regardless of any differences between parties on tax-raising mechanisms—on what works and what does not. The consensus that a tax system that works has to be in place, and that the corporate great and good have an obligation under such a system that is equal to that of ordinary citizens, is greater than I can remember it being for a long time.
Against that background, I am a little disappointed that the Government did not go a bit further in accepting some of our recommendations. Given that the climate surrounding the matter has changed a lot since the report was published, I hope that over the coming months the Government will review some of their responses to the report, particularly when the Prime Minister himself has said that taxation should be a major focus of the forthcoming G8.
I have a few questions for the Minister, and I hope that she will be able to help us with them today. The first is about automatic information exchange. Our Committee recommended that it would be useful for the UK to adopt something like the system in the United States, where there is the Foreign Account Tax Compliance Act. The Government have said no to that so far, stating that it would not work. That is a point of view, but I have difficulty marrying it with the Government’s now saying that something like that would be a good idea in relation to Crown dependencies and overseas territories. If that sort of thing can be done with them—and I would welcome that—why is it so difficult to do it more widely?
Regarding what works, the Committee recommended country-by-country reporting. This is not rocket science. It is multinational companies reporting, on a country-by-country basis, the names of all the companies belonging to them in each country, along with their financial performance and tax liability, the costs and net book value of their fixed assets and the details of their gross and net assets in each country. That is a really important starting point for getting transparency that works. The Government say that they do not consider that possible either, but I do not follow their logic. They seem to be saying that, at European Union level, they support the mandatory reporting of most of those kinds of things in relation to the extractive industries and forestry, and I agree with that, but why, therefore, can they not go that little bit further and do what our Committee recommended? I just do not understand the Government’s logic here. Can the Minister explain it? Unless we have that kind of information flowing through on a country-by-country basis, how in practical terms will we ever know what is going on with transfer pricing?
My third question is about something that the Chair of the Committee mentioned. The extractive industries transparency initiative is a good thing, as is the fact that the Government welcome the strategy review that is taking place, but would we not have a bit more credibility if we said that we were prepared to join the initiative ourselves, particularly as it was our idea in the first place?
My fourth question is about co-ordination in Government. Taxation is, rightly, normally the province of the Treasury, but we know from the fact that this debate is happening—that we have produced our report and the Government’s response has come in—that it is also something in which the Department for International Development has a big role. However, it is not always clear to me, and to many others, how far different Departments are in step with each other and how much co-ordination and discussion goes on. Will the Minister comment on the extent and, without breaching any confidences, the nature of any discussions that have taken place between DFID and the Treasury about the draft Finance Bill? As far as DFID policy is concerned, has there been any response to the requests—from a lot of places now, in the UK and elsewhere—for provisions to be included in our domestic tax legislation that would assist developing countries to collect taxes?
My fifth question, which is also on Government co-ordination, is: how far, across government, is there engagement with the wider community? Draft Finance Bills and tax systems and so on can seem dry, but the public interest is now greater than ever. Is the Minister prepared to consider or, even better, to commit to some kind of cross-Whitehall consultation with civil society and outside tax experts on proposals for the G8 in relation to tax?
My final question is about clarity. The Committee, along with a number of people outside, have been saying that there needs to be a Minister with responsibility for tax and development in a clearer way than has existed so far. The Government have been fairly silent on whether our recommendations on that matter are a good idea or not such a good idea, so I ask the Minister, would that be a good idea? If the answer is no, what is the alternative, if we are to provide greater clarity across Government on tax and development?
I place on record my thanks to my colleagues and everyone else involved with the Committee for their work. The report has been warmly received outside this place. We were a bit ahead of the game in highlighting the issue’s importance. Some of what we said in the report has been borne out by events since publication, so I hope the Government will go a little further by responding more positively to some of the specific recommendations than they did in their original response.
Pauline Latham (Mid Derbyshire) (Con)
It is a pleasure to serve under your chairmanship again, Sir Roger.
I am pleased to speak in this debate on the report on tax in developing countries published by the Select Committee on International Development. It is difficult for us to lecture other countries when we do not have our own house in order. I am pleased that the Chancellor is considering how he might tax companies that are not paying their fair share of tax here because, like developing countries, we need tax to address our deficit if we are to continue—and we will continue—to fund international development and many other things. I will be pleased when the Chancellor of the Exchequer returns to tell the House of Commons exactly how he will do that, because it is important. I completely support my two colleagues who spoke before me, my right hon. Friend the Member for Gordon (Sir Malcolm Bruce) and the hon. Member for Birmingham, Northfield (Richard Burden).
I will focus on the part of the report on the role of the extractive industries transparency initiative, which was mentioned by both my colleagues. I am particularly interested in that topic, on which I have tabled written parliamentary questions, and next month I will be visiting a coal mine in South Africa with the Industry and Parliament Trust. I was going to go to a diamond mine, but I have been downgraded, although there will be no problem with free gifts at the end of the visit.
I currently chair the extractive industries transparency initiative group, which is currently an informal body, but I am hoping for it to become an all-party group very shortly as I have just found a final member. At a meeting of the group before Christmas, our guest speaker was the chair of the EITI, the former Secretary of State for International Development, the right hon. Clare Short, who provided a valuable insight into the EITI’s worthwhile work.
The establishment of the EITI was a massive step forward, and I pay tribute to the previous Labour Government for taking the lead in founding the initiative. The underlying principle of the EITI is that Governments disclose the amounts they receive from corporations in the extractive sectors, including payments of taxes, signature bonuses and royalties, and corporations operating in participating countries make a corresponding disclosure of the payments they make to the respective Governments. An EITI report for the relevant country is then published, reconciling the amounts paid by corporations with the amounts received by the Government. Any discrepancy between the two amounts may indicate that revenues are falling into the hands of corrupt officials, which is not unusual in many of the countries we talk about in the international development sector. The methods used are an extremely effective way of identifying possible corruption, and ensuring that the two figures correspond is one way in which people in participating countries are able to call their Governments to account.
There are two stages of EITI accreditation: EITI candidate status and EITI-compliant status. There are 14 countries with compliant status, although one of those, Yemen, is currently suspended, and 21 countries with candidate status.
The EITI has a robust yet flexible methodology—the EITI standard—that ensures a global standard is maintained throughout the implementing countries. The EITI board and international secretariat are the guardians of that methodology. Implementation, however, is the responsibility of individual countries. The EITI standard, in a nutshell, is a globally developed standard that promotes revenue transparency at local level. The EITI rules establish the methodology that countries must follow to become fully compliant with the EITI.
As much as I am a big supporter of the EITI, however, I believe that more than a decade since its establishment—and a productive first decade it has been—the EITI needs to go further in its transparency work. As the report advocates in its recommendations, the time has come for the EITI to publish contracts between mining companies and Governments. The “Publish What You Pay” campaign suggests that such publication would help to expose any contracts that are patently disadvantageous to the country concerned. We only have to look at many countries in Africa to realise that they are mineral-rich, but money is not going back into those countries for Governments to invest for the benefit of their people, not just the higher echelons in society. It is important that such publication goes ahead.
Sir Malcolm Bruce
My hon. Friend is making a valuable contribution with her important speech, but does she acknowledge that, prior to the emergence of the EITI, we had situations, such as in Angola, where BP, to its credit, wanted to publish information on the taxes it paid and was basically told by the corrupt Minister who was pocketing those taxes that if BP did so, it would be thrown out of the country and not be allowed to continue its activities? The EITI has done an awful lot to prevent such things, thereby exposing those countries and Governments who will not sign up.
Pauline Latham
My right hon. Friend makes an important point. Some companies do want to do the right thing by publishing information so that people in those countries know how much money is going to the Government that could be invested in health, education, women’s rights and the whole gamut of things that we try to promote through our international development money. It is important that EITI goes further.
The thing that disappoints me, and has obviously disappointed my right hon. Friend and the hon. Member for Birmingham, Northfield, is that although we were the founders of the EITI, we are not a member. The report states:
“If the Government genuinely hopes to encourage more developing countries to sign up for EITI, it must be willing to lead by example.”
As with the tax we are not collecting, we must sign up to the initiative.
Recommendation 11 suggests that the UK should become a member and that the EITI should request the publication of contracts. The Department for International Development has responded by saying it “partially agrees,” and I am therefore partially pleased, but I urge the Government to re-examine their position on that recommendation. Rather like the tax that the Chancellor has not been collecting from companies in this country, we must lead by example by getting our own house in order before we tell anyone else how to run their country—not that we should be telling other people how to run their country. We should assist countries by giving them best practice, which is an important point for Britain to lead in the world.
I hope the report will make a real difference to the economies of developing countries, because it is one of the most important reports since I became a member of the Committee.
Andrew Stunell (Hazel Grove) (LD)
I am delighted to take part in this debate. I have been away from the real world for the past two and a half years, but I have now returned, which gives me an opportunity to join in with some of these things that have wider significance.
Before the last general election, I spent an interesting and helpful year on the Select Committee on International Development. I remember a number of reports from that time, but two seem relevant to the report before us. One was “Aid Under Pressure”, which considered the pressures of the worldwide downturn and climate change. That report stated that development needs in the third world are as pressing now as they ever have been and that significant problems must be confronted. The second relevant report was on urbanisation, which documented the fact that we are now at the tipping point where half the world’s population lives in urban areas. We live not in an agricultural world, but an urban one. In many cases, there are far more small-scale enterprises with productive outputs, with the possibility of their raising revenue for public services. The challenges of doing that are immense, because so many of those enterprises are informal and the land that they are on is often held informally. I remember visiting Nigeria and looking at a DFID project to facilitate the registration of land rights. Property cannot be taxed if the owner is not known. A business cannot be made to pay tax on anything if its existence is not known. The report is a logical follow-through on that, considering the next steps that need to happen.
In so far as establishing my credentials goes, I should say that I, too, met the Christian Aid bus when it came to my constituency. Perhaps hon. Members present who did not meet the bus should draw that to our attention!
Successive UK Governments should take pride in the achievements of the UK in supporting and promoting international development and in the aid targets we have set ourselves and are now, under this Government, achieving. But as the hon. Member for Birmingham, Northfield (Richard Burden) said eloquently, not all our constituents think we are on the right track. They are critical of many aspects of our aid programme. It is therefore important not only that we assert the reasons for having an international development programme, but that we require countries that we are helping to have systems of governance, public administration and taxation that are robust enough to support development in their own right, as far as they can. This document’s recommendations seem to point in the right direction. I will make some points about that in a moment.
All this has to be underpinned by a much wider understanding inside the UK about why it is important to support international development. There is a moral case—many people, perhaps including those on the Christian Aid bus, would put that well at the front as the best reason—but we must recognise that for many of our constituents the moral case is ambiguous at best and, at a time when our economy and public services are under pressure, it is not self-evident in every respect.
We need to make the utilitarian argument as well. If we want less worldwide conflict and migration and we want growth in UK trade and more exports and jobs, we need a peaceful, well-developed world. It is in the UK’s interests to support that and to encourage it to happen.
Of course, those who would criticise the international aid programme would always centre on the criticism that says that it is all wasted and that corruption and, as this report documents, evasion mean that the people there are not doing all they can to help themselves. I go strongly on the moral case, but I always think it is important to say to my constituents that there is an essential utilitarian case for aid as well.
This document goes some way to showing that you can have your cake and eat it. Part of the aid and development programme is about helping countries stand on their own feet and showing how our aid and development programme, and the UK’s policies, can contribute to that desirable aim of having free-standing, self-supporting third world countries that can prosper without the need for subventions from this country or others.
The report contains 16 recommendations. The Government have accepted seven, partially accepted six and disagreed—they do not say “rejected”, which would be too abrupt—with three. Seven yeses, six maybes and three noes. Not all of the 16 recommendations are of equal significance or importance in terms of getting us in the right direction. I am delighted that the Government have accepted seven. Having looked at the recommendations and the Government’s responses, there is nothing that I need to comment on. However, I am sorry about the other nine recommendations and I want to spend a little bit of time picking out one or two of those.
On the partial agreement on getting sound, transparent tax regimes, recommendation 4 states that the Treasury should be pressing Crown dependencies to meet those standards. Clearly, what is good enough for the United Kingdom ought to be good enough for our Crown dependencies as well. The Government’s somewhat wishy-washy response about whether they thought it was a good thing, an achievable thing or anything to do with them was a little bit disappointing. I hope that my hon. Friend the Minister, whom I also welcome to her role, will be a little bit more robust than the Government have been in their formal response and will say that this transparency question is important.
The Government say that they do not want to go any further than the global forum concept, but that does not seem sufficient. They have described it as not being the most fruitful way forward. I encourage my hon. Friend the Minister to tell us what is the most fruitful way forward and how the British Government intend to adopt that, instead of the Committee’s recommendation. Obviously, if the recommendation is being rejected because the Government want to go further, I am with them on that. But it is a good idea for them to spell that out to us more solidly.
The Government disagree with recommendation 6, relating to the UK getting something comparable to the US Foreign Account Tax Compliance Act, saying that they are
“fully committed to tackling tax evasion and”
see
“transparency and information exchange as key tools but”
do not think that this is an appropriate means to achieve it. There is some wording that I am almost certain the Minister did not put in—it sounds as though Treasury civil servants added it—saying that that Act
“has created significant difficulties for the US”.
Perhaps the Minister could spell out what those significant difficulties are. The US does not seem to think that it has significant difficulties. It is fine to turn down the best machine tool we have because we think that the blade is a bit blunt, but if the people using the tool find that it is working perfectly well, we should have an independent assessment of that or a reassessment by the Government.
The Government response says:
“The aim of this overall approach is to develop a comprehensive network of tax information exchange agreements which will enable the UK”—
Government—
“and others to gain access”.
It seems as though they are offering to do everything that does not do anything, and not getting down to the nitty-gritty of what will make a difference. The Committee came up with a valuable, practical and operational way of doing it, which the United States Government are putting in place. It is for this Government to say more distinctly what they intend to do instead, not simply that they do not think that that is appropriate to UK circumstances.
Recommendation 10 is about ministerial responsibility. My hon. Friend the Minister and I, until fairly recently, had some shared experience of ministerial responsibility. I tempt her to agree that the time has come to set up yet another of those inter-ministerial groups, which draws together people from different Departments to consider in the round and with professional support exactly how the Government can do things. Unless I am very much mistaken, my hon. Friend has a piece of paper in front of her stating that the Government are always joined up, they always work together and nothing ever drops the gaps. I entirely support her interpretation of events, but a minor reinforcement of the process by the setting up of an inter-ministerial group could be a further helpful step in the right direction.
Recommendation 13 relates to CDC, which has had what might be called a chequered media profile, and I remember some discussions from when I was on the International Development Committee, as well as the media comment. It is disappointing that the Government have not sought to turn CDC into a much more outward-looking and ethical institution. It ought to be a transparency exemplar when promoting commercial aid and development projects in different countries. There ought to be no question of stuff not being automatically available. Indeed, the Government response is in partial agreement:
“CDC is committed to obtaining further improvements in tax transparency and disclosure, but this will take time.”
Basically, implementation of the Committee’s recommendation would result in CDC overall doing less, not more investment in poorer countries. Paradoxically, however, the response goes on to state that the CDC will continue
“to ensure…fair and full payment of taxes by its investee companies to the countries in which they are based.”
That is fine, but the problem that the Government seem to be claiming is inhibiting their adoption of the Committee recommendation is that they do not want to put the companies at a commercial disadvantage by making them more transparent in their tax affairs, yet they go on to say that they will ensure that those taxes are paid.
For a company that is supported or invested in by CDC and that is performing in such a country, to pay all its taxes as it should would put it at a commercial disadvantage to every other company in that country, which would not be paying its taxes. The disadvantage is in whether it has paid the tax and not in whether it tells people that the tax is paid. The Government have somewhat confused themselves, and I would like them to convert their partial agreement into full agreement with recommendation 13. We have a particular piece of kit—CDC—that is in British Government hands and ownership, so it should be used as the absolute paradigm of good behaviour and best practice in promoting investment.
I hope that gives a flavour of how I believe the Government should respond, but I also want to make a point to do with the lobbying—the presentation—by my good friends in Christian Aid and the consortium; it relates to the £160 billion. No one, and I am sure that the Government do not make this mistake, should imagine that the £160 billion is floating around, waiting to be used for development in third-world countries. If the money comes from somewhere, it will presumably come from the profits of the companies—some would say no bad thing—but if it comes from those profits, the companies would be less profitable, which itself has implications. I am afraid, although it is not necessarily a zero-sum game, it is certainly not a £160-billion-sum game, and we need to be realistic about that. [Interruption.] With the embarrassing noises going on in the background, I draw my remarks to a close.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I congratulate the Chair of the International Development Committee, the right hon. Member for Gordon (Sir Malcolm Bruce), on opening the debate. I commend the work of the Committee members on this important report and its insights into and contribution to the subject of tax in developing countries. The Opposition very much welcome the nature of the report and its hard-hitting recommendations. Alongside the recommendations already adopted by the Government, we hope that the Minister and her colleagues will look hard and closely at the others discussed by hon. Members, including my hon. Friend the Member for Birmingham, Northfield (Richard Burden), which have the potential to make a significant contribution if furthered by the UK Government.
Government Members and my hon. Friend have highlighted in the debate and through their work in the Committee and elsewhere that tax and public finance are the backbone of governance, state-building and effectiveness in any society. They are a vital component of public accountability and democracy. If the international community can do one thing to transform positively the politics and governance of developing countries, enabling them to become self-sufficient, it is to support efforts to collect the correct tax revenue and to ensure that it is spent properly, free from corruption.
The right hon. Member for Gordon mentioned a number of examples of progress being made thanks to investment over a number of years by DFID and others. Countries such as Rwanda and Tanzania, among others, give us signs of hope about how much progress can be made if we make the right investments and help with capacity building, supporting those countries to make the transformative changes to build their states and systems so as to be able to generate the kind of revenues to which they are entitled but which are currently being lost. As made clear by the Committee, we can therefore genuinely look forward to the opportunity for developing countries to be much less dependent on aid, which is surely in the best interests of the countries concerned, as well as of those countries contributing to the aid budget. It would not mean that developing countries will not need our support, but it would mean that they become more independent and self-sufficient, which is exactly what people in those countries want. Our duty is to ensure that we make the contribution and the changes, and to show the leadership required to enable that to happen.
A legitimate and accountable system for tax revenue is therefore critical to alleviating poverty, which my hon. Friend the Member for Birmingham, Northfield highlighted eloquently in his speech. He also spoke highly of the contributions of campaigning organisations such as Christian Aid, and I want to mention the campaign efforts of ActionAid, which has done a great deal of work with political parties across the board and with the Committee.
The report points out that in excess of $13 trillion may be hidden in tax havens and that the estimated cost to developing countries per annum is likely to be around £160 billion, a figure far exceeding the global aid budget. Imagine what could be achieved if that money was available to deal with global poverty.
I want to focus on a number of themes, some of which have already been discussed. I shall pick out three key recommendations of the Committee. I want to discuss controlled foreign companies and the Government’s response to the Committee’s recommendation of UK candidateship of the extractive industries transparency initiative. Hon. Members have raised both issues, but I have a few questions. The third area is the Government’s response to the Committee’s recommendation on the Commonwealth Development Corporation.
The report addresses the Government’s relaxation of their anti-tax-haven law—the controlled foreign companies rules. As my hon. Friend said, the Prime Minister demanded bold steps from his fellow G8 leaders when the UK took over its presidency. He pledged that the UK chairmanship would, among other things, focus on tackling tax dodging. However, the current reforms to CFC rules do not meet the Government’s rhetoric. Although we appreciate the need to reform those rules to provide certainty and an attractive climate for businesses based in the UK, there are, as the report and hon. Members here today pointed out, real concerns among Members of Parliament and organisations that campaign on the issue that that will lead to a setback and damage the prospect of developing countries being able to raise the sort of revenue that they have raised in the past.
Action Aid said of the changes that
“a significant deterrent that discourages UK-based companies from shifting profits from developing countries to tax havens”
will be lost and estimates that reforms may cost developing countries as much as £4 billion. If that is true, as many have indicated is likely, it is a scandal that the Government will preside over the change, and shameful that they will not consider the matter and take on board the Committee’s recommendation to carry out the impact assessment. That recommendation was also made by my party during discussion of the 2012 Finance Bill when an amendment was tabled to ask the Government to reconsider.
Will the Minister work with her colleagues in the Treasury and consider the matter again? As hon. Members have said today, the climate is right, and the opportunity exists—the British public are becoming increasingly aware of the dangers and immorality of tax avoidance as well as tax evasion—for the Minister to work with her colleagues to ensure that the change does not damage prospects for people in developing countries and that the loss of revenue does not happen. The sum is £4 billion, although the Government dispute that, but even if it is less it is a significant sum, which could make a difference to some of the poorest people in some of the poorest countries in the world.
The hon. Member for Mid Derbyshire (Pauline Latham) raised the important issue of the EITI, and I want to reiterate her point. Given the leadership role taken by the former Labour Secretary of State, Clare Short, and others—the British Government are recognised as having achieved this important development—it is right and it is time that the Government signed up to the EITI. We would show not only that we were the initiator, but that successive Governments have led by example, and this seems to be an opportune time to do so. Will the Minister work with her colleagues to reconsider the recommendation, and move from disagreeing to agreeing?
The right hon. Member for Hazel Grove (Andrew Stunell) referred to a key recommendation on CDCs, and it is clear that there are inconsistencies in what the Government are saying. Surely it is more appropriate and sensible to put serious weight behind transparency, and this is an important way in which to do so. Will the Minister say whether the Government will reconsider? The issue is tied in with country-by-country reporting by multinationals, not only in the extractive industries, but multinationals generally. Many are increasingly under public scrutiny for some of their actions, which people believe are unethical, and are attempting to improve their behaviour. The Government should show leadership, and one way of doing so is to increase country-by-country reporting and transparency. I hope that the Minister will look at the matter again, consider the views represented in the Chamber and expressed by the Select Committee, and rethink the Government’s position.
To reiterate a point that others have made, this issue is critical, but some people will say that it is not the most—
Rushanara Ali
The Minister used the word, and I will not repeat it. The issue is significant. If we get it right, tax and revenue raising for development will be a major contribution. It is not a magic bullet, but if there were something close to one, this is it. The Select Committee’s contribution in pulling the evidence together and highlighting the scope for action comes at an important moment. The public are leading the debate through their campaigning in the domestic arena, and people are increasingly recognising the immorality of tax evasion and avoidance, and this is an opportunity for the Minister and her Government to consider how to close those tax loopholes and to ensure that countries receive the revenue that is generated but that they are losing. The Government must provide the necessary support to make that happen. I hope that she will take on board the questions and issues that have been raised today.
The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)
It is a pleasure to serve under your chairmanship this afternoon, Sir Roger. I thank and congratulate my right hon. Friend the Member for Gordon (Sir Malcolm Bruce) on securing this important debate. I also thank him and the International Development Committee for providing a wide-ranging and thought-provoking report. Finally, I thank all those who provided evidence to the inquiry, which included representatives of business, leading academics and non-governmental organisations. Many points have been raised, and I will address as many as possible in the time left to me, but I want so make some general comments.
I agree with the Committee on the significant role that effective tax systems play in helping developing countries to increase their national prosperity and reducing aid dependency, so I welcome the broader parliamentary debate on the issue. Taxation is at the heart of what the Prime Minister described as the golden thread of development. As has been said, helping developing countries to mobilise domestic resources offers the only sustainable alternative to aid for the funding of public services. At the same time, taxation is an important part of governance and state building. It builds the relationship between citizens and the Government, making states more effective. Fair and transparent tax collection promotes social cohesion, shapes Government legitimacy, promotes accountability of Governments to tax-paying citizens, and stimulates effective state administration and good public financial management.
Taxation is a very important part of economic policy, for growth, trade, investment and private sector development, as well as for meeting environmental challenges. The coalition Government are committed to supporting developing countries to access sustainable sources of revenue and to collect the tax that they are due.
My right hon. Friend the Member for Hazel Grove (Andrew Stunell) asked if not this, what is the most fruitful way? That could be applied to many issues raised today. Apart from international negotiations and conferences, the most fruitful way this country can work with and help Governments across the developing world on this issue is through our world-respected and professional technical assistance on tax. We are lucky in this country, because we have Her Majesty’s Treasury to tell us how to do things. The rest of the world is not so fortunate and that expertise—[Interruption.] Why are people murmuring laughter at our being so fortunate? It is one of our principal talents and skills, and we can offer the world that expertise and really make a difference. I will come on to Zambia in a minute, because as my right hon. Friend the Member for Gordon said, there has been a huge achievement in terms of tax revenue collection, but there are also some holes in the system.
The IDC’s report acknowledged the value of support that the UK provides to revenue authorities. DFID’s work with partner countries on tax includes 48 tax programmes across 20 countries, totalling around £20 million a year. Our support is focused on where we can make the most difference and get the best results for our developing country partners. As several hon. Members have mentioned, we also need to deliver the best value for money for UK taxpayers. Most of DFID’s work on tax is at a country level. Projects are managed by staff who live and work in the country, which means that projects can be responsive and demand-led. Tax projects may focus specifically on strengthening revenue collection or on broader objectives, such as public financial management reform or public sector reform.
In Afghanistan, which my right hon. Friend touched on, from 2007 to 2012 we helped increase tax revenues from 4% of GDP to 11.6%, helping the Afghan Government to finance the delivery of basic services. Last month, the Secretary of State for International Development was in Afghanistan, extending that support to the Afghanistan Revenue Department until 2016 with the aim of increasing revenue collection to 15%. In Ethiopia, HMRC’s support to the Ethiopian Revenues and Customs Authority, together with other support, helped to reduce average customs clearance times: for example, low-risk imports went from seven days to 10 minutes, and exports from eight hours to 15 minutes. Those are huge barriers to have removed. In Rwanda, the UK helped to provide the laws and regulation under which the Rwanda Revenue Authority was established, and the office building and management systems. The authority reached a point at which it was collecting the full £24 million of DFID’s 10-year support programme every three weeks, and its effectiveness has been an important factor in Rwanda’s impressive record on development performance.
Building capacity of revenue authorities is important and, as other hon. Members have said, so is ensuring revenues are spent effectively. We do that in a number of ways. We recognise the importance and value of transparency in tackling tax evasion. The global issues referred to in the report have been getting more attention, and are rising up the agenda. Although not good, it has been helpful to see those corporate moves that meant that the large companies referred to in this debate paid so little in this country over a number of years. That has made the issue of how corporations use tax systems in different countries to move around their profits more understandable to the wider public, and that is a great motivator. The Prime Minister has put tax evasion and avoidance right at the top of the agenda for the G8 and is focusing on fixing the issue here, too.
I want to address some specific issues that have been raised. A number of hon. Members raised the issue of the EITI. In terms of our membership, the UK is a real supporter of the EITI, and first thought of it, but we did not implement it in the past because the IMF did not consider us resource rich. Greater transparency in the extractive sector will be an important focus of the UK’s G8 presidency in 2013. As others have said, the UK can hardly call on other countries to implement the EITI or live up to high standards if we are not prepared to do so ourselves. That is why the Prime Minister called for an urgent review of the UK’s position on EITI. We expect that review to be concluded by the end of January. We provide support to the EITI International Secretariat and the EITI multi-donor trust fund, which provides technical assistance to implementing countries and represents the UK on the EITI board. Our bilateral programmes support EITI candidacy and/or implementation: for example, in the Democratic Republic of the Congo, Nigeria, Afghanistan and Burma.
[Mr Charles Walker in the Chair]
At the moment, a decision has not been taken on the publication process of the EITI review, but the broadening of the scope was also raised. The Government welcome the review of the EITI that is under way to develop a broader standard for consideration by the EITI board, with a view to possible introduction in 2014. The UK is an active participant in the strategy review, which is a multi-stakeholder process, considering a wide range of proposals that could be included in a revised standard. As was raised by my hon. Friend the Member for Mid Derbyshire (Pauline Latham), the proposals include disclosure of contracts, more disaggregated reporting of data and background on the sector, among other things.
A number of hon. Members raised FATCA, or the US Foreign Account Tax Compliance Act. The Government are fully committed to tackling tax evasion. As we stated in the Government response to the Committee, we do not regard the unilateral introduction of a version of the US FATCA in all its glory—so to speak—in the UK as the means to achieve automatic information exchange, because FATCA is unilateral and extraterritorial in its approach. For example, it imposes severe withholding taxes on those that do not comply. While I cannot elaborate at this point on the significant difficulties that have been created for the US as well as the companies affected by its implementation, I am happy to undertake to write to my right hon. Friend the Member for Hazel Grove on that issue.
That said, as hon. Members may be aware, the Government have signed an agreement with the United States of America. It is the first of its kind and it will significantly increase the amount of information automatically exchanged between both countries. As announced at the autumn statement, the Government see that as testing a new international standard in tax transparency. Obviously, when we see how that goes, the Government will look to conclude similar agreements with other jurisdictions. The UK and the Isle of Man have jointly announced our intentions to conclude an enhanced automatic tax information exchange agreement, based on the UK-US FATCA agreement. We are also in similar discussions with the other Crown dependencies and the overseas territories. The Government commend the great leadership of the Isle of Man in this area. The G20, of course, is committed to strengthening tax transparency and the exchange of information.
Richard Burden
I am grateful to the Minister for giving way. If I understand her correctly—I hope she will tell me if I have got this wrong—in terms of the outline agreements that are being reached with the United States and the work that is being done in relation to overseas territories, are the Government saying that they see those as a kind of pilot scheme for a more extensive automatic transfer of information? If so, that sounds like a good thing. If not, there is still a gap. What about the wider application of automatic transfer of information?
Lynne Featherstone
I thank the hon. Gentleman for his intervention. I cannot give him the comfort that he seeks that it is the Government’s intention, if what he refers to works, to extend it right across the world, but we are extending it and looking at it. If it provides a good model, we will obviously look at it again to see what application it might have in which jurisdictions.
My right hon. Friend the Member for Gordon raised the issue of Pakistan. I believe that hon. Members may have taken representations or evidence this morning. I understand that that is a real issue, because Pakistan has one of the lowest rates of tax collection, averaging only 10% of GDP in recent years. An improved tax regime is the key priority for DFID in Pakistan. The importance of improving Pakistan’s tax-to-GDP ratio is raised regularly in our engagement with senior Government representatives there, as it is by the IMF and other donors. We raise it; the issue is trying to get an effect and a change in the circumstances there. DFID is involved in strategic dialogue about the World Bank’s support on revenue at federal level and also contributes analytical work—for example, on the political economy of tax reform. We are supporting wider public financial management reform in some provinces. That includes the strengthening of revenue policy. This is a major issue, on which we are putting a lot of emphasis.
There was frustration about the willingness of elites to pay tax in developing countries. It is true: the elites are very reluctant to pay. How can we expect everyone else to be paying tax in a country if the elites are not setting an example? As an example, I refer to what DFID has done in Burundi. As ever, I hear what my right hon. Friend says about the Select Committee’s view on Burundi. He has made that case both publicly and privately on many occasions. However, there is the recent example of DFID supporting the Office Burundais des Recettes. A public outcry has led to MPs and Ministers paying tax for the first time. It is something if one can raise the issue to the point at which there is a public voice about the accountability of the Government in terms of setting the prime example. My right hon. Friend made the point that if Prime Ministers and MPs do not pay their taxes, it is pretty hard to say to the rest of the country and to the elites, “You should be paying tax.”
I do not want to go on for too long. The Chair has changed—it is a great pleasure to speak under your chairmanship, Mr Walker—and my right hon. Friend the Member for Gordon must introduce the second debate. However, I want to address a couple of things. One issue that was raised quite often was the Starbucks effect and what we are doing in this country about that. The Government are taking significant steps to ensure that everyone, including multinational companies, pays their fair share of tax. The response is twofold. There is support for international action. Alongside France and Germany, we are providing additional resources to the OECD to speed up the international efforts on dealing with profit shifting by multinationals and erosion of the corporate tax base at global level. The OECD will deliver a progress report to the G20 in February 2013 on actions to tackle base erosion and profit shifting.
There is also further investment in HMRC. HMRC will expand its risk assessment capability across the large business sector and increase its specialist transfer pricing resources to speed up its work to identify and challenge multinationals’ transfer pricing arrangements. The Government relentlessly challenge those that persist in avoiding tax and have recovered £29 billion of additional revenues from large businesses in the last six years, including £4.1 billion in the last four years from transfer inquiries alone.
A number of hon. Members raised the issues brought up by Christian Aid and ActionAid in relation to the costs of evasion and avoidance. As has been discussed, the estimates are numerically disputed, but the bigger point is that, despite suggestions that the estimates of tax evasion and avoidance have been agreed by the OECD, the figures have not been endorsed by any of the OECD’s committees. The key point is that evasion and avoidance are undoubtedly significant challenges for developing countries and that the Government are committed to providing support, but as I have said, tax capacity building and technical assistance are the primary issues.
I want to deal with the country-to-country reporting model or rather the broader one, not the one that is being considered for the EU directive, which is for the smaller view. The big ask is the model whereby all multinationals disclose information that goes beyond payments to Governments. This model has been discussed in the OECD task force on tax and development without any consensus being reached on its merits. The Government believe that the case has not been made for the effectiveness of this model in achieving its objectives while minimising costs to business. It is not being called for by developing countries, but the Government do agree that many developing countries do need to improve their ability to assess transfer pricing risk and detect abusive profit shifting and that other options, such as the transfer pricing transaction schedule described in recommendation 7, could offer more proportionate and effective help.
A number of hon. Members raised the issue of a DFID Minister for tax. I have to say, as my right hon. Friend the Member for Hazel Grove rightly predicted I would, that the development impact of UK tax and fiscal policy is a collective responsibility for all members of Government. DFID, the Treasury and HMRC all work together. [Laughter.] Did my right hon. Friend read my brief? However, the UK is committed to helping developing countries to build robust, fair and sustainable domestic taxation systems and, having listened to what was said, I propose to consider the proposal that was made for an inter-ministerial group. I will take that away with me. I am not promising anything, but I want to look at how that is referenced. There are many discussions across Government. Her Majesty’s Treasury is everywhere across Government, as I am sure hon. Members in this room are well aware, but if what was proposed would be a productive way forward, I am certainly prepared to look at it in the future.
The last issue that I will address, because I have gone over my time slightly, is the request by the International Development Committee on scaling up. The report acknowledges the value of technical assistance provided by DFID and HMRC to national revenue authorities in developing countries and recommends that work in this area is scaled up. I agree completely. I have been in post for four months now and have been looking at this issue. Tax is high on the agenda. It is high on the agenda for the G8. It seems to me that the most successful and most useful thing that we have done as a Government in terms of enabling developing countries to operate is to enable them to be the masters of their tax collection and their tax systems.
I was in Zambia, too, and Zambia did fail some of the tests set by the IDC in terms of the provision of information. We are looking at that. But in Zambia, I did meet representatives of the audit committee, the public accounts committee and the Office of Public Prosecutions. All of them are taking on this agenda in a way that I have not seen in many places. There really is a desire for them to collect the revenue and for us to help them—enable them—to do that and do it well.
I am sorry that I have not addressed all the points that were made. There is unanimity across this room and, indeed, everywhere that it is important to deal with tax avoidance and tax evasion not just because that would enable countries to fund their own public services and to begin to achieve separation in terms of aid dependency, but because there is moral rectitude in paying one’s fair share. In this country, as others have said, we stand proudly on our commitment to 0.7% of GDP in a political environment that is challenging; there have been attacks on us for that. We have to show that every penny counts and every taxpayer pound is spent wisely. One of the ways in which we do that best is by helping to ensure that tax revenues can be collected across the world. Those who travel across the world and talk to the Governments of the world and civil society across the world will know that the position is variable across the world. We are making progress, but there is still progress to be made.
I thank all Members for their contributions. I thank the Committee again for drawing attention to this subject and for recognising the valuable work the UK is doing. The IDC has made a valuable contribution to the new shape of our programme for tax.
Mr Charles Walker (in the Chair)
Order. May I ask Sir Malcolm Bruce to respond briefly to this debate and then to move seamlessly into his opening remarks for the next debate?
Sir Malcolm Bruce
I will speak just for the time it takes the Minister of State to assume his place.
I thank the Minister for her response. There are clearly differences between the Committee’s recommendations and the Government’s view. Even if the Government are not willing to accept our specific recommendations, may I say in a constructive spirit that I hope they will strenuously undertake to do everything they can to encourage greater transparency nationally and internationally, using whatever mechanisms they think will work? We would certainly expect them to pursue that issue, because the domestic and international agendas have coincided.
The Minister’s example of the work the Revenue has done shows how difficult transfer pricing is for a country such as the UK, but it is 10 times more difficult for small developing countries with virtually no capacity, which is why they need support. I am therefore grateful to her for saying that the scaling-up of this activity is being actively considered. We on the Committee always say that what we are really interested in is what works, and this activity works, so we need more of it.
Afghanistan
(11 years, 10 months ago)
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Sir Malcolm Bruce (Gordon) (LD)
The indulgence of the House has allowed the Committee to bring two reports for debate, and we are grateful for that. Indeed, under the new procedure we had the advantage of briefly presenting the report on Afghanistan in the main Chamber, which enabled us to have a good, topical exchange. Therefore, I do not wish to detain the Committee by repeating too much of what was said; instead, I want to focus on points of difference and points of commonality between the Committee and the Government.
Obviously, the most contentious thing we said in our report was that the Department for International Development’s unique mandate in Afghanistan of promoting a viable state, which it was given by the National Security Committee, was—I think this is the best way to express it—unrealistically ambitious. I have read the Government’s response, and I did not expect them necessarily to accept what we said, but we thought it was important to raise the issue. Of course we, too, would like Afghanistan to be a viable state. After all the trouble that the people of Afghanistan have been through, they deserve a viable state, and anything the UK Government can do to contribute to that is right, proper and responsible, so I hope we have agreement on that.
Our concern, however, was that there was an over-extended idea of what DFID, specifically, was capable of achieving. That took us away from the fact that DFID is good at promoting development, in the sense of better governance, which is a contribution towards a viable state; encouraging livelihoods; delivering education and health; and generally improving quality of life. In a situation that will be very uncertain and unpredictable post-2014, we felt it would perhaps be better to make that DFID’s priority. In any case, the Government have mandated DFID to do that, and I quite understand that it will say, “That is our responsibility. That is what we want to do, and we will say how.” However, I hope the Minister will understand that our comments were meant in the spirit not only of saying, “Let’s get hold of what’s possible,” but of establishing what the real priorities should be, given what DFID can realistically do, rather than getting ourselves too hung up on aspirations that require many more players—indeed, the entire international community and all the players in Afghanistan—to deliver.
That said, the Committee decided it was important to revisit the situation in Afghanistan to look beyond the date when the engagement of combat troops comes to an end at the end of 2014. The Committee had visited Afghanistan five years before; the hon. Member for Birmingham, Northfield (Richard Burden) was on that visit, and I obviously went on both visits. The visit this time took place between 17 and 21 June 2012. We recorded that we were inhibited by the security situation from getting as deeply into development projects as we would have liked. Nevertheless, we had a useful visit, and we had the opportunity to engage with a number of important players.
Once we had analysed the situation, we felt there was a second significant comment to make. It was impressed on us time and again that the almost defining dilemma in Afghanistan—indeed, the way we could articulate the progress that had been, and continued to be, made there—was the status of women. A lot of the information presented to us—it consisted not just of statements; it was backed up by facts and figures—said that Afghanistan is, without qualification, the worst place in the world to be a woman.
Nicola Blackwood (Oxford West and Abingdon) (Con)
The IDC’s excellent report makes a number of really important statements on this issue. In particular, it states that
“the treatment of women…post-2014 will be the litmus test”
for success. There has been a lot of progress in the past 10 years, but 87% of Afghan women still face some form of violence. Does the right hon. Gentleman think that one solution would be for the next operational plan to include women’s rights, and particularly dealing with violence against women, as a thematic priority?
Sir Malcolm Bruce
I am grateful to my hon. Friend for that intervention. Yes, the Committee does think that. To be honest, we would like the Government to take a much more explicit position on that. In reply to us, they said that, based on the Tokyo agreement and other measures, they believed enough was in place to protect the achievements so far and the rights of women post-2014. I have to say that that view was not widely shared by the women we met, which was not very many, but the ones we did meet were very vocal. Although we understand the Government’s reasoning, when we tried to look at programmes specifically aimed at the rights and needs of women, we found that those programmes really did not exist. The response to that is, “Well, that’s mainstreaming.” However, the issue of women in Afghanistan is such that mainstreaming simply is not, and cannot be, enough. That is precisely why we used the expression “litmus test”.
Those are the two most contentious things we said, and I am quite certain the Committee will stand by them. No doubt, the Minister will stand by the Government’s response. Even if we disagree, however, I hope we can accommodate the fact that we are looking for the maximum engagement by the UK Government to ensure that the progress that has been made is, to the extent that we have the capacity to do this, continued beyond 2014. I also hope we recognise that monitoring the rights and progress of women is the best single way of identifying what is going on in Afghanistan. I put it as crudely as this: if the position of women in education and employment, and the moves to tackle violence against women, have moved in a positive direction by 2020, we can be sure that Afghanistan has moved in a positive direction; if the reverse is true, the reverse will be true for the whole of Afghanistan.
That does not mean there has not been a lot of progress or that we can make any serious predictions about where Afghanistan will be by 2014. The optimists say, “It’s a success. By 2014, we will have achieved a fully trained army, a fully functioning police force and a viable Government. We can withdraw. Afghanistan is secure as a functioning, viable and, to some extent, democratic state.” That is absolutely what we would like it to be, but I do not think anybody believes it will be like that. However, it seemed to us that the pessimists, who think Afghanistan will immediately collapse and be taken over by the Taliban, were unlikely to be right either. The picture seemed much more confused and unpredictable. We do not even know who the Government will be, who will be elected President or what the composition of the Parliament will be.
We received some disturbing evidence. BBC correspondent David Loyn is quoted in our evidence as describing Afghanistan as a “rentier state”. In other words, an awful lot of the movers and shakers simply go where the money is and siphon it off for their own purposes. Not all of it is going that way, because clearly if it were, there would not be progress in the number of girls in school and children being vaccinated, or in the delivery of health services and the improvement of roads. It is completely wrong to think that nothing has been delivered. A lot has been delivered, and progress has been made. There are now 3 million girls in school, where there were none before; but there are probably another 3 million who are still not in school, so let us not lose sight of that. We have not cracked the whole problem.
Such things are variable across Afghanistan. One of our difficulties was that we could not go to places we should have liked to visit; but there is plenty of evidence to show that things are very difficult in some places and better in others. That has probably always been true of Afghanistan. It has always been a centripetal kind of state, with a lot of variability. One group in the Committee went to Helmand, and one group, which included me, went to Bamiyan. That is a tale of two completely different Afghanistans. Helmand, which is of course in the headlines as far as Britain is concerned, is where British troops are deployed, where we run the provincial reconstruction team, and where we have suffered substantial casualties.
I do not want to get engaged in the question of the military position in Afghanistan. It has been well expressed and documented, in Helmand in particular, but it is clear to the Committee that we cannot, post-2014 when the PRT is closed and the combat troops are withdrawn, leave the people of Helmand without any commitment from the UK to their future development. However, we must recognise, as the Department for International Development has done, that operating a district office, for example, is unlikely to be achievable in that scenario. Indeed, the decision has been taken that that will not happen, so the programme will have to be run out of Kabul. Therefore, in our view, we must have a different approach, involving partners who can, as our representatives, engage locally and win the trust, and the hearts and minds, of people on the ground. It cannot be done from Kabul; it must be done by people who are there, who probably will not be DFID personnel.
On the other hand, those of us who went to Bamiyan—unfortunately it was only for a day trip and we could not stay for a second day as had been intended, or get out and about as we had hoped—saw a completely different picture. It is worth recording that the PRT, which is being wound down, is led by the New Zealanders. We had a spectacular flight into Bamiyan, through the mountains and past the Buddhas on to the airfield by which the PRT is located and were quickly whisked from the plane to the PRT. The New Zealand commander said he would happily have walked into town with us, as he had done with a three-star American general in full uniform several weeks before. They were able to sit down in a coffee house, and all that happened on the walk to town, a mile there and back, was that the general was stopped every few yards by people insisting on having their photograph taken with him, shaking his hand and thanking him and the NATO forces for bringing what they saw as peace and opportunities for prosperity and development. The records show that in Bamiyan there has not been an explosion of any kind of ordnance in 10 years; so not all in Afghanistan is violence, conflict and insecurity. There is a variation, from one extreme to the other. It is important to note that, because it shows that there are opportunities.
The chancellor of the university in Bamiyan told us that the matriculation of young women students had gone up from under 10% to more than a third of students in three years. As he put it, fathers and young men appreciated the prospect of educated daughters and wives. That was positive and good.
Having gone to the contentious places, we concluded—and I think that the Government agree—that the programme must be flexible and fleet of foot, and will have to respond to rapidly changing and unpredictable circumstances. We suggest that that approach is more likely to work. Indeed, if there is a plan B that recognises that, we will not be inhibited by sudden changes of direction; we shall have enough options.
Others want to speak, so I do not want to detain the House other than to say that we made a particular recommendation about our concern about the security forces, with which the Government did not wholly agree. Some colleagues had a briefing earlier in the week, which I could not attend, and they may say more if they catch your eye, Mr Walker. My understanding is that there are points of concern about the treatment of people in detention, which has deteriorated; about the variable functioning of the police; and, particularly, to return to the gender issue, about the shortage of women police—there are only 1,300—and the clear need for many more of them. In the post-2014 situation, trust between the people and the police will be a crucial part of security and space for development.
Will the Minister tell us something about the future of the community development councils? We did not have much chance to engage with them this time, but we got evidence about them, and have engaged with them in the past. Our view was that they are a good basis for grass-roots democracy and the building up of a more decentralised capacity. In that context we wanted more devolution of decision making to the provinces, because the nature of Afghanistan is that capacity is needed across the country. Kabul does not hold Afghanistan and if there is no capacity for administration and policy delivery outside Kabul the country cannot hold. We are concerned about the extent to which the UK Government, who have a policy in that area, will help to deliver it further.
The Committee has a positive wish that those who believe that the engagement in Afghanistan was a mistake should be proved wrong. Most of us do not believe we should not have been there. Indeed, there was plenty of evidence that an awful lot of people in Afghanistan are extremely grateful for the improvements in their circumstances since the NATO engagement, compared with the previous 20 years. The optimistic point is that an awful lot of people therefore have a stake in ensuring that those improvements should not be lost. It seems to the Committee that the role of the UK Government, in co-ordination with the international community, is to do all that they can to ensure that those gains will be maintained and, if possible, extended. In those circumstances the priority for DFID is to do what it does best—development—rather than nation building.
Richard Burden (Birmingham, Northfield) (Lab)
I welcome you to the Chair, Mr Walker. It is a pleasure to follow the Chair of the Select Committee, the right hon. Member for Gordon (Sir Malcolm Bruce). As he said, I was not able to go on the last Committee visit to Afghanistan. Injury, sadly, prevented me from doing so. However, I was on the visit that we paid to the country in 2007. It is the only time I have been there, and is an experience that will stay with me for ever. Afghanistan is one of those places that gets to you.
That leads me to a point about the overall tenor of our report, and what we were trying to say. What we said about the need to be clear as to what we are doing post-2014—particularly in relation to DFID’s work in Afghanistan—and about concentrating on such things as poverty alleviation, and focusing less on state building, attracted comment. It is important to point out that we are not saying that the things DFID and the UK Government have been doing until now were unimportant. We certainly do not say that state building in Afghanistan is unimportant. However, we are cognisant of the kind of message that has been impressed on hon. Members across the House for some time by the hon. Member for Penrith and The Border (Rory Stewart), who is not a member of the Committee but who has a wealth of experience from Afghanistan and beyond. We need to be clear about what we are doing. I said that Afghanistan is the sort of place that gets to you; but those who want to contribute as positively and constructively as possible need to get Afghanistan. Part of that means not trying to do everything and being aware, to some extent, of what we can do and what we can do best. That is not to say that we should be unambitious and go only for the easy stuff—it is not that we should climb mountains that are flat. We need to concentrate and focus on the kinds of things we say in our report, which are hugely challenging issues. Gender and the position of women are not unchallenging areas in which to be involved in Afghanistan, nor is the accountability of the security forces or what we have said about human rights. It is important to set that in context.
DFID and the UK have done tremendous work there, but as we move to a new situation post-2014, which is uncharted in so many ways, it is important to bear in mind the wise words we have heard from people such as the hon. Member for Penrith and The Border and others.
I would like to touch briefly on one area on which I would appreciate the Minister’s comments. To some extent it flows from our report and is certainly topical at the moment: emergency relief and humanitarian assistance as we move into winter. I shall refer to a striking article in The Guardian on new year’s eve by Emma Graham-Harrison, who was in Kabul. She quoted the UN deputy envoy and humanitarian co-ordinator in Afghanistan, Mark Bowden, who clearly said that more aid money needs to be dedicated to emergency relief at the moment in particular. The article came out with a striking quote from 77-year-old Shah Ghasi:
“Each family already has two or three people who are sick”.
He has squatted in a camp on the outskirts of Kabul for nearly a decade. He says:
“We only have hot water to try and keep warm—no stoves, no fuel.”
If we look at the forecast, we see that nobody knows how severe the winter will be. It is forecast to be a bit milder than 2011, so the impact of cold on the camps may not be as bad as it was last year, but we are talking about a country with one of the world’s worst child mortality rates, rampant malnutrition and other health problems that can make the challenges presented by winter particularly difficult.
The Minister and I have discussed, across the Floor of the main Chamber, other emergency situations on which winter is having a big impact—Syria being an obvious one. The UK is stepping up to the plate there better than a number of other countries are. The scale of the problem in Afghanistan as we go into winter should not be ignored; it could become greater, as violence is still bad and in many ways getting worse. Slightly echoing some of the problems in Syria, Mark Bowden said that only a tiny percentage of aid money coming into Afghanistan, perhaps just single figures, goes to supporting urgent humanitarian needs and that donors stumped up less than half the cash the UN sought for Afghanistan’s emergency response fund this year; at one point the fund was completely empty. Those comments were reported in the article to which I referred.
The situation is serious. A week before the article was written, 10 people apparently froze to death waiting to cross into Pakistan from Afghanistan. When the problems are that severe, in a country as poor as Afghanistan, with its problems of health and conflict, we need to address them, particularly at the moment. If the Minister says one or two things about that, I will be particularly grateful. If he wants to reflect on it and write to us, I would also, obviously, be grateful for that.
Pauline Latham (Mid Derbyshire) (Con)
It is a delight to serve under your chairmanship, Mr Walker, for what I believe to be the first time. I visited Afghanistan for the first time with the Committee last year. I particularly want to focus on the rights of women and girls, as did my right hon. Friend the Member for Gordon (Sir Malcolm Bruce), the Chair of the Select Committee on International Development. It is an appropriate topic to discuss, because the UN theme for international women’s day, which is very soon—8 March—is:
“Elimination and prevention of all forms of violence against women and girls.”
Since 2001, when we went into Afghanistan following the attacks on the World Trade Centre in New York, we have spent £30 billion on aid to the country, and I still believe that the rights of women and girls have not been fully recognised. I would like to point out, however, that the aid we have invested in Afghanistan has achieved an enormous amount. For example, as my right hon. Friend said, more than 3 million girls are now in education. Maternal mortality has also been brought down.
Prior to 2001, the Taliban banned girls from going to school. The role of women has been key to transforming Afghanistan. I am pleased that the report, in recommendations 19 and 20, clearly states what needs to be done to ensure that work in that area continues to move forward, and gains need to be capitalised on, not lost. Some women we met when we took evidence here, who were modestly but well dressed professional women, were asked what would happen if they dressed that way in Afghanistan; the simple answer was, “We’d be stoned to death.”
I would like to mention three headlines on three consecutive days in December 2012. One from Reuters states:
“Female government worker shot dead in Afghanistan…Nadia Sediqqi, acting head of women’s affairs department in Laghman province, is shot dead on her way to work. Violence against women appears to be on the rise in Afghanistan…Unknown gunmen have shot dead a senior female government worker five months after her predecessor was killed in a bomb attack, officials in eastern Afghanistan say.”
One on 11 December states:
“Afghanistan women ‘still suffering horrific abuse’…Thousands of Afghan women are being failed by the country’s justice system…Yet the reality suggests many women still live with the daily fear of violence. Last month police said they arrested two men in Kunduz for allegedly beheading a teenage girl after her father rejected a marriage proposal. It came soon after four policemen were sentenced for raping an 18-year-old.”
And on 12 December:
“Afghanistan: Women suffer despite anti-abuse law, says UN”.
Things are not as rosy as we would like.
Nicola Blackwood
Does my hon. Friend agree that the point raised by the Chair of the Select Committee about the worrying failure to recruit female police officers highlighted something concrete that the UK can do to improve the situation? More female police officers would help, not only because they would be recruited into economic activity, but because there would be women in the security services who those suffering violence could go to, so they could access protection from the police force, which is often hostile. Afghanistan has a target of recruiting 5,000 female police officers by 2015. Surely, we should support that target.
Pauline Latham
My hon. Friend makes an important point. As we know, we also need more female doctors able to examine girls when they have been raped or abused in any way, so that they will share their stories with females, rather than be unable to talk because they are being examined by men or, very often, taken into custody because they have been raped.
To say that women in Afghanistan are second-class citizens is still a vast understatement. The Taliban are still present in Afghanistan and some would argue that they have moderated their view on women, which I believe many of them have, but there is a divide, with some of them wanting to return to their old-fashioned values. For example, I am sure that most people are aware of the incident in Kandahar, when students were forced to watch as their head teacher was executed for ignoring Taliban orders to stop the schooling of young girls. In addition, only a year ago the current Government, led by President Karzai, supported senior clerics in the country who have allowed husbands to beat their wives in certain circumstances.
The organisation Global Rights has stated that 87% of Afghan women will suffer domestic abuse in their lifetime, and those who stand up to their husbands are punished for their behaviour in disrespecting their husband. In Afghanistan, we met an educated woman who has a good job, but her brother will still decide who she marries. She has no choice in that, and she cannot even tell him the sort of man she would like to marry, because he will ignore it. That is not uncommon there; it happens all the time.
Before I visited Afghanistan, I read a story on the BBC News website about the “I had to run away” report published by Human Rights Watch. The report highlighted that hundreds of Afghan women are in jail for so-called moral crimes, including running away and extramarital sex. It stated that women were punished for fleeing domestic abuse and violence, and that some rape victims were imprisoned. I want to point out what is meant by “extramarital sex” in that context. It is sex outside marriage where a woman is forced to have sex against her will—what I think most people in this room would consider a clear case of rape, but which is in fact deemed a moral crime. The report also calls on the Afghan Government to release about 400 women and girls held in jails or juvenile detention centres.
There has been a sharp rise in honour killings and violent crimes against women. Forced marriages and forced child marriages remain widespread, which, apart from a range of emotional distress, means that women and girls are unable to become independent. They become trapped in a vicious circle that often makes them reliant on their abusive husbands. That is the current situation in Afghanistan, more than a decade after military intervention. My deep personal fear, which is shared by Orzala Ashraf, the independent civil society activist who gave evidence to our Committee, is that as we approach the withdrawal of forces in 2014, women risk “dropping off the agenda.”
