House of Commons
(11 years, 10 months ago)
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Prayers
(11 years, 10 months ago)
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Hon. Members
Object.
Bill to be considered on Tuesday 5 February.
City of London (Various Powers) Bill [Lords] (By Order)
Second Reading opposed and deferred until Tuesday 5 February (Standing Order No. 20).
Oral Answers to Questions
(11 years, 10 months ago)
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Jessica Lee (Erewash) (Con)
1. What fiscal steps he is taking to encourage private sector job creation.
Mr Brooks Newmark (Braintree) (Con)
6. What fiscal steps he is taking to encourage private sector job creation.
The Chancellor of the Exchequer (Mr George Osborne)
More than 1 million private sector jobs have been created since the first quarter of 2010 and employment is at a record high. We are supporting more job creation by further reducing the rate of corporation tax to 21%, and since 1 January we have been helping businesses large and small to invest, with a temporary tenfold increase in the annual investment allowance. We can afford these tax reductions in part because we are taking tough action on tax evasion. I can confirm to the House that last night Her Majesty’s Revenue and Customs received £340 million from the Swiss Government, a first instalment of the deal we have struck, and the first time in our history that money due in taxes has flowed from Switzerland to the UK, instead of the other way round.
Jessica Lee
I warmly welcome the announcement that my right hon. Friend has just made. I am sure the fact that a fairer share of tax is being paid will also be warmly welcomed by my constituents in Erewash. Does my right hon. Friend agree that another important aspect of private sector job creation is the role of apprenticeships? Companies such as Derwent Analytics and TecQuipment in my constituency have an important role and are enriching young people with opportunity and skills for the future.
Mr Osborne
My hon. Friend is right, and I am glad she welcomes the deal we have struck with Switzerland—a deal, by the way, rejected by the previous Government. Apprenticeships are vital in helping to create that skilled work force. More than 1 million people have started apprenticeships since 2010 and in her constituency alone there has been a 42% increase. I am delighted that successful businesses in her constituency are helping to train the work force of tomorrow.
Mr Newmark
Does my right hon. Friend agree that the Government’s generous tax incentives provided by the seed enterprise investment scheme not only stimulate investment by angel investors for start-ups, but help create jobs in the private sector?
Mr Osborne
I do agree. The seed enterprise investment scheme has succeeded in getting money into start-up businesses and we currently have the fastest rate of business creation in our history. I take this opportunity to thank my hon. Friend for all the work he has done, going around the country promoting the scheme.
John Healey (Wentworth and Dearne) (Lab)
If everything is going so well in the jobs market, why is the number of people on the dole long term the highest for 15 years? Why has the number of young people in Rotherham out of work for more than 12 months tripled over the past year? When is the Chancellor finally going to act to give people real help with jobs?
Mr Osborne
Of course, we are clearing up the mess that Labour left behind. As we do that, the private sector has created over a million new jobs, unemployment has been falling, employment is at a record high, and female employment is at a record high. I would have thought the right hon. Gentleman should celebrate that, rather than talking it down.
Alison McGovern (Wirral South) (Lab)
Private sector job creation is not working for young people. In January 2011 I asked the Government how many young people they would be paying out the dole to by the end of this Parliament. They said 279,000. In December 2012 they had to up that figure to 310,000, an extra 31,000 young people who they predict will be on the dole by the end of this Parliament. Who does the Chancellor blame for that planned increase in welfare spending—himself or the Secretary of State for Work and Pensions?
Mr Osborne
The claimant count has fallen on the most recent measure, which was published last week. As I said, 1 million jobs have been created in the private sector. We are also, as my hon. Friend the Member for Erewash (Jessica Lee) reminded us, creating the apprenticeships to give these young people the skills they need, which the previous Government were not providing, to compete in the modern economy. I would ask the hon. Lady to get behind the education and welfare reforms needed so that people have the right incentives to work and the right skills to get a good job in future.
Mr Andrew Tyrie (Chichester) (Con)
The recent cancellation of the rise in fuel duty in the autumn statement was very welcome news for all our constituents, and it will help with jobs. Our constituents now need greater certainty about future rises, so will the Chancellor accept the Treasury Committee’s recommendation, published today, that he should use the Budget to set out a clear medium-term strategy for fuel duty?
Mr Osborne
My hon. Friend is right to remind us that fuel duty is 10p per litre lower than it would have been if we had stuck with Labour’s Budget plans. We have also, as a medium-term measure, abolished the fuel duty escalator that the previous Government put in place. He mentions the Treasury Committee’s report. I hope that, as Chair of the Committee, he will welcome the fact that we have got the money in from Switzerland, because one of the issues that the report raised was whether that money would be forthcoming, and the fact that it came last night was very welcome.
Chris Leslie (Nottingham East) (Lab/Co-op)
While the headline rate of unemployment is falling, is not rising long-term unemployment bad for society, as my hon. Friends have been saying, but bad for the Exchequer too, because it is one reason why so far this year the deficit has been going up, with £7 billion more borrowing than in the same period last year? Can the Chancellor at least bring himself to admit that?
Mr Osborne
Unemployment rocketed because of the disastrous economic policies of the Labour party, and the deficit rocketed too. The good news is that 1 million jobs have been created and that the deficit has come down by 25%. Perhaps one day we will get an economic policy from the Labour party and we can make comparisons with what it would do in office. Until then, the hon. Gentleman should get behind the measures to clear up the mess that he left behind.
Ian Lavery (Wansbeck) (Lab)
2. How many households no longer eligible for child benefit have opted not to receive it.
Barry Gardiner (Brent North) (Lab)
8. How many households no longer eligible for child benefit have opted not to receive it.
The Economic Secretary to the Treasury (Sajid Javid)
The Government estimate that in the 2013-14 tax year over 1 million out of 8 million families are affected by the new charge. As of 24 January, over 340,000 recipients have opted not to receive the payment. The charge will raise over £1.7 billion each year to tackle the deficit.
Ian Lavery
The Government pride themselves on their fairness. Can the Minister explain to this House what is fair about a one-earner family making up to £50,000 having their child benefit cut while a two-earner family making up to £100,000—twice the amount—is able to retain their child benefit?
Sajid Javid
I know that the hon. Gentleman is a man of principle, and I have respect for him, particularly since he refused to work for the right hon. and learned Member for Camberwell and Peckham (Ms Harman); I do not blame him. I note that on his website he says that he has
“a strong commitment to supporting the…less well off in society.”
He is absolutely right and I agree with him, so perhaps he can explain why he is against a measure that is targeted at the 15% of people who are the highest earners in society. [Interruption.]
Mr Speaker
Order. Question Time must be conducted in an orderly way. It is not for a Minister to suggest that a Member should start getting up and answering questions. It is Ministers who answer questions, and that is the end of it.
Barry Gardiner
Will the Minister discuss with his colleagues in the Home Office and the Department for Work and Pensions the effect of the combined changes that those Departments and the Treasury have made, which mean that a young child in my constituency—a British child whose mother has leave to remain and work in the UK but who is estranged from their British father as a result of his domestic violence—will now not be able to receive child benefit for at least 10 years?
Sajid Javid
The hon. Gentleman raises a very specific issue. I think he will understand that I have not looked at that particular concern of his constituent, but I will be happy to look at it in more detail if he provides me with more information.
Harriett Baldwin (West Worcestershire) (Con)
Can the Minister explain why, at a time when we are having to make such difficult decisions on public spending, it is fair to argue, as Labour does, that we should pay child benefit to millionaires?
Sajid Javid
My hon. Friend raises a very important point. In the 13 years of the previous Government, the welfare budget went up by 62% in real terms; it was out of control. If we are going to deal with the problem that they left behind, we have to make sure that everyone makes a contribution.
Mr Iain Wright (Hartlepool) (Lab)
3. What recent assessment he has made of the effect of the Government’s fiscal policies on the level of long-term youth unemployment.
The Financial Secretary to the Treasury (Greg Clark)
Despite difficult economic circumstances, more people in the United Kingdom are in work than ever before in our history. Unemployment, youth unemployment and long-term unemployment are now falling. Through initiatives such as our city deals programme we will work with local communities to respond to particular local challenges.
Mr Wright
Back in the real world, long-term youth unemployment in Hartlepool has risen by 86% since this Government took office. How much of that increase can be attributed to the Government’s economic policies and which of those policies will the Minister now change to help the jobless youth in my constituency?
Greg Clark
I know that the hon. Gentleman was a member of the previous Government who left the mess that we are clearing up, but I would have thought—[Interruption.] I take an interest in Teesside, as he knows. In his article for the Hartlepool Mail, he said:
“The town’s economy has the makings of a modern, innovative and highly skilled manufacturing”
town. The hon. Gentleman should get behind his town and support the city deal for Teesside that his colleagues are campaigning for.
Mr Julian Brazier (Canterbury) (Con)
Does my right hon. Friend agree that the combination of rising private sector employment in this country and the number of measures that we are taking, including the largest apprenticeship scheme for almost 50 years, is one reason why our youth unemployment is at a much lower level than that in large parts of Europe? It is now past 60% in Spain.
Greg Clark
My hon. Friend is right. It is important that we make sure that our young people have the skills available, and the expansion of the apprenticeship programme is a key feature of that. It is important to send the right message to young people, which is that there is a 90% chance that a young person who joins the jobseeker’s allowance scheme will have a job within a year, and a 60% chance that they will have a job within three months. It is very important that that message gets out and that young people should not be demoralised by the Labour party.
Mr Gregory Campbell (East Londonderry) (DUP)
In parts of the United Kingdom that are highly dependent on the public sector, such as Northern Ireland, does the Minister agree that we need to maximise the private sector to ensure that the hard core of young people who are unemployed get into skills and training programmes so that when jobs become available they are best placed to get them?
Greg Clark
The hon. Gentleman is absolutely right. What he says for Northern Ireland applies to the rest of the country as well, and that is what we are pursuing with our policies.
Mr Philip Hollobone (Kettering) (Con)
One of the best ways to tackle youth unemployment is to encourage the growth of small and medium-sized enterprises. In that regard, may I share with the Minister the good news that Northamptonshire has recently been declared the most enterprising county in Britain, and that in Kettering in the third quarter of last year there were 154 new company formations, a record for the borough?
Greg Clark
I am very pleased to hear that from my hon. Friend, who has to count as one of the House’s most enterprising Members. He will know that Northampton came out very well of the recent cities survey with regard to its record of growth, and it is very important that we support that by getting more jobs and more people into work there.
Helen Goodman (Bishop Auckland) (Lab)
In answer to my hon. Friend the Member for Hartlepool (Mr Wright), the Minister made it absolutely clear that he is completely unaware of the fact that the cuts in the north-east total £4 billion, greater than those in Spain. Is it any wonder that youth unemployment is third only to Spain and Greece?
Greg Clark
The hon. Lady should reflect on the fact that the fall in unemployment in the north-east of nearly 25% is greater than that in any region in the country. She should be celebrating the turnaround in the north-eastern economy to which she and I have been aspiring for many years.
Andrea Leadsom (South Northamptonshire) (Con)
To go with the enterprise taking place in Northamptonshire, may I urge colleagues throughout the House to consider having an apprentice in their own office? I have had apprentices for two years now, both of whom were school leavers from Northamptonshire schools. They do a brilliant job and there are all sorts of facilities available to support that.
Greg Clark
If the apprentices that work in my hon. Friend’s office contribute to her own productivity and innovation in policy production, she is a standing example of the success of the scheme.
Henry Smith (Crawley) (Con)
4. What steps he is taking to help people with the cost of living.
Mr Marcus Jones (Nuneaton) (Con)
5. What steps he is taking to help people with the cost of living.
The Chief Secretary to the Treasury (Danny Alexander)
The Government continue to take steps to support households. The personal allowance will be increased to £9,440 in April 2013 to support hard-working individuals. The cash increase in that year is the largest ever. The 3p fuel duty increase planned for January 2013 has been cancelled, as a result of which fuel duty will have been frozen for two and a half years.
Henry Smith
I thank my right hon. Friend for that answer and warmly welcome the fact that more than 1,700 people in my constituency have been taken out of paying income tax altogether by the raising of the threshold, and that more than 42,000 people in my constituency have had their income tax reduced as a result. May I urge him to be bold and go further?
Danny Alexander
I am grateful to my hon. Friend for those comments. We are increasing the tax allowance towards the bold and ambitious goal of £10,000, which Conservatives and Liberal Democrats have joined together in coalition to deliver. We will certainly be bold and ambitious, and I will take his comments as a Budget submission.
Mr Marcus Jones
For the third year running, the Government have provided additional funds to councils to allow them to freeze council tax, which doubled under the Labour Government. I am aware that Warwickshire county council intends to freeze council tax, but will my right hon. Friend join me in urging Nuneaton and Bedworth borough council and North Warwickshire borough council, which are Labour controlled, to get on board, freeze council tax and give the hard-working people in my constituency a break?
Danny Alexander
My hon. Friend makes an important point. We have provided funding to local authorities to enable the council tax freeze to be delivered. Of course, councillors in those areas will be answerable to their constituents if they fail to deliver the substantial financial benefit that that offers. He is right to say that council tax doubled during the Labour party’s time in office.
Geraint Davies (Swansea West) (Lab/Co-op)
Does the right hon. Gentleman accept that the cost of living increases have hit the poorest hardest, including the man I mentioned last week in Prime Minister’s questions? Should we not therefore follow the US in taxing the top 2% more, having net investment and generating an extra 1% growth, rather than hitting the poor hardest?
Danny Alexander
In that case, I am sure that the hon. Gentleman will welcome the fact that the wealthiest in society are paying more in every year of this Government’s time in office than they ever did under the Labour party.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
Analysis by Citizens Advice shows that the Chancellor’s cuts to tax credits and benefits will
“swamp any gains from the change in personal tax allowances for almost all low income households…and many middle income families”.
How can that hit on working families be justified on the same day as millionaires are getting a tax cut?
Danny Alexander
The hon. Lady will know that working people in this country are net beneficiaries of the measures announced in the autumn statement. I would have thought that she would welcome the fact that 2.2 million Scots will gain from the increase in the personal allowance. It is a massive policy to ensure that the working people of this country have more of their own money back in their pockets to use for themselves.
Jeremy Lefroy (Stafford) (Con)
7. What progress HM Revenue and Customs has made in closing loopholes in the tax system.
Charlie Elphicke (Dover) (Con)
9. What plans he has to tackle corporate tax avoidance and to close the tax gap.
The Exchequer Secretary to the Treasury (Mr David Gauke)
Over this Parliament, we have introduced 31 measures to tackle tax avoidance, including loophole closures. This year, our work will focus on strengthening the disclosure regime, consulting on new sanctions for avoidance promoters and introducing the general anti-abuse rule. HMRC will also increase its risk assessment and specialist transfer pricing resources to target multinationals. Combined, those measures will strengthen our commitment to tackling tax avoidance and reducing the tax gap associated with it.
Jeremy Lefroy
I thank the Minister for that answer. How will the Government use the presidency of the G8 this year to tackle international tax loopholes that have an effect on receipts to the UK Treasury?
Mr Gauke
My hon. Friend is right to raise that point. The Prime Minister has said that he wants to use the G8 for this purpose and to have a serious debate about tax avoidance. The OECD is looking at this matter. We are encouraging it to do so and have provided it with additional resources. It will report back on solutions that could be developed to tackle profit-shifting by multinationals and the erosion of the corporate tax base.
Charlie Elphicke
May I say how welcome it is that the UK is using the presidency of the G8 to tackle international tax avoidance, after a decade in which the Government of this country stood by while industrial tax avoidance was allowed to run rampant? I urge the Government to focus on the issue of tax presence, particularly for companies such as Amazon, which we all know are in this country and should be paying tax in this country, but are playing the rules to avoid it.
Mr Gauke
I will not get into individual cases. As I have said, the OECD, at the urging of my right hon. Friend the Chancellor, is looking at these issues. We want to ensure that there is an international tax system whereby economic activity is taxed where it occurs. That has been overlooked for too long and we are determined to address it.
John Mann (Bassetlaw) (Lab)
Will the Minister join me in calling on all political parties in this country to refuse or return any donations from tax avoiders?
Clive Efford (Eltham) (Lab)
Will the Minister say why there are fewer people in the offshore investigation and affluence investigation units in Her Majesty’s Revenue and Customs than there are working on cutting child benefit for families?
Mr Gauke
I should point out that those units were not in existence under the previous Government and were introduced as a consequence of our reinvestment programme. On enforcement and compliance more generally, I also point out that if we are looking only at numbers, under the previous Government the number of people working in HMRC’s enforcement and compliance department fell by 10,000. Under this Government it will increase by 2,500.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
The managing partner of Ernst & Young has dismissed the concerns of the House about aggressive tax avoidance by stating:
“The simplest solution is to stop banging on about morality and change the law.”
Does the Minister share my view that in a civilised society we do not live by rules and regulations alone, but by what we consider to be right? Should not boards of companies that operate in this country be asking themselves a key question about all their activities, including their tax policy: is this the right thing to do?
Mr Gauke
Increasingly, artificial contrived behaviour is something that all of us, including the public, simply do not accept. My hon. Friend is right to say that this is a board matter, and boards should take tax policy seriously. Companies should think very seriously about aggressive, artificial, contrived behaviour and there is low tolerance for such behaviour.
Kevin Brennan (Cardiff West) (Lab)
Did the Minister see the footage that recently came to light of the Chancellor of the Exchequer, then in opposition, appearing on the “Daily Politics” programme and advising the public about how to take advantage of tax loopholes?
Mr Gauke
This Chancellor has done more to tackle tax avoidance than any of his predecessors, and this Government have taken tax compliance much more seriously. I will give one more statistic: when we took office the yield from HMRC’s enforcement and compliance activity was £13 billion. We expect that number to have increased to £22 billion by the end of this Parliament. We are taking real steps to address this matter.
Dr Julian Huppert (Cambridge) (LD)
10. How much VAT was paid by (a) sixth-form colleges and (b) further education colleges in 2012.
The Chief Secretary to the Treasury (Danny Alexander)
Her Majesty’s Revenue and Customs does not collect data on the VAT paid on individual goods or services at a sufficient level of detail to indentify the amount paid by sixth-form colleges and further education colleges. VAT costs, like all other costs, are taken into account as part of the up-front funding allocation.
Dr Huppert
Sixth forms and further education colleges such as Hills Road and Long Road sixth-form colleges and Cambridge Regional college do excellent work. However, they face a large VAT burden—some £300,000 for sixth-form colleges and well over £1 million for Cambridge Regional college—that schools do not face, as well as receiving less funding than the school sector. Will my right hon. Friend agree to investigate whether that anomaly can be corrected, so that sixth-form colleges and FE colleges can have a level playing field?
Danny Alexander
As my hon. Friend will know, when we took office we found a situation in which sixth-form colleges were considerably less well funded for that group of pupils than schools. We are taking steps, year by year, to equalise the funding arrangements, and we will look again at that in the spending round in the first half of this year.
Kelvin Hopkins (Luton North) (Lab)
As a governor of Luton sixth-form college for 20 years and a former teacher of A-levels, I am convinced that sixth-form colleges are the most successful institutions in our education system. Is it not time for the Government to stop punishing them for their success?
Danny Alexander
I dare say that the hon. Gentleman’s comments on sixth-form colleges will be echoed by many Members of the House. That is why, as I said in answer to the earlier question, the Government are taking steps year by year to equalise the funding arrangements. I am sure he will welcome that.
Valerie Vaz (Walsall South) (Lab)
11. What recent assessment he has made of the extent of underemployment in the work force.
The Financial Secretary to the Treasury (Greg Clark)
The latest assessment was given in last week’s employment figures and showed that 90% of new jobs created were full time, and that the number of involuntary part-time workers fell by 23,000.
Valerie Vaz
The Minister will know that 70% of the jobs that have been created—the new jobs—are part time. The Office for National Statistics has said that 3.5 million people are underemployed. Is the figure of one in 10 people underemployed rising or falling?
Greg Clark
The hon. Lady is not quite right. In fact, the greater number of jobs created have been full time rather than part time. It is important to understand that the term “underemployment” refers to people who would like more hours even if they are employed full time. The fact is that 90% of people in work say they do not want any more hours. Most of the rise happened before the election. Since the election, the number of full-time jobs has increased faster than the number of part-time jobs.
Guy Opperman (Hexham) (Con)
The Minister and I met local enterprise partnership members in Newcastle 10 days ago and discussed the city deal and the increase in job numbers. Does he agree that, with a 9,000 increase in job numbers in the north-east in the last quarter, all jobs should be welcomed, whether they are part time or full time?
Greg Clark
My hon. Friend is absolutely right. The number of hours being worked in the country is at a record level. We should not sneer at people who choose to work part time. That is their option, and they have more opportunities to work part time and full time than they had before.
Albert Owen (Ynys Môn) (Lab)
Unemployment in my constituency went up last month and is up on last year, and underemployment is increasing. People in employment want to work more hours and are not working the maximum amount to be classed as people in full-time employment. How will cutting benefits for those people—they receive in-work benefits and are on low pay—help?
Greg Clark
The hon. Gentleman will know that, under the Labour Government, the benefits system was a barrier to people increasing their hours. The reforms this Government are making through universal credit will remove that important barrier.
Robert Halfon (Harlow) (Con)
Does my right hon. Friend agree that the best way to incentivise people back into work is to cut taxes for lower earners? Will he consider reintroducing the 10p income tax rate that was abolished by the previous Government?
Greg Clark
I note and receive my hon. Friend’s bid for consideration in the Budget, but he will know that we have taken people out of tax, which has been important in restoring incentives and the rewards people have for going back to work.
George Freeman (Mid Norfolk) (Con)
12. What recent steps he has taken to increase the level of infrastructure investment.
The Chancellor of the Exchequer (Mr George Osborne)
By making the hard choices to save money in areas such as welfare, this Government have been able both to reduce the deficit and to increase capital spending on the infrastructure that is vital to our economic future. That is funding more roads and rail, and faster broadband, than in the years of the previous Government, when money was wasted. Indeed, public investment as a percentage of gross domestic product is higher on average in this Parliament than under the previous Government.
George Freeman
I thank my right hon. Friend for his commitment to upgrading our infrastructure, which was so woefully neglected in Labour’s 13 years of waste. In particular, I welcome the £5.5 billion in the autumn statement for science, roads and free schools. We will never build a 21st-century economy on 19th-century infrastructure. Given the pressure on public finances, does he agree that we may need to be bold in unlocking new models in private investment? I am thinking particularly of mutual and local investment such as the tax increment financing that has financed so many American cities.
Mr Osborne
I agree with my hon. Friend. In East Anglia, where his constituency is, we have invested more than £280 million in life sciences, and are providing infrastructure by, for example, upgrading the A11. He is completely right that we should look at new forms of financing. We have introduced tax increment financing, as he suggests. From April this year, all authorities will, within prudential limits, have unfettered access to standard tax increment financing.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Is the Chancellor aware that Mr John Cridland of the CBI said yesterday that the Government have a national infrastructure plan but were just incompetent at delivering it? That incompetence, which characterises the Government, is leading to a situation in which the Government will have achieved, by the end of this Parliament, about half the level of national infrastructure investment of 2008, which will cripple the competitiveness of the British economy. What is the Chancellor going to do about it?
Mr Osborne
It is an inconvenient truth to the hon. Gentleman that public investment as a percentage of GDP is higher on average in this Parliament than under the entire last Labour Government. That is because this Government are making the difficult choices on welfare, which Labour Members oppose, to save money and reduce the deficit, and to spend more, for example, on roads than they did during their period in office. That is the right priority for the taxpayer.
Jesse Norman (Hereford and South Herefordshire) (Con)
Can the Chancellor confirm that Labour’s last Budget planned to cut capital spending by 50%?
Mr Osborne
Yes I can. Again, it is an inconvenient truth that we are spending billions of pounds more on capital spending than was setout in the Budget that half of them opposite, who were in Parliament before the last election, voted for. We are making those choices: they oppose everything because they have nothing to offer in this place.
Rachel Reeves (Leeds West) (Lab)
That is an incredibly complacent answer from the Chancellor. Does he not agree with the Deputy Prime Minister that the coalition Government in fact cut capital spending in infrastructure projects too far and too fast, and that this has hampered growth and the economic recovery?