I must pay tribute to the former Secretary of State for International Development, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell). On his appointment to that role, he made the empowerment of women a central theme of his Afghanistan development strategy. Our report points out our slight concern that that may not be being translated into a priority for DFID on location in Afghanistan. Should that be true, I hope that the Government will encourage such a priority and press it as the most important part of what they can do.
It is extremely important that the Government work with the international community to support Afghanistan fully to meet United Nations Security Council resolution 1325 on women, peace and security. I am therefore pleased that DFID, in its response to the Select Committee report, has agreed with recommendation 19, which is to seek to combat violence against women through support for women’s shelters and legal services, and to continue to ensure that women and girls are a major focus for its education and wealth creation programmes.
However, I urge DFID to rethink its disagreement with recommendation 20, which proposed the creation of a joint donor and Government plan for women and girls during the transition. That would encourage donors to commit themselves to specific programmes and objectives based on evidence and consultation. I believe that, as it states in our report, that
“could help catalyse greater commitment and sustained political will to ensure that women and girls are not forgotten in transition.”
I hope that the report will make a real difference to the people of Afghanistan and to world security. I know that the Minister will do all that he can to support our views.
Mr Charles Walker (in the Chair)
Order. I will start the winding-up speeches at 4 pm, and if the Front-Benchers keep their speeches to 14 minutes, Sir Malcolm may have a little go at the end.
Jeremy Lefroy (Stafford) (Con)
It is a pleasure to serve under your chairmanship, Mr Walker, and to follow my hon. Friend the Member for Mid Derbyshire (Pauline Latham), who made such a passionate speech about the position of women in Afghanistan. My colleagues on the International Development Committee have covered some areas in detail, so I shall attempt to cover those that have not been touched on.
I want to focus on what our report said about the private sector and DFID’s response on that. I also want to say a few words about taxation and the increase in revenue, which has been one of the success stories in Afghanistan but still needs a lot more work. I will then conclude with some remarks about oversight for the Afghan national security forces and about this week’s comments by the UN deputy special representative, with whom we had a meeting.
As we all know, the private sector is the engine for growth, and growth is as important to Afghanistan as it is to the United Kingdom. One of the major areas of disagreement that the Government have with our report is on our comments about DFID’s approach to the private sector in Afghanistan. In many ways, I hope that we were wrong and they were right, but we had some concerns about DFID’s approach to that extremely important area.
It was difficult for us to see the work on the ground. As my right hon. Friend the Member for Gordon (Sir Malcolm Bruce) mentioned, we hoped to see some of the work in Bamiyan, but it just did not prove possible, so we had to take people’s word for it. I will just cover some of the areas in which DFID is involved. The first is agriculture, which is of course absolutely vital. It is a passion of mine. DFID is involved in the reduction of poppy cultivation, and therefore in the increase of the cultivation of other crops; in de-mining; in strengthening institutions focused on agriculture; in improving productivity of cereal crops through irrigation; in high-value vegetables; and, indeed, in commercial poultry. All those are essential.
One thing that we noted and wanted to bring to the attention of both DFID and the Afghan Government was the fact that many opportunities for adding value to agricultural produce do not seem to be taken up. Most agricultural produce went across the border to Pakistan in raw form and came back in processed form, thus denying Afghans the opportunity to add value, income and the employment of their own people. We want to encourage DFID to see how it can further help in adding value to agricultural produce in Afghanistan. Agriculture is of course essential and, by the end of this period in 2015, we want DFID to have made real progress in that area. I am sure that it is capable of doing so, and that the Minister will respond about what is now going on and being achieved.
DFID has a strong programme to support employment and enterprise, particularly through small and medium-sized enterprises that, realistically, as is the case in this country, will be the main generator of employment and growth in Afghanistan. DFID’s target is 20,000 jobs by the end of this period. It would be excellent if the Minister gave us feedback on how that programme is going and what it consists of. It would be a great step forward if the programme could achieve that and, indeed, even more.
Another area is good infrastructure, without which economic development is difficult at best, and impossible a lot of the time. DFID has a major programme of developing infrastructure, particularly in rural areas, with more than 1,100 km of secondary road and 1,095 of tertiary road planned. I am very pleased by that, because the emphasis is often on primary roads—asphalt or tarmac roads—that look good and are great if people are near one, but if people are even 5 km away and on an awful road, such roads do not help much to get their produce or animals to market. DFID has concentrated on that, as we saw in the Congo. DFID’s work on one road that I had the pleasure of travelling along meant that a journey that would have taken five days took two hours. It makes a huge difference. I would be pleased to hear the Minister’s comments on how the programme to develop rural road infrastructure is going.
Then there is the elephant in the room of the Afghan economy: mining. We were told that the value of minerals in Afghanistan is estimated—possibly underestimated—at $3 trillion. Their extraction would make an enormous difference not only to the Afghan economy but to Afghanistan’s tax base and therefore its public services. We were pleased to see that DFID has engaged strongly in the development of governance over mining, particularly taxation. We would be pleased to hear from the Minister what progress has been made since we were there, whether the mining industry, which was developing fast when we were there, has made further progress and whether that has resulted in an increase in revenues to the Government as well as local employment. I think that we are all hoping that we were a bit too pessimistic about DFID’s private sector programme, and that the Government are right that it is on track and will make a major contribution. I hope that we are proven wrong. That is what we would all like.
On taxation, tax revenues about a decade ago amounted to a mere 3% of a very low GDP: in effect, to nothing, which made Afghanistan completely dependent on aid. With the substantial help of DFID, that has now risen to 11%, more than in Pakistan, which was referred to in the earlier debate, where it is less than 10%. We should congratulate both the Afghan Government and DFID on their work on that. However, 11% is still a long way from where things should be.
I will make a few comments on taxation, perhaps referring a little to the earlier debate. Taxation is indeed the route out of aid, because from taxation derives the ability to pay for public services. I remember reading in the office of the Tanzanian tax inspector with whom I was having some discussions when I worked out there, “When I pay taxes, I buy civilisation.” That was pretty much the only comment made in that office with which I agreed, but it made the point that taxes are the means of acquiring schooling, health care, security and all the other goods that we take for granted.
There are various types of taxes: income-based taxes, sales tax and VAT, mineral royalties, customs duties and crop levies. Traditionally, in developing economies, the bulk of taxation has come from customs duties and crop levies, because they are easy to collect; you see something—a crop or an imported car—and you tax it. However, those are regressive taxes, in that crop levies affect smallholder farmers and tend effectively to result in a marginal income tax rate, which can often be 30%, 40% or even 50% once the cost of production has been taken into account, and customs duties tend to prevent trade, particularly exports. Concentrating on those taxes is not recommended.
The route upwards in tax collection is clearly sales taxes such as VAT and income-based taxes, whether on personal or company income. Much more needs to be done both in Afghanistan and elsewhere on the collection of corporate and personal income taxes as well as VAT. They require highly skilled and honest revenue authorities, which is where DFID comes into its own. I urge DFID to continue its support to the Afghan revenue authorities for the collection of income taxes and mineral royalties. In Burundi, we saw the tax revenue increase by a substantial amount through DFID’s involvement and the work that it is doing to promote trade and investment in east Africa. I want increased support for the revenue authorities in Afghanistan, because DFID’s work has been so successful up to now.
A final point on taxation: in any country, a follow-up is needed on the discrepancy between obvious wealth and taxes paid. We heard earlier about the fact that some of the wealthiest people in Pakistan pay no taxes. It is blindingly obvious to everybody that they should be paying taxes, yet they do not. I believe that the same is true in Afghanistan. The revenue authorities need to be able to conduct their affairs without fear or favour, and DFID should be helping them do so.
I turn to the question of the Afghan national security forces. We suggested in our report, although DFID disagreed, that there should be independent oversight. I understand why DFID disagreed—it felt that sufficient checks and balances already exist in the system, and perhaps they need to be given the opportunity to work—but we understand that the United Nations human rights report to be published next week will say something along the lines of “Conditions of detention have deteriorated” and raise concerns, particularly about Afghanistan local police groups. We understand why DFID rejected our recommendation, but can the Minister update us on whether he feels that the inspectorate of police and the other bodies put in place are proving effective, or whether the jury is still out?
In conclusion, I reiterate the comments made by several of my colleagues about the progress being made. It was an honour to go to Afghanistan. I pay great tribute to DFID’s staff there, and to all the staff of the Foreign and Commonwealth Office and the British Council whom we met, for their warmth, their hospitality and the value of the work that they do. Progress has been made. It is vital that we get the message across. So many British people, particularly our armed forces, have made huge sacrifices to bring advances that are quite apparent to the people in Afghanistan. In my county of Staffordshire, we have the 3rd Mercians, who served in Afghanistan in 2011 and will probably go out again at the end of this year. I want them to know that the work they are doing is vital to the people of Afghanistan, that by and large it is appreciated and that they will be honoured in the memory of what they have done.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I am pleased to serve under your chairmanship, Mr Walker, not for the first time. It is a great pleasure to be part of this debate. I thank the Chair and members of the Select Committee on International Development for their excellent work in producing this report and the one presented in the previous debate. The issues facing Afghanistan, particularly as we move towards gradual exit post-2014, are critical, and it is right that we focus on what happens next and what the UK Government do, particularly in relation to international development.
I welcome the Government’s commitment to delivering aid to Afghanistan at levels comparable to the present until 2017. However, there are major concerns about what will happen to the country’s aid budget beyond then. As most would agree, an abrupt cut to foreign aid could severely destabilise Afghanistan and have an adverse effect on its economy and people. Hon. Members and my hon. Friend the Member for Birmingham, Northfield (Richard Burden) have raised a number of issues, focusing particularly on the impact on women, who remain among the most vulnerable in Afghanistan and in comparison to others around the world.
Some 97% of Afghanistan’s official GDP comes from spending related to the international military and donor presence, and local businesses currently rely heavily on development aid and foreign military expenditure. The hon. Member for Stafford (Jeremy Lefroy) focused in his speech on the importance of the economy. I point out that the economy is already contracting as troops leave. It is expected that future growth will be slower, especially in urban and conflict areas. The combination of a drop in aid and military withdrawal could have a devastating impact and set back the progress that has been made to date. The World Bank has already warned that an abrupt cut-off in aid could lead to the collapse of political authorities, civil war and a greater reliance on opium profits. Will the Minister assure us that the UK will maintain adequate aid and increase measures to improve aid effectiveness beyond 2017? Moreover, given the risks involved, will he also give us an assurance that the UK Government will use their influence to ensure that other donor countries do not withdraw aid abruptly?
The Government’s response says that Afghanistan’s extractive industries will contribute significantly to economic growth, enabling the Afghan authorities to deliver basic services and reduce the country’s dependency on aid. According to the World Bank, the extractive industries could contribute to half of the 4.9% per annum GDP growth projected to 2018-19. However, it will still be many years before revenues from this sector start mitigating the effects of the military draw-down. What other measures are the Minister and his Department taking to mitigate those effects?
Afghanistan is still in the throes of conflict and lacking in some of the strong governance mechanisms that can drive transparent and accountable government. Given those facts, it is hardly surprising that the report has highlighted the ongoing challenges and problems of corruption. According to Transparency International, Afghanistan remains one of the world’s most corrupt countries. Ensuring that each pound spent is trackable and accountable, as the former Secretary of State for International Development promised, is incredibly difficult and important. What steps are the Department and the Minister taking to improve the accountability and transparency of UK Government funding to Afghanistan?
I want to focus now on the very important subject of gender, which has been raised by the Chair of the Committee, the right hon. Member for Gordon (Sir Malcolm Bruce), and others, including the hon. Member for Mid Derbyshire (Pauline Latham), who is the chair of the all-party UN women group—I serve as the vice-chair. She has been working hard with colleagues across parties on the issue of violence against women in Afghanistan and across the world, especially in the light of the recent issues posed by the rape, attack and killing of a woman in India.
The situation of women around the world is of deep concern, even in countries such as India where, despite significant economic progress, women’s rights still fall short. The hon. Lady pointed to the huge challenges faced by Afghanistan and the important contribution that Britain and the international community must make if we are to see progress in this area.
I welcome the UK Government’s decision to commit to protecting and promoting the rights of women and girls in Afghanistan, but it is important that they follow that through with practical action. The IDC report has highlighted a number of important recommendations. We have constantly heard words of commitment from the Government in relation to women not just in Afghanistan but elsewhere in the world, but what additional steps will be taken to show that genuine commitment?
Women have made important gains in Afghanistan since the fall of the Taliban. As the report highlights, 2.2 million girls are now in school, compared with only 5,000 under the Taliban. That is a success that we all need to celebrate. However, as the report highlights, the situation for women and girls in Afghanistan, while improved in some ways, remains incredibly troubling. As the Chair of the Committee pointed out, women in Afghanistan are the worst off in the world, and we must ensure that we continue our efforts to improve their position.
In a statement, President Obama said:
“Afghanistan cannot succeed unless it gives opportunity to its women.”
Failure to do so will seriously undermine the legacy of the UK’s intervention and could lead to a dangerous and uncertain future both for Afghan women and for the nation more generally.
Women and girls still suffer from a lack of access to the basic legal protections. A recent UN report argues that although the law on the elimination of violence against women is being used to secure some convictions, it is often ignored by many in the police and justice sector. Does the Minister agree that DFID should create specific projects in its next Afghanistan operational plan to work on women’s protection and empowerment? As has already been mentioned, when it comes to issues of equality, mainstreaming is a challenge even in a UK context let alone in a country such as Afghanistan. Given that there is a real need to keep the pressure up, is it not right that there should be a specific special focus on women alongside the mainstream interventions with which DFID is involved?
Let me turn now to the projects that are targeted at women, especially those that focus on the specific need to protect them against violence and, as the hon. Lady mentioned, rape and other forms of oppression. It is not clear that the Government are fully committed to the kind of interventions that are needed and that require special focus. Will the Minister clarify how many DFID-backed projects target the needs of women?
It is disappointing that the Government’s response to this report does not endorse the IDC’s recommendation to create a joint donor-Government plan for women and girls during the transition. The report says that DFID’s programmes already support the objectives set out in the Government’s national action plan for women in Afghanistan. However, the national priority programme has described NAPWA’s implementation as “slow and insignificant”.
ActionAid has pointed out that the Ministry of Women’s Affairs has secured only a fraction of the $30 million that it needs to deliver the national priority programme, which is just a first step towards full implementation of NAPWA. Will the Minister tell us how his Department will ensure that all Afghan authorities and institutions are fully compliant with the organisation End Violence Against Women and NAPWA?
In conclusion, the coming years will be challenging in Afghanistan. As international attention will inevitably shift elsewhere as troops come home, we must do all we can now to ensure that the Afghan people build a sustainable future for themselves. One of the most important elements of that, as the report rightly points out, is ensuring that the situation for women and girls in Afghanistan is improved. We must build on the achievements that have been made in the last decade and ensure that women and girls are protected from violence and discrimination. That will require a continued commitment from the UK Government. The sacrifice of our troops and the loss of thousands of lives—not just among British troops—will be in vain if we do not secure a sustainable future for Afghanistan. People must not be worse off than they were before the conflict and the intervention began. Our involvement must be about ensuring that we are there with the people of Afghanistan long after our troops leave.
The Minister of State, Department for International Development (Mr Alan Duncan)
I thank my right hon. Friend the Member for Gordon (Sir Malcolm Bruce) for securing this debate. We in the Department for International Development welcomed the International Development Committee’s report on Afghanistan, to which we have of course already formally replied. Put simply, the Government strongly agree with the majority of the Committee’s recommendations. In particular, we recognise that the next few years hold considerable uncertainty, and we welcome the Committee’s judgment that we retain an obligation both to the Afghan people and to British service personnel to continue our assistance for many years to come. That is why, at the Tokyo conference last July, we worked hard to secure long-term support from our international partners for Afghanistan’s development beyond security transition in 2014. I can tell the hon. Member for Bethnal Green and Bow (Rushanara Ali), who is the Opposition Front-Bencher, that the UK is specifically committed to maintaining its current aid—approximately £178 million a year at the moment—beyond transition until at least 2017.
We are now working closely with the Afghan Government to ensure that they deliver the essential economic and governance reforms agreed at Tokyo. Although it is still early days, I am pleased to report some good progress. Structures are now in place to monitor performance against the Tokyo commitments. Let me assure hon. Members that we will link our long-term support to progress by the Afghan Government on these critical reforms.
However, we do not support the Committee’s recommendation for a mechanistic link between performance and financial support. Nevertheless, the House should be in no doubt that we will act when we need to, as we did, for instance, in suspending Afghan reconstruction trust fund payments following the Kabul bank crisis. And as co-host of the ministerial review conference in 2014, we will engage with our international partners to speak with a unified voice.
As my right hon. Friend the Member for Gordon said, Afghanistan is perhaps the worst place in the world for a woman to live, and that point was profoundly echoed by my hon. Friend the Member for Mid Derbyshire (Pauline Latham). A key commitment at Tokyo was strong action on women’s rights. As the Committee’s report said and as hon. Friends have highlighted during this debate, Afghan women and girls continue to face enormous disadvantages. The Secretary of State for International Development has made clear the priority that she places on this issue, including on her recent visit to Afghanistan, where she raised her concern directly with President Karzai.
We are already supporting a range of initiatives that we hope will benefit Afghan women. Thanks in part to UK support, there has been considerable progress in girls’ education, as my right hon. Friend the Member for Gordon, mentioned; there are now more than 2 million girls in school, when there were virtually none in school in 2001. Almost one in two pregnant women in Afghanistan receive antenatal care today, compared with only one in six in 2003. We have also contributed to improving women’s access to justice and jobs.
It is also important for us to say that we agree with the Committee that violence against women remains a significant concern, and I commend the work of NGOs such as ActionAid in trying to combat that violence. The UK will continue to press the Afghan Government to implement the current law on the elimination of violence against women, or EVAW. Through the Tawanmandi programme, we are also supporting 35 women’s organisations to take forward a range of activities, including raising awareness of the EVAW law and providing legal support and shelters to victims of violence.
We continue to look for ways to improve opportunities for Afghan women and girls in all our programmes. In the next few months, our focus will be on supporting women to participate in the political process and in elections in 2014. However, we do not agree with the Committee’s recommendation for a joint Government-donor plan for women and girls through transition. The Afghan Government’s commitments to women and girls are already laid out in the Tokyo framework, and it is important that we focus our efforts on ensuring that those commitments are delivered. In our view, drafting another plan risks becoming a distraction.
The UK already supports Afghan women in public life. Our work with the Afghan Interior Ministry is helping the Afghan police to protect and uphold women’s rights. The British embassy in Kabul also funds organisations such as the Afghan Independent Human Rights Commission, to ensure that they can continue to operate effectively and with the necessary security.
In the same vein, and as my right hon. Friend said, we disagreed with the Committee’s proposal for the establishment of a new oversight body to investigate allegations of violence by the Afghan national security forces. There are a number of existing mechanisms, both within the Afghan Government and externally, to carry out that function. As part of the UK’s work with the Interior Ministry and the Ministry of Defence in Afghanistan, we already train, advise and mentor staff on a range of issues, including human rights. Given the number of challenges ahead, it is important that we focus our efforts on what needs to be done and avoid any duplication of process. For example, as highlighted on page 45 of the Committee’s report, it is absolutely essential that access to education, health care and other basic services is improved for the long-term stability of Afghanistan.
My hon. Friend the Member for Stafford (Jeremy Lefroy) raised a number of issues, including concern about the development of the private sector. I suggest that DFID’s approach to wealth creation is much broader than the Committee’s report has suggested. Our programmes range from encouraging international investment and building regional trade links right down to providing support for local farmers’ co-operatives and skills training.
For instance, in Nangarhar province we are supporting rural entrepreneurs to produce high-value vegetables, and in Kama district we are successfully supporting poultry businesses that are providing jobs for women in 20 villages. As for extractives, which I totally agree is perhaps the largest and most important sector in Afghanistan and one in which there is of course enormous scope for corruption, DFID has supported the Ministry of Mines since 2010 to develop a regulatory framework, to encourage international investment and to ensure that effective management of the country’s mineral wealth can be built up. Furthermore, we are currently developing a package of continuing support in this sector. On the more detailed area of infrastructure, I undertake to write to my hon. Friend with more detail about such issues as roads.
Let me reassure the Committee and the House that our programme is already carefully balanced between developing the capacity of the Afghan Government at national and provincial levels to manage services, and ensuring effective delivery in the districts.
I now turn to the serious issue raised by the hon. Member for Birmingham, Northfield (Richard Burden). We agree with the Committee that Afghanistan faces significant humanitarian challenges, and I can confirm to the House that we are committed to continuing to build up our humanitarian programme. Last year, my Department delivered life-saving assistance to more than 5,600 families who had been affected by the 2011 drought and provided food and other essential household items to around 150,000 internally displaced people in Afghanistan. As recommended on page 80 of the Committee’s report, we are also engaging with rural communities to help them to strengthen their resilience to these changes. And DFID is currently developing a multi-year, multi-sector package of support for some of the neediest sectors in Afghanistan, to deal with issues such as nutrition and food security.
We are working hard to ensure that ordinary Afghans have opportunities to make a decent living for themselves and their families, while helping to stimulate long-term, sustainable economic growth in the country. We disagree with the Committee’s finding that DFID’s approach to wealth creation is too centralised and disconnected from the needs of ordinary Afghans, as I hope that I have illustrated by giving those two examples just now. As I was saying earlier, our programmes range from encouraging international investment support at the regional level right down to the village level. Indeed, UK aid has equipped more than 11,200 young people in Helmand, including 1,900 women, with vocational skills.
Let me turn to what my right hon. Friend the Member for Gordon, at the start of his comments, referred to as DFID’s unique mandate to create a viable Afghan state. I sense from his comments that he regards that idea as somewhat fanciful. We agree with the Committee that DFID cannot deliver a viable Afghan state on its own, but we do not believe that the objective is a redundant concept. On the contrary, the goal, shared by the Afghan Government and our international partners, is essential to securing Afghanistan’s long-term stability and future. In some respects, these are early days in the history of the country.
The goal is also consistent with DFID’s approach to working in fragile and conflict-affected states worldwide. The Prime Minister has said, and this encapsulates our thinking, that
“you only get real long-term development through aid if there is also a golden thread of stable government, lack of corruption, human rights”
and
“the rule of law”.
By contributing to the objective of the development of a viable Afghan state, we are helping to ensure that the Afghan people have a stake in their own future, through a Government who are more accountable and transparent, and capable of responding to their basic needs.
My right hon. Friend the Member for Gordon mentioned community development councils, and DFID is working with the World Bank, other donor partners and the Afghan Government on the future role of the councils, including how best to integrate them into the government structure below the level of central Government. The point that he made is a valid one, and we are already taking steps to implement the sorts of things I sense he would like to see. We agree, of course, with the Committee that NGOs also play a vital role on the ground in Afghanistan, delivering key services and assistance to the Afghan people, and we will continue to support such essential work.
Finally, we welcome the Committee’s acknowledgment of the immense challenges that exist in delivering results in fragile and conflict-affected states such as Afghanistan, and also its appreciation of the efforts of DFID staff. Despite the challenges, we continue rigorously to ensure that DFID programmes are robust enough to deliver real results for the Afghan people and that there is value for money for the UK taxpayer. I have been encouraged by many of the comments and questions that we have heard this afternoon and, on behalf of DFID, I reassure the House that our commitment to this desperately poor country will continue for many years to come.
Sir Malcolm Bruce
I thank the Minister for his most constructive response to what has been a good debate. Indeed, I thank everyone who has taken part.
In spite of the differences of emphasis, I believe that our report has been well received. It has provided a useful focus for those who are either too positive or too negative about the future. It is much better to be realistic, recognising the challenges and coming up with constructive recommendations on the understanding that there is a need to be flexible. Although we do not agree on everything, the Minister’s response demonstrates that we are on the same page as far as the overall objective is concerned.
I echo my hon. Friend the Member for Stafford (Jeremy Lefroy) in pointing out that we cannot say often enough to those British people who will listen that the idea that our engagement in Afghanistan has been a failure and has not made a positive difference is simply not true. It has made a huge difference. The situation is difficult. It is a difficult country and there are lots of challenges, but we have met so many people whose lives have been dramatically improved, and the statistics bear that out.
I am absolutely certain that the successors of the current Committee members in another Parliament will go back to Afghanistan in four or five years’ time. I hope that the fears will not have been realised and that some of the hopes will have been fulfilled. I hope that they still have a democracy and a functioning Parliament, but above all I hope that the position of women in Afghanistan is not as good as today but much better, or at least moving in the right direction. I repeat exactly the point that the hon. Member for Oxford West and Abingdon (Nicola Blackwood) made: for the Committee, that will be the litmus test of whether the engagement in Afghanistan has delivered real social and political change. We hope that it will have, and we believe that it can, and we absolutely agree that the UK Government have a key role to play. Regardless of the differences of emphasis, DFID in Afghanistan has our full support.
Question put and agreed to.
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
The Government believe the UK economy should be supported by a framework of laws that ensures we have a strong and efficient labour market which is flexible, effective and fair. We are looking at the laws that affect all aspects of the relationship between employers and employees, and at each stage of the relationship, through the employment law review. Priorities for reform have been informed by the red tape challenge process, and the results of the 2011 resolving workplace disputes consultation.
Today the Government are publishing their response to the consultation on ending the employment relationship, and launching three further consultations relating to the employment relationship, covering:
How early conciliation should operate in practice;
A range of proposals to improve the TUPE regulations; and,
Reforming the regulatory framework for employment agencies and employment businesses.
Our response to the ending the employment relationship consultation details how we will support the legislative changes in the Enterprise and Regulatory Reform Bill regarding the inadmissibility of offers of settlement in unfair dismissal claims at employment tribunal, and a power to increase or decrease the limit on the compensation awarded in cases of unfair dismissal.
Settlement agreements offer a dignified, consensual and mutually beneficial way of ending the employment relationship without risking a long, costly and distressing employment tribunal claim. In support of the legislative change, we have consulted on the principles to underpin the system, and the best way for Government to enable employers and employees to approach settlement agreements confidently in a fair and appropriate way. We will ask ACAS to publish a statutory code of practice, which will include template letters for beginning the settlement discussion, and an explanation of the term “improper behaviour”. Accompanying guidance will supplement the code with more substantive practical advice, including guidance on good practice for employers to approach settlement within the broader context of management.
The Government intend to introduce the statutory code and guidance by the summer, in line with the legislative change coming into force. In relation to the unfair dismissal compensatory award cap, the Government intend to introduce a 12 months’ pay cap on the compensatory award for unfair dismissal, subject to parliamentary process. The introduction of a pay-based cap will run alongside a specified overall cap, with the limit the lower of the two figures.
With regard to the overall level of the cap, no consensus emerged in consultation either in terms of whether it should be changed, or, if so, how it should be changed. We are therefore not pursuing a change to the overall cap on the compensatory award for unfair dismissal at this time.
The Government will introduce the necessary secondary legislation to implement the change to the cap after the Enterprise and Regulatory Reform Bill receives Royal Assent.
We are also launching today a further consultation on early conciliation. We announced, in the Government response to the resolving workplace disputes consultation, our intention to introduce an early conciliation (EC) process that would make it a requirement for most prospective claimants to send the details of their claim to ACAS before they are able to lodge the claim with the employment tribunal. This proposal, which has received broad support from all stakeholders, will enable ACAS to offer the parties the opportunity to resolve their dispute without the need for tribunal involvement.
We are taking the necessary primary powers to introduce EC in the Enterprise and Regulatory Reform Bill. However, the implementation of EC requires secondary legislation and the development of the necessary administrative process. This consultation sets out how we intend that EC should operate.
Our consultation on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) also launches today. TUPE legislation protects employee rights when the business or undertaking for which they work transfers to a new employer. The call for evidence identified concerns that the benefits intended from service provision changes to TUPE made in 2006 had not been achieved and that the provisions on employee liability information were not required.
The Government consider that there is scope to improve the regulations by removing unnecessary gold-plating and generally eliminating bureaucracy. Accordingly, we are consulting on a range of proposals designed to ease the transfer process, including the repeal of the service provision changes and the specific requirements regarding the notification of employee liability information.
In addition, we are consulting on a number of proposals to change the wording of particular provisions in TUPE to more closely reflect the acquired rights directive and the case law of the Court of Justice of the European Union.
One example of this is the provisions restricting changes to contracts. Other proposals will allow smaller firms, in some situations, to inform and consult employees about transfers directly and we will also improve guidance on a range of issues.
Additionally, we are launching today a consultation on reforming the regulatory framework for employment agencies and employment businesses. The recruitment sector plays an important role in the UK’s labour market by improving the efficiency of matching demand for jobs to demand for workers. However, the legislation which regulates the sector is complicated and difficult for businesses and individuals to understand.
We want to reform how the recruitment sector is regulated, ensuring that protections are in place for people looking for work, but removing costly and complex regulations.
We want to establish when it is appropriate for the Government to impose rules on the recruitment sector and when it is more appropriate for the sector and marketplace to decide the rules for themselves. The consultation will also seek views on different enforcement options and whether individual enforcement would be more effective than the current Government enforcement regime.
Copies of the “Ending the employment relationship” Government response, and of each of the consultation documents being launched today, have been placed in the Libraries of both Houses.
Regional Growth Fund
(11 years, 10 months ago)
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The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
Today my right hon. Friend the Deputy Prime Minister will announce the opening of a fourth competitive round of the regional growth fund (RGF). A total of £350 million is available for applicants. Building on the RGF over the last two years, this money will continue to support businesses to expand and create jobs.
The additional funding was announced in the 2012 autumn statement as part of a range of measures to target help for businesses and rebalance the economy to drive growth. This brings the overall total of RGF to £2.6 billion—helping create and safeguard thousands of jobs and attract private sector investment.
RGF is delivering jobs and growth through good value-for-money projects and programmes—so round 4 will be a further competitive bidding process, with the same objectives as previous rounds. We still need to build growth in key parts of the country which are overly dependent on the public sector and the RGF is a key part of this because of its success in generating private sector investment.
Round 4 of the RGF is open now and will close to applicants on 20 March at noon. Bids will be appraised as quickly as possible. The accelerated timetable that I introduced for round 3 will be used which means the contracting process will be complete within six months of a bid being selected. Potential applicants should look out for expressions of interest events in their local area for support and further help with the application process. The first of these will be in Manchester on 31 January followed by meetings in Birmingham on 6 February, Leeds on the 19 February and Nottingham on 25 February. Other meeting dates, including one in London, will be announced shortly. These meetings are open to any organisation interested in bidding.
Further information for bidders is available at:
https://www.gov.uk/understanding-the-regional-growth-fund.
Progress to date
The contracting process for rounds 1 and 2 process is now complete and 89% of all round 1 and 2 projects and programmes have started. In total, 180 projects and programmes have agreed final terms. This means that over £1 billion has been released generating £5.8 billion of private sector investment. A small number of contracts are either at an advanced stage of due diligence or have specific strategic value so have been given a little more time. However, in order to retain the sense of urgency these have been moved onto the round 3 timetable which means that a final offer will have to be agreed by 19 April.
Selected bidders from round 3 are currently agreeing terms and conditions for their final offers from the accelerated timetable which was announced in October 2012. The deadline for agreeing a provisional offer is 19 January and I will be issuing a further statement following this deadline to update both Houses on progress in round 3.
Exceptional RGF
Ministers have agreed that Government reserve the option to use RGF funding flexibly in order to respond quickly to economic shocks and opportunities or to ensure that viable growth-promoting projects are not terminated because of minor funding shortfalls which need to be met quickly. This will be in exceptional circumstances only and will take place outside the normal bidding process, although detailed due diligence requirements will still need to be met.
Exceptional RGF will be funded through money recycled back into the fund because selected projects or programmes have either reduced in scope or withdrawn. I will include updates on exceptional RGF in my regular statements to Parliament on RGF.
Standards in Public Life Committee (Fourteenth Report)
(11 years, 10 months ago)
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The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
The fourteenth report of the Committee on Standards in Public Life (Cm 8519) has been published by the Committee today. Copies are available in the Libraries of both Houses.
Finance Bill
(11 years, 10 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are today publishing draft legislation for inclusion in Finance Bill 2013, in addition to that published on 11 December. This will be open for technical consultation until Wednesday 6 February 2013.
Details of the clauses “Tax Information and Impacts Notes” and “Explanatory Notes” published today are available on both the HM Treasury and HM Revenue and Customs website.
The draft legislation includes clauses on the following policies announced at Budget 2012:
The removal of a tax charge under the remittance basis of non-domicile taxation which can arise inadvertently in certain circumstances;
The definition of trusts with vulnerable beneficiaries. This is a revision of legislation published on 11 December 2012 and contains detailed provisions originally planned to be introduced by secondary legislation but which will now be introduced via Finance Bill 2013.
The draft legislation also includes two other clauses:
As announced at autumn statement 2012, the Government are publishing draft legislation to raise the annual drawdown pension limit from 100% to 120% of the value of an equivalent annuity;
Legislation which amends the Corporation Tax Act 2010 to ensure that, as with police authorities before them, chief constables and the Commissioner of Police of the Metropolis are exempt from any liability to pay corporation tax on any profits from chargeable activities. This is a new announcement and the legislation will take effect from the dates the new legal entities came into existence. For the Commissioner of Police of the Metropolis the legislation will take effect from 16 January 2012, and for chief constables it will take effect from 22 November 2012.
Extraordinary Foreign Affairs Council
(11 years, 10 months ago)
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The Minister for Europe (Mr David Lidington)
The High Representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland, has called an extraordinary Foreign Affairs Council for Thursday 17 January in Brussels to discuss the situation in Mali, and take stock of possible EU action in support of the Malian Government and people. I will attend.
Baroness Ashton’s statement calling the extraordinary Foreign Affairs Council can be found at:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/134662.pdf.
As set out in Baroness Ashton’s statement, the Foreign Affairs Council will discuss the proposed EU training mission, financial and logistical assistance for the deployment of African-led International Support Mission to Mali (AFISMA), and will consider other direct support to the Malian Government.
I will report to Parliament the outcome of the extraordinary Foreign Affairs Council, and will continue to update Parliament on future Foreign Affairs Councils.
Plasma Resources UK Limited
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
Further to the written ministerial statement made on 13 July 2012, Official Report, columns 84-85WS, I am announcing today that the Government have decided to seek private sector investment in the Government-owned limited company, Plasma Resources UK Ltd (PRUK) through the sale of the majority or all of the shares in the company. We are taking this action to support the company and its employees in the next phase of the company’s development.
We have carefully examined the strategic options that will best allow the company—which includes the UK-based fractionation facility Bio Products Laboratory Limited (BPL) and the US-based plasma supply company, DCI Biologicals Inc—to grow and be successful in an established and highly competitive global industry. It should fulfil its potential as part of the strategically important bioscience sector of the UK economy. Our conclusion is that this route will best meet those requirements.
Patients will also benefit, as investment will not only allow continued improvements to the existing products but also the potential development of new treatments to create a better product portfolio. Resources will also be used to ensure that the facilities keep pace with the latest technology so the company can achieve its full potential. Overall, the investment will play a key part in ensuring the continued supply of high-quality products to patients.
Potential investors will need to show not just the level of resources they are willing to make available but also set out a credible plan as to how the operations will be grown and how products will be developed.
Public Reading Stage
(11 years, 10 months ago)
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The Leader of the House of Commons (Mr Andrew Lansley)
The coalition programme for government undertook to introduce a new “Public Reading Stage” for Bills to give the public an opportunity to comment on proposed legislation online.
In pursuance of this aim the Government have conducted two pilot Public Reading Stages on the Cabinet Office website, in respect of the Protection of Freedoms Bill in February/March 2011 and the Small Charitable Donations Bill in August/September 2012. In addition, an online consultation was conducted by the Department of Health on the draft Care and Support Bill, which is currently undergoing pre-legislative scrutiny by a Joint Committee of both Houses.
Levels of participation in these consultations varied: for the Protection of Freedoms Bill 6,600 individuals visited the site; and 256 contributors made a total of 568 comments. Many of these were from members of the public rather than from organisations and made a helpful contribution to improving the content of the Bill. Participation on the Small Charitable Donations Bill was more limited: there were 85 comments from 23 organisations, most of which had already contributed to an earlier consultation on the Bill. There were no comments from individuals without a connection to interested organisations. The online consultation on the draft Care and Support Bill attracted a substantial number of responses, with over around 1,000 comments received. The detailed outcome of this consultation has been submitted to the Joint Committee scrutinising the Bill.
The comments from the Protection of Freedoms Bill and the Small Charitable Donations Bill were collated and presented to the Public Bill Committees, alongside an analysis by the Department responsible for the legislation. The comments and reports were referred to during the Committee Stage for each Bill, although they did not directly trigger any amendments.
The Government remain committed to promoting public engagement in Parliament and specifically in the legislative process. The pilot results indicate that approaches to consultation should be carefully tailored to the Bill. We will therefore seek to make our approach to consultation on legislation in line with the consultation principles introduced last year. These seek to ensure a more proportionate and targeted approach, so that the type and scale of engagement is proportional to the potential impacts of the proposal. We will not, at this stage, be introducing a Public Reading Stage as a matter of routine for Bills. Instead, an assessment will be made on a case-by-case basis of the type of public engagement and consultation that best fits the nature and timing of individual Bills, taking into account levels of stakeholder engagement in policy development. This decision does not preclude further consideration with a view to improving public engagement, particularly during Public Bill Committees, by this House.
The Government will draw upon the foil range of existing consultation and engagement mechanisms available, in line with the development of an open policy making model, as outlined in the civil service reform plan. These consultations may be conducted where it has not been possible to publish the legislation in draft, or either as part of or in addition to pre-legislative scrutiny where this would not duplicate work being undertaken by Select Committees.
URENCO
(11 years, 10 months ago)
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The Prime Minister (Mr David Cameron)
I am today confirming a machinery of government change concerning the management of the Government’s stake in the uranium enrichment company URENCO.
Responsibility for this is moving from the Department of Energy and Climate Change to the Department for Business, Innovation and Skills.
Sickness Absence
(11 years, 10 months ago)
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The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
Today the Government will publish a Command Paper giving their response to the independent review of sickness absence in Great Britain carried out by Dame Carol Black and David Frost. We are setting out a new strategy which will help people to stay in work, support employers to manage attendance more effectively, and reduce the number of people falling needlessly on to sickness benefits.
The review identified structural failings in the current system, which typically offers little support to either employees or employers in the early stages of sickness absence and brings significant state resources to bear only once the individual has become detached from the labour market and significant damage has been done to their future employability.
Our response sets out new measures to support employers, employees and healthcare professionals to minimise avoidable absences and keep more people attached to the labour market. We expect this to yield significant benefits for individuals, employers and the state.
At the centre of our approach is a new state-funded service which will carry out an independent assessment of employees after four weeks of sickness absence and provide advice to the employee, employer and GP. This service will be funded by the abolition of the percentage threshold scheme, which currently reimburses some elements of statutory sick pay but does nothing to encourage employers to reduce it. We agree with the reviewers that existing resources would be better used to support employers to manage sickness absence more effectively.
We will also support employers by retaining existing tax relief on employee assistance programmes and abolishing statutory record-keeping requirements for statutory sick pay. We will consider the introduction of a tax relief on interventions recommended by the new service, and make a decision at the 2013 Budget.
The response sets out how we will use the opportunity provided by wider reform of the welfare system to address the problems the reviewers identified with the way the current benefit system treats people with health or sickness issues. Under universal credit we will ensure that people receive appropriate support to assist their return to work from the start of their claim rather than waiting until they have undergone a work capability assessment. And we will use the universal jobmatch system to help people who are unable to return to their old job due to health issues to find more suitable employment.
The response also announces measures to strengthen sickness absence management within the public sector, following the progress made by the civil service in reducing absence and reviewing the terms of occupational sick pay policies. We will continue to work with public sector employers to bring transparency and accountability to the management of sickness absence.
The response has been informed by close working across Government and the devolved Administrations and input from employers, employee organisations and health care professionals across the country, who have all made an important contribution to the development of these proposals.
Grand Committee
(11 years, 10 months ago)
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Defamation Bill
(11 years, 10 months ago)
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The Deputy Chairman of Committees (Lord Geddes)
My Lords, it is now 2 pm. I have to start the proceedings as usual by saying that in the event of a Division in the House, which is extremely unlikely, the Committee will adjourn for 10 minutes. Before we come to the first amendment, the noble Lord, Lord McNally, has a statement to make which is not debatable.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, at the beginning of the Committee’s discussions on Tuesday, the noble Lord, Lord Browne of Ladyton, raised an issue in relation to legal advice which had been given to Rutland County Council. It suggested that the general powers given to local authorities in Section 1 of the Localism Act 2011 had overturned the bar on them suing in defamation, which was established by the House of Lords in Derbyshire County Council v Times Newspapers.
My officials have explored the issue with officials at the Department for Communities and Local Government, which is responsible for the 2011 Act. The Government are in no doubt that if a case were brought, the courts would still find that local authorities cannot bring action in defamation. The decision in Derbyshire was reached on public policy grounds, which we considered remain compelling. The House of Lords found that it would be contrary to the public interest for organs of government to be able to sue in defamation, and that it would be an undesirable fetter on freedom of speech. It must be borne in mind that Derbyshire was decided before the enactment of the Human Rights Act 1998. Consideration of Article 10 would only bolster the reasoning of the House of Lords in Derbyshire.
In any event, I can reassure the Committee that even if the issue was brought before the court and found to the contrary, the situation could be remedied by way of a statutory instrument under Section 5(3) of the Localism Act 2011. The power allows the Secretary of State to prevent local authorities using Section 1 powers to do anything specific in the order. In this case, an order could be made preventing any action being brought in defamation. I have already indicated in earlier debates our view that it is preferable for the courts to have the flexibility to continue to develop the Derbyshire principle, rather than to attempt to prescribe rigid boundaries in statute. That remains our view. In the unlikely event of any difficulty arising as a result of the provisions in the Localism Act, prompt action can be taken to address that without any need for primary legislation.
Clause 7 : Reports etc protected by privilege
Amendment 39
Lord Mawhinney
“( ) After paragraph 8 insert—
“8A Communication between a Member of Parliament and any constituent.””
Lord Mawhinney
My Lords, although two days have passed, this is the first debate following that on Amendment 31, which was moved by the noble Lord, Lord Hunt of Chesterton. After we had adjourned, a thought occurred to me which I probably should have put on the record in that debate. In all truth, it did not occur to me then; but it has since, so I wish to do that. In col. GC239 of Tuesday’s Hansard, in summing up his amendment, the noble Lord listed a number of institutions with which he had been in communication in framing it. One of them was the Institute of Physics, which he said has 45,000 members. It was not until I was on my way home that I realised I should probably have said that I am an honorary member of the Institute of Physics. I suspect that does not even remotely influence anything but, for the record, I make that clear.
As regards Amendment 39, I want to point out that it was drawn to the Joint Committee’s attention that when a constituent speaks to a Member of Parliament, that Member, if he then relays the information given to him or her in the House, has privilege as far as Parliament is concerned. However, there was a question mark as to whether the communication between the constituent and the Member of Parliament was also covered by privilege. It seemed to the Joint Committee that it was extremely important that it should be covered by privilege because at the very heart of our democratic process is the concept and the reality that a Member of Parliament acts on behalf of his or her constituents. That ought not to be mitigated or reduced by pressures that would rule out things that the constituent could say to his or her Member of Parliament.
We were also told that the Government intended to bring forward legislation on privilege. We all understood that and the committee took the unanimous view that—how do I put this delicately?—this might be a long, drawn-out process, which started with ministerial statements some time ago that the Government intended to legislate in this area, and various steps have been taken along that path. There was no great confidence that we would soon reach the end of that path. Unanimously, the committee decided to recommend to the House and the Government to clarify the position and to remove any doubt that what is said between a constituent and his or her Member of Parliament should also be covered by privilege. The argument was raised by one witness that these days you cannot necessarily trust every Member of Parliament to behave appropriately in such circumstances, to be careful in the use of what would probably be highly contentious information and to use it in such a way that would be in keeping with the well established standards of the House of Commons.
The Joint Committee took the view that an occasional misuse of information by an individual Member of Parliament was not sufficiently important to offset the fundamental issue that we were addressing. Our thoughts are encapsulated in this amendment, which I beg to move.
Lord Lester of Herne Hill
My Lords, I rise in support of the amendment and what I will say briefly has some relevance to my later Amendments 43 and 44, dealing with parliamentary privilege. I am very sympathetic to the idea explained by the noble Lord, Lord Mawhinney, that we should not wait for some future legislation as a result of the consideration of parliamentary privilege generally, but that where there is an issue that properly falls within the scope of defamation and nothing else, we should take advantage in this legislation to make the necessary amendments. I regard this as one necessary amendment for the reasons given by the Joint Committee on the draft Bill.
The Government stated in their response that this was best left to the forthcoming Green Paper and draft parliamentary privilege Bill. The Green Paper concluded that while some forms of correspondence between constituents were already protected by common law qualified privilege, it would be inappropriate to extend qualified privilege to all forms of correspondence as it would run the risk of potentially encouraging correspondence to MPs intended to circumvent court orders and damage the privacy or reputation of third parties. The Government expressed the view the it would better to continue to enable the courts to determine the boundaries of privilege in individual cases.
I understand that and it is an objection to a wider issue than liability and defamation procedures. It is all about breach of privacy and contempt of court. However, given that the amendment of the noble Lord, Lord Mawhinney, seeks only to provide qualified privilege in defamation proceedings and that there seems to be agreement that it is already covered by the common law in appropriate circumstances, I see no good reason in principle to oppose it. I note that the Libel Reform Campaign supports it. It suggested adding “Private” at the start of the amendment to distinguish between letters and e-mail and social media.
Baroness Hayter of Kentish Town
On behalf of my noble friend Lord Browne, I thank the Minister—and, even more perhaps, his officials who did the hard work—for bringing so promptly to us the response on Rutland. Perhaps I should declare an interest as someone who is married to a member of the Institute of Physics.
I support the thrust of the amendment, but will the Minister, or perhaps the noble Lord, Lord Mawhinney, clarify whether it would cover all letters from MPs to constituents? We had a case locally where an MP attached to a letter a copy of a letter that they had received from another constituent—a row was going on between two constituents, as often happens. Would attaching that letter be similarly covered by privilege if it was then given, as it was, to the press? However, we undoubtedly support the intention of the amendment.
Lord McNally
When a Front-Bencher stands up, that is usually a signal that it is the end of the debate.
Lord Phillips of Sudbury
It is only a short point. Will the Minister confirm that the amendment will not affect a situation where a constituent writes to a Member of Parliament a brazenly vicious and malicious letter designed to cast some other constituent in the most deplorable of lights? I think that I am right in saying that malice would destroy the qualified privilege. On that basis, it might be worth having on the record that we are not by this amendment upsetting the law in that kind of situation, because it should not go that far.
Lord McNally
My Lords, the noble Lord, Lord Phillips, is the most frustrating of colleagues, because, the moment that I am tetchy with him about his cavalier approach to procedure, he then intervenes to make a very helpful comment. The question that he has asked, as well as the one asked by the noble Baroness, Lady Hayter, are ones on which I would be interested to hear the view of the noble Lord, Lord Mawhinney, because my reply is going to be to preach caution to the Committee.
I know that the noble Lord, Lord Mawhinney, unusually for him, expressed a degree of cynicism about how long the path ahead was for us on this, but I think that we should proceed with caution at this stage. It is an issue of relevance in a wider context than just defamation proceedings.
As noble Lords will be aware—and this is partly an answer to the suggestion of the noble Lord, Lord Mawhinney, that the Government were somehow dragging their feet—the Government published a draft Bill and Green Paper on parliamentary privilege in April last year. This sought views on a range of issues, including, in the broad context which I have mentioned, those which form the subject of this amendment and those in subsequent groups. Consultation on the draft Bill and Green Paper closed at the end of September, and a Joint Committee of both Houses has recently been established to consider the issue further. Therefore, in these circumstances we consider that it is clearly preferable for the issues relating to parliamentary privilege to be left to the Joint Committee to consider and take forward rather than pre-empting its considerations by including the provision in the Bill. No doubt, the deliberations of the pre-legislative scrutiny committee to which the noble Lord, Lord Mawhinney, referred and, indeed, these contributions will inform the deliberations of the Joint Committee, but on that basis I hope the noble Lord will be prepared to withdraw the amendment and leave the matter in the hands of the Joint Committee that has been established.
Lord Mawhinney
My Lords, I think my noble friend in his careful reply hinted vaguely that I might have been motivated by a touch of cynicism. I am surprised about that given how long this has been in the hopper. A second Joint Committee has now been established and part of its job will be to review the findings of the first Joint Committee. Were I to be accused of cynicism, it might more usefully be applied in those circumstances rather than simply on the basis of time elapsed.
It is probably a somewhat unusual set of circumstances for a Joint Committee to be established in part to review decisions taken by a previously properly established Joint Committee, and I look forward to the potential for an exciting debate in your Lordships’ House about which of the Joint Committee reports the House gives most credence to were the two reports not to be identical.
As regards the question raised by the noble Lord, Lord Phillips of Sudbury, my understanding is that malice is always outside qualified privilege. As regards the question raised by the noble Baroness, Lady Hayter, I was careful to draft this amendment in general terms. I did that in part because as a former Minister I know well that if the spirit of the amendment is adopted, officials will always find an opportunity to tell the Minister that the amendment is not quite correctly drafted and that he needs to do this, that or the other. They do that extremely well, and I have been the beneficiary on many occasions, so I am not being in any sense rude or aggressive. I am simply explaining that it did not seem to me to be worthwhile to try to think up every set of circumstances. If the Minister accepts the principle, when the Bill emerged from Report, it would be drafted in the way that would be most sensible as far as the Government were concerned. On this issue, I guess that would be most sensible in terms of the House as well.
The issue is that day in, day out constituents correspond with their Members of Parliament and there ought not to be an inhibition on that. Personally, I would probably restrict it to the direct communication between the constituent and the Member of Parliament because it would be that on which the Member of Parliament would stand up and address the House of Commons. Anyway, the Member of Parliament has to exercise some judgment about what he or she wishes to say in the Chamber. I do not think our Joint Committee—I look to the noble Baroness to correct me if I am wrong—was trying to be picky to the last detail. We were trying to persuade the Government to accept this principle, which is why I worded my amendment simply to get the principle in front of my noble friend. I have heard what he said and have some sympathy, but do not feel encouraged that the Government’s timeframe will be such as to meet the urgency that I think the Joint Committee wanted him to feel on this subject. Of course, I will be happy to withdraw the amendment but, in doing so, I ask my noble friend to give it serious thought and perhaps to bear in mind that, were this to go into the Defamation Bill, when the Government’s all-singing, all-dancing piece of legislation comes forward, this clause could at that point be taken out of that Bill and put in to the new Bill so that all defamation was in one place. I beg leave to withdraw the amendment.
Baroness Hayter of Kentish Town
My Lords, the amendment in my name and that of my noble friend Lord Browne of Ladyton would extend the privilege set down in Clause 7(4) to local government. This is probably the existing intention of the clause; we can see no reason why it would not be. It is really simply for the avoidance of doubt that the suggested wording would give comfort to those local journalists who play rather an important role in propagating the work of local councils.
It would also be useful to seek some clarification from the Minister, to whom we gave some notice, about whether this clause covers the Welsh and Northern Ireland Assemblies—although the Bill does not cover Northern Ireland, reports of that Assembly could well appear in our newspapers and affect people here—and the Greater London Authority. I am fairly sure that it covers all of those and is about government in its broadest sense, but we want the wording to make that clear. I beg to move.
Lord McNally
My Lords, as an afterthought on my noble friend Lord Mawhinney’s approach to amendments, I can confirm that officials do wonderful work. However, his approach also reminds me of a story that the noble Lord, Lord Healey, told. When he was Minister of Defence, a man came to him with a solution to the Russian submarine menace: you boil the North Sea, and when the water has evaporated you can see where the submarines are on the seabed. Denis said to the man, “That’s fine, but how do I boil the North Sea?”. The man said, “Look, Mr Healey, I’ve had a good idea. Surely you and your officials should work out the practicalities”. That is just a passing thought.
I understand why the amendment has been tabled. I hope that my reply will clarify matters; I am not sure, given the presence of some very informed noble and learned friends. What I say at this Dispatch Box is of assistance to judges and courts when they make such decisions. I think so anyway, as a non-lawyer. Is it called Pepper v Hart? You see, I am learning on the job here.
Clause 7(4) extends the provision in paragraphs 9 and 10 of Schedule 1 to the Defamation Act 1996 on qualified privilege attaching to information published by legislatures, Governments and authorities exercising government functions. The changes ensure that the provisions also cover fair and accurate summaries of material and that the scope of the defence is extended to the relevant publications no matter where in the world they occur.
Amendment 39A amends the definition of governmental functions used in subsection (4) and in the 1996 Act to include a reference to local authorities as well as to police functions. We do not believe that this is necessary. We consider that local authorities are already covered by the reference to,
“any authority performing governmental functions”.
The Defamation Act 1952 covered information published,
“by or on behalf of any government department, officer of state, local authority, or chief officer of police”.
The 1996 Act was intended to extend this coverage. We are in no doubt that the reference to,
“any authority performing governmental functions”,
should be read as embracing the specific bodies referred to in the 1952 Act.
There is no indication that the absence of a specific reference to local authorities has caused any difficulty in practice. However, to take the specific point, we also believe that the devolved administrations would fall within the term “legislature”, which is used in the amendment to the 1996 Act made by subsection (4) of Clause 7 and elsewhere in relation to qualified privilege.
The Deputy Chairman of Committees
It is unusual to speak after the Minister, but there is nothing to prevent any noble Lord speaking.
Lord Lester of Herne Hill
I am grateful to the deputy chairman. I am sorry to be unusual, but I normally am. Not only do I agree with what has been said but, in my mind, extending statutory qualified privilege in the schedule is one of the most useful things that the Bill does. We are dealing there with clearly prescribed situations, of which this is one, where, if the press gives a fair and accurate report, it will be protected, as will the public interest. The fact that this has been extended extremely broadly, as my Bill sought to do, whereas the 1996 Act did not do so, is a matter for congratulation.
Baroness Hayter of Kentish Town
I was going to use two words I now know I should not: they were simply “thank you”. I am not allowed to say that. I thank the Minister for his answer and beg leave to withdraw the amendment.
Lord Phillips of Sudbury
Lord Phillips of Sudbury
My Lords, as has already been said, Clause 7 substantially amends the provisions of Section 14 of the Defamation Act 1996 and, in particular, Schedule 1 to that Act. Subsection (7) of Clause 7 deals with reports of proceedings at meetings of listed companies and stipulates that qualified privilege should attach to,
“A fair and accurate copy of, extract from or summary of any document circulated to members of a listed company”.
There are then listed three cases in which the privilege applies. The first is where the document is circulated with the authority of the board of directors, and the second case is where the document is circulated by the auditors of the company. So far, so good and so predictable. However, in relation to qualified privilege, Clause 7(7)(b) seeks to amend Schedule 1 to the 1996 Act by substituting sub-paragraph (3) of paragraph 13 as follows:
“A fair and accurate copy of, extract from or summary of any document circulated to members of a listed company which relates to the appointment, resignation, retirement or dismissal of directors of the company”.
My amendment seeks to add, “or its auditors”.
Lord Mawhinney
My Lords, my Amendments 41 and 42 have been bracketed with this amendment, and I would like to speak to them at this point. I have great sympathy with what the noble Lord, Lord Phillips, has just said about auditors, and I hope attention will be paid to that.
In Clause 7(9) the Bill has:
“After paragraph 14 insert … a fair and accurate … report of proceedings of a scientific or academic conference”.
The Joint Committee spent a lot of time talking about this. It felt strongly that peer-reviewed articles were certainly right to be covered—and I would like to pay particular thanks to the noble Lord, Lord Bew, for his considerable help in helping the committee understand the issues on this particular matter—but it was much more nervous about the inclusion of conferences. I should add that from 1968 to 1984 I was an assistant professor, a lecturer and a senior lecturer in universities in the United States, and in this country and in those capacities I attended many academic conferences, as has the noble Lord, Lord Bew, and other noble Lords.
“Conference” is a very widely drawn word. Having attended the world conference on radiation biology and radiation physics, I would have no difficulty in saying that it qualified for special consideration in the context of the Bill. On the other hand, and I speak carefully, conferences are called by a variety of people for a variety of reasons, not all of which deserve the sort of protection that we are envisaging in this legislation.
The Joint Committee came fairly firmly to the view that there ought to be protection. The wording “scientific or academic” included medicine. There were queries as to why medicine was not specifically mentioned but we thought “scientific or academic” was sufficient to cover all the academic disciplines.
We were very strongly of the view that there ought to be protection. We were equally strongly of the view that conferences ought not to be included unless my noble friend intends on Report to define, delineate and describe what the Government mean by an academic conference, or unless he wishes to add regulations about the reviewing of contents of conferences to bring them into line with peer-reviewed papers.
Amendment 42 adds to peer-reviewed papers coverage for material in archives that is of academic importance and subject to the ground rules specified in the particular amendment. The effect of the two amendments together is strongly to endorse peer-reviewed scientific and academic papers, to remove the Government’s intention to include conferences and to add authentic archive material.
Lord Bew
My Lords, I rise to support the amendment moved by the noble Lord, Lord Mawhinney, and to say that he has accurately recalled the discussion and the feeling of the Joint Committee. My sense is that we actually did get differing evidence. For example, I seem to recall that the Master of the Rolls was sceptical about extending privilege to academic conferences for the reasons that the noble Lord, Lord Mawhinney, has given us. On the other hand, we had a former Lord Chancellor, for example, who took the view that it was right to extend privilege. So there was a genuine difference of evidence from significant people. We were certainly much keener to protect peer-reviewed journals than we were to offer a new measure of protection for conferences for the simple reason that all of us who are academics have attended conferences that we are not sure would deserve this privilege. The Government may well have things to say to expand their thinking to produce a more enthusiastic response—on my part, at any rate. However, it is worth saying that they were somewhat cagey on this matter.
Perhaps I may say very briefly, referring to the privilege matters discussed and to what is about to come, as the one person who was a member of the Joint Committee on Parliamentary Privilege and of the Joint Committee on the Defamation Bill, that I am finding the discussion so far extremely helpful, I expect to find further discussions even more helpful, and I am learning a lot.
Lord Phillips of Sudbury
Given the noble Lord’s deep involvement in this issue, I understand what he is saying about the amendment proposed. However, is he not very concerned, along the same lines, by the provisions of Clause 7(5), which would allow,
“a press conference held anywhere in the world for the discussion of a matter of public interest”,
to have qualified privilege? It seems to me that you would be in the bizarre position of having a conference to which qualified privilege did not apply, but the press conference after the conference would be the subject of qualified privilege.
Lord Bew
The noble Lord makes a very good point, one that I was actually aware of. While I fully understand the ambiguity to which he referred, the reason why I am more open to the provision as it stands for press conferences is that in recent time we have had, to my knowledge, at least one celebrated case where a particular government department gave a press conference and people subsequently wrote perfectly legitimate articles on the basis of what was said by that department but none the less, the case went to court and substantial payments were made.
I cannot bring myself to say that it is reasonable that if a department of government holds a press conference and people actively report or elucidate on what is said there, there should subsequently be libel actions, which there have been in recent times. That is the reason why at the moment I am living with the press conference issue.
I am open to persuasion on this question of conferences, but those of us on the Select Committee want to know that the Government have thought enough about the fact that some academic conferences are not very well run and are somewhat chaotic, and that they have some way of thinking that responds to that. A fundamental thinking of our committee was that the deepest problem is that academics, in the sciences or in the humanities, can be driven by their research to certain conclusions, and at this point there is a chill point that means they would discover it was difficult to find an academic outlet because a journal might say, “Our budget is so small that if there is a libel action here, even though your research looks very interesting to us, we can’t possibly publish it”. We know that this is currently going on, and that seems to be the greatest single evil in this field that needs to be addressed. I feel less concerned in principle about defending the rights of someone who may be spouting off a little at a conference.
Lord Lester of Herne Hill
My Lords, I had not expected to need to reply about press conferences but, in the light of my noble friend Lord Phillips’s intervention, I better had. This question was dealt with by the House of Lords in a case that I was involved in called McCartan Turkington Breen v Times Newspapers, 2001 2 Appeal Cases, 277; the noble Lord, Lord Bew, may remember it.
Lord Lester of Herne Hill
What happened was that a soldier was found guilty of murder for, I think, killing a woman at a roadblock in Northern Ireland and sentenced to imprisonment. He was represented by a firm of solicitors in Northern Ireland. A group of senior military men had a meeting in a castle in, I think, Yorkshire in order to accuse the solicitors of negligence in the way that they had gone about defending the soldier. The meeting in the castle was open to the public, but very few members of the public were in fact able to get in. The law firm sued for libel and the defence was that it was a public meeting and therefore covered by statutory qualified privilege. The argument was that it was not really a public meeting but a press conference; they gave out a press statement and it was in a castle.
Lord Bingham gave the lead judgment, making it clear on free-speech grounds that the press are the eyes and ears of the public, and that where the public cannot get in easily on an occasion like that and the press can, the press must be free to make a fair and accurate report—it must be fair and accurate—of what is alleged at the press conference, which is to be treated as a public meeting.
On Article 10 grounds, the House of Lords clarified the meaning of “public meeting” to include press conferences. In fact my memory, although I may be wrong, is that the Faulks committee in 1975 had recommended that press conferences should be included. So I have no difficulty at all with the express words in the Bill making clear that it covers press conferences anywhere in the world, for the reasons given by the House of Lords, per Lord Bingham, in that case. My difficulty is with what is to be done with the amendment tabled by the noble Lord, Lord Mawhinney. I was looking at the Joint Committee report about it. Paragraph 48 states:
“The draft Bill goes some way towards tackling this problem by extending qualified privilege to include fair and accurate reports of what is said at a ‘scientific or academic conference’. We welcome this development, provided the conference is reputable”.
The report goes on to deal with peer-reviewed articles and recommends extending it to peer-reviewed articles in scientific or academic journals. Then, as the noble Lords, Lord Bew, and Lord Mawhinney, have done, it explains the definitional problems, and towards the end it recommends,
“that the Government prepares guidance on the scope of this new type of statutory qualified privilege in consultation with the judiciary and other interested parties”.
As I read this, the Joint Committee are saying that it is a good idea, but there are definitional problems, so include it, but with proper guidance.
Baroness Hayter of Kentish Town
There is no answer to that. On the first point, on the face of it, it appears to be not a bad idea. I think that some of us feel that half the problem is that auditors are not sacked often enough. On the Financial Services Bill, we went through many of the things that they somehow failed to notice. I cannot resist saying that the people who would be most likely to sue are, of course, auditors. Auditors are firms. If we were to get our way about resisting non-natural persons having the same rights as natural persons, perhaps we could get around it that way. That is partly because I cannot resist reminding the Minister of that.
On conferences, my fellow members of the Joint Committee said that we felt that the peer-reviewed nature of the documentation or the speech is important. However, in many of the cases of scientific conferences where action has been taken, it has been taken by a corporation. That is not wholly so, but very frequently, so there may be more than one way to skin this cat. We would support the rightful emphasis on peer-review.
Lord McNally
In relation to Amendment 40, the Defamation Act 1996 gives a defence of qualified privilege to fair and accurate reports of proceedings at a general meeting of a UK public company and to copies of and extracts from various documents circulated to members of such a company.
Clause 7(7) extends this protection more widely to cover reports in relation to companies listed on recognised stock exchanges worldwide and to summaries of such material. This includes material circulated to members of a listed company which relates to the appointment, resignation, retirement or dismissal of directors of the company. The debate has reflected this. In drawing up this Bill, we have constantly challenged about where we are drawing the line and whether it is the right place to draw the line.
Amendment 40 would in addition extend qualified privilege to material relating to the appointment, resignation, retirement or dismissal of the company’s auditors. We do not consider that this would be appropriate. Extending privilege in this way would give protection to reports on contractual material between companies and their auditors such as issues of appointment and dismissal. We consider that this would be an inappropriate intrusion into how companies conduct their business affairs which could impact on business efficiency, and that it is preferable for the focus of Schedule 1 to continue to be on protecting fair and accurate reports of material which is publicly available.
Amendments 41 and 42 would alter the way in which the Bill extends qualified privilege—
Lord Browne of Ladyton
I am grateful to the Minister for giving away and apologise to Members of the Committee since I did not take part in the debate on this amendment. It occurred to me as he was speaking, and I draw his attention to the provisions of his own Bill, that the place where he seeks to draw the line and the restriction that he seeks to maintain may well already be overtaken by the provisions of new sub-paragraph (2)(a) which subsection (7) seeks to add to the schedule. I cannot think of any circumstances where the kind of document that the Minister is talking about in such a meeting would not be circulated to the members of the company with the authority of the board of directors of the company. That information will already be privileged as far as I can see. I may be wrong, but it seems to me that the Minister’s concern about revealing private commercial business of this nature is already overtaken by the provisions which he seeks to put in the Bill.
Lord McNally
I doubt that. We are moving the extra line to where a company has made a decision to change its auditors, which will be reported to the members of the company. There may be a number of reasons for that, but the report will be suitable for the annual general meeting, and other issues, personal or related to performance, may be covered by it. As I have said, in a number of these areas, we are drawing lines. Where there is a relationship between a company and its auditors, I just wonder whether it would be entirely conducive to good working relations between them if a reason for dismissal which was extremely damaging to the auditors was privileged in this way.
Lord Lester of Herne Hill
My Lords, I am sorry to say that I cannot understand that. We are dealing with a public listed company; we are dealing with the resignation or removal of directors, which is a very serious step; we are dealing with qualified privilege, quite rightly, to give a fair and accurate report of that. The auditors are officers of the company performing a vital role. If they are mixed up with some wrongdoing that needs to be reported, we are dealing not with some private, contractual, sensitive matter, but with what is in the report to the shareholders about the public listed company. That is already there. I cannot therefore see any good reason for not including the auditors in that. It is nothing to do with an ordinary, private commercial relationship, so I agree with the noble Lord, Lord Browne.
Lord Browne of Ladyton
In the interests of clarity, I am not very pleased with how I put the argument earlier. I can put it much more simply. With respect to the noble Lord, Lord Phillips of Sudbury, I think that his amendment is unnecessary. The circumstances that he envisages in this sort of environment are already covered by the provisions of the government amendment that we all support. I cannot imagine that what he seeks to allow to be reported and to attract privilege would be circulated other than with the authority of the directors to the members of the company. I think that it is unnecessary but it may be an issue that needs to be thought about. I am concerned that perhaps in telling the Committee the line that has been adopted and to hold the line at a particular point, the Minister may already have crossed that line in any event by these provisions.
Lord McNally
I will reflect on that but I am also very concerned and do not want to enter a field regarding the professional relationship between auditors—or, perhaps I may respectfully suggest, lawyers—and companies, where there is a barn door left open. I understand, as indicated by the noble Lord, Lord Browne, that the intention of the proposal is to give protection. I am willing to reflect on whether where we have drawn the line is exactly right, and I will listen to expert opinion in this Committee. As a layman, I also feel a slight tingle between the shoulder blades about where we are going in terms of the relationship of professions such as auditors and lawyers with their clients. I, too, would like advice on these matters.
Lord Lester of Herne Hill
We are not supporting the amendment. We are urging the Government to accept that the amendment is not necessary because the matter is well within its scope.
Lord Phillips of Sudbury
Before this mini debate concludes, I would just say that I agree with my noble friend Lord Lester about the particularity of the post of auditor. It is not like the lawyers of the company. They are not officials of the company; they have a unique role, and I simply put it to the Committee that they should be on the same footing vis-à-vis defamation as the directors. They are not as it stands because of the point to which the noble Lord, Lord Browne, referred. Clause 7 refers only to privilege extending to documents circulated by the auditors of the company, but proposed new sub-paragraph (3), where the amendment would bite, refers to documents circulated by the company to the members of the company. At the moment, it gives qualified privilege to those documents vis-à-vis appointments, and so on, of directors but not of auditors. I am saying that it should be there, but it can be reflected on.
Lord McNally
You can see, Lord Chairman, that this is a very interesting Committee. Amendments 41 and 42 would alter the way in which the Bill extends qualified privilege to certain types of material. Again, I was interested in the interventions and understand some of the concerns expressed. We thought about whether we should try to define “conference”, and perhaps we will have another think about that. If anyone has a suggestion, they know my address.
As the Committee will know, we had a lot of discussions with editors of a number of scientific and academic journals. They were keen to stress that qualified privilege for peer-reviewed articles was seen as the most important priority by them. I very much agree with the point that the noble Baroness, Lady Hayter, made in her intervention. We should hold close to the protection of a proper peer-review process in the changes that we are making to the law.
As the noble Lord, Lord Bew, indicated in his recollection to the Committee, these editors and others were not opposed to the extension of qualified privilege to fair and accurate reports of proceedings of scientific and academic conferences, or to fair and accurate copies of, extracts from or summaries of matters published at such conferences. Our impression was that the scientific community has welcomed this extension.
We do not agree with this amendment. The protections set out in subsection (9), along with the protection in Clause 6 and a number of other measures in the Bill are an important step forward and reflect our aim of ensuring that scientific and academic debate is able to flourish.
Lord Mawhinney
We are all agreed on the importance of peer review. As my noble friend is going to think further about conferences—he has just said that he will—will he do so in the context of peer review? That is the principle that we are all hanging on to. The Joint Committee could not find to offer to him a satisfactory way which enshrined peer review in the context of conferences, partly because peer-reviewed papers are peer reviewed ahead of publication. Peer review in conference would be subsequent to whatever was being said. Will my noble friend at least assure the Committee that when he reflects further on conferences, he will do so specifically in the context of peer review?
Lord McNally
Most certainly. That was the point that the noble Baroness, Lady Hayter, made, with which I heartily concur. It is interesting that when the Bill was debated in the other place, the move in the direction of conferences and other gatherings was warmly welcomed. I will reflect, but these proceedings will of course also be read by the scientific community. Perhaps it will help me. I have made this point time and again: I want to be able to look the scientific and academic community in the eye and say, “Look, this is the best that we can do in giving scientists and academics the maximum of freedom to indulge in proper debate and criticism in their areas of expertise”. I certainly accept that suggestion by my noble friend Lord Mawhinney. There has been a general welcome for our attempt to extend this more widely than the very narrow context of peer-reviewed articles in magazines of repute.
Amendment 42 would extend qualified privilege, subject to explanation or correction, under Schedule 1 to the Defamation Act 1996 to peer-reviewed articles and fair and accurate copies and reports of material in an archive where the limitation period for an action against the original publisher of the material has expired. In speaking to the amendment to Clause 6 tabled by the noble Lord, Lord Hunt of Chesterton, I expressed concern about extending the protection for peer-reviewed material more widely than in respect of articles in scientific and academic journals. This amendment would extend that protection even more widely to any peer-reviewed material, wherever it appears, and, as a result, would serve only to increase the risk of the defence applying in instances where the peer-review process had not been applied in a sufficiently robust way.
In respect of extending qualified privilege to archives, this is something that I know the Joint Committee on the draft Bill, chaired by the noble Lord, was in favour of. We indicated in the government response to the committee that we would consider this proposal. However, after considering the position further, we came to the conclusion that extending qualified privilege to archives would potentially make the defence available to a very wide range of material. There would also be considerable difficulties in defining what types of archive should or should not be covered. We believe that this would risk not providing adequate protection for claimants, and therefore we do not consider this amendment to be appropriate. There is no generally agreed definition of what constitutes an archive, and this amendment would potentially cover a very wide range of material.
I am have to say again—and I am not opening any gates for reconsideration on this—that I was, until a few weeks ago, the Minister for the National Archives. I am extremely proud to have held that position because it is one of the jewels in our crown in terms of a national asset. As I said to the noble Lord, we are again worrying about where to draw the line. On this occasion, we draw the line, as far as he is concerned, on the wrong side of his amendment, but I hope he will agree to withdraw it.
Lord Phillips of Sudbury
I am grateful for what the Minister said and for the contributions to the debate on this amendment which have prised out a matter not hitherto appreciated. However, rather than prolong this debate, I suggest that there be a conversation with the Minister hereafter and perhaps a return on Report.
Lord McNally
It might be an indication of how confused the Minister gets that it was subsequently clarified to me that the noble Lords, Lord Lester and Lord Browne, were both supporting me—something that I was not aware of when I heard their speeches.
Lord Phillips of Sudbury
That does not change my reply. I beg leave to withdraw the amendment.
Lord Lester of Herne Hill
“Reports etc of certain Parliamentary matters protected by absolute privilege
(1) The following are absolutely privileged—
(a) a fair and accurate report of proceedings in Parliament;(b) a fair and accurate report of anything published by or on the authority of Parliament; and(c) a fair and accurate copy of, extract from or summary of anything published by or on the authority of Parliament.(2) The court must stay any proceedings where the defendant shows that—
(a) the proceedings relate to the publication of anything that falls within paragraph (a), (b) or (c) of subsection (1); or(b) the proceedings seek to prevent or postpone the making of any such publication.(3) This section also has effect in relation to the Welsh Assembly and the Northern Ireland Assembly (and any reference to Parliament is to be read as a reference to the Assembly in question).
(4) The Parliamentary Papers Act 1840 is repealed.”
Lord Lester of Herne Hill
In speaking to Amendment 43, it may be convenient for me to speak also to Amendment 44 as they both deal with privilege. If that is not convenient, I shall speak to Amendment 43 only, but they are grouped together.
There is one defect in Amendment 43, which is that subsection (4) should not repeal the Parliamentary Papers Act 1840 for reasons that I shall explain.
I know that the Minister will say in his reply, “Leave it all to the Committee on Parliamentary Privilege”, but I hope that these amendments will eventually persuade the Government that that is not a convenient and sensible course. That will be particularly true when we come to the Neil Hamilton affair and Clause 13, which was being dealt with 13 years ago by the Joint Committee on Parliamentary Privilege of the noble and learned Lord, Lord Nicholls of Birkenhead. There has never been a more authoritative committee, crowded as it was with jurists former law officers of the Crown and with evidence given by every conceivable expert on parliamentary privilege. The idea that we should now revisit what that committee said about Clause 13 of the Defamation Act is not sensible.
However, before I come to that, I need to deal with Amendment 43. The amendment would have the effect of reinstating Clause 7 of the Bill that I produced to provide absolute privilege in defamation proceedings for fair and accurate reports of proceedings in Parliament. Section 1 of the Parliamentary Papers Act 1840 prevents any civil or criminal proceedings in respect of a report, paper, votes or proceedings published by order of either House. Section 2 confers similar protection on copies of such publications. Section 3 confers a lesser degree of protection on any extract from or abstract of such publications, which must be published in good faith and without malice.
Newspaper reports which are not taken from Hansard are also protected at common law. The case of Wason v Walter, 1868-69, 4 Queen’s Bench, 73, established that by analogy with reports of court proceedings, a publisher of a report of a parliamentary debate is protected at common law from actions for defamation. If the whole debate is published, the protection is absolute. If less than the whole is published, the protection is qualified by the requirement that it is published without malice, as stated in the Joint Committee on Parliamentary Privilege report 1999, paragraph 356.
Court proceedings now enjoy absolute privilege under Section 14 of the Defamation Act 1996. Section 15 confers qualified privilege on reports of the proceedings in public of a legislature anywhere in the world, as well as material published by or on the authority of a Government or legislature anywhere in the world, which we have just discussed. The report must be fair and accurate and published without malice and in the public interest.
Wason and Walter was decided by analogy with the privilege afforded to court proceedings. Chief Justice Cockburn said that given the,
“paramount public and national importance that proceedings of the Houses of Parliament shall be communicated to the public … to us it seems clear that the principles on which the publication of reports of proceedings of Courts of Justice have been held to be privileged apply to the reports of Parliamentary proceedings. The analogy between the two cases is in every respect complete”.
The same protection should therefore be conferred on fair and accurate reports of parliamentary proceedings as applies to court proceedings.
In 1999, the Joint Committee on Parliamentary Privilege of the noble and learned Lord, Lord Nicholls of Birkenhead, described the 1840 Act as being,
“drafted in a somewhat impenetrable early Victorian style”.
It recommended that the,
“protection given to the media by the 1840 Act and the common law itself should be retained.
We consider, further, that the statutory protection would be more transparent and accessible if it were included in a modern statute, whose language and style would be easier to understand than the 1840 Act. We recommend that the 1840 Act, as amended, should be replaced with a modern statute”.
The 1840 Act was considered more recently by the House of Commons Culture, Media and Sport Committee in its report Press Standards, Privacy and Libel, at paragraphs 94 to 102. Referring to the 2009 case between Trafigura and the Guardian newspaper, that committee concluded that Parliamentary Questions tabled regarding the case were clearly covered by these provisions and would not therefore be covered by the then existing super-injunction which prevented publication of any reference to the case. That interpretation was challenged by the firm of Carter-Ruck, acting for Trafigura. I do not think that I need to go through that, but the committee concluded:
“The free and fair reporting of proceedings in Parliament is a cornerstone of a democracy. In the UK, publication of fair extracts of reports of proceedings in Parliament made without malice are protected by the Parliamentary Papers Act 1840 … They cannot be fettered by a court order. However, the confusion over this issue has caused us the very gravest concern that this freedom is being undermined. We therefore repeat previous recommendations from the Committee on Parliamentary Privilege that the Ministry of Justice replace the Parliamentary Papers Act 1840 with a clear and comprehensible modern statute”.
Neither committee specifically addressed the question of whether publication of reports of parliamentary proceedings should be absolute or remain qualified. The approach taken in my Bill was endorsed by the Joint Committee on the draft Defamation Bill on the basis that it is of fundamental importance that proceedings in Parliament can be reported upon freely by the press to ensure that people can discover what is being said and done by elected representatives on their behalf. In paragraph 51 of its report, my noble friend Lord Mawhinney’s committee said:
“We recommend adding a provision to the Bill which provides the press with a clear and unfettered right to report on what is said in Parliament and with the protection of absolute privilege for any such report which is fair and accurate”.
The Government’s response left the issue to the Parliamentary Privilege Green Paper. I will not take further the time of the Committee by reading any of that, but some of the issues which they raise have nothing to do with defamation, but with privacy and contempt of court. I accept that the issues raised in their Green Paper on contempt and privacy may be best dealt with in more detail by the Joint Committee on Parliamentary Privilege or the Law Commission in its review, now pending, on the law of contempt of court. However, none of that is any good reason for not giving effect to what the committee of the noble Lord, Lord Nicholls, recommended 13 years ago, what the Commons committee has recommended and what the Joint Committee on this Bill has recommended. That is three committees over more than 13 years concentrating only on defamation, not on privacy or contempt.
Lord McNally
My Lords, just to give some sense of momentum on this, I can tell your Lordships that the Joint Committee that has been established on parliamentary privilege is asked to report by 25 April 2013.
I listened carefully to what my noble friend said. As always, he made an extremely well informed and well researched contribution, but can I just put to the Committee a political reality? We are dealing with probably one of the most sensitive areas of the functioning of our parliamentary democracy; that is, parliamentary privilege. There is not a snowball’s chance in hell of the Houses of Parliament in an area, which is so sensitive and so important, allowing this Committee and this Bill to make decisions which go ahead of what the Joint Committee is going to do.
As the Government’s Green Paper pointed out, the point of parliamentary privilege is not defamation or what is published in the newspapers; it is the right of Members of Parliament to conduct their business in Parliament. That is why parliamentarians are so careful and so jealous about how we should handle this.
Therefore, I am sorry to say that I can give my noble friend no other response than the one that I gave to the noble Lord, Lord Mawhinney: that the Joint Committee is now in being. Certainly, my noble friend’s contribution today will be well worth reading by that committee, but it is a matter for that committee and I urge my noble friend to withdraw his amendment.
Lord Lester of Herne Hill
I am grateful. I learnt this appalling word from Europe, comitology, which is the study of committees, and I have gone too much into the past committees. Although I am not surprised by the Minister’s reply, I am deeply disappointed by it, because what my amendments seek to do is extraordinarily important but modest. The first would clarify the 1840 Act on a completely non-controversial issue so far as that Act, which is all about reporting proceedings in Parliament, is concerned. The second amendment would remove what everyone has always agreed was a gross anomaly. We apparently will have to wait for yet another committee to look at this, but I am liable to return to it on Report, because I am not satisfied by the stonewalling. On that basis, I beg leave to withdraw the amendment.
Lord Browne of Ladyton
“(a) a statement is published to the public (“the first publication”); and(b) there is subsequently published (whether or not to the public) that statement or a statement which is substantially the same.”
Lord Browne of Ladyton
My Lords, the amendment, which is in my name and that of my noble friend Lady Hayter, would apply the single publication rule to the subsequent publication of the same material by any publisher rather than by the same publisher. As it appears to be convenient to the Committee, I shall speak also to Amendments 47A and 47B which stand in our joint names, too, and may make some passing reference to the amendments tabled by the noble Lord, Lord Phillips of Sudbury. I intend to speak to the amendments comparatively briefly, because this issue was rehearsed in Committee in the House of Commons, but I am seeking further information, if possible, from the Government.
Under the current law as I understand it, each publication of defamatory material gives rise to a separate cause of action which is subject to its own limitation period. That as I understand it, although I have no experience of it, is known as the multiple publication rule. Clause 8, which I support, very sensibly introduces a single publication rule to prevent an action being brought in relation to publication of the same material by the same publisher after a one-year limitation period which will apply from the date of first publication. I have no intention of going through the effect of the six subsections of this clause. They are there for Members of the Committee to read for themselves.
Lord Phillips of Sudbury
My Lords, I do not know whether my few words in Amendments 45 to 47 could be described as eloquent.
Lord Phillips of Sudbury
Oh, elegant. Well, they are certainly not elegant and certainly not eloquent. Nevertheless, they are designed to make life a little easier for whoever hereafter will read this Act of Parliament. They are very modest drafting amendments, putting the definition right up where it first appears in two places, dispensing with the need for subsection (2) and saving words—which is never a bad thing in legislation. It is as simple as that.
As to the much more substantial amendment moved by the noble Lord, Lord Browne of Ladyton, and supported by the noble Baroness, Lady Hayter of Kentish Town, I await what the Minister has to say with more than usual intensity. I can quite see that there are many issues of some subtlety around this that need, as always, to be weighed. I am inclined to support them but I am waiting to hear from him.
Lord Marks of Henley-on-Thames
My Lords, I support the principle of Amendment 44A moved by the noble Lord, Lord Browne of Ladyton. The single publication rule in this Bill is an important reform for avoiding multiplicity of actions and is thoroughly welcome, but its impact is markedly diminished by restricting its application to republication by the same publisher. I can see no justification in principle for restricting a claimant suing on a second publication by the original publisher but permitting him to sue on a publication at a later date by a second publisher.
Lord Ahmad of Wimbledon
In terms of audibility for all noble Lords, please could noble Lords make sure that their mobile phones are kept well away from the microphone because they cause issues with listening and difficulties for all concerned.
Lord Marks of Henley-on-Thames
I rather hope it was not mine, but it might have been. At any rate, it has been moved now.
The proviso of republication in a different manner as the application of the rule in my view provides sufficient protection. That was the unanimous and strongly held view of the Joint Committee, and it is one which I urge the Government to reconsider. I would add one caveat which is that, while I support the principle of this amendment, I can see the need for its qualification to ensure that this situation is addressed. It is possible to envisage a first publication by an insolvent publisher and then a second publication by a publisher who is worth suing. It would be perfectly reasonable for a claimant to take the view that he did not propose to sue the first publisher, but that he did wish to sue a publisher at a later date when the original limitation period might have expired because that publisher was worth suing and was likely to be good for the costs and the damages. It does not seem to me to be beyond the wit of draftsmen to cater for that position and to allow suing a second publisher in those circumstances. Subject to that caveat I support the amendment.
Lord Brown of Eaton-under-Heywood
I was not proposing to speak to this amendment at all but it seems to me that there is an enormous distinction to be made between person A and person B as to which publication one is being denied by the Limitation Act the opportunity of proceeding in respect of. It is, with respect, not only whether the second publisher may be financially worth suing as opposed to the first publisher which must be catered to in this provision, but surely also the standing and reputation of the publisher. One can very well imagine a situation in which one simply would not be bothered to be defamed by person A because that person’s standing and reputation was itself so low and yet a republication by somebody of real repute and standing would trigger one’s intent to sue. So if this Amendment 44A is to be accepted, that sort of thing should be catered to, whether under the provisions of subsection 4, with a specific provision about material difference lying on occasion in the character and position, financially and otherwise, of the publisher, or in some other way, I leave to others to consider.
As to the other amendments, I agree with the view that Amendments 45, 46 and 47 are a simpler and more elegant fashion of expressing those provisions. As to Amendment 47B and the proposed insertion of new Section 5A, I am neutral as to how desirable it is to spell out these considerations which shall not be regarded as materially different. I would respectfully suggest that the expression should be not,
“shall not be deemed to be”—
it is not a question of deeming—but
“shall not be regarded as”,
but that is a very minor point indeed.
Lord Lester of Herne Hill
On my noble friend Lord Phillips’s Amendments 45, 46 and 47, I hardly ever argue with parliamentary counsel as being defective in the way that they approach their work. With respect to my noble friend and to the noble and learned Lord, Lord Brown, I do not think that it is an improvement to save two words by twice repeating,
“or a section of the public”,
when it is clear beyond argument in Clause 8(2) that protection to the public includes publication to a section of the public. I therefore oppose what Lord Wilberforce once described as “the austerity of tabulated legalism”.
Lord Ahmad of Wimbledon
My Lords, we have heard much about balance. In order to provide balance from the Dispatch Box, at least in terms of the coalition, it is only right and appropriate, after my noble friend has spoken, that I now address the Committee and deal with some of the issues that have been raised. I listened with great interest to the noble Lord, Lord Browne, proposing the amendments and noted with great care what he said. At times I felt that some of my responses had winged their way over to him.
I shall respond to the amendments in front of us and share some thoughts as well. I assure noble Lords that when looking at the tabling of an amendment and its implications, both I and my noble friend Lord McNally look at these wordings in rigorous terms to test their application, ultimately from a layman’s perspective, to try to understand and get behind the true meanings of the different clauses.
Amendment 44A would amend Clause 8(1) to provide that the single publication rule would apply to the publication of the same material by any publisher rather than by the same publisher. As noble Lords have acknowledged, this would significantly extend the scope of the single publication rule, and there are implications for the protection for claimants. I shall talk through some technicalities. First, it would mean that if the claimant were to bring an action in relation to the original publication and that action took more than a year to resolve, he would then have to rely on the court to exercise its discretion under the Limitation Act and permit him to bring a further action against another person who might have republished the material. Although the claimant may have obtained a court injunction against, say, a local newspaper in this regard to prevent further publication of the material, another newspaper under different ownership in a neighbouring town would still be free to republish it.
The scenario painted by my noble friend Lord Phillips is certainly not something that I have looked at, and I will have to refer to our officials in that regard. Sorry, it was my noble friend Lord Marks who painted the scenario on solvency, which was an interesting proposition to dwell on.
I talked about understanding what this would mean from a layman’s perspective. In our discussions, one of the things that have been conveyed to me is that the purpose behind the amendment, or at least its effect, would be, in short, that one newspaper could simply report what another one had reported without paying any due regard to whether it was defamatory. Of course, in these circumstances a court has a discretion and in some cases would be likely to exercise its discretion in favour of the claimant. However, the concern remains for the Government that this process would involve additional delay and expense. We do not believe—I am going to use the words again—that it would strike the right balance.
Amendment 47A relates to the provision in subsection (5) that the single publication rule does not apply where the manner of the subsequent publication is materially different from the manner of the first publication. As the noble Lord, Lord Browne, acknowledged, unless considered in conjunction with Amendment 44A, it is difficult to see how this amendment would apply. When a statement is published for a second time by the same publisher, as Clause 8 provides, the comparative quality and credibility of the source will, in most cases, always be the same, even though the place where the subsequent publication appears may be different.
In any event, the Government do not consider that the amendment is necessary. Subsection (5) identifies certain matters to which the court may have regard in considering whether publication is made in a materially different manner. It is difficult to see what relevance the fact that a subsequent publication has been made in a more credible place has to the question of whether a claimant should bring a claim.
The noble Lord, Lord Browne, raised the question: what does “materially different” mean? The noble and learned Lord, Lord Browne, acknowledged that to define “materially different” may be a little fact-sensitive. We believe that the question of whether the publication is materially different should be decided by the courts rather than that we should attempt to provide a definition in the Bill. In the unlikely event that the court considered issues such as those contained in Amendment 47A to be relevant, there is nothing to prevent the court taking them into account.
Amendment 47B provides that subsequent publication shall not be deemed to be materially different in two specific instances: first, where the statement is part of an academic or scientific journal and goes from being accessible only on payment of a fee to being accessible free of charge; and, secondly, where the subsequent publication is as a result of an archive accessible on the internet. We recognise that concerns have been expressed about the importance of archives and material in scientific and academic journals. We have taken action elsewhere in the Bill to protect material which has been properly peer-reviewed.
However, there may be circumstances in which making previously subscription-based journal articles freely available could significantly increase the extent of the publication and could cause serious harm to the claimant. This is also the case where the material was previously available only in an off-line publication and is placed on an archive accessible on the internet as this may bring it to the attention of a much wider audience. We do not consider that it would be right to say that a claimant should never be able to bring an action in these cases, which would be the effect of the amendment.
In any event, the court would need to be satisfied that the publication has been made in a materially different manner, and how that test is applied is, again, best left to the court to determine in each individual circumstance. In the event that the court decides to allow a claim to proceed, the serious harm test would have to be satisfied for the claim to succeed. We, again, believe that this strikes the right balance.
On Amendments 45, 46 and 47, I cannot add much more to the words of my noble friend Lord Lester in describing the Government’s position. We believe that there is clarity in the Bill as drafted. On that basis, I hope the noble Lord will withdraw his amendment.
Lord Browne of Ladyton
My Lords, I am grateful to noble Lords for participating in this short debate on the amendments, and I am grateful to the Minister for his response, even if it was substantially predictable. I am particularly grateful for what I might call the neutral support of the noble Lord, Lord Phillips, but why should I expect anything more since that is what I give his amendments? I am grateful to the noble Lord, Lord Marks of Henley-on-Thames, for his overt support of Amendment 44A, and grateful, too, to the noble and learned Lord, Lord Brown, for the benefit of his wisdom. I have to say that I see the strength of his argument to a degree and I am sure that it was reflected in the words of the Minister. I venture to suggest, however, that if that is the nature of his thinking on this issue, if we come back to it in the future, he might apply that logic to Amendment 47A and find that he should be supporting it even if it could be better and more elegantly drafted.
I will look very carefully at what the noble Lord has had to say. I am interested in a thread of consistency running through the way in which we legislate. I am tempted to say that the answer to the example that he gave of republication in a different town as a justification for restricting this single publication rule to the same person lies in Clause 8(4). That could be said to be “materially different”. I say with respect to the Minister that it is not a complete answer. From the point of arguing against myself, I prefer the argument of the noble and learned Lord, Lord Brown, but that may already be accommodated in the potential of subsection (4).
In trying to tease from the Government further specification on “materially different”, it is no answer to say that it will be left entirely to the courts, when subsection (5) seeks to do that in part. There are two examples of what would be relevant to the court in determining whether the manner of the subsequent publication is materially different. I appreciate that it is not intended to be an exhaustive list; we could go round in circles debating it, but it is no answer to suggest that it is a matter entirely for the court when the Government themselves seek to specify it in the clause. We should either put in some or none—we will go back to our earlier debates. I am seeking consistency. I am concerned that I may stir the noble Lord, Lord Lester, and may add time to this. I am trying to do this quickly and will go away and reflect on it. I beg leave to withdraw the amendment.
Lord Mawhinney
“( ) A person domiciled in England or Wales may bring an action for defamation in respect of publication by a person to whom subsection (1) below applies provided that they can demonstrate that such publication has caused them serious and substantial harm.”
Lord Mawhinney
My Lords, politics is frequently described as the art of the possible, but it is also described as dealing with truth and people’s perception of the truth, and the latter is frequently harder than the former for politicians to handle.
I was reminded of this particular issue because there have been a number of very high profile legal cases called, mainly in the tabloid press, libel tourism. Because they have been high profile and involved lots of money, a perception has been created that this is a major problem. In fact, though, the evidence given to the Joint Committee was that it was not a major problem, in the sense that it happened not frequently but occasionally. However, the perception of it being a major problem probably meant that it needed to be addressed, and the Government, in my view and that of the Joint Committee, have sought to address libel tourism in Clause 9. My amendment would clarify that if you are resident in this country you could take out legal proceedings wherever the libel was alleged to have taken place. This country has a reputation of being a friendly place in which to bring major libel cases, but in many of the few they have precious little to do with England and Wales—and “precious little” is probably a euphemism for practically nothing.
We as a Committee were keen to ensure that, in defining what you could not do, we did not raise any question about what a bone fide resident in this country could do, irrespective of where the libel took place, so long as the UK resident could show that he or she had been seriously and substantially harmed. If something defamatory was said in a far-flung part of the world and no one in this country ever heard about it, that would not pass this test. On the other hand, it would pass the test if there was perceived to be serious harm done in the perception of people in this country. The amendment is not complicated, nor does it seek to persuade the Government to go into new territory that they do not want to go into. It is with the grain of the Government’s thinking but would clarify that trying to address libel tourism does not diminish the right of residents of this country, subject only to the harm test.
Two other amendments are linked with this one. On Amendment 49, it is quite clear from the Government’s Bill that the court has to make a decision about what is “appropriate”. What is “clearly appropriate” will therefore fall into the same category. My sense is that “clearly” is a higher level than “appropriate”. A court is perfectly capable of deciding “appropriate” and “clearly appropriate”, and at this stage I am ambivalent until I hear from the Minister why he thinks this is a good or bad idea, because I can see arguments in both directions.
Initially, I had a sympathetic reaction to Amendment 50A. However, I started to think a little more about what the words say. In our law we do not often require people to demonstrate that they have funds available before they begin proceedings; indeed, if that were a general tenet of the law of this country, Members of Parliament would have a lot less to do because constituents would stop coming to them and saying, “I won a law case but the person doesn’t have the wherewithal to meet the bill”. Indeed, I have been in that situation myself.
I am not entirely clear how you would prove to the court’s satisfaction that not only did you have the money but it would still be there when the judgment was made. Having the money before you start and still having it when you finish are, conceivably, two entirely different issues, so I have some hesitation about the amendment of the noble Lord, Lord Singh of Wimbledon. Again, I would also be interested to hear what the Government have to say. I beg to move.
Lord Phillips of Sudbury
My Lords, I speak to Amendment 49 in my name. I believe that Clause 9(2) goes too far in requiring a court to be not merely satisfied that England and Wales is the most appropriate place to bring an action but clearly satisfied. It is not clear to me quite what that would mean in any event. Is it applying a criminal law test of “beyond reasonable doubt”? I think it loads the dice against a person who is not domiciled in the UK.
Lord Mawhinney
What the clause actually says is,
“satisfied that … England and Wales is clearly the most appropriate place”,
not,
“clearly satisfied that … England and Wales is the most appropriate place”.
Would that make any difference to his argument?
Lord Phillips of Sudbury
I am obliged to my noble friend for picking up my slackness. No, I do not think it would. The wording, as the noble Lord, Lord Mawhinney, just said, is:
“England and Wales is clearly the most appropriate place”.
I think it is quite enough to leave it to the judge to decide whether it is the most appropriate place. That is a strong test in itself and, as I say, I do not think it is right to load the dice in this regard. In my view, what is provided for in Clause 9 goes far enough to stop the most undesirable cases of libel tourism.
On Amendment 50A in the name of the noble Lord, Lord Singh of Wimbledon, I am afraid I agree with my noble friend Lord Mawhinney. It would make the position of the poor litigant wanting to protect his or her name and reputation even more unequal than it already is. We know that legal aid does not apply to defamation proceedings and to have a provision that requires him or her to satisfy a court that they have resources to meet costs arising from an unsuccessful action means that at least half the population will never be able to protect their reputation, and that cannot be right.
Lord Singh of Wimbledon
On that point, it is the litigant from abroad that I am concerned about, not the defendant in this country—a litigant with substantial funds.
Lord Phillips of Sudbury
With respect, it says:
“Action against an individual domiciled in the UK”.
It does not say anything about where the plaintiff is domiciled. It talks about where the defendant is domiciled. If I were suing the noble Lord, he is domiciled in the UK but so am I. This clause does not affect my domicile, only his.
Lord Singh of Wimbledon
My Lords, this whole amendment is concerned with protection against those domiciled abroad using their wealth and remoteness to chill freedom of expression in the UK. It could be that the wording is clumsy. I will come back to that. It is intended to be applicable equally to wealthy businesses and religious cults. My concern is with the latter.
Many in this House will be aware of the power and influence of powerful cult leaders who claim deep religious insights denied to the rest of us. They often attract and get large donations from rich businessmen and media celebrities, which they use to acquire property and business interests, and often to fund expensive lifestyles. More worryingly, they also prey on the superstitious and vulnerable, promising to use their influence with God to help people meet life’s challenges or to cure incurable diseases. In one case, a cult leader got a woman to sign over her property in return for a promised cure for cancer. Sadly, the woman died soon after. I believe that it is in the public interest that such activities are exposed.
There are many more such cases in which superstitious and vulnerable people are deprived, sometimes of virtually all that they have. The power and attraction of such organisations is totally dependent on uncritical acceptance of their claims to special powers; they use their might and muscle to silence those who, in the public interest, dare to challenge them. Many such organisations are domiciled in the subcontinent of India, or in the United States and Canada, and use their wealth and power to stifle any public-interest questioning of their activities. They also use their remoteness from the UK to avoid paying the costs of any finding against them.
There are many examples. I will give one of a young journalist, who questioned the practices of an Indian sect and found himself in a ruinous lawsuit. After three nightmare years facing financial ruin, he eventually won his case but has no prospect of recovering some £50,000 spent in doing so, as this would involve further protracted litigation in Indian courts. The attitude of such foreign-based litigants is very much, “Heads I win, tails you lose”. It might be that the amendment’s wording is clumsy but its intention is very clear. I believe it will significantly deter those who use power and remoteness to intimidate those in the UK who are genuinely concerned about their activities..
Lord Lester of Herne Hill
My Lords, I shall speak briefly only to Amendment 50A, tabled by the noble Lord, Lord Singh of Wimbledon, to bring him good news as to why it is not needed because we have something else in place. When the noble and learned Lord, Lord Mackay of Clashfern, was Lord Chancellor we dealt with a Bill whose Title was something like the “private international law miscellaneous provisions Bill”—the team behind the Minister will know its correct name. I was concerned that people in countries such as Singapore or Malaysia, which have draconian libel laws and use them to suppress dissent and unpopular views without, I am afraid, any proper respect for the right to free speech, would be able to bring those laws into this country and enforce them here in libel proceedings.
I was concerned about that because the EU was in the process of harmonising tort law, including libel law, and seeking to abolish what is known as the double actionability rule of common law, which provides that if a wrong is committed in another country—a road accident in Gibraltar, for example—the victim could bring a claim for negligence in this country based on what had been done in Gibraltar, but only if it was actionable under the law of this country as well as Gibraltar’s. In other words, domestic British legal standards had to apply and be satisfied. Under the EU harmonisation programme, the danger was that if you abolished the double actionability rule it would mean that someone in one of these other countries could bring in their bad, repressive libel law and rely upon it in this country.
Of course, President Obama did precisely the same thing that I am about to say that we did to the Malaysia and Singapore. In that Act, we kept the double actionability rule in place but only for libel proceedings. The effect is that the Defamation Bill, when it becomes law, will provide the British standard; anybody coming from another country and seeking to use the defamation law coercively will have, under the double actionability rule, to satisfy the standard anyway of the Defamation Act, including the Defamation Act being read with the constitutional and conventional right to free speech. So there will already be very strong reasons in public policy why such a person will not get very far if they seek abusively to bring libel proceedings in those circumstances.
Lord Marks of Henley-on-Thames
My Lords, I rise briefly to support the amendment proposed by the noble Lord, Lord Mawhinney. Again, this was a recommendation of the Joint Committee. We took the view, I suggest rightly, that it is entirely correct that cases against those who are not domiciled here or in a convention country should be restricted if they are brought by claimants who are themselves domiciled outside the jurisdiction. But I do not think it right for a local potential claimant within the jurisdiction to be debarred from suing a foreign defendant for a libel that has caused the local claimant serious harm here, even if there may be other countries that are at least as appropriate. For example, an Italian newspaper could publish a libel in Italy and England that would cause a local English claimant damage in both jurisdictions. There may be reasons for the defendant to argue that Italy would clearly be the most appropriate forum for the resolution of the dispute but, as it stands, this section would debar the English claimant from suing in England.
The clause is intended to restrict libel tourism so far as is consistent with the Brussels and Lugano conventions. It does that, but it should not also restrict local claimants from suing foreign defendants here when their reputations have been damaged here, even if there may be other jurisdictions in which they might equally well or better sue.
The amendment achieves what should be the aim of the clause. I am not sure that the proviso relating to harm is necessary, because I would be content to rely on Clause 1 for the serious harm test. But subject to tidying it up, I suggest that the amendment proposed by the noble Lord, Lord Mawhinney, is entirely justified.
Lord Phillips of Sudbury
My Lords, I briefly comment on what the noble Lord, Lord Singh of Wimbledon, said. I have to stick to my earlier analysis, but after hearing what he said, if his amendment had incorporated the purport of that I would have been very sympathetic to it—notwithstanding what my noble friend Lord Lester said, because his clause would address a different issue. The only question I have is whether the security for costs arrangements that can be invoked here might not come to the aid of the person to whom he refers.
Lord McNally
My Lords, this has been an extremely useful debate. From the beginning there has been a question of whether libel tourism exists, and there are varying views on this. Indeed, without breaking too many confidences, when I explained to a very senior member of the Government that we were trying to curb this so-called libel tourism, he said, “Are you sure? Should it not be the more the merrier?”. He had the idea that if foreigners wanted to come and use our excellent legal and judicial services they should be welcomed. In another respect, of course, we make a great play of the excellent facilities at the Rolls building for doing just that. However, there was a problem not only with the numbers but in the use of threats to stifle publication or opinion—the so-called chilling effect—and it is right that we have had this debate.
Amendment 48 would mean that the effect of the provisions on libel tourism reflected in Clause 9 would be narrowed as cases where the claimant is domiciled in England or Wales would no longer be caught even if the main impact of the alleged libel was outside England and Wales. The Government do not consider that narrowing the scope of Clause 9 is appropriate. It would mean, for example, that a Russian oligarch domiciled in England and Wales could sue a person outside the UK/EU in the English courts in circumstances where the alleged main harm to his reputation has occurred in, say, Uzbekistan.
Although I am sure the hearts of my colleagues behind me will sink, I have listened to the debate and I will study again the remarks made and the example given by the noble Lord, Lord Marks.
Lord Marks of Henley-on-Thames
Perhaps I may correct something that I have said. My example, which was off the cuff, of Italy was wrong: it ought to be the United States or somewhere outside the Brussels and Lugano conventions.
Lord McNally
I was just thinking that myself, but I did not want to raise it.
Broadly, at the moment we consider it is right that these cases should be caught by the test and therefore not automatically take place in our courts. Where a claimant in a case where the defendant is domiciled outside the UK, EU or Lugano convention states is unable to satisfy a court that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place to bring the action in respect of the statement, then he or she should be refused access to our courts and should be required to seek redress abroad. Such cases are not likely to arise with any frequency but, when they do, they give rise to legitimate concerns about libel tourism which uses up the time and resources of our courts.
We do not believe that the requirement to show that England and Wales is clearly the most appropriate place to bring the claim will cause undue inconvenience to claimants domiciled here who legitimately wish to bring an action in this jurisdiction to protect their reputation. It is likely that in most cases where a claimant is domiciled in England and Wales the Clause 9 test will be satisfied as the main harm to reputation will have been caused here and, in those circumstances, a claimant will readily be able to show that this is the most appropriate place to bring the claim. However, claimants should not be able to use our courts to pursue libel actions which are more appropriately heard elsewhere, even if they are domiciled here.
Amendment 49 would make a small amendment to Clause 9, but would have an undesirable impact on its effectiveness. Clause 9 provides that a court does not have jurisdiction to hear and determine an action to which the clause applies unless it is satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement.
Amendment 49 would remove “clearly”. We do not believe that this would be appropriate. Great concern has been expressed in Parliament and elsewhere about libel tourism. The amendment would reduce the strength of the test to be applied by the courts and could have the effect of leading to their allowing more claims to proceed in this jurisdiction in instances where the question of whether this is the most appropriate place to bring the claim is more marginal. We believe that most people who have commented on these issues would agree with us that it is important to give a signal to the courts that Clause 9 should be applied robustly, and that claims should be allowed to proceed only where this is clearly the most appropriate jurisdiction.
Turning to Amendment 50, I understand the point made by the noble Lord, Lord Singh, about drafting. Perhaps I may say in passing that as soon as he starts speaking my mind comes to mornings when I feel tetchy, down-at-heart and at war with the world, and his mellifluous voice comes on “Thought for the Day”, and, at the end of it, I always feel a little bit better about the world. The amendment would require an organisation or individual bringing an action against a person domiciled in the United Kingdom to provide evidence that it or he has funds in the UK to meet any costs that might arise were the action to be unsuccessful. As the amendment is drafted, this would apply where both parties are domiciled in the UK as well as where only the defendant is domiciled here. This would put potential claimants with limited resources at a serious disadvantage, as has been said by a number of those who have spoken in this debate. For example, it would mean that if an individual wished to bring an action against a national newspaper based in the UK, he or she would have to show that he or she had sufficient means to pay the newspaper’s costs, which could be substantial, in the event that the action was unsuccessful. This would considerably restrict access to justice.
However, the point that the noble Lord, Lord Singh, raised and the specific examples that he gave should give us pause for thought. As with the other points made about the way in which our laws are being used, the ability of those from abroad with resources to intimidate those making legitimate criticism of their behaviour should give us pause. The noble Lord, Lord Lester, gave assurances on that matter. As always with advice from the noble Lord, I wish to take it away and consider it, and ask my advisers whether the assurances that he gave are sufficient to protect against the abuses. How we protect against the kind of threat and intimidation that comes short of reaching court, I do not know, but perhaps one of the defences is that, when the Bill becomes an Act, people will be more aware of the protections in our law against such intimidation.
We recognise the concerns that exist about the costs of defamation proceedings for both claimants and defendants, and are firmly committed to reducing them. As I have mentioned in debating earlier amendments, the provisions on costs protection which we have asked the Civil Justice Council to consider, together with changes to the Civil Procedure Rules to support early resolution of key issues, will help claimants and defendants of limited means to bring and defend claims.
I have given noble Lords an assurance that I will look at this debate and see whether we have got the balance right. I am not sure that I can give any idea that we are going to give up “clearly”; I am going to defend that to the very last. I can see us at some future date on Report voting at 11.20 pm on whether “clearly” should stay in the Bill, with the noble Lord, Lord Browne, seeing an opportune moment to defeat the Government. Until that moment, I ask noble Lords not to press their amendments.
Lord Lester of Herne Hill
I shall explain in case I was not clear. I was trying to say that all the defences—the requirement of serious harm, the public interest defence, qualified privilege—will be able to be used as a shield against an unscrupulous claimant, and the double actionability rule would require that too.
Lord Mawhinney
My Lords, I listened carefully to what my noble friend said, and he generated in me a little surprise; I was under the impression that he and I were singing from the same page of the hymn sheet on this one. I shall suggest to him why he and I may appear to be thinking differently and invite him to reconsider one thing that he said.
I incorporated into the amendment the view of the Joint Committee about “serious and substantial harm”. We have already debated that and the Government have a view. If their view turns out to be as we suspect it to be from this debate, I am not chasing on “serious and substantial”; I used it merely because the Joint Committee did, but I am not sure that anyone is going to get too precious about that aspect of the amendment.
As I said at the beginning, the amendment was designed to protect those who live in this country so that they would not get excluded. My noble friend chose to interpret that—perfectly correctly; I have no complaint—by citing a Russian oligarch who lived here and who had been libelled in Uzbekistan, I think he said, and the damage was in that country.
This is the point that I would like my noble friend to think about: if you take this amendment as a freestanding amendment, it allows itself to be interpreted in the way in which my noble friend interpreted it. However, if the amendment became part of the Bill then it would sit just a few lines above Clause 2, where the court has to make a decision as to whether this is the most appropriate location for a legal case to be heard. Given the example that my noble friend used, an English court would be asked to decide whether or not this was the most appropriate place for a Russian oligarch living in Kensington to take action against someone who slandered or libelled him in Uzbekistan. I yield to no one in my admiration for British justice and I am guessing that, if you put together the amendment and Clause 2, judges would say, “No; the fact that you are here allows you to come and ask us, but it doesn’t mean that this is the most appropriate place for you to do this”. When my noble friend says that he will reflect further on this debate, I invite him to look at his example against the pairing of the amendment and Clause 2, which would both be an integral part of this overall clause, and invite him to accept that Clause 2 has a mitigating effect on the amendment. If he buys the general argument that I am encouraging him to think about, and if he says that in order to clarify this we need to tweak the new amendment to make crystal clear what we are trying to say, then I am free and easy with that; in fact, I would be delighted were he to do so.
Given that caveat, because I think that we are not very far apart and that a drafting tweak might clear that up, I thank my noble friend for his response. I note that he is nodding in thoughtfulness—I attribute nothing else to him other than thoughtfulness—and in that spirit, I beg leave to withdraw the amendment.
Lord Phillips of Sudbury
Lord Phillips of Sudbury
Perhaps I may make a comment, but not to pick up the point so clearly made by the noble Lord. It occurs to me, especially in the light of the amendment tabled by the noble Lord, Lord Singh of Wimbledon, that it is odd that if this is dealing with libel tourism, it is about actions by plaintiffs not domiciled in the UK rather than dealing with defendants not domiciled. It seems to me that it is the wrong way round, but that could be the subject of discussion.