Mr Osborne
We are spending more on capital than the plan set out by my predecessor, the right hon. Member for Edinburgh South West (Mr Darling)—the plan that the shadow Chancellor voted for. We have increased capital spending in the 2010 spending review and increased it in autumn statements since. That is why we are spending more money on roads, and it is completely hypocritical for the Labour party to complain about capital spending cuts that would have been deeper if they had stayed in office.
Rachel Reeves
It is simply not correct to say that the Government have matched the plans of my right hon. Friend the Member for Edinburgh South West. The Office for Budget Responsibility says that in the first three years this Government are spending £12.8 billion less on infrastructure than the plans that they inherited. It is £6.7 billion lower in this year alone. But if the Chancellor and Deputy Prime Minister are now so concerned about the shrinking economy, why do they not listen to the advice the International Monetary Fund gave them last week and use the Budget in March to rethink their failed economic plan?
Mr Osborne
I do not think that the hon. Lady is being completely straight with the House about the numbers she is using—[Hon. Members: “Withdraw.”]
Mr Speaker
Order. Hon. Members may leave this to me. The Chancellor is very versatile in his use of language and he can rephrase that. No Member would be other than straight with the House. He should withdraw that term and use another, and I feel sure that he will do so.
Mr Osborne
Of course I withdraw it and would simply say that the hon. Lady has been very creative in the use of the numbers that she has put before the House. The number she is using is the amount of money that Labour was spending on capital before the general election, but it set out plans to cut capital after the general election. We have exceeded those plans, and it is completely hypocritical for the Labour party to claim that it would have spent more on capital when it clearly would not have.
Mrs Mary Glindon (North Tyneside) (Lab)
13. How many working households will be affected by the changes to the uprating of tax credits and other payments announced in the autumn statement.
The Economic Secretary to the Treasury (Sajid Javid)
The 1% uprating of working age benefits and tax credits is estimated to affect 1.65 million working age households in 2015-16. Of this total, around half of the households have no individual in work and half are households in which at least one individual works at least an hour a week.
Mrs Glindon
Can the Minister confirm that his Government’s own figures show that, shamefully, cuts to tax credits and other benefits will push hundreds of children in North Tyneside—and 200,000 children nationally—into poverty?
Sajid Javid
What I can confirm is that the Government are taking a very focused approach to welfare. Under the previous Government, nine out of 10 families with children were eligible for tax credits. No wonder our welfare budget was out of control. Through the Welfare Benefits Up-rating Bill and other reforms the Government have introduced, we are making our welfare system affordable and more focused.
Andrew Bridgen (North West Leicestershire) (Con)
Can my hon. Friend confirm that working families will be, on average, £125 a year better off after the announcements in the autumn statement?
Sajid Javid
I can confirm the figure used by my hon. Friend. Indeed, if we take account of all the tax changes we have made in the personal allowance, I can also say that an individual on the minimum wage and in full-time employment will see their tax bill halved under this Government.
Rushanara Ali (Bethnal Green and Bow) (Lab)
23. More than 50% of children in my constituency are living in poverty, with the Child Poverty Action Group warning that the Government’s tax and benefit changes will push 1 million children into poverty by 2020. Why did the Minister and his Department decide not to publish the child poverty impact assessment alongside the Welfare Benefits Up-rating Bill?
Sajid Javid
As a child, I lived in a two-bedroom flat with seven people, and I saw child poverty on my street every day. I know that the hon. Lady cares passionately about this issue—[Interruption.]
Mr Speaker
Order. The House must calm down. The Minister’s answer must be heard.
Sajid Javid
I respect the hon. Lady for caring passionately about this issue. She served as a commissioner on child poverty in London and has considered the issue deeply, so I hope she agrees that there is no sense in having a measure of child poverty that just looks at relative income. It is far more important that we all come together and look at education, jobs and access to health services, and have a proper measure of child poverty if we are to truly eradicate it.
Richard Graham (Gloucester) (Con)
The Minister is surely right to focus on the most important elements for our young people, which include considerable Government investment in apprenticeships and taking so many people, including many of those apprentices, out of income tax altogether. Four thousand people, including many young people in my constituency, will be taken out of income tax in April. Does he agree that it is extraordinary that no one on the Opposition Benches realises the importance of this measure?
Sajid Javid
My hon. Friend is absolutely right to raise this issue and the help it brings, particularly with regard to apprenticeships. In fact, in the constituency of the hon. Member for Bethnal Green and Bow (Rushanara Ali), there has been a more than 100% rise in apprenticeships because of this Government.
Mr Andrew Turner (Isle of Wight) (Con)
14. How much revenue will accrue to the Exchequer from the beer duty escalator in each of the next three years.
The Economic Secretary to the Treasury (Sajid Javid)
The Government have inherited plans to increase alcohol duties by 2% above inflation until 2014-15. The extra 2% is forecast to increase beer duty receipts by £35 million next year and £70 million the following year.
Sajid Javid
My hon. Friend is right to raise this issue, and he has contributed to many debates on it in this House. Making the change would mean lost revenue, and we would have to find another way to cover that loss. He may find it useful if I point out some Government measures that have helped pubs, such as the changes in the annual investment allowance, the cut in the small profits rate of corporation tax and the extension of small rate relief holiday.
Lilian Greenwood (Nottingham South) (Lab)
Why does the Chancellor refuse to review the impact of alcohol taxation? Is he worried that it will show the effect of VAT on the prices in our pubs, and the impact that is having on our pub sector?
Sajid Javid
The hon. Lady will know that the beer duty escalator was introduced by her Government. This Government have inherited those plans and are carrying them out. If she does not like this tax, perhaps she could make a stronger case if she tells us how she would cover the lost revenue.
Priti Patel (Witham) (Con)
15. What plans he has to simplify the tax system.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are committed to simplifying the tax system. Since 2010, we have set up the Office of Tax Simplification and have acted on a range of its recommendations. The Government are improving tax administration for small businesses and, from April 2013, will introduce a new cash basis for calculating tax, benefiting up to 3 million small self-employed businesses.
Priti Patel
Does my hon. Friend agree that the most effective way to simplify the tax system and to maximise tax yield is to reduce the burden of taxes through lower taxes?
Mr Gauke
It would be right to say that the Government have taken 2.2 million people out of income tax—that is certainly a simplification for them. We have reduced the small profits rate of corporation tax and reduced the main rate of corporation tax. We have taken steps, wherever possible, to reduce taxes.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
Can the Minister reassure the House that these attempts at tax simplification will be more successful than last year’s attempts, which saw U-turns on caravans, pasties, charities and the oil and gas sectors? Can he reassure the House that these attempts will work a lot better this year?
Mark Pritchard (The Wrekin) (Con)
Following on from my hon. Friend the Member for Witham (Priti Patel), who made her case well, given that the Exchequer benefited from the courageous decision to reduce the top rate of tax from 50p to 45p, may I encourage the Chancellor to go even further in the Budget and reduce the top rate of tax to 40p, in order to see more funds come into the Exchequer?
Mr Gauke
I will take that as a Budget representation. The point is that the 50p rate was not effective in raising revenue—my hon. Friend is absolutely right to make that point—and it was damaging to our competitiveness. There are better ways in which we can get more money from the wealthiest, and that is exactly what this Government have done.
Sheila Gilmore (Edinburgh East) (Lab)
Perhaps the Minister could explain how the changes in child benefit have simplified the tax process in this country.
Mr Gauke
A moment or so ago we heard lots of shouting about the 50p rate, yet the Labour party is the first to defend the idea that those very people should continue to receive benefits. Ensuring that child benefit is targeted best meant either looking at this on a household basis—which would have meant putting 8 million households into the tax credit system—or adopting the approach that we have chosen, but the Labour party is always there, ready to spend taxpayers’ money where—
Mr Speaker
Order. We are obliged to the Minister, but we will move on to one more question.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
16. What progress has been made in making compensation payments under the Equitable Life payment scheme.
The Economic Secretary to the Treasury (Sajid Javid)
The scheme continues to make good progress. A detailed report will be published next week, which I am pleased to announce will highlight the fact that the scheme has paid more than £500 million to policyholders. I know that the resolution of Equitable Life is an issue that interests many Members, so I can announce that the scheme will now be moving to quarterly progress reports, with the next one published in May.
Dr Coffey
I welcome that answer from my hon. Friend. I am proud that our Government have started the payment scheme, although there are still some people who have not yet been assessed. I would encourage him to work with his officials to ensure that that happens as quickly as possible.
Sajid Javid
My hon. Friend is right to be proud of the Government’s achievements on Equitable Life. The previous Government had a decade to help victims of this scandal and did absolutely nothing. As mentioned, more than £500 million of payments have already been made. I can assure my hon. Friend that I am in regular contact with the scheme administrators, and I will work closely with them on a regular basis to ensure that things can be improved.
Mr David Amess (Southend West) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Mr Amess
My right hon. Friend will recognise the valuable work that public sector workers do, by and large on our behalf, but he will also acknowledge the fact that their earnings have increased by only 1%. Is it the Government’s policy that benefits will not increase by any more than the increase in public sector pay?
Mr Osborne
It is the Government’s policy that both should rise by 1%. It is a rather bizarre argument advanced by the Labour party—that public sector pay should go up by 1%, but benefits should go up by more than 1%. The Opposition are the people who will have to explain it to the hard-working public sector taxpayers who have to pay for the welfare system.
Ed Balls (Morley and Outwood) (Lab/Co-op)
May I start by welcoming the Chancellor back from his winter mini-break in Davos? I do not know whether he got any skiing in, although he and his chums certainly went out on the piste.
Back to Britain: in August 2010, the Chancellor also made a speech at Bloomberg, in which he claimed that his economic plan would secure the recovery. A few weeks later, his spending review said that by now we would see growth of 5.2%. Let me ask him: since his spending review, how much growth have we actually had?
Mr Osborne
I am glad the right hon. Gentleman noticed that I went to Davos, where I met the last two Labour Prime Ministers as well—and I could not help but notice that both of them were talking about the global economic problems. Of course we have to sort out those problems abroad, but we also have to deal with our problems at home, and of all the people now in Parliament, the right hon. Gentleman bears primary responsibility for putting Britain into this mess. The reason his economic argument is not making more traction is because no one believes that the problems that got us into this mess are the things that will get us out of it.
Ed Balls
How complacent is that? The economy is flatlining and borrowing is rising on the right hon. Gentleman’s watch. Let me tell him the facts. Since the spending review, growth has been just 0.4%, which is 13 times lower than he forecast. Our growth is slower than that of America, France, Germany, Australia, Canada, Mexico, Turkey—the list goes on and on. Let me ask him this: now that the chief economist at the International Monetary Fund, the Deputy Prime Minister and even his dining chum the Mayor of London are losing faith in his plan, when will he listen, stop being so complacent and finally act to kick-start this flatlining economy?
Mr Osborne
There is no complacency about dealing with the mess that the right hon. Gentleman left behind. He talks about the economy over the last couple of years. Let me tell him what has happened in the Morley and Outwood constituency. In his area, the unemployment claimant count went up 190% under the last Government; it has fallen by 7% under this Government. The youth claimant count was 161% up under his Government; it has come down by 10% under this Government. We are fixing the problems that he created. The only job that he is interested in saving is his own. The truth is that while he remains in the post that he is in, he is a reminder to everyone of all the mistakes that Labour made when it managed the economy.
Steve Brine (Winchester) (Con)
T4. A number of my constituents—[Interruption.]
Mr Speaker
Order. This is a considerable discourtesy to the House. The hon. Gentleman must have his question heard.
Steve Brine
Thank you very much, Mr Speaker.
A number of my constituents have been caught out by the high interest rates charged on payday loans. At a time when many families are struggling with high levels of personal debt, what are the Government doing to ensure that consumers are protected against bad practices in that industry and the often extremely high interest rates that are charged on such loans?
The Economic Secretary to the Treasury (Sajid Javid)
I know that my hon. Friend is passionate about this issue, and he is right to raise it today. The Government are committed to ensuring that people who borrow from payday lenders are protected against bad practices. Last January, we announced our intention to transfer the regulation of consumer credit from the Office of Fair Trading to the new Financial Conduct Authority. The FCA will have powers and sanctions to address consumer detriment in the consumer credit market, and we will shortly be publishing consultation on this very issue.
Mr Tom Harris (Glasgow South) (Lab)
T2. May I take this opportunity to pay tribute to the Chancellor’s excellent judgment in supporting Labour’s spending plans up until November 2008? Will he therefore accept that the deficit he inherited was caused not by the spending plans supported by those on both sides of the House but by the worldwide recession?
Mr Osborne
The idea that Labour irresponsibility had nothing to do with the fact that Britain had a higher budget deficit than almost any country in the world is fanciful. The truth is that my predecessor as Chancellor has accepted that Labour was spending too much, as has Tony Blair, who was Prime Minister during that period. The only person who will not accept that is the person who was chief economic adviser at the Treasury at that time—the man who Labour have now been landed with as shadow Chancellor.
Kris Hopkins (Keighley) (Con)
T5. The last Labour Government presided over a decline in manufacturing industry in west Yorkshire, which fell from 23% of local economic output in 1997 to just 14% in 2010. What steps is the Chancellor taking to reverse that trend and to support constituencies such as mine, which have relied on manufacturing for jobs and growth?
Sajid Javid
That is a shocking reminder of the economic incompetence of the previous Government and of the damage that they did to our economic base. The revitalisation of manufacturing is important for the rebalancing of our economy. Keighley in west Yorkshire has an important manufacturing tradition, and it is benefiting from the manufacturing advisory service and from the £2.7 billion of regional growth money that is going to the entire nation. Also, the announcement in the autumn statement of more money for UKTI will benefit the help that UKTI gives in Yorkshire.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
T3. Today, we saw the Government unveil their “pile ’em high, teach ’em cheap” approach to child care, hot on the heels of cuts to tax credits for poor working families and cuts to child benefit. When is the Chancellor going to unveil his supposed plans for a tax benefit for child care? What are the Government doing to support working families?
The Chief Secretary to the Treasury (Danny Alexander)
If the hon. Lady were concerned about child care, I would have thought she would welcome the fact that under this Government the free offer for three and four-year-olds has been increased from 12.5 hours to 15 hours and that this Government have put in place a new offer for the 40% most disadvantaged two-year-olds for 15 hours’ free nursery education at that age. We will bring forward the proposals to which she refers very shortly, and I hope that when she sees them, she will welcome them.
Jane Ellison (Battersea) (Con)
T8. Will the Chancellor update the House on a subject on which all Members receive a great deal of correspondence—funding for small businesses? Will he in particular update us on the funding for lending scheme and other similar initiatives?
The Financial Secretary to the Treasury (Greg Clark)
I can tell my hon. Friend that in the most recent period, net lending under funding for lending has increased by £500 million. It is also the case that the average interest rate on small business loans has declined by 0.33% since the scheme was introduced.
Pamela Nash (Airdrie and Shotts) (Lab)
T6. Families living with a disabled member are going to be hardest hit by tax credits and benefit cuts. That is not according to a third-party briefing, but according to the Government’s own assessments. What do this Government have against disabled people in this country?
Danny Alexander
I think that is a very poor way to phrase the question, especially when the hon. Lady will know that disability living allowance payments, for example, are continuing to be uprated in line with inflation, even as we have to take more difficult decisions on other parts of the economy.
Jeremy Lefroy (Stafford) (Con)
T9. A recent article in MoneyWeek suggested that raising the minimum wage would cut the cost of tax credits and benefits and increase employment. What work has the Treasury done on the interrelationship between the level of the minimum wage, the cost of benefits, tax revenues and employment levels?
Sajid Javid
It is not clear that tax credits are being used to supplement lower wages, but what I can say is that the Government have taken action to bring unsustainable levels of tax credit spending under control. It has already been reduced in respect of eligibility from nine out of 10 families with children to six out of 10. Our reforms are also making work pay. Universal credit will unify the current complex system of welfare and make sure it always pays for people to go into work. The withdrawal rate will aim to smooth that transition into work.
Paul Blomfield (Sheffield Central) (Lab)
T7. Last Friday, the Bishop of Sheffield, the Bishop of Hallam and other faith community and civic leaders came together to launch a campaign for a fair deal for Sheffield. Will the Chancellor recognise their concern that the combined effect of his austerity programme with unevenly distributed cuts and benefit changes that hit the poorest hardest is having a disproportionate impact on our urban areas and our big cities? Will he listen to those concerns?
Greg Clark
Yesterday, I met the leader and chief executive of Sheffield and we were discussing the very good progress made in the Sheffield city deal, which all parties, including the hon. Gentleman’s, strongly support as being key to the economic prosperity of Sheffield in the future. I would hope that he would welcome that.
Stephen Williams (Bristol West) (LD)
We already know that in April the personal tax allowance is going to be raised to £9,400—the largest rise in history. By the time we next meet for Treasury questions, the Chancellor will have put the finishing touches to his Budget. I now urge him to take the final step and deliver £10,000 of tax-free pay in time for April 2014.
Mr Osborne
We have a very clear commitment to reach that £10,000. We have not put a time scale on it, but even under the plans we have already put forward, that level will be reached with inflation increases before the end of this Parliament. This is a good example of two parties coming together to help working people across this country.
Graham Jones (Hyndburn) (Lab)
T10. In the autumn statement of 2011, the Chancellor allocated £5 million to combat metal theft, which through Operation Tornado has been highly successful. With that funding coming to an end, was that a knee-jerk reaction or is the Chancellor going to continue it?
Mr Osborne
I am happy to look at the funding for the metal theft initiative, but I know that the Government have introduced regulation to clamp down on this crime, which can of course endanger people’s lives.
Nadhim Zahawi (Stratford-on-Avon) (Con)
In a debate in this Chamber, the right hon. Member for South Shields (David Miliband) accepted this Government’s spending envelope, but was quickly shot down by the shadow Chancellor. Is not the real problem here the fact that to be credible on the economy, the Labour party needs to come up with a policy that stands up?
Mr Osborne
My hon. Friend has described the comments of the right hon. Member for South Shields as a speech. I think we could describe them as an audition.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Chancellor of the Exchequer is being lobbied heavily by the Mayor of London, Boris Johnson, for a massive increase in infrastructure spending in London. Does he realise that if he really wants to get our economy going, he should be investing in the infrastructure of the towns, cities and regions of our country, particularly Yorkshire and the north-west?
Greg Clark
The hon. Gentleman may not have been aware of it, but an announcement was made yesterday that was germane to his point: the announcement of the extension of High Speed 2 to Leeds, Sheffield and Manchester, which, in 13 years in government, his party never got around to delivering.
Penny Mordaunt (Portsmouth North) (Con)
The Minister may be aware of the report on football governance which was published today by the Culture, Media and Sport Committee. I want to record my thanks to him and to Her Majesty’s Revenue and Customs for their help in dealing with Portsmouth football club. Will he assure us that his Department will play its full part in ensuring that prospective owners who are not fit and proper do not get their mitts on these important community assets and destroy them?
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government will, of course, look closely at the Committee recommendations. As my hon. Friend the Minister of State, Department for Culture, Media and Sport has made clear, it is time for football to get its house in order.
Mr David Anderson (Blaydon) (Lab)
The Chancellor is well known for trying to help us Back Benchers to do our job. Would he be so kind as to place in the Library the criteria that he uses to define whether or not the economy is in the danger zone, and will he tell us whether it is in the danger zone today?
Mr Osborne
There is a pretty simple definition. Every day and every week the British Government have to go and borrow money to fund the extremely large deficit that was left behind, but we can command record low interest rates because of the confidence that the rest of the world has in our economic plans.
James Morris (Halesowen and Rowley Regis) (Con)
Unemployment among 18 to 24-year-olds in my constituency is 15% lower than it was in December 2011, but does the Chancellor agree that we still need to do more to improve young people’s skills, especially in the context of the black country city deal, which is focusing on skills in advanced manufacturing? May I commend that proposal to the Treasury team?
Greg Clark
I was in Wolverhampton recently, meeting business and civic leaders from the black country. The proposals to increase skills to help the advanced manufacturing sector in the area to expand are well under way, and I look forward to responding to the bid very soon.
Andy Sawford (Corby) (Lab/Co-op)
In opposition, the Chancellor was fond of quoting the Institute for Fiscal Studies in support of his policies. Does he accept the finding by the IFS that because of all the changes that he has made following his autumn statement, the average one-earner family with children will be £534 worse off by 2015?
Mr Osborne
I am fond of quoting the IFS in government as well, and it says that Labour’s plans would add £200 billion to borrowing.
Mark Menzies (Fylde) (Con)
What assurances can the Minister give me that if shale gas production is given the go-ahead in Fylde it will not be just the Treasury or the company that will benefit, and that substantial benefits will flow to the local community?
Mr Osborne
I know that my hon. Friend has a strong constituency interest in this issue. We want to see the shale gas revolution come to the United Kingdom—it has done wonders for the United States economy—but that must, of course, happen in a way that does not damage the environment and enables communities to benefit. I shall be happy to work with my hon. Friend, and other Members of Parliament throughout the House who may be affected, to ensure that communities share the benefits—which I hope can be shared by the whole economy—of this new form of energy extraction.
Ian Austin (Dudley North) (Lab)
On the many other occasions on which the economy has gone into reverse under this Chancellor, he has blamed the snow, and he has blamed the floods. When people took time off in the summer to go on holiday, he presumably blamed the sun. He has blamed the Americans, and he has blamed the Europeans. He blamed the Queen’s jubilee. He even blamed her grandson for getting married. Whose fault is it this time?
Mr Osborne
I think that I have been pretty consistent in blaming that lot opposite.
Mr Speaker
Order. I am sorry to disappoint colleagues. It is always box office, and demand has greatly exceeded supply. We must now move on to the urgent question.
Home to School Transport
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Roberta Blackman-Woods (City of Durham) (Lab)
First, may I congratulate two of my constituents, Michelle Bainbridge and Stephen Guy, on running such an excellent campaign in Sherburn village against the home to school transport arrangements, and on discovering that the problem lay not with the local authority, Durham county council, but with national legislation? I also thank them for introducing this petition, which has attracted hundreds of signatures.
The petition states:
The Petition of residents of Durham,
Declares that the Petitioners believe that the Home to School Transport Guidance and Education Act 1996 does not make adequate provision for children travelling safely to and from school and that it should be amended to set a new statutory threshold of 2 miles to access free school transport; to properly define a safe route to school as one that considers issues of lighting topography, degree of isolation and other relevant matters and defines a safe route as one that can be walked safely by secondary school aged children without being accompanied by an adult.
The Petitioners therefore request that the House of Commons urges the Government to amend the Home to School Transport Guidance and Education Act 1996 accordingly and ensure that all households in receipt of any earnings replacement or means tested benefit or tax credits shall have access to free home school transport.
And the Petitioners remain, etc.
[P001153]
Deployment to Mali
(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.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr John Baron (Basildon and Billericay) (Con)
(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on deployment to Mali.
The Secretary of State for Defence (Mr Philip Hammond)
On 14 January the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Boston and Skegness (Mark Simmonds), made a statement to the House outlining the UK’s deployment of two C-I7 transport aircraft to provide logistical support to France, as well as a small detachment of technical personnel deployed to Bamako airport to assist with the reception of the C-I7 aircraft. Since that announcement, we have decided to extend our support to the continued provision of one C-I7 in support of the French for a further three months. There are currently about 20 people deployed in Bamako supporting liaison with French forces and, following a French request for additional surveillance support, we have deployed a Sentinel R1 aircraft to Dakar, Senegal, with supporting ground crew and technical support staff of about 70 people.
EU Foreign Ministers agreed on 17 January to establish an EU military training mission to Mali—EUTM—and work is ongoing to scope that mission. Today in Brussels, representatives from EU member states, including the UK, will meet to discuss the individual member state contributions to the mission. The UK is prepared to contribute up to 40 personnel to the EUTM, either in an HQ or training team role. We do not envisage UK personnel fulfilling a force protection role, and it is quite possible that all 40 personnel will not be required, dependent on the contributions from other member states. I can assure the House that we will not allow UK personnel to deploy on any mission until we are satisfied that adequate force protection arrangements are in place.