Lord Singh of Wimbledon
“Action against an individual domiciled in the UK
(1) This section applies to an action for defamation against a person who is domiciled in the United Kingdom.
(2) The organisation or individual bringing the action, in addition to satisfying the court of serious harm, must also provide evidence of funds in the UK to meet any costs arising from an unsuccessful action.”
Lord Singh of Wimbledon
On rereading the wording, I feel that it does say what I intended it to say but that is drafting. I am grateful to the noble Lord, Lord Lester, for his comments and assurances, and I am particularly grateful to the Minister, Lord McNally, who gave the impression that he would look at this a little further. In those circumstances, I shall not move the amendment.
Lord Browne of Ladyton
Lord Browne of Ladyton
The amendment, standing in my name and that of my noble friend Lady Hayter, would confine Clause 10 to actions for damages only. I say at the outset that I support Clause 10. It is a significant improvement in the law, and that position is supported by those who practice commercial activities. The Booksellers Association, to which I will refer later, is a strong supporter of Clause 10, but it does not think that it goes far enough for reasons I am about to give in support of the amendment.
Amendment 50B would restrict Clause 10 to action for damages only. It would provide that a court does not have jurisdiction to hear and determine an action for damages,
“for defamation brought against a person who was not the author, editor or publisher of the statement complained of unless the court is satisfied that it is not reasonably practicable for an action to be brought against the author, editor or publisher”.
The intention is that when the primary publisher cannot be found, the claimant would still be able to sue the secondary publisher for an injunction of some description, a take-down order or for a book to be removed, even if they were not able to pursue an action for damages.
I am in the fortunate position of being familiar with the Government’s position on this amendment because it was moved in the House of Commons. The Government thought that it could lead to a situation that even when it is reasonably practicable for an action to be brought, the secondary publisher would end up having to defend the claim, although they would not be liable for damages if the claimant were successful. Nevertheless, the Government said that they would give further consideration to this issue. The response from that further consideration may well be Clause 13, which was not there at the time of that debate. I cannot anticipate fully what the Minister will say, but I have an expectation that he may refer to Clause 13.
Clause 13 merely provides in the context of a judgment that the court may order a statement to be taken down. It would be more appropriate to make it clear that claimants retain the right to bring an action when the remedy sought is not damages. Again, this could perhaps be better drafted to achieve that, and I am content to discuss that. If the Committee can be persuaded to support the principle of this argument, I urge the Government to take the argument seriously.
For ease of dealing with these three amendments that I have grouped together, Amendment 50D is a consequential amendment on Amendment 50B and provides that nothing in Clause 10,
“prevents a court from granting any injunction or order requiring a person to cease publishing a defamatory statement”.
It may be unnecessary, but it is coupled with it. Again, I have the benefit that the Minister who dealt with this debate in the House of Commons indicated that further consideration would be given to this issue, too, but it may be that the further consideration has resulted in Clause 13, at least in part.
Amendment 50C is an inelegant amendment. It seeks to do something that I do not think that I have ever seen before in legislation, and it can be criticised for that reason. However, because of the nature of these proceedings—we are encouraged by the noble Lord, Lord McNally, to treat them as some form of seminar discussion—I have retabled this amendment. It mixes up the substance of the issue with the issue of jurisdiction. I understand that, and I am happy to take on the chin that criticism of it. However, if we move towards each other in relation to this, or if the Minister can give a better explanation than there has been otherwise about a specific aspect of this argument, and we go beyond this in agreement, I am sure that this amendment can be redrafted in another way.
At the heart of this amendment is a belief on the part of the Booksellers Association and those who advise it—indeed, there may be people in your Lordships’ Committee who have advised it at one time or other; happily, I have not—that the innocent dissemination defence, which existed previous to the 1996 Act, as a matter of fact and practice is now repealed effectively, although perhaps that was not the Government’s intention. The debate in the other place was interesting because the then Minister who dealt with it conceded in the debate that there were different views on the effect of Section 1 of the Defamation Act 1996 as to whether the defence that it provided was weaker than or as good as the innocent dissemination defence. With this short debate that I hope we will have, I seek to elicit from the Government a clarification of their position as to whether there is a difference between Section 1 of the 1996 Act and the effect of the Bill, taken together, on the one hand and the pre-1996 defence of innocent dissemination on the other, and why the Government believe that this combination that we are now presenting to secondary publishers is better than what they had before 1996.
The amendment requires that a prima facie case should exist. Although Section 1 of the Defamation Act 1996 is available to booksellers as a defence, the Booksellers Association contends that it is weaker than a common law defence of innocent dissemination, which that section replaced. As I have said before in Committee, the Minister who then dealt with it substantially conceded that point but only went as far as to say that there were differing views on the section as to whether one was weaker than the other and did not express what the Government’s position was. I think that there is at least a reasonable expectation on the part of secondary publishers that the Government should nail their colours to the mast and say what they are creating here by this process.
The Booksellers Association also contends that under Section 1, booksellers and other secondary publishers lose the protection if they know or have reason to believe that a publication contains any defamatory statement, whereas under the previous defence of innocent dissemination a defence would have existed if the bookseller had a reasonable belief that the alleged defamatory material was not libellous, having in most circumstances received assurances from lawyers that one of the defences applied.
Lord Lester of Herne Hill
I am very grateful to the noble Lord, Lord Browne, for the way in which he has just presented the amendment. I do not have the Booksellers Association as my client, although I did some time ago meet it in order to discuss the problem which has been eloquently described. I have, however, acted for Amazon US and Amazon UK and I would like briefly, because it harps back in a way to Clause 5 and the internet, to link that with what we are now discussing because it is quite important. If I walk into Daunt Books in London to buy a book, I am reasonably clear that if the bookseller has no reason to believe that the book is defamatory, the bookseller would have a defence under the defence of innocent dissemination as it was before 1996 and probably under Section 1 of the 1996 Act as well. I agree that there is some lack of clarity about the effect of Section 1 on the common-law defence in that situation.
The problem becomes much more acute for the international bookseller who is selling via the internet. The case that I was once in—thank goodness it never led to an argument because it was settled—is a very good example. A book published in the United States completely wrongly and in a defamatory way attributes to police officers in Northern Ireland the killing of Catholics. It is completely disgraceful and defamatory. So the police officers go against the author who is made bankrupt. They go against the publisher who is made bankrupt, so they have no recourse at all. So they go against the international bookseller on the basis that it has sold a defamatory book on the internet. When we buy that on our computers online, whether from Amazon US or Amazon UK, that is an act of publication. There is therefore publication by the bookseller of something that is defamatory and therefore Amazon is liable. Amazon, shipping the book from its warehouse in California, has absolute immunity under US law. Amazon does not have immunity under UK law, nor should it, and the same applies to Amazon UK.
The practical problem is: what is the position of the international bookseller? It can try to rely on Section 1 of the 1996 Act. The problem with that is that it is quite narrow and very unclear as to how it applies. It can try to rely on the e-commerce directive and to give new meaning to Section 1 of the 1996 Act. It can try to rely on Article 10 of the European Convention on Human Rights to give clarity as well. But all I can say is that some years ago I had a merry time—well paid—in trying to work out the answer to the puzzle that I just described.
If something like Amendment 50C were included, and the noble Lord, Lord Browne, is quite right in saying how difficult it is to clarify some of this, it would have benefit not only for the home-grown London bookseller but for the international bookseller in trying to resolve what would otherwise be extremely complicated problems that I have probably failed properly to explain.
Lord Mawhinney
If peer-review is one of the principles that we want to hang on to, combating chilling effect should be another that we want to hang on to. I have no idea, and I am not competent to judge, whether the wording of the amendment tabled by the noble Lord, Lord Browne, is right and precise, but combating chilling effect ought to be deemed to be so.
Lord Ahmad of Wimbledon
My Lords, I will take all three amendments together as they have been grouped. In doing so, I will refer first to Amendments 50B and 50D. They seek to provide that Clause 10 should prevent an action for damages for defamation being brought against a person who was not the author, editor or publisher of the statement complained of unless the court is satisfied that it is not reasonably practicable for an action to be brought against the author, editor or publisher, but should not prevent a court from granting any injunction or order requiring a person to cease publishing a defamatory statement.
As the noble Lord, Lord Browne, indicated, the amendments were originally tabled in Committee in the other place by the honourable Member for Newcastle-under-Lyme. His concern was that circumstances could arise where a claimant who had successfully brought an action against the author of defamatory material on a website was left in the position of being unable to secure removal of the given material. This situation might arise as a result of the fact that an author may not always be in a position to remove material which has been found to be defamatory from a website, and the new defence in Clause 5—together with the more general protection provided to secondary publishers in Clause 10—might prevent the website operator from being required to do so. As the noble Lord acknowledged, it was precisely for this reason that the Government introduced Clause 13 into the Bill on Report in the other place.
In an offline context where a successful action is brought against an author, editor or publisher and a secondary publisher is made aware of the successful action, we believe that in the great majority of cases the secondary publisher would act responsibly and remove the defamatory material from sale.
However, there are issues that still appear pending and this point has been reiterated by my noble friend Lord McNally and made by me as well. We are listening in great detail to the debates and discussions in Committee. As has been illustrated from the Government’s perspective in the other place, appropriate clauses and amendments are being introduced to refine this particular Bill if and when they are needed.
Amendment 50C is identical to the one tabled on Report in the other place. It was said then that it was in part an attempt to codify the defence of innocent dissemination. As the Government explained then, Clause 10 is about jurisdiction. To require the court, as part of an assessment on jurisdiction, to assess the merits of the case before it in the manner proposed would be highly unusual and potentially confusing. Furthermore, it would involve additional evidence and expense, which would be wasted in the event that it was held that it was reasonably practicable for the claimant to pursue the primary publisher. Such arguments are properly pursued once it is established that the court indeed has jurisdiction. Subsection (1)(c) would also put the onus on the claimant to show what was in the knowledge of the secondary publisher, which, as well as being practically very difficult, would be a significant shift in the current law.
The noble Lord, Lord Browne, drew to the Committee’s attention the fact that there is a debate over the terms of Section 1 of the 1996 Act—the noble Lord, Lord Lester, referred to this as well—and how that compares to the common-law defence. A question was raised about the Government’s position. The Government believe that it is preferable to adopt the approach in Clause 10 of directing claimants towards those who are actually responsible for defamatory material. This reflects the approach that we have taken elsewhere in the Bill. In the unlikely event that it is not reasonably practicable to sue the author, editor or publisher, Clause 10 allows a claimant to bring an action against a secondary publisher, such as a bookseller. However, nothing in the clause would then prevent that bookseller from deploying any defences available to him them.
We believe that this approach strikes a fair balance that provides substantial protection for secondary publishers while not denying claimants a means of redress where this is deemed appropriate. I hope that on that basis of these explanations, the noble Lord will agree to withdraw his amendment.
Lord Browne of Ladyton
My Lords, I am grateful to the noble Lord, Lord Lester of Herne Hill, for his intervention and for indicating the value of at least one of my amendments in a broader, international sense. I think that that will help to concentrate our minds on the value of looking with some care at the provisions of Clause 10. I am grateful to the noble Lord, Lord Mawhinney, for his reminder that we should be seeking a direction of travel away from what may inadvertently have been created by the effect of Section 1 of the 1996 Act on the common-law defence that existed.
I am grateful, too, to the Minister, although I have to say that I am disappointed in his articulation of the Government’s position. There is a lack of courage on their part if, even in these circumstances where we are all agreed on the direction of travel, they are not willing to say that the law in relation to secondary publishers is moving in the direction of undermining the chilling effect of the behaviour of lawyers, who often act for very wealthy clients, intimidating small people from pursuing business because to some degree it involves an expression of free speech.
The appropriate response to this short debate is to indicate to the Minister that I will go away and think about this again. With regard to the first of our amendments, Amendment 50B, after this debate I am minded to consider whether Section 13 should be broader in scope. That may be the answer to the problem and a more appropriate way of dealing with it—not to restrict it only to secondary publishers and the web but to seek that it be broader in scope. That might be a simpler way of addressing at least part of the problem.
On the pre-1996 common-law position being better and less chilling than the present situation, even when improved by Clause 10, I am not sure that I will abandon my attempt to persuade the Government that something must be done. I now have the difficult job of solving how one can do that without challenging the court to deal with jurisdiction and the substance of the case at the same time. My limited experience of practising before the courts—limited by being elected to the House of Commons, although it was 20 years’ experience—suggested that once one started to make arguments about preliminary issues, one often got far into the substance of the case to do. In making arguments before the court, it was quite difficult to do the sort of thing that we suggest is possible here, by keeping these two issues separate. Apart from anything else, you often do not understand the arguments until you understand the facts and where the credible argument likely lies in a set of circumstances well enough. Anyway, never mind that.
I will go away and think about this again. We may have room for some progress in extending the scope of Clause 13. I am not sure that I will ever persuade the Government to move beyond, with all due respect, a slightly timid position on innocent dissemination, but we may have to return to this issue on Report. In the mean time, I beg leave to withdraw the amendment.
Lord Mawhinney
“( ) A court may only order a trial with jury in a case involving a senior figure in public life and when that person’s credibility is at stake.”
Lord Mawhinney
My Lords, there is no need to take any time to establish that all of the members of the Joint Committee believe in the importance of trial by jury. That was not the issue. The issue was whether jury trial was appropriate in defamation cases. Most of us went into the committee being unsighted, and the evidence was very quick and almost unanimous: judges had in effect already decided that jury trials were probably not the way to go in defamation cases. A number of witnesses told us that there had not been a jury trial for defamation or libel in the past 18 months to two years; the practice had largely ceased. We were moving to a position of saying that we endorsed the present situation.
Then we got evidence from the editor of the Guardian. In his evidence, he said something which caused us all to perk up. He referred back to the case of the Guardian against Jonathan Aitken. He said that he and his newspaper had wished that that trial had been conducted in front of a jury. He made the case that occasionally, perhaps even exceptionally, people in public life needed to be tried in front of their peers simply because of the public perception and ramifications of someone in high office being in that position. He specifically mentioned judges, Members of Parliament and, if my memory is right, very senior people in the Armed Forces, where the credibility of the public and the individual were such that they needed to be tried in those circumstances. However, other than that, he said that what the judges had already established was the way to go. All I have sought to do in this amendment is accurately to reflect our evidence. I hope that I have done so faithfully. I beg to move.
Lord Brown of Eaton-under-Heywood
My Lords, there can be few occasions, particularly at five past five on a Thursday afternoon, when one feels entitled to tell, so to speak, a story from one’s own experience. However, I believe this to be just such an occasion.
Over a quarter of a century ago, I tried, with a jury, the case of the late Robert Maxwell suing Private Eye. It was a defamation case. The burden of the central complaint that Maxwell was making was that Private Eye had published a piece which insinuated that he had tried, by means of free holidays and the like, to bribe the then leader of the Labour Party—Neil Kinnock—to recommend him for a peerage: plus ça change. The case was opened—as all these cases invariably are—at great length and the witnesses started to go into the witness box. I came back from lunch on the fourth day to find a note from the jury which read, “Please, sir, can you tell us what a peerage is?”. On the fourth day of a case all about peerages they did not know what that meant, which did not increase my faith in, and admiration for, juries.
A later case over which I presided in the Court of Appeal was that of Grobbelaar, who secured a very large award from the jury—I cannot remember the exact amount but I think that it was about £100,000—on the basis that he had been libelled by a newspaper which had accused him of match fixing. Noble Lords will remember that he was a Zimbabwean who I think played for Liverpool at the time. We eventually held—we were upheld in this by the Appellate Committee of the House of Lords—that that was a perverse award. Again, that was not greatly to the credit of juries. Therefore, I confess that I am very strongly opposed to juries in defamation cases, not least when important people—celebrities—are involved. Juries tend to be mesmerised by celebrity. Indeed, that is true of defamation cases and there are many other instances—it is perhaps invidious to mention them—where that can be seen to be so in the libel context and perhaps more widely.
Under Clause 11 as drafted, defamation cases will be tried without a jury unless a court orders otherwise. The matter is left to the general discretion of the court. Obviously, only very exceptionally would it be thought a good idea to have a jury trial with all the disadvantages of such a trial in terms of length, expense, unreasoned judgment and all the rest of it. If I may respectfully say so, the problem as I see it in this proposed amendment is that it is, first, too prescriptive and, secondly, may well encourage the use of jury trial. In the original report of the Joint Committee, it was recognised in paragraph 25 that it would be undesirable to restrict this discretion—that is, the court’s general discretion—although it is fair to say that it went on to state that it should be possible to outline general principles. The general principle later referred to was that the circumstances in which the discretion should be exercised,
“should generally be limited to cases involving senior figures in public life and ordinarily only where their public credibility is at stake”.
The first problem with the proposed amendment is that it limits the discretion of the court because it states that:
“A court may only order a trial with jury”,
in this class of case, and there may be others. For that reason, it also raises in acute form the definition problem of deciding who is properly to be regarded as a senior figure in public life and when that person’s credibility is at stake. Perhaps more fundamentally, the amendment raises the very concerns that the Government in their response to the Joint Committee report refer to in paragraph 62. It was there said that:
“Concerns were expressed that including guidelines in the Bill could be too prescriptive and could generate disputes”.
I have already alluded to that as one of the problems. It goes on to say that:
“There would also be a risk that detailed provisions setting out when jury trial may be appropriate could inadvertently have the effect of leading to more cases being deemed suitable for a jury than at present”,
which would work against the committee’s view, one that the Government share, that jury trials should be exceptional. If this clause is amended as proposed, there is a risk that if somebody who claims to be a senior figure in public life whose credibility is at stake wants a jury or, indeed, the defendants to a claim by someone who is arguably within that description want a jury, then initially you have a dispute and a debate as to whether it is a case where it is permissible to have a jury and, if so, the suggestion would be that Parliament would have implicitly sanctioned the thought that that is indeed a case where it is appropriate, whereas I would suggest through my earlier illustrations that not even in that case would it generally be appropriate for a jury trial. I would respectfully oppose the amendment.
Lord Lester of Herne Hill
My Lords, I am so glad that the noble and learned Lord, Lord Brown, has just made that very important contribution. I agree with all of it and therefore I can be extremely brief. I could add recollections from my own casebook of cases where juries were wholly inappropriate. The particular one I have in mind is the Convery case in Northern Ireland, but I will not go into that now.
I want to make only a couple of points. The first is that in the 19th century, Albert Venn Dicey said in his Introduction to the Study of the Law of the Constitution that the best safeguard of free speech is the English jury, which is far better than all those charters of rights, whether continental or American. That was the view at the end of the Victorian era, and Fox’s Libel Act did of course place great emphasis on the role of the jury. It was that Act, as Sir Brian Neill reminded me, that led judges to be very concerned about not giving rulings on meanings too early because they did not want to interfere with the jury. I was surprised to discover, when acting for newspapers, that they no longer believed that trial by jury was a good safeguard of free speech. They preferred the reasoned judgment of a single judge which could be appealed, because it was a reasoned judgment, to the unreasoned and incapable of being appealed judgment of a jury. In my Private Member’s Bill, with Sir Brian Neill as my guide, I took the step of saying that, not always but normally, trials should be by judge alone and not by jury.
Much to my surprise, the free speech NGOs and others, with the one exception being Liberty for reasons I understand, all supported it, as did the entire press. I note, of course, what Alan Rusbridger has said, but I do not agree at all with making a special case for celebrity public figures. As the Minister will remember, recently in another context the House agreed to abolish the old common law offence of scandalising the judiciary. The Law Commission agreed with that, as did the senior judges. It could not be seen why senior judges should be made a special case to be protected from gross offence, rudeness and attack when nobody else could be. Were we to approve this amendment, we would be saying that there was a special privileged class, called the great celebrity or public figure, who were to be given special point under the legal system. That would create completely the wrong impression.
One of the most important reforms is abolishing a presumption of trial by jury. The reason is that that then enables the Government, in their procedural changes, with the judges’ co-operation, to make all kinds of changes that would not be possible if the normal mode was trial by jury. This is an extremely significant clause and I very much hope that the Government hew to it without amendment.
Lord Lloyd of Berwick
Could the noble Lord just inform me, although I am sure I ought to know this: is Fox’s Libel Act still on the statute book?
Lord Phillips of Sudbury
My Lords, I, too, am extremely unhappy with the amendment. To take a literal point, why only a senior figure in public life? Why not a senior figure in the private sector, for example, where the consequences of the substance of a libel trial may be at least as important as for a senior figure in public life?
Above all, this provision—although I perfectly understand that my noble friend Lord Mawhinney did not advance it in any spirit adverse to the principles of our legal system—as my noble friend Lord Lester just said, would create a privileged class of person. It is not compliant with equality before the law. What is more, it trenches on the discretion of the judge, which I believe is the only reasonable way of limiting the right of privilege of trial by jury, given that that judge will be able to take into account all factors that seem to him or her relevant in that particular case. I am also bound to say that I cannot think of another provision in English law that discriminates in this way. I hope very much, although this was persuasively argued by my noble friend, that it will not be given credence by the Government.
Baroness Hayter of Kentish Town
My Lords, when coming back to this it is helpful to have been a member of the Joint Committee and heard the evidence. Before I address the amendment, given that it is the only one on the clause, it is worth saying how important the clause is; the removal of the presumption in favour of a jury is one of the most important parts of the whole Bill. I thought that we ought to get that on the record. While juries are very rarely used, the fact that they can be used at all is what has added to cost with regard to the extension of time in this. They drag out action, mostly because they deny the ability of the judge to take early views on issues that, quite properly, they feel must wait in case there is a jury trial, so they have not been able to take an early view until the doors of the court swing open. It was our view on the Joint Committee not only that this was important for the reduction of costs but that we hoped that judges would seize the opportunity for some really good case management, and tried to pull this stuff back as much as possible to get the time and therefore the money reduced. I do not think that we will ever go quite as far as the American system of case management, but I think that we were mentioning an urge to be as early and robust as possible.
The Joint Committee did not go as far as saying that there should be no jury trials, although some people suggested that. As the noble Lord, Lord Mawhinney, has said, it seemed that there were cases, such as a judge, where, for reasons of public confidence, a jury would need to be there to ensure that it was not one judging their own, if you like. Again, as much for public confidence as for anything else, that could also mean people who were involved in appointing judges, or people who were very senior in Government. In such cases an independent jury is there as much to give the public confidence in the hearing as for any great insight that the jury may bring.
The feeling of the Joint Committee, which I support, is that such cases should be few and far between. Most importantly, the Bill, and I think that this is the purpose of the amendment, should signify that we are talking about a very few cases in exceptional circumstances. This does not really relate to a TV star or a celebrity, in the word of the noble and learned Lord, Lord Brown of Eaton-under-Heywood, or an athlete or the head of a business. We were looking more at those people who are involved in the broadest sense in the judicial and legislative process who, to the outside world, perhaps seem a bit cosy. Those are the sorts of cases that would be the exception.
We were looking for some indication to be given, because otherwise the fact that there could be a jury will have exactly the effect that has been suggested—possibly more cases, and people arguing that they should have a jury. We therefore want to try to shut that off as early as possible. A final decision still has to be made by a judge. Whether it is easier or harder for the judge to do that, it is important that they are given some guidance. Those in our Lordships’ House who have been judges know better than I whether it is easier or harder to do that without guidance. In a sense, guidance needs to be given to those who might be either claimants or defendants about whether they have a small or a large chance of getting a jury trial. They need to know that the circumstances are very limited.
We were partly searching for some indication to be given that we are talking about a very small number of cases. Cases where public confidence would almost demand that they were heard not simply by a jury should be few and far between. We look forward to the Minister’s response on this.
Lord McNally
My Lords, perhaps I should say at the outset that both my party and the coalition Government are more attached to jury trial than perhaps some of the comments about the quality of juries in this debate. Part of the coalition agreement is about our support for jury trial. However, we as a Government also accept the strong arguments made by the Joint Committee. The contributions from my noble friend Lord Mawhinney and the noble Baroness, Lady Hayter, put this amendment in context, but for me the extremely helpful intervention by the noble and learned Lord, Lord Brown, removes any reason for lengthening this debate. He explained clearly the dangers of going along the lines of the amendment. We believe that under the terms of Clause 11 as drafted, the courts will have a wide discretion in deciding whether jury trial is appropriate.
I take the point made by the noble Baroness, Lady Hayter, in her closing remarks. Part of what we are hoping is not to open the gates to more jury trials or to create any special class of person who should be put into jury trials. Much of what we are hoping for, as a result of this legislation and other actions taken, is much more robust case management by judges to make cases more easily and cheaply dealt with. However, I have to tell my noble friend that, although I understand his loyalty to the committee of which he is chair, the Government would not find his amendment acceptable.
Lord Mawhinney
My Lords, I do not need to take too much time. I thought it was interesting that all three distinguished lawyers who took part in the debate with very impressive political sleight of hand got us into celebrities extremely quickly. The Joint Committee did not discuss celebrities; I did not mention celebrities; the Bill does not mention celebrities; and the amendment does not mention celebrities. But celebrities are easier to attack than generals, admirals, members of the Cabinet or senior judges, so I am not surprised that they went for celebrities, but we might at least have the record straight.
Normal behaviour now does not do juries. It has not for the past 18 to 24 months. There has not been one, we were told. I carefully said in my opening remarks, “exceptionally” and “occasionally”, and that was the view. It remains my view precisely because—and I think the noble Baroness, Lady Hayter, said it better than I did—wrapped up in all this is an element of public confidence. It is easy to squander public confidence. If you have ever been a Member of Parliament, you know it is extremely hard to get it back once you have squandered it, so I wish my noble friend well. He has the lawyers on his side, there is no question. I look forward to listening to him defending to the rest of the country how doing away with jury trials in defamation cases enhances the coalition’s commitment to jury trials. I beg leave to withdraw the amendment.
“( ) Regulations may make provisions as to the procedure to be followed on the making of an application for an order under subsection (1).”
Baroness Hayter of Kentish Town
My Lords, I rise to move this amendment which is tabled in my name and that of my noble friend Lord Browne of Ladyton. He mentioned Clause 13 in an earlier debate about whether it is possible that we will need to broaden this for the reasons that were discussed in relation to booksellers.
In general, we are very pleased to see Clause 13 in the Bill. It was brought back by the Government on Report in the other place in response to an issue that our Labour friends raised in Committee there. They were rightly concerned that circumstances could arise in which a claimant had successfully brought an action against the author of defamatory material online but would be unable to secure the removal of that material. We welcome the new clause and the fact that the Government—as they have promised to do all the way through the Bill, so I should not be too surprised—have listened.
However, Amendment 51A adds what our amendment in the Commons also included, which is a call for regulations setting out the procedure for making a removal order. Again, it is part of the clarity which we believe is important for people to know how to apply to a court to make such an order. I know that all the lawyers are very familiar with these things, but ordinary claimants and defendants are less so.
This part of our original amendment was not addressed by the Minister in the Commons, although he said he would go away and think about the amendment generally, so we hope that the Minister will be able to enlighten us on his colleague’s reflections on this.
Amendment 51B is a belt-and-brace or clarification measure. It is designed to ensure that the removal of defamatory material from a website should not prevent the claimant being able to bring an action in defamation. I think it is clear, but clarification is of help. I beg to move.
Lord Ahmad of Wimbledon
My Lords, I thank the noble Baroness for introducing the amendments. I want to revert to the broadening of the scope which was talked about in Clause 13. Again, in the spirit of what has been said before by my noble friend Lord McNally, if that is required and desired, the Government are happy to contemplate it.
Amendment 51A envisages introducing a regulation-making power to set out the specific procedure to be followed in relation to the making of an application for an order under Clause 13(1). We do not believe that this amendment is necessary. Clause 13, as the noble Baroness acknowledged, was introduced in the other place to address the concern that the claimant who had successfully brought an action against the author of defamatory material online may be left in the position of being unable to secure removal of the material. This situation might arise as a result of the fact that an author may not always be in a position to remove the material and the new Clause 5 defence might prevent the website operator being required to do so. The clause, therefore, applies only where the claimant has brought proceedings against the author and is completely separate from the process under Clause 5. As drafted, it enables an order for removal of the material to be made during or shortly after the conclusion of those proceedings, or on a separate application under Part 23 of the Civil Procedure Rules. Part 23 governs applications for court orders and sets out in detail how the process should work, including rules in respect of how an application is to be made, where it should be filed, what information should be included and how it should comply with any relevant time limits, among other matters. To the extent that any supplementary provision might be required, it is the Government’s view that the existing power to make rules of court is entirely sufficient to enable such a provision to be made. A regulation-making power is therefore unnecessary and could perhaps add confusion about the relationship with Part 23 and possibly cast doubt on the scope and applicability of the existing power in the Civil Procedure Rules.
Amendment 51B provides that the removal of allegedly defamatory material from a website and the publication of an apology or correction should not prevent an action for damages being brought. It is not clear how this amendment fits specifically with Clause 13. As I have said, this clause is to address situations where a claimant brings a successful action against the author of defamatory material online but where the author may not be in a position to remove material which has been found to be defamatory from a website. Where the content is removed by website operators in other circumstances—for example, after following the Clause 5 process where the poster chooses not to engage or agrees to removal—there is nothing in either Clause 5 or Clause 13 which would prevent a claimant bringing a defamation action seeking damages against the poster. Clearly, there may be cases where the damage caused by a defamatory statement is so serious that simply having it removed from the website will not provide the claimant with sufficient remedy. In these cases, it is right that the claimant should be able to pursue an action against the poster, and if that is the intention behind this amendment, then we agree entirely with the principle and the sentiment. However, we do not believe this amendment works in conjunction with existing provisions in Clause 13 and, for the reasons I have given, such a provision is deemed unnecessary. Where a statement is removed by a website and the claimant still wishes to pursue an action against the author, there is nothing to prevent them doing so.
In light of the assurances I have given and coming back to the issue of the scope, which the noble Lord, Lord Browne of Ladyton, addressed earlier, I hope the noble Baroness will agree to withdraw the amendments.
Baroness Hayter of Kentish Town
I thank the Minister for that. He is right about Amendment 51B; that was the intention. His assurance that although defamatory material has been taken down there can still be an action for damages meets the point that we were trying to raise. On regulations and his reference to Civil Procedure Rules, the problem is the same. To expect an ordinary citizen to know that there are even such things as Civil Procedure Rules, let alone where to find them or what they say, is difficult. When the Government come to look at the guidance and other regulations attached to this, I urge them to look at whether the Civil Procedure Rules may be incorporated, even if they are word-for-word the same. Asking ordinary folk to go through lots of rules or even to know that they exist is a tall order. I will leave that thought with the Minister. I beg to withdraw the amendment.
Lord Browne of Ladyton
“Disapplication of the Legal Aid, Sentencing and Punishment of Offenders Act 2012
Sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 shall not apply in relation to civil actions for defamation, malicious falsehood, breach of confidence, privacy or publication proceedings.”
Lord Browne of Ladyton
My Lords, Amendment 51C would disapply the LASPO Act in relation to defamation proceedings and Amendment 51D would apply one-way costs shifting to defamation proceedings. Both the amendments are probing amendments. I have some sympathy with the Minister in being prodded on this issue again. He may have thought that he had seen it off with his letter of 10 December and the assurances that he has repeatedly given us, but I am afraid that I shall invite him to discuss again costs in relation to defamation.
As noble Lords will be aware, and as I think the Minister is acutely aware, this issue was addressed during the passage of the LASPO Bill, when calls were made to disapply it in relation to defamation and privacy proceedings. Assurances were given by the Minister that this would be addressed in the Defamation Bill. I do not seek to keep him specifically to that assurance, because I suppose that, on one view, a substantial amount of water has passed under the bridge since that debate and many other things are going on. Whatever intention other noble Lords may have in the debate that will ensue on this, I have no intention of transgressing into the debate about the Leveson recommendations and their consideration in tri-party talks; I have managed until now not to mention “Leveson” anywhere in your Lordships’ House, and I had intended to keep it that way.
Throughout the passage of this Bill, we have had further assurances that something will be done to address the cost of defamation proceedings, and the Government recently gave a commitment that LASPO would not apply to defamation until they had resolved the situation in relation to costs. That stay of execution, as it were, is very welcome. Our amendments are, however, designed to elicit further information from the Government as to the timing of these proposals and what they will consist of, to the extent that the Minister is in a position to share that information with me.
I want to make one very specific point to the Minister which I hope he will address when he responds. I have before me his letter of 10 December 2012, which was very welcome and very helpful in covering a number of issues before the Committee convened to consider this Bill in detail. Under the heading “Cost Protection in Defamation and Privacy cases” it sets out that,
“the Government is keen to provide some form of cost protection so as not unduly to damage the interests of impecunious parties. The Government has asked the Civil Justice Council (an independent advisory body, chaired by the Master of the Rolls) to advise on this by the end of March 2013”.
So I realise that we will have to be patient until the end of March 2013 to see what the council under the chairmanship of the Master of the Rolls advises. In order to instruct those deliberations, we have the benefit of annexe A to the letter, which sets out the terms of reference of the Civil Justice Council’s remit.
I am limited in my understanding of all of this, never having practised in this jurisdiction, but I understand that cost protection is designed to protect a party from the liability to pay the other side’s costs if their case fails. If my case fails, cost protection is designed to protect me from the liability to pay costs, or to reduce my liability. That addresses half of the problem. The serious part of the problem is how does one deal with the impecunious client who does not have the ability to institute proceedings in the first place if LASPO and the Jackson reforms are applied to defamation? How does one encourage lawyers to take on cases on some form of contingency basis, in the light of the application of LASPO and the Jackson reforms? The Government may believe that that is dealt with through the cost protection order process, but I am not satisfied that it is. Will the Minister address that issue? I beg to move.
Lord Phillips of Sudbury
My Lords, I cannot clearly say whether I do or do not support these two amendments as they have all sorts of ramifications and implications. What is common ground between the noble Lord, Lord Browne, and the noble Baroness, Lady Hayter, is that the position of not only the impecunious would-be litigant, but that of the not-well-off would-be litigant in relation to defamation, whether as plaintiff or defendant, is astonishingly unsatisfactory. It makes this branch of law, more than any other, one in which equality before the law is frankly mythical, unless one finds an extraordinarily public-spirited solicitor who will in effect act for nothing if his client’s case collapses. Even then, there would be costs possibilities for the poor litigant, whether as defendant or plaintiff, in that he or she may end up having to pay the other side’s costs. All I am doing is sympathising with my noble friend Lord McNally in having to answer these two issues. At the moment, there is no ready answer, although the idea of changing the recently passed LASPO legislation for defamation has its own problems if one believes, as I do, that the methods of paying lawyers under the conditional or contingency fee system have led to great problems of public interest. That is a rather ineffectual contribution to the debate on these two amendments.
Lord McNally
My Lords, I will not, at this hour, reopen the debate on LASPO except to say that what we were addressing, following the advice of Mr Justice Jackson, was the inflationary effect of the no win, no fee regime that we have replaced. How it will work out in terms where any success fees will be paid from damages we will have to see. But let us not be in any doubt that there was a problem that was generally agreed had an extremely inflationary effect on the cost of justice in this country.
Lord Browne of Ladyton
My Lords, the Minister shares with me the view that this is a fiendishly complicated challenge. I welcome his reluctance to embroil us in a debate on the recommendations of Lord Justice Leveson’s report but I hope that before Parliament’s deliberations on the Defamation Bill are concluded, we will know the recommendations of the Civil Justice Council and have some clarity on the way forward in relation to Lord Justice Leveson’s report and, in particular, his recommendations about costs in defamation actions. We will then be at least in a position of knowing that when the seal is put on the Defamation Act—which broadly we all support and consider as progress in the development of the law—we will not have to revisit the issue quickly thereafter. That would be nonsensical.
I know that sometimes it is not possible get all stars aligned but surely it must be possible with draft legislation of this nature, where there is such substantial agreement, for parties to timetable the proceedings of Parliament in such a way that we maximise the possibility of coherence and consistency rather than minimise it. I hope that we do not get caught up in the demands of people who are timetabling other business, the usual channels and so on, and are railroaded into a timescale on this Bill which makes our deliberations look foolish shortly after we have concluded them.
I am grateful to the Minister for his response. We will certainly return to this issue on Report; there is no question about that. The application of the LASPO Act to these proceedings sits in the context of a very clear undertaking, which we intend that the Minister and the Government will live up to. We will come back to that and I hope that we will have more specification of some description, or at least that the tripartite talks may have concluded in relation to Lord Justice Leveson’s recommendations. Pending that day, I will keep the rest of my powder dry and, for the moment, seek the leave of the Committee to withdraw the amendment.
Lord Browne of Ladyton
“Defamation county courts: special jurisdiction
(1) The Lord Chancellor may, with the concurrence of the Lord Chief Justice, by order made by statutory instrument designate any county court as a defamation county court and confer on it jurisdiction (its “special jurisdiction”) to hear and determine such descriptions of proceedings—
(a) relating to defamation, or(b) ancillary to, or arising out of the same subject matter as, proceedings relating to defamation,as may be specified in the order.(2) The special jurisdiction of a defamation county court is exercisable throughout England and Wales, but rules of court may provide for a matter pending in one such court to be heard and determined in another or partly in that and partly in another.
(3) An order under this section providing for the discontinuance of any of the special jurisdiction of a defamation county court may make provision as to proceedings pending in the court when the order comes into operation.
(4) Nothing in this section shall be construed as affecting the ordinary jurisdiction of a county court.
(5) The Lord Chief Justice of England and Wales may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under this section.”
Lord Browne of Ladyton
My Lords, this amendment is designed to probe the Government on the possibility of creating a defamation county court. The idea of having such a court has already been discussed in a previous session of your Lordships’ Committee. It was a recommendation of the Joint Committee, at least in a pilot sense. At this time of day, I shall spare your Lordships the pain of having to listen to me read the whole of the paragraph that refers to this from the Joint Committee’s report.
However, for the purposes of the record it is paragraph 87, which I will read in short. It starts with a sentence that I think we would all agree with:
“Some witnesses argued that costs would be reduced if libel cases were generally dealt with by county courts rather than the High Court”.
It goes on to make a good argument, concluding:
“The Ministry of Justice should implement a pilot scheme to determine how this proposal might work in practice”.
This amendment is our attempt to set a statutory framework for such a pilot scheme. The idea behind it is to significantly reduce the costs of defamation proceedings; an issue that we have agreed is a shared concern.
The drafting of this amendment will prove not to be perfect but it is intended to be a probe. However, it is based on the Patents County Court. By way of background, the Patents Court is not a county court in the usual sense but a specialist court for the resolution of intellectual property disputes. It was originally set up in 1990 but was set up under its most recent guise in late 2010, with the aim of providing efficient intellectual property case trials as an alternative to costly and time-consuming High Court trials.
The key provisions of the Patents County Court are that costs are on a fixed scale, capped at £50,000, while the damages that the court can award are limited to £500,000 and each trial is aimed to be concluded—wait for it—within two days. The court has recently started giving non-binding opinion, generally during the case management conference stage of proceedings and before trial, as to the likely outcome of the case. I suspect that all noble Lords in this Committee would welcome that environment for the early and swift deliberation of cases that got to trial, never mind the issue of some pre-trial provision or alternative dispute resolution, which noble Lords have previously discussed.
When this idea was discussed during our previous session, the Minister said that he would go away and think about the idea. With this amendment I am providing an opportunity for the Minister to tell us where his thinking presently is. For the purposes of the record, the exchange that I am referring to was with the noble Lord, Lord Faulks during the first day in Committee at col. GC 458. I beg to move.
Lord Marks of Henley-on-Thames
My Lords, I strongly support allowing county courts to hear all but the most serious defamation cases. As the noble Lord has said, it was a recommendation of the Joint Committee; indeed, it was the noble Baroness, Lady Hayter, and I who advocated it very strongly on that committee. Quite apart from the complexity of the law and the arcane procedures that we have developed, one of the main reasons why costs have become so high in these cases has been the development of a highly specialist Bar and specialist solicitors, all conducting cases very expensively exclusively in the High Court.
The simplification of the defences in this Bill, coupled with the simplification of procedure and more extensive and earlier case management, should make it possible to reduce the complexity of defamation cases substantially. In those circumstances, the development of county court expertise with designated judges to manage and hear these cases would make justice, importantly, more local, quicker, cheaper, simpler, and in all ways more accessible. Of course there will always be cases that are complex, difficult and paper-heavy. They will require High Court expertise and the attention of specialist High Court judges. However, I hope that for the generality of cases county courts will become the norm and that therefore the cases will become simpler to sue, to defend and to resolve. We recommended trialling county courts for defamation cases; I ask that that happens soon.
Lord Mawhinney
My Lords, just as I paid tribute earlier to the noble Lord, Lord Bew, for his contribution, so I pay tribute also to the noble Baroness, Lady Hayter, and the noble Lord, Lord Marks. Without them I am not sure that the Committee would have come to this conclusion. The noble Lord, Lord Marks, has just eloquently explained our thinking and our reasoning. Indeed, my noble friend Lord McNally may remember that the noble Baroness, Lady Hayter, had one or two questions for him on this subject when he came to give evidence.
The noble Lord, Lord Browne, said that we proposed a pilot, and the noble Lord, Lord Marks, has confirmed that. I would add that we proposed a pilot in part because we thought that this was such a radical idea that the Minister would need some help in dealing with the legal profession. We could hear the legal profession lining up against this idea and we wanted to side with the Minister, so we suggested a pilot. However, he should not be unaware of the fact that he will have one or two sessions of arm-wrestling with people who were not overly persuasive to the Committee before, hopefully, he gives effect to this particular amendment.
Lord Phillips of Sudbury
My Lords, I add my strong support for this amendment. You could almost say that we have been mourning the failure to provide justice in the defamation field for more years than I can remember. The Society of Labour Lawyers published a document, Justice for All, back in the 1960s. The Society of Liberal Democratic Lawyers published its blueprint 20 years ago. Every legal body that I am aware of has bemoaned the intractable problems related particularly to defamation. However, I see here the seeds of a breakthrough. It is very difficult for us lawyers to accept that sometimes the best is the enemy of the good, and I would far rather have some rough and ready justice within a sensible, practical framework such as might be provided under this amendment than I would see justice spurned. I hope that we can be open-minded and a bit imaginative and, before this Bill is done, provide something that will remedy what is at present a shame for us all.
Lord McNally
My Lords, it has taken me till the fourth day of this Committee to rumble the noble Lord, Lord Browne. Beneath his metropolitan, urbane and sophisticated exterior, there is a canny Scot. My absolute copper-bottomed assurances on dealing with costs are met with a clear assurance that that will not be delivered without him battering us on to deliver. Now he notices a bandwagon on county courts that was rightfully set rolling by the Committee and he immediately claims it as his own. I can see him now, ticking off in his memoirs the influences that he has had on the Bill. I hope that when he gets home tonight he will read to his wife the passage about “metropolitan, urbane and sophisticated”.
Let me be clear that defamation cases can be started in a county court at the moment, although both parties must agree to this in writing. That is the position under Practice Direction 7A to the Civil Procedure Rules, but I freely acknowledge that it may be that we should revisit those procedure rules. We will give the issues involved very careful attention, and I sincerely welcome this very useful debate and the suggestions that have been made. The Lord Chancellor already has broad powers to allocate business between the High Court and the county courts. When the noble Lord, Lord Faulks, raised the matter earlier in our proceedings, I think I mentioned that the Lord Chancellor has expressed his interest in this idea. The Lord Chancellor’s broad powers are under Section 1 of the Courts and Legal Services Act 1990. The provisions in the Crime and Courts Bill to establish a single county court, which the House has approved, will preserve this power.
I therefore assure noble Lords that we are very interested in this idea, but it does not need primary legislation to carry it forward. If we consider the use of county courts to be appropriate, the necessary procedural changes to enable that to happen can be put in place. I hope that that is a firm enough indication of direction of travel. I tore up my notes and changed them to that very positive response because of the persuasive case that the noble Lord, Lord Browne, made in opening this debate. In the mean time, I hope that he will withdraw his amendment.
Lord Browne of Ladyton
My Lords, I am grateful for the support of the noble Lords, Lord Marks of Henley-on-Thames and Lord Mawhinney, but I am not surprised by it because the amendment draws support already from the report of the Joint Committee. I am grateful also for the overt support of the noble Lord, Lord Phillips of Sudbury.
I have to thank the Minister for his flattering if somewhat inaccurate and probably libellous description of me. It is unworthy of him to suggest that I am a bandwagon-jumper in any sense. I will privately produce evidence to him that this is an issue which I have been discussing with members of the legal profession in England in various guises for some months now, because it is not entirely what he and the noble Lord, Lord Faulks, described and discussed. This very specific provision is presented in this fashion, taking advantage of the specialist Patents Court, to make another criticism that I think the Minister will have to face should he seek our shared ambition of moving these cases to the county court—that is, there are already specialist judges who do these cases, but they are in the High Court. There will be, I predict, resistance on the part of the judiciary, among others, who will say that this difficult, complicated work, which requires High Court judges, has to be kept there.
The reason why I presented the amendment in this fashion, having thought about it for some time—since long before the exchange between the noble Lord, Lord Faulks, and the Minister took place—is that I cannot think of a more complicated area of law and fact than patent law. If a specialist court at county court level, with specialist judges, works for that area of the law, then I believe it can work for defamation.
I am also told that it is in the nature of the legal profession that our very senior judges tend to have been in the profession for a period of time and retire. I am not entirely sure what further lifespan on the Bench—that is the wrong phrase—what further time on the Bench the judges in the High Court who are specialists on defamation have. Although I do not know this, the suggestion was made to me that there is a probability that they will retire, or at least that a significant number of them may, within a comparatively short time. I am not sure whether that is right but they will have to be replaced sometime, and it should not be beyond the ability of the legal profession to produce judges at county court level who have this specialism.
I am not entirely sure whether the Minister is right that the creation of a specialist court or courts, such as the patent courts, does not require primary legislation. If it does not then I am interested to know why the patent courts were created by primary legislation if we can create specialist county courts without it, but maybe the law has been changed since they were created.
Lord Phillips of Sudbury
Might the noble Lord encourage the Government to look at the possibility of empowering registrars of county courts to do much more of the preliminary work? They could have a much bigger role, but again that might require primary legislation.
Lord Browne of Ladyton
I am grateful for that intervention from the noble Lord, Lord Phillips. The best that I can say is that I am sure the Minister has heard that suggestion, and when he is deliberating further on this potential development I am sure that he will take into account.
I am reassured that this is sufficiently high among the Government’s priorities to be a possibility—that is the best that we can expect at this stage. We will continue to keep an eye on this issue while the Bill is before the House.
Lord McNally
The noble Lord asked a specific question on the powers to create a court in this area. The amendment is clearly based on the provision for the Patents Court in the Copyright, Designs and Patents Act 1988, which is being repealed as part of the provisions of the Crime and Courts Bill for establishing a single county court. It is superfluous because powers already exist to allocate jurisdiction as between county courts or, in future, in the single county court and the High Court under Section 1 of the Courts and Legal Services Act 1990.
This also gives me the opportunity to withdraw my scandalous assertion; I was just getting a bit demob happy in asserting that the noble Lord jumps on bandwagons. I stick by “metropolitan, urbane and sophisticated”, though, because I know how much trouble that will give him back home in Scotland.
Lord Mawhinney
“Civil Procedure Rule Committee Guidance
The Secretary of State shall publish guidance for the Civil Procedure Rule Committees proposing procedural reforms in the case of defamation proceedings.”
Lord Mawhinney
My Lords, at the end of his last contribution to the noble Lord, Lord Browne of Ladyton, the Minister talked about the importance of procedural change. This amendment is about procedural change. The committee got frustrated at times because to us the single most important thing was cost and bringing this legislation to literally millions of people who are at present prevented from getting coverage by the law. I will not take the time of the Committee at this late hour to read into the record the evidence that the Minister gave when he came, but we were encouraged that he was of a similar mind to us. The Government have the power to interact with the senior levels of the legal profession and the judiciary to require them to do things. We were hugely impressed by the cost attached to the management structures of the judiciary at this time. They could be streamlined, enhanced and quickened, and all of that pulls down the cost and therefore makes legislation available to millions who at the moment are priced out of the market.
I know my noble friend is going to tell me about the Master of the Rolls. I understand all of that. I have noted very carefully that he hopes to be in a position to press a button of some description by October of this year and I am sure we are all going to hold him to that. But I cannot let this opportunity pass. This looks on the face of it a fairly obscure, perhaps mildly boring, not very important amendment but it may be just about the most important amendment that the committee made and it comes with a lot of feeling, a lot of passion and a lot of importance. If Parliament does not legislate to make remedy available for the millions, it is legitimate to question what Parliament is all about. If my noble friend will accept this amendment and then put his shoulder to the wheel and push aside those who will line up to thwart him in every direction, he will have the thanks not only of our committee, not only of this Committee, not only of the House and Parliament; he will have the thanks of millions and millions of people who will look at our deliberations tonight and think, “It is all very well for them but we do not have any say in this procedure at the moment”. I strongly commend this amendment to the Committee.
Lord Browne of Ladyton
My Lords, on behalf of the Opposition, I wish strongly to associate myself with the amendment tabled by the noble Lord, Lord Mawhinney. It must be possible for Parliament through this Bill to find a conduit to the appropriate Rolls committee to express the unanimous view of Parliament that access to justice in this area must be improved and it can only be improved if we reform the way in which these cases are conducted to reduce the cost and delay of them. I am not entirely sure whether this is the appropriate way to do it and I do not think it matters to the noble Lord, Lord Mawhinney, whether it is. There must be a way of doing that without transgressing on the appropriate separation of powers. There must be some way of getting that message across. It is undoubtedly the case for those of us who have practised before the courts, whether in this jurisdiction or in other jurisdictions, that whether there is a specialist Bar, whether there is a complicated area of the law, whether there are litigants with deep pockets, the one thing that is most important to the efficient conduct of business is the maximum appropriate judicial intervention to concentrate the minds of parties on the real issue and to get them to resolve those issues in the minimum of judicial time. If we can find some way of doing that, while at the same time ensuring that those who do not have deep pockets have a right to redress, we will have done our work. Raising the bar, simplifying and explaining the defences and preparing the best suite of defences the world has ever seen will mean nothing if all we have done is recreate the issues of dispute for the same tediously long processes and complicated debates that eat up vast amounts of people’s time and resources. They also destroy lives—much more quite often than the remarks that were made about them in the first place.
That said, we do not consider the amendment necessary. The rule committee does not operate in a vacuum and civil procedure rules are made by a process that requires the approval of the Lord Chancellor for rules made by the committee. I take it on board; I have been in this job long enough to realise that you have to be careful in the separation of powers that we have in our system between the responsibilities of the judiciary, the Government and Parliament. But that does not mean that Parliament or the Government cannot send the clearest messages to the judiciary. That is why I agreed with the noble Baroness, Lady Hayter, earlier that case management is a major responsibility now for judges, and in this case in particular.
The Government can and do put before the committee proposals for amendments to rules of court. The Lord Chancellor is also able by virtue of Section 3A of the Civil Procedure Act 1997 to notify the committee that he thinks it expedient that rules should achieve a specified purpose, and in such a case the committee must make rules as it considers necessary to achieve the specified purpose. Ministry of Justice officials have discussed the contents of the Bill and related procedural issues with members of the senior judiciary on a number of occasions during the period in which the Bill has developed. Most recently, a meeting has taken place to discuss these issues with the Master of the Rolls, Lord Dyson, who heads the Civil Procedure Rule Committee. The Government will put proposals for procedural changes to support the new Act before the Civil Procedure Rule Committee shortly. Our intention is to ensure that these are in place when the Act comes into force. I hope on that basis that the noble Lord will be prepared to withdraw this amendment.
Lord Mawhinney
My Lords, I offer warm thanks to my noble friend for what he has said. He pointed out that arrangements already exist for the interrelationship between government and the judiciary. That was the point that I sought to make in moving the amendment. No one on the committee, and no one I know, is trying to challenge the separation at the very heart of our democracy; that was not the issue. However, having been told that there are ways in which those who are elected can relate to those who sit in judgment, we took the view that the more that people understood that those ways existed, the more they would be used, the more the Government’s arm would be strengthened and the more people would benefit in their advocacy and involvement.
I reassure my noble friend that he and I are approaching this in exactly the same way. He will notice that I did not table any amendments on arbitration and mediation, which were very much parts of the committee’s report. I did not do so because they are all wrapped up in this question of cost; I mention them now so that he will not forget them when he reflects further on how best to reduce costs. Very much in the spirit that he has outlined the issue, in which I wish to share, I beg leave to withdraw the amendment.
Lord Mawhinney
“Reporting to Parliament
The Secretary of State shall report to Parliament annually on the codification of this Act; and in particular on its impact on accessibility and clarity of the law.”
Lord Mawhinney
My Lords, I feel, on a personal level, the need to start, not exactly by making an apology, but by recognising that I have been playing far more of a role in this Committee than my record over 30 years in Parliament would have caused anyone to anticipate, or than I would find comfortable. I have interpreted my responsibility as chairman of the Joint Committee in carrying through the work of the Joint Committee to this Committee so that when the government Bill did not cover what we recommended I could at least draw the issues to the attention of this Committee. In that sense and spirit I move my last amendment; I am probably as pleased to be at the end of the process as much as the rest of your Lordships are.
We were conscious that we were doing two things. Defamation seems to be one of those areas of law where the common law has prevailed. What has been codified has been minimal, and judges have been left to move the thing forward. The argument for that has been the great flexibility of common law. We got evidence that not many people understood the common law and that there was benefit for the citizenry to have more codification in this area than has traditionally been the case. Hence this final amendment, to set out some help: to ask the Government to help people to understand the codification, what is left of the common law, and what more might be usefully codified and then to undertake to report to Parliament annually, so that all of us can see that as what is agreed in Parliament is implemented, so the public benefit. I thank my colleagues for their patience and, for the last time, invite them to allow me to move the amendment.
Baroness Hayter of Kentish Town
My Lords, the Committee has heard from me before, as has the House at Second Reading, on my admiration for the concentration of the noble Lord, Lord Mawhinney, both on the ordinary citizen—particularly in Peterborough—who might get caught up in a libel case, whether as claimant or defendant, and also on the need of anyone involved to be able to read and understand the Bill after enactment without the need of lawyerly guidance, as he has just outlined. This is his final throw and we should support him.
We do not want the courts to so run away with interpretation and reinterpretation of the Act that a simple reading of it would give very little guide to the current law on defamation, so nuanced will it have become in learned judgments. I imagine that the noble Lord, Lord Mawhinney, would want Parliament to come back to this at that stage and say, “Look, the Act no longer represents the law; we should amend it”. We concur completely with his desire that untutored people should know their rights and their duties in regard to defamation and we hope that the Government can respond positively to the amendment.
In the mean time, as we close this part of our scrutiny of the Bill, I thank the Lords Deputy Chairmen who have guided us through procedures; the Bill team, who have assisted us throughout, both here and in other meetings, for their patience; the Ministers for their mostly good humour and occasional cheekiness; and our colleague, Sophie Davis, for keeping my noble friend Lord Browne and myself as close to the straight and narrow as was in her ability to do.
Lord Phillips of Sudbury
I associate myself and these Benches with the most recent remarks of the noble Baroness, Lady Hayter.
Lord McNally
A few weeks ago in the House I tried to make a Churchillian quote and got it completely messed up. I shall have another go.
“This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning”.
I have got it right this time.
The only doubt I have had is about how vigorously the Committee have taken up my invitation for discussion. I will not make that mistake again. Next time, I will be utterly Stalinist in ramming the Bill through.
Our considerations of the Bill have been extremely useful. The constructive way in which the Opposition have approached the Bill and brought their experience to it, and the fact that the noble Lord, Lord Mawhinney, has seen his duty as chairman of his committee not ending with the delivery of the report but has helped and guided us on the thinking behind so many of the recommendations, have been extremely helpful. My colleagues on these Benches have been extremely helpful and it has been great to have the help of some distinguished judges.
We now move on to Report and it is rather sad that I cannot accept the final amendment tabled by the noble Lord, Lord Mawhinney, as it stands. He was an experienced Minister and will know that the two things that I have been told to avoid, even in my brief ministerial career, are annual reports to Parliament and sunset clauses, which are usually the stuff of Opposition amendments. I cannot accept an annual report because, as the noble Lord will know, arrangements already exist for post-legislative scrutiny. The Ministry of Justice is committed to fulfilling the requirements of post-legislative scrutiny in relation to this legislation.
However, taking up the point which was partly implicit in what the noble Lord, Lord Mawhinney, said and in the final remarks of the noble Baroness, Lady Hayter, I cannot make commitments on spending money in the Ministry of Justice because we have not got any. The noble Baroness is absolutely right that once this legislation is passed, a simple guide for laymen and laywomen on what we have done, how we have done it and how it will be applied, both on our website and in printed form, would be extremely useful. In that spirit I will take away the amendment and hope that the noble Lord will withdraw it.
Lord Phillips of Sudbury
Would it not be possible to think of what was done in the Charities Act 2006? This is landmark legislation in defamation. Could there not be a review within four or five years, which would not impose, obviously, the obligation of an annual review but would ensure that this did not go by the board because there was another Government with other priorities?
Lord McNally
But, my Lords, that is exactly what will happen. There will be post-legislative scrutiny within three to five years of this Act passing.
Lord Mawhinney
My Lords, I salute my noble friend the Minister. I thank him and the noble Lord, Lord Ahmad. We as a Committee have been well served by the Ministers. They have undertaken to reflect on what has been said, and I have the confidence to believe that a little of what was said that initially did not please them may turn out eventually to be slightly more persuasive than originally they may have thought. I look forward to Report and I make a promise to colleagues that I shall not be as visible then as I have sought to be here. I seek leave to withdraw the amendment.
House of Lords
(11 years, 10 months ago)
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Electoral Register: Young People
(11 years, 10 months ago)
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Lord Roberts of Llandudno
To ask Her Majesty’s Government what specific measures they are taking to ensure that the maximum number of young people are enrolled on the electoral register.
Lord Roberts of Llandudno
My Lords, on this historic day, when we celebrate the 150th anniversary of the birth of David Lloyd George, I beg leave to ask the Question standing in my name on the Order Paper.
Lord Wallace of Saltaire
My Lords, I have to add that my father met Lloyd George. We have a photograph somewhere of my father with him—there are about 3,000 people in the picture, but never mind, it is still historic.
Government, politicians, political parties, electoral administrators and others in society all have a role to play in encouraging people to register to vote. As we have made clear throughout the ERA Bill’s consideration, the Government are committed to doing all they can to maximise registration, including among young people. They are looking at ways to modernise the system to make it as easy and convenient as possible for everyone to register to vote.
Lord Roberts of Llandudno
I thank the Minister for his reply. I declare an interest as president of Bite the Ballot, the youth democracy movement. I am not only president, but I think great-grandfather of that movement. Is there not an opportunity for us to give young people when they reach the age of 16, possibly 17, an electoral registration form in their schools so they can sign up then? We could even give them an electoral registration form when they go to university, say in freshers’ week when they get their pack of information. We might be able to sign up a large number of people in those two possible ways.
Lord Wallace of Saltaire
That is an interesting consideration. I will take it back to the Cabinet Office and discuss it with the Department for Education. I talked to several head teachers in Westmorland on Friday afternoon about citizenship education and how we involve young people in politics. Part of the problem we face is churn. Young people move, so even if they are put on the register when they are 17, they may well be off it—or be in the wrong place—by the time they are 20. So there are some real problems with keeping young people on the register as well as getting them on it.
Lord Elton
My Lords, if the noble Lord were to accept my noble friend’s suggestion, would he make sure that the opportunity to enrol in schools takes place after suitable instruction in the functioning of this country’s politics and constitution? While he should be on his guard against undue political influence from the teachers, he will be pleased to know that in my experience on all but very rare occasions when a teacher advises supporting one party, the class always follows the other.
Lord Wallace of Saltaire
My Lords, I can remember the history sixth form when I was at school. As we got closer to the coming general election, the history teacher’s interpretation of the characters of Mr Disraeli and Mr Gladstone moved towards Mr Disraeli being better and better and Mr Gladstone being more wicked than he had been before. The idea of neutral school teaching is not one that is very easy. Citizenship education is important. The national curriculum is currently being reviewed and the issue of what role citizenship education plays both in the national curriculum and in sixth-form activity in schools throughout the country is one that clearly we need to consider further.
Lord Maxton
My Lords, given the advances in smartcard technology in recent years, is it not time that we looked again at the idea of compulsory registration of all children from the age of nought, to ensure that everyone is automatically on the register from the age of 18 without filling in forms or anything else?
Lord Wallace of Saltaire
My Lords, the Government intend to introduce the option of online registration as from 2014. How far we go towards what would in effect be a sort of ID card for each child born is a matter on which we will have to have further debate. The noble Lord will of course have seen the discussion in some of the press about whether parents wish to put microchips in their children, so that they know where they are all the time.
Baroness Trumpington
My Lords, is the Minister aware that I not only knew Lloyd George but I was his land girl? [Laughter.] Shut up, everybody. Does the Minister share my view that it is unfair that students at university, who are birds of passage, should have the right to vote in Cambridge and other university cities in general elections, thus deciding—due to the power of their numbers—the political future of the town where they are students but not permanent residents?
Lord Wallace of Saltaire
My Lords, the question of where young people between the ages of 19 and 25 are permanent residents is one of our problems. They are very often transient, given the nature of what they do. I am not quite sure how long my children remained permanent residents at home after the age of 18; they were more often at their college or university than at home.
Lord West of Spithead
My Lords, can the Minister clarify whether young Scottish men and women in the Armed Forces will be disfranchised in the context of the vote for the separation of Scotland from the United Kingdom?
Lord Wallace of Saltaire
My Lords, I understand that that question is under active consideration.
Lord Phillips of Sudbury
My Lords, is my noble friend, having twice rightly mentioned the importance of citizenship education, aware that it is currently part of the core curriculum but on present reckoning will be taken out? Is that not lunatic in light of the declining democratic adhesion of so many young people?
Lord Wallace of Saltaire
My Lords, my understanding is that we have not yet entirely decided the full spread of the core national curriculum. Of course, not everything that schools do is part of the national curriculum, as the head teachers explained to me on Friday afternoon. There is a whole range of other activities, including visits to local courts, the local council and the whole business of self-government within the sixth form. That is part of a broader citizenship curriculum, which is the sort of thing that good secondary schools should do.
Baroness McIntosh of Hudnall
Does the noble Lord agree that the most important thing that we have to establish in young people is an understanding of how important it is that they should vote—not just that they be on the register but that they use the opportunity? Does he further agree that in a small way the ongoing work from within the Palace of Westminster by the Education Service and, if I may say, the Lord Speaker’s Peers in Schools programme is contributing to getting that message across?
Lord Wallace of Saltaire
My Lords, I am happy to agree with that. In the recent report on electoral registration in Northern Ireland, one of the points made is:
“Interest in politics is an important driver of registration and declining estimates for accuracy and completeness are set against a declining interest in politics”.
We must all take that on board and work to increase interest in and commitment to politics among the broader public, including young people.
Severn Barrage
(11 years, 10 months ago)
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Lord Hylton
To ask Her Majesty’s Government when they expect to announce a decision on the latest plan for a major Severn barrage.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, we recognise the potential benefits of the barrage after looking at this carefully in a two-year cross-government feasibility study that was completed in October 2010. Before the current proposal can be subject to further consideration, it will need to be developed in considerably more detail to demonstrate, in particular, robust environmental mitigation plans, evidence of the low-head turbine impact, evidence of net regional and national job benefits and affordability for consumers. The Government remain open to hearing about well developed proposals for harnessing energy from the Severn and elsewhere.
Lord Hylton
My Lords, I thank the noble Baroness for her reply. Does she agree that uncertainty is bad for everyone? If it went ahead, would a big scheme not replace several new nuclear power stations? However, if there is no big scheme it would give us the opportunity to design smaller schemes—for example, at the English Stones or by means of tidal canals. Will the Government at least update and amplify their earlier study so that the earliest possible decision can be reached?
Baroness Verma
My Lords, I understand the noble Lord’s concerns. The consortium to which he refers submitted a business case to DECC in November 2011. In 2012 we asked for some supplementary information and we have had a series of meetings with the consortium at ministerial and official level, but none of these satisfies having enough of the detailed evidence on the economic and environmental impacts of the scheme that we require. The noble Lord will understand that until we get more detail about the plans it will be difficult to make a decision.
Lord Anderson of Swansea
My Lords, would the noble Baroness put the Hafren Power proposal within her category of well developed proposals? From the viewpoint of south Wales, it would be a tragedy if we did not look seriously at this—the biggest renewable energy project in Europe, which would harvest the natural powers of the Severn—and missed the opportunity. It would generate 50,000 jobs and improve flood protection. Most importantly, it could be developed without any contribution from public funds. Is the noble Baroness aware that there is considerable support in Wales for this project, and are the Government giving it a fair wind? What is the Government’s preliminary response to the Hafren Power proposal?
Baroness Verma
My Lords, in my Answer to the noble Lord, Lord Hylton, I laid out that we are taking all proposals very seriously. However, as the noble Lord will be aware, it would not be right for the Government to take a decision until they are completely satisfied that the mitigation plans against environmental impacts that need to be in place are in place. We have made it clear to all consortia that we are interested in looking at how we can harness energy. We need a good mixture of energy but we also need to ensure that it is viable economically and environmentally.
Lord Crickhowell
My Lords, is my noble friend aware that I have studied the latest proposals for the scheme extremely carefully? I agree that they are at the most rudimentary stage. The only positive feature that I could find in them is that the noble Lord, Lord Rowe-Beddoe, is a non-executive director.
Baroness Verma
I am extremely grateful for my noble friend’s support for my Answer. I reiterate that it is incumbent on all Governments to make sure that whatever projects they agree to have looked at all the detail. Thus far, we are not satisfied that we have had enough detail from the consortium on this.
Lord Wigley
My Lords, subject to the environmental conditions that the Minister mentioned being met, given that the project could generate 5% of the UK’s energy needs, and in view of the Welsh economy’s need for a kick-start of this sort, will she give an assurance that the Government will support this project?
Baroness Verma
I cannot say that the Government will support this project until we are satisfied that all the details that are needed to ensure that it is environmentally and economically viable are met. Those conditions have not yet been met.
Lord German
My Lords, the proposal currently before the Government is not for a Severn barrage, it is for a Bristol Channel barrage. As such, it is a very large scheme indeed and has enormous environmental, physical and economic costs. Have the Government made an assessment of the costs to energy consumers—in household energy bills—of this proposal compared to other forms of low-carbon energy, such as offshore wind?
Baroness Verma
My noble friend raises an important point. Until we have a more detailed plan, we are unable, on the information we have at the moment, to make a complete assessment of the impact on consumers. We do know that alternative energy is providing us with good value at the moment, and offshore wind is one of those energies.
Lord Howarth of Newport
Developing the important questions just asked by my noble friend Lord Anderson and the noble Lord, Lord Wigley, and accepting the importance of the environmental considerations that the Minister has rightly mentioned, will she bear in mind that this project is convincingly financeable at present and prospective rates of interest? That is an important reason for a quick decision. Effectively, it would be a free gift of an enormous increase in renewable energy in Britain. It would also be of great benefit to reviving the economy and employment in south-east Wales.
Baroness Verma
I come back to my original point, which I have stated a number of times. I understand where the noble Lord is coming from in his commentary. However, given that the consortium will no doubt look for subsidies for the contract from energy bills for this particular energy as well, it is incumbent on the Government to make sure that they deliver best value to the British public. At this time, we are working with the consortium on a much more detailed plan. We have not ruled it out, but we want more detail about what it proposes to do. At the moment we are not satisfied on that.
EU: Budget
(11 years, 10 months ago)
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Lord McConnell of Glenscorrodale
To ask Her Majesty’s Government what position they will take on the European Development Fund and other European Union aid budgets in the current negotiations on future European Union funding.
Baroness Northover
My Lords, the UK’s top priority in negotiations for the EU budget for 2014-20 is budgetary restraint. We oppose increases beyond inflation in any area of EU expenditure, including the European Development Fund. However, it is important at least to maintain or increase the proportion of official development assistance within restrained EDF and overall EU budgets.
Lord McConnell of Glenscorrodale
I thank the Minister for her Answer. It would be an absolute scandal if those who lived in the poorest countries in the world were made to pay for the deficits that exist in the richest part of the world. In addition, will the Government address this technical point? Any reductions in the EU aid budget will simply have to be made up again in the national aid budgets of the member states. In the United Kingdom, where we have agreed to meet the 0.7% international target, that will mean that any reduction in the EU aid budget is simply transferred to the DfID budget because the EU aid budget contributes to that 0.7% target. The only countries that will benefit from a reduction in the EU aid budget will be those that wish to reduce their aid contributions by the back door and do not replace that money in their national budgets. Will the Government look again at this issue and ensure that the EU aid budget is preserved so that those countries that wish to reduce their aid contributions by the back door are not allowed to do so, and ensure that we make a contribution to that multilateral development assistance?
Baroness Northover
I thank the noble Lord for his question. He is well aware that the United Kingdom is increasing its own spending because it recognises the importance of supporting the poorest in the world, even when we are in financial difficulties. As far as the EDF and the EU budget are concerned, we scrutinise them very carefully for their poverty focus. We are encouraged by the direction they are heading in, so perhaps I can reassure the noble Lord in that regard. However, we will continue to keep up the pressure, as it needs to be poverty-focused. I point out that we are fifth in the league, as it were, in terms of ODA in the EU, behind Sweden, Luxembourg, Denmark and the Netherlands, all of which have gone beyond the 0.7%. The evidence is not quite as he indicated in terms of other countries. For example, there are increases from Germany, Italy and Sweden, so the picture here is not quite as he portrays it.
Lord Chidgey
Is my noble friend aware that the European Court of Auditors has just reported on its study of 48 EDF schemes—road transport programmes totalling over something like 2,500 kilometres—in the Sahel? It shows that, while it is by far the European Commission’s financially most important sector, it has been only partially effective in promoting policy reform that would ensure the sustainability of this massive road infrastructure investment. What is the Government’s response to the court’s recommendations that the European Commission should better focus European Development Fund resources and make better use of the conditions that it attaches to the programmes?
Baroness Northover
This report was published a couple of days ago, on Tuesday. DfID will produce a considered response, which will be scrutinised by Parliament. It is worth flagging up that, as my noble friend rightly points out, this looks at aid since 1995 in terms of road building and at whether the balance between road maintenance and road building has been sustained as it should have been. In the United Kingdom we know that when you are in constrained financial circumstances a balance must be struck between those two areas. I am sure that we can learn many lessons; nevertheless, it is not as though the balance between those issues is not also felt in other countries.
Baroness Kinnock of Holyhead
My Lords, is the Minister aware that if current proposals made by the President of the European Council to freeze the levels of spending on EU development aid are implemented, aid will suffer a larger reduction than absolutely any other area of the EU budget and that the UK will see a decrease in its current contribution to the European Development Fund? These are two very important factors. Would it not be perverse if the effect of a commendably ring-fenced UK development budget was diminished by a huge 11% cut in the EU development budget?
Baroness Northover
As I said to the noble Baroness’s noble friend, the noble Lord, Lord McConnell, the EDF has clearly been a very effective measure in this regard. DfID is extremely keen to make sure that that is protected and that the EU’s aid contributions are poverty-focused. Within the EU budget there is clearly also a focus on near neighbours. We need only look at what has happened across the Middle East and north Africa to see how the security, stability and economic progress of those near neighbours are important. The new accession countries are also important. However, we are keenly aware of the importance of the EDF and its poverty focus, and we are seeking to increase its focus on the poorest.
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)
My Lords, I think that the House would like to hear from the noble Lord, Lord Pearson, first.
Lord Pearson of Rannoch
My Lords, I am grateful to the noble Lord. Do the Government agree with the think tank, Open Europe, that only 46% of EU aid reaches really poor countries compared with 74% of our own aid? Have the Government worked out the cost of churning our aid through Brussels? Are we really incapable of controlling it all ourselves?
Baroness Northover
I have just given an answer saying that the EDF is very poverty-focused. What the EU is doing is looking somewhat wider, but that is a worthwhile project as well.
Lord Collins of Highbury
My Lords, DfID’s own multilateral aid review published in March last year rated the European Development Fund and ECHO among the top performers. It also identified clear reform priorities in order to demonstrate results and deliver greater value for money from the UK aid that is channelled through the EU. Can the Minister provide an update of the department’s assessment of the EU’s progress on achieving those reforms?
Baroness Northover
DfID is closely engaged in this area and I have met Commissioner Piebalgs a number of times. We are sure that they are heading in the right direction.
Food: Waste
(11 years, 10 months ago)
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Lord Greaves
To ask Her Majesty’s Government what is their response to the Institute of Mechanical Engineers report Global Food: Waste Not, Want Not.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, we are grateful for this contribution to the debate on food waste and agree that too much food is wasted. The waste review sets food waste as a priority, giving the Government’s commitment to tackle it by focusing on waste prevention. The Government are working through agreements with food retailers, manufacturers and the hospitality sector to reduce food waste, and we are helping households waste less and save money through the Waste and Resources Action Programme’s “Love Food, Hate Waste” campaign.
Lord Greaves
My Lords, this excellent report highlights the fact that around the world, somewhere between a third and a half of the food that is produced is not eaten. Is that not a shocking example of inefficiency within the capitalist free market system? Is it not time that the Government took the issue far more seriously by getting together with producers, distributors and retailers in this country so that we do not just hope that consumers will behave better, but actually do something about it?
Lord De Mauley
My Lords, my noble friend would not necessarily expect me to agree with every word he has said. Our key tool for diverting waste, particularly food waste, from landfill is the landfill tax. On top of that we have the “Love Food, Hate Waste” campaign aimed at households, the Courthauld commitment, and the Hospitality and Food Service Voluntary Agreement that is operating successfully with retailers, manufacturers and caterers. We have the AD Loan Fund, and WRAP provides evidence and advice on food waste. Under the waste review in which we have committed to move food waste up the hierarchy and away from landfill, with waste prevention a priority, we are exploring incentive arrangements and working with local authorities, businesses and others to make it easier for businesses and households to manage their food waste better.
The Countess of Mar
My Lords, most food waste is generated by households. Does the noble Lord agree that food is too cheap in this country? If it cost the price of production in most cases and thus gave farmers a bit more of a profit, householders—housewives, perhaps—who prepare food would be more careful about wasting it.
Lord De Mauley
My Lords, I would not wish to see anything in the way of increases in food prices for consumers. I think that that would be going too far.
Baroness Jenkin of Kennington
My Lords, what are the Government’s plans for phase 3 of the Courthauld commitment, given that Courthauld 2 expired in December? Will phase 3 learn from the phase 2 target of a 5% reduction in supermarket food waste, which was exceeded after only the second year, indicating that the initial target was somewhat unambitious?
Lord De Mauley
My Lords, the waste review commits us to exploring the potential for a successor to Courthauld 2. The UK Government are working with WRAP and current Courthauld signatories and trade bodies to determine the best way forward following the completion of the second phase of the Courthauld commitment and the agreed outcome will aim to build on the significant progress made so far. As I say, the agreed outcome will build on progress and it is anticipated that we will launch Courthauld 3 in the spring of this year.
Lord Grantchester
My Lords, under the Waste Strategy 2000, the Government have strict targets for recycling household waste. By 2020 the amount of biodegradable municipal waste for landfill must be reduced by 35% of the amount produced in 1995. Do the Government have plans to go further, such as a ban on all food waste to landfill?
Lord De Mauley
No, my Lords. We do not plan to ban all food waste to landfill. However, we are making significant progress and we will continue to make significant progress—building, I may say, in a spirit of friendliness, on progress made by the previous Government.
Baroness Knight of Collingtree
My Lords, do these strictures apply to horse meat?
Lord De Mauley
My Lords, that is a bit wide of the Question. However, on the subject of horse meat, consumers should have confidence that food is exactly what it says on the label. There are strict rules requiring products to be labelled accurately.
Lord McConnell of Glenscorrodale
Surely the most significant impact that could be made here is not through regulation or changing the capitalist system, but by changing the behaviour of consumers. The ridiculous overuse of “best before” dates and the ridiculous dominance of almost perfect-looking potatoes, apples and other forms of vegetables and fruit in our shops, make the most significant contribution to the waste in every home in the country on an everyday basis, at a time when people are starving elsewhere in the world.
Lord De Mauley
I find myself in almost complete agreement with the noble Lord. First, I agree with him that compulsion is not the sensible way forward. On the specific issue of sell-by dates, on 15 September 2011 we published date-marking guidance that will help ensure that dates are applied consistently, making it easier for consumers to understand. “Use by” or “sell by”, labels should be used only where the safety of food cannot be guaranteed after that date. Most other foods should have a “best before” date only to indicate when the food is no longer at its best but is still safe to eat. We are seeing date-marking meet the guidance; for example, more labels are starting to drop the confusing “display until” dates that are only for stock rotation.
Business of the House
(11 years, 10 months ago)
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Lord Hill of Oareford
That the debate on the motion in the name of Baroness Hollis of Heigham set down for today shall be limited to three hours and that in the name of Lord Smith of Leigh to two hours.
Standing Orders (Public Business)
(11 years, 10 months ago)
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Lord Hill of Oareford
That the standing orders relating to public business be amended as follows:
Standing Order 73 (Joint Committee on Statutory Instruments)
In Standing Order 73(1), after “Human Rights Act 1998”, leave out “and”; and after “Regulatory Reform Act 2001” insert “, any draft order laid under or by virtue of section 7 or section 19 of the Localism Act 2011, and any draft order laid under or by virtue of section 5E of the Fire and Rescue Services Act 2004”.
Electoral Registration and Administration Bill
(11 years, 10 months ago)
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Lord Wallace of Saltaire
That the amendments for the Report stage be marshalled and considered in the following order:
Clause 1, Schedule 1, Clause 2, Schedule 2 Clauses 3 to 5, Schedule 3, Clauses 6 to 13, Schedules 4 and 5, Clauses 14 to 27.
Lord Wallace of Saltaire
My Lords, I beg to move the Motion standing in my name on the Order Paper.
Lord Forsyth of Drumlean
My Lords, I know that the House has agreed to consider the Report stage and Third Reading on the same day, but could I ask my noble friend why it is assumed that no Peer will have anything to say which requires consideration by Ministers during the moving of these amendments? Could he tell us what is the urgency that has required both remaining stages to be carried out on the same day?
Lord Wallace of Saltaire
My Lords, the Electoral Commission is anxious to have sufficient time to make sure that the transition to the new electoral system takes place on the set date. We are all of us, on all Benches in this House and in the other place, I think, concerned to make sure that the transition to individual electoral registration results in as complete and accurate a register as possible. For that purpose, the sooner this Bill passes and becomes an Act, the better.
Baroness O'Cathain
My Lords, does that mean that the demands of time for the Electoral Commission are more important than the demands of time for us to make sure that what we decide on is the right way of tackling this Bill?
Lord Cormack
Further to that, my Lords, could the Electoral Commission be gently told that it itself should not procrastinate as much? We were debating an issue yesterday where the Electoral Commission has taken so much time that we were not able to consider its recommendations on the Scottish referendum question because those have not yet been made. What is sauce for the goose is sauce for the gander.
Lord Wallace of Saltaire
My Lords, in the process of considering this Bill I have met quite a large number of electoral registration officers. They are a subculture that works incredibly hard during electoral campaigns. I have real respect for what they do and how hard they work at the local level. We all have to recognise that getting this right, and improving the declining accuracy and the incompleteness of the current register as we move towards a different one, is a very important goal which we share across all political parties and Benches in this House.
Taxation: Families
(11 years, 10 months ago)
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Baroness Hollis of Heigham
That this House takes note of the impact on families of changes to tax and benefits.
Baroness Hollis of Heigham
My Lords, when in the 1830s the Tory, Lord Shaftesbury, sought to limit child labour, mill owners insisted it was essential to the economy. Shaftesbury said that he refused to accept that the prosperity of Britain must depend on the labour and pain of its poorest children. The last Government lifted more than 1 million children out of poverty. With these cuts, some 300,000 to 400,000 children by 2015, and up to 1 million children by 2020, will now slide back down the snake into absolute poverty. I refuse to accept—the whole House will refuse to accept—that poor children must be made poorer still, so that the rest of us can, in time, become more prosperous.
Individual cuts seem modest, until you add them up. Can the noble Lord, Lord Freud, tell us whether the Government have published a cumulative analysis of the cuts since 2010? In its absence, I have tried. I especially thank Sue Royston of Citizens Advice and Howard Reed of Landman Economics for working through the statistics and the weekends, although any errors are of course my own. Let us remind ourselves that the Government froze the value of tax credits and child benefit, changed the taper rate, reduced the childcare component and, for some 200,000 families, increased working tax credit hours, which may cost them £40 to £50 a week on top. Next came the benefit cap, which hit families, especially in London, although my city of Norwich has 100 families affected by it. Housing benefit was reduced from 50% to 30% of private sector rents, so many now face serious shortfalls in local housing allowance; as do those facing the bedroom tax on alleged underoccupancy. From April, perhaps a quarter to one-fifth of working-age tenants of the housing association that I chair face HB cuts of £12 to £15 a week, as they have nowhere else to go.
Also in April come the localised council tax benefit cuts. Families who had not expected to pay council tax now face a poll tax of £5 or more a week. Benefit rises are to be capped at 1%. The bottom one-third of households will lose almost £5 a week as well as £15 per week, effectively, by 2015. The change from DLA to PIP will probably remove the lower-rate care element, worth around £20 a week, as well as making changes to carers’ benefits—all this before the arrival of universal credit, which will cut disabled children’s benefit from £58 a week to £27 a week. I could go on.
What is the overall impact? In my city of Norwich, which has a population of 135,000, these cuts will take £35 million a year from our poorest citizens and out of our local economy. What is the impact on families? By 2015, the poorest one-fifth of our people will have lost up to £2,000 a year. The more vulnerable families—those with younger children, or three or more children, in poor health, in poor housing or with disabilities—will suffer even greater cuts, of £40 to £60 a week, alongside, of course, severe cuts in public services. Take a working husband—a security guard on minimum wage—his wife, two children of three and six, living in, and now defined as underoccupying, a three-bedroom, £100-a-week council house. Citizens Advice calculates that whether he is in full-time work with in-work benefits, or loses his job and is fully reliant on benefits, either way that family will, by 2015, be losing £30 to £35 a week, even taking into account the tax changes. If the younger child, say, is disabled, they will lose £40 a week by 2015. If, however, by 2015 that family is on universal credit, they will be losing £50 a week if in work, and nearer £65 a week—unbelievably—if he is unemployed.
Why are the Government doing this? The Tories think it necessary and perhaps desirable. The Liberal Democrats, I think, find it necessary but perhaps regrettable. Their argument goes—I will list it and try to address these points—first, the welfare cost is unsustainable; secondly, it is creating welfare dependency; thirdly, welfare has to be cut if we are to cut the deficit; fourthly, it is not right that pay be limited to 1% while benefits rise at CPI; and finally, in any case, the rise in tax allowances offsets all this.
A fair summary, I hope, of Government views. Every point is false; every one. First, the welfare bill is not unsustainable. According to the DWP’s former chief economist, benefits took 12.5% of GDP under John Major in 1994, with 8% going to working age households. As of January 2012, benefit spend fell to 10.5% of GDP with only 5% going to working-age people. The driver of benefit spend is simply more pensioners getting better pensions. I welcome that, but poor children should not be made poorer to pay for it.
Next, in the Telegraph a fortnight ago Mr Duncan Smith asserted that tax credits and benefits created welfare dependency, when he knows that they make it possible for families to live on the same wage as that paid to a single man. A single parent, a Telegraph reader from Amersham in Buckinghamshire, wrote back on 3 January that she had brought up 3 sons while working part-time. Two are now at university and she is about to go into full-time work. She concluded:
“I object to Iain Duncan Smith’s suggestion that tax credits have made people lazy dependants who rely on hand-outs ... the tax credit has been a life saver”.
His welfare dependency; her life saver. His smear; her experience. I know whom I believe.
Next, the Government tell us that we have to cut welfare to cut the deficit, otherwise, it will be nurses and teachers—the usual rhetorical flourish. It is a matter of policy choices. It always has been and always will be. I will offer mine, although they are not necessarily those of the Labour party. While private pensioners enjoy more than £30 billion a year of tax relief, two-thirds of which goes to the better-off, while we cap the upper earnings limit, which saves higher rate taxpayers £11 billion a year, while we refuse—as my noble friend Lord Campbell-Savours has reminded me—an ad hoc Lords committee, urged by my noble friend Lord Myners, on tax-avoiding personal service companies, and while millionaire earners see their tax rate fall to 45p at a cost of £3 billion, I think that there is money from those who can afford to pay.
Fourthly, we are told that as pay is limited to 1% so must benefits, which since 2007 are outpacing pay. Until 2007, earnings outpaced RPI benefits. Why else did pensioners demand that the state pension be linked to earnings not prices? Yes, since 2007, during the recession earnings have fallen behind inflation. Does that mean that we reduce benefits so that they do not keep pace with inflation either? In any case, it is a false contrast because many families with 1% pay increases also rely on tax credits, housing benefit or council tax benefit for a living income.
As the Child Poverty Action Group has said, this child is poor not because its mother is a lone parent but because she is a cleaner; this child is poor not because its father abuses drugs but because he is a security guard. Five million people are paid less than the living wage. Two-thirds of those benefits cited by Mr Duncan Smith go to households in work to ensure that work pays, as we all wish to see. However, to make the unemployed poorer, the Government will make all the working poor receiving benefit poorer as well. One despairs.
Finally, the Minister may say that raising the tax threshold significantly is the best way to support low-income working people—except that it really is not. Very many of the working poor are below the tax threshold, and others—the full-time cleaner or the security guard on the minimum wage—keep only 15% of that alleged gain because means-tested housing benefit and council tax benefit taper away 85% of the increase in tax allowance, and then the other cuts pile in.
Every justification used by the Government for these benefit cuts is untrue—every single one. If, in a final throw, the Government say that the public support them, that is because the Government, with the aid of some of the press—none of whom, I suspect, will experience these benefit cuts themselves—have peddled the view that the poor must become poorer to save the rest of us.
Do the Government know or care what damage they are doing as they finger the vulnerable, the fragile, the poor, the soon to be underemployed, the soon to be unemployed, the soon to be in severe debt, the soon to be evicted—and, yes, the soon to be hungry—and encourage those who are themselves just a rung or two up the ladder, also struggling, to blame not those above them, bankers and the like, but those below them for their struggle? That is ugly, cynical, and utterly indecent.
We must all refuse to use this language of welfare, with its dark shadows of handouts and dependency, stigma and scroungers, failure and fault. When we founded the NHS we also built social security—the roots of which go back to Lloyd George—the insurance of the social contract we make each with each other; a network of mutual social obligation. We pay in, and in need, we take out, as is our right.
It is social security. I calculate that two-thirds of our £205 billion social security spending is likely to come back to each of us in our own lifetime: when we have children, when we are sick and, above all, when we draw our state pension. It smoothes the volatility of our working lives, as it should.
Only a third of social security spending goes in means-tested benefits, perhaps to relieve other people’s hardship; two-thirds will come back to us, as payments on our insurance paid—exactly as you would hope and expect from a contributory social security system based on entitlement, alongside a decent safety net for those in hardship, which could so easily have been any of us in the past.
Let us reframe the debate: it should not be about welfare and dependency, strivers and shirkers—such morally ugly language. It is about social security, contribution and entitlement. When I look around my former council ward in Norwich I see children unable to go on school trips, mothers missing lunch to feed their children an evening meal, women pawning their engagement ring to pay for school shoes. I see a middle-aged couple who have not eaten for two days arriving at my local food bank. I see families fearful that as they cannot afford the rent of their council home from April they may become homeless—and the worst cuts are yet to arrive.
I ask this House today, how many of us here have suffered any cuts? As a comfortably-off pensioner I have not suffered a penny of cuts—and so I will not accept that it is right that poor children should be plunged deeper into poverty to spare all of us; that middle-aged couples should resort to food banks to spare us; that families unable to pay their rent because of underoccupancy should face eviction to spare us. We are not entitled to ask the poor and their children to carry these cuts for our benefit. It is profoundly wrong and I am ashamed.
Baroness Jenkin of Kennington
My Lords, rising to speak after the noble Baroness, Lady Hollis, who is so well known for her knowledge, expertise and experience in this area, I feel a bit like a young and very inexperienced First World War pilot up against the Red Baron, or perhaps the Red Baroness in this case. However, like other noble Lords, I am of course grateful to her for the opportunity to participate in this debate.
Let us take a moment to look at why the Government are having to take these steps. When the coalition came into office in 2010, the country’s tax and benefit system urgently needed reform precisely because it was failing families, especially families headed by couples, and let us remember that such families are still in the majority.
I will start by putting my remarks in context with that great reformer of the mid-20th century, the architect of the welfare state itself, William Beveridge. His blueprint for social reform anticipated the enormity of the post-war social challenges and showed a reforming Government how they could rise to them even in the hardest economic times—then, as now. It is worth remembering that his appeal to conservatives and other sceptics was to argue that welfare institutions would increase the competitiveness of British industry in the post-war period, not only by shifting labour costs like healthcare and pensions out of corporate ledgers and onto the public accounts, but also by producing healthier, wealthier and thus more motivated and productive workers who would also serve as a great source of demand for British goods.
Yet by the end of the first decade of the 21st century we had become a nation that was dependent on benefits to a degree that would have astonished and possibly horrified Beveridge, so concerned was he in his later life that the state might have replaced the welfare society where people anticipated, gave, and received mutual help. We had created a veritable tax credit culture that had been fostered by the party renowned for tax and spend. By 2011, nine out of 10 families were receiving some form of subsidy from government over and above child benefit. Families earning over £50,000 a year were able to apply for a top-up in the form of child tax credits, yet even the most numerate stock broker or accountant found themselves unable to work out exactly how they were calculated. For those families, that might have meant a degree of uncertainty about whether it was worth while for a second earner to pursue a part-time job which in turn might have meant the tax credits were all tapered away. But that is nothing in comparison to the abject fear in much lower-earning families that changes to earnings might lead to demands for massive repayments.
Our benefits system was at breaking point under the weight of the confusing complexity of 51 different benefits, withdrawn at different levels. At the end of many years of economic growth, prior to the recession, 5.4 million people were claiming out of work benefits. Many had done the sums and did not consider it worth their while to work as they would struggle to earn as much as they were entitled to on benefits. DWP figures from 2010 show that despite 2.4 million households receiving working tax credit, 35% of families stayed in poverty when a parent entered work.
A significant couple penalty was also a feature, making it much harder for single-earner couples, who might have several young children, to work their way above a somewhat arbitrary poverty line than a single parent. The level of fraud was such that lone-parent claimants exceeded actual numbers in the country by an estimated 200,000. Fathers facing a general slump in blue collar wages, a situation exacerbated by many employers understanding that the Government would top up the little they were willing to pay, often perceived that the mothers of their children would be better off living separately from them.
Researchers at the University of Essex found a spike in the divorce rate of a staggering 160% among families where working families tax credit made it distinctly financially advantageous for a woman to part company with a low-earning or non-earning husband. That is why universal credit has been designed to ensure that people will be better off in work, to make work pay, to simplify an eye-wateringly complex system and reward responsibility, with couples raising children together and sharing the daily load, fathers and mothers willing to work extra hours to improve their families’ lives, not expecting the taxpayer to do that for them. Let us face it, in most cases, they were and are the taxpayer.
Turning to the tax system, I strongly support my party’s pro-marriage credentials and the introduction of the transferable tax allowance for married couples. This would be a popular first step towards rebalancing our tax system so that it is fairer to single-earner families. The organisation Care found that the tax burden on one earner couples with two children is a staggering 42% higher than the OECD average. We are among a small minority of countries in Europe which do not recognise interdependence within families but instead tax on an individual basis.
The tax burden on couple families is why the respected Institute for Fiscal Studies found that increasing the personal tax allowance helps richer families most, where both parents are more likely to have jobs that enable them to take full advantage of tax-free earnings, while transferable tax particularly benefits families at the poorest 20% level. Enabling a low-earning or non-earning spouse to transfer some or all of their personal allowance to their other half sends the vital signal that this Government understand that it is not always desirous or in the best interests of families for both parents to be working. It is not only Conservatives who believe this. Towards the end of her time as Trade and Industry Secretary, Patricia Hewitt admitted in an interview to the Daily Telegraph that new Labour had done a disservice to families by assuming that having both parents in continuous work should be the goal. She said they had belatedly recognised that inadequate recognition had been given to what matters to people most—their families and relationships. She said:
“If I look back over the last six years I do think that we have given the impression that we think all mothers should be out to work, preferably full time as soon as their children are a few months old … We have got to move to a position where as a society and as a Government we recognise and we value the unpaid work that people do within their families. That’s mothers but also fathers and people looking after elderly relatives or people with disabilities”.
I do not suppose that my noble friend the Minister could have put it better himself.
In summing up, I must reiterate that while those who need it should of course continue to receive support, welfare reform is vital for this country so that we stay competitive and support and encourage people’s aspirations to work, setting the right example to their children by paying their own way and avoiding dependency. This Government have grasped the nettle, not despite economic hardship but because our financial circumstances highlighted how urgent was the need for reform.
Child benefit changes have not been carried out in a seamless and sensible way—there is no getting away from that charge—but again we have to face up to the realities. We are in an economic quagmire. Giving more than £1,000 to every family, however wealthy—and that is just for a first child—is unsupportable. However, it is also untenable that single-earner families on incomes a little over the threshold set by the Government quickly lose everything when they are already being hammered through the tax system.
If we really want to support families in need, we must prioritise the most vulnerable, particularly the disabled, as the Secretary of State and my noble friend the Minister have pledged to do. We should do absolutely everything possible to make work pay, recognising that, if wages are not rising, it cannot be right to keep pumping in government subsidy in a way that will let employers off the hook and make it even more difficult to imagine life without benefits.
Lord German
My Lords, I pay tribute to the noble Baroness, Lady Hollis, for securing this debate today. I do not think anyone in your Lordships’ House does not understand her dedication to these issues. Without wanting to trade figures with her—which is obviously a dangerous trade and I will not upset some of the interpretations she places on those figures—it is, of course, important that your Lordships hear the sort of scrutiny that she brings to these issues. The noble Baroness has secured a full debate on a very important matter for the House to consider.
I am pleased to have this debate, especially as it ranges over the benefits and tax systems together. They are inseparable in any discussion of welfare issues in our country. This Government’s actions in this area have been a mix of major policy changes—some on a very large scale—coupled with the need to reduce the budget. That is a difficult balancing act, but the Government have done well to shift the policy agenda at the same time as having to make sharp reductions in public expenditure. It is worth remembering that if you take the relevant tax and benefits expenditure together, the total welfare bill of this country represents nearly £1 in every £3 of public expenditure. That is more than the total expenditure on health, education and defence added together across the whole of our country. Therefore, it is impossible to escape the need for cost reduction in the welfare bill in our deficit-burdened country.
I wish there was greater political honesty around this matter. It was certainly not helpful when, a couple of weeks ago, the Labour Front Bench in the House of Commons outlined a new idea to divert funds from pension tax relief to a jobs guarantee. In an earlier announcement, Labour had already allocated that same money to reversing changes to tax credits. This does no credit to politicians in general or to debates on these issues. The fiscal burden is a reality that cannot be escaped.
Nevertheless, it is pleasing to note that in the Autumn Statement we were able to reduce the hit on the overall welfare bill. There was much talk of the need to make a reduction of £10 billion; indeed, it was frequently talked about in debates in your Lordships’ House. The eventual reduction figure announced was much less: £3.8 billion. Even so, it still requires tough and difficult decisions. Any reductions in the welfare bill have to be fair and proportionate. When money is tight, spreading the impact over a large number of people who lose a small amount of money is fairer than targeting specific groups for larger cuts. The average loss from the changes made in the Autumn Statement will be in the region of £3 a week.
I am pleased that the Government have reduced the hit on the bill and, in particular, avoided some of the more unpleasant proposals put forward in the lead-up to the Autumn Statement. Those aged under 25 will still be eligible for housing benefit, benefits will not be frozen and families will not have their child benefit capped if they have more than two children. It is also clear that the 1% cap is a temporary measure. However, the most beneficial change, which comes in from April this year, is the increase in the personal tax allowance. The amount earned before paying tax increases from £8,105 to £9,440. That is the largest real-terms increase in the personal allowance for 30 years. It will give the average worker an increase in their pay of nearly £600, and—of particular relevance to this debate—59% of the 2.2 million people taken out of tax altogether from April will be women. This is a much more effective and efficient way of putting money into people’s pockets than the hand-back system of tax credits.
The tax credits system is so complex that it led to more than £10 billion in fraud and error. From this April, the changes will benefit 23 million workers in our country but not the 1.8 million of our richest people who will pay more as a result of the changes. Someone working full-time on the minimum wage will see their income tax bill cut in half compared to what it was under the previous Government. It is getting fairer but I hope the Government’s ambition is that no one on the minimum wage should pay income tax at all. I very much hope that the Government will go further in this direction.
Our welfare system provides the safety net. Any decent society must do this but I believe that it should do more. It should help those people who are able to improve their lives and their life chances. Giving people a helping hand to do better is also a key role for a modern welfare system. That is why trapping people in a benefits culture is a bad idea. It offers no solutions and no way out for those who are able. The hand-back tax credit system has had the impact of increasing reliance on state support instead of providing an increase in personal confidence and self-reliance. Taking away tax first is the way that we should proceed, which is what this Government have been doing. People will not have to hand it back; they will see their money in their pocket.
The complex mix of benefits and tax credits created by the previous Government has meant that far too many people are not better off in work. Changing that aspiration and making sure that people are better off in work is the great hope that I am sure your Lordships’ House shares for universal credit. Working for just a few hours a week will mean that you are better off. I should be grateful if the Minister would give this House an update on progress towards implementation of universal credit so that we can see how all this will come into effect this year.
One of the tricky issues that universal credit brought forward was that of childcare under a universal credit system. Since universal credit will give an opportunity to bring more people into a system of balancing their tax and benefits together, it will obviously be received by more people. Spreading the same amount of money across more people could mean a reduction in the amount of childcare funding that would be provided. I was very pleased that the Government managed to find an extra £300 million in order to bridge some of that gap.
The difficulties that we face with funding mean that the levers within the future system should allow for more incentive to be provided within it. I know that the Minister shares the ambition that the taper rates should be such that people should be able to keep more in years to come. I hope that he might also comment on that when he responds to this debate.
I very much agree with the noble Baroness, Lady Hollis, about language. Care must be taken over the language that we use in all these issues. Stigmatising people by language and by the difference and distinction between those in work and those out of work does not aid encouragement and support for improvement in people’s quality of life. The fact is that the vast majority of people want to work and are working hard in order to do so. More than half the people who claim jobseeker’s allowance do so for six months or less. I am afraid that both sides of the political divide have been guilty of this sort of rhetoric. I hope today that your Lordships can agree that this distasteful practice must end.
In conclusion, I give two examples of how, if the universal credit system works as we all hope it will, it will lead to change for families in our country. A typical one-earner couple with two children who are renting will be £761 better off under universal credit if they come into the system this year. I wonder whether that is a sign that the change we bring will support families. A one-earner family with an income of £20,000 and two children will gain £223 from the personal allowance increase. They will obviously lose tax credits of £150 and child benefits of £39, but under universal credit they will still make a net gain of £34. When my noble friend sums up on the ambitions for universal credit, could he support these examples and show us that universal credit will make sure that work will always pay and families will always be better off?
Baroness Pitkeathley
My Lords, I feel privileged to speak in this debate introduced by my noble friend Lady Hollis, who, in a very fine speech, spoke with her customary forensic skill and passion. I am very glad to have the opportunity to focus on those families who have caring responsibilities. I believe that the cumulative impact of the changes to social security, taken together with the cuts in social care services, has not been adequately assessed.
Let us look, first, at the number of caring families. The census statistics published last week show that the number of carers has risen by 11% since the last census in 2001, bringing the total in England and Wales to 5.8 million—a rise of nearly 600,000 carers. That means that across the United Kingdom there are now an estimated 6.5 million carers, and the value of the carers’ support has been estimated by Carers UK as being £119 billion every year. I make no apology for quoting that statistic for the second time this week in this Chamber.
Carer’s allowance, the main carer’s benefit, is already the lowest of its kind. At £58.45 a week, it leaves many carers in financial hardship as a result of the reduced earning power and higher living costs associated with disability and ill-health. A survey of more than 4,000 carers in 2011 showed that 45% of carers are cutting back on essentials such as heating or food; four in 10 are in debt as a result of caring; and the stress of money worries and other stresses associated with caring mean that the health of one in two carers is severely affected. I quote one carer:
“We have suffered financial hardship so bad it is unreal. Before I became a carer I worked for many years. I believe that I paid all my dues. Today a carer is made to look like a scrounger. I feel every time you speak to one of the agencies that are supposed to help us and be understanding they somehow try to make you feel ashamed of yourself”.
According to new government impact assessments, while 510,000 people will receive a higher award following the introduction of the personal independence payment, by 2018 an estimated 607,000 fewer disabled people will be entitled to support. Given the link between carer’s allowance and DLA and the PIP, this risks a knock-on impact of 23,000 fewer carers being entitled to receive the carer’s allowance. DLA acts as a gateway to carer’s allowance but this will not be replicated in the PIP. The government impact assessment shows that by 2018 there will be a 10% reduction in the number of disabled people in the groups which act as a gateway to carer’s allowance.
The impact assessment in May 2012 said that the reforms would,
“not affect the overall size of the Carer’s Allowance population or the level of expenditure on the benefit”.
However, this appears to be inconsistent with such a substantial reduction—as I have quoted—in the number of disabled people in the carer’s allowance gateway groups concerned with the PIP and the DLA. A third of people entitled to carer’s allowance are entitled to the benefit because they care for someone on middle or higher-rate DLA.
Should the carer’s allowance caseload follow the pattern of reduction in PIP spending, we would perhaps expect to see a fall of 34,600 in the total caseload of those entitled to carer’s allowance and a fall of 23,800 in the number of those in receipt. It is very frustrating that the lack of a full impact assessment means that we cannot reconcile the apparent inconsistency between the projected fall in the DLA and PIP caseload and the suggestion by the Minister and others that the carer’s allowance will be unaffected. The latest impact assessment, I am sorry to say, simply states that the Government are,
“continuing to analyse the impact on certain passported benefits and schemes, including Carer’s Allowance”.
This is quite unacceptable given that implementation will be with us in April this year. Therefore, I must ask the Minister: when will the Government publish a full assessment of the impact on carers of the introduction of the PIP, including an assessment of the impact on the projected carer’s allowance claimant count compared with projections if DLA were to continue? This seems to be inconsistent with government policy on the benefit cap. The Government have said that the cap is intended to improve work incentives, yet carers in receipt of carer’s allowance are already caring for a minimum of 35 hours a week—many of them for 50 hours or more—so it would be impossible for many to juggle work with heavy caring responsibilities.
The benefit cap is also meant to promote behaviour change and discourage long-term benefit claims. However, in his response to an amendment at Report stage of the Bill in the Lords, the Minister said that,
“one thing we are not looking to encourage is a change in the carer's behaviour so that they stop caring. That is absolutely not where we want to go”.—[Official Report, 23/1/12; col. 892.]
I think that most of us would say amen to that.
The Secretary of State for Work and Pensions stated, when he introduced the Bill in the Commons, that the benefit cap was,
“a matter of fairness, so that those who are working hard and paying their taxes do not feel that someone else will benefit more by not playing a full part in society”.—[Official Report, Commons, 9/3/11; col. 922.]
I suggest that if this cap is designed to be fair to individuals who are working hard and playing a full part in society, it cannot be right that it applies to carers—the very epitome of the big society.
The cap is also designed to apply to workless households, a description which carers would find insulting, given the level of their workload, and inaccurate, given that carers in receipt of carer’s allowance are, as I have said, already providing a minimum of 35 hours’ care a week. Each one is saving the state an average of more than £18,000 a year with the unpaid care they provide for loved ones. Surely it is deeply unfair to apply the cap to carers, given their contribution to society. It seems to me that doing so sends out a very negative message about the value that the Government place on caring. Indeed, the cap may ultimately act to disincentivise those who willingly and lovingly take up caring for their families, and it may in the future lead to family finances collapsing and caring becoming financially untenable. It is a great pity that, in spite of the valiant efforts of many of my colleagues, the Government did not accept the amendments on this issue tabled on Report and at other stages of the Welfare Reform Bill.
I turn to the bedroom tax, which will also have a severe impact on certain groups of carers. They may be unable to cover the shortfall and be forced to move—for example, where one member of a couple has a disability and the couple cannot sleep in the same bedroom or where an extra room is needed for equipment. Families who have spent considerable amounts of their own money making suitable adaptations to their homes may also be forced to move. This would not only be distressing for families and disruptive to care arrangements but could risk a greater long-term cost as adaptations will then be needed in their new homes.
As regards changes to council tax benefit, carers will be affected differently depending on the scheme adopted by their local authority. I am happy to say that some councils are proposing to recognise carers as a vulnerable group but others are not. Carers may face substantial reductions in the support that is available to help meet council tax bills. This, again, is inconsistent with the aims of the policy to improve work incentives. The Government have made it clear that they do not wish to force carers to give up caring and return to work. I have already quoted the Minister on that. However, if carers are unable to increase their income through work, reductions in support with council tax bills will only put them under further financial pressure.
In summary, I very much fear that all the changes will seriously undermine carers’ ability to care for older and disabled loved ones and will push families to breaking point, with serious long-term consequences for family life, health and social care services and, indeed, for our wider society. That makes neither moral nor economic sense.
The Lord Bishop of Exeter
My Lords, I too thank the noble Baroness for securing this important debate. There is much I could say, but in the time available I shall look particularly at the experience of one-earner couple families in the context of recent child benefit changes and our tax system in general. Before doing so, I make two crucial points about one-earner families in general.
First, one-earner families are often families where a couple has made a deliberate decision to sacrifice having a second salary so that one parent can be at home for the children. The stay-at-home parent in such a family performs an important job, investing in their children’s development which can save the state significant amounts of money to the extent that it helps the children in question develop into adults who are more likely to fulfil their potential and make a net contribution to society. The social science evidence is very clear about beneficial child development outcomes by every benchmark. In the context of all the concerns about “Broken Britain”, this is an important consideration. Such families should be valued and supported rather than penalised.
Secondly, the DWP’s own figures show that most one-earner families have good reason for being one-earner couple families. Figures derived from the 2010-11 DWP family resource survey demonstrate that well over half—61%—of all one-earner couple families have either a child below five, someone who is disabled or someone with caring responsibilities. So the majority of one-earner families are one-earners out of necessity rather than by choice. This is extremely important because, as we have already heard, there are those who give the clear impression that one-earner families should not be helped because all stay-at-home parents should get paid employment. This is a deeply misguided view that has no regard for the constraints that one-earner families operate in, the sacrifices they make and their significant contribution to the national well-being.
I now turn to the recent child benefit changes that took effect last week. While no one wants to pay tax, we accept that it is necessary for the common good. For any tax to be sustainable, it is vital that it is fair and is seen to be fair. However, that is not the effect of the higher-income child benefit charge. Under the charge, a one-earner couple begins to lose its child benefit at £50,000 and loses it completely at £60,000, while the two-earner family next door has the potential to earn up to £100,000, so long as neither income rises above £50,000, and keeps all its child benefit up to nearly £120,000, so long as neither income reaches £60,000, before losing it completely. This is not a small unfairness. It is very significant.
On 6 January the Prime Minister argued on the “Andrew Marr Show” that the higher-income child benefit charge was fair because it is right to ask the top 15% of the country to make a greater contribution during difficult financial times. That would be entirely defensible if the higher income child benefit charge really were to have this impact but it does not. The social policy charity CARE has released figures that help to put the problem in focus. A one-earner couple with four children on £50,000 is already in the least well-off half of the population, with a higher net income than only 45% of the population. The removal of child benefit will push it even further down the income distribution. A one-earner couple with three children on £60,000 and in receipt of child benefit is just in the seventh decile, but will drop well into the sixth decile if child benefit is removed. Meanwhile, a two-earner couple with two children on the same wage will be well up in the eighth decile and keep its child benefit. Thus, not only will the higher income child benefit charge impact one-earner families in the lower half of the income distribution, two-earner families right towards the top of the income distribution—in the eighth decile—will keep their child benefit. If this is fair, it is a very odd definition of fairness.
The unfortunate impact of the higher income child benefit charge must also be seen in the context of an appreciation that even before the charge took effect our tax system already gave one-earner couples a very rough ride and continues to do so. As the noble Baroness, Lady Jenkin, has pointed out, the latest available OECD figures demonstrate that the tax burden on one-earner married couples on an average wage in the UK and with two children is 42% greater than the OECD average. In this context the higher income child benefit charge is particularly unfortunate. Once again, CARE has released figures that illustrate the problem. At the moment one-earner couples already pay far more tax than two-earner couples with the same income, largely because they access only one tax allowance rather than two. A one-earner couple with two children with an income of £60,000 pays income tax of £13,950. A comparable two-earner couple, each earning £30,000, pays £8,768. After the HICBC is added, the one-earner couple’s tax bill rises to £15,667. This is £6,899 more than that of the two-earner couple. Put another way, a one-earner family with two children and on an income of £60,000 already pays 60% more tax than a comparable two-earner couple, each earning £30,000. With the introduction of the HICBC, the one-earner couple will pay 80% more tax. The charge will increase the one-earner two-child family’s annual tax bill by £1,717. Over the lifetime of the children, if child benefit is claimed for each child up to the age of 18, this represents a £30,000 increase in the family’s tax bills.
There is an extraordinary irony in all this. Prior to the general election, the then Leader of the Opposition talked at great length about his commitment to helping one-earner married couples by giving them a transferable allowance. This commitment was a key part of the “Broken Britain” narrative that made it into the coalition agreement, and yet, to date, the only thing the Government have done is actually to make life much harder for one-earner couples. Some might say, “Well perhaps there has been no action because there is no money”. But that does not make sense because the Government have found literally billions of pounds to fund a huge increase in the personal allowance that the Institute for Fiscal Studies has demonstrated disproportionately benefits those in the top half of the income distribution. The transferable allowance is far more progressive as it has been shown disproportionately to benefit those in the bottom half of the income distribution.