Today in Addis Ababa the African Union is hosting a donor conference to discuss how the international community can support the African-led intervention force, AFISMA, in delivering the role that the United Nations Security Council has mandated it to fulfil. The UK will today offer £5 million for two new UN funds to support the strengthening of security in Mali, with £3 million directed to AFISMA and £2 million to activity in Mali that facilitates and supports political processes for building stability. The UK is also prepared to offer up to 200 personnel to provide training to troops from Anglophone west African countries contributing to AFISMA, although the numbers required will be dependent upon the requirements of the AFISMA contributing nations. To establish those requirements, we have deployed a small number of advisers to Anglophone west African countries that are likely to contribute to the AFISMA mission, to assess their needs and to gain situational awareness.
Foreign and Commonwealth Office Ministers will provide an update to the House on the outcome of the discussions in Brussels and Addis Ababa at the appropriate moment.
Mr Baron
I thank you, Mr Speaker, for granting this urgent question, and thank the Secretary of State for his answer.
British involvement in Mali and the wider region is deepening, and it is clearly in everyone’s interests that we do not allow legitimate Governments to fail, particularly when faced with extremists. It is no secret that I opposed our recent interventions in Afghanistan, Iraq and Libya, because I fear that one can be drawn into ever-deepening conflicts. Afghanistan illustrated the dangers of being sucked into larger deployments. That mission morphed into something much larger: it changed from a mission to defeat al-Qaeda or deny it the use of Afghanistan to one of nation-building.
Drawing on our lessons in Afghanistan—and, perhaps, on other interventions—will the Government clarify the following points? We need greater clarity on the role of British troops. The Government have said they will not be placed in a combat role, but there are a host of grey areas between combat roles and support roles. What exactly will these advisers do? Will they be involved in logistics or training, or will they advise on strategy? Equally importantly, how will they be protected? Are we deploying troops on the ground to protect these advisers, or are we relying on our French colleagues to provide that protection?
May I also ask the Secretary of State what exactly is the exit strategy? It is very easy to get drawn into these situations, but it is not always clear what the endgame and exit strategy are, and even what the endgame looks like. What are the contingency plans if military progress does not go to plan? Is there talk on the table that we should perhaps be deploying or committing, or be prepared to commit, more troops if the fighting goes badly? At the moment, that is all going well, but the situation can change very quickly.
Finally, what lessons should we learn from United Nations Security Council resolution 2085, which was passed last year and called on local African nations to lead the combat role in defeating these extremists in northern Mali? There was tremendous delay in the implementation of that resolution. What lessons have we learned from that, because we seem to be playing catch-up? On a related but slightly separate issue, what is the international community’s broader strategy on encouraging local forces to play a more proactive role, not only in Mali, but in the wider region, in combating these extremists? These are legitimate questions and the British public and we as a House need to ask them, because there is a real danger of getting drawn into a much larger deployment, particularly if things do not go to plan on the ground.
Mr Hammond
I am grateful to my hon. Friend for his questions. First, the UK has a clear interest in the stability of Mali and in ensuring that its territory does not become an ungoverned space available to al-Qaeda and its associates to organise for attacks on the west. Secondly, we have established military co-operation with France, which is an important part of Britain’s strategy for the future, and this situation, along with the Libya campaign, is an opportunity for us to demonstrate the validity of that working relationship with France. The role of British troops, as I set out in my response to the urgent question, is clearly not a combat role, and it will also not extend, as we envisage it at the moment, to a force protection role. We are looking for force protection arrangements to be put in place, probably by the French, but certainly by the European Union in relation to the EU training mission.
My hon. Friend asked me about the exit strategy. France has made it clear that it envisages a short intervention to stabilise the situation on the ground while the African forces from neighbouring countries and the Malian army deploy to sustain the situation in the longer term. We concur with that strategy. I should say, again, that it is not our intention to deploy combat troops; we are very clear about the risks of mission creep and we have defined very carefully the support that we are willing and able to provide to the French and the Malian authorities.
My hon. Friend referred to UN Security Council resolution 2085 and the time delay in deploying African forces. I think it is well known that the intention was to deploy African forces in support of the Malian authorities later this year, but the situation on the ground has become more urgent, hence the decision by the French to intervene. Some of these forces require equipment and some require additional training, and the response time to the mobilisation envisaged by resolution 2085 has perhaps been longer than we would have liked. The lesson we can learn from that is that if we want local forces to be able to deploy and respond to resolutions of this nature, we may have to take a more proactive role in resourcing them to do so.
On the broader strategy for encouraging local forces to tackle extremism, part of our defence posture, set out in the strategic defence and security review 2010, is to devote an increasing proportion of our defence resources to upstream engagement, building capacity in fragile nation states to allow them to deal with early threats to their security, rather than waiting for the situation to degenerate to the point at which it requires outside intervention.
Mr Jim Murphy (East Renfrewshire) (Lab)
Thank you, Mr Speaker, for giving us the opportunity to discuss security in north Africa today, and I thank the Secretary of State for his statement. It is essential that Mali does not become a haven for terrorism, which would allow militants to oppress a people, hold territory, destabilise a region and threaten UK interests. It is therefore vital that the international community enables Mali and its neighbours to defend themselves.
Let me turn to six specific issues. Can the Secretary of State guarantee that no UK personnel will be redeployed to Mali from Afghanistan? What other European allies plan to commit trainers and at what level?
There will be broader worries about mission creep. The UK commitment to Mali has grown from lending the French two transport aircraft to the deployment of perhaps hundreds of troops to the region. It appears clear that Islamists have chosen to abandon population centres and might now melt away across near-non-existent borders. It is possible that they will be able to regroup and return to carry out the type of terror attacks we have seen in Iraq, Afghanistan and elsewhere. What assessment has the Secretary of State made of the ability and intent of al-Qaeda in the Islamic Maghreb and its associates to do so?
I want the Secretary of State to say more about force protection. If UK trainers are based in Bamako, which has not to date been the centre of violence, that might make them and the capital a target. Our forces will, I assume, be armed, so what will the rules of engagement be? UK trainers might be non-combat, but that does not mean that they are without risk. They are deployed and will need to be protected in a hostile environment, so what security guarantees has he received from French forces about protecting UK trainers as a condition of this deployment from day one?
We all know that lasting stability will be achieved through a political process, so will the Secretary of State outline the strategy to achieve that? In particular, will he give his assessment of whether the Tuareg people will be part of the process?
While we consider the importance of winning hearts and minds in Mali, there is another country where public consent must be retained and that is here in the UK. The public are wary and weary of conflict as a consequence of recent history. There will be worries about mission creep and the safety of UK trainers and it is essential that the Secretary of State allays those fears today.
Mr Hammond
I am grateful to the right hon. Gentleman, although I have to say that there was a little bit of fence sitting. Although we all recognise that the public are wary and weary of conflict, I did not hear a clear indication of whether he supports the actions that the Government propose to take in support of this French mission.
The right hon. Gentleman asked about the redeployment of troops from Mali to Afghanistan and I assume he meant Afghanistan to Mali. We are acutely conscious of the primacy of the operation in Afghanistan and the limits of what we have been able to offer the French in this operation are defined largely by the need not to degrade our capabilities in Afghanistan. We are looking all the time at what we can do without impacting on the air bridge or the operation in Afghanistan. As he noted, our initial response was to offer logistical support as that was what was urgently required to get French troops and equipment into Mali. The French ask has evolved to include additional surveillance capability, which we have now provided with the Sentinel R1. Over the next weeks and months the requirement will be for training of the Anglophone African troops who will provide the force in support of the Malian army in due course.
The right hon. Gentleman asked for an assessment of al-Qaeda in the Islamic Maghreb. It is fair to say that our situational awareness of the Maghreb is not as great as we would like it to be. It is not an area where Britain has had traditional involvement, but we are making strong efforts to obtain awareness of what is going on there. We should not underestimate the potential for terrorist threats to emerge from the Islamic Maghreb, but nor should we overestimate the strength of the Islamists in this region.
The right hon. Gentleman also asked about our forces on the ground in Bamako. Bamako is well to the south of Mali and the problems are in the north. I agree that it is not impossible that Islamists could penetrate the south of the country in small groups, but there are many reasons why it might be difficult for them to operate there. The rules of engagement for British personnel will be on the basis of self-defence when they are based at Bamako. Force protection is provided within the airfield at Bamako by the French forces on the ground. As I said earlier in relation to any UK training mission, we will not allow any UK trainers to deploy until we are satisfied that adequate force protection measures are in place.
The right hon. Gentleman asked about the political process, and of course a political process is essential. I envisage that the European Union will be engaged in economic and political development in Mali in the future. The involvement of the Taureg people, of course, is essential to a sustainable and lasting peace in that country.
Sir Peter Tapsell (Louth and Horncastle) (Con)
May I repeat to my right hon. Friend what I said unavailingly to his five Labour predecessors as Defence Secretary that the more frequently western forces intervene in Muslim countries, the greater will be the spread of jihadism throughout the whole Islamic world and the higher the threat of terrorism in this country?
Mr Hammond
I hear my right hon. Friend’s warning loudly and clearly, but of course precisely the problem that we are dealing with is that Mali is not an Islamic country. Mali is a country with a majority Christian population, with a significant Islamic minority. It is a country of two halves geographically, climatically, religiously, culturally and ethnically. That is the challenge, but the solution must be a democratically elected Government in Bamako who effectively represent all parts of that country. That is the long-term aim that we all aspire to achieve.
Mr Bob Ainsworth (Coventry North East) (Lab)
Our commitment to Mali and the region has grown considerably over the past few days. Notwithstanding the relatively positive news that is coming from the country, no one really believes that the security issues will be addressed in the short term. How long does the right hon. Gentleman envisage the deployments that he is confirming today are likely to be? The relatively small numbers that he is reporting to the House need to be supported by far larger numbers if such an operation is to be sustained. How many people overall will be necessary to sustain the commitment over time?
Mr Hammond
I do not accept the right hon. Gentleman’s last point. The numbers that we have outlined are the numbers that we envisage sustaining the Sentinel aircraft based in Dakar, Senegal—about 70 people. That is the requirement to sustain the aircraft there. We have about 20 people on the ground in Bamako. The C-17 we envisage staying for up to three months. We have not set a time limit for the surveillance capability; it will stay for as long as we can provide it without impact on other operations and as long as it is useful. The training mission has not yet been defined, so it would be premature for me to talk about a time scale, but it clearly will be a finite time scale in preparing the African Anglophone nations’ forces for deployment to Mali.
Sir Malcolm Rifkind (Kensington) (Con)
The liberation of Timbuktu and other towns in the north is, of course, very much to be welcomed, but my right hon. Friend will remember from the precedent of both Iraq and Afghanistan that the liberation of towns and cities is the easy part and that there is every probability that there will be many years of asymmetrical conflict in Mali unless a political solution is achieved. Will he advise the House whether he is having discussions with the Foreign Secretary to ensure that Britain can make a contribution that, in particular, would try to divide the jihadi terrorists from the other local insurgents who do not have international aspirations, thereby making the prospect of ultimate peace that much more foreshortened?
Mr Hammond
My right hon. and learned Friend is right of course to warn of the prospect of asymmetric conflict. Although it is reassuring that towns such as Timbuktu have been taken by French forces, we should not delude ourselves into thinking that that is equivalent to the defeat of the Islamist forces in the area. They have melted away and will, no doubt, regroup and return in one form or another.
My right hon. and learned Friend is also right in saying that the key strategic imperative is to separate the jihadists from those northern Malian rebels whose discontent with the Government is more secular in nature. There is some evidence that that is already happening and that the presence of Malian Government and French forces in the area will encourage and accelerate that process, but I can assure him that my right hon. Friend the Foreign Secretary is acutely aware of the need for rapid political progress, as well as rapid military progress.
Frank Dobson (Holborn and St Pancras) (Lab)
Will the Secretary of State and the Prime Minister bear in mind that, whatever the merits of what is presently proposed, the American catastrophe in Vietnam started with the deployment of American troops in a training and advisory capacity?
Mr Hammond
I am sure that those lessons have been taken firmly on board and are part of the military folklore that informs decision taking today.
Sir Menzies Campbell (North East Fife) (LD)
Although my right hon. Friend may be able to justify in the short term the step change in Britain’s commitment in Mali that he has announced this morning, what account is being taken of the long-term implications of such a commitment, not least if there is success in Mali followed by displacement of al-Qaeda to other more favourable countries in north Africa? How far are we willing to pursue them?
Mr Hammond
My right hon. and learned Friend talks about a step change in Britain’s commitment in Mali. Let me set this in context. In the SDSR, we made it clear that a greater part of Britain’s defence effort in future would be devoted to training, supporting and upskilling local forces in fragile areas, to prevent the breakdown of order in such countries. We are proposing to deploy up to 200 troops in a training role to support four Anglophone countries in west Africa to prepare forces to intervene in Mali. That seems to me to be a very well leveraged use of British forces, British resources and British capability to deliver effect at minimal cost and risk to ourselves.
Angus Robertson (Moray) (SNP)
The Secretary of State has drawn attention to the fact that discussions involving other countries are taking place in Brussels about the commitment that they are prepared to make to Mali. Will he update the House on commitments that have been made thus far by EU neighbours, including countries such as Denmark, and confirm that those discussions also involve countries that are not in the EU, such as Norway and Canada?
Mr Hammond
The hon. Gentleman is right; some offers of assistance have already been provided—I have just had a discussion this morning with the Belgian Defence Minister—but it would be better, if he does not mind, to await the completion of the discussion today. I can assure him, as I have already assured Mr Speaker, that one of my colleagues from the Foreign and Commonwealth Office will come to update the House as soon as we have the readout from that discussion and the one in Addis Ababa.
Sir Gerald Howarth (Aldershot) (Con)
My hon. Friend the Member for Basildon and Billericay (Mr Baron) was entirely right to urge on my right hon. Friend extreme caution in this matter. However, does my right hon. Friend not agree that the EU training mission to Somalia is a useful precedent here? That is one of the areas in EU defence that has actually been rather successful, unlike most of the rest of it, and that is therefore a proper course to follow. Will he give us an indication of what the Nigerians intend to do? That is a Christian and Muslim country; it should be able to help out in Mali; and it has well trained troops as well.
Mr Hammond
I am happy to agree with my hon. Friend that the EU training mission in Somalia has been a success. Indeed, I see some similarity between the situation in Somalia and that in Mali. What is required in Mali is military training, economic development support and rule of law and civil governance reform, to help that country to achieve stable and sustainable government in the future. That is something that I believe the EU is well positioned to lead on and to deliver, and we look forward to supporting it in that effort.
Mr Dennis Skinner (Bolsover) (Lab)
Now that the Defence Secretary is talking about sending in troops and weapons, will he bear it in mind that when the intervention took place in Libya—at a very low level, we were told by the Government at the beginning—and when those Benghazi rebels were provided with large numbers of weapons, we found that al-Qaeda and other terrorists in Mali and north Africa were using the same weapons that Britain and other countries had supplied. That is mission creep, and if he is not careful, it will get even worse.
Mr Hammond
I hear what the hon. Gentleman says. I did not refer to weapons. We have talked about troops in a training role. Our preference would be that that training is carried out in the countries that are providing the troops—Nigeria, Gambia, Sierra Leone and Ghana—and if not, that it is carried out in Bamako. It will not be in the forward regions where the fighting is taking place.
Bob Stewart (Beckenham) (Con)
I support the deployment of a Sentinel R1, but may I urge my right hon. Friend to be slightly careful about the use of language? We have already deployed a C-17 to Bamako, and that C-17 has a section of the RAF Regiment within it—for force protection. Force protection personnel are combat troops. They may not be used in combat, but they are combat troops.
Mr Hammond
Yes, I hear what my hon. Friend says. The C-17 is currently carrying out missions moving equipment and troops from France to Bamako and from Dakar in Senegal and other capitals in the region into Bamako, so its mission is into the country, rather than within the country.
Mr David Winnick (Walsall North) (Lab)
After 11 years of warfare in Afghanistan, does the Secretary of State accept that there is no appetite whatever in this country for British troops to be sucked into a new war, a war far away, and a war that could easily escalate? Does he also accept that arising from what he has said today, there should be another statement as quickly as possible next week on what has occurred?
Mr Hammond
I have already made a commitment that there will be another statement on the outcome of the meetings today. It may be next week; it may be sooner. As soon as we are in a position to inform the House, we will do so. I completely agree with the hon. Gentleman. Of course there is no appetite to be sucked into another war—there never is—but there is an appetite to be safe and secure. There is an appetite to ensure that terrorists cannot establish freedom of movement in an area such as the Sahel in order to attack us in the future. I say again that this appears to me to be a very limited and well-leveraged intervention by Britain in support of the French, who have deployed significant numbers of troops and equipment, and who are doing the heavy lift alongside the Malians. What we are now proposing to do is help to reinforce the English-speaking African countries which have also indicated that they are prepared to contribute forces to deal with this as a regional problem. That is the right way to solve such a problem, and our limited support for it is a highly effective way of Britain leveraging its capabilities.
Penny Mordaunt (Portsmouth North) (Con)
Non-interventionism is in vogue, but does the Secretary of State agree that because of the nature of the UK, our trade routes and our status, we have huge interests across the world, and consequently, that this sort of capacity-building exercise is time and money well spent?
Mr Hammond
I absolutely agree with my hon. Friend. I remind her and other hon. Members of the risks to our society and the societies of our allies if we allow areas of ungoverned space to fall under the control of al-Qaeda and its associates and to become a place where they can plan and execute attacks on our interests.
Jeremy Corbyn (Islington North) (Lab)
Does the Secretary of State recognise that Mali is in a post-colonial situation and there is great tension between the north and the south, and that the failure of successive Governments in Mali to address the wishes of the Tuareg people has led to this conflict, as has the exploitation of the country’s minerals? Does he not accept that unless there is a political solution to those issues in Mali, western forces will be there for a very long time and we will be sucked into a horrible war from which we will end up ultimately having to make a humiliating retreat?
Mr Hammond
I do not accept the last part of the hon. Gentleman’s question, but I of course accept that, for there to be a sustainable peaceful situation in Mali over the longer term, there will have to a political solution to the tensions that exist between the north and the south of the country—tensions that, frankly, were created by a colonial map drawer and were pretty predictable when one looks at the ethnic and religious make-up of that country. But the fact that the regional powers are prepared to deploy in support of the Malian army is something that we should very much celebrate and support. Let there be a regional solution to the short-term problems in Mali, and by all means let us be active and forward-leaning in our support for a long-term political solution to the problem.
Sir Nick Harvey (North Devon) (LD)
I strongly support the Defence Secretary’s announcement today, which I believe to be well judged in every particular. I welcome the fact that other countries in the EU recognise the threat to all of our security that would be represented by ungoverned space in that part of the world, and their willingness to join in this training mission. So long as we are being guaranteed that there is no question of our moving into a combat role, I do not think we should view these or any subsequent requests for practical help as mission creep. We should be willing to make a long-term contribution in west Africa, building up regional capacity so that on future occasions western troops will not be required to move in.
Mr Hammond
I am grateful to my hon. Friend and I agree with the sentiments that he expressed. The Prime Minister has made it clear that we have no intention of entering a combat role in Mali. The French have taken the lead and supporting them is the sensible and the right thing to do.
Mike Gapes (Ilford South) (Lab/Co-op)
Thirteen years ago I went to Sierra Leone with the Defence Committee and saw British troops and Gurkhas training the Sierra Leonean armed forces. I am therefore very pleased that Sierra Leone is one of the countries that is prepared to take on the African mission, but does not this raise a wider question of long-term co-operation between the European Union and the African Union to make sure that we do not have to have ad hoc intervention forces, which might take a year or maybe longer to establish, but that when necessary we can intervene to preserve democracy and defend people against extremism?
Mr Hammond
The hon. Gentleman makes an extremely good point. The EU training mission in Somalia and the support arrangements for the African Union intervention in Somalia have come to work very well, but they took a while to get together at the beginning. Now we are embarking on a new activity on the other side of the continent and we are starting from scratch again. His point is well made. Is there a mechanism by which we can create some standing apparatus to ensure that when the need arises for local or regional intervention, supported by outside expertise and resources, we can provide it quickly and effectively? I am happy to pass on those thoughts to my right hon. Friend the Foreign Secretary.
Mr James Gray (North Wiltshire) (Con)
I welcome the Secretary of State’s reassurances about the very limited commitment in Mali not cutting across our capabilities in Afghanistan, but he well knows that the C-17s play a central role in the air bridge and in our commitment to withdrawing by the end of next year. Is he absolutely certain that there will be no possible diminution in that determination if, for example, the commitment of the C-17s were to be extended beyond the three months to which he is committed?
Mr Hammond
The commitment that we have made on the C-17 is for three months and the reason that we have limited it to three months is precisely because we would want at that point to review what impact, if any, any extension beyond that time would have on the air bridge to Afghanistan. Afghanistan remains our principal focus and we will not do anything that will impinge upon success there.
Hugh Bayley (York Central) (Lab)
Nobody welcomes the deployment of British troops abroad, but the UK is right to provide support to France and to the Anglophone west African countries, which, in long run, ought to be giving the security guarantees that are needed in Mali. Will the Secretary of State explain why this is an EU security lead rather than a NATO security lead, what liaison there is between the EU and NATO, and what both bodies are doing to assess where the rebels and their armaments will go next so that we can have a regional response to the crisis?
Mr Hammond
My view is that this type of operation, where there is a military component and a much wider dimension within the country—a need to establish the rule of law and proper civil governance, and an ongoing need for economic development assistance—is ideally suited to EU involvement. At the moment, the French operation is a national operation, but the fact that the EU has been prepared to propose a training mission is welcome. There is, as yet, no NATO activity around this operation. It is a French operation first, then an EU and an AFISMA operation.
I should correct something that I said earlier. I said that the majority of Malians were Christians, but in fact the majority of Malians are Muslims. The ethnic split, not the religious split, puts the majority in the south.
Patrick Mercer (Newark) (Con)
Things go wrong in war. While I absolutely understand all the rightly cautious points that the Secretary of State has made, what forces are earmarked and what contingency plans are in place for when those things do indeed go wrong?
Mr Hammond
We do not expect things to go wrong. We are talking about deploying a small, 200-strong-maximum training force, probably to Nigeria, Ghana, Sierra Leone and Gambia, and, as I have outlined, we have a very small number of forces on the ground in Bamako. As my hon. Friend would expect, permanent joint headquarters continually makes plans for contingencies, although he would not expect me to outline in detail what those plans are. He will know from his own experience that the military are almost obsessive-compulsive about having contingency plans for every operation that they are engaged in, and I can assure him that they will have contingency plans for this one.
Paul Flynn (Newport West) (Lab)
Why have the Government not honoured the pledge that the Foreign Secretary gave me a fortnight ago when he gave a broad assurance that we would discuss in this House, and vote on, whether we deployed soldiers abroad? When the Government decided to go into Helmand province in 2006, they hoped that not a shot would be fired. Then, only two British soldiers had died in combat after five years of warfare; now, the figure is 440. Is not there a grave danger that Mali could turn into another Helmand?
Mr Hammond
No, I do not think so. I think that the hon. Gentleman is referring to an answer that my right hon. Friend the Foreign Secretary gave in relation to the use of war powers. The troops that we are talking about deploying will not be used in a combat role, and the war powers issue does not arise. They will be deployed in a training and support role.
Margot James (Stourbridge) (Con)
Limited military engagement in a supportive capacity to the French and African forces is a precursor to the nation building that is likely to be required, alongside what has been achieved in Somalia, in order to reduce the Islamist al-Qaeda threat. Does my right hon. Friend agree that compared with Afghanistan, Mali and the wider Sahel region is in Europe’s back yard and is a direct threat to our common security?
Mr Hammond
Allowing ungoverned space in Afghanistan would also represent a direct threat to Europe’s security. We know that a significant proportion of the security threats to the UK arise, and have arisen in the past, from the Afghanistan-Pakistan region. What is a threat to Europe’s security and Britain’s security is ungoverned space in which terrorists can organise, exercise freedom of movement, and launch attacks. Wherever ungoverned space arises, whether it is in Somalia, the Sahel, or the Afghanistan-Pakistan border area, we have to take appropriate action to close it down so that that space becomes properly governed and properly monitored.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State kindly for clarifying many of the issues that concern us. There is a great humanitarian crisis developing in Mali, with 230,000 people displaced and 150,000 people having left the country. Will the deployment involve help for the deepening humanitarian crisis and for the infrastructure rebuild?
Mr Hammond
My right hon. Friend the International Development Secretary is very much engaged with this issue. The deployment that I have talked about today is a training mission, but we are also looking to provide humanitarian support in the short term to deal with the movement of people in response to conflict, and in the longer term as part of an EU initiative to support the development of civil governance and economic development, particularly in the north of the country, thus addressing some of the underlying problems of at least part of this insurgency.
Sir Bob Russell (Colchester) (LD)
In this increasingly troubled world, will the Secretary of State reflect on whether it is prudent and in Britain’s interests to cut the size of our armed forces?
Mr Hammond
I can tell you my view on that, Mr Speaker. It is prudent to have a balanced defence budget and to be able properly to equip the troops that we have and seek to use to defend this nation’s security. I am afraid that given the state of the defence budget that we inherited from Labour, we have taken the only responsible set of actions that we could take in order to secure Britain’s defence for the future.
Keith Vaz (Leicester East) (Lab)
May I support and welcome the steps taken by the Government, which I am sure are welcomed by countries near Mali? The Secretary of State mentioned ungoverned space. One country with a lot of ungoverned space is Yemen, where yesterday eight people were killed in a suicide bomb attack by affiliates of al-Qaeda. If the Government of Yemen request the same support that those other countries near Mali have requested, will our Government be prepared to give them that support?
Mr Hammond
We have good relationships with the Government of Yemen and we provide advice and support to them. The President of Yemen was in London a few months ago, and we had very constructive discussions. The action proposed by the AFISMA countries is mandated by a UN Security Council resolution, and the action that we are taking is to support these countries in the discharge of that mandate.
Mr Tobias Ellwood (Bournemouth East) (Con)
Will the Secretary of State confirm that it has for some time been the intention to provide training in a number of west African countries as a form of upstream engagement? For the clarity of the House, will he elaborate on the differences between AFISMA, Operation Newcombe, and the EU training mission?
Mr Hammond
My hon. Friend is absolutely right. This training support should be seen in the context of our ongoing and very good relations with the Anglophone countries of west Africa, where we already have in place excellent military-to-military relationships and provide some training to them. This is very much a continuation and a stepping up of an activity for which there is established precedent, and I hope that the House will support it on that basis.
Thomas Docherty (Dunfermline and West Fife) (Lab)
The Secretary of State will have seen the report in Friday’s Le Monde about atrocities that have allegedly been committed by Mali Government forces as they have seized back territory. Will he explain why we are not making it an absolute requirement on the Malian Government to investigate and co-operate fully with the International Criminal Court before we give them a single shilling?
Mr Hammond
We are making the point very clearly to the Malian Government that if they want to benefit from the support of the United Kingdom and other members of the international community, they must respond swiftly and effectively to the allegations that have been made. The French forces command in Mali is also very focused on the need to address this issue promptly.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Does my right hon. Friend envisage 3 Commando Brigade playing a part in this initiative?
Nick Smith (Blaenau Gwent) (Lab)
May I press the Secretary of State? Will he tell us more about the relationship between the European Union training mission and the French military mission? Will he also tell us what is happening to the Sentinel security system, which was going to be cut under the strategic defence and security review? Will it be reprieved?
Mr Hammond
To answer the last question first, the ongoing use of Sentinel is not currently funded beyond 2015. It remains one of the candidate programmes for the—[Interruption.] The hon. Member for North Durham (Mr Jones) cackles from the Opposition Front Bench, but he was a Defence Minister in the previous Government who left us with a £38 billion gap between the equipment they had ordered and the budgets available to pay for it. We are having to prioritise and identify the programmes that are most important to maintaining Britain’s national security. Sentinel is a candidate programme for funding after 2015, and we will continue to look at its run-on costs and whether we can justify the investment in them.
Mr Julian Brazier (Canterbury) (Con)
I welcome the rounded and proportionate response that my right hon. Friend has outlined. Has the National Security Council asked the Department for International Development, the Foreign Office, the Department for Business, Innovation and Skills and other relevant Departments to talk to their French counterparts about how we can flesh out this mission as a whole so that it is not purely a military one?
Mr Hammond
Yes, I can assure my hon. Friend that DFID and Foreign Office officials and Ministers are in touch with their French counterparts and that there has been a great deal of traffic backwards and forwards between London and Paris over the past 10 days.
Rushanara Ali (Bethnal Green and Bow) (Lab)
The Secretary of State mentioned £5 million being contributed towards United Nations funds. What proportion of that will come from the Ministry of Defence budget and what proportion, if any, will come from DFID budgets? Will he also tell us when we can expect an announcement on what kind of humanitarian assistance the British Government will provide and when?
Mr Hammond
I will alert my right hon. Friend the International Development Secretary to the hon. Lady’s last question and ensure that when a further statement is made to the House—I anticipate that it will be made very shortly—that issue will be covered in it.
I am not absolutely certain, but I assume that the £5 million that I referred to will come from the conflict pool, which is a cross-Government, tri-departmental pool of money. If I am wrong about that, I will write to the hon. Lady and place a copy of the letter in the House.
Steve Baker (Wycombe) (Con)
My right hon. Friend has emphasised the issue of ungoverned spaces. Mali is five times the size of the UK, or thereabouts, with a quarter of the population, and Algeria ten times the size with a population three fifths the size of ours. What are his expectations for the proper governance of these vast, empty spaces?
Mr Hammond
Governance should not be confused with policing. Proper governance is about a system for bringing the people of the northern part of Mali into the overall governance of the country, making the Tuareg population feel part of the overall structure and having a demonstrably fair system for sharing the nation’s resources and wealth. That will be the key. As my hon. Friend rightly says, the sparsity of population and the vast spaces defy any aspiration to be able to police them in the conventional sense.
John Cryer (Leyton and Wanstead) (Lab)
If there were ever an example of mission creep, this is it. Further to the question asked by my hon. Friend the Member for Newport West (Paul Flynn), at what point will the Secretary of State test the will of Parliament?
Mr Hammond
I do not accept that this is an example of mission creep. What we have done is extremely modest. We are providing strategic air-lift support for a limited period and one surveillance aircraft, operating from a neighbouring, friendly country, and we are now talking about deploying up to 250 troops in a training role, most of which will be carried out in the countries donating the troop forces. I do not consider that to be an escalation of the scale characterised by the hon. Gentleman.
Rehman Chishti (Gillingham and Rainham) (Con)
Given the difficult terrain in Mali and the surrounding area, is the United Kingdom likely to provide drone assistance, as it did in Libya and Afghanistan, either as surveillance or on a front-line basis?
Mr Hammond
We currently assess that we could not provide drones or unmanned aerial vehicles of any sort in support of the French campaign in Mali without it having an unacceptable impact on our operations in Afghanistan, so we have declined to do so.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
The Secretary of State has rightly referred on a number of occasions to the need for political reform, economic development and humanitarian relief, but he will know that people have been saying that Mali has needed that for years and warning that if Mali did not get it, we would have problems with that country. It would be all too easy, after, I hope, a quick military success, for those long-term commitments to be forgotten, so what guarantees can we have that there will indeed be the sustained support that is undoubtedly needed from Britain and the European Union?
Mr Hammond
The hon. Gentleman makes a fair point. It is an unfortunate fact of life that it is only when countries force themselves to the top of the news agenda, sometimes for completely the wrong reason, that everybody recognises that we have known that there was a problem there for a long time and that we knew what needed to be done, but did not quite do it. I would hope, having now focused on the challenge and seen in Algeria the week before last the potential consequences of allowing terrorist organisations to gain ground in this area, that the EU in particular will have the will and the tenacity to see this through and to do what needs to be done over the medium to longer term.
Richard Graham (Gloucester) (Con)
My hon. Friend the Member for Basildon and Billericay (Mr Baron) is surely right to raise the high human and financial cost of earlier interventions under the previous Government, but there is a danger of seeing everything through the prism of previous experience. I support the Defence Secretary’s commitment today to deploying considerable British military training capabilities alongside allies, with the support of neighbouring countries and with full awareness of the dangers of mission creep in Mali, for the better security of Europe. Does he agree, however, that training in fragile areas comes under the heading of conflict resolution and that it would, therefore, be appropriate for DFID to make a wholesome contribution to the costs of this training mission?
Mr Hammond
My ears are always open to any suggestion that anybody else might contribute to activity that otherwise falls on the defence budget, but as I said earlier the funding for this operation will come from the conflict pool and from pooled funds that are available for precisely this type of intervention. This is an arrangement that is working extremely well across Government and is one of the successes of the past couple of years.
Mark Durkan (Foyle) (SDLP)
Notwithstanding what the Secretary of State has said, he will understand that many will remain concerned about the quick-sand syndrome overtaking these deployments, particularly in the absence of the political and economic engagement developing a more visible and viable profile. He is right to characterise so darkly the terrorist threat, but he must also acknowledge that Malian Government forces face allegations of serious human rights abuses, including recently. How is he proofing those whom he is deploying in a support role against any future suggestion that they will be implicated in supporting such abuses in the future?
Mr Hammond
British forces have clear rules of engagement. The forces we have deployed so far will be limited to engagement on the basis of self-defence only if they are attacked. I have already acknowledged our concerns about the allegations that have been made about Malian forces, and I know that our French colleagues have similar concerns and are addressing them with the Malian Government and the Malian forces on the ground. This situation is in a state of flux on the ground. The Malian forces are regrouping. Some of their command and control systems are currently inadequate, but the French are seeking to make a difference on the ground.
Mr Philip Hollobone (Kettering) (Con)
What is the extent of military co-operation between Algeria, Mali and Nigeria? Will the South Africans provide any troops? With America increasingly looking to the Pacific, will European support for an African solution to this problem be enough without substantial American involvement?
Mr Hammond
I should tell the House that the United Kingdom has agreed to the use of US bases in the UK for the provision of refuelling support for the French forces, should the US choose to provide it. That is a decision for the US, but we would be comfortable with US aircraft operating from US bases in the UK for that purpose.
Nigeria is committed to providing troops to support the mission in Mali. I do not believe that the Algerians are committed in the same way, but they have an interest in security on the Algerian-Malian border. As far as I am aware, there is no commitment from South Africa.
Jason McCartney (Colne Valley) (Con)
Will my right hon. Friend confirm that British forces are deployed on training missions not only in Africa but around the world? Will he also confirm whether the intelligence gathered by the Sentinel aircraft will be used in support of French offensive operations or just to safeguard our troops on their training mission?
Mr Hammond
My hon. Friend is right to draw attention to the fact that British military training missions are taking place in many countries around the world. British military training is highly sought after by many foreign Governments. It is one way in which we punch above our weight by having a degree of influence on foreign militaries and Governments that we might not otherwise have.
The intelligence output from Sentinel will be deployed principally not for the protection of British forces on the ground, but to deliver intelligence to the French to increase their situational awareness of what is happening over these vast tracts of land.
Robert Halfon (Harlow) (Con)
Does my right hon. Friend agree that an ethical foreign policy means one of muscular enlightenment, and that as a democracy we have a moral duty to intervene where possible to stop extremism and dictatorship, not just for the benefit of the world community, but for the people of individual countries?
Mr Hammond
I think that we have an absolute duty to intervene wherever there is a threat to Britain’s national security and the security of Britain’s interests around the world. This is exactly such a case. This is a well-judged, well-leveraged intervention that will deliver efficiently a result that is in Britain’s national interests.
Roger Williams (Brecon and Radnorshire) (LD)
I am sure that everyone welcomes the fact that Malian and French troops entered Timbuktu without resistance, preventing further damage to its people and fabric. Nevertheless, the city is in desperate need of support to rebuild its medical and educational facilities and its local economy. Will the Secretary of State ensure that British training and advice are given to Malian and African troops on how best to work with agencies to provide them with security and safety so that they can carry out their work?
Mr Hammond
My right hon. Friend the International Development Secretary is heavily engaged in activities in Mali. I suspect that many people in this country thought that Timbuktu was a mythical place until it popped up on their television screens three days ago. My hon. Friend talks about an urgent need to rebuild medical and educational facilities. This city has not been occupied by rebel forces for years; they were only there for a few days. However, he is right that there is an urgent need to provide development support to towns and cities in the north of Mali, where the level of economic development is very low. I know that that is a focus of my right hon. Friend the International Development Secretary.
Point of Order
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Robert Halfon (Harlow) (Con)
On a point of order, Mr Speaker. As chairman of the British-Brazil all-party parliamentary group, I tabled early-day motion 981 on the nightclub fire in Santa Maria, in which sadly at least 230 Brazilians lost their lives. Are we able, as a House, to send our condolences to the Brazilian Parliament and to open a book of condolences here?
Mr Speaker
I will certainly reflect on the hon. Gentleman’s suggestion. I accept the seriousness of the issue and the sincerity with which he has addressed it. I shall revert to him in due course.
Equality (Marriage) (Amendment)
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
13:49 - The House having divided: - Ayes: 86 / Noes: 31 - Question accordingly agreed to.
Mr Edward Leigh (Gainsborough) (Con)
I beg to move,
That leave be given to bring in a Bill to amend the protected characteristics in the Equality Act 2010 to include a person’s conscientious beliefs about the definition of marriage; and for connected purposes.
In my office, we call this the Adrian Smith Protection Bill, because it was his case that prompted me to table it. I will read an extract from the letter that Adrian Smith has written to Members of Parliament:
“I’m the housing manager who was demoted and had my salary cut by 40 per cent, all because I said on my personal Facebook page that gay weddings in churches would be ‘an equality too far’. I wrote those four words using my own computer, outside work time, on a page that was not visible to the general public. Yet my bosses at work still saw fit to punish me.
I tried reasoning with my bosses, but they dug their heels in. I was left with no option but to go to court to clear my name. It took the better part of two years, which was a living nightmare for my family and me. In November the High Court ruled in my favour. But they didn’t have the power to order my reinstatement so I was left in a demoted job which carried a lower salary. I have now found a job with a different employer. I shouldn’t have been treated like an outcast, and my family shouldn’t have had to suffer like they did.”
I am introducing this Bill to protect people like Adrian Smith. His case cost him and the charity that supported him £30,000. He got £98 in damages. He was told by the lawyers who advised him that he would be unlikely to win his case for unfair dismissal because of recent rulings by the European Court of Human Rights in Strasbourg.
One of those rulings went against Lillian Ladele. She was told by the European Court of Human Rights that she had no right to have her view on marriage respected at work. She was dismissed by Islington borough council, even though the relevant part of her work could easily have been given to other employees. That ruling means that an employee who is ordered to go against their conscience on the issue of marriage has few, if any, legal rights to protect them. That is why we need an amendment to the Equality Act 2010.
There is already a problem, but if the Government succeed in redefining marriage, the problem will get much worse. We are told that the Marriage (Same Sex Couples) Bill is to be fast-tracked and that full scrutiny on the Floor of the House is not welcome. However, the Bill is not some obscure change in the law; it raises profound ethical, moral and, I would argue, constitutional matters that affect the Church of England. It also raises matters of conscience. We therefore need full scrutiny on the Floor of the House. I hope that the Opposition will press for that. I, for one, will support them if they do.
I have this opportunity, a week before the Second Reading of that Bill, to put on the record the deep concern that exists about freedom of conscience. I believe that that right is as important as the protection of church weddings. The Government’s Bill does nothing to protect ordinary people’s conscientious views. Adrian Smith and Lillian Ladele can therefore be mistreated at work. They should be protected, but the Bill offers them no protection.
Aidan O’Neill QC has produced a legal opinion that points out that NHS and Army chaplains may argue their case for traditional marriage in church on a Sunday, but could find themselves in trouble for articulating the same views in their workplace on Monday.
Marriage charities that were set up to promote traditional marriage at a time when nobody dreamed that there was an alternative could find themselves shut down. Only this week, the last Catholic adoption agency, St Margaret’s in Glasgow, was ordered by the Scottish charity regulator to drop its policy of requiring prospective adopters to have been married for two years.
According to a leak from the Department for Education, officials are worried that teachers will be in the firing line if marriage is redefined. Indeed, my right hon. Friend the Secretary of State for Culture, Media and Sport was pressed on that point by John Humphrys on the “Today” programme last week. She admitted that even in RE lessons in religious state schools, teachers would have to teach the subject in “a balanced way.” Many people in this country believe profoundly that traditional marriage is between a man and a woman, and they want the right to teach that in school.
The Education Act 1996 requires schools to teach about the nature of marriage, so if marriage is redefined they will be required to teach about the nature of same-sex marriage. Teachers who decline will find themselves in the firing line in the same way as Lillian Ladele. Why should we put thousands of teachers at risk of dismissal for believing that marriage is between a man and a woman? Labour and the teaching unions will find themselves in a firestorm if they do not protect their members. Indeed, extant counsel’s opinion tells us that the courts are unlikely to rule in favour of parents who want their children excused from classes teaching same-sex marriage.
This ten-minute rule Bill is not a blocking measure to stop same-sex marriage; it would simply insert in the Equality Act 2010 protection for a person’s conscientious views on the definition of marriage. It would protect those who hold the traditional view that marriage is between a man and a woman, just as it would protect those who hold a contrary view. People’s right to belief and conscientious right to freedom of expression must be protected. That does not mean that those conscientious views override all other considerations, but simply that conscientious beliefs about the definition of marriage are a protected characteristic that must be taken account of.
I believe we must protect the right of conscience. For over a century, atheist teachers have been allowed to express their opinions and no one can force them to teach religion. Pro-life doctors cannot be forced to participate in abortions. During the second world war when we were in a life and death situation, we allowed the existence of conscientious objections. In 21st-century Britain, however, woe betide anyone who refuses to declare full support for same-sex marriage in the workplace or the classroom.
In my time in Parliament I have battled for freedom of speech—we had a great victory on section 5 of the Public Order Act 1986—and this is not a fringe concern. We go around the world—we have just heard a statement on Mali—investing blood and treasure to extend freedom, but let us not forget the freedom on our own doorstep. Some Members who support redefining marriage might be utterly convinced about the rightness of their cause. I respect their views, but surely they must be generous towards those who disagree. They should ensure that the law respects and does not trample over people’s deeply held beliefs.
Millions of our fellow citizens believe passionately in marriage, and they believe their own marriage defines who they are. They do not want their marriages redefined over their heads by politicians. They believe that history, biology, ethics and religion all tell us that marriage is, uniquely, the coming together of one man and one woman for life to the exclusion of all others. I believe that these people are entitled to protection not just in their churches but in their workplace, at home, on Facebook and when they teach in the classroom. They are entitled to talk about their beliefs on marriage—such beliefs are mainstream and sensible—and should do so without fear. If we do not believe in freedom of speech for those with whom we disagree passionately, I believe we have no passion for freedom of speech.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I am grateful for the chance to respond to this motion with the greatest courtesy and respect for the hon. Gentleman’s sincerely and deeply held beliefs, but I regret that they appear to have motivated him erroneously to use a sledgehammer to crack a nut. I rise to oppose the motion as a fellow Christian who was baptised in the Church in Wales, confirmed in a Welsh Presbyterian chapel, and who now worships again within the Church in Wales.
I have opposed over many years many of the things that the hon. Gentleman has said on theological and political matters, but I differ with him today through no ill will. In fact, I am conscious of the gifts and privileges that we are afforded to listen to views on either side of the debate in this House, and indeed outside the House when we listen to the views of our constituents and the many others who have written to me, and no doubt also to the hon. Gentleman.
I differ with the hon. Gentleman on three principal areas. First, as many hon. Members will recall, the Equality Act 2010 already takes great care to provide protections for persons of religion and belief, despite significant scaremongering at the time, such as claims that we were going to lose Christmas and other such things. Those protections were placed on a principled equal footing with other protected characteristics, including those of sex and sexuality. As the Government Equalities Office made clear in guidance when the Bill was introduced:
“In the case of Ministers of Religion and other jobs which exist to promote and represent religion, the Bill recognises that a church may need to impose requirements regarding sexual orientation, sex, marriage and civil partnership or gender reassignment if it is necessary to comply with its teachings or the strongly held beliefs of followers.”
I believe the Act already provides safeguards against the scenarios envisaged by the hon. Gentleman, and that it does not need further clarification by Parliament.
Secondly, by opening up debate on such a carefully considered piece of legislation in what is effectively a piecemeal way, we could essentially be undoing the work of a great deal of parliamentary debate that took place when we considered where to set the boundaries on “protected characteristics”, and how to balance appropriately the rights of one protected group alongside or against those of another. As I have said, great care and respect were provided to people of religion and belief, as well as to those without belief, to ensure that they could not be discriminated against on that basis, and appropriate exceptions were provided in relation to other protected characteristics to prevent malicious prosecutions—for example, trying to force a church or other religious institution to appoint a minister or priest not of its faith. I have worked for a Christian organisation protected by such provisions, to ensure that where there is a genuine occupational requirement to employ a practising Christian, that requirement is protected and respected.
Thirdly, I fear that this motion is unfortunately a veiled attempt to prejudge and resolve a problem that, in my view, the Bill on equal marriage does not create. With the greatest respect to the hon. Gentleman, a motion such as this is not the best vehicle through which to pursue the views of this House on such important matters, given that next week we will have a clear opportunity to debate and discuss all implications of the proposed equal marriage legislation, not just one part in isolation which I am worried could merely distract the House.
The hon. Gentleman and those who support his position will be entirely at liberty to pursue their concerns and lines of inquiry as part of their contribution to the Second Reading debate, or to probe the point by tabling amendments subsequently. I have no doubt that Ministers will be able to assure him that the problem he appears to be outlining will not be created by the Bill on equal marriage, and therefore does not need to be resolved by an unnecessary measure.
The hon. Gentleman and I will no doubt find ourselves on fundamentally different sides of the debate next week. I for one do not believe that my faith, or any other, has a monopoly on the definition of marriage, and whatever it may have been historically, marriage is an institution that I believe now transcends belief, faith and religious conviction. As such, I hope marriage will be made open to all who wish to enter it, whether in the sight of their God, gods, or simply their closest friends and family.
My Church currently does not permit same-sex marriage and will not be forced to do so under the proposed legislation. I will argue from within for it to change its mind, but it is fundamentally a decision for that Church and its decision-making procedures. Until such a time—if, indeed, it arrives at all—the Bill on equal marriage will, I believe, protect those with different views to mine. The hon. Gentleman and those with similar views should have no fear: nothing in the proposed Bill constitutes an attack on them, their marriages, or those who cannot support same-sex marriage and would not enter into one owing to their own sincerely held beliefs. It is inaccurate to suggest that any religious denomination that does not want to celebrate such marriages might be forced to do so if a permissive, rather than mandatory, mechanism such as this Bill is introduced. The hon. Gentleman and others should rightly test and secure assurances on that if they so wish, but I believe there is no need for this motion.
Finally, in proposing a Bill at this stage, the hon. Gentleman will be aware that there is no chance of it progressing through the relevant stages in this House and the other place before Prorogation, and no chance of making it on to the statute book. I emphasise again to hon. Members and colleagues that next week the House will have a chance to make its views clear on the entire issue, not just on one small part disassociated from the others. On that basis, although my views differ from those of the hon. Gentleman, I will not push the House to divide on this motion, and I hope other hon. Members will take the view that we should not distract from the full and free debate and that we should vote on these issues next week. The House should now be allowed to move on to deal with the other important business before it today.
Question put (Standing Order No.23).
The House proceeded to a Division.
Mr Speaker
The hon. Gentleman cannot raise a point of order during the Division. He can toddle up to the Chair and have a chat if he so wishes, and I have a feeling he will avail himself of that prerogative.
Electoral Registration and Administration Bill (Programme) (No. 2)
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Lords Amendments | Time for conclusions of proceedings |
|---|---|
Nos. 5 and 23 | Two hours after the commencement of proceedings on consideration of Lords Amendments. |
Nos. 7, 10, 11, 1 to 4, 6, 8, 9 and 12 to 22 | Three hours after the commencement of those proceedings. |
Electoral Registration and Administration Bill
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:03 - The House divided: - Ayes: 292 / Noes: 334 - Question accordingly negatived.