Of course, to the extent that the introduction of transferable allowance was made as a commitment to recognise marriage, albeit only in a one-earner context, the Government’s failure to act has been rendered even more perplexing by the fact that this marriage commitment in the Prime Minister’s manifesto has received no attention, while proposals to redefine marriage that were not in any party’s manifesto are proceeding with undue haste.
I recognise that the Government’s transferable allowance commitment still stands. Given, however, that the coalition agreement pertains only to the period 2010-15, time is running out. Transferable allowances can be introduced only through Budget resolutions and it is widely appreciated that the next Budget, on 20 March, just over two months away, is the last opportunity that the Government will have to introduce a transferable allowance and have any chance of it becoming operational before the next election. I firmly hope that the Chancellor will listen and make this a priority on 20 March. I also hope that he will reflect on reforming the higher income child benefit charge so that it does indeed target only families in the top 15% of the country and that it does not discriminate against one-earner families. As I said earlier, let us not forget that most one-earner families do not have the option of becoming two-earner families, and that they make an incredibly important contribution to our national wellbeing and should not be penalised for doing so.
On 11 February 2009, Philip Hammond, the then shadow Chief Secretary to the Treasury, spoke to the Daily Express about,
“the continuing bias in the tax system against two parent families where only one adult works. No other European country penalises families in this way. If we want to end child poverty we must end this discrimination”.
Lord Bates
My Lords, it is a privilege to speak in this debate and I congratulate the noble Baroness, Lady Hollis, on securing it. She has an acknowledged expertise and a well deserved reputation in this area. One of the things that has been most healthy about the political debate over the past 10 years is that sometimes the debate on this whole area of welfare reform had been taking place on the left of British politics. However, the work of my right honourable friend Iain Duncan Smith, Philippa Stroud and my noble friend Lord Freud, has started a debate about a compassionate view of how welfare reform could be undertaken on the right and centre-right of British politics. That informed level of debate is overwhelmingly healthy as we wrestle with these important issues.
My first point is that the 1% benefit increase limit is the result of a desperately difficult choice that the Government have had to make in light of the macroeconomic circumstances in which we find ourselves. Had we inherited the type of economic legacy that a Government coming into office in, say, 1997, would have had, there would be absolutely no question about having this debate or being forced into a position of having to consider the types of situations that I have absolutely no doubt will bring hardship to many of the most vulnerable and poorest people in our society. Nor do I deny the veracity of the statement made by my right honourable friend the Secretary of State for Work and Pensions in the foreword to his, State of the Nation Report: Worklessness and Welfare Dependency in the UK. He said:
“Addressing poverty and inequality in Britain is at the heart of our agenda for government. It is unacceptable that, in one of the wealthiest nations in the world, millions of adults and children are living in poverty. Whole communities are existing at the margins of society, trapped in dependency and unable to progress. In these areas, aspiration and social mobility disappear, leaving disadvantaged children to become disadvantaged adults”.
That was a clear and true statement of where this Government are going. It is evidenced by one or two things.
Mention has been made by my noble friend Lord German of the macroeconomic situation. That is what is driving this review and rethinking. It is not possible for the Opposition to say with credibility that this measure is absolutely wrong when we know that welfare accounts for roughly £1 in every £3, or a third, of revenue raised. They claim that they have a credible plan for reducing borrowing and yet cannot say what they would do to reduce that level of borrowing. The noble Baroness, Lady Sherlock, is chipping in. I greatly respect her and I welcome her to her position on the Front Bench. I hope that when she responds she can give us an insight as to where in the Opposition’s view the fair way would be to apply savings to the welfare budget. We would all be interested to hear that. The veracity of the argument presented would be much stronger if those points were put forward.
It was with a great sense of irony that the current work and pensions spokesman in the other place, Liam Byrne, famously left a note on his desk in 2010, saying, “Sorry, I am afraid to say that there is nothing left”. That may well be the case. If you have nothing left, you have to make very tough choices about where savings have to be made.
There is another view that I want to challenge and that is that somehow these changes are being made in a capricious and arbitrary rather than considered way. There is no room in a society in what is one of the wealthiest nations on earth for there ever to be that type of charge levelled against a civilised government; it does not stack up. The reason is that pensions are exempt from these changes. Those pensions will be increased in line with inflation, taking the single person’s state pension to about £110 per week, which is up from about £97. We inherited that. That was a clear statement of intent. Mention has been made of carers and the importance of people who look after children, or elderly relatives. The announcement last week that there is going to be a reduction of a flat-rate state pension, at about £144 per week, is tremendously good news for those people. It is based on the principle that if people can work, they should work. In the past it has not always been the case, but it is a clear-cut choice.
A charity that I work with in the north-east of England deals with young, hard-to-reach, unemployed people. People make a calculation about benefit entitlement and whether employment will pay. Benefits may be well meant but on the matter of the cap on benefits, coming in at about £26,000 for a couple, that would require them to have an income in the region of £45,000 to be able to exist without those benefits. If that does not create dependency, I do not know what does. To say to somebody with no qualifications whatever that they ought to be able to seek a job at the level of deputy head teacher is clearly nonsense.
We must be careful about how we go about this and in saying that we do not want to create dependency. We must always make sure that work pays. That is where universal credit comes in. That says that no matter what the salary of the job that you are taking is, with a straight-line taper of 65p in the pound, you will always be better off when you work. That is a basic principle and seems to me to be good. Work is the best route out of poverty. What is most difficult in the charity is for people to get their first employment on their CV. Once they have a job they can more easily find another one and progress out of poverty. Education is a key to that and that is why education reforms are key to our drive to reduce to child poverty. These general steps can be widely welcomed.
There is room for further work to be done. This is an ongoing debate. We understand the difficult choices that have to be made, the challenges in the market and the importance of raising tax thresholds. That is another important element in making work attractive, particularly at the lowest levels—not so that people stay there but that they progress from there. Page 13, table 2A of a helpful briefing for this debate from the Institute of Fiscal Studies and provided by the Library looks at average earnings growth. Reference has been made to the historic figures, so I will not repeat them. The institute forecasts that average earnings will increase by 2% in 2012, by 3.1% in 2013, by 4.3% in 2014 and by 4.5% in 2015. That tells us that you need to make every possible effort to ensure that people get into work in order to benefit from those increases.
I leave two final thoughts for my noble friend to ponder. First, I endorse what my noble friend Lady Jenkin and the right reverend Prelate have said about recognising the importance of marriage in the tax system through a system of transferable allowances. Secondly, I remember having debates about the minimum wage. I argued vigorously that it would never work. I was absolutely wrong. The minimum wage does work. It is a very important safeguard in our society that people have a basic wage. The fact that we accept the Low Pay Commission’s increase of 1.8% is also right. When winding up, would my noble friend consider the argument that in reducing welfare dependency we need to move progressively from a minimum wage towards a living wage?
Baroness Donaghy
My Lords, I thank my noble friend Lady Hollis for introducing this debate and for her leadership. She keeps us all on our toes. Equally, I would like to say how pleased I am that the noble Lord, Lord Freud, is still in his place. It is nice to know that there is somebody there who understands what we are talking about, even if we do not always agree with what he says. I want to deal with the self-employed and the impact on them of draft Universal Credit Regulations 57 to 59 and 62 to 64.
Many self-employed people will not become IT moguls, business entrepreneurs or worldwide rock stars. Many are self-employed because they cannot find secure employment. They are often self-employed on building sites, because the choice is either that or no job at all. They are “white van man”. They are those who, 50 years ago, would have worked in large factories, utilities or local authorities, doing manual or craft jobs. Often, they have been failed by our education system; they are important. Many such people prefer to be independent and would never assume that they would have to turn to the state for help. It is against their natural inclinations. However, sometimes they need assistance, particularly if they have a family to support in hard times. They should be able to expect a state system that responds to their needs. I am grateful to the Low Incomes Tax Reform Group for its briefing on this subject. There have been some improvements to the rules for the deduction of expenses but the most serious objections that were raised last summer remain.
The monthly assessment requirement will mean that small businesses will draw up accounts not once but 12 times a year. The absence of any carry-forward rule will result in genuine trading losses going unrecognised. In addition, the minimum income floor does not allow enough time for a business to grow and develop. It gives no help when a business is experiencing a temporary dip in profits. It also prevents pension contributions and legitimate business expenses being fully recognised.
Under generally accepted accounting principles, a true and far statement of how a business is doing involves accounting for business receipts and expenditure over the period to which they relate. If a business buys stock for resale, it will account for the purchase price over the period in which the stock is expected to be sold. A tax bill, referable to a tax year, may be paid in two instalments but accounted for over the whole year. An insurance premium, paid in one instalment, will be spread over the period of the insurance cover, which is usually a year. Investment in essential equipment will be written down over the equipment’s expected life. If there is a deficit in one accounting period, it can be set against surpluses in other periods which give a true and fair picture of the state of the business.
This method of accounting is also followed for working tax credit, enabling claimants to draw up one set of accounts that keeps administration costs down and matches the support given by the welfare system to the actual state of the business. The universal credit regulations depart completely from these generally accepted principles. Under Regulations 57 to 59, businesses will account to the DWP month by month on the basis of amounts received in the month, minus business expenditure paid out in the month. If that produces a loss for the month, it may be not be carried forward to subsequent months. It is simply disregarded.
If it produces a result lower than the minimum income floor, or MIF, Regulation 62 will substitute a minimum income floor equal in most cases to the national minimum wage for a 35-hour working week, less a deemed amount of tax and national insurance on that level of earnings. It is almost as though someone has drafted these regulations with no experience of the fluctuations of running a business.
Although I was not self-employed myself, I ran a student union for 16 years with a turnover of about £750,000 a year. You learnt that, to get a true picture of March and April, it was better to take the figures together because Easter came at different times each year. You learnt that because of a large booking in July, you made more profit than during the rest of the year. The following month, because it was the only chance for major refurbishment projects and major expenditure, the figures would look pretty dreadful, but I still collected my salary. Unlike a person running their own business under these regulations, it did not have any consequences.
The real objections to this method of accounting are that one month is an artificially short period over which to draw up a set of accounts, and that cash-in, cash-out does not present a true and fair view as it does not relate receipts and expenses to the period over which they accrue. The failure to recognise losses further distorts the economic picture, and imposing a minimum income floor does not allow for events beyond the claimant’s control.
This particularly applies to farmers. It does not take account of the ups and downs in a normal trading cycle that are part and parcel of any self-employed business. Legitimate business expenditure is doubly limited by the denial of any carry-forward relief and by substituting the minimum income floor for the net profit figure for any month in which the net profit figure is lower.
The accounting method imposed by the regulations presents a wholly distorted picture of how the business is doing and ignores the economic reality. The minimum income floor will apply to most businesses after a start-up period of 12 months. Originally, each claimant was to be allowed one start-up period in their lifetime. Since the consultation in the summer, that has been relaxed in that a start-up period may be permitted once in every five years to accommodate a claimant who did not succeed in their first attempt at running their own business but wants to try again. This is a small improvement and should be acknowledged.
After the start-up period, the minimum income floor will apply to every claimant who is “gainfully self-employed” unless they are subject to no work-related requirements, a work-focused interview requirement or a work preparation requirement. A claimant is gainfully self-employed if the business is their main employment and is,
“organised, developed, regular and carried on in expectation of profit”.
If the claimant is not gainfully self-employed, they are not subject to the minimum income floor. Instead, they will face work-search or other requirements imposed by jobcentre staff and sanctions for non-compliance.
One change since the summer is that in calculating the minimum income floor there will be deducted,
“an amount that the Secretary of State considers appropriate to take account of any income tax or national insurance contributions for which the person would be liable in respect of the assessment period if they had earned income of that amount”.
Whether this change is good news or not will depend on what amount the Secretary of State considers appropriate for the purpose. There is a risk that the Secretary of State will assume that a self-employed person pays the same amount of tax and national insurance, over the same period, as an employed person.
In reality, the self-employed pay tax and national insurance in two instalments, in January and July, based on their earnings in the previous period. If the Secretary of State considers it appropriate to take account of the tax and national insurance actually paid by the self-employed claimant, at the time they pay it, that will give at least some measure of relief when the business needs it. Otherwise, the self-employed claimant would be earning less than an employed claimant, yet receive less by way of universal credit because of the distorting effect of the minimum income floor.
On pensions, the self-employed are responsible for their own pension provision, but they will receive no recognition for it under the minimum income floor. They will be at a disadvantage over the employed claimant, whose pension contributions will be relieved in full as and when they are paid.
I raised the issue in November 2011 about what happens when a business suffers a downturn or undergoes a period of economic difficulty. I think I used the example of a farmer who was affected by foot and mouth disease in neighbouring stock and was working twice as hard but could not move his stock for sale. I hoped that the minimum income floor could be suspended during periods when the business suffered in such a way. Assurances were given in the debate that these were,
“issues that we are looking at very closely”.—[Official Report, 1/11/11; col. GC 453.]
However, no such provision has been made by the regulations. There is no recognition in the regulations that a business may experience low or no profits.
The absence of any facility for carrying forward a loss made in one month to subsequent months remains a fundamental flaw in the design of universal credit for the self-employed. In discussion, the Government have appeared to see the need for this facility but have not made any changes because the IT system has not been designed to allow carry-forward.
The burdens that the proposed regulations impose on the smallest businesses and the disregard for the most basic principles of accountancy will seriously hamper claimants who wish to enter work via the self-employed route. In many cases, they would find themselves better off on benefits than in work, which is plainly contrary to the Government’s intention.
There are 4.5 million self-employed people in this country, any of whom may at some point need to claim universal credit due to the risk and uncertainties inherent in running one’s own business. Self-employment is a viable route out of welfare and into work. I hope that the Government will reconsider the regulations and create a system that is as responsive to the self-employed as it is to the employed and unemployed.
Lord Greaves
My Lords, I feel out of place on this speakers list. I looked at it and thought that almost everyone on it apart from me is an expert and they will be bandying figures and statistics around that will send my brain numb by the time I stand up to speak. That is true: they have sent my brain numb. The debate is full of experts, not least the noble Baroness, Lady Hollis, who introduced the debate, and my noble friend Lord German. I have to say that I thought the noble Baroness was kinder to the Government than I would have been had I been making her speech.
I congratulate my noble friend Lord German on introducing a number of things into his speech that would not have been there if it had not been for the presence of the Liberal Democrats in the Government. If things are bad, they are nothing like as bad as they would have been had we just had the Conservatives.
The reason why I thought that I should take part comes from my work as a local councillor, where I represent one of the poorest areas in east Lancashire. Last week, I was watching the television at home. The BBC in the north-west was doing a week-long series on food banks in the region. I thought, “Has it really come to this?”. This country is something like the sixth richest in the world. It is richer than it has ever been apart from a slight sag in the past five years—it really is slight in historical terms. Has it really come to food banks now being part of the mainstream culture of this country? I find it extraordinary.
I had made a list in preparation of all the problems that we are experiencing at the moment, but the noble Baroness, Lady Hollis, dealt with them all in far more detail and far more expertly, so I will not read them out. But I have one or two points to make. The changes can all be individually justified, particularly against the need that the Government see to cut spending, but put together the position is horrific for many people. When that is combined with benefits in kind provided by local services through local authorities and other bodies, it is made even worse.
I think that it was the noble Baroness who said that if you cut people’s benefits, there are serious effects on local economies. The fact is that benefits, as a side-effect, are an efficient way in which the Government can put money into the economy. Most of the money that people get in benefits is spent. As that money is spent, it has a direct positive impact on local economies. On the one hand we have the Government, with Mary Portas and all the rest of them, saying “Town centres are in trouble—let’s have initiatives to help them”. On the other hand, they are taking money away from the very people—certainly in small and medium-sized towns—who use the town centres most, because many of them do not have their own transport to go to the out-of-town or edge-of-town supermarkets and so on. The poorest people spend their money and so, simply from an economic point of view, it is a good idea to give more money to them.
I concur with everything that has been said about some of the quite appalling attacks on poor people that have been made, such as the comparison between strivers and skivers, which the noble Baroness, Lady Hollis, called ugly, cynical and indecent. I congratulate her on finding words for that which are appropriate to use in the House of Lords. I tried to think of words but thought that I had better not mention them, because any that I would use would be out of order.
I recommend to anybody who thinks that the answer is that people who do not have jobs should just get them that they go down to their local Jobcentre Plus, have a look at what jobs are on offer and how many of them there are. They will very quickly come to the view that that is not the immediate answer.
It is fairly clear that somewhere between 10% and 20% of the poorest people in this country are quite deliberately being made poorer by the policies of this Government. If they are not in work, their benefits are being cut; if they are in work, they are too poor to benefit from the cuts in income tax, because they do not pay it, and their benefits are also being cut.
I rely a lot on the work of Professor Danny Dorling, an incredibly energetic geographer who seems to produce a book every three weeks. He is not one of those typical geographers who simply stroll around the countryside looking at the scenery. It is fairly clear, from work that he and others have done, that the levels of economic inequality in this country declined year on year from some time shortly after the end of the Great War into the late 1970s—inequality being the spread between the richest groups of people and the poorest groups. In the 1980s it got worse; it got steadily worse during the years of Conservative government from 1979 to 1997 and it continued to get worse, year on year, through the Labour years until 2010. That is clearly still happening, partly because people at the top are getting much richer, but also because people at the bottom have not been keeping up with everybody else and are now quite clearly falling behind. We are told that the answer lies in social mobility, which I am in favour of. However, you can have social mobility in a more equal society and economy and in a less equal economy. On its own it does not alter the basic facts.
As a Liberal, I go back to William Beveridge and try to put things in the context of what he said back in the 1940s. As we all know, he put forward his five giant evils: want, disease, squalor, ignorance and idleness from lack of work, which perhaps we would now call worklessness. His remedies are interesting to read today. Everybody now says that what they want to do—wherever they stand on this argument—is based on what Beveridge thought.
Beveridge proposed that people in work pay a standard weekly payment into the social insurance fund and suggested unemployment payments for people for as long as they have not got a job. He also proposed benefits for pensioners, maternity grants, widows’ pensions, pensions for people injured at work, and so on. What was crucial was his proposal of what he called child allowances, which became family allowances and which have now mutated into child benefit. They were at a very much higher level than child benefit has now become. As part and parcel of that, he advocated the creation of a National Health Service, so that when you were poorly you got treated for free at the point of need.
The crucial part of all Beveridge’s proposals was that payments in all these cases should be at a standard, flat rate, depending on contributions, with no means tests, which he was opposed to. So many of the problems that we now have in what people call the welfare benefit system—the tax allowances and all the rest—have come about because people have tried to be too clever by means-testing this, that and the other, with all the unfortunate side-effects that means tests have. The cleverer people get, the more they try to finesse the system; the more detail they put into it, the more problems they create.
I will give two examples. Instead of subsidising property, which is what used to happen until about 20 or 30 years ago, we now have the mantra that in the area of housing the people in the houses should be subsidised. The effect of this is the present crazy housing benefit system, which takes up so much of the welfare benefit budget and yet is no more than old-fashioned out-relief for landlords. We also have the working tax credit, which is no more than a subsidy to employers who pay low wages. This is the fact of the matter and the situation that we have got into. I do not know how we will get out of it. I am quite sure, however, that we will not get out of it by making the poorest 10% or 20% of people in this country even poorer today.
Baroness Massey of Darwen
My Lords, I thank my noble friend Lady Hollis for securing this important and stimulating debate and for introducing it with her usual immense knowledge and commitment.
I should like to focus today on the impact of changes to tax and benefits on children. As my noble friend said in her opening remarks, government policy is likely to be detrimental to children. It is obvious to say that children are our future, but if we neglect children we will surely be burdened later with possible criminality, drug-taking, other risks and social unrest. All that is important, quite apart from the vital humane impetus to protect children and advance their well-being and educational opportunities, particularly children who are vulnerable or deprived.
I declare an interest as chair of the All-Party Parliamentary Group for Children. This year we are conducting an inquiry into what opportunities there are for children to achieve their potential and into how children see their needs. We listened to a number of children, and it is striking how so many of them place a huge emphasis on the importance of parents and families in their lives, including those children who have challenging family circumstances.
What happens to those parents and families in times of austerity must be considered, and I am dismayed at the potential disruption and depression that may be caused by government policies. Is it not surprising that Save the Children is, for the first time, focusing some efforts on children in the UK, or that, as the noble Lord, Lord Greaves, said, we are seeing food banks in unexpected places such as Guildford and, as my noble friend Lady Pitkeathley tells me, in Ross-on-Wye?
It is easy to portray people in unfortunate terms using easy soundbites which appeal to popular prejudices and which are so often inaccurate, and it is interesting to note that many of us think that 27% of all welfare is claimed fraudulently. However, the Government’s figure is 0.7%, worth around £1 billion as opposed to the £70 billion lost in tax evasion. Further, most welfare payments go to pensioners. Unemployment benefit has fallen to 11% of average earnings compared with 22% in 1979. Therefore, myths abound. The fact is that since 2010 long-term unemployment has increased by 146% and I am told that there are plans to cut local authority budgets by 30%, to the dismay of those working to deliver services. All this will impact on families and children, and the poorest will be hit the hardest.
Perhaps I may give some examples that reflect the concerns of groups in the voluntary sector which are working with children and families. They include Barnardo’s, the Children’s Society, Working Families, CARE and Save the Children. Contrary to the Government’s ambition, levels of childcare funding may lead to disincentives to work. Under universal credit, lone parents with more than one pre-school child could face losing a significant amount of any extra money they earn. I was impressed by the speech of the right reverend Prelate the Bishop of Exeter on this issue. There may well also be an impact on the provision of free school meals, which is sometimes the only good meal that a child will have in a day. Some 1.2 million children living in poverty in England miss out on free school meals. The Government seem to be set on proposing that, under universal credit, families will be entitled to free school meals only if they earn less than a certain amount, which is another disincentive to earning more. I take the point made by the noble Lord, Lord Greaves, about the administrative costs of means-testing.
The plan to cap the uprating of key benefits and tax credits for the next three years will mean that almost 20 million adults with children and 11.5 million children will be affected. This will hurt millions of families who are already finding it difficult to meet the costs of food, rent and other basic necessities. For example, by 2015, a lone parent of two young children working as a nurse and earning £530 a week will lose £424 a year. Primary and nursery schoolteachers have an average weekly income of £600. Some 150,000 of them will be affected by the cap. The charity Working Families estimates that around 205 of the 3,000 calls made to its helpline in 2012 were on the issue of benefits and tax credits. Some 41% of parents in severe poverty said that they would consider giving up work and 25% would consider reducing their hours as a result of cuts in the level of support. In times of austerity it can be difficult for parents to find extra hours of work as employers cannot afford it. This means that up to 210,000 families with 475,000 children may lose out on tax credits. Does the Minister not think that the Government’s policy is producing a negative rebound?
Parents with disabled children report difficulties due to the high cost of specialist or one-to-one care because there is no extra support in the system for the childcare costs for a disabled child. Paying for such childcare is turning out to be a huge barrier to parents going into paid work. There is also disappointment that the principle of universal child benefit has been undermined. Child benefit has been simple to administer, has a high take-up and carries no stigmas, and by and large ensures that the money reaches the right people. Some families are now going to lose out and the system has been made more complex. It would be interesting to know the administrative costs associated with the new system.
Maternity and paternity pay in real terms may encourage parents on low incomes to cut short that important time with a new baby because they cannot afford it. This may affect early bonding, which is considered by experts to be very important in child development. The 1% uprating will impact on those claiming statutory maternity and paternity pay, which is well below the national minimum wage of £135.45 a week. The benefit cap may also apply until a parent reaches the wages level set out in their claimant contract. I am aware that there are some exceptions, but it may force parents who are currently working part time on low wages to seek longer hours, thus affecting family life. The prediction is that the median income in households with children is set to fall and that child poverty is set to increase.
The tax and benefit changes are significant factors in these trends. The introduction of universal credit may offset them in some cases—for example, it has advantages for those without children and for a couple who are both seeking paid work. I again cite CARE, which has challenged the Prime Minister’s statement that the child benefit charge will apply only to the top 15% of the country. As the right reverend Prelate pointed out, the charity has figures to show that the charge is not targeted at the top 15% and will impact on many families in the middle income distribution. The policy takes child benefit from those in the lower half of income distribution while not taking it from two-earner families which are considerably richer.
I return to my original concern that the inequity in tax and benefits that makes children and families suffer is morally indefensible and may have long-term consequences that affect not only children but society. I look forward to the Minister’s response.
Lord Alton of Liverpool
My Lords, the noble Baroness, Lady Hollis, has a long-standing and well deserved reputation as someone who, both in office and out of office, has championed the cause of disadvantaged people. I share her basic proposition that the Welfare Benefits Up-rating Bill, to which she referred, is both poverty-producing and risks increasing both absolute and relative child poverty. I strongly believe that the Government need to become far more focused on the root causes of social security and tax credit demand and that their priority should be to make progress on full employment, living wages, affordable housing and support for children.
They also need to be much more aware of the impact of their policies on the vulnerable—a point that has been alluded to by virtually everyone who has spoken in this debate—and especially, I would argue, on people with disabilities. The Government should note a report that has been released today, The other care crisis: Making social care funding work for disabled adults in England, published jointly by Leonard Cheshire Disability, Mencap, Scope, the National Autistic Society and Sense. I would particularly refer them to the chapter headed “Turning back the clock on disabled people’s independence”.
When the Welfare Benefits Up-rating Bill was considered in another place, Sarah Teather MP, the former Minister for Children and Families, was courageous and right to vote against it. She was also right to say that it is the politics of the playground to paint a picture of scroungers versus strivers. Rather than caricatures, we need to ask how it can be right to promote policies that will lead to a couple with two children earning £26,000 a year losing more than £12 a week while 8,000 millionaires will be better off by an average of £2,000 a week. It is neither fair nor just, or equality of sacrifice or an equitable sharing of austerity, that, according to the Institute for Fiscal Studies, referred to by the right reverend Prelate in his excellent speech, some 7 million working families will be on average £165 a year poorer, while another 2.5 million families with no one in work will be £215 worse off. In this context, the new legislation is the last straw on top of escalating inflationary increases in the costs of food, travel, fuel and heating, and comes on the back of changes to housing benefit regulations, the Welfare Reform Act 2012 and the Local Government Finance Act 2012—all thrown at the poor like a series of hand grenades.
Two nights ago I chaired a Roscoe Lecture at Liverpool John Moores University, and I declare my interest as I hold a chair there. I had invited John Bird MBE, the founder and editor-in-chief of the Big Issue, to deliver the lecture. At the heart of his remarks on Tuesday was the proposition that the creation of a dependency culture has not helped the poor, but quite the reverse. He said that the Government have,
“created a new class of people who are outside society: workless, broken, and lost to ambition and social improvement”.
But he was not suggesting that the way to tackle this culture is to cut benefits before we have tackled the fundamental cause. Mr Bird suggested that 450,000 families are on long-term benefits. I invite the Minister to comment upon a statistic he gave, that only half of 1% of those on long-term benefits go to university or into higher education. If that is so, what can we do about it? Certainly, the disincentive of phenomenal indebtedness from student loans is a major disincentive for poorer families, kicking aside the ladder of educational advancement, with all the concomitant effects that has on social mobility.
Having been the first from my own family to experience higher education and having grown up in a home without a bathroom, and then a council flat—and then, as a student, being elected to represent a disadvantaged community in the heart of Liverpool, where half the homes had no inside sanitation or bathrooms—I have noticed some fundamental changes in the intervening 40 years. One is the disappearance of fathers from the lives of children and having any involvement in their upbringing. Some 800,000 children have no contact with their father, a point referred by the noble Baroness, Lady Massey of Darwen, in her excellent remarks a few moments ago. Many drift into gangs and drug culture. The Government need to take parenting much more seriously. I support entirely the recommendations made by CARE and referred to by the right reverend Prelate and by the noble Lord, Lord Bates.
The second change that I have seen concerns benefits. Before the 1980s very few people were on benefits. Working class families, like the one I came from, saw them as the Beveridge safety net. The 1980s and mass de-industrialisation changed all that, turning the working classes into workless classes and, all too often, into benefit-dependent classes—which is why, with 2.5 million unemployed and 958,000 NEETs in this country, people without opportunities for education, employment or training, job creation is crucial.
Where is the present approach taking us? Last year, the implementation of the Government’s policies saw a 44% rise in the number of families relying on emergency bed and breakfast accommodation after losing their homes, bringing the total to almost 4,000 people, and a staggering 79% increase in the number of people visiting volunteer-run food banks—we heard this referred to earlier on—with some 230,000 expected by the end of 2013.
This spectre should concentrate all our minds. It represents not only a catastrophic human cost but also stands to create profoundly negative economic and social effects in the long run. Considering the numerous studies linking unmanageable debt to crime, family breakdown, alcohol abuse and mental health difficulties, there are clear dangers stemming from the fact that more than one million people now rely upon payday loans to cover essential outgoings such as utility bills. Similarly, the hundreds of thousands of children growing up in overcrowded homes or going to school hungry face significantly increased risks of education and health problems, presenting obvious challenges further down the line.
In this context it is unsurprising that so many organisations working to support poor families have expressed deep concern at the virtually unprecedented set of restrictions on the welfare system, which threatens further to weaken the safety net, which has been badly holed. The chief executive of the Cardinal Hume Centre, which provides a vital lifeline to Londoners in poverty, recently said:
“Breaking the link between inflation and benefits before the effects of these changes”—
to the welfare system—
“have even been assessed, is a potentially disastrous move that could cause unsustainable hardship for many people who are already struggling to get by”.
I particularly want to ask the Minister about the effects on disabled people. The Welfare Benefits Up-rating Bill alone stands to impact upon the lives of some 1 million disabled people, adding to the pressures already generated by the Welfare Reform Act and associated cuts. One third of disabled people are living in poverty in the UK and the new legislation simply seems to add to their impoverishment. I particularly want to ask about the new personal independence payment, especially as it relates to mobility issues, about which I have a Question down for a reply during Oral Questions next Thursday. An alliance of disabled people’s organisations is extremely concerned about its effects. Can the Minister confirm the Government’s own prediction, made earlier this month, that 27% fewer working-age people will be eligible for the Motability scheme once PIP is fully rolled out? Disability organisations say that the new proposal means that 42% fewer disabled people of working age will be eligible—an average of 200 people in every constituency.
By changing the criteria for the “enhanced mobility rate” from 50 metres to 20 metres, many will lose a vital lifeline. Cars will simply be taken away, while those who are unable to drive, and use their mobility allowance for other means of transport, will be without the wherewithal to fund privately owned cars or taxis. It is sheer Janus-faced double-speak to tell disabled people to bring their gifts to society and to contribute by working, volunteering or being part of their community, and to take away their means of doing so.
I would also like to ask about the new regulations and the failure to include the existing qualifying phrase,
“reliably, repeatedly, safely, and in a timely manner”,
the criteria used to decide whether a person can carry out essential activities. Without those words, these guidelines will not be worth the paper they are written on when it comes to tribunals or appeals. I hope that the Minister will give this urgent reconsideration.
To conclude, overall, the impact on vulnerable people of many of these changes is going to be devastating. These changes are too deep, they are coming too fast and they are already undermining the most fundamental safety net through which no one should fall. It is unacceptable that through job loss, disability, illness or low pay, parents and children are going hungry and becoming homeless. But the facts speak for themselves and that is the reality for a rapidly growing number. With food banks and shelters increasingly overburdened, it is now urgent that we repair the damage being caused to families and to our society. That is why it was so right for the noble Baroness, Lady Hollis, to put this Motion before your Lordships’ House today. We are all indebted to her for doing so.
Baroness Prosser
My Lords, I join others in thanking the noble Baroness, Lady Hollis, for tabling this debate. I particularly thank her for her excellent opening speech.
I will direct my remarks towards the situation of the working poor. Back in the 1980s, at the height of Margaret Thatcher’s Government’s attack on the funding of public services, a journalist whose name I have forgotten coined the phrase, “private wealth and public squalor”. Fast-forward 30 years, and we are facing the same situation, although somehow worse. It is worse because over that period the gap between rich and poor has grown exponentially, so that we now have private wealth, public squalor, and private poverty.
Downward pressure on wages has come about for a variety of reasons. First, there is the reduced ability of trade unions to maintain, on behalf of their members, wage levels which give workers a fair share of the financial cake, which in turn in the past has provided pressure on the labour market as a whole, lifting up the pay of those at the bottom end of the scale. Organised labour reduces and low-paid, unrepresented work opportunities increase: the balance shifts towards an inexorable decline overall. The continuing use of technological solutions, and the consequent reduction in workforce numbers, within certain sectors of the economy—together with the globalisation of huge swathes of manufacturing—have also played a major part in keeping down the costs of labour.
To add insult to injury, along come the Government with the bright idea that reducing people’s incomes even further will, first, somehow help to solve the debt crisis—I am not sure how taking away the ability of large swathes of the population to have enough money to spend, even on essentials, will put money in the Government’s coffers, but that may be another story—and, secondly, will encourage lazy scroungers to get out of bed in the morning, when in fact two-thirds of the people affected by these cuts are already in work.
Those affected most by the very wide-ranging changes and reductions to benefits are working parents with dependent children. What kind of Government decide to target the poorest in society—people struggling to keep their heads above water, balancing the payment of the electricity bill against the cost of the supermarket shop? Parents are having constantly to tell their children, “No, we can’t go to the football match” or, “No, we can’t go on holiday like your friends do”. Do Ministers have any idea how soul-destroying it is never to be away from the fear of not having a penny piece, and always having to make do and mend, although you are going out to work and trying your hardest? Do the Government seriously think that the children of those families, starved as they are of the opportunity to flourish and grow, are being given the start in life that will enable them to become tomorrow’s committed and fully rounded citizens?
Noble Lords should look at the array of changes taking place. Working families are being bombarded with requirements to reduce their expenditure and/or to increase the number of hours worked each week. How easy is it for a mother, for example, to find an extra eight hours’ work each week and what does that mean for childcare arrangements and costs? These households, which are at the bottom end of the income scale, lose out particularly badly by the use of the CPI for uprating purposes, from cash freezes to child benefit and working tax credit. When replying, can the Minister please not say that it is all right because of the changes to the tax system for lower earners? Many of these families will have had an income below the personal allowance anyway.
The demonisation of the recipients of welfare has been particularly upsetting. I firmly believe that the vast majority of individuals would much prefer to be able to earn sufficient so that they do not have to get involved with “the social”, as it is known. Most folk want financial independence and want their children to have a better life than they have had. There will of course always be a small minority—the workshy and the idle. That has always been an issue, but it must be kept in perspective. They are a tiny minority. We cannot have a low-wage economy and a social system which then blames the low-paid for their own misfortune.
Finally, I think that I am probably the only Member of this House who has spent a long time reliant on welfare benefits. My husband became paralysed at the age of 28, and I spent eight and a half years looking after him and my three young children. I can tell the House that relying on welfare is not a lifestyle choice. We were what is known as “the deserving poor” and were therefore treated with a measure of respect, and probably sympathy. I also had a supportive, although far from well-off, family. However, it should be borne in mind that welfare payments are calculated to leave no space in the personal budget, so that the smallest incident becomes a crisis: the lost school coat, the broken kettle or the worn-out bed linen. How are these things dealt with when there has been no opportunity to set money aside?
The reductions in value now being proposed to the weekly incomes of both the working poor and those who have fallen on hard times through ill health, et cetera, will indeed cause a crisis—and all the rhetoric will be that it is their own fault. We need a strategy for growth, with a well educated and trained workforce and high-quality employment opportunities. That is what will deal with the country’s debt and the deficit.
Lord Touhig
My Lords, I join all noble Lords in thanking my noble friend Lady Hollis for securing this debate. No matter where we sit in this House or what our political affiliations are—or if we have none—I think we all agree that the noble Baroness, Lady Hollis, brings huge background knowledge and commitment to trying to solve some of the problems that we are talking about today.
On Monday, I asked the Government,
“what is their estimate of the saving to public funds as a result of the work of unpaid carers in the United Kingdom”.
In answering, the noble Earl, Lord Howe, said:
“the Government themselves have not estimated savings to public funds as a result of unpaid carers’ contribution to care and support”;
but he added that,
“there can be no doubt about its huge value to those who receive care and to the wider community”.—[Official Report, 14/1/13; col. 470.]
Why, then, when a disabled youngster in the care of his or her family becomes a disabled adult, is he or she considered a separate household from the caring parents with whom they live, making the parents subject to the housing benefit cap?
The Government have said that a family with a disabled youngster and in receipt of disability living allowance would not be subject to the cap, and to me that seems right and just. But for the life of me I cannot understand why this situation changes when the self-same disabled child becomes a disabled adult. On the Government’s own admission, around 5,000 carers in the United Kingdom will see their housing benefit capped. It will mean that the average affected caring family will see its financial support cut by £87 a week. The Work and Pensions Minister, Esther McVey, said in the other place on 10 December that families that would be exempt from the cap would be,
“those on working tax credit, all households with someone who is in receipt of a disability-related benefit, war widows and widowers, and those in receipt of war disablement pensions”.—[Official Report, Commons, 10/12/12; col. 15.]
I praise the Government for that—I think it is fair and reasonable. That is why I cannot believe that the Government really intended to penalise some 5,000 families in the way that they will do with the regulations that have been published. I urge the Minister to look again at this and accept the view from Carers UK, which says that it is,
“simply unfair to protect some carers and not others”.
I again refer the Minister to the comments from Esther McVey on 10 December, when she said:
“I will reiterate what a household is: a household is a basic family unit, and for the purposes of paying out-of-work benefits that will be a single adult or a couple and children”.
However, she added that,
“once another adult is in the house, that is a separate household”.—[Official Report, Commons, 10/12/12; cols. 15-16.]
When that adult is the disabled child whom they have cared for since birth, it is plain daft to treat that person as a separate household—frankly, it is barmy, and it is an insult. As this stands, a caring family is being penalised simply because the disabled child grows up into adulthood. That cannot be right. In fact, I believe it is a tax on disabled people growing up.
I should declare an interest as a vice-president of the National Autistic Society. Families affected by autism will be hit particularly severely because, according to National Autistic Society research, they spend longer caring and therefore have less time for employment. Across the United Kingdom, 21% of all carers spend more than 50 hours a week caring, but of those caring for someone with autism, 83% say they spend at least 50 hours caring. This was highlighted in Who Cares for the Carers?, a National Autistic Society document published in 2009. Caring for someone with autism is therefore disproportionately intense in terms of hours. In return, if the carer spends at least 35 hours a week caring, they receive the princely sum of £58.45 a week carer’s allowance. This cap will therefore disadvantage carers who spend at least as many hours caring as many people work in a week and are therefore themselves unlikely to find employment. That illustrates the reality of caring for an autistic child or adult.
Perhaps I may briefly touch on two case studies. Ann and Laurence have four sons. Two of them—Peter, 31, and Stephen, 21—have Asperger’s syndrome and ADHD and live at home with their parents. Although highly intelligent and educated to MSc level, Peter struggled for three years to get a job until his mother helped him find one as a teaching assistant. Stephen is less able to succeed academically and will never be able to live independently. His mother describes the challenge:
“When you have your children you think you will nurture them and teach them to become independent like my parents did with me. But that’s not the case.
I wouldn’t expect to be doing the things for my adult children that I’m doing. That’s a carer’s role ... My fear is that one of us will get ill and we’ll have to care for that person plus the two boys, and that will be difficult”.
Mark and Cathy have a six year-old called Malachy, who has classic autism. He is non-verbal and communicates through his own invented sign language. Caring for Malachy is exhausting and relentless. Mark often goes to work having had just three or four hours sleep. He and Cathy rarely have time to do the normal things that couples do, such as go out for an evening. Mark describes the challenge as follows:
“Malachy’s autism and difficulties [are] like a time bomb within your family. He completely dominates everyday life. It permeates my employment. Cathy had to give up work. It permeates the situation with the two younger children … he gets a lot of one-to-one attention”.
Things are already difficult for carers. A National Autistic Society survey last year showed that 74% of carers do not receive any support at all, and one in three carers under the age of 40 said that they would like to work, but cannot do so because of their caring role. Many more have had to give up paid work, reduce hours, work part-time or take lower paid jobs in order to care for someone with autism.
I think that, at this time, it is also worth remembering that with local authorities raising eligibility thresholds for social care support, and many services such as day centres closing down, many carers are likely to find themselves missing out on the services they need. Let us make sure that we do not make life even harder for family carers who, in fact, are the backbone of care in this country.
Lord Stoneham of Droxford
My Lords, I join in the congratulations for the noble Baroness, Lady Hollis, not only on this debate but on the leadership that she provides the House on forensic analysis and social concern. I am sad that I cannot be completely alongside her today on the issue before us. I would like to follow by setting some sort of economic and social context, following in the footsteps of my noble friend Lord Bates.
Although government is never easy, it is always exceptionally difficult when the economy is bordering on recession and there is an overspending deficit to clear up at the same time. We will never really know, but I suspect that without the formation of the coalition and a deficit-reduction strategy we could well have had turmoil in the markets and the IMF knocking on our door. Interestingly, that was precisely the scenario that our opponents in the general election said would happen with a coalition—but it has not happened.
As we look at the impact of tax and benefits changes on families, we therefore need an economic context for all the decisions being made—and the economic context has been dire. There has been a huge adjustment in living standards, with a fall of more than 7% overall since 2009. In fact there has been no growth in real income for the median income earners for a decade. This was inevitable when economic growth has been subzero. Households have not only had to bear the burden of the national debt reduction; they have also had to reduce their own personal household debt, following a decade of economic growth built on the shaky foundations provided by unsustainable huge growth in personal credit and debt.
The European meltdown and rising commodity prices, particularly energy, have compounded the economic impact of the UK recession. This has undoubtedly led to an adjustment of the Government’s deficit strategy—not to plan B, but actually to one which closely follows the strategy set out by the Labour Chancellor Alistair Darling. We will be very keen today to hear the views of the noble Baroness, Lady Sherlock, telling us where she will make the savings to replace the cuts that they oppose.
Two other points need to be made about the economic context, the first of which is on mortgages. The confidence in the Government’s deficit reduction strategy has led to the continuation of low interest rates. This has been critical to those families who otherwise would have been embroiled in debt repayment problems, negative equity and very severe impacts on family budgets. That was the scenario in the last recession in the early 1990s and it could easily have happened again if interest rates had moved up to 5% or 7%. Those with mortgages—and they are not simply the well off—have benefitted from those low interest rates. That should not be forgotten, and low interest rates must remain an important objective.
The second issue is employment. Growing unemployment is always the great fear associated with recession. We can look at the impact of benefits on family incomes but this assumes a static situation. In reality, the situation is very fluid. People move in and out of the labour market. Unemployment figures used to be explained to me as being like a bath: unemployment figures rise like water in a bath when the flow into unemployment continues; but the flow out of unemployment is plugged because the vacancies disappear in weak economic conditions.
This recession has been marked by a much better performance on employment at a time when the working age population has increased by 350,000 a year, more than we could have ever anticipated. There is nothing worse for an individual’s psyche than losing their job. Self-respect and purpose go with being in work. There will be arguments about the type of jobs being created. However, the figures show that there are 1 million more jobs in the private sector and the possibility of these jobs—whether full or part-time, permanent or agency—is encouraging and vital for families up and down the country, north as well as south.
This growth reflects incredibly well on our flexible labour markets. It has allowed adjustments to be made to keep people in jobs. It has created many new opportunities which otherwise would have been denied to people on the fringes of the labour market. It also undermines the arguments that say that our labour market is not sufficiently flexible and that there should be more attempts to increase flexibility, thereby undermining basic protection rights.
This leads to another point—that recessions are always bad things. It is why boom and bust is so damaging to the poorest and most vulnerable. They are the ones who suffer when the flows into and out of the unemployment bath move adversely. The poorest and less skilled and those who are less mobile will always bear the heaviest burden. That is fundamentally why putting the national economy on a secure path of growth is so important, and important to them. That is why sustainable growth must now be the overriding priority for the coalition.
However, despite the difficulties and the economic constraints that the coalition Government are facing they are also confounding their sceptics by a massive programme of social reform that will benefit vulnerable families. We are being, and will be, criticised for the tough decisions that we have had to make on work-related benefits. However, this criticism ignores the relative rise of benefits compared to the position for those who are reliant on earnings over recent years when real incomes have been falling. At some stage an adjustment was going to be on the agenda.
This action, however, is matched by action that will assist families. As we have heard today, the rise in the basic tax allowance by 45% in three years is unprecedented. Anyone on the minimum wage has seen their tax bill halved. The Labour Government gave a high priority to families through the growth of family credits. The coalition has prioritised pensioners, who would otherwise have been very vulnerable to energy prices going up, and whose incomes have fallen behind income growth. The triple lock meant that, last year, pensions went up by 5.2%, and will go up in April by 2.5%. It would have been much less under the previous Labour regime.
Action on current pensions is being matched by fundamental reforms on the single-tier pension and, in due course, in seeking to resolve the social care issue for the elderly which was left hanging by the previous Government. It has been a major worry and concern for growing numbers of families with elderly relatives that these issues have not been resolved. The wholesale reform of the welfare system will follow with the reform of universal credit. Who would have thought that a coalition could take on this issue—which James Purnell failed to persuade Gordon Brown’s Government to tackle because there were thought to be too many more losers than winners in a reform needed to simplify, target resources on the poor and reduce disincentives to work?
The noble Baroness, Lady Jenkin, mentioned William Beveridge. Today is the birthday of Lloyd George. I think that they would be justly proud of the scale of the reform that the coalition Government are undertaking at this very difficult time. Reform and change are always difficult. It is made even more difficult when money is short and there are insufficient funds to help oil the wheels of change. However, no one can say that the coalition Government are not seeking to combine economic competence with a social concern for fairness which is aimed at improving the outlook, security and well-being of families up and down this land.
Lord Graham of Edmonton
My Lords, it is a privilege and a pleasure to take part in this debate, which was so well introduced for our benefit by my noble friend Lady Hollis. I have known Patricia for many years. She is well—if not uniquely—qualified because in her city of Norwich she was the leader of the group. When we had a Labour Government she was a prominent Minister. It is the way of this House to bring together men and women who can speak from the heart. I cannot believe there is a person on the other side of the Chamber who heard the noble Baroness, Lady Hollis, who did not agree with much of what she said.
The problem is, we are where we are now and how do we get out of it, from the point of view of families? I cannot possibly enter into the finite arguments about which policies are right or wrong. I have an inclination as to where I stand, as does everyone in this House. Since we are talking about families, I thought I would mention that I am the eldest of five children. In 1930 my father was made unemployed and he did not get another job until the war started in 1939. It was tough. In 1937 he had 37 shillings a week to feed the seven of us.
When it comes to a level of poverty, it is very difficult for someone like me to believe that people are in poverty with a capital P now. Everything is relative. There are people sitting on both sides of the House who have been Members of Parliament and know what I mean when I talk about surgeries. When I attended my surgeries in Edmonton, I would meet people who had big problems, mainly to do with housing but also to do with work. Twice in my time I left the surgery, went to my car and cried because I could do nothing about it.
I very much hope that we are moving towards a stage in this argument where calling the other side names is not the solution. We are all politicians and we all have a point of view but we will not solve the problem if we build up resentment. I was born in Newcastle-upon-Tyne, not far from Jarrow, where the marchers came from. That was how they manifested themselves. We all know that at the end of the day it did not do very much to change the Government.
I say to this Government that, of course, most of the time they are the masters, but not all the time. I sense that there is resentment with a capital R building up among more and more people, many of whom voted for this Government and are now suffering from the actions they are taking. I am not even arguing about the actions because if there was a Labour Government we may very well have carried out some of the policies.
When I was a boy, I came home from school and said to my parents, “Look what I’ve got”. It was a pair of boots. My dad said, “How did you get those?”. I said, “Earlier today two policemen came into the classroom. They whispered to the teacher and the teacher called us out: Tommy, Teddy, Billy, Wilfie”. On Tyneside, you did not say Wilf or Tom; it was Wilfie and Tommy. So I went out and there were two policemen with a great big wicker basket. In the wicker basket were pairs of boots. The policeman threw a pair to me and said, “Try these on”. On Tyneside, in my station in life, your footwear was what we called sandshoes—other noble Lords might call them plimsolls. They were sixpence a pair from Woolworths and when they wore out you put a piece of cardboard in the bottom. When the cardboard wore out, you put another piece of cardboard in, until your mam could find sixpence.
So I brought the boots home and my dad said, “Where have you pinched them from?”. I said, “I haven’t pinched them, Dad, I was given them”. He hit me again and said, “Tell the truth”. Finally they realised I was telling the truth. My dad smiled; my mam cried. Years later, when I was in the Royal Marines, I came home and said to Mam, “Remember the time I brought the boots home and you cried?”. She said, “Yes”. I said, “Why did you cry, Mam?”. She said, “Because I knew that the teacher had been asked to send out of the room the children that she knew were from poor families”, and that she had cried from shame.
If anyone wants to ask me why I am Labour, why I am a socialist, it is because we lived in a society that might have done something but did not care. It is about time all the parties recognised that it is a big problem. I am not blaming one or the other, but the solution that we have had from the noble Baroness, Lady Hollis, is well worth studying.
When I was working for the Co-op, I was paying out the dividend and there was a big queue. I looked up and there was Jackie Milburn, the hero of Tyneside. He said, “Can I have some money from this passbook?”. I said, “I’m sorry, you can’t”. He said, “Why not?”. I said, “Because it is in your wife’s name. You take this form, get her to fill it in, come back and I will pay you”. He came back the next day and said, “How much can I get?”. I said, “There’s £7 and 17 shillings in the book; I can pay you £7 and 14 shillings because you must leave three shillings in the book”. He said, “That’s a week’s wages”. Playing for England and Newcastle in 1948-49, he was on the princely sum of £8 a week. We all have to try to take account of comparisons.
I mentioned the Co-op because the Co-operative movement deserves a lot of credit for starting self-help. Most people who worked in the Co-op were members of the Co-op. They would leave their dividend in the book until they had £4 or £5 and that was their nest egg. I think that the Government could do more to energise ordinary people to use the argument and the instrument of mutuality, credit unions and things of that kind. I hope the Minister will be able to recognise that there is a job of work to be done there.
In conclusion, there is no complete answer to this problem. I can understand people who think one way or the other, but in my view we should be past blaming the other side for what happened. All Governments find things that need to be done. The problem for this Government is that they are not doing what they said they were going to do. I rest my case.
Baroness Sherlock
My Lords, what a wonderful place to start. I would certainly not want to go back to when my noble friend Lord Graham or the children of today would have no boots, but maybe a place where Wayne Rooney got £7 a week would be a country I would think about living in.
Like other noble Lords, I am most grateful to my noble friend Lady Hollis for introducing this debate so powerfully. If I were the Minister I would be getting anxious already about how I would respond to that rather forensic opening statement. I congratulate her, too, on choosing the topic and expressing it in a way that has drawn so many powerful speeches from around the House. In a debate such as this, I am proud to be a Member of this House. I have learnt something from every speaker and having the opportunity to come into the debate at the end is really a privilege.
It is clear that there is widespread concern about the impact of tax and benefit changes on families. Given the rather forensic opening assault by my noble friend Lady Hollis, the Minister has some rather big questions to address. I was impressed that my noble friend had done so much spade work in trying to dig out the cumulative impact on families of successive tax and benefit changes since 2010. She mentioned a whole number of cuts that have been made but there are more. As well as those changes she mentioned, the Government have abolished the health in pregnancy grant and the baby element of child tax credit; they have cancelled the planned toddler element of child tax credit; the government contribution to the child trust fund has gone; the Sure Start maternity grant is not there for second and subsequent children; and the Government are introducing hefty charges for using the Child Support Agency.
All of that makes me worry about the extent of the burden being borne by women and children. This was highlighted very well by my noble friend Lady Massey of Darwen. If I were a mum of young kids, out there on a modest income, I would be starting to wonder what David Cameron thought about me and why so much of this burden seems to be borne by people like me. This is before we discuss the move to uprate benefits by just 1% for the next three years. Would the Minister like to comment on Tuesday’s admission by the Government in another place that that 1% change would increase child poverty by 200,000 more than would have been the case if benefits were uprated by CPI?
What is the Government’s strategy on tax and benefits for families? The Chancellor of the Exchequer, Mr Osborne, explained this very well. Introducing the Autumn Statement in another place on 5 December, he said:
“Those with the most should contribute the most, and they will, but fairness is also about being fair to the person who leaves home every morning to go out to work and sees that their neighbour is still asleep, living a life on benefits. As well as a tax system where the richest pay their fair share, we have to have a welfare system that is fair to the working people who pay for it”.—[Official Report, Commons, 5/12/12; col. 877.]
Let us test the Government’s record against that statement. First, will those who have the most contribute the most? The Government decided to reduce the top rate of income tax from 50% to 45%, a move that will give a major tax break to high earners including, as the noble Lord, Lord Alton, explained very clearly, giving 8,000 people an average tax cut of £2,000 a week. This is at the same time as introducing a Bill that would give someone on jobseeker’s allowance an increase of just 71p a week for three years.
What, then, of the personal tax allowance increase that was advocated so ably by the noble Lord, Lord German? Does that help the poor? Sadly, it does not. The nature of tax allowances is that everybody who pays tax benefits from them and the poorest do not, a point clearly made by the right reverend Prelate the Bishop of Exeter and the noble Baroness, Lady Jenkin. The Child Poverty Action Group calculated that a working family eligible for both housing and council tax benefits will gain just 13p a week from the extended personal allowances. The much quoted Institute for Fiscal Studies noted that households towards the bottom of the income distribution,
“benefit relatively little from the increase in the income tax personal allowance, as many individuals in these households would have had a personal income below the allowance (i.e. they would have paid no income tax)”.
The IFS continued,
“Households in the middle and upper-middle of the income distribution benefit the most as a percentage of income from the increase in the personal allowance”.
So, that is not so good on those with the most paying the most.
What, then, of the opportunity to consider how the Government make sure that the system is,
“fair to the working people who pay for it”?
Tax credits, and all those payments I listed at the beginning of my speech, are or were available to working parents. The Minister may argue that surely the Welfare Benefits Up-rating Bill will rebalance things by giving people on benefits only a 1% increase. Again, no. As the noble Lord, Lord Alton, noticed, although it is true that some 2.5 million workless households will find their entitlements reduced by an average of £215 a year, 7 million households, about half of those with somebody in work, will lose an average of £165 a year. As a number of noble Lords have commented, I am sure we have all seen the report from the Children’s Society which describes the kind of losses that occur. A second lieutenant loses £552 a year; a nurse or a primary school teacher lone parent loses £424. These people are not sleeping off a life on benefits but they will really pay the price.
As we heard from my noble friend Lady Hollis, in the case she cited of a Daily Telegraph reader, tax credits have made a real difference, in particular to enable people with children to move into low-paid work. Not only do they help those who cannot work full-time, they have also helped households where only one member of a couple is in work—the groups of concern to the right reverend Prelate the Bishop of Exeter and to the noble Baroness, Lady Jenkin. The Government have taken the decision to move across to universal credit, to replace all these benefits. I see the noble Lord, Lord German, has confidence that all will be well in those days and I very much hope so, although I confess that I am getting worried about the repeated reports of delays and the constant snipping away at the support within universal credit—not as worried as the Minister, perhaps, but he can tell us more of that later.