The Leader of the House of Commons (Mr Andrew Lansley)
I beg to move, That this House disagrees with Lords amendment 5.
Mr Speaker
With this it will be convenient to take Lords amendment 23 and Government amendments (a) and (b) in lieu.
Mr Lansley
Lords amendments 5 and 23 on the boundary review were inserted into the Bill in the Lords, despite being outside the scope of the Bill. This was clearly done with the intention of preventing the implementation of the boundary review, which was agreed by this Parliament in the Parliamentary Voting System and Constituencies Act 2011.
The effect of Government amendments (a) and (b) in lieu would be to provide for the boundary review to proceed and for the Boundary Commission’s recommendations to come into force, taking effect at the next general election, without a requirement for any further vote in either House of Parliament.
I move this motion as Leader of the House in order to facilitate the debate. In the first instance, Members of this House will decide whether to disagree with the Lords in their amendment, the effect of which would be to put off the boundary review until 2018. If Members approve that motion, we would then go on to vote on whether instead the current boundary review should go ahead without further interference.
Michael Fabricant (Lichfield) (Con)
May I say how disappointed I am that it is not the Deputy Prime Minister who is moving the motion? I will have to ask my right hon. Friend the question instead. Is he aware that in 2010 in this Chamber the Deputy Prime Minister made it very clear that the boundary review would be established on the simple principle of fairness, with all votes being of equal worth? Do the Lib Dems not do principle on the 29th of the month, or is it just on Tuesdays?
Mr Lansley
My hon. Friend makes his point very well. I will come on to the substance of the issue, but if he will forgive me and the House will bear with me, I wish first to make certain that hon. Members understand the structure of the debate and what the implications of each vote might be.
If the motion to disagree with the Lords in their amendment were agreed, we would go on to vote on the Government amendments in lieu, which would have the effect of proceeding with the boundary review without further votes in Parliament. If, however, hon. Members vote against the motion to disagree, the Lords amendments will be held to have been agreed with, and no further votes will take place on this group. There are therefore three potential outcomes: to agree with the Lords; to disagree and put the Bill back as it was when it left this House; or to settle the boundaries review issue now through the amendments in lieu.
I should make it clear to the House that while as Leader of the House I am enabling the debate, I will also set out my view and that of my party. In doing so, I will not be setting out formally the view of the Government, as there is not a settled coalition view. Accordingly, and as happened in the Lords, collective ministerial responsibility has been set aside for this debate.
Mr Peter Bone (Wellingborough) (Con)
I do not quite understand what the Leader of the House has said. On 6 September 2010, the Parliamentary Voting System and Constituencies Bill received its Second Reading, and the Deputy Prime Minister—Nick Clegg, as he is listed in Hansard—voted for it, and Mr Peter Bone voted against it. On Third Reading, on 20 November 2010, Mr Clegg again voted for it and Mr Bone voted against it. Surely it must be the settled view of the Government? It has gone through all its stages: how can it not be the settled view of the Government?
Mr Lansley
My hon. Friend will recall very well that that Bill was the Government’s view and the Government’s policy, and the House agreed with that Government Bill. The issue is these Lords amendments, and as I told the House, the ministerial code explicitly allows for ministerial responsibility to be set aside in particular circumstances, and it has been set aside in relation to the debate and votes on this particular point.
Mark Reckless (Rochester and Strood) (Con)
Does the ministerial code not also say that Ministers must abide by the coalition agreement in the same way as they must abide by international law?
Mr Lansley
No, I am afraid that my hon. Friend is not correct in that respect. The coalition agreement is clearly a relevant issue, but it is not encapsulated in the ministerial code. The code is very clear—he will no doubt be familiar with it—and makes clear the requirements for Ministers to accept the obligations of ministerial collective responsibility save when it is explicitly set aside. I am simply making it clear that collective ministerial responsibility has been set aside in relation to this debate and for these purposes.
Mr Christopher Chope (Christchurch) (Con)
My right hon. Friend has answered questions about ministerial responsibility in front of a Select Committee. Can he tell us who set aside collective responsibility and, if it was the Prime Minister, why he did so?
Mr Lansley
My hon. Friend will be aware that the Prime Minister has responsibility for the ministerial code. Indeed, when ministerial collective responsibility is explicitly set aside, it is the Prime Minister who makes that decision. He is clearly doing it, as the House will understand, in the context of coalition government. As we know, that can give rise to occasions where there is not a collective view, and where by extension it is therefore not possible for a collective view to be the subject of collective ministerial responsibility. Let me turn to the substance of the issues.
Mrs Eleanor Laing (Epping Forest) (Con)
Will my right hon. Friend give way?
Mr Lansley
No; I will give way in a moment. Let me turn to the substance of the issues.
Parliament agreed less than two years ago to a boundary review, and it did so for good reasons. There are major disparities in the size of constituencies. In England, East Ham has 92,000 voters; Wirral West has just 55,000. The differences are even greater in respect of other nations: Arfon in Wales has an electorate of just 41,000. This means that some votes count much more than others, and the principle of greater equality in the value of each vote is at the heart of this new boundary review. Votes should carry much more equal weight across the country in electing Members to this House and in deciding a future Government. If the current review were not to happen, in England the next general election would be based on the register of February 2000, with all the consequent disparities and inequalities which have been exacerbated since then. It would be 15 years out of date.
Mr Jack Straw (Blackburn) (Lab)
Does the right hon. Gentleman accept that he is being just a tad disingenuous in claiming—
Mr Speaker
Order. Although the list of proscribed words ceased to exist some time ago, I would say that the right hon. Gentleman is on somewhat dodgy ground in using that word. In view of his known dexterity in the use of language, I exhort him to deploy another term to make his point.
Mr Speaker
Order. If the right hon. Gentleman cannot accuse somebody of behaving disingenuously, it is small comfort for that person to be accused of behaving only a tad disingenuously.
Mr Speaker
Order. I am sure the right hon. Gentleman will not be held back for long.
Sir Peter Bottomley (Worthing West) (Con)
On a point of order, Mr Speaker. Would you accept a motion that the right hon. Gentleman be no longer heard?
Mr Straw
Would the Leader of the House accept that he has put only a part of his argument when he justifies the measure on the grounds of seeking equality of electorates? That principle is agreed across the Chamber. The objection to the 2011 Act was that it was a wholly partisan measure, breaking a clear convention that this kind of measure be agreed across the parties, to arbitrarily reduce the number of MPs from 650 to 600. That is the real reason.
Mr Lansley
Well, Mr Speaker, that was a long time to be sitting down. I think the right hon. Gentleman knows me well enough to know that I am on occasions wrong, but I endeavour never to be disingenuous. On this occasion I am not wrong either. One could equally argue that it was a partisan effort on the part of the Opposition to frustrate the intention of the House to bring equality and fairness into the franchise when the Parliamentary Voting System and Constituencies Act 2011 was passed. None the less, my point is simply that Parliament voted on that legislation, which has been enacted. That was done on the principle of equality and fairness and the Boundary Commission has proceeded on that basis. Not now proceeding with the review would leave all the inequalities in constituencies, between constituencies and between voters that go all the way back to February 2000.
Mark Reckless
My right hon. Friend says that he is not wrong, but he stated that the ministerial code contains no reference to the coalition agreement. Paragraph 1.2 states:
“The Ministerial Code should be read alongside the Coalition agreement”.
If that is the case, why is the Deputy Prime Minister being allowed to break it?
Mr Lansley
My hon. Friend has the advantage of me, but the ministerial code explicitly states the circumstances in which ministerial collective responsibility can be set aside. That is for the Prime Minister to decide, notwithstanding either the coalition agreement or the ministerial code.
Returning to the review, Members of this House must be aware that not only is the principle of equality and fairness relevant, but the review will have the effect of bringing down the number of Members here from 650 to 600, cutting the cost of politics by £13.5 million a year. As we are cutting back on administration and costs across the whole of the public services, it is only right that we apply the same principles to ourselves.
Chris Ruane (Vale of Clwyd) (Lab)
On inequality, how equal is it to reduce the number of MPs from 650 to 600 and increase the number of Members of the House of Lords by an extra 125 since 2010? Where is the equity in that?
Mr Lansley
The hon. Gentleman and Opposition Members know perfectly well that if they had supported a programme motion on House of Lords reform, we would have been able to reform the House of Lords and reduce the number of Members in the Lords. But no, they did not do that.
Chris Bryant
So charmingly done. The right hon. Gentleman said that he was going to cut the cost of politics, yet the average cost of a completely unelected new peer is £150,000 a year. How many extra peers will he be appointing before the next general election? We have already seen the fastest appointment of peers of any Government in history.
Mr Lansley
We always made it clear on the Government Benches that if the House of Lords remained unreformed it would be necessary to enable it to better reflect the character of the outcome of the preceding general election. I will not reiterate the point I made to the hon. Member for Vale of Clwyd (Chris Ruane), but if the Opposition had supported House of Lords reform we would have been able to deal with that.
Mr Kevan Jones (North Durham) (Lab)
Will the right hon. Gentleman give way?
Mr Lansley
No, I am going to make more progress—this is only a two-hour debate.
I am asking the House to maintain the boundary review. As my hon. Friend the Member for Lichfield (Michael Fabricant) reminded us earlier, it was my right hon. Friend the Deputy Prime Minister who said, quite rightly, on Third Reading of the Bill that became the Parliamentary Voting System and Constituencies Act 2011:
“Fairness demands constituencies that are basically equal in size…there can be no justification for maintaining the current inequality between constituencies and voters across the country.”—[Official Report, 2 November 2010; Vol. 517, c. 864.]
I have heard no argument that changes that, nor any justification from the Lords to seek to do so.
Harriett Baldwin (West Worcestershire) (Con)
I thank the Leader of the House for giving way. He rightly emphasises that the coalition agreement is an important document, but could he also remind the House that manifestos are important, and will he inform us all of the Liberal Democrat manifesto pledge on reducing the number of MPs?
Mr Lansley
Again, my hon. Friend has the advantage of me, as I do not have the Liberal Democrat manifesto to hand. I will say from the Dispatch Box that the coalition agreement is important and that it set out our shared objective to introduce a Bill that included provision for the introduction of the alternative vote in the event of a positive result in a referendum—there was not such a positive result—as well as the creation of fewer and more equal-sized constituencies. The Parliamentary Voting System and Constituencies Act 2011 is therefore entirely part of the commitment made in the coalition agreement.
James Duddridge (Rochford and Southend East) (Con)
When I entered the House, a colleague advised me to carry in my top pocket a couple of good jokes for speeches. I will read one from the Liberal Democrats’ manifesto, which sadly my right hon. Friend does not have to hand. It is quite clear:
“we will be able to reduce the number of MPs by 150”—
full stop, end of quote. Why then are they not doing it? This would have been a good first step.
Mr Lansley
My hon. Friend makes an important point. If I may, I put it to my hon. and right hon. Friends on the Liberal Democrat Benches that they might like to explain their reasoning to my hon. Friend later in this debate.
Mrs Laing
I thank my right hon. Friend for giving way. I hope it may be helpful to him and the House to know that his colleague the Deputy Prime Minister gave evidence to the Select Committee on Political and Constitutional Reform on 19 April and 13 December last year, and I asked him the exact questions that Members have been asking in the last few minutes. He made it clear to the Committee that he still agreed with what he said at the Dispatch Box on Second Reading: that we have to put right what he called
“the broken scales of our democracy”—[Official Report, 6 December 2010; Vol. 515, c. 36.]
However, he also made it clear that although he considers the current system to be unfair, he is absolutely certain that that unfairness should continue until after the next general election. That is his position.
Mr Lansley
I am sure the House is grateful to my hon. Friend for informing it about the discussions in the Political and Constitutional Reform Committee. From my point of view, I know the Deputy Prime Minister’s commitment to constitutional reform. I think the boundaries review and the introduction of greater equality and fairness in constituencies and between voters is an important constitutional reform, and I hope he would want to see it put through before the next election.
Mr Lansley
I will carry on for a moment, if I may.
Some argue that the boundaries review may spend further money this year and then not be approved—that argument was adduced in the Lords. One might equally say that several millions have been spent and the process should be completed. Either way, the amendments in lieu, if passed today, would settle that question. They would bring the review into effect without any further political interference, which, given the independent character of the review, has merit in any case.
Mr Lansley
I will, and then I will give way to my hon. Friend the Member for Crawley (Henry Smith).
Toby Perkins
I am grateful to the Leader of the House. It is undoubtedly true that the question could be settled one way or another today. However, given that the Liberal Democrats are clear that they will not support him, is not the most sensible thing for the House to finish this and not waste any more money on it, rather than continue with the process when it has already been made clear that what was a very political initial manoeuvre is now doomed to fail?
Mr Lansley
I am rather disappointed that the hon. Gentleman thinks that my modest rhetoric might have no impact on my hon. Friends on the Liberal Democrat Benches. Surely that is the whole point of this debate and, in particular, of my colleagues and I tabling the amendments in lieu—precisely because it would be in the interests of this House to settle the matter today. It would be in the interests of this House, not least in its relationship with their lordships, to say, “We have settled it today. The boundaries review should be completed, as we legislated for it to happen, and there should be no more interference by either House, for any reason or any party.” There is an independent review; it should be completed. Before we come to the amendments in lieu, however, we first have to decide whether the Lords were right to amend the Bill as they did.
Mr Lansley
Let me make this point, if I may. Let me put it plainly: I believe that what was done in the Lords was an abuse of the parliamentary process. We sent them a Bill concerning electoral registration; they inserted a provision outside the scope of the Bill. This is the first time that that has been done, and it was done contrary to the advice of their Clerks, who ruled that the amendment was not relevant to the Bill. It is also significant to note that the Cross Benchers in the Lords voted by two to one against inserting the boundaries amendment.
Steve Baker (Wycombe) (Con)
I am not in the least surprised that the forces of reaction still come from the other place, but does my right hon. Friend share my astonishment that now the forces of reaction are the party opposite and the party below the Aisle, on the Liberal Democrat Benches?
Mr Lansley
Yes, my hon. Friend makes an important point. I might say that the argument was put to the Members of the other House that in agreeing such an amendment, the Lords are seeking directly and dramatically to intervene in the structure of elections to this House. As my noble Friend Lord Strathclyde told peers in another place:
“How odd it would be if this unelected House…should have the temerity to tell the elected House how to proceed on its…election”.—[Official Report, House of Lords, 15 November 2010; Vol. 722, c. 568.]
How often did Opposition Members complain when they were in government if the unelected House sought to overrule the elected House? Let them contemplate this: how much stronger is that complaint, which I heard them make, when the view of this House is overruled in relation to the franchise to this House?
Pete Wishart (Perth and North Perthshire) (SNP)
May I remind the Leader of the House that those of us on the SNP Benches were never in government? He will have no comfort from the Scottish National party. We will be voting against the Government’s proposals, even though the new boundaries would be to our advantage. Can he explain why the Conservatives are selecting candidates on the current boundaries, not the new boundaries?
Mr Lansley
I am very disappointed in what the hon. Gentleman says, because I would hope that Members of this House would attach immense weight to the primacy of this House in determining the franchise for this House and reject a move by the unelected House to seek to interfere with the previously settled will of this House.
Andrea Leadsom (South Northamptonshire) (Con)
Although Members in the other House might not care what voters think, because they do not have to face them, surely other colleagues in this House must care that all their electors would like the cost of Parliament reduced and for all votes to count as much as each other.
Mr Lansley
My hon. Friend makes a good point well. Anybody who votes to agree with the Lords or not to disagree with them on this amendment will, I fear, have to explain to their electorate why they are not reducing the cost of politics when we are asking the public services generally to do that.
In what is colloquially known as the Hart-Rennard amendment we have not only an abuse of parliamentary process, but a democratic travesty. The unelected House is seeking to frustrate the precisely expressed will of this Parliament—not a previous Parliament—to deny fairness and equality in the franchise and fundamentally to manipulate the basis on which this House is to be elected.
Mr Kevan Jones
Can the right hon. Gentleman explain why this Government have appointed 125 new peers since 2010? Contrary to what my hon. Friend the Member for Rhondda (Chris Bryant) said, the average cost is £130,000 a year, which adds an extra £16,250,000 a year to the cost of politics, or £81,250,000 over five years.
Mr Lansley
Leaving aside the fact that some of the figures that the hon. Gentleman quotes were from the resignation honours back in 2010, I would say that he heard what I said about House of Lords reform. If he and his colleagues had supported the programme motion, we would be in a completely different place in the House of Lords.
Mr Lansley
There is limited time for this debate and I need to conclude my speech.
I urge Members to recognise that democrats in all parts of this House should reject the Lords amendment. Even those who object to the boundaries reviews, whether for party, personal or other reasons, should reject the way in which the Lords have amended the Bill. In doing so, they would still have the option of voting for or against the review, in the subsequent vote on the amendment in lieu or, if it is rejected, in October when the boundaries reports come before the House for approval.
Mr Lansley
I will give way finally to my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) and then my hon. Friend the Member for Wolverhampton South West (Paul Uppal).
Jesse Norman
I am very grateful to the Leader of the House for giving way. I can only sympathise with his travails over the abuse of powers on this issue by the House of Lords. Can he imagine how much worse it would have been if the House of Lords had been elected?
Mr Lansley
My hon. Friend is inviting me to engage with a series of hypothetical situations. I will resist the temptation.
All four boundary commissions have completed their consultations and are finalising—
Mr Lansley
I will, but I have given way to the right hon. Gentleman before and it took about five minutes.
Mr Lansley
As Leader of the House, I am answering for my party and for the Government—[Interruption.] My party will live very happily with the outcome of the boundary commissions’ review, I can tell you that. The boundary commissions are finalising their recommendations. They are doing that because this Parliament voted for that measure. This concerns a fundamental feature of our democracy—namely, the basis on which we are elected to this House.
Paul Uppal
On that point of principle about the democratic deficit, is there not an irony in the fact that Labour and Liberal Democrat Members are often inspired by the Chartists, who voted for equal-sized constituencies? There is a perverse relationship today, in that those Members are going to go through the Lobby and vote to retain the disconnect and the democratic deficit.
Mr Lansley
I was right to give way to my hon. Friend; he has made a good point. That votes should be of equal value is a fundamental principle that we should seek. We voted for that in legislation earlier in this Parliament, and it is now our task to see it through. This must be fair, equitable and democratic. It is wholly wrong that these measures should be overturned by an unprecedented device in the other House. I therefore ask Members across the House to disagree with the Lords. Having done that, we can go on to decide whether positively to settle the boundaries today by voting for the amendment in lieu or to let the proposal come back as planned on the basis of the boundary commissions’ reports later this year. In the interests of democracy and equality, I urge the House to disagree with the Lords in their amendment.
Mr Speaker
I thought that the hon. Gentleman’s thirst might have been quenched, but the truth, as we all know, is that he is unquenchable.
Michael Fabricant
I shall take that as a compliment, Mr Speaker. You will know that I am very naive about what goes on on the Back Benches, as it has been a long time since I was last here—apart from the past two weeks, of course. I have been asking questions of my right hon. Friend the Leader of the House about the views expressed by the Deputy Prime Minister, who, sadly, cannot be here today. Do you have the power to call the Deputy Prime Minister to the House to explain why it is suddenly no longer a point of principle for him to vote for a measure that he voted for only a couple of years ago? Perhaps you could explain that to me, Mr Speaker. I am curious.
Mr Speaker
No, I do not; no, I could not; and no, it would not be right for the hon. Member for Lichfield (Michael Fabricant), who is a decent fellow, to seek to embroil me in partisan politics. That would be unworthy of him, and I feel sure that he would not knowingly behave in an unworthy way.
Sadiq Khan
May I begin by congratulating the Leader of the House on the sheer audacity of his speech? His criticism of the House of Lords is breathtaking. Only six months ago, he and his party were saying that—I paraphrase—the House of Lords was so perfect that it did not need any reform, yet here he is today, arguing that it is so inept and incompetent that it cannot be trusted with this issue, despite all the Lords’ experience and the impartiality that the Conservatives claim comes from being unelected. You really could not make it up.
Sadiq Khan
The hon. Gentleman will know that the Leader of the House is in charge of the timetabling of legislation in Parliament, and that it is for the Government to decide whether to proceed with a Bill. The Government chose to abandon that Bill, not the Opposition. The chairman of the Conservative party has now left the Chamber, but I have never known him to be a scholar of political and constitutional matters. We know why he was here. It is his job to ensure that the largest possible number of Conservative MPs are returned at the next general election. That is why he was here, taking an interest in this matter. It was not because he is interested in political and constitutional reform or because he is trying to reduce the cost of politics.
The House of Lords is a self-regulating Chamber. The Clerk’s advice on the admissibility or otherwise of an amendment is non-binding. By voting in favour of the amendment, the Lords have made clear their view that it is within the scope of the Bill. I am afraid it is hard luck if the Conservative part of this Government does not like that. When it comes to House of Lords reform during this Parliament, the ship has sailed.
Before us today are two groups of amendments made in the other place to the Electoral Registration and Administration Bill. I want to put on record our recognition of the work done by colleagues in the other place, from all parties and none, who spent four days debating, revising and improving the Bill.
Jacob Rees-Mogg (North East Somerset) (Con)
Is not the relationship between the two Houses based on convention? Every so often, the House of Lords breaches a convention, one of which is that we should have primacy in our own affairs and should therefore decide how elections should be carried out and how boundaries should be determined. It was a breach of convention over the 1909 Budget that led to the Lords having their powers curbed before. This is a much more serious constitutional issue than the right hon. Gentleman is suggesting.
Sadiq Khan
The hon. Gentleman will be aware, because he sat through my superb speech during the debate on the House of Lords Reform Bill, that I made a point in that debate about the importance of function, of looking at the powers of the second Chamber and of convention. He will recall that, although the Second Reading was voted for by a huge majority, it was the Government who chose to drop the Bill from the legislative timetable. That was their decision, and it is the Government whom the hon. Gentleman should be lobbying.
Chris Bryant
Is it not a generally accepted principle that the House of Lords has a special relationship in that it is a guardian of the constitution in a way that those who are elected might sometimes not be?
Sadiq Khan
Absolutely. I have to say to those who have a grievance against conventions or against House of Lords reform that I am afraid the ship has sailed. They had their opportunity, but it passed them by.
The amendments have been made in addition to the improvements made here in the Commons during the progress of the Bill. We managed to secure a commitment that an annual canvass would still take place in 2014, that the option of a rolling opt-out was removed and that a civil penalty would be created for those who refused to respond when requested to register to vote. The Bill still left this House with serious problems, however, which is why we voted against it on Third Reading when it was last before us.
I would like to use this opportunity to place on record our appreciation of those who tabled the amendments in group 2: Lord Hart of Chilton, Lord Rennard, Lord Wigley and Lord Kerr of Kinlochard. This amendment received support from across the other place, and a Labour peer, a Liberal Democrat peer, a Plaid Cymru peer and a Cross Bencher tabled it. It was passed by a majority of 69. We welcome the amendments made to the Bill in the other place. We shall not, therefore, be supporting the motion before us today to disagree with the Lords in their amendments.
The effect of the amendment we are debating will be to postpone the review of parliamentary boundaries by one electoral cycle.
Mr Stewart Jackson (Peterborough) (Con)
Let us focus on the practical ramifications of the right hon. Gentleman’s vote today. Is he really prepared to tell his constituents in Tooting that it is appropriate, fair and equitable that, by the time of the general election after next, in May 2020, the enumeration data on which the electorates are based will be 20 years old? Some of the constituencies in my county of Cambridgeshire are the fastest growing in England, and they will have well over 100,000 electors by then, while some in Wales will have fewer than 40,000.
Sadiq Khan
It is a bit rich for a Conservative Member to lecture us on equality and fairness. I will come to those issues later in my speech.
The amendment will also similarly delay the reduction in the number of MPs by 50 to 600, as a result of which the next general election will take place on the current boundaries with the number of MPs at 650.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Does my right hon. Friend agree that this is not about having fairer constituencies—that can be accomplished by a periodic redistribution—nor about saving money? It is a highly political Bill aimed at the Labour party and at the Liberal Democrats who were naive to support it in the first place.
Sadiq Khan
The House has heard what my hon. Friend has said.
Should the amendment be supported, it would mean having more time to address the deficiencies in the current electoral register, particularly against the backdrop of the move towards individual electoral registration. The reason why that is so important is that the electoral register is the very basis on which boundaries are drawn and redrawn. It is the raw material from which the Boundary Commission constructs parliamentary constituencies. If that raw material is of poor quality, the subsequent output from the Boundary Commission will also be of questionable quality.
It is not necessary to take just my word for it or that of the House of Lords. The Electoral Reform Society said last year:
“A depleted register has major implications for political boundaries. A substantial fall off in registered voters, weighted towards urban areas, would require the Boundary Commission to reduce the number of inner-city seats. This will create thousands of ‘invisible’ citizens who will not be accounted for or considered in many key decisions that affect their lives, yet will still look to MPs to serve them as local constituents.”
Mark Tami (Alyn and Deeside) (Lab)
Does my right hon. Friend agree that we need only look at what happened in Northern Ireland to see some of the dramatic effects and the drop in the number of those registered?
Sadiq Khan
My hon. Friend is right to remind the House of the lessons we can learn from Northern Ireland. A recent report by the Electoral Commission recorded its concern about the record drop in the number of people on the register.
Chris Ruane
A few moments ago, my right hon. Friend said that thousands of people will be missing from the register. The true figure is that there are 6.5 million people missing from it—and these are often among the most marginalised people in the country. I believe that it is wrong to go ahead with the boundary review without having secured these missing millions back on the register.
Sadiq Khan
As ever, my hon. Friend makes a very good point.
The Lords amendment has two main principles, the first of which concerns the shift to individual electoral registration. We need time to allow for the switch to the new system to bed down.
Sadiq Khan
I need to make some progress but will give way later.
We need to be sure that the completeness and accuracy of the register has not been damaged by the move. As has been said, the Electoral Commission estimates that about 6.5 million eligible voters are currently missing from the register—a truly startling figure. That is enough for almost 90 parliamentary constituencies. The current situation in which we find ourselves is bad enough; it should be imperative on us to do all we can to rectify it.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Does the right hon. Gentleman recognise that if he is successful today, he will be re-creating rotten boroughs, which were got rid of in the 1830s?
Sadiq Khan
I think that the Electoral Commission, the Boundary Commission and electoral registration officers will be quite offended by the hon. Gentleman’s comments. I am sure that, on reflection, he will want to withdraw those remarks.
Mr Kevan Jones
Does my right hon. Friend agree that this Bill has nothing to do with fairness, saving money or the cost of democracy, but is actually about pure party political advantage for the Conservative party? Is it not straight out of the Karl Rove book of how to rig elections to the advantage of a sitting party?
Sadiq Khan
We have seen that the general election co-ordinator for the Conservative party has left the Chamber. The fact that he was in his place earlier speaks volumes about the motives of the Conservative part of the Government.
The move to individual electoral registration risks even greater numbers falling off the register.
Mr Nigel Dodds (Belfast North) (DUP)
The right hon. Gentleman will know that on the Northern Ireland Benches, we are concerned about the maximum representation for Northern Ireland in this House. As well as that, however, there is the issue of the impact, not mentioned so far, on elections to the Northern Ireland Assembly, because reductions in seats for Northern Ireland here also impact on the representation in that Assembly. Does the right hon. Gentleman agree that that is an important aspect, which has not so far been properly addressed?
Sadiq Khan
The right hon. Gentleman makes a very good point. Northern Ireland not only loses 17% of MPs to the Westminster Parliament, but the consequences for the Northern Ireland Assembly are very serious, too. Supporting this amendment would give us the time— another electoral cycle—to get it right, which is why right hon. and hon. Members of all parties should support it.
Harriett Baldwin
I am really struggling to follow the right hon. Gentleman’s argument. He is arguing that he would forfeit at least £70 million-worth of savings to the taxpayer by delaying this matter for five years, while also arguing that it is right to fight the 2015 general election on constituencies that have not been looked at since 2000—15 years out of date.
Sadiq Khan
I can reassure the hon. Lady that I am just warming up. If, during the course of my speech, I have not addressed the points she raises, she can intervene again later, once I am in full flow.
Mr Lansley
The right hon. Gentleman is trying to make a link between the electoral register and the Electoral Registration and Administration Bill and the boundaries review—but that is a completely false connection. The 2015 election will be based on a register in its current form, not on individual electoral registration, either way—whether done through the boundaries review as planned or whether done without it. The Bill does not impact on that.
Sadiq Khan
The Leader of the House must be a fantastic poker player, as he said that with a straight face. I will give him a mini-lecture on why he is so wrong, on this issue as well, in a few moments. If he is still not persuaded, he can intervene and explain it to me again.
I have explained why we have sought to amend the Bill—both in this Chamber and in the other place—to include further mechanisms for maximising voter registration, particularly for the harder-to-reach sections of our communities. The importance of doing all in our power to avoid a sharp drop-off in registration levels was brought home by the experience of Northern Ireland, recently re-emphasised in the Electoral Commission report.
We know that those most likely to fall off the register are not sprinkled uniformly across the country. Each constituency does not have its equal share of missing voters. Instead, it is generally accepted that the missing eligible voters are likely to be from black, Asian and ethnic minority communities, the more transient residents who live in rented accommodation such as students and young people, the elderly and the disabled and those in more deprived communities. The Leader of the House and his Back Benchers talked about equality and fairness, but the Electoral Commission has reported that
“under-registration is notably higher than average among 17-24 year olds (56% not registered), private sector tenants (49%) and black and minority ethnic British residents (31%)”.
It also found that
“the highest concentrations of under-registration are most likely to be found in metropolitan areas, smaller towns and cities with large student populations, and coastal areas with significant population turnover and high levels of social deprivation.”
These millions missing from the register would not count in the calculations for the setting of parliamentary boundaries. Any boundaries produced would be skewed and would be open to questions about their legitimacy. That should worry us all.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
Does the right hon. Gentleman think those people were on the register in 2000?
Sadiq Khan
Let us follow the logic of the hon. Lady’s argument: there are 6 million people missing from the register at the moment, but if we cannot ensure that we get them back on the register and stop further falls, we should be happy with the status quo. She is wrong: we should not be happy with the status quo; we should try to get these 6 million people on to the register and stop the cliff fall.
We should also bear it in mind that we are losing seven constituencies in Scotland, three in Northern Ireland and 10 in Wales. Although the latest census confirms that our population has risen, there will be fewer Members representing constituencies which will, as a result of inaccuracy, have fewer people on the electoral roll. That raises real concerns about whether the interests of all four of our nations will be properly protected by the Westminster Parliament.
Pete Wishart
The right hon. Gentleman is right to point out that Scotland will lose seven constituencies if the boundary review goes ahead. We will be supporting the amendment, not because we feel that its proponents have a great case but because it would end the prospect of further Conservative government in Scotland. However, given the current boundaries, will the Labour party not have a start of up to 30 seats at the next general election?
Sadiq Khan
I am always happy to discuss voting systems. If the hon. Gentleman is arguing for proportional representation rather than first past the post, that is a debate that we can have—although not, I hasten to add, during the short time that remains to us today.
Toby Perkins
My right hon. Friend’s point about the number of people who are not on the electoral register is one of the most fundamental in the debate. If Government Members had given us some sense that they were taking the position seriously—if they had paid attention to some of the reasoned amendments tabled by my hon. Friend the Member for Rhondda (Chris Bryant)—it would have been much easier for us to take them seriously today.
Sadiq Khan
The Government’s complacency on the subject of the missing 6.5 million is breathtaking, and we should see it in a wider context as well. At the same time as the size of the elected legislature is being reduced through the cutting of 50 MPs, the number of unelected peers is increasing by about 50 a year. Since 2010, 117 new peers have been created at a cost of £18 million a year. The amount that will be saved by the cutting of those 50 MPs is £13.6 million. We understand from No. 10 briefings—and the Leader of the House has confirmed today—that the creation of more peers will be announced shortly.
However, it is not just the cost that should worry us. The Government are becoming more powerful. We have more Government special advisers that at any time in our history. Moreover, these changes will reduce the size of the legislature while leaving the Executive untouched, thus making Governments more powerful at the expense of elected MPs representing their constituents. Accepting the Lords amendment would enable the reduction in the number of MPs to be delayed, which would have the added advantage of giving us time to consider the right balance between Executive and legislature.
Sadiq Khan
I will give way to the hon. Lady, who has been very patient and has risen several times.
Dr Wollaston
The right hon. Gentleman mentioned students. Does he think it reasonable that the MP who represents a student in, say, Bristol West represents more than 82,000 people, while just across the road in Bristol East the MP represents 13,000 fewer? It is not necessary to be a student of maths to realise that a vote there will carry far less weight. That cannot be right; it goes against all the basic Chartist principles that we would expect the right hon. Gentleman to support.
Sadiq Khan
I agree with the hon. Lady, as do the Electoral Reform Society and the Electoral Commission. She should join me in ensuring that those invisible citizens who should be on the register are put on the register. Let us not rush ahead with partisan boundary changes.
Sadiq Khan
I have been very generous, as the hon. Lady knows. I will make some progress, and if I have time after that, I will give way.
Labour legislated for individual electoral registration in 2009. The timetable and safeguards that we proposed at the time received cross-party support, but there was a general recognition that risks would be involved in the transition, which is why it was spread over a number of years. However, the Bill in its unamended form has watered down some of the safeguards that we introduced, thus failing to take account of risks that could mean the loss of millions of eligible voters from the register.
The complexities of the move are enormous. It involves the carry-over of existing registered voters for periods of the transition, the simultaneous piloting of data-matching schemes, a drive to show the public how to register, and changes in the way in which local authorities seek to register voters and how they should deal with a refusal to co-operate. As the Government themselves admit,
“Individual Electoral Registration (IER) is the biggest change to our system of electoral registration for almost a century and it is essential we get it right”.
Sadiq Khan
I want to make some progress first.
I agree wholeheartedly with that statement. “Getting it right” means that we must allow sufficient time to check that the transition does not result in millions of eligible voters dropping off the register, and rectifying that if it does occur.
Sadiq Khan
I want to make some progress. I have only a short time left.
The second principal purpose of the amendments is to deal with the uncertainty about the boundaries on which the next election will be fought. That uncertainty has left the process of redrawing boundaries on the basis of the Parliamentary Voting System and Constituencies Act 2011 in a state of limbo. The current boundary review is wasting public resources, and risks creating a degree of confusion in the minds of voters about which constituencies they live in and who their MPs are.
I will not rehearse the statements made by the Deputy Prime Minister last August about the proposals for boundary changes, but, needless to say, he has made it clear that his party will not now support the new boundaries, on which both Houses are due to vote in the autumn. Rather than our having to wait until the autumn, however, the amendment gives us an opportunity to bring an end to all remaining elements of uncertainty about this issue, as well as improving the move to individual electoral registration. We do not want voters not to know which constituencies they live in, or to be confused about whether those constituencies will change at the next election.
Chris Ruane
Currently, 6.5 million people are missing from the register. According to the Electoral Commission, if the IER arrangements had gone ahead as originally proposed by the Government, the number of unregistered voters could have risen to 16 million—16 million of the poorest people. Is that the way to run a democracy?
Sadiq Khan
One would think that rather than heckling in a snide and partisan manner, Ministers would be expressing concern about the millions of invisible citizens who are missing from the register.
The next general election is nearer than the last. We want the public to have more certainty about the constituencies in which they live and about who will be the candidates in the election, but if the amendment is rejected, they will know neither of those things until 2014. If we are to reinforce the connections between MPs, candidates and their constituents, we need to know the facts sooner rather than later. We need an end to the impasse, and that is what voting for the amendment would provide. Ending the impasse would bring clarity and certainty. It would also halt the work of the Boundary Commission, which would save significant amounts of money that might otherwise be wasted on a review that will not be implemented.
Agreeing with the amendment would allow us to monitor, check and rectify any deficiencies that emerge from the transition to individual voter registration. In the event of a dramatic slump in the number of eligible voters on the register, it would allow time for that to be corrected without a severe undermining of the legitimacy of parliamentary boundaries redrawn on the basis of a depleted electoral register. It would allow the next general election to be fought on the current boundaries, and would allow us to engage and register the missing millions in the meantime. It would prevent the wasting of any further money by the Boundary Commission, and it would bring certainty. That is why we will not be supporting the motion to disagree with the Lords amendment, and I hope that Members in all parts of the House will join us.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I rise to ask the House to agree with their lordships in the amendment, and to disagree with the motion to disagree. Let me, however, begin on a note of agreement with my right hon. Friend the Leader of the House. It is important for us to deal with this matter, and to deal with it today. It is before us now, so let us deal with it.
I want to touch briefly on what I consider to be the three main questions that confront us: the admissibility of the amendment, the substantive issues surrounding it, and what I might euphemistically refer to as the wider issues for the coalition.
Let me start with the question of admissibility. The other place is self-regulating; it is completely different from this House in that regard. Because it is self-regulating, all matters of order reside with the House collectively, not with any individual. The Clerks give advice, and it is given on the understanding, and in the belief, that it will be accepted. That is the convention, but it is a convention, not a rule. The rule is that anything their lordships decide collectively is in order. As they have so decided, that settles the matter as far as order is concerned. If anyone wants to revisit the debate, however, may I suggest they look in particular at the remarks of two Cross Benchers, both of whom served this House well as Speaker? They made very plain their reasons for voting for this amendment.
John Thurso
I am sorry, but, as a matter of fact, I cannot. All sorts of things have happened in their lordships’ House, however, and I can tell Members the last time that the asperity of speech motion was moved. I was there when the late great Lord Conrad Russell moved it, and I do not think it had been moved for 300 years before that.
James Duddridge
I fully understand why the hon. Gentleman wants to talk about procedure and the House of Lords. Will he add to his list of three things he is going to cover an explanation of why he and the Deputy Prime Minister have changed their view? On 1 November 2010 the hon. Gentleman said in respect of a Government Bill on equalisation that
“I have absolutely no problem with that general principle…the principle of equalisation is a very good one.”—[Official Report, 1 November 2010; Vol. 517, c. 672.]
John Thurso
I am grateful to my hon. Friend for his helpful intervention, and I will address that point later. I reiterate that I stand by the words he quotes about my having no problem with the general principle. I have put on record on many occasions how that general principle should be dealt with, however, and I will cover that point later.
Greg Mulholland (Leeds North West) (LD)
I do not think any Member disagrees with the principle of having more equal seats, but several amendments were not accepted that would have made the rules governing this proposal sensible, many of them tabled by Government Members. If they had been accepted, we might not find ourselves in this position now.
Sir Peter Bottomley
In the 1950s Jo Grimond said in my hearing that one of the roles of the House of Lords was to stop the House of Commons abusing the electoral process. I think that to carry on having boundaries that are old and constituencies with unequal numbers of voters is just such an abuse. What would Jo Grimond say about what is happening now?
John Thurso
I had the great privilege of listening to Jo Grimond on many occasions. He met his wife in my grandparents’ house and proposed to her there—and, indeed, Laura was godmother to my sister. I regularly listened to him, therefore, and I feel certain that if he was in the circumstances we are in, he would without doubt support his Liberal colleagues. [Interruption.] One has some small advantages in life.
Their lordships’ amendment 5 delays the implementation of the boundary changes until the next Parliament. There are three good reasons why this should happen, two of which have been touched on and featured in the debate in their lordships’ House, and the third I shall add. The first point is in regard to the quality of the register. Since the Parliamentary Voting System and Constituencies Bill was enacted, much work has been done on that register. At the time, the best evidence was that it contained the details of about 92% of those who should be on it. As a result of work carried out by the Electoral Commission, we now know the figure is much lower, however; it is, in fact, 82%. To my mind, that is a material difference that should be addressed. We should be asked to look at that again.
Paul Uppal
In a genuine effort to be non-partisan, may I ask the hon. Gentleman to give his opinion on the fact that the Cross Benchers in the House of Lords overwhelmingly voted against these amendments?
John Thurso
I disagree with that. I went through the Lords Hansard and underlined the names of all the Cross Benchers I could see in each of the voting lists. There were slightly more of them in one list than the other, but there were quite a number in support of this amendment. I remember that one of the great dictums of their lordships’ House is that all peers are equal, so I would look to the result, which was 300 on one side and 69 or so fewer—231—on the other side.
Mr Stewart Jackson
The hon. Gentleman is an experienced parliamentarian, so he will know that it has hitherto been the practice of the other place not to amend secondary legislation substantially—or, indeed, at all—even on some very contentious subjects and Bills over the past few Parliaments. Why, therefore, has this happened on this particular occasion?
John Thurso
I recall very well that, when I and others were given their P45s and left that place, one of the discussions that we had was about why on earth we in the other place should not register dissent on secondary legislation. Indeed, that has occasionally happened, which serves to demonstrate that there is a changing dynamic. Because of that changing dynamic, we need to look at the constitutional arrangements in the round, and that topic will form the substantive element of the last part of my argument.
Andrew Stephenson (Pendle) (Con)
In the other place, by convention their lordships defer to what the Clerks say. Over the past 20 years, on the five occasions when amendments have been deemed inadmissible by the Clerks, they have deferred to the Clerks’ superior knowledge. In this House, such an amendment would be deemed to be outside the rules and we rightly follow the rules set out in “Erskine May”. Does my hon. Friend think we in this place should continue to follow those rules, or should we throw “Erskine May” in the bin?
John Thurso
My hon. Friend is asking me to ponder questions that go slightly above my pay grade, because one person alone can make those decisions in this House: Mr Speaker. It is entirely up to Mr Speaker to accept or reject the advice given. I therefore refer my hon. Friend to the remarks made by Baroness Boothroyd, a former Speaker of this House. She said there were occasions when she had gone against the advice given to her by the Clerks. We do not know when that happens, however, for the simple reason that that is the prerogative of the Speaker, and we accept it without question.
Jacob Rees-Mogg
I am grateful to my noble Friend for giving way. At the Committee stage of any Bill, it is up to this House to give an instruction to consider any amendments, whether or not they have been deemed by the Clerks to be in the scope of the Bill, so this House has much the same powers as the House of Lords in this respect.
John Thurso
I am always deeply grateful to my hon. Friend for helping me out on these occasions.
My first point is about the electoral register. The second point is about what has happened in regard to boundaries. We now have the benefit of the proposals that have been made. At the time of our original discussion, we did not; we were looking at the question in theory. A fascinating point arose from a discussion I had with a senior member of the Government on the other side of the coalition. I will not name the Member as it would be invidious to do so. [Hon. Members: “Go on.”] Absolutely not; my lips are sealed. He said that in a given area the proposal their experts had come up with was the one thing that had never been thought of. That is precisely what has happened in respect of my own seat. The proposed size of it gives me concern, as it would become the largest. However, in electoral terms—notionally, on the basis of the historical numbers—the change would increase my majority, although one would never boast about that in any highland seat. My constituency would go from being made up of two and a quarter counties to comprising two counties, 90% of another county and a little chunk of a fourth, none of which are linked together in any way, shape or form; none of this has any rationale of community. These areas have different local election arrangements; the seat goes through wards. The proposed seat goes all over the place, simply to squeeze in enough in respect of both the area and the numbers.
The general principle, I always agreed, has to be tailored to the other principles we have always used when setting out boundaries: the big regional variances. So I feel it is a good idea to look again at what has been proposed, now that we have seen that the actual proposals are quite different from those envisaged, in theory, at the time.
Christopher Pincher (Tamworth) (Con)
But my hon. Friend must have thought about this when his own leader made a statement on political and constitutional reform in this House and said that the changes we are proposing will
“bring our oversized House of Commons into line with legislatures across the world.”—[Official Report, 5 July 2010; Vol. 513, c. 24.]
In other words, the changes will make the House of Commons smaller. Have legislatures around the world become bigger or has the Deputy Prime Minister, whom we both regard with affection, become a little smaller?
John Thurso
Let me deal with that precise point at the moment I arrive at it. First, I wish to deal with my third point of substance, which is the one that was not made in the debate. It is brief but it is important. A reduction in the size of this House increases the percentage of the payroll vote and thereby strengthens the grip of the Executive on Parliament, without there being an acceptable counterweight.
That leads me to my final point, which relates to the wider coalition issues. Let me make it absolutely clear that I supported the formation of this Government and I remain committed to them. As a Liberal Democrat, I entered this coalition because I believed in 2010 that the country needed a stable Government to deal with the financial crisis that was before us. As a member of the Treasury Committee in the previous Parliament, I had looked at many of the matters on the sovereign debt markets and was concerned, and I believe that the right decision was made.
However, when two very different parties come together to get agreement on an essential issue there has to be agreement on other areas. The red line issues—the ones we will not have at any cost or the ones we must have at any cost—are relatively straightforward to address, because we either agree them or we do not, and we are either there or we are not. All the other matters that are subject to negotiation, both individually, as policies, and, most importantly, collectively, as a slate, are much more difficult to deal with. The coalition agreement is not a pick-and-mix menu; it is an agreement. I agreed to the boundary changes—in many respects with a heavy heart—but I did so in the knowledge that the rest of that agreement acted as a counterweight. To my mind, that would occur mainly through Lords reform, which I judged would increase the check on the Executive and strengthen Parliament. For me, that was a fundamental point and I believe it is a fundamental point for all my colleagues.
Dr Wollaston
Does the hon. Gentleman not feel that there are many other ways in which we could reduce the size of the payroll vote in this House? That would have been perfectly possible to do by, for example, reducing the number of Parliamentary Private Secretaries or Ministers. His argument is therefore surely not an acceptable one.
John Thurso
Many things are possible, but I have to deal with what is in the agreement and that is the key point.
Christopher Pincher
The hon. Gentleman said that this vote was linked to Lords reform. His leader does not think that, as he has said:
“There is no link; of course, there is no link.”
What has changed?
Sarah Newton (Truro and Falmouth) (Con)
On this point about coalition well-being, does my hon. Friend agree that—and is he sad about the fact that—my Lib Dem colleagues in Cornwall are misrepresenting their vote this evening by saying that a vote against the Bill is a vote against a “Devonwall” seat? He knows, as I do, that the Boundary Commission decides the boundaries and it is not due to bring them back to us until October. So this is hardly good coalition politics, is it?
John Thurso
I think I grasped the point being made, but I think we should deal with what is before us today and that we should think again. We should accept what the Lords have said to us.
Jesse Norman
I thank my noble and hon. Friend for his comments. First, is he aware that there is a Bill at the moment that would reduce the size of the House of Lords without making it into an elected Chamber, which his own party is opposing? Secondly, on the question of whether the Lords are able to put up a decent fight against the Executive, is he aware that during the Labour Governments of Mr Blair and the right hon. Member for Kirkcaldy and the other—[Interruption.] I have forgotten his name, as he appears so rarely in this House. Is my hon. Friend aware that during that time the Lords defeated the Government 450-odd times and the Commons defeated them fewer than 10 times?
John Thurso
I am very grateful to my hon. Friend for that, as it is a perfect argument in favour of supporting their lordships on this occasion.
Andrew George (St Ives) (LD)
May I, through my hon. Friend, seek to clarify something? In places such as Cornwall, cross-party agreement has been established on opposing a cross-border constituency. We therefore have an opportunity today to vote in such a way as to defer that until after the next general election and therefore put off the time when such an unacceptable boundary change would affect the people of Cornwall.
John Thurso
My hon. Friend is right. I just want to make it clear that when I entered this coalition, I made it clear to the leadership, when my party discussed whether we would accept this arrangement, that for me the agreement in toto was what counted and that Lords reform, as part of the constitutional arrangements, was vital. After the vote on Lords reform, I made it abundantly clear to my leadership that my position had changed and I could not, in all conscience, continue to support what we had done before. That is a fundamental point for myself and my colleagues.
I gently point out to my friends on the Government Benches, in the mildest manner possible, that they have got what they wanted: the great, the good, the wise, the academic, the apolitical, the ex-public servants and the generals, whom they strove so hard to protect, have come together in their wisdom and given us amendment 5. I beg the House to support it.