If the Government are confident and want to invest in universal credit because it will help people to move between welfare and work, why are they doing so much to undermine work incentives and cut the payments to low-income families in work? How can that make sense? When Ministers say, as they often do, that social security spending is unsustainably high but fail to be honest about the drivers for that spending, not only is that bad politics but it will cause them to make the wrong policy choices, which is even worse. One reason spending on out-of-work benefits is higher than the Government want it to be is that unemployment is higher than the Government predicted, and pursuing economic policies that make the recession worse or longer and do not promote growth are likely to make that situation worse.
The Government have made some decisions about their work programmes. They abolished Labour’s successful Future Jobs Fund and their own Work Programme has been shown to be worse than doing nothing. I regret to say that I read in the Guardian this week that the Government’s much vaunted unemployment figures include some 20% of people who are in fact on job training schemes, most of them still claiming jobseeker’s allowance. The Government need a strategy other than simply blaming people for the fact they have lost their jobs. As a country, we need a strategy to go out there to pursue growth and create jobs, as was so well described by my noble friend Lady Prosser. We also need measures to support those who are long-term unemployed. There are currently more than 130,000 adults over the age of 25 who have been out of work for two years or more. I share the view of the noble Lord, Lord Bates, that people who can work should work. Labour had said that if it was in government now, it would introduce a two-year compulsory programme; when someone had been on jobseeker’s allowance for two years, they would be in a compulsory job. That would have tackled the question of long-term youth unemployment.
I have focused on working families not because I want to demonise or marginalise those who are not in work, but to try to point out that the tendency to imply that the entire social security bill is spent on a bunch of idle layabouts and is paid for by hard-working people is at best disingenuous and at worst playing politics with the lives of struggling families who are already finding it very hard to make ends meet. My noble friends Lady Prosser and Lady Donaghy have explained how tough life can be for struggling, low-income workers, either in employment or self-employment. The last thing these people need at the moment is for the state to take away from them some of the bit of help they have which is just about helping them to make that transition.
Statements such as that from the Chancellor fail to acknowledge that when unemployment is high there are people claiming benefits who, before they were made redundant, were paying tax to fund them and will do so again. It also fails to acknowledge the disabled people who will clearly struggle, a point made very well by my noble friends Lord Touhig and Lady Pitkeathley and by the noble Lord, Lord Alton. I would be grateful if the Minister could confirm what will happen to disabled people who, even if they receive protected benefits, often get 70% of their income from benefits which will be hit by the 1% limit.
I finish where this debate started. The analysis of my noble friend Lady Hollis was very powerful. I urge the Minister to tell the House today whether he accepts her figures for the impact of the Government’s changes to tax and benefits. If he does not, will he tell us when the Government will publish their own analysis of all they have done to families in Britain? In Britain today it seems that we can afford tax breaks for millionaires but a food bank is opening every three days and a million people have resorted to a payday loan just to pay their rent or mortgage. I invite the Minister to explain those priorities to the House.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, this has been an interesting and important debate, and I am grateful to all those who have contributed. The noble Baroness, Lady Sherlock, referred to the quality of the debate; there was something interesting in all the speeches, which is not always the case. I therefore thank the noble Baroness, Lady Hollis, for securing the debate.
I shall set some context for the debate before I try to deal with as many of the points raised as possible. The arguments for our programme of tax and welfare reform are well rehearsed. We have heard much discussion in the media, in Parliament and elsewhere on the welfare and tax policies that the Government have planned. However, I think that it is worth me touching on the rationale for our programme of reform.
We have already made significant progress in tackling the fiscal challenge that we faced when we came into office. We inherited the largest deficit in more than 60 years and, since then, welfare spending has risen from 11% of GDP in 2007-08 to more than 13% today, including pensions and working-age payments. In a constrained fiscal climate, this puts real pressure on key public services and is unsustainable. The deficit has now been reduced by a quarter, and we have created more than 1.2 million private sector jobs. Even if we play around with the small anomaly of those who are on skills training, there has been a huge increase in private sector jobs.
The noble Baroness, Lady Hollis, raised a question about cumulative impacts, and I was fascinated by her sums on this. However, I need to point out that this Government publish impacts of benefit and tax changes alongside each Budget and Autumn Statement. That is something that previous Governments did not do.
Baroness Hollis of Heigham
Is the Minister acknowledging that the Government have not published a cumulative analysis of the cuts, benefits and tax changes since 2010? If he is so doing, which I think is what he has said, it is still done slice by slice. Can we hope that he will do so—will he give a commitment to do so in future?
Lord Freud
My Lords, it is bluntly impossible to do a total cumulative assessment. I have looked at doing it, and you do not know what to put in and what to leave out. No one has done it in the past; it is not possible. Doing it year by year, as we do, is the best we can do—and it gives a fair view of what happens in a particular year.
I shall continue. While we are taking action to reduce the deficit, we have continued to support families by cutting tax for more than 24 million working people, lifting 2 million of the lowest-paid workers out of income tax altogether. Further freezes in council tax this year will help families with the cost of living by keeping the cost of council tax bills down. Here I pick up the point made by the noble Baroness, Lady Pitkeathley, about localising council tax support. That is being done because it is at the local level where the need for particular support is best understood, and we have announced additional funding of £100 million to support that process. More widely, we are investing heavily in low-income families by supporting the most disadvantaged through every stage of their education.
On the question raised by my noble friend Lady Jenkin, the right reverend Prelate the Bishop of Exeter, and my noble friend Lord Bates, the Government remain committed to recognising marriage in the tax and benefits system. That is as far as I can go today. On the point raised by the right reverend Prelate on child benefit, it will be completely removed only from families that include someone earning over £60,000, and 90% of families will continue to receive child benefit.
It is clear that decisive action is needed to control the damaged and hugely expensive welfare system that we inherited. Labour increased spending on benefits and tax credits by £75 billion and, in real terms, expenditure on all working-age benefits increased from £59 billion in 1997-98 to almost £95 billion in 2010-11, in today’s money. These increases are simply unsustainable. In tax credits, spending increased by £23 billion in real terms between the same two dates, which meant that nine out of 10 families with children became eligible for tax credits—a point made by my noble friend Lady Jenkin. In some cases, families could receive more than £70,000 in earnings and still be entitled. It is clear that, given this level of generosity, we could not protect child benefit and tax credits from the need to make welfare savings.
The Government have not shied away from acknowledging that tough decisions are needed, and we are committed to ensuring that savings measures are taken in the fairest possible way. That is why the 10% richest households will contribute most as a result of the tax and benefit changes that we are making. My noble friend Lord German inquired about that. Overall, as a result of recent changes, we may have reduced the marginal rate from 50% to 45%, but everyone in this House will be familiar with the impact of the Laffer curve. What really counts is how much total tax is taken from the richest; a quarter of all income tax is paid by the top 1% of earners, and the top 5% pay about £50,000. In practice, our changes mean that, overall, the richest will pay £1,000 a year each more in tax, not less, as has been claimed.
It is reasonable to expect the richest to pay their fair share, and it was equally important that we took action to ensure that people on benefits did not receive support that far outweighed the income received by many families who do not rely on benefits to get by. We have, for example, done away with the frighteningly high rates of housing benefit in the private rented sector, and from April this year we are applying an overall benefit cap so that households on out-of-work benefits no longer receive more in welfare payments than the average weekly wage for working households.
The year 2013 is pivotal for welfare reform. The introduction of universal credit and the personal independence payment in April will kick off the most fundamental reforms of working-age benefits for generations. I am pleased to tell my noble friend Lord German that we aim, still on time, to start universal credit on 29 April as a pilot, moving to a national basis in October. The universal credit system creates a seamless system of support to make work pay. People will be able to keep more of their income as they move into work, and it delivers a smoother and more transparent scheme that does away with the administrative difficulties created by switching between benefits and tax credits.
The noble Baroness, Lady Donaghy, made a particular point on universal credit and the self-employed. She made a point about the carry-forward, and I can tell her that I am aiming to introduce something for that to work efficiently; that will be in time for when the people who need it will be using it, so I hope that I can reassure her on that important point.
In the Autumn Statement, the Chancellor announced measures to tackle the rise in spending on benefits and tax credits by increasing the majority of working-age benefits by 1% for the next three years. The savings in that Statement amount to £2.8 billion in 2015-16. We are aiming here to strike the right balance between the support we provide and the need to tackle the spiralling cost of the welfare bill. Picking up the point made by the noble Lord, Lord Alton, on disabled people, we are protecting those elements of ESA support, the disability elements of tax credits and the main disability benefits—DLA, carer’s allowance, attendance allowance and incapacity benefit. While I am discussing the points made by the noble Lord, Lord Alton, about disability—picking up his query on PIP—I suspect we will have a chance to talk about that more next week. There is not a difference: the 50 metre to 20 metre change does not create any substantial difference in entitlement. I will be able to go into that in some more detail.
Although the Government are committed to supporting working families, it would be unrealistic to exclude that group entirely from our savings measures. Although some families will be affected by the tax credit and child benefit changes, we need to put this into context: working households will gain by an average of £125 in 2013-14. Households will, on average, gain—no matter where they sit in the income distribution.
A lot has been made of the suggestion that 81% of the £1 billion or so raised by the tax and benefit changes will come from women. However, the analysis underpinning the 81% figure misrepresents the true impact of welfare reforms on women. It assumes that because the payment of child benefit is to women, its restriction hits women; but the reality is that in many cases it goes into households. The real figure, if you do that analysis, moves from the 80% or so figure to the 60% or so figure. The Government continue to support women and their families through their tax; 80% of households with children will see their tax credits increase. The across-the-board freeze in council tax bills will help families with the cost of living.
Picking up the point made by the noble Baroness, Lady Pitkeathley, on PIP for carers, I remind her that we are committed to linking carers to receipt of either rate of the daily living component of PIP. That is the underlying reason why the impact assessment published in May 2012 showed that broadly the same number would be entitled to the carer’s allowance. Of course, continuing on her theme, where a carer lives in the same household as someone who is disabled, the benefit cap will not apply anyway, because that is one of the exclusions.
On childcare, we are spending an additional £200 million on universal credit and the focus of that is on families who work fewer than 16 hours a week. This investment will mean that 100,000 more families will be helped as they move into work. The Childcare Commission has been considering the cost of childcare in England and we expect its report to be published soon, so there will be further developments on that.
Turning to child poverty, by the relative income measure, the previous Government may have made some progress in moving children from out-of-work households out of poverty, but the effect on children from in-work families was considerably less. As my noble friend Lord Bates pointed out, work is the best route out of poverty. However, only 13% of the reduction in child poverty between 1998 and 2010, came from this fundamental route of families moving into work. That is where universal credit is so important: our estimates are that up to 300,000 more people will enter work as a result of the introduction of universal credit through improved financial incentives alone; 75% of the gainers from universal credit are in the bottom 40% of the income distribution.
Universal credit will make it easier for people to understand the level of benefit to which they are entitled—compared to the current complex system of benefits and tax credits—and significantly improve the take-up of unclaimed entitlements. That is a powerful tool in tackling poverty, because in 2009 it was estimated that 400,000 of the people living in relative income poverty were doing so because their families were not receiving all the benefits to which they were entitled.
I need to point out the importance of our White Paper on pensions, published earlier this week. The reforms will give a boost to the people who lost out on the additional state pension in the past, such as low earners and self-employed people. About 750,000 women who reach state pension age in the first 10 years after the single-tier pension is introduced will receive an average of £9 a week more in state pension because of the single-tier valuation. In response to the noble Baroness, Lady Hollis, this Government are committed to protecting pensioners—much though she may resent it. We have legislated to restore the link to earnings for the basic state pension, and are committed to the triple lock.
On the point raised by the noble Baroness, Lady Sherlock, about relative beneficiaries, the people in the middle have been squeezed quite savagely in recent years overall. I refer her to the interesting article in the Financial Times suggesting that those brackets were back at the levels of 2002-03, whereas the bottom 30% had increased their income in real terms by 3% or 4%.
Our fundamental welfare reforms will transform the welfare system by 2017. The replacement of many of the current suite of income-related benefits and tax credits with our flagship reform—universal credit—will provide a streamlined and transparent scheme that will mean that 3 million families will be better off, on average, by about £168 a month. In April this year, the largest ever increase to personal allowances will benefit 24 million people and lift 1.1 million people out of income tax altogether. Our tax measures, coupled with a modern benefit system, will demonstrate that supporting families remains an absolute priority for this Government.
Baroness Hollis of Heigham
My Lords, first, I thank all noble Lords who have taken part in the debate. In particular, I should like to congratulate my noble friend Lady Sherlock on her very impressive and superb debut on the Front Bench. It was an admirable wind-up speech and we are indebted to her. All our congratulations go to her. She absolutely rightly drew on the speeches of my noble friends who talked about carers, the self-employed and low earners, as well as disabled children and their families who are worried as their children become adults. My noble friends will allow me therefore not to repeat what she has already said. I want to take one or two minutes—I promise not to take any longer—to pick up on one or two points made by those sitting on Benches other than my own.
I welcome the speech of the noble Baroness, Lady Jenkin. Like her, I support universal credit and, like her, I prioritise the support that we need to give to families. I was sorry that she reiterated the point that tax credits had created welfare dependency. As my noble friend Lady Sherlock said, the whole push of tax credits was to make work pay—a philosophy that goes straight through from tax credits into universal credit. I hope we do not get that argument repeated again.
As I expected, the noble Lord, Lord German, emphasised the value of the tax allowance rise. Of course, I am pleased about that. However, I remind the House of the effect on someone working full time on a minimum wage—the security guard I quoted. That tax allowance increase is worth £1.71 a week. That is before the £30 of other benefit cuts kick in. The noble Lord, Lord Bates, drew on the argument that the economy is in such a state and the deficit is so high that poor children must be made poorer so that the rest of us can be made more prosperous. He failed to address the point that the big increase in benefit expenditure—which, pace the noble Lord, Lord Freud, I welcomed—has been driven by the increase in pensions spending, and that the amount of GDP going to those of working age on social security benefits has fallen since 1994 from 8% to 5%. It is simply false to say that that expenditure is unsustainable. It is about political and moral choices. However, he is right, and I am delighted to hear him say this, that a living wage would reduce the welfare bill. I hope that we can count on his active support for that in future.
I especially thank not only my noble friends but also the noble Lord, Lord Greaves, who made a brave, splendid and first-rate speech. He made points that I wish I had had the wit to make myself. I also thank the noble Lord, Lord Alton, from the Cross Benches, for his powerful, moral critique, which again reminded us of where our moral priorities should lie when we make these policy decisions.
The noble Lord, Lord Freud, referred to cumulative assessment. With the help of Citizens Advice and Landman Economics, we were able to work out pretty precisely—to within 10p or so—the total cumulative effect, since 2010, of the benefit cuts and tax changes. I did it for one family type—the security guard with a wife and two children. If we can do it over a weekend with wet towels and half a bottle of gin, I am quite sure that the Government can do it with the numbers of staff that they have in the Treasury. The answer is that the Government are not choosing to do it. They do not want to be shamed by us and others as to the effect of what they have done over time. There cannot be any other reason why the noble Lord, of all people, who has the utmost respect from the House for his integrity on these issues, and the Government continue to duck the consequences of their action by giving us the cumulative statistics today.
The noble Lord, Lord Freud, also mentioned the Laffer curve. At that point, the noble Lord, Lord Skidelsky, muttered into my ear, as others have done, that the Laffer curve, which says that the lower the tax rate the more you collect, has been discredited by almost every reputable economist in this country and in the United States. I am sure that the noble Lord, Lord Freud, knows that.
As to the noble Lord’s point about pensions, it is simply inappropriate of him to accuse me of not welcoming what is happening on the single state pension when before the general election I was one of those who wrote a pamphlet calling for it, in which I was fortunate enough to corral the willing consent of his right honourable friend Steve Webb to contributing for it and calling for it. I am absolutely delighted. The point I was making was not that I do not welcome the improvement in pensioner benefits. Of course, I do. I argued that it should not be paid for by making poor children poorer. That is the shame on this House.
Finally, the noble Lord, Lord Freud, sheltered behind averages, which of course fall in the middle of the third quintile. I was trying to describe the effects on the poorest quintile, particularly the poorest decile. He did not rebut one of those statistics.
A long time ago, the Reverend Thomas Chalmers, a Scottish Malthusian in 1819, said that character is the cause, comfort is the result. He had the excuse of not being able to read the early effects of an industrialising society and its profound effects on the poorest and the most vulnerable, and its children. What is our excuse? I beg to move.
Local Government: Finance Settlement
(11 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text
Lord Smith of Leigh
This House takes note of the Local Government Finance Settlement.
Lord Smith of Leigh
My Lords, I am grateful to have the opportunity to raise the issues created by the local government settlement for 2013-14 and for the wealth of talent from local government who will contribute to the debate. I look forward to that. I confess that I presented my first budget in 1983-84, 30 years ago. Those were tough times in the era of the Thatcher Government but not as tough as we have today. Last week, in Wigan, we agreed our next year’s budget proposals with some £18.9 million of cuts on top of £43 million achieved over the past two years.
I declare my interests: I am leader of Wigan Council, chair of the Greater Manchester Combined Authority, vice-chair of SIGOMA and one of the many vice-presidents of the LGA in this House. This year’s settlement was announced on 19 December but it was no Christmas present for local authorities. It is by far the most complex settlement ever—certainly, in my memory—and included the new system of local government finance, which was agreed during the autumn of last year and moved funding towards support from business rates. Of course, we do not understand the impact of the current rating appeals. As regards moving council tax benefit support to local authorities, I think that in the debates on the Bill, we talked about a 10% reduction for local authorities. For my authority, it will be just over 15%, so we have that to cope with. We have got changes to specific grants, such as the funding for academies. A local authority near me, Trafford, has lost about £5.1 million from this change but its total budget was only £3.3 million.
The new homes bonus has been cut. We have got new capping rules, which will allow local authorities to increase council tax by 2%. Unusually, this year we can add precepts, as well as levies, from transport authorities and others. Perhaps it is surprising that public health money allocated to local government was not included in the settlement although it has come through. Those are some of the changes but we have not mentioned the effect of the public spending review and the reduction in grants to local authorities.
During the passage of the Local Government Finance Bill, I made the point that we are transferring greater risks to local authorities with this settlement. Business rates are going to go to local authorities, as will the impact of business rate losses. A major supermarket catching fire could lead to the closure of that supermarket and, therefore, there will be no business rates. That cost will be on the local authority. We also debated for some time what the collection of council tax would be under the new arrangements. I do not think any of us expect that to be anywhere near 100%. There are one or two smaller local authorities which I think in future are financially vulnerable. We certainly need to keep a watch on that.
“Local government has borne the brunt of cuts to public spending and the settlement announced confirms that this will continue to be the case until 2015”.
Not my words, but words that I can agree with, in which local authorities have taken some 28% reductions while Whitehall departments have only taken an 8% reduction. Those words were stated by Sir Merrick Cockell, chair of the LGA, and I understand that he is leader of a local authority in London with which the Minister may well be familiar.
Despite the Government’s mantra about fairness—part of which I caught at the end of the previous debate—the cuts have different impacts in different parts of the country. Over the past two years, under the Government’s new measure called Spending Power—unknown two years ago—the average reduction for local authorities has been £91, but in Dorset the average reduction has been only £8.50. In Knowsley, it has been £229 and in the current settlement—I apologise to my noble friend on the Front Bench for making this comment—Luton has gained by £12.40 whereas Rochdale has lost by £57.50.
What is fair about a distribution that is treating local authorities so differently that they are having to cope with similar problems in different ways? How is local government coping with the scale of cuts that is forced on them? The answer is that they are actually coping a lot better than many central government departments, and achieving some of these savings largely on target. As a practitioner, I am the first to admit that there are still significant efficiency gains which local authorities can and must pursue. To give evidence for this, in my recent budget we were able to take £1 million off our IT services because we had gone out for a joint procurement with a neighbouring authority which saved that amount. There can be efficiency savings, but the scale of what is demanded of local authorities cannot be achieved.
The Secretary of State has recommended to local authorities that they should use balances. At best, this is only putting off the evil day. Towards the end of last year, I was acquainted with one local authority which, because it had been a hung council, had dithered for two years without making any cuts. They had used all the balances in making the budgets balance. However, come the third year balances have gone. They now have to get back on track and are in the process of making savings of £100 million in one year. As I mentioned, the risks for local authorities have risen because of the new funding regime and risks need to be protected by local authorities so inevitably will be to be a high level of reserves to cope with that.
In my own authority, I use reserves in the concept of invest to save, that is to spend money upfront now which will lead to savings elsewhere. We have got a significant capital programme to improve the basic quality of our road network, which is enabling us to save roughly £1.5 million a year on highways maintenance and the day-to-day repairs of patching up and so on. If you improve the fabric of the road, you can make savings. That is how we are using reserves.
We can try to make the savings by putting the cost upon our employees. For the past two years, we have had a pay freeze in local government. We have now reached the end of that road. It is time in the forthcoming year that local authority workers, like other workers, have some compensation for the impacts of inflation and other things. When we have done all those things, we are still left with reducing the services provided directly by local authorities. If we are lucky, some of these services may be taken up by community groups. We have been successful in transferring a small library to a community group, but that is a small library in a small location. Clearly it could not happen with a major library and that is only going to happen in one or two cases. In most cases, we will start to cut and reduce; services will disappear. Due to the scale of the cuts, no area of local authority spending can be exempt. The impact on individuals and communities will be severe.
Those who have seen the news today may have seen the report of the Coalition of Disabled talking about the impact of local authority cuts on people with disabilities. It says that a £1 billion shortfall will affect disabled people across the country. Some of the cuts that we have decided to make in our adult services and in our local authorities will reduce the cost to us in local government, but they will simply shunt costs across to the NHS. In a sense it is not a real cut in public spending, it is simply moving it from one area to another.
With the additional redundancies that we are creating we are doing damage to local economies and to local people in communities. I think that we are becoming a less civilised place. We are seeing a reduction in provision for the most disadvantaged and vulnerable in our society; we are seeing a reduction in provision of the arts; we are seeing a reduction in the provision of the local library service. The House has debated on numerous occasions—so I do not want to get into the detail of it—the forthcoming crisis in the provision of social care, simply illustrated I think by the so-called Barnet graph of doom. These looming pressures will and are already beginning to affect local authorities, but I want to remind Members that this is not a cost which will affect just social care. During the past few months, I have been scrutinising the budget for Greater Manchester transport to make sure that it has kept within its budget limits. It told us that the prospect of more pensioners coming through with free travel—not national but local travel—will have a significant impact on its budgets over the next couple of years.
We cannot simply continue with these slash-and-burn tactics that the Government are applying to local authorities. The cumulative, year-on-year, effect of cuts will and is having serious effects on services. Most of all, and perhaps worst of all, it is not working in what the Government want to achieve in cutting the public deficit. We estimate in Greater Manchester that the impact of the Government’s policies has been to cut about £1 billion off direct services, but because of the rise in unemployment, we are paying out more in welfare payments. Health costs have gone up, so public spending has gone up in Greater Manchester, not down.
There is a better way: the way of public service reform. Most public spending is still coping with the symptoms of problems rather than the cause. If we began a proper, full collaboration of services in an area, as shown by the community budget pilots, we could save—according to estimates verified by Ernst & Young—up to £22 billion over five years. Not only would we be saving public money but we would be improving the local economy, because the impact would be to get more people back into work. We would reduce dependency and improve outcomes for individuals and communities.
I recently visited a project for troubled families in my borough and was moved by the outcomes of, that project and by the extent to which those families lives had been turned round by the adoption of a different approach that looked to find ways to solve their problems rather than just assuming that the way to deal with them was to take the kids away.
Some parts of government get sufficient support, but clearly not all do so. The settlement also contained a significant reduction in the early intervention grant. My authority received a grant of £4 million. This was money to help children’s development in the crucial early years and is a way of reducing dependency, but the money disappeared.
I would like the Minister, in replying to the debate, to say that she will tear up the 2013-14 settlement, but I do not expect that she will. However, there are three things that I hope she will consider seriously when replying. First, it is a new system, so let us see whether we cannot carefully monitor the impact that this complex settlement is having and show willingness, if it is necessary—I think that it probably will be—to intervene in-year if the consequences for individual local authorities demand it. Secondly, let us begin an early dialogue with local authorities on the forthcoming settlement for 2014-15, which will, following the autumn spending review, result in more misery for local authorities. We will need to think about that. Thirdly, I hope that we can have serious conversations with willing local authorities on the reform of public services, which will produce better results for everyone.
Lord Tope
My Lords, I begin, as I always have to do in these debates, by declaring my interest as a councillor in the London Borough of Sutton. Given the subject matter under debate, I now have to add that I am a very recent member of its pension scheme and am therefore entitled eventually to receive a tiny pension.
The noble Lord, Lord Smith, began with his confessions. If it is something to confess, then I confess to moving my first budget as a council leader back in 1987, although for the previous 12 years I had explained to the Conservative authority how it could do better; indeed, ever since Anthony Crosland declared, within months of my election, that I had missed the party.
I thank the noble Lord, Lord Smith, for today’s debate and for the rather measured way in which he introduced it, although his unprovoked attack on Luton was a little unjustified. I agree with the comments he made towards the end of his speech concerning the need for public sector reform, and most particularly the opportunities that must exist not only for budget savings but for much better and more efficient working from what is now known as community budgeting. I wish that we could move a lot faster than seems to be the case thus far. That offers considerable opportunities.
While I thank the noble Lord for the debate and well understand why the Opposition chose to highlight this subject, the timing is a little unfortunate in that the consultation has just ended. If the Government already have a settled view, it is certainly not one that the Minister will be in any position to give us today; nor, therefore, do I imagine that she is likely to give us many clues as to what will be in the final settlement announcement when it is made. However, I hope that she will be able to respond to some of the points that will be made today.
As the noble Lord, Lord Smith, said, this was the latest ever settlement announcement on record, having been announced just before Christmas. Indeed, some necessary information was still awaited only a few days ago, not least the public health funding announcement, which was made just days ago. It is hard enough in a normal year—if there ever is a normal year—but this is a particularly bad year for this to be happening given the scale of change that has to take place in local government. Local government has to deal with the effects of previous years’ budget reductions, which are still working their way through the system, although the localisation of business rates was a very radical and welcome change, and we spent many happy hours debating in this Chamber the changes in the council tax support scheme. All this is coming at once and having to be coped with by local authorities, most particularly by staff in their finance departments. I hope that the Minister will pay tribute to their work and to the achievement of local authorities generally, councillors and particularly staff, and most especially staff in the finance departments. I am fairly confident that she will do so, given her background. That would make a very welcome change, not on the part of the Minister but as regards some comments made in the other place, which, frankly, make people in local government feel even more misunderstood and unappreciated. Kind words cost nothing but sometimes reap considerable benefits.
I think we all recognise that the late settlement to which I have referred was beyond the control of DCLG Ministers. Nevertheless, it was imposed and it has made life more difficult. However, the greatest innovation occurs in difficult times. I often wish that that were not so. Probably the greatest time for innovation is wartime. None of us would wish to experience that again, although sometimes it feels a little like that for local authorities. I wish that we could achieve that innovation in a rather more measured way and with a lot less pain than is being inflicted on us now. Nevertheless, we should recognise that, largely as a result of the unwelcome budget reductions and the scale and speed of those reductions, greater innovation is emerging.
We also see at this time of the year what I regard as the annual ritual of the local government finance settlement. It seems to bring out not only the best in some but the worst in everyone. For as long as I can remember, Ministers in all Governments have always claimed that the settlement was very much better than it ever turned out to be. I have been watching this ritual every year over 40 years. Local government always claims that it is the end of the world as we know it, but the world is still here and we still survive. Councils then enter into a bitter battle. Wigan attacks Luton, the north attacks the south, we argue with each other as to who is worse off, and urban authorities attack rural authorities. All this is done to get a larger slice of a cake, the size of which is never going to change. In doing that, we know that one authority’s gain will inevitably be others’ loss. What made this worse—this is perhaps one of the reasons why some northern authorities feel that they are getting a worse deal—was the very large share of local authority funding that came from central government and local authorities’ dependence on that. Too many local authorities all over the country—I suggest that this applied to a greater extent in the north than generally in the south, excluding some in London—were heavily dependent on central government funding. Inevitably when that funding is reduced, as it has to be, they feel the effects rather more. I hope that that will start to change as local authorities become increasingly able to raise a greater proportion of their budgets.
The noble Lord, Lord Smith, referred to a 28% reduction. That was, indeed, the figure from the DCLG for the reduction in the local government finance settlement. However, as we know, other departments have also required local authorities to implement their budget cuts. I have seen estimates of the actual reduction in local authority budgets ranging certainly between 32% and 35%, and in some cases the reduction is higher than that. As we all know, as the public sector funding cuts begin to bite, local authorities will inevitably have to curtail the expectations and needs of their staff.
I have stated that I am a London councillor and therefore I want to conclude with some issues of particular concern to London councils, although they have a wider application. The first is the results of business rate revaluation appeals. According to Valuation Office Agency data at April 2012, 24% of all appeals are in London and they represent 28% of the total rateable value of the local list in England. This must mean that the value of appeals in London is likely to represent much more than 24% of the England total. However, because the Government have used an England average to adjust the estimated business rates aggregate downwards, the adjustment is not enough to reflect accurately the size of appeals that London boroughs are likely to face. In other words, London boroughs’ baselines are likely to be artificially high, thereby leaving them more vulnerable to funding shortfalls.
London Councils has asked the Government to monitor the adequacy of that sum and I hope that the Minister will at least confirm that that will happen. Of course, London Councils is also urging the Government to address any such shortfall under the new burdens procedure. I suspect that the Minister will feel unable to give that commitment today but I hope that she will take it away and argue for it elsewhere. Finally on this subject, will the Minister confirm that, if appeals are successful, local authorities will have to reimburse businesses straight away but will only get reimbursement from government over a five-year period?
Another concern for Londoners is the proposed transfer of £150 million of undamped grant from urban to rural areas. The impact of this change will fall disproportionately on London. On London Councils’ analysis, this suggests an overall funding loss of around £75 million in undamped grant for London. I know that the Minister cannot make any substantive comment on this today, but I hope she will confirm that any such changes in the final settlement will be accompanied by robust factual analysis to support them. I know that London councils have made their own representations individually and collectively to Ministers and I have no further time to add to those.
I echo the words of the noble Lord, Lord Smith, in introducing this debate. Local government generally has performed exceptionally well under exceptionally difficult circumstances. It is widely recognised as the most effective and efficient part of the public sector, and it may be that local government should be giving 50 top tips for saving money to the Secretary of State rather than the other way round.
Lord Beecham
My Lords, last week the Government published their mid-term review. It was not so much a candid assessment of their first two-and a-half years as a Candide assessment, where everything is for the best in the best of all possible worlds. We read in the document that the “shared instinct for decentralisation” on the part of Tories and Lib Dems has apparently become “an organising principle”, with,
“an historic shift of power ... to put our counties, cities and citizens … in control of their own affairs”,
with,
“sweeping reforms to increase local authority freedom,
and,
“the ability for councils to finance themselves independently through retaining 50 per cent of the business rate”.
The latter, of course, is determined by the Government. Yet Eric Pickles was the first Cabinet Minister to offer up cuts, in his case of 30%, to the Chancellor after the election—nearly four times the scale of cuts suffered by other central government departments. He continues to preside over a massive reduction in resources on a scale unprecedented even by the standards of the Thatcher years. Characteristically the finance statement and its accompanying documents were riddled with inaccuracies, so that the website had to be taken down after representations from council treasurers. Equally characteristically, the Secretary of State not only underestimates the scale of next year’s cuts, he said next to nothing about the even bigger cuts to follow in 2014-15, which for many authorities are likely to be in the region of 7% to 8%. Perhaps he had in mind consideration of the forthcoming county council elections. The pain would to some degree therefore be deferred until the following year.
The Government seem determined to move inexorably away from a needs-based system which, for all its unevenness, at least sought to address the disparities between more and less prosperous areas, to one based on crude numbers. However, there are matters of general application and I will return later to the issue of distribution. These are matters which have occasioned profound concern across the local government family and the political divide within it. For example, the Local Government Association—yet again I declare my interest as an honorary vice-president and as a member of Newcastle City Council—draws attention to what is a real cash cut in services for all councils so that a few might be permitted to capitalise up to £100 million of redundancy costs from capital receipts or borrowing. No proper explanation has been given for this cut, apparently made for “accounting reasons”. Perhaps the Minister will give us the reason—if not today, then subsequently. Perhaps he will also explain where the £100 million of local government cash has gone.
Similarly, as the noble Lord, Lord Tope, has pointed out, many councils will face problems over rating appeals, many going back several years. It would appear that they face the risk of having to fund 50% of the backdated costs of successful appeals, even though the money will already have been paid into the national pool. That risk should ideally stay with DCLG. I understand that the department is providing funding to cover this for a period, but what are the Government doing to secure the expediting of hearing appeals by the Valuation Office? I illustrate the problem by referring to my own authority, where there are outstanding appeals against the valuations on the 2005 basis on 100 properties with a rateable value of £30 million—that is just for one local authority—and the DWP has made the largest claim, which goes back over six years. What action will be taken to deal with that?
There are other common issues, for example a further cut of 30% nationally in core services such as childcare, cuts in support for concessionary travel, and youth and education services, and the holdback of £150 million of early intervention grant which also comes with a 28% reduction compared to the present year. In addition to these significant issues there are huge problems around issues of distribution. It is here that the seismic shift from a needs-based approach would be most keenly felt. This is not a simple north/south issue. Inner London boroughs, coastal towns such as Great Yarmouth and other communities—some urban, some rural—with significant economic and social problems in different parts of the country all suffer, although if you look at the regional map, there are marked regional differences.
Consider the new homes bonus, largely financed by top-slicing money which would have come to local government anyway—a fact often forgotten. The effect is to divert resources from the less prosperous areas to the more prosperous, where the housing market is more buoyant. Newcastle will admittedly benefit from the bonus, to the extent of a little over £3 million. The problem is, we lose nearly £6.5 million as our share of the top-slice grant, so we are nearly £3.5 million worse off, despite making significant efforts under councils of both political persuasions to facilitate new homes building. Note too the perverse effect of the damping regime, which funnels moneys from authorities losing significantly more spending power per head than some of those who receive it. I referred in a previous debate to the £40 million that Surrey received last year, which went straight into its reserves. This apparently will increase to £63 million next year and will be built into the base thereafter.
Next year Wokingham, which Ministers perversely cite as a comparator to Newcastle—although I have not heard the noble Baroness do that yet—will receive £204 funding per dwelling in damping grant. That is three times the amount for Newcastle, which has had much larger grant cuts per dwelling in recent years. This comparison is wholly invalid. The Government have cited a difference in spending power—that is to say council tax, business rate and grant—of £700 per dwelling, but half of that is due to the higher costs of adult and social care in a much poorer and less healthy population, one-sixth to council tax support, another sixth to grant for homelessness, £95 of the £700 for children’s social care—and we have proportionately four times as many children in our care as Wokingham.
The Minister recently wrote to my noble friend Lord McKenzie with some information about the Social Fund allocations. It is very illuminating, because it emerges that the Social Fund allocation to Newcastle, which must surely be a critical measure of deprivation, is 15 times the size of that for Wokingham. Even allowing for some adjustment for population there clearly is a huge disparity in need, yet the current system does not reflect it and is decreasingly reflecting that. It wholly invalidates the comparisons that Ministers are drawing.
Another instance is the funding for concessionary travel. We receive four times Wokingham’s funding for that but our costs are nine times greater. What is true of Newcastle is true of much of the north-east and other hard-pressed regions. The north-east as a whole will lose £275 million under the new homes bonus schemes by 2018. There are real concerns about a cut in resource equalisation and the 30% cut in support for looked-after children, where the numbers and costs are increasing by 26% in the north-east compared with 10% nationally—a function of the region’s economic plight.
In Northumberland, a county with the second longest road mileage in the country, apparently with the same area as Cyprus and much of it exposed to extremes of bad weather, government funding for highway repairs will fall by more than 40% by 2014. My city faces a yawning gap of £100 million a year by 2015-16 on a current net budget of £266 million. The closure of the gap will require cuts of unprecedented magnitude. In the ward that I represent, which is among the 10% most deprived wards in the country, we expect there to be the closure of community buildings and a playcentre, and a reduction in standards of maintenance of open space, before one takes into account the significant loss of income that many constituents will incur as a result of the benefits changes. Other councils in the region face similarly appalling prospects as the relative needs assessment reduces by £573 million, compared with an increase in the central share of £871 million—and that is just for next year.
What does the Secretary of State have to offer? Fifty shades of Pickles, it seems. He provides a patronising list of possible savings, from the stultifyingly banal, such as not providing mineral water for council meetings, to the patently obvious, such as increasing council tax collection—although that will not be easy in light of the council tax benefit cuts. It will become uneconomic to collect tiny amounts from people who can barely afford to pay and who did not have to pay in the past. I say nothing about the bill for biscuits in the Department for Communities and Local Government, which apparently increased by £10,000 last year. The Secretary of State ignores local government’s record in driving through efficiencies for many years—to which the noble Lord, Lord Tope, referred—leading the way for the public sector, just as he ignores the damage to local services and the communities they serve in the damage this Government are wilfully inflicting, especially on those areas and their people who can least bear it.
My noble friend Lord Smith and the noble Lord, Lord Tope, referred to public service reform. It is right that councils should do more to collaborate and make savings, not merely among themselves but across the whole public sector. I recently asked a Question about that. I look for collaboration between the Government and local government across the whole range of the public sector to engender savings that might, to some degree, mitigate the disaster that is about to strike our communities.
Baroness Smith of Basildon
My Lords, I am grateful to my noble friend Lord Smith of Leigh for providing the opportunity to have this debate about the local government settlement. It is clear from the speakers’ list and from what we have already heard that there is a huge amount of experience in your Lordships’ House. I suspect that across the Chamber our reasons for taking part in this debate are similar—we value and support local government, not as an entity in itself but for what it can achieve. I spent eight years as a county councillor in Essex, my degree is in public administration, I have worked in local government and was a Local Government Minister here and in Northern Ireland. There were times as Minister when I felt that I was a poacher turned gamekeeper, turned quarry—as I am sure the Minister will understand. I am also a vice-president of the LGA.
We have heard details of level of cuts and I want to focus on the impact of the financial settlement. My noble friend Lord Smith was clear; we are not against efficiencies or genuine savings, but this settlement goes way beyond that in its expectations. In 2011, Secretary of State Eric Pickles, in his inimitable style, told his party conference that local government could, “do more for less”. This financial settlement is certainly testing that premise. Joanna Killian, who chairs the Society of Local Government Chief Executives and is the chief executive of Essex County Council, expressed her concerns that the,
“local government settlement confirms that local government will continue to bear the brunt of public sector cuts”.
She warned:
“This settlement will increase the risk of more councils being financially unviable”.
That view is supported by a recent report by the Audit Commission—soon to be abolished by the Government —which states that auditors consider 43% of larger single-tier councils and 34% of district councils to be at short-term or medium-term risk. There is no party-political divide on how dangerous the situation has become. That is a professional assessment from auditors, councillors and officials. The leader of Kent County Council, Conservative councillor Paul Carter, warned,
“the tank is running on empty”.
Sir Merrick Cockrell, the Conservative chair of the LGA, called the cuts unsustainable. The notion of making changes at the margins, cutting back on some services, and increasing or introducing reasonable charges has gone. We now face a fundamental re-evaluation of what local government is able to do.
While the Government talk of localism, every action they take removes not just money from local authorities but the power to tackle those very problems in society that the Government are exacerbating. I accuse Ministers of misleading local government about their intentions regarding what local government can and should do. When the Localism Bill received Royal Assent, Ministers hailed the legislation as,
“the biggest transfer of power in a generation, releasing councils and communities from the grip of central government”.
When Eric Pickles became Secretary of State, there was a view that as a former council leader he knew the value of local government. He even spoke of the “power shift” from national to local. A hugely entertaining read, in retrospect, is his speech from the Conservative Party conference in 2011. He said that in comparison to Whitehall local government has been the most “efficient part” of the public sector. “My friends”, he said,
“you can feel that power is shifting … from Whitehall to councils … Together we will shake off the shackles of Labour and Britain will become great again”.
I allow some leeway for conference rhetoric but Ministers perpetuated this myth as they pushed the Localism Bill through Parliament.
We often hear talk of power without responsibility but the way in which this Government are treating local authorities is the reverse. This is passing on responsibility without power. Ministers repeatedly state that budget decisions are the responsibility of local councils and that they should decide where the axe will fall. But it is central government—despite warm, meaningless words from Eric Pickles that local government is the most efficient part of the public sector—that hands down the budget on which councillors have to balance the books.
If central government decides the funding levels it holds the power and all that local government is left with is the responsibility—responsibility for trying to manage cuts to have the least impact. This is passing the buck. While local councils are trying to provide services, most of them statutory ones that the Government say that they must provide, the Government are removing the resources that allow them to do so.
Here are some examples. Labour-controlled Thurrock Council, which is a unitary council, is seeking to manage cuts of £13 million this year. One of its difficulties has been the relatively new government concept of “spending power” that assumes councils are able to raise the same level of council tax next year as they are this year. The new local council tax support scheme that replaces council tax benefit means that there is a significant difference. In Thurrock that will be a reduction of more than £8 million. I wonder if the Government really understand the impact of their policies.
Conservative-controlled Southend Council, along with many other councils, 10 of which are Conservative, has rejected the Government’s plans for a further freeze on council tax as being unworkable, despite having to make significant and damaging cuts. Recently, Southend Council leader Nigel Holdcroft said:
“We no longer have any leeway and we have to make real cuts to services … to balance our books—and that involves making some very hard choices”.
Even Conservative councils, which clearly do their best to support their Government, find the Government’s financial settlement unworkable. Southend is not alone. A number of other Conservative councils have not taken the Government freeze this year.
Earlier this week at the council of my home town, Basildon, virtually every member of staff was handed a personal letter headed, “Transformation programme: collective redundancy consultation”. In all my years involved in local government I have never seen anything like it. I quote:
“The reduction in resources and the expectation of localism means the council needs to work together with partners and local people to create an environment where everyone can thrive ... The role of the council is changing from simply doing things for people to one of working with them to do more things for themselves”.
That may be worthy of “Yes Minister” but it goes on to promise,
“a varying degree of change for all of us”.
Not quite all, as I shall come on to. The real purpose of the redundancy consultation is to warn staff that,
“there is a risk that the council will be unable to continue to provide work for all its employees”.
In other words, not a single member of staff, other than the most senior, I understand, has job security. Everyone who has received that letter is being made aware that their job is at risk. Why otherwise would they be sent the letter? The deputy leader of the council has already said that he expects up to 200 redundancies in the next few months. And there will be more to follow. How did those staff, many long term and not on high salaries, feel when they went home that night—numb, scared? They were certainly demoralised. As I have mentioned before in your Lordships’ House, this is the same council which, apparently against advice from the Secretary of State, will pay a part-time executive director £100,000 a year and according to reports from council documents paid its top 12 earners £200,000 more than in the previous year, 2011.
The council refuses to release information to the public to confirm and explain this arrangement, despite having received a letter from the Secretary of State that ordered it and every other local authority to release details of salary and perks paid to senior executives. Is it a coincidence that a council that behaves in this way to its staff has seen long-term sickness almost double? In six months from April to September 2012, mental health has been the main cause of long-term sickness absence and has risen from fewer than 100 days to more than 200. That information comes from a publicly available council document.
There is a serious implication here for administration. Cuts in staff have an impact on the scrutiny of the administration. Last week, when Councillor Gavin Callaghan received an inadequate response to an inquiry regarding unused and vacant buildings locally, he was told that it would do its best to provide information but that it was “quite short staffed”. The information was required for a meeting last night. He asked for the information more than a week before. However much they wanted to, the staff was unable to help. Effective governance needs effective scrutiny. Opposition councillors can fulfil their scrutiny role only if they have the information to do so.
My final point on Basildon Council regards apprenticeships. Yesterday the council issued a press release congratulating itself on participating in a careers convention for schools and its offer of apprenticeships. I am hugely supportive of apprenticeships but I am very concerned at reports that as staff numbers are reduced apprentices are moved into their desks to undertake some of their work. This of course is much cheaper.
My last comment on the settlement is to remind ourselves that police and fire services are also affected by these cuts. I am appalled that Essex no longer has a single 24-hour police station. Only yesterday, we saw the London police and fire and rescue services respond so quickly to the dreadful helicopter crash at Vauxhall Cross. London fire services are facing the loss of 12 fire stations, two of which attended Vauxhall, 18 fire appliances and around 520 staff.
Some weeks ago I met representatives of the Metropolitan Fire Authorities about the budgetary pressures that they face. They were pragmatic and professional but clearly very concerned. Ministers will have to be very confident indeed that there are no public safety implications if they go ahead with these significant cuts to the fire service. To find a way forward, a representative of the Metropolitan Fire Authorities has asked the Minister whether the discretion afforded to the eight fire and rescue authorities to raise council tax precept by just £5 can be extended to all fire and rescue authorities, given that their precept levels are relatively low. I hope that the Minister understands their anxiety and can give a response.
Local government services range from the major life-changing and enhancing to the mundane but include those services that bind and connect communities and make a difference to their way of life. I am known to be pragmatic and practical, so I am not exaggerating when I say that this Government are putting too much of that at risk. I hope that the Minister can reassure me that that is not the case.
Baroness Garden of Frognal
My Lords, I remind noble Lords that timing is very tight. I ask noble Lords to sit down as soon as the Clock hits 10 minutes.
Lord Greaves
My Lords, I, too, had to present council budgets a quarter of a century or so ago. The one that I particularly remember was in 1990, which was the poll tax budget. Pendle was particularly badly hit. The then director of finance and I kept reminding ourselves of what happened to Wat Tyler after he organised poll tax riots 500 or 600 years earlier. The result of it all was that the electors decided to remove me from the council and the director of finance became the chief executive. He is still there and the electors have recanted. Therefore, I declare my interest as a member of Pendle Council, a member of the executive and a vice-president of the LGA.
I want to talk about a group of councils that I think was alluded to by the noble Lord, Lord Smith of Leigh, which I call the sorry seven. They are seven ordinary shire district councils that are being clobbered even harder than everybody else by this settlement. They are Hastings, Great Yarmouth, Barrow-in-Furness, Bolsover, Hyndburn, Burnley and Pendle. They are two seaside towns, with all the problems of declining seaside towns over the decades, and five former industrial areas in the north of England, if Bolsover is in the north of England. I cannot speak in detail on all of them but they are all very similar and I can certainly speak about Pendle, which is a district of 90,000.
The first problem with districts such as this, typified by Pendle, is that 70% of our houses are band A for council tax, so there is no great resource that we can rely on compared with other councils. The problem with business rates is that they have been declining in many parts of the borough over the years because they were based on old mills, many of which have gone and are still being removed. Indeed, the owners of old mills are still demolishing them in order to avoid paying business rates. We need an expansion of our industrial and commercial base. Achieving that in areas such as ours requires public sector investment—not completely public sector but with partnerships and all the rest. At the very least, it requires public sector seed corn and assistance. If councils have no money, they will not be able to do this and the result will be that the business rate base will decline.
The sorry seven councils, because of the lobbying that they have done and the problems that have been pointed out, are now eligible for something called the efficiency grant, whereby Ministers will try to micromanage them in a number of different ways that they think are desirable. Why Ministers such as Brandon Lewis or Eric Pickles should want to micromanage Hastings, Pendle or even Great Yarmouth is a mystery, but there we go.
The Government say that the top cuts for any council are 8.5%, but if you do the sums for councils such as Hastings and Pendle in cash, the cut in cash grant this year is 17%. Even if you include the small amount that these places get for the new homes bonus, the cut is still 15%. It will be even worse in 2014-16.
I have some projections of the total core revenue funding that has been available over the years to my council and is now projected. The total funding for 2009-10 was £13,186,000. Some noble Lords will think that these are tinpot little places but they are shire districts. They are not bad places but we do not have as much money as big councils. The projection for 2014-15, which is five years later, is £6.9 million. When my noble friend said that some councils might have a 30% cut over that period, we are talking about a 50% cut, more or less. That is the scale of the disaster that is affecting the sorry seven—this small group of small councils, whose problems could be solved by the Government with relatively little money but they are not doing so.
As far as we are concerned, we have done everything that they wanted us to do— or almost everything because we have not abolished our chief executive. We cannot understand how you can run a council without one and a half chief officers and directors, which is what it will become. We have an arm’s-length leisure trust and we have stock transferred our council housing at the behest of the previous Labour Government because they were bribing us with vast amounts of money to do that. We have outsourced many back-room services and a front-counter service and got the private sector partner to build new offices in the middle of Nelson. We have a highly successful joint venture with a local development company, whereby it raises two-thirds of the finance, the council raises a third, and most of that is put into land, buildings and so on. However, without any money you cannot go on doing things like that for ever.
We have had a radical stripping-out of top officers. We are supposed to be in the top 10 most efficient councils in the country—I do not know how people work that out, but that is what is said—and we have apparently had more awards than any other council this year. However, it makes no difference. We have to subject ourselves to this extraordinary procedure, whereby Ministers in the DCLG will assess whether we have qualified for this new efficiency grant. Of course, we have to assume that we will get it in order to make any sort of sensible budget. If we did not assume that the £1 million or so in efficiency grant that is being offered will come, we would be in even worse straits—and yet, how do we know that we will get it? The whole system that is set up for this small group of councils is absolutely crazy; nobody could dream it up.
I will say a few words about the new homes bonus, which other noble Lords have mentioned. According to our chief executive, who spoke to me this morning, the new homes bonus is “at the heart of what will kill Pendle and councils like it” in the next two or three years, and that applies not only to the sorry seven. As has been pointed out, the new homes bonus is topsliced; it is taken out of the general fund for local authority spending from the Government. It is then paid to councils where houses are built and occupied. In other words, it is a transfer of funds from areas where housing is not being built to growing areas, where it is. On the face of it that seems quite reasonable, so why not do it?
The first reason is that whether you are able to build and occupy houses in your area is not under local control. Even with social housing we have problems making the figures stack up with the rules laid down by the Government and the Homes and Communities Agency. However, for commercial housing you have to have people who are prepared and want to build houses in a sensible way in sensible places in your area. If you are not in a booming or growing area, that is not very easy. The new homes bonuses that have been allocated so far have not been on the basis of recent decisions anyway, but on the basis of historic actions and decisions—what people put in local plans three, four or five years ago—that bear no relation at all to present policies. There is no damping mechanism on the new homes bonus as there is on the change in business rate system, so it is simply taken away and handed out to other places.
If I understand the figures correctly, the new homes bonus in 2013-14 for new properties—the rest make only a slight difference—will be: £116 million for the south-east councils; £144 million for London; £57 million for the north-west; £21 million for the north-east; and £53 million for Yorkshire and Humberside. In other words, London and the south-east will receive £260 million and the three northern regions will altogether receive £131 million.
I will not say that there are no places in London and the south-east that have needs similar to those of much of the north of England. However, that allocation, on the face of it, seems to amount to a redistribution of funding and resources from the north of England to London and the south-east of England. The Government need to answer the question of how that can be justified on any basis that is in any way related to actual needs and what people do on the ground, and I seriously wonder if the Government will be able to do so.
Baroness Armstrong of Hill Top
My Lords, first, I apologise for being late and I thank Members on the Front Bench opposite for their indulgence. I got to Durham station in good time following a meeting in County Hall first thing this morning, only to find that the train I was due to catch had been cancelled because of a body on the line, and the next train was half an hour late, so I am afraid that I missed the beginning of my noble friend’s speech. I want to intervene only briefly, I hope.
Despite all the rhetoric, I am concerned that this year’s settlement is far more complex than previous ones and that therefore it is much more difficult for authorities to work out precisely what they will be getting. Indeed, certain grants have not yet been announced, but here we are at the end of the formal consultation period and at the point where, by law, local authorities must make their decisions. I had hoped that the impact of localism would mean that the settlement would be much more simple and straightforward, but in fact the opposite has happened. It means that localism is not yet a reality. Elements of the settlement are being tied in for a long period, which goes against the principle of fairness. Local authorities largely now try to plan over a three-year period but, because of the lateness of the settlement, they are not in a position to do that with confidence. They now rightly consult their local council tax payers and residents much more than they ever did, but that is being made more difficult when they do not have clear figures with which to work.
I come from the voluntary sector and I declare my interests in all the charities that I am involved with in the north-east that inevitably work with local authorities. They do not know what their allocation for next year will be, so many of them are having to put workers on 90-day redundancy notices in the hope that it will not be necessary but, none the less, they are having to do so in order to comply with the law. That causes great unrest in those charities.
The settlement this year has come inordinately late. Only last Friday did authorities learn about their public health settlement, while many other aspects have not yet been decided. I do not think that that is acceptable to authorities, so I would beg the Government to improve their performance next year. As my noble friend Lord Beecham said, on top of the settlement arriving only on 19 December, which is very late—in the department I used to try to insist that it was delivered during the last week of November at the latest; that deadline subsequently slipped but I think it is what central government should go back to—it is also true to say that there were a lot of mistakes in it. Even the overall amounts in terms of spending power were quite wrong when the settlement was first made in December. It has been incredibly difficult for local authorities to work out with their partners and stakeholders just what the impact is going to be. My noble friend Lord Beecham also pointed out that this has had a real effect on the distribution of the settlement.
I am at a loss to understand why deprivation has so little impact on the decisions being made around the settlement. I wish to goodness that we did not have to say in the north-east that we continue to have more people unemployed, more people on low wages and therefore more people on benefit than in other parts of the country, but we do. That is the reality. That reality means that the needs which local government has to respond to are greater.
On top of that, the Government have set the damping arrangements in stone until, I understand, something like 2020, which I find inexplicable. In my era, damping always caused us enormous problems. Nobody liked it and everybody asked why it was necessary. I used to spend my time explaining that, if you are losing a lot of money, you need a bit of time to adjust. This year, however, damping is working the other way. In Durham, although we are losing, on current projections, over £200 million during the period to 2018, this year we will have to contribute over £9 million to the damping grant, whereas—as my noble friend says—Surrey will receive £59 million. In fact, Surrey is getting an increase in its settlement, whereas Durham is getting substantial decreases in the basic settlement, yet it still has to contribute to the damping, which will give Surrey even more money to distribute to its less deprived population. This seems inexplicable, and I have had difficulty in trying to rationalise it with people, particularly councillors in the locality.
Deprivation raises its head very quickly in all sorts of ways. In Durham this year, we have to make available services for the homeless for the first time ever. The charity that I am involved in has just entered into a contract with Durham County Council to offer services to rough sleepers. There have been homeless in the city, but rough sleepers have never been found there before. That is a consequence of deprivation and of the changes that are going on at the moment, and the local authority has responsibility for it. I would be having a go at the authority if it did not accept that it has a responsibility to respond to this. However, it costs money. Although it is not a massive amount in terms of the overall budget, it is a reflection of that deprivation, and we fear that the changes in benefits on 1 April will bring further challenges. There are huge challenges to local government. I have a rule in the charity that we do not whinge. We are not whingeing; we are asking for timely, proper announcements, and for recognition of deprivation and the cost that that deprivation implies.