Mr Speaker
I hope that this is a point of order rather than a point of enormous wit—we shall discover.
Kevin Brennan
It is not for me to judge, Mr Speaker. During the excellent speech by the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), he was intervened on a couple of times and was referred to as being the “noble” Member. Can you clarify whether or not there are any noble Members in this House? Or are we just all common?
Mr Speaker
All right hon. and hon. Members in this Chamber are equal. That is perhaps not the answer that the hon. Gentleman seeks, but it is the answer that he is going to get, especially as his attempted point of order was just that—attempted. It was many things but it was not a point of order.
Paul Blomfield (Sheffield Central) (Lab)
I am delighted to have the opportunity to speak in the debate and to follow the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), who made a striking and powerful speech. I, like other Members, particularly enjoyed his last point.
I am pleased to be able to speak in opposition to the Government motion and in support of Lords amendments 5 and 23, and I welcome the cross-party support for those amendments in the other place and in the Chamber today. The other place has done democracy a great service by highlighting the link between this Bill and the Parliamentary Voting System and Constituencies Act 2011, because, contrary to the point made by the Leader of the House, the impact of these two pieces of legislation together would have been unfairly to reduce the representation of our great cities and urban areas.
A number of Government Members have talked about the simple principle of fairness, and the Leader of the House talked about the disparities in the system. There are disparities, but they are not the ones that he talked about. If I were selected by my party members again, the proposed boundaries would benefit me electorally. Nevertheless, they are unfair and undermine our democracy because of the enormous mismatch between population and registered voters.
Kevin Brennan
Is that not the heart of the argument, in that the Government’s original proposals were based on a principle of no representation without registration?
Paul Blomfield
My hon. Friend makes a very powerful point. Indeed, that is at the heart of my argument.
Paul Blomfield
I will give way to my hon. Friend, because he has done so much work on this issue and I have great respect for his views.
Chris Ruane
I thank my hon. Friend for his kind comments. Does he think that the fairest way to redraw the boundaries might be to use the census statistics, as they give a full and accurate figure of everybody who lives in the UK?
Paul Blomfield
My hon. Friend has clearly done so much work on the issue that he anticipates one of the points that I was going to make. He is absolutely right.
I want first to illustrate the mismatch by comparing my constituency, Sheffield Central, with the neighbouring constituency, Sheffield, Hallam. I am glad that I shall be walking through the same Lobby later as my political neighbour, but the two constituencies are of a very different nature and they illustrate my argument.
Sheffield Central is inner city and multicultural; we have large council estates, houses in multiple occupation, two universities and very high levels of voter turnover. Already, 17% of households have nobody on the register. Sheffield, Hallam consists of our city’s leafy suburbs; it is largely monocultural with large areas of comfortable owner-occupation, and a very stable population. Only 4% of its households have nobody on the register. There is a huge disparity between the number of people represented by the MPs for those two constituencies.
I have made that point before, but I now have the advantage of supporting it with the latest information available, which is from the 2011 census. If the argument was reduced to a simple question of constituency size based on the number of registered voters, our two constituencies would appear to be pretty similar in size. However, if we compare the population according to the 2011 census with the number of voters registered on 2 January 2013 according to the council’s electoral registration officer, we can see that the picture is completely different. Sheffield Central has 76,596 registered voters whereas Sheffield, Hallam has 71,559—the difference is just 5,037, or 7%. According to the census, Sheffield Central has a population of 115,284 whereas Sheffield, Hallam has a population of 89,356, and so the difference is 25,928, or 20%.
Mark Field (Cities of London and Westminster) (Con)
I, too, am a representative of an inner-city seat. Surely the hon. Gentleman recognises, as I do, that one of the main reasons behind such differences is the number of non-UK nationals in a particular constituency who often live in households containing no UK nationals and therefore no UK voters. I know that puts a huge additional burden on him as a Member of Parliament, as it does on me—all these people require representation—but they are not UK nationals and therefore should not be voting in UK general elections.
Paul Blomfield
There is a bit of a difference between the two inner-city seats that the hon. Gentleman and I represent. Although there is some evidence to endorse his point, it does not explain the enormous disparity between the two seats in Sheffield.
Many of those who are excluded from the electoral register are precisely the people who form a huge proportion of my casework and I know that the situation will be the same for many Members who represent inner-city seats. More importantly, the combination of legislation means that their voice in Parliament will be reduced. If the Electoral Commission’s original concerns about the impact of the Bill came into being and were compounded by a process of redrawing boundaries based on the register as at December 2015, the gap would widen even more. If boundaries were redrawn based on an average electorate of 76,641, which was the basis for the Electoral Commission’s calculations, the actual population of Sheffield Central would be approaching 50% more than that of Sheffield, Hallam.
Some might argue that the Electoral Commission’s worst fears might no longer come true, particularly in the light of some of the concessions the Government have been forced to make. In the longer term that might be true, but crucially the next boundary review would be conducted at the low point of the registration cycle in December 2015. Let me make it clear that like those on my Front Bench I support the principle of equalisation. In so far as there is public interest in constitutional reform, that argument has enormous resonance with the public, but the people to whom I have spoken were shocked to learn that equalisation is based not on population but on the number of registered electors. The effect of the combined legislation will be not to reduce but to enhance inequity.
Dr Wollaston
Does the hon. Gentleman accept that that is simply not always the case? In Torbay, for example, those on one side of the road are represented by a Liberal Democrat colleague who represents 76,000 voters. On the other side of the road at the Brixham end of Torbay, which is in my constituency, there are just over 67,000 voters. One vote carries 11% more weight on the Brixham side of Torbay, and when we take the populations into account, the discrepancy is even higher. It does not always ring true that using population equalises matters because, in some cases, it would make things worse. It certainly would in my constituency, where the situation is already unfair.
Paul Blomfield
I do not think that Sheffield is any different from many of our other large urban centres, and I think that the effect I have described in relation to Sheffield would apply to the vast majority of urban areas in this country. There might be some exceptions in Devon.
To respond to an earlier comment, my view is that we should move towards a system of genuinely equal constituencies based on boundaries drawn by population size, not by registered voter numbers, but that is clearly a debate for another time. Whether or not we go down that route, we need now to pause, to ensure that individual electoral registration does not further enhance inequity and does not further disempower our cities. If we do not pause, we risk creating a US-style democracy, with notorious under-registration, that excludes the disadvantaged and the disengaged and that focuses political parties and elections on the needs of the more privileged and in that way poisons our politics.
Chris Ruane
I thank my hon. Friend for giving way once again. He mentions the American system, where registration has gone down. That was a deliberate political act by the Republican party to organise voter suppression. Does he think that there is an element of deliberate political voter suppression from the Conservative party?
Paul Blomfield
Indeed; the plan was pretty transparent, and it seems to be falling apart under the scrutiny of another place and with the support of other parties across the House. I am delighted about that because accepting Lords amendments 5 and 23 will provide the pause that we need to ensure that our democracy is not weakened. That would give us the time to get this right, and I look forward to the House supporting those amendments.
Penny Mordaunt (Portsmouth North) (Con)
I hope I can cheer up my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) and the whole House by quoting Edmund Burke, who told the electors of Bristol:
“Your representative owes you, not his industry only, but his judgment”.
We cannot be on autopilot in the House; we must do what we think is right, in the interests of our constituents and the country, which is why I did not join my Government in voting against the measures on payday loans proposed by the hon. Member for Walthamstow (Stella Creasy), or Labour’s proposed extension to the national insurance contribution holiday to the south-east, and it is why I voted against my Government over the constitutional car crash that was the House of Lords Reform Bill.
Greg Mulholland
I thank my hon. Friend for giving way, but one thing that I think we probably can agree on—certainly, some of us who have different positions on this—is that it was simply wrong to include those two very separate items in the Bill. I wanted to oppose the boundary changes, others wanted to oppose the AV measures, but we could not do so because they were tied up in the same Bill.
Penny Mordaunt
Presumably, when the Division bell rang on that occasion, 54 Liberals did not take collective leave of their senses—whether they lost them some time ago I cannot say. But I am sure that they were present in a moment of brilliant acuity as the bell tolled, and they voted to improve our parliamentary democracy, which is what the hon. Gentleman did.
Penny Mordaunt
I will make some progress.
We can take it that the Liberals believed in equalising the size of constituencies and reducing the number of MPs. I say that with some confidence because we know that they believe it still; they just do not want it yet. Today, we are not asked to throw out the concepts altogether, which would be a bizarre but perhaps defensible position intellectually; we are simply asked to put them off till the next Parliament—a curious position of which some further explanation is required, and I hope that you agree, Mr Speaker.
Mr Mark Spencer (Sherwood) (Con)
One of the words that has been overused in this Parliament is “fairness”. Fairness, fairness, fairness is all we have heard from some of our coalition colleagues, but a word that I would like to introduce is “honourability” and ask whether it is honourable for someone to take a position and then move, frankly, to a different one when they see what is before them.
Penny Mordaunt
I thank my hon. Friend, and to ensure that I do not offend Mr Speaker or anyone else in the House, I welcome the opportunity to put on record the fact that I think all Liberal Democrat Members are honourable ladies and gentlemen, but I hope during my speech to point out to them what they would need to do to remain so by tomorrow morning.
The answer to this puzzle is found not in the amendments but in the fact that the Deputy Prime Minister has made it quite clear that Liberal support for the changes has been withdrawn because the House of Lords Bill could not be passed. I remind the House that that is the same Deputy Prime Minister who was quite categorical in his assurances that one had no influence over the other, while the battle for the constitution still raged. It has doubtless not helped the Liberals’ mood that the public so comprehensively rejected their plans for electoral reform. The Liberals have withdrawn their love because of a contrived slight.
The Deputy Prime Minister can repeat until he is blue in the face—although a fuller conversion to that colour might prove harder to achieve—that the programme for government promised Lords reform, but that will not make it true. There was never any obligation for Conservatives to support Lords reform, and I rebelled with a heavy heart but a clear conscience. Will the same be true for the Liberals in the wrong Lobby today?
Mark Field
I share much of my hon. Friend’s frustration, but does she agree that this row would not have happened if, instead of focusing on the rather fatuous arguments about saving a relatively small amount of money, we had set out to equalise the constituencies but to keep the number at 650 for this House?
Penny Mordaunt
Even if we set aside the vital matter of the absence of an obligation on Lords reform, to make the allegation that Conservatives broke a coalition promise requires considerable front. Thirty-six per cent. of the Liberal Democrats rebelled over tuition fees, by comparison with less than 30% of the Conservatives on Lords reform. It is only because the Liberals have fewer MPs than we do—that is, they received a smaller mandate from the people—that their rebellion did not matter.
John Thurso
May I put the record straight? The coalition agreement on tuition fees was that all Liberal Democrats had the right to abstain. What happened was that a certain number of colleagues chose to go against the measure. In order, therefore, to give the Government what they needed, the remainder of my colleagues voted in favour of it. That is what really happened.
Penny Mordaunt
I am trying to give the Liberal Democrats a chance to justify their behaviour. Even if we accept the Liberal code of conduct of an eye for a coalition eye, after their flawed portrayal of the Lords Bill the score is, at best, even.
Mr Spencer
What message does my hon. Friend think is conveyed to colleagues who lost their job when they voted against that legislation and who will now witness some of our Liberal Democrat colleagues walking through the Lobby against Government policy but keeping their jobs?
Penny Mordaunt
My hon. Friend makes his point well. I am sure it is not lost on those in the Chamber and outside.
We are forced to conclude that industry and judgment have indeed ceded the stage to spite, pettiness and self-interest. The people have rejected the Liberal Democrats’ voting reforms and the Liberal Democrats cannot win the argument for Lords reform, so they will oppose boundary changes, which they want, in the hope of re-opening negotiations after the next election, while casting flirtatious glances across the Chamber. The Liberals have exchanged their legendary sandals for flip-flops in the hope that that will enable them to keep their options open, but they would be wrong to think that the real damage they will do today is to the prospects of the Conservative victory in 2015 or to the notion of a Conservative government.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
On the subject of Liberal Democrats, has not our hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) been strangely inconsistent today? Was not what he said on tuition fees exactly what happened on House of Lords reform? Some of us voted against House of Lords reform. In any case, is it not clear in the coalition agreement that the link was not to House of Lords reform but to AV? Is it not also clear that in the Liberal Democrats’ manifesto they advocated a reduction of 150 Members of Parliament?
Penny Mordaunt
My hon. Friend is right. That is not lost on the House or on the general public. The only harm that the Liberals will do today is to themselves. They confirm what has long been suspected—that the national interest and the constituency interest come a poor second to Liberal Democrat interest.
Dr Wollaston
Does my hon. Friend agree that the Liberal Democrats have had to get off their high horse because they have sent it to be turned into horse burgers?
Paul Farrelly
Does the hon. Lady agree that, as the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso)—the hon. Member for three and a bit counties—explained, the Liberals are only following the very wise maxim, “When the facts change, I change my mind”? It is a maxim that her Chancellor might also follow.
Penny Mordaunt
I thank the hon. Gentleman for his intervention. This comes to the heart of the matter. When the Division bell goes today, the 54 Liberals who voted in favour last time must ask themselves why a boundary review is a less valid measure now than it was in 2010 or will be in 2018. They must have a care for their consciences, do what is right for the country and their constituents, and do the honourable thing.
Chris Ruane
I have been interested in this issue since 2001, when my hon. Friend the Member for Dumfries and Galloway (Mr Brown) informed me that there had been a massive drop in voter registration in 100 constituencies, 90 of which, I discovered when I looked at the figures, were Labour constituencies. Some might say that it was our fault for introducing the changes in 2000.
I have sought to get the facts and figures on this for the past 10 years. I have tabled over 400 parliamentary questions on registration, population size and boundary size, and I have spoken in every debate on the matter in this House. I have come to the conclusion that what is, or was, proposed is a political act to deliver, in the case of the boundaries review and legislation, the 2015 general election, and in the case of individual electoral registration, the three or four elections after that. I hope that we will find out very shortly that it has all come to naught.
The reasons why I say this are many. I wish to compare the attitude of this Government with the attitude of the previous Labour Government. I blame the previous Labour Government, and I do so to their face, for not getting what we thought were 3.5 million missing electors on to the register. It was our fault that we did not do that. However, no one can accuse the previous Labour Government of using our political majority, which was huge, for party political advantage on constitutional issues. One of the first things that Labour did was introduce proportional representation in the European elections. In Wales, we went from having four Labour MEPs to one Labour MEP. We had a majority of 180 back in 1997—such a huge majority that we could have delivered devolution to Northern Ireland, to Scotland and to Wales without PR, but in the interests of fair play and playing properly on the constitution, we introduced PR, which did down Labour’s vote.
Susan Elan Jones (Clwyd South) (Lab)
It is good that my hon. Friend has made that thoughtful mention of Wales. Does he agree that this Bill means that the people of Wales will see a reduction of 10 seats, from 40 down to 30? I would be interested if the hon. Member for Aberconwy (Guto Bebb) wished to intervene to say whether he agrees with that, and, if not, how he would explain it to his dwindling electorate.
Chris Ruane
I will give way to the hon. Gentleman if he wishes to intervene.
Chris Ruane
He does not. I think that he has forgotten about the Act of 1536 which settled these issues.
Mark Field
The hon. Gentleman has a very selective memory on the actions of the previous Labour Government. The massive extension of postal voting and the resulting lack of trust that is now in the electoral system was brought about with the massive majority to which he referred. That has made an enormous difference to the running of our elections and has led to a huge amount of distrust, particularly in inner-city seats.
Chris Ruane
If the hon. Gentleman looks at one of the 400 questions that I have tabled on this issue, he will see that the number of people who have been prosecuted for electoral fraud each year is about one or two. That is bad; any electoral fraud is bad. If he looks at the other side of the scales of justice, he will see that there are not, as we thought, 3.5 million people missing off the register, but 6 million. If individual electoral registration had gone ahead as proposed by the Government, 16 million people would have been missing off the register.
Let us have a look at the pans of justice. With one or two cases a year of electoral fraud, all the resources are made available, but with 6.5 million people off the register, no resources are available. One of my questions, which was answered two weeks ago, asked for some numbers on this subject. If electors do not fill in the extra registration form, the electoral registration officer has to send a canvasser to their house at least twice—that is the law. Labour managed to implement that law, and in 2010 only eight local authorities disobeyed it; I think that they were all Tory authorities. In 2011, when the Tories had got their feet under the table, that figure massively increased, to 30 or 40. Of the 60 constituencies in England that do not send an electoral registration officer to knock on the doors of the non-registered, 55 are Conservative, one is Labour—Telford—and I think that the rest are Lib Dem. There is an element of politicisation in what the Conservative party is proposing.
Three years ago I went to see Experian to discuss the issue of the unregistered. I told its representatives that 3.5 million people were not on the register, but they said that the actual figure was 6.5 million. I took that information to the Electoral Commission, which said, “That can’t be true. We’ll do our own research on the issue.” Lo and behold, 18 months later, the commission came back to me and said, “Mr Ruane, you and Experian are absolutely right, but the 6.5 million people who are off the register are a different 6.5 million people from those noted by Experian.” I therefore asked the Electoral Commission whether 13 million people could be missing from the register; I said it tongue in cheek, but millions of people are missing from the register and the resources have not been made available to get them on to it.
Mrs Laing
The hon. Gentleman and I have had various arguments on this issue across the Floor of the House for as many as nine years. Even if what he is saying is correct, he is completely missing the point about the amendment and the importance of the Bill. How can he say that it is fair that Arfon has 41,000 constituents while Somerton and Frome has double the number—82,000? How can he possibly say that that is fair?
Chris Ruane
I thank the hon. Lady for her intervention. She should think about the figure that I have mentioned: 6.5 million people are missing from the register. The vast majority of them will be in Labour constituencies. The vast majority of the case load for Labour Members and those Members who serve poorer constituencies around the country comes from the unregistered, the people who should legally be on the register but are not. If those people were factored in, the inequality would not be as great.
Wayne David (Caerphilly) (Lab)
Does my hon. Friend think that, if the island of Anglesey is not to have a Member of Parliament, it is fair that the Isle of Wight is to have two under the Government’s proposals?
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is making a compelling case. To use the example of the county of Greater Manchester, in the previous Parliament we were entitled to have 28 Members of Parliament. As a result of the 2010 periodic review, that number was cut to 27, and the proposed boundary changes would lead to it being cut to 26, yet the 2011 census shows that the population of Greater Manchester is going up, not down.
Chris Ruane
I agree with my hon. Friend and think that the census should be the basis for any future redrawing of boundaries.
In conclusion, the reason given by the Conservative party for wanting to introduce the boundary review changes is to decrease the number of MPs from 650 to 600. It says that it is a case of cost and that that is its primary reason, and yet when I tried to table a parliamentary question in the Table Office to find out the cost of an MP and the cost of a Lord, I was told that I was not allowed to do so. Fortunately a Lord in the other place tabled the question and received the response that it costs £130,000 per Lord and £590,000 per MP. The Government have created an extra 125 Lords since they came to power in 2010 and they propose to create another 50 over the next few weeks. Where is the logic in creating an extra 175 unelected Lords while reducing the House of Commons from 650 to 600 Members?
Miss Chloe Smith
I beg the hon. Gentleman’s pardon for interrupting him when he was about to conclude. Given that he is in favour of having such hard casework, is he proud of the fact that his electorate is about two thirds the size of mine?
Chris Ruane
My electorate was even smaller than that of the hon. Lady’s constituency 10 years ago. The voter population in my constituency went down to as low as 47,000. It was only when I started to put pressure on, and following the professionalisation of the electoral registration officer in Denbighshire county council, that the number went from 47,000 to 57,000. I believe that there are even more unregistered people in the constituency.
The vast majority of the 6.5 million missing voters are in Labour constituencies. This is therefore a political act, and one that has come unstuck.
Bill Wiggin (North Herefordshire) (Con)
It has been said that
“political duty must be placed before private feeling.”
That was how James Rankin, the MP for Leominster, advised the House when the boundaries came up for review in 1884. He went on to say that the Prime Minister had
“appealed to the Members who sat for small boroughs not to be selfish”.—[Official Report, 28 April 1884; Vol. 287, c. 799.]
I agree with the then Prime Minister and my predecessor from long ago. Mr Rankin’s concern was for his constituency and the people whom he fought to represent. That is my concern now because, without wishing to get misty-eyed, after nearly 12 years, I am deeply fond of them.
Where we can all agree is on the principle of evening out the size of seats and ensuring that every vote carries equal value. In our last manifesto, we promised to champion a fairer system. It is only right that we try to make good that commitment. I do not think that everyone knows how grotesquely skewed the current state of affairs is. Some constituencies are almost double the size of others, meaning that their inhabitants are under-represented in elections and, subsequently, at Westminster. The overall balance is weighted heavily towards the Labour party. Labour Members know in their hearts that were it the other way around, they would be the first to call for realignment. Their opposition hardly befits a modern democracy.
Ironically, before the last boundary change, my constituency was about the right size numerically. It was close to the UK average of 76,641 voters. Yet that did not save it. That is where my problem lies.
Mr Tom Harris (Glasgow South) (Lab)
Perhaps my memory is failing me and the hon. Gentleman’s is better, but when the boundaries were stacked against the Labour party and in favour of the Conservatives in the 1980s, did the Conservative party demand the kind of changes that it is demanding today?
Bill Wiggin
The hon. Gentleman was not here in the ’80s and neither was I. I will carry on because time is short.
The problem I have is not with the theory behind the sixth general review, but with how it has been conducted in practice. We all want fairness and had high hopes that the Boundary Commission could do a better job. With hindsight, perhaps it should have been asked to respect county boundaries over ward boundaries. Despite agreeing to take existing constituencies into consideration as far as possible, the Boundary Commission for England recommended that the North Herefordshire constituency be dismantled and merged with Worcestershire and Shropshire to form a constituency with a minority part of each county. My hon. Friends and neighbours are fine people and there is little to be gained from Conservative Members fighting one another. At a time when people do not believe promises and when people vote for independents who have no manifesto, I believe that honouring the promises that I made to my constituents at the general election is very important.
The Prime Minister said at Admiralty house on 6 June 2011:
“We will help you through this”.
That was one of his best intentioned, least helpful and most worrying comments. What did he mean? What did he think would happen? How would help be offered? Did he really care about it at all? My sense of concern must have been felt by the Lib Dem coalition partners. How extraordinary it is in modern politics that one’s seat can be saved by one’s opponents who have spent the last 12 years trying to take it away.
There are more dilemmas in this vote for me and my constituents. What in the end would benefit them more: a future Conservative Government or a better alignment of boundaries? In 1884, my ancient forebear put the answer on the record. I will not bore the House with the details. He did say, however, that every elector should have two votes. I cannot agree with that.
Otherwise, little has changed. I do not believe that Herefordshire has received the respect that the Boundary Commission should have given it, but I will always put my constituents first; they will always be my priority. Whether the fairness and equality of a vote, and the corresponding chance of a Conservative victory, is more important than the boundaries of my existing and historic seat, is a decision worthy of deep deliberation.
Geoffrey Clifton-Brown
I am grateful to my hon. Friend for giving way, since I will not have the chance to make a speech today. Amendment 5 contains one important provision that shows why those who vote for the amendment are absolutely determined to wreck the Bill. The explanatory notes to the amendment state that
“the Boundary Commissions would not have a discretion to consider inconveniences attendant on boundary changes”.
In other words, people would have grounds to argue against any boundary changes that the boundary commissions proposed.
Bill Wiggin
I am deeply sorry that my hon. Friend will not have the chance to say more this evening. He deserves to.
The economic and other damage left by the Labour party, and the need for equality in votes, shows the greatest good to my county and my country although it may cause me the most harm personally. Putting aside all temptations and fears, my conclusion is that the sacrifice made by the loss of my seat must be worth it for my constituents. They deserve promises to be kept, fairness and justice to be paramount, and for their vote to count as equally as any other. I therefore support the Government and disagree with their lordships.
Mr Bone
I want to make a few brief points. I voted against the original Bill on Second and Third Reading because I wanted to see boundaries equalised but not a reduction in Members. I lost that debate and that vote, and I accept the will of the House. I also accept that Labour Members have been consistent in their views.