Lord Shipley
My Lords, I declare my interest as vice-president of the Local Government Association. I thank the noble Lord, Lord Smith of Leigh, for initiating this debate, which gives us an opportunity to contribute to the national debate on the settlement.
The funding cuts for local authorities are worse than expected. It is not clear to me why local government has had to absorb such large reductions, nor do I think it is right that the 28% reduction in government support funding over the four years of the current spending period is now, in practice, nearly 33%. The pressure on services, particularly adult services, is very great and the extra 2% cut now planned for 2014-15 is a step too far—not least because cuts in government support impact particularly hard on those councils more dependent on government grant. In terms of the outcomes from the consultation I hope that the Minister, together with her colleagues, will bear this in mind.
In this debate I want to concentrate on council tax: the levels of council tax charged by local authorities in England and the consequences of a year-on-year freeze. In too much of the public discussion about the cuts and the fairness of them, the role played by council tax in alleviating some of those cuts has been strangely absent.
The public debate over the settlement has been dominated by those trying to persuade the Government to adopt their definition of fairness. Never in the history of local government settlements have the words “fair” and “fairness” been used as much as they have in recent weeks. The Government claim that the settlement is fair to everyone. In the settlement announcement on 19 December, the Secretary of State said:
“This is a fair settlement, fair to north and south, fair to rural and urban areas and fair to shires and metropolitan England”.—[Official Report, 19/12/12; col. 1604.]
Northern councils argue, correctly, that they face much bigger cuts than councils in the south and say that this is unfair. Some councils in London face much bigger cuts than elsewhere in the south too. Overall, the reductions in the more deprived areas are twice the average reductions across the country. However, councils in the south counter that the level of support per head in the north will still be much higher than in the south even after the latest round of reductions in government support.
Rural councils complained in late December that the spending settlement hits rural areas harder than urban ones. In the summer, south-east councils published a report claiming that a fairer deal was needed for the south-east, because south-east residents faced unfairly high levels of council tax as a direct result of low central funding for south-east authorities. They pointed out that per capita grant allocations in the south-east outside London were half the level of London and of the metropolitan areas.
So, perceptions of fairness vary. Equalising resources through government funding is surely fair, as a principle, but is it not also fair that levels of council tax charged should be more equal between different councils? Some councils charge more than others despite being in the same part of the country. Similar properties, with householders on similar income levels and with similar household costs, can pay widely different amounts of council tax.
As an example, the average council tax this current year in my home city of Newcastle upon Tyne is £1,039, which is the third-lowest in the north-east and which, incidentally, is £540 lower than Wokingham. The lowest average council tax in the north-east is £904 in Sunderland and the highest is Redcar at £1,166—a difference of £262. At band D, the highest in the north-east is £1,681 in Hartlepool and the lowest is Sunderland at £1,343—a difference of £338. However, household incomes, housing costs and the general cost of living are not that different across the north-east. So why is there a demand that only the Government should solve the funding gap for a council which charges lower council tax than its neighbours when it could raise extra income by charging a council tax closer to their level?
I will go a little closer to home. On average, a Newcastle household pays £1,039, which is £20 less than a Gateshead household, which pays £1,059. At band D the difference is greater: Newcastle charges £1,512 but Gateshead charges £1,600—£88 more. If we compare Newcastle to Northumberland, with which it shares a boundary, we find that although Northumberland charges broadly the same as Newcastle at band D, at £1,504, the average household in Northumberland pays £1,155, which is £116 more than the average payment in Newcastle. I am puzzled by why these differences are not being publicly discussed. Simple arithmetic tells us that a small rise in council tax to the level of a neighbouring council could generate significant sums to alleviate, for example, proposed library closures and cuts in cultural support over the next three years.
This takes me to the issue of whether council tax should be frozen. When the new Government proposed a zero council tax rise in their first year of office and gave councils an equivalent grant to cover the cost, I was in agreement with that freeze, having in previous years supported raising council tax by the rate of inflation and dealing with other rising costs through driving major efficiency measures. However, since the first year of the council tax freeze, despite the offer of time-limited freeze grants, councils have had options. In the current financial year, four north-east councils, all in the Tees Valley, raised council tax by 3.5%. They were prudent.
This year’s offer of a 1% freeze grant when costs are rising higher than 1%, and when councils could raise council tax by up to 2% without calling a referendum, needs to be thought about very carefully. Councils which continue to freeze council tax, possibly for two further years, making five in total, will end up in even greater dependency on the Government for their income. I think that this is a very dangerous strategy. Councils need greater control of their own finances by generating a stronger local tax base, which will in future, of course, include building business rate growth in which they will share financially.
The Secretary of State has said recently that councils have a “moral duty” not to increase council tax. I would not have put it like that. Surely the moral duty of councils is to deliver services needed by their residents, particularly those who are less well off. Councils could, of course, help themselves more by driving greater efficiencies in the way that they work. As an example, in his settlement announcement the Secretary of State said that if councils merged their back offices like the tri-borough initiative in London, they could save £2 billion. If those figure proved to be true, it would mean that there is potential for saving more than £20 million in Tyne and Wear—money that could be redirected into service provision.
I understand from the press that more than 20 councils in England are reported to have considered their financial position in the context of whether council tax should be frozen, and they have rejected this option and are planning to raise council tax by up to 2%. Of these, 10 are Conservative run. I think that they are right to choose to do this if they see it as being in the long-term interests of their residents. This is localism in action. It reduces dependency on central government and can avoid cuts to services. Crucially, it provides greater financial stability.
However, what if councils think they should raise council tax by more than 2%? The Secretary of State said in his settlement announcement that holding a referendum would be,
“democracy in action: if you want to hike taxes, put it to the people.”—[Official Report, 19 December 2012; col. 1603.]
Yet, apparently, none plans to do so. So, why do councils shy away from holding referendums? I am regularly told that it is not worth doing because there would be a no vote if a council went to a referendum. I doubt that that would always be true. Are those councils really saying that they are so detached from their voters that even a reasoned case would be rejected?
I think that councils need to show much greater leadership and self-confidence rather than putting all their efforts into trying to persuade everyone that this is only a matter for the Government to address. If they genuinely believe they cannot drive further efficiencies, why do they not put their case to their voters? If it is really true that libraries have to close, swimming pools are at risk and that cultural budgets have to be abolished, surely the public should be given the right to vote on the option of paying a little bit more to prevent this happening.
I agree entirely with the noble Lord, Lord Smith of Leigh, who asked for there now to be a discussion about the way forward, particularly in view of 2014-15. I would welcome the consultation and further discussion that he has called for.
Baroness Donaghy
My Lords, I thank the noble Lord, Lord Smith of Leigh, for initiating this debate, although there is an element of sadomasochism in having to go through this again when we went through it on 19 December. I wish I had had the time to do some research into how often members of the coalition Front Bench have said from the Dispatch Box “That’s a matter for local councils to decide.” Closing libraries; a matter for councils. Shrinking sports facilities; a matter for councils. Closing Sure Start centres; local government. Cutting bus services; that is up to councils.
In her letter to the noble Lord, Lord McKenzie, following the debate on the provisional local government finance settlement for 2013-14, the Minister wrote:
“It is entirely for local authorities to decide how much they are prepared to spend on council tax support”.
We have an “entirely” now. We should state quite clearly that the Government are responsible for what is happening to local authorities. I firmly believe that the population at large, when the impact of these announcements is finally felt, will know that it is the Government who are responsible, not local government. Historically, hand-washing in public has a very bad record.
As has already been said, the Audit Commission has found that the most deprived areas have seen substantially greater reductions in government funding as a share of revenue expenditure, compared with councils in less deprived areas. That says it all. I will not repeat examples that others have given in this debate. My noble friend Lady Smith referred to Joanna Killian, the chair of SOLACE, the Society of Local Authority Chief Executives and Senior Managers. Ms Killian said:
“This settlement will increase the risk of more councils being financially unviable and focus needs to be given to how this market failure is managed”.
How chilling a statement is that?
The single most important reason why I think the Government will be blamed is the localisation of council tax benefit. No Conservative partners in the coalition are participating in this debate, apart from the Minister, of course. So I will try to inject a Conservative view. The noble Lord, Lord Jenkin, said:
“The poll tax was introduced with the proposition that everyone should pay something … We got it wrong. The same factor will apply here, that there will be large numbers of fairly poor households who have hitherto been protected from council tax, who are going to be asked to pay small sums”.
Families already facing difficult choices between heating and food bills will receive a bill for council tax for the first time in March-April. Figures from the Institute for Fiscal Studies show that the average working family will lose £165 per year, while the average non-working family will lose £215. How many will be willing to pay council tax for the first time? One journalist has described this coalition government policy as a “death wish”.
I want to deal with the issue of council reserves. The Secretary of State has accused some councils of,
“stashing away billions, turning town halls into Fort Knox, whilst at the same time threatening to cut frontline services”.
This was in response to the Audit Commission’s report that English councils’ tax reserves stood at £12.9 billion in 2012, £4.5 billion more than in 2007. The Audit Commission considers that the building up of reserves is praiseworthy. Councils increased their reserves by £1.3 billion in 2011-12, despite budgeting to reduce them, and this has been a consistent trend over recent years.
The Audit Commission identified two factors that appear to have driven that growth. Some councils were highly effective in meeting their savings targets, creating underspends, which could be added to reserves. For instance, in 2011-12 the total service spend, excluding education, fell by 7.4% against a target of 6% in single tier and county councils and by 8.9% against a target of 9% in district councils. The second factor identified was that councils were,
“putting money aside to mitigate the risks of the ongoing cuts programme and changes to council funding from April 2013”.
That is all very sensible stuff, I would have thought.
The biggest concern expressed by auditors about the financial problems was that councils might try to address their 2011-12 problems through capitalisation requested under exceptional circumstances or unplanned use of reserves. It seems that councils cannot win, whatever they do. Does the Minister have any tips—perhaps one of the 50—about what is a reasonable level of reserve for a council, and would that be about the same level as the then Councillor Pickles stashed away when he was leader of Bradford Council?
We should not forget the impact on jobs in local government. Thousands have already gone and many more people will lose their jobs in the future. Thousands of years of collective experience will be lost.
Local authorities have had their improved efficiencies thrown in their face. They are subject to needless media attacks from the Secretary of State and at the same time they are to be given the dirty job of sending out council tax bills for the first time to people who can least afford it. I was trying to think of an appropriate song for local authorities to illustrate how unloved they must feel by the coalition Government. The only one I could think of was “Nobody Likes Me (Guess I’ll Go Eat Worms)”. That was not quite right. There was another one, however, an old Gracie Fields song, which was “I’m A Lonely Little Petunia In An Onion Patch, Oh Won’t Someone Come And Play With Me?” Perhaps they are a little twee for such a serious subject; other suggestions would be welcome.
Lord McKenzie of Luton
My Lords, I thank my noble friend Lord Smith for initiating and leading this debate today and acknowledge his record as a responsible and progressive leader of a local authority. I should make clear the position of Luton, so that it is on the record. Like lots of other authorities, we have had to face significant redundancy programmes, tens of millions of pounds of cuts, we now share a chief executive with two other authorities and we increased council tax last year. I said to the current leader of Luton Council, Councillor Hazel Simmons, that I would hate to have to face the problems that she has to tackle. In my day we may have agonised over a million pounds here or there, but nothing like the scale of things which councils are facing today—councils such as Luton, Wigan, Newcastle, Basildon, Durham, Pendle, and many more. I express my admiration, therefore, to those such as Councillor Simmons and my noble friend Lord Smith who stay at the helm and do their best to cope with the challenges that this Government confront them with and who use their democratic mandate to seek to protect the most vulnerable.
Our main focus today has been on the local government finance settlement, in the words of my noble friend Lord Smith, “the most complex ever”. My noble friend Lady Armstrong highlighted difficulties with the complexity, information still to come through and the tardiness of it and how difficult that made it to consult meaningfully with local communities and the voluntary sector. The settlement follows on from the first two years of the current spending round, and to see this in context, we should reflect on those first two years, in particular the report of the Audit Commission, Tough Times 2012, which is stark. Over the two years ending March 2013, councils will have had a cut in their funding equivalent to 9.3% of their 2010-11 revenue spending. This amounts to £5 billion. Looking at these two years as a whole, the deprived areas of the north of England, the Midlands and inner London have seen the highest cuts. For the 20 most deprived areas, revenue spending has fallen by 14%; in the 20% least deprived by 4.4%. The juxtaposition of this debate with that led by my noble friend Lady Hollis reminds us that unfairness in distribution of resources is not limited to local government.
We see this also in the latest proposals covering 2013-14 and 2014-15. The 20 most deprived authorities will have their spending power cut by an average of 8%; the least deprived by 0.7%. Once again, the most deprived authorities are to be hit the hardest. The Prime Minister’s local authority will gain 1.1%; Manchester will lose 8.2%. Total central government funding for all local authorities in England will fall by 3.9% in 2013-14, but there will be a swingeing 8.6% reduction in the subsequent year. We must add to that the cuts in the two preceding years and acknowledge that, from the Autumn Statement, we know that this pattern is set to continue to 2018. An efficiency support grant will come as limited welcome news to those few who receive it, Pendle included, but the settlement means that local government will continue to bear the brunt of public spending cuts. It is clear from what the noble Lord, Lord Greaves, said, that access to that efficiency support grant is not going to solve the problems of Pendle. The fact that it could have been even worse, with some of the top-slicing for academies and the safety net less than feared, appeals reflected in business rates aggregate, although perhaps not effectively enough for London, with no extra 2% cut in 2014-15, is cold comfort to those faced with having to grapple with the consequences of the settlement.
What will councils do in these circumstances? Of course, for the Secretary of State this should all be easy—just follow the great man’s 50 tips, and all will be well. It is as though councils had not endeavoured to pursue many of the ideas set out and, indeed, initiated some of them. Perhaps we can review the relevance of some of the suggestions. For example, on the proposition to improve council tax collection rates, can the Minister give us a view on the likely impact on collection rates of the new system of council tax support? Sir Merrick Cockell, chair of the LGA and referred to by other noble Lords, offered the view that most councils will have to ask people on lower incomes, including the working poor, to pay more council tax than currently. What is the Government’s assessment of how many councils will not have a scheme that is either the default scheme or equivalent to it? Research by the New Policy Institute suggests that of the first 130 schemes that it has reviewed, only 38 councils have opted to absorb the reduction in support; more than 90 will pass on the cut to poorer residents. It estimates that some 670,000 working age claimants, including 162,000 low income workers, will face an average bill of £156 a year. What is the Government’s estimate?
The Minister was kind enough to write yesterday, following our debate on 19 December. In that letter, she refers to the basis on which local council tax support funding is to be distributed, which is to be OBR forecasts for 2013-14. However, there is a phrase which states:
“An adjustment was made to mitigate very high budget pressure”.
Can the Minister explain what that adjustment is? We really are about to enter the age of poll tax mark 2.
On council reserves, the Government’s own policies are driving councils’ need for prudence by transferring risk to them. Council tax collection risks are made more difficult by reduced support for the poorest, and business rate collection risks are now to be shared with government. We are at the start of a new system which the Government say that, left to them, they would not wish to see reset until 2020. This is made worse by embedding the disproportionately high cuts that have been weighted against many of the poorer and most deprived areas in the funding baseline from 2013-14. Matters are not helped, of course by, the provisional settlement figures coming later than usual—the noble Lord, Lord Tope, made that point—when they were riddled with errors that necessitated corrections within days.
To date, councils have coped with the cuts by maximising efficiencies and redesigning services, shedding hundreds of thousands of jobs in the process. But, as the LGA and others point out, this will be impossible to do for ever. These cuts will reach, and are reaching, front-line services; there will no longer just be salami-slicing efficiencies, whole services will go. My noble friend Lady Smith made that point with some force. The pressures on councils will get worse, as the need for statutory services, particularly adult services, grows, and resources decline. Council tax freezes are all very well, but even Tory councils, as the noble Lord, Lord Shipley, said, are beginning to realise that they erode the tax base in real terms for subsequent years.
Of course, we hear the mantra that salvation for local councils lies in their own hands, because if they grow their business rate base they will retain half the increase—notwithstanding, of course, that the Government seem intent on applying some of the increase in the local share to reduce revenue support grant. If they build new homes, they will garner the new homes bonus. But as we debated when the Local Government Finance Bill was under consideration, not all councils have an equal ability to do this. Tight urban areas may simply not have the land to expand the business base, and the general squeezing of budgets, with the inevitable focus on statutory services, reduces discretionary spend on councils’ economic development services.
In any event, local councils are not totally masters of their own destiny in this regard. The Financial Times today carried an article about the tightening of capital rules for banks by the FSA, which could cause the scrapping of property developments outside London. There is not much that councillors can do about that.
There are, of course, some interesting messages in the recent report of the noble Lord, Lord Heseltine, No Stone Unturned in Pursuit of Growth, where he espouses the benefits of unleashing the entrepreneurial spirit of local areas; we agree. However, government itself has to have a strategy for growth if this is to be meaningful.
There has been much discussion about the consequences of the settlement for local councils and for taxpayers—and also for the challenges facing councillors. The real victims, however, are not the institutions or even the elected members: they are the individuals and families who rely on the services that the councils provide. These are vital services which, in some cases, keep people alive, and which ensure that individuals can have a decent quality of life. They are services which give a meaning to community and a sense of belonging. We lose all this capacity at our peril.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, along with other noble Lords, I thank the noble Lord, Lord Smith, for generating this debate. It has not been very long since we had a previous discussion about the local government finance settlement just before Christmas, and here we are again. None the less, I also want to thank the noble Lord for the measured way in which he introduced the debate. He has a lot of common sense and experience, which comes out in the way he speaks.
I was asked, by the noble Baroness, Lady Armstrong, most particularly, about the delay in the provisional settlement. It was later than we would have wished and we appreciate that that has caused a great deal of late assessment. As the noble Baroness and others will know, the annual Autumn Statement was late this year, so we could not get out the provisional settlements any time before that was done. However, I reassure her that we are working to publish the final settlement as early as possible in February. We have made clear to other departments that local government needs all funding allocations—£150 million for the early intervention grant topslice, for example, and the public health grant that has now been announced—as soon as possible. In the interim, noble Lords will know that we have each year been receiving local authorities that have come to discuss their own settlements; no decisions have yet been made on what they have put forward, but they are in the process of being considered. As a department, we have not been sitting back just letting things happen; nor are we unaware of the difficulties that this has caused.
Sometimes, I think we look at this from different ends of the telescope, but I want to say that I appreciate that local government is in a changing situation. It is required to make major decisions as the financial position has moved us into having to reduce its grant. I do not want anybody to think that the department itself is sitting in luxury. It is not: we have lost nearly 30% of the grant that is given to local government, and if we do not have that, we cannot pass it on. We are feeling the pinch as well; the noble Baroness, Lady Armstrong, will know that there has been a huge reduction in the number of staff.
Councils account for a quarter of all public spending. This year, they will spend more than £114.5 billion. That is larger than the budget of the National Health Service, and twice the entire defence budget. It is also more than double the debt interest, so we are not talking about peanuts here. We are talking about a very substantial slice of the nation’s budget. It is vital that local authorities continue to play their part in tackling the inherited budget deficit. They have to make sensible savings and deliver value for money for the taxpayer.
I know that no noble Lord who has spoken will agree with the following statement but we believe that local government has been given a good deal in 2013-14. It is worth noting that it was exempt from further reductions in the Autumn Statement. We could have lost another 1%, which did not happen. The important protection that this provides will give local authorities time, I hope, to look at where they can change services and manage savings, bearing in mind that next year will probably not be any better.
This is the beginning of a new settlement. It is a fundamental change from the old ways of working. Councils will be expected to make changes, which I appreciate is not always easy. The accusation has been made that this budget or settlement is not fair but I disagree. We think that it is fair. Of course, because of the way in which the formula works, there are differences in certain areas. Northern councils have not come off worse than anyone else. We understand that some areas got less than they anticipated but the north-south split was not part of a formula. We have retained the four floor dampings and the protection that they offer most councils. This year, we have gone further and stretched the banded damping floors so that they give more weight to the councils that are most dependent. At the same time, the Government have introduced banded floors for fire and rescue services.
We also have restored the level of the relative resource amount to that for 2010-11 to help authorities with a low council tax base. We have introduced a safety net to provide additional protection where councils are likely to lose resources. Noble Lords will know that, between the top-up and tariffs, no one will be worse off than having 92.7%. There will be a safety net on the business rate to help provide that, which will help to ensure that service provision does not suffer as a result of volatility in the council’s business rates. The noble Lord, Lord Smith, referred to the reduction in the business rate and what would happen if there was a big drop because, say, a business went out of business. The answer is that the safety net would pick that up and there would be a within-year settlement. There would not be a big problem.
Next year, councils will host new financial incentives to increase their income. If they build more homes—we have heard a lot about the new homes bonus—they will benefit. There was a suggestion that the new homes bonus would be cut. The new homes bonus is as it was expected to be. There was to be topslicing next year but local authorities have asked that most of that new homes bonus should go into the settlement, which has happened. The new homes bonus is already contributing to the budget. It also is worth noting that the new homes bonus does the job it is meant to do. It pays for, and helps to pay for, the development of new homes. Empty homes also benefit from the new homes bonus. While it is not ring-fenced, it supports local authorities in providing infrastructure that will support homes.
There is also up to £1 billion in community infrastructure levy. I was rather taken aback to hear a noble Lord say that councils could not do what they want. The general power of competence is a very fundamental part of giving councils responsibility for all their own decisions and for what they can do. There is the benefit from the £2.4 billion Regional Growth Fund and the £770 million Growing Places Fund, so there are other sources of money coming to local councils.
The noble Lord, Lord Smith, acknowledged that councils will have to achieve savings and I acknowledge that they are doing so. The noble Lord, Lord Tope, asked me to say thank you to local government, which I have no hesitation in doing. As a former part of local government, I know and I appreciate what it does and I know that councils have an enormous amount to do in supporting their local communities. That is the view across the department and of our Ministers. We appreciate that that is so. If it was not so, we would not be passing any of the additional powers or responsibilities that we are to local government. I hope that will underline a little how the noble Lord, Lord Tope, and we feel about local government.
Returning to the noble Lord, Lord Smith, and others, he was gracious enough to accept that local government was going to have to achieve savings and everybody has known that. There has also been a huge amount of advice as to how those savings might come about and a great many local authorities are already following that. They are sharing chief executives, back-office services and contracts for open spaces and waste management, but not all of them are doing that. Those that are behind need to learn from those that are doing it. The Local Government Association—to give it its due—has some very powerful peer help for local authorities. Those that are not doing it and do not understand it need to ask for that help, which I know is there.
The noble Lord, Lord Smith, who made all the major points, also mentioned the collaboration between public bodies. Community budgets are great and the four whole-place budgets will now be extended out. They are demonstrating very clearly that where public bodies get together, they can pool their funding and work together to help individuals. Troubled Families is a good example of co-operative work where not everyone is tootling off, doing the same thing for the same family, but one person has responsibility. This is beginning to work and beginning not only to save money—that is not the only purpose of this—but to set those families on a road which will, we hope, lead them to jobs and their children into education, away from all those things that were holding them back.
Community budgets are not as specific as the whole-place budgets but they also demonstrate that you can bring public bodies together to manage their budgets better. When I was a leader of a council, you could not do that. I often said it was like being in a little kingdom with a wall around you. You could not share budgets so this is a great move forward.
The other thing that was brought up in particular was the business rate appeal. Room has been made within all the settlements to allow for appeals. There is headroom now—I think of about 8%—to settle these problems. The Local Government Association and the department have spent a long time agitating together to see if this could be done on a more individual basis, but it just is not possible because the number of outstanding appeals is not known. The support has been given and is there so I hope that that will be understood.
There was some concern about rural local authorities getting more than other authorities. In fact, rural authorities are a bit peeved as they feel that they are getting less than others. One needs a balanced understanding of who is getting what. The noble Lord, Lord Greaves, suggested that the shire district councils were worse off and said that Pendle, Hastings and Great Yarmouth councils could bid for an efficiency support grant. He will know that the efficiency support grant is allocated to seven councils so that their spending power is not reduced by more than 8.8%, which is the level for all local authorities. Anybody who has studied the figures will know perfectly well that there is a range here. Some local authorities do better than others as regards spending power but the relevant councils stood out as being ones that were very much losing out.
The retention of the business rate will, of course, have different effects in different parts of the country. The noble Lord, Lord Greaves, was right to point out that it will be easier to retain it in some places than in others. We will need to monitor how that works. However, local authorities have asked repeatedly to retain the business rate. Although they clearly cannot keep all of it, this is a good step in the right direction. As we have made clear, we hope to raise the 50% figure slightly as the financial situation improves. I make no promises in that regard but I hope that that will happen in due course.
A number of specific questions were asked, which I will need to look at to see whether there is anything further that we need to take on board. I wish to finish my speech by commenting on the council tax freeze. That issue is very important as it has meant that local taxpayers have been protected from large council tax increases. The noble Lord, Lord Shipley, said that it was up to councils to decide the level of council tax that they needed to levy and that they should be able to impose it. However, that was the old position and it caused a great deal of angst and upset. For that reason it was decided to limit council tax increases. Local councils can increase their tax this year by up to 2%. If they feel strongly that they need to go above that level, they have to put their case to their local residents and ask them whether they are happy for that to be done. Therefore, rather than just being faced with a rise in council tax, residents will be asked whether they think that it is appropriate. That seems to me not an unfair way to proceed.
I will draw my remarks to a close before I run out of breath and can no longer speak. I thank all noble Lords who have contributed to this interesting debate, in which some looked at this issue through a different end of the telescope from me. However, that does not surprise me.
Lord Smith of Leigh
I thank all noble Lords for their contributions to this debate, particularly the two who were so keen to contribute that they found the stamina to participate in two debates today.
The general theme that emerged in the debate concerned what the basis of funding for local authorities should be and whether it should be based on the ability to raise revenue or on need and deprivation. We shall need to come back to that theme. Noble Lords talked about the complexities and difficulties of the new system. A number of noble Lords, including myself, mentioned the problems associated with valuation appeals and the impact that that might well have in some areas. The noble Lord, Lord Tope, mentioned that issue and I agree with his comments in that regard. The provision will cause difficulties in lots of areas and London may be worst affected.
My noble friend Lord Beecham concentrated on needs. Clearly, coming from the north-east and Newcastle, that is something that he understands. None of us wants to be in an authority that is dependent and has high deprivation. We want to work to get rid of deprivation but we will not do so without support.
The interesting part of the contribution from my noble friend Lady Smith of Basildon was the Basildon letter. Presumably that letter is going to local authorities across the country and is obviously making many people worry about their jobs. It is a very difficult matter. I have been undertaking an exercise in my authority where we have been talking to front-line staff. It is not easy when you know that, as you explain the issues in local government, particularly funding, some of the people you are talking to may not be there come 1 April.
As usual, the contribution of the noble Lord, Lord Greaves, was interesting. When he talked about his seven authorities, it illustrated his point about how settlements these days seem to be skewed, as it were, towards success. Authorities that have the ability to raise business rates or get new homes or whatever will benefit, whereas areas such as his own in Pendle will have much more difficulty and will suffer. He illustrated that very well. My noble friend Lady Armstrong talked about complexity and made the point that it is not just local authorities that are impacted by the local authority settlement but the voluntary sector, which relies on local authority funding. Obviously, if local authorities are taking cuts, there will be cuts in the voluntary sector and, if we get settlements late, they will get them late too.
There was an interesting contribution from the noble Lord, Lord Shipley. He talked about fairness and raised the issue of council tax. If I understood him correctly, the problem with council tax averages—as the noble Lord, Lord Greaves, said—is that it all depends on the banding. If an authority has a huge proportion of band A properties, then its average is much lower than other areas, so maybe raising bands would be quite difficult. My authority rejected the less than generous offer from the Secretary of State to freeze council tax this year. It would have cost about £1.5 million to do it this year and would have deferred the cost into next year. I admired the courage of the noble Lord, Lord Shipley, when he suggested a referendum on increasing the council tax. I proposed in Greater Manchester that we had a congestion charge, which went to a referendum. I still have the scars, so I am not too keen on that.
My noble friend Lady Donaghy took a very brave line when she tried to take a Conservative view of what might have been said, given the absence of contributions from that side. She then spoke about reserves and at the end tried to come up with a song. Whatever song it is, I am sure it will be the blues.
My noble friend from the Front Bench, Lord McKenzie of Luton, obviously defended his own authority, quite rightly. However, I thought there was an anomaly there that I had to mention. With his experience and expertise he raised issues which we had rehearsed during the passage of the Local Government Bill and which we need to think about. He stressed—as many of us did—that we are talking not just about the impact on institutions such as councils, which is mostly ongoing, but about the impact that these cuts will have on individuals and communities.
Finally, the Minister, in her usual charming and informed response, replied as best she could about the issues raised. She talked about the role and size of local authorities. We agree that, if there needs to be a reduction in public spending, part of it will have to come from local authorities, but it should not be disproportionate. That is the issue. We will obviously disagree about whether it is a good deal or not. The good news is that we are exempted from the Autumn Statement this year, although we may not be in future. The Minister tried to explain the concept of fairness by saying that she had been attacked by all sides. Of the three points that she raised, she probably accepted that we will have more collaboration and that we will monitor what is happening in the settlement, so perhaps two out of three is not bad. It is a better strike rate than most strikers in the Premier League, other than van Persie.
Unemployment: Young People
(11 years, 10 months ago)
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Lord Chadlington
To ask Her Majesty’s Government what is their assessment of the use of online tools, including social media, to combat youth unemployment.
Lord Chadlington
My Lords, there will be no argument in this House that to have 945,000 16 to 24 year-olds—roughly six times the population of Oxford—out of work in the United Kingdom is a blight on our society. Youth unemployment is 20.3%: 100,000 of these young people have been out of work for more than two years; 266,000 for more than 12 months; and 436,000 for more than six months. One new graduate in every five available for work is unemployed and 36% of recent graduates are employed in lower skilled jobs. A YouGov poll commissioned by the independent Million Jobs campaign, with which I am involved—and I declare the interest—revealed that voters considered youth unemployment, behind the economy and immigration, to be the third most important issue facing the country, and 80% consider government policy to be ineffective.
Work builds families, affirms personal values and binds communities together. Being out of work for long periods impacts health and well-being. Youth unemployment cost the Exchequer more last year than the entire further education budget for 16 to 19 year-olds in England. The digital world, particularly the social media, seems to be an ideal platform to reach out to these young people in their own language and medium, motivating and informing them about employment opportunities. Online tools are how 16 to 24 year-olds communicate and keep abreast of events: 82% of young people use the internet to look for advice and information, and 95% of 16 to 20 year-olds and 74% of 21 to 24 year-olds have used Facebook in the past four weeks.
The digital economy, with which these young people have such facility, is what many businesses, particularly SMEs, are demanding—20% want a web designer, 12% see e-marketing as key to growth and 10% want help with customer management systems. More than three-quarters of businesses acknowledge that young people have these digital skills in abundance. Some 90% of the young unemployed tell us that they can use social media to promote an idea or cause. Nearly 70% can design a web page, 20% develop an app, and many are confident at coding or working with databases. Yet less than 25% of businesses will offer these young people a first-time job or training opportunity. O2 estimates that the unused digital skills of the young unemployed are worth some £6.7 billion to the British economy. Can it really be beyond the wit of government and man to bring together these skills with the digital needs of business?
However, many young unemployed have no skills to apply for work. Jobs Network—a site which colleagues and I have developed; again, I declare my interest—enables those leaving an individual school or university to access advice and help from alumni and from local businesses providing work experience. It provides help in preparing a CV, interview techniques, practical mentoring and career advice. Schemes such as this have real scalability and could be rolled out across schools throughout the United Kingdom.
The Government recognise the importance of online communications. Gov.uk is an excellent source of general information; Universal Jobmatch is the Jobcentre Plus online service; and Plotr and FutureYou are excellent first steps. However, despite this, we are not maximising online potential. Most government-run and funded initiatives are patchy, ill co-ordinated and not geared to what young people want, but rather geared to what government wants to provide.
At Million Jobs, the unemployed tell us that they want an online one-stop jobs shop that provides a complete service, including mentoring. They are looking for a national equivalent to our Jobs Network. Plotr shows some promise of providing this but does not have mentoring and networking capabilities. Research suggests that this and other government-funded sites appear to be too patronising in tone and too basic in content. Every government employment initiative has its own website but they are not co-ordinated, one is not linked to another and they are boring and lack focus. The coalition Government inherited 750 public sector websites, which demonstrates the extent of waste and confusion when it comes to an online co-ordination strategy.
Lessons can be learnt by considering successful initiatives in the private sector. O2’s online campaign, Think Big, has been a success because from the first visit it is fun and engaging, and its success shows the benefit of sustained and integrated promotion, with 4,200 Twitter followers and an ongoing editorial press campaign. Similarly, Livity, a youth-engagement agency, works with young people to create innovative new campaigns. Clients such as Google, Roundhouse and the NHS receive a unique insight into young minds, and in return Livity’s young people get excellent training and employment opportunities.
Some of the government-run sites are impossible to use. Fewer than 10% of student-loan applications are fully transacted online because of the complexity and frustration involved.
The private sector also recognises that there is an inherent contradiction in the way that social media work. Most people use social media to communicate and engage with and mobilise each other. It is therefore very much a bottom-up way of communicating. Anything that suggests top-down control will, by its very nature, deter already disillusioned young people. In a recent discussion about this anomaly with the Department for Work and Pensions this difficulty was confirmed. It has piloted 10 Facebook pages that have not met expectations.
There is a need for the social-media drive to be co-ordinated, and to interact with young people through channels that they use and have established themselves. Real attention must be paid to mentoring. Of course, that is where Jobs Network succeeds, by linking school leavers and university graduates to mentors in their local communities. This approach is supported by a recent report on youth unemployment. Compared with young people who sought no career advice, those who had discussed job opportunities with four or more employers were almost twice as likely to report having a good idea of the knowledge and skills needed to do a job, and they are more than twice as confident about their ability to find a good job too.
Over the past 30 years the UK has had an average of some 500,000 young unemployed people. Online and social networking provides a unique avenue by which we can reduce this horrendous waste of human talent and energy. So I have two big questions for the Government. First, how do they expect to link the online skills of the young to the needs of business?
Secondly, how can the Government develop a coherent online strategy that achieves at least five things? The first is a recognition that online communications require a bottom-up and not a top-down structure. Secondly, the tone of online communications, if they are not to be ridiculed or ineffective, cannot be patronising. Thirdly, with so many government initiatives being taken, they need to be co-ordinated and focused. Fourthly, there is much to be learnt from the way that the private sector has developed its own initiatives in this area. Finally, investing real money in getting the young into work will save the Exchequer billions of pounds, help keep our families and local communities together, and prevent this young generation being a lost generation. Can the Minister please take each of these points in turn and outline the Government’s attitude and policy towards them?
Lord Ramsbotham
My Lords, I congratulate the noble Lord, Lord Chadlington, on obtaining this debate and on his masterly survey of the current situation. I hope that he will forgive me if, before focusing on combating unemployment among youth in contact with the criminal justice system, I take noble Lords on an indirect approach to my conclusion about the context in which online strategies can be employed, inspired by two sentences in the UK Commissioner for Employment and Skills, Valerie Todd’s, foreword to her report, The Youth Employment Challenge, published in July last year:
“Lack of experience combined with a lack of social contacts in a labour market which still relies heavily on informal methods of recruitment makes it increasingly difficult for young people to get a foot on the ladder”.
Secondly,
“Commissioners are committed to encouraging and incentivising UK employers to embed a culture of developing and recruiting young people into routine business practice. It is in all our interests to rise to this challenge”.
I am one of those who believe that the only raw material that every nation has in common is its people. Woe betide it if it does not do everything that it can to identify, nurture and develop the talents of its people—all its people. If it does not do that, it has only itself to blame if it fails.
I declare another interest in youth development as a past member of the City and Guilds strategy board at the time of what I regard as one of the most disastrous political decisions ever made. It was the refusal by the then Secretary of State for Education and Skills, Ruth Kelly, to accept the recommendations about raising the status of vocational education made by Mike Tomlinson in 2004. It has resulted in far too many young people being forced to go down academic routes to which they are entirely unsuited rather than having an early introduction to vocational courses and so suitable placements in the labour market.
The lack of vocational training has had another unfortunate result. At a time when the country is crying out for growth, employers are complaining bitterly about the skills shortage that is preventing them from being able to expand and develop their businesses. This is coupled with attitudes to work in general, which include a refusal to consider menial jobs because they are what some term “immigrant work” and an inability to turn up on time.
These attitudes would have come as no surprise to Glubb Pasha, whom noble Lords will remember as the commander of the Arab Legion until 1956. He wrote a monograph about empires which, he said, lasted for 250 years or 10 generations. The British Empire, according to him, lasted from 1700 to 1950. In characterising their rise and fall, he catalogued the drive and ambition of their early generations, followed by the high but turning point marked by universal access to higher education, followed by decline, encouraged by lethargy and lack of ambition, marked by people thinking that their education entitled them to a living.
That may or may not be true, but what is undoubtedly true is the confused state of our world, which is in the midst of an information technology revolution that nobody knows how to control, and whose impact on government, economies and how people live is imperfectly understood. This confusion includes the changing role of people, as labour-saving devices take over, making it difficult to determine how many people are needed and in what jobs to make the world go round and what skills they need in order to earn a living wage.
This is of course simplistic, but it provides a backdrop to the circumstances of the group of people to whose needs I wish to draw attention. It includes the appalling lack of education and job skills in young offenders, which is an indictment of our educational system. I admit that I cringe whenever I hear political parties talking competitively about their “virtual” employment schemes—virtual because they do not in fact offer either real employment or the prospects of such—or putting people back to work, when they know, and I know, that the work that they are promising simply is not there. There is a clear disconnect between the number of jobs available, the skills needed to perform them and the skills base of the potential workforce. I fear that until and unless that fact is recognised and appropriate remedial action taken, the situation can only get worse.
I once had a conversation with the head of education and skills at a young offender institution, who told me that her first task was to motivate young people to want to learn. She also wished that she had vocational training classrooms so that she could motivate them to want to work. She welcomed the aptitude tests introduced by the previous Government under its new deal, because they gave such a clear indication of individual talent and potential, but she could not exploit that knowledge because of the lack of facilities to enable young people to develop their skills.
In parallel, I have also come to the conclusion that the inability of young people to communicate verbally is the scourge of the 21st century. However able they are at digital communication, they cannot communicate either with each other or with their teachers. That is largely due to the absence of what used to be regarded as normal aspects of family life such as eating meals together. The chaotic and dysfunctional lifestyles they live are, almost from birth, dominated by the television screen, computer games and social media.
I accept that that this could be seen as helping them to prepare for life in today and tomorrow’s world by familiarising them with the tools of emerging society. However, there is what is termed a digital divide between those who have access to and can use online tools and the social media, and those who have not and/or cannot. That is why, when considering youth employment, it is important to strike a balance between reliance on these tools, and on the social contacts and informal methods of recruitment that are deemed by employers to be such an essential part of the process of getting on the employment ladder. That leads me to hope that the Government will not put all their youth employment-finding eggs in one digital basket.
That is the end of my indirect approach to the subject of this debate; I will now concentrate on my direct approach. The noble Lord, Lord Chadlington, has already mentioned Plotr, the Government initiative launched by the Prime Minister last year to help young people to plot their careers online. Nick Hurd, Minister for Civil Society, said recently that Plotr had the broad aim of,
“inspiring young people and connecting them to all the opportunities available to them to make the most of their lives”.
That is very worthy and praiseworthy for the digital haves, who have access to online tools and social media, but not so good for the have-nots, who include the 8,862 between the ages of 15 and 20 held in young offender institutions, who face the double whammy of also being denied access to the work experience and social contact that is deemed so essential by employers.
The Justice Secretary, launching his rehabilitation revolution, announced his determination to reduce reoffending, to achieve which a home, a job and a stable relationship are said to be the three most important contributory factors. I expect that the Minister, in her summing up, will commend the use of online tools and the social media to combat youth unemployment, with all the advantages trumpeted by Nick Hurd. However, I hope that she will also encourage the Justice Secretary to ensure that young offenders, for whom everything possible must be done to deter them from a life of crime, are given access to the online and social media tools, if not individually because of security reasons, then at least in learning and skills departments in establishments.
Lord Mitchell
My Lords, I, too, will start by thanking the noble Lord, Lord Chadlington, for securing this debate. Youth unemployment is an incredibly important issue, and it is to his great credit that he raises it today and has spoken so knowledgeably and passionately on this subject. I will also pay tribute to the work he has done in equipping school leavers for the jobs market.
I would like to set out my own background in this area because it is pertinent to what I have to say. I have been involved in information technology for most of my adult life. I started my business career in an environment where data were stored on punch cards and massive mainframe computers were water-cooled. Today, this iPad that I am reading from at this very moment has many thousand times the power and internal storage memory of those massive machines—and I can fit it into my briefcase.
In 2000, when I was first introduced into your Lordships’ House, I founded a charity called the e-Learning Foundation. Its remit was to ensure that every school child in this country had their very own computing device which they could use at school as well as at home. We thought then that the computer should be as ubiquitous as the pencil and we recognised that, in the 21st century, IT skills were critical. Most of all, we were concerned about the problems associated with the digital divide, which the noble Lord, Lord Ramsbotham, has just mentioned, that occurs when the population is segmented into those who are IT literate and those who are not. The devices we first used were laptops and even desktops. They were heavy, expensive and, in the case of the desktop, clearly not mobile. Today we have a new world. Again, the iPad in front of me demonstrates how it has all changed and how the technology today fulfils the criteria we were seeking: powerful, small and mobile. When I read that over the Christmas period, iPads and other tablets were the hottest consumer presents, it comforts me that the objectives we set at the e-Learning Foundation are now close to being met. In a few years’ time, no young person will be without a tablet, much the same as very few are without their smartphones.
When we come to youth unemployment, it seems that there are two sides to the picture. First, as the noble Lord, Lord Chadlington, has already stated, it is an extremely discouraging situation. But the other side is slightly more reassuring. A whole generation has grown up with the skills needed in the 21st century. What we need now is to channel those skills. I contend that with better recruiting methods, the young unemployed can be matched with dynamic companies, particularly smaller ones.
I turn, first, to the challenge. Currently, almost 1 million young people are unemployed in the UK, with 430,000 claiming jobseeker’s allowance. Of particular concern is the number of young people who are finding themselves in the very difficult position of being unemployed for a long period of time. Almost a quarter of a million are currently among the long-term unemployed, which is at its highest level since 1994. Given that long-term unemployment for the whole population stands at 1.3 million, we need to do everything we can to ensure that our unemployed young do not find themselves out of work for extended periods or even for the rest of their lives. The demise of the Future Jobs Fund is to be regretted, especially since the DWP impact analysis showed that for each person it contributed £8,000 to the economy. The Work Programme, which was designed by this Government to replace the Future Jobs Fund, appears to have been rather badly named because it is not a programme and it does not create very much work. Of the 785,000 people who have been referred to the programme, only 18,000 have achieved what could be a called a job outcome. Essentially, in its first 12 months, the Work Programme has placed only two in every 100 participants into work. That is not very impressive. I shall put it more strongly. The Government have a habit of announcing shiny new policies, each of which grabs a quick headline, but because they have been ill thought through they wither on their implementation. This is just another example.
I must emphasise to your Lordships that, for my party, youth unemployment is very high up on the agenda. My right honourable friend Ed Miliband has said that the real jobs guarantee would give six months of paid work to anyone aged under 25 who has been out of work for more than a year, and that it would be paid for by a tax on bank employment.
Social media provide opportunities for us to help find jobs for more young people. In today’s world, young people no longer get their news from print, but from their screens. There are downsides to this, of course, but there are also benefits. Equipped with digital skills, young people are in a better position to help companies, many of which are falling behind in their adoption of digital technology. One programme started last November in the United States catches the eye. It is called the Social Jobs Partnership, a collaboration between Facebook, the US Department of Labor and the National Association of Colleges and Employers. It uses five of the biggest job-listing sites in the United States to gain access to 1.7 million vacancies on Facebook and builds upon research from the National Association of Colleges and Employers which shows that companies want to use social media better to contact potential recruits. Some 87% of those surveyed suggested that candidates “like” a Facebook page of companies that they are interested in.
I listened with interest to what the noble Lord, Lord Chadlington, said about his work on programmes to give school leavers the skills they need to go out and find a job. One area that needs to be addressed is personal presentation and interview technique. I know it seems old-fashioned, but too many young people do not have a clue how to present themselves. Even in the digital age, this matters. Maybe peer-to-peer contact would help. I want to address some of this as I proceed.
My mantra on job applications is that you never have a second chance to make a first impression: so make a first impression. I know it seems blindingly obvious, but those looking for a job need to know that they must turn up on time—indeed, before time—for an interview. To be five minutes late and flustered is unacceptable. They should look attentive and dress appropriately. Young people need social skills that may not come easily to them: how to present themselves and how to speak on the telephone. Most of all, they need to do their homework. In a world where information is so easy to come by, why is it that some interviewees do not research the organisation they are hoping to join? In my view, it is because the education system has failed them. Schools and universities need to do more in instructing young people how to prepare for job-seeking and interview technique.
Young people also need to be aware of the perils of the digital world. Digital presence is very important, from the wording used in an e-mail to what they put on their Facebook page. Employers look on Facebook and it is not helpful if silly videos, or worse, are on their sites. CVs need to be better. I am associated with a wonderful organisation called the Amos Bursary, set up by my noble friend Lady Amos and her sister. This charity helps young black men find their way to full-time employment. For some of these young men, university can be very daunting, and for one reason or another they lack personal networks. Mentors can help.
Social networking sites offer young people the opportunity to link in with the outside world. I believe that much more can be done. LinkedIn is a good example. Many of us use it and it seems to be geared to the professional classes, but why should it be just them? It is free, so why is it not used by more young unemployed people?
In my family two young people have set up companies, by coincidence, in the graduate recruitment sector. I need to declare this interest. First, my own nephew, Keren Mitchell, is a founder of the JobCrowd, and my son, Felix Mitchell, is a founder of Instant Impact. Both are relevant to these points. Sometimes family gatherings are interesting.
The JobCrowd is the graduate recruitment equivalent of TripAdvisor, which provides anonymous references for hotels and restaurants. In this case, the site enables job applicants to get inside information from their peers who already have jobs. They answer questions such as, “What is it really like?” and, “Can I believe what I’m being told?” Instant Impact places graduates with small and medium-sized companies—in particular, paid interns. I want to say a little about this before I finish.
Competition for jobs is very high and every applicant is doing his or her best to make their CVs seem as interesting as possible. Internships really matter and the sad fact is that many young people believe that it is necessary to take unpaid positions just to show that they have a track record. Students doing holiday jobs are one thing, but people having to work for nothing is simply wrong. Many of the worst offenders are in the NGO or charitable sector. To be honest, charities that I have personally been involved in have also done this, so I am not without guilt. Companies do it, particularly those in media and marketing, where young people are willing to sacrifice their pay just for the glamour. It also exists here, in this Westminster village. How many MPs and members of your Lordship’s House have unpaid young people working for them just so that they can put this placing on their CVs? It is wrong; it must change, and change quickly; and we should set the example.
This digital age is presenting new opportunities in so many ways, but the most successful of all has been social networking. If we can use this technology to help solve the iniquity of youth unemployment, we will have achieved a lot.
Baroness Stowell of Beeston
My Lords, I am very grateful to my noble friend Lord Chadlington for securing this debate. I feel as strongly about youth unemployment as everyone else who has spoken today. First, I associate myself with the comments made by the noble Lord, Lord Mitchell, about presentation and the importance of communication. Like the noble Lord, I believe it is essential that people get it right because there is only one chance to make a first impression.
I also very much share the views of the noble Lord, Lord Ramsbotham, about the importance of vocational education and of people having a clear route to success via that road if an academic route is not right for them. It may interest noble Lords to know that I was a teenager in the early 1980s and did not go to university. I do not remember anybody encouraging me to go but that may have been because I desperately wanted to go to work. I was very fortunate to have two wonderful parents, who said to me that getting a job, being dedicated to it and doing it to the best of my ability would be a route to success. I will leave others to judge whether I have achieved success so far but I very much understand how important it is for those who do not naturally want to follow an academic route to have other clear options available to them.
Youth unemployment is still too high in this country, as my noble friend Lord Chadlington made clear. However, the levels of worklessness among some young people cannot simply be put down to the present state of the economy. The problem we face, as noble Lords have indicated in their comments today, is much more entrenched than that. For the past decade and longer, too many of our young people have been trapped on the margins, some of them growing up without positive role models or in families where no one has ever held a job, failed by underperforming schools or dropping out of education without any qualifications, and ending up in the jobcentre at 18, unready for the world of work.
Even before the recession, youth unemployment had started to rise. In 2001, just over half a million young people were unemployed. By 2007, that number had already increased to just over 700,000. As all noble Lords agree, we cannot afford to neglect the next generation. Whether it be keeping them in school or vocational training, or helping them into work, this Government are committed to supporting young people, ensuring that they realise their potential.
Even in these tough economic times, we have seen that it is possible to make some progress. Youth unemployment is down by 72,000 in this quarter alone. If you take out those in full-time education, that fall is even greater—down 90,000 to 626,000, the lowest figure since the beginning of 2009. However, we are not complacent, and I am not here to talk down the situation. There are promising signs that the steps we are taking to tackle youth unemployment are having an effect but, clearly, we need to do more.
I will come to online issues in a moment but will first say something about investment and how we have radically changed the way we are approaching the issue of youth unemployment in this coalition Government. Through the £1 billion Youth Contract, this Government have brought together previously piecemeal provision and underpinned it by greater funding, scope and ambition. With the DWP, the DfE and BIS working together, the contract offers intensive employment support for young people, targeted at addressing the particular barriers they face.
We know that a lack of experience often proves a problem, so we are creating an extra 250,000 work experience places over the next three years. Of 65,000 young people who have started work experience already, nearly half are off benefits 21 weeks later. We know that for businesses, employing a young person comes with both a cost and a risk attached, which is why we are offering 20,000 new apprenticeship grants and 160,000 wage incentives to encourage employers to take on young people. By easing the costs, it becomes more straightforward to give young people a chance. However, we are also emphasising the potential benefits to employers, which is incredibly important—a point made most forcefully by my noble friend Lord Chadlington. As he said, young people are what is known now as “digitally native” and can offer skills that are valuable to businesses, certainly to small and medium-sized businesses that might not naturally have those skills already available to them in their existing workforce.
In the DWP, alongside these valuable interventions, we are harnessing online tools and channels ensuring that our employment services reflect how claimants—and young people in particular—choose to interact. I have given a range of examples but the most recent and significant is the Universal Jobmatch; an online service which has transformed the way people look for and find work. It is simpler and quicker for jobseekers to use, with alerts when new jobs are posted. It provides a free service for employers, and the service also benefits Jobcentre Plus advisers by modernising how they review claimants’ work search activity.
However, as the noble Lord, Lord Ramsbotham, said, we must recognise that not all people have access to the internet, and that not everybody has the skills to be able to use these kinds of services. I would say to the noble Lord that even the most basic jobs these days do require some form of digital skill, even if it is just data-entry in a warehouse. We must recognise that if someone is not able to use some of our online services to find jobs, it is our responsibility to make sure that they are trained so that they can use those services, because they will need those skills once they arrive at work. I was interested to hear that the initiative that the noble Lord, Lord Mitchell, said that he launched when he first entered the House of the Lords was his e-learning foundation and the provision of devices. I wish him continued success with that.
I turn now to what we are doing for those still in school and the points made by my noble friend Lord Chadlington about online communication to promote opportunities—all of which I agree with. I believe that the bottom-up approach and co-ordinating our effort are not mutually exclusive—neither is his point about tone. We need to do all these things, as well as learn from what works in the private sector and be open to new initiatives that we do not run ourselves.
One national service that is available is the National Careers Service, which was launched in April last year. It supports young people in making training and career choices. I note what my noble friend said about some of the services available, but I am sure that a service that is less than a year old is seeking to improve what it offers continually, learning from the experiences of those who use it.
UCAS is independent of government and provides an online application service for those wanting to pursue further and higher education. Picking up one of the points that my noble friend made about ensuring that there is co-ordination of services, it is worth reminding ourselves that one of the advantages of the digital and online world is that users like to be able to access data and adapt it—to use it in ways that best suit their needs. That lends itself to—and points towards—not necessarily having a single shop that is nationwide and available, but making something accessible so that people can adapt it.
The Government have recently made data available that compares university courses—this is on a website that we run called Unistats—but we are also making that data widely available. The consumer service Which? has taken advantage of this and has already adapted that material into its website, which is available to those who want to be able to see and compare directly how different courses might provide the kind of training and education that they want.
The National Apprenticeship Service provides information on a nationwide basis, but we know that there is more we can do to promote the schemes available. We think that the idea set out by the noble Lord, Lord Adonis, in his article in the Financial Times earlier this week—that UCAS should become an integrated higher education and apprenticeships service—is a great one. We have noticed that UCAS is enthusiastic about this as well and David Willetts is already pursuing this.
All these national services are tweeting and using social media to communicate what they are doing. I myself have retweeted things in the past to promote what they are doing. But we must be careful that we do not try to control too much from the centre. As with the great initiative that the noble Lord, Lord Mitchell, referred to, TheJobCrowd, if something is working and people are using it, far be it from us to seek to control it.
As my noble friend said, plotr.co.uk is a new website arising from a partnership of businesses in response to the Prime Minister’s direct challenge to find new ways to inspire young people to broaden their horizons. That is something that we want to see continue. However, as and when new local schemes, such as the Jobs Network, which my noble friend mentioned, get off the ground and achieve results, we want to hear about them so that we can promote them to other schools for heads to consider. Earlier I talked about today’s debate to my honourable friend Matthew Hancock, the Minister for Skills, who works out of both BIS and the Department for Education. He asked me to inform my noble friend that he would welcome learning more about the Jobs Network.
The noble Lord, Lord Ramsbotham, pointed to the risk to young offenders of long-term unemployment. It is worth pointing out that when young offenders are released they are referred directly to the Work Programme at the start of their claim. This provides intensive support and providers are incentivised to support this group as being in need of particular support. Perhaps the noble Lord is aware that there was a debate earlier this week specifically about support and training for young offenders. If he has not had an opportunity to read that debate in Hansard, he might be interested in the response that my noble friend Lord Ahmad gave to that debate.
In conclusion, we cannot underestimate the challenge of youth unemployment, especially in an uncertain economy, nor the damage we would do if we did not support our young people to be ambitious for success. By providing more training, work experience and opportunities for young people via the online channels that they use readily and often, we are giving individuals a chance to prove themselves and to secure a better future, which everyone here today wants to achieve. From a personal point of view, we must ensure that we do not define success too narrowly. For me, success is doing what you do as best as you can, and I want all young people to be able to experience that.