I thought today that I would be speaking in support of the Government, but I have since learned that I am speaking in support of Conservatives in the Government, which makes me feel a little better. My problem is very simple. If one reads the debates on Second and Third Reading, the Deputy Prime Minister, who led for the Government on this issue, made sensible remarks about equalising the size of constituencies, with which I thoroughly agree. However, when something is said as a matter of principle—this is where I think politics is brought into disrepute—whether it is about an in/out referendum on the EU or voting against tuition fees, and when a deal is done and a pledge made in coalition that there will be a vote on the alternative vote and in return the boundary review will be supported, that pledge must be kept.
The only honourable thing the Liberal Democrats can do tonight if they do not vote with Conservative Members is resign from the Government and cross the Floor of the House. If they have any principle, any honesty, that is what they must do. I remember when the aspiring new Prime Minister spoke to the Conservative party in the 1922 committee when the coalition came into being. The only issue that the party had to decide on was whether it would allow a vote on AV in return for Liberal Democrat support on boundary reviews. That was the deal. The Conservative party kept to that deal but the Liberal Democrats have gone back on their part of it. They are a disgrace and should be on the Opposition Benches.
Ben Gummer (Ipswich) (Con)
I rise briefly to express my regret on three points. First, I regret that the other place has seen fit to ride through the conventions that have held it secure in its position for many centuries. It has done so on the basis of Members who have gone to that House, precisely—Opposition Members have referred to this—through a packing of the House of Lords under the previous Government. Those Members have then ridden through their conventions in order to place us in this position, with a constitutional change foisted on this democratically elected House.
I also regret that we will not have boundary review until 2018 if we disagree to the motion. That will mean that many Members will not be equal. Mr Speaker, you said in response to an earlier point of order that all hon. Members are equal, but they will not be equal in the representation they bring to the House.
Greg Mulholland
Twenty-seven months ago, in October 2010, I tabled an amendment that said that the boundary changes were being rushed through and should be postponed until the next Parliament. I was right then and I am right now.
Hon. Members agree that this is a serious issue, and that we should look to try to have more equal constituencies, but the logic that has been followed does not do that. We need common-sense proposals for the next Parliament that hon. Members can unite around. We need constituencies that do not cross county boundaries and major council boundaries, and ones that are geographically commonsensical. The measure needs to be tied in with individual registration, as the Bill should have been.
If we are serious about reducing the number of MPs, we need a debate on what our role is. If we reduce the number, it will be more difficult for us to fulfil our myriad roles—our roles are different from those of Members of other Parliaments in the world.
The truth is that the Bill was based on a solid principle, but the reality was wrong. We have a duty to scrutinise it. I said that in October 2010, and I have not changed my mind. I will be voting the right way, as I did three years ago.
Miss Chloe Smith
I beg to move, That this House agrees with Lords amendment 7.
Mr Speaker
With this it will be convenient to consider Lords amendments 10, 11, 1 to 4, 6, 8, 9 and 12 to 22.
Mr Speaker
Order. Will right hon. and hon. Members who are leaving the Chamber—[Hon. Members: “We’re celebrating!”] Will Members who are leaving the Chamber for whatever purpose please do so as quickly and quietly as possible so that I can call Minister Smith to speak to the motion? She should not have to fight to be heard, and we wish to hear her.
Miss Smith
Thank you, Mr Speaker. I shall speak to Lords amendment 7 and, with your leave, I shall speak to the other amendments in the group as well. It might therefore take me a few minutes to complete my speech, as it covers all the amendments.
Lords amendments 7, 10 and 11 will enable voters waiting in a queue at close of poll to be issued with ballot papers and to vote, even if the time of close of poll has passed. Following debates on the subject, the Government have decided to accept the principle of the amendments introduced in both Houses, to ensure that people are able to exercise their right to vote if they are already in the queue at 10 pm on polling day. The measure has attracted cross-party support in both Houses, and the Government agree with the sentiment behind a change in the law to enable voters to vote.
The Government did not accept amendments previously tabled on this subject, and have instead introduced their own group of amendments to address some of the issues identified by the previous amendments. For example, the amendment tabled by Lord Pannick did not apply to Northern Ireland and would have resulted in an inconsistent position for voters across the United Kingdom.
In tabling their own amendments, the Government remain concerned that all potential consequences for other aspects of electoral law of any new provisions relating to close of poll should be dealt with at the point at which the new provisions take effect, to reduce the risk of unintended consequences. I will not dwell at length on those amendments; suffice it to say that the term “close of poll” is used in a number of electoral provisions, including those that determine when exit polls may be published and the point by which postal votes must be returned. Some of those provisions attract criminal penalties and it would not be right if the impact of a change were not considered and addressed, to avoid a position in which people might fall foul of the law inadvertently. The amendments therefore provide for a proportionately limited power that will allow the Government to make any such consequential changes that might be required on commencement.
Let me make it clear that, although the Government are introducing these amendments, we remain of the view that proper planning by returning officers must be the first priority to reduce the risk of queues forming. However, this change to the law will provide an effective back-stop to supplement that planning. The Government have also consistently argued that administrative points remain to be addressed, and we will work closely with the Electoral Commission and electoral administrators on the best way to implement the amendments for voters. However, putting aside those points of detail, I hope that we can agree to support this change to the law for the benefit of voters.
The other amendments in the group relate to the transition to, and operation of, individual electoral registration. That is the core of the Bill, through which we aim to tackle electoral fraud and the perception of fraud. Under IER, electors will be required to register individually, rather than by household. In that way, we will be moving to a system in which individuals will have to provide information to verify their application, and so take responsibility for their registration to vote. That will modernise our electoral registration system, facilitating the move to online registration and making it more convenient for people to register to vote. Our aim is to tackle electoral fraud, increase the number of people registered to vote, and improve the integrity of the register.
It falls to me to rebut a few points made in the previous debate, as they properly relate to the subject matter in this group of amendments. I was concerned to hear the Labour Front-Bench team whipping up scare stories. It felt to me that they had little else to say, and their opportunism led them to introduce some confusion into our debate. It is important to note that the figures occasionally quoted, as I understand it, by the hon. Member for Vale of Clwyd (Chris Ruane), who is not in his place, related to an opt-out that was included in the draft legislation published in June 2011, and not to the transition to individual electoral registration in general. The hon. Gentleman quoted the concern of the Electoral Commission about completeness, potentially leaving, in his citation, 16 million people unregistered. Those comments were, I suggest, a misquotation of the Electoral Commission’s chairwoman, Jenny Watson. She clarified her opinion in a follow-up statement. I hope that is of help to the House.
It is also important to rebut very firmly further comments of the hon. Member for Vale of Clwyd. Sadly, I see that he is still not in his place, after having made the lurid suggestion that the Government are engaged in voter suppression. I cannot stand against that more strongly. I think it would be helpful if I noted that the Electoral Commission has been calling for the introduction of IER since 2003. It supports that introduction and believes
“it is the right thing to do because the current system is vulnerable to fraud; and it is right that people take responsibility for their own votes. The ‘household’ registration system means there is no personal ownership by citizens of a fundamental aspect of their participation in our democracy—their right to vote.”
I seek to support that right to vote. I am concerned that the hon. Member for Vale of Clwyd, who is still not in his place to engage in debate, made such lurid comments.
Geraint Davies (Swansea West) (Lab/Co-op)
The Minister will be aware that 25% of people in Britain are functionally illiterate, meaning that they cannot handle a yellow pages directory effectively, and that many others cannot speak English very well. There is reason to believe that when others are helping people to register in households, this move could lead to a reduction in registration and the disfranchisement of many of those people.
Miss Smith
I thank the hon. Gentleman for that thoughtful point. I would be happy to discuss that with him in more detail outside this place, as I fear that we will not have time in a full hour to deal with every way in which under-represented groups need to be assisted, supported and encouraged to register to vote. It is absolutely this Government’s intention and passion to get as many people registered to vote as possible. That would certainly include, using appropriate methods, the groups to which he has referred.
Graham Stringer (Blackley and Broughton) (Lab)
Does that mean that it is the Government’s policy to support house-to-house canvasses to make sure that individuals register, and will such canvasses be resourced?
Miss Smith
Yes, it is the Government’s policy that the annual canvass is a valuable part of the process. The hon. Gentleman will, I suspect, know as well as I do that it is for local authorities to resource that in the sense of providing the people to carry it out. He will also know that it has been clear throughout the passage of the Bill that the Government will ensure that financial resources are available to local authorities.
Mr John Redwood (Wokingham) (Con)
Just as we want to make sure that anyone who is eligible to vote is able to do so, we also need to make sure that only those eligible to vote do vote. Will the Minister remind us what checks there will be on an individual to prevent that individual from registering twice under different names?
Miss Smith
My right hon. Friend is absolutely right. The innovation of data-matching will allow us to cross-reference, we hope, about 70% of electors against other sources of data held by the Government. That will, in large part, assist the endeavour outlined by my right hon. Friend. It will help to ensure that the register is both as complete and as accurate as possible, and that those who should not be on the register are not included.
Wayne David
I shall address amendments 7, 10 and 11 first, and then amendments 6, 8, 9, 21 and 22.
The Opposition have consistently supported the introduction of individual electoral registration. We agree with it in principle; indeed, we legislated for it when we were in government. We also support the twin principles of achieving maximum accuracy in the electoral registers and maximum completeness. I am pleased the Government have now accepted the arguments that we and others have put forward in this House on a number of occasions. I remember the hon. Member for Somerton and Frome (Mr Heath) being totally dismissive of them, but we welcome the fact that the approach taken by the other place is more rational and that the Government admit—although belatedly—that their initial arguments were wrong, and that they now agree with us. The Government have seen the light, on this issue at least.
I am also pleased that the Scottish Government have taken action and that the views of the Electoral Commission have been taken on board. I remind the House that, in the aftermath of the May 2010 general election, the Electoral Commission produced a report that identified four key factors in what had gone wrong. There was evidence of poor planning assumptions in some areas, and of poor conduct of the election on polling day. The use of unsuitable buildings and inadequate staffing arrangements at some polling stations were also an issue. It was said, too, that the contingency arrangements were not properly triggered or were unable to cope with demand at the close of poll—that was very evident. Finally, the Electoral Commission found that there was restrictive legislation which meant those in queues at polling stations at the close of poll were not able to be issued with a ballot paper. The Government were initially trenchantly opposed to that objective view. They now agree that it is necessary to accept it and to introduce corrective legislation. I welcome that; this House supports the Government’s conversion.
The second substantive issue is to do with the so-called carry-forward—or carry-over—and the commencement of full individual electoral registration in December 2015 or December 2016. We support the Government’s amendments in that regard and recognise that there has been a move, albeit a more modest one than on the other big issue, to try to accommodate the legitimate concerns expressed in the other place. However, the Electoral Commission has reservations about these amendments and, indeed, they are a rather convoluted set.
The Minister set out a convoluted process. I have to be honest and say that, on occasion, it sounded as though she was speaking double Dutch. The Bill is to contain a delay in the implementation of full IER from December 2015 to December 2016. We might think that that is fair enough, as it will allow greater parliamentary scrutiny, greater parliamentary involvement and a greater opportunity to get more people on to the electoral register under IER than would have been the case. But, unfortunately, the Government will not go the whole hog, and they are introducing a byzantine system whereby having a cake and eating it is the order of the day. They are saying, “Yes, that change will be in the Bill, but we reserve the right to contradict what is in the Bill by saying that our implementation plan stays in place. We will still want to do what we always intended to do, despite the amendment we put into the Bill.” If any hon. Member is confused, I do not blame them, because, as I said, the Government are speaking double Dutch.
To make matters worse, the Government have introduced a procedure—the negative assent procedure—involving both Houses, and that will make the situation even more complicated. Let me try to be helpful to the Minister, as always, by suggesting what the Government might do to resolve their internal contradiction. She began by sensibly saying that the implementation date will move from December 2015 to December 2016, but there remains a right for the Secretary of State or Lord President of the Council to make an order to remove those carried-forward entries in December 2015. Given the mood of the House and what has been said generally this afternoon, I suggest that the Government give a firm commitment not to implement that, so that everybody will be clear that the implementation date will be 2016. We will support these amendments, but it would be enormously helpful if the Minister responded positively, recognising the mood of both Houses, by saying, without any equivocation, that there will be a delay in the implementation of IER until December 2016.
Mrs Laing
I was totally taken by surprise to discover that the Minister is urging the House to accept Lords amendment 7 on voters waiting at polling stations at the close of poll. On 27 June 2012, I introduced this very amendment—it was almost word for word—which was known then as new clause 4. I will not repeat the speech I made then. We had a long debate and I was supported in my arguments by the hon. Member for Penistone and Stocksbridge (Angela Smith)—that is all on the record in Hansard, at column 359 and onwards. That is lucky, because we do not have time to debate that all again this afternoon, and I am delighted that we do not have to do so.
In that debate, the hon. Member for Somerton and Frome (Mr Heath) stood there and told me how everything I said was wrong and that I was silly to waste the House’s time by introducing my new clause, which he said was total rubbish and totally unnecessary. He said that returning officers could deal with all the problems and that this was merely a matter of management.
Mrs Laing
I am glad that the hon. Lady agrees with my recollection of what happened on 27 June. I believe she also agrees with my arguments that these matters should not be left up to individual registration officers, especially given that their ability, resources, experience and enthusiasm vary considerably from one part of the country to another.
Mr Redwood
I remember my hon. Friend’s speech and she made her point very well at the time. I suggest that she claims credit and congratulates the Ministers on realising that she had a better Government policy than they did. We can then be one big happy family.
Mrs Laing
I thank my right hon. Friend for that point and am coming to it.
I am very glad that the Minister recognises what I and other Members said on 27 June 2012 was right, but, as I am sure my right hon. Friend will agree, this is also a very good example of why we need a revising Second Chamber rather than another House at the other end of this Palace of Westminster that challenges everything we do and makes things difficult for the process of government. We need a House that looks again at what has been said and done in this Chamber and makes sensible suggestions. In this case, the suggestion made by their lordships is almost exactly the same as the suggestion I made on 27 June; I am delighted that their lordships agree and I am extremely delighted that the Minister is urging the House to accept the amendment.
Neil Parish (Tiverton and Honiton) (Con)
I, too, congratulate my hon. Friend the Member for Epping Forest (Mrs Laing) on her foresight and vision. It is great that the Government are taking on her suggestion, because there is no doubt that if a queue of people is waiting at the polling station to vote, it is not beyond the wit of man or woman to put a polling clerk or somebody else in the line to act as a marker between those who arrived before 10 o’clock and those who arrived afterwards. I cannot see any great argument for saying that that would delay the whole process, because at the count many boxes come in from all over the constituency and some will arrive first, meaning that their contents can start to be counted, whereas others will arrive later. We got ourselves into a bureaucratic nightmare that could be fixed quite simply. I am delighted that the Government have accepted the Lords amendment, and I congratulate my hon. Friend again on her foresight.
Miss Chloe Smith
I am grateful for the opportunity to add a few comments in response to what has been said. I suspect it comes as no surprise to anyone that this is the quieter end of this afternoon’s work and that we might finish rather sooner than the programme motion suggests.
The hon. Member for Caerphilly (Wayne David), if I understood him correctly, urged me to take a slightly different approach to the programme’s implementation date. Let me deal with that first. I stress again the points I made in my opening speech: like the hon. Gentleman, we want the transition to IER to be as clear and easy as possible for electors and administrators. The Electoral Commission is a key part of that work through its delivery of both the nuts and bolts—that is, the forms and operational guidance—and the publicity campaign that will accompany the transition.
It is important that we are all clear on the implementation plan. As my noble Friend Lord Wallace of Saltaire stated in the other place when outlining these amendments, we expect the transition to IER to take place on the time scale set out in the implementation plan published last July. I reassure the House, the Electoral Commission, administrators and electors that we are committed to implementing the transition to IER during 2014 and 2015, resulting in a register published in December 2015 that includes only individually registered electors.
Wayne David
If the Minister is reiterating the point that the Government are committed to the original implementation plan, why are they proposing to change the Bill? She cannot face both ways; it is one or the other. We all agree that we want clarity, but it must have a firm base. She cannot have her cake and eat it, as I said earlier.
Miss Smith
I humbly suggest that the other place—the revising Chamber that it indeed is—thought that this was a sensible way to go. I simply note, of course, that although I would have liked things to be as originally proposed—2015, with no further detail—this is a concession tabled in response to concerns expressed in the other place.
Wayne David
As the Minister belatedly says, of course this Government amendment was proposed in the other place. What I am suggesting is that, rather than having clarity as the prime motivation, the Government were quite keen to have a grubby little compromise and the Bill deserves better. It is far too important in principle to have a convoluted, contradictory implementation date. What we need, again, is clarity and straightforwardness. The people on the ground—the electoral registration officers—require that.
Miss Smith
I give the hon. Gentleman clarity and straightforwardness, as I have done several times now and will happily do again. The implementation plan for IER remains exactly the same. The Government amendment was tabled in response to concerns expressed in the other place. It strikes a sensible balance, and I note again all the benefits of a two-year transition that we have planned for, such as two canvasses and, of course, a general election where interest in politics will be high, starting in November 2013—that is, the transition, not the general election—backed up by our national campaign with the Electoral Commission to maximise registration. All those elements will now proceed apace, to the plan that we have set out, and I think that that is absolutely clear. I welcome the Electoral Commission’s direct confirmation that
“For practical planning purposes, the Commission’s view is that it will…advise EROs to plan on the basis that the point of removal is likely to be 2015”.
That answers the point and makes things as clear as possible.
Wayne David
The Minister is generous in giving way, but given that she has been unwilling to accept my reasonable suggestion, does she agree that at the end of the day the implementation date of IER will depend on the result of the next general election?
Miss Smith
It is no surprise to anyone to learn there will be a general election in 2015, and it is no surprise to anyone who reads the detail of the amendments to learn that a key decision will take place in the summer following that election. I make no secret of that. In fact, it is as well for me to have the chance to talk briefly about that because what we see is the ability for the then Government to take a reasoned and data-driven view of the completeness and accuracy of the electoral registers as they will then exist. For that reason, I have faith in the approach of the 2015 stop point being the right one, because I am confident that our plan will have delivered the completeness and accuracy that we all seek.
Wayne David
We are coming to the close of our parliamentary proceedings on the Bill, and I accept what the Minister says: the Government have a principled position, as I believe that we do, in wanting to ensure that as many people as possible who are entitled to be on the electoral register are indeed on it. As was mentioned earlier this afternoon, there is a great deal of concern that the Government might not be doing as much as they could to get groups that are traditionally under-represented on the electoral register engaged in the new process. In the Minister’s concluding remarks, will she reassure the House that that work is under way and will continue apace?
Miss Smith
I certainly do seek to give that reassurance, but not—I would like it noted—in response to the frankly lurid accusations that have been made this afternoon by Members who are no longer present in the Chamber. The Government’s aim is to tackle electoral fraud and to improve the integrity of the register. We are indeed undertaking a programme of activity to get the maximum number of eligible people on to the electoral register. That is vital. The Bill enables the introduction of a modernised electoral registration system that makes it easier for people to vote. It will improve the integrity of the register and, therefore, of the electoral processes that are based on it.
I welcome the comments of my hon. Friends the Members for Epping Forest (Mrs Laing) and for Tiverton and Honiton (Neil Parish) in seeking for voters to be able to cast their votes at polling stations. I am well aware of the history of that debate, both in this Chamber and in the other place. I recognise that in the course of the Bill we have been able to take a pragmatic approach to the concerns of both Houses and, I hope, to accommodate them in a way that delivers a sensible implementation programme and a Bill of which we can all be proud.
Lords amendment 7 agreed to.
Lords amendments 10, 11, 1 to 4, 6, 8, 9 and 12 to 22 agreed to.
HGV Road User Levy Bill (Programme) (No. 2)
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I beg to move,
That the Order of 20 November 2012 (HGV Road User Levy Bill (Programme)) be varied as follows:
1. Paragraphs 4 and 5 of the Order shall be omitted.
2. Proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.
I wish to put on record the helpful, constructive and conciliatory approach of the Opposition to the programme motion.
Question put and agreed to.
HGV Road User Levy Bill
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I beg to move amendment 1, page 5, line 4, leave out subsection (3).
I had the opportunity to have an informal chat with the Minister earlier today about the amendment. Although I am aware that technically it may not do the job exactly as required, I shall outline its intent and the background, and I hope the Minister will address both the intent and what is proposed, and deal with the requirements in due course.
The background to the amendment is correspondence from the British Vehicle Rental and Leasing Association, from Miss Amanda Brandon, the legal and policy executive of the BVRLA, and the legal director, Mr Jay Parmar. The BVRLA, as the Minister and colleagues who were on the Committee will know, gave evidence to the Public Bill Committee on 4 December. In response to a question from the Chair of the Committee, Mr Parmar said:
“However, we have some serious concerns about the drafting of the Bill and the impact it could have both financially and economically on our members”.
He went on to say:
“To give the Committee a feel for the figures, we have estimated that our members tend to dispose of around 20,000 trucks every year, so if we look at a typical fleet that is being disposed of being between band E, as proposed in the Bill, and band G, we believe that, under band E, with two months unused lorry road user fee available, the figure is around £1.06 million, and for band G it is £1.6 million. That is the amount that we would not be able to reclaim under the Bill, which would result in a loss of around £2.7 million each year to UK operators. That starts to give the scale of our concern.”––[Official Report, HGV Road User Levy Public Bill Committee, 4 December 2012; c. 35-36, Q87-88.]
I am sure that the Minister has seen the correspondence received this week from the BVRLA, which says:
“The BVRLA is fully supportive of the Bill’s key aims of creating a level playing field between UK and foreign hauliers and ensuring foreign operators make a fair contribution towards using UK roads. However, clause 7(3) will impose a new cost burden on UK owners as they will be restricted in the amount they are able to claim as a refund for the unused proportion of the levy. A vehicle owner today is able to obtain a VED refund without such a restriction when it is being sold or SORN’d”—
a reference to an off-road notice, as the Minister knows. We had this exchange in Committee, so he is very familiar with this territory.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
I thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for tabling his amendment. I hope that I will be able to persuade him that it does not deal with the concerns raised by the BVRLA, which I should like also to address. I want to try to prove to him that his amendment would potentially, if we were not careful, give a free £200 to an awful lot of people. I hope he will agree with me on that. We discussed the point about clause 7 in Committee when the hon. Member for Linlithgow and East Falkirk (Michael Connarty) raised the issue of 10 monthly and 12 monthly payments.
Removing clause 7(3) would remove the annual rebating formula and mean that all the rebates would be made under subsection (4), which applies to all periods of time over one month and less than one year. Under the European directive, the charges and rebating formula must be the same for both UK and foreign-registered vehicles.
In selecting the charges for different time periods, we have chosen to offer the annual levy at a discount compared with the purchase of 12 monthly levy payments. That is also compatible with the Eurovignette directive, which states that the annual charge may be no less than 10 times the monthly charge.
The hon. Gentleman’s amendment would not have its intended effect, which I believe is to ensure that UK hauliers would be able to claim the rebates in twelfths rather than tenths, as proposed by the Bill. As he has rightly pointed out, I am aware of what the BVRLA has put together. It has been lobbying for a change to the calculation because at the moment it estimates that a UK operator could incur a small loss when it delicenses a vehicle—typically when it is sold—compared with the existing rebating regime for vehicle excise duty, which rebates in twelfths. The BVRLA has identified that a small extra cost to operators could be introduced by the way in which the levy is rebated compared with how VED is rebated.
Currently, when a vehicle is delicensed—typically when it is sold—the previous owner can claim back the outstanding whole months of VED, with the rebate calculation done in twelfths. From the introduction of the levy in 2014, UK operators will only be able to reclaim VED on the same basis that the levy can be reclaimed, namely in tenths. Setting the annual rate at 10 times the monthly rate complies with EU law and will maximise the revenue from the monthly charges. That means, in effect, that it is discounted when compared with the cost of the 12 monthly levy charges.
The decision to offer rebates in tenths was made, as I explained in Committee and as the hon. Gentleman has mentioned, to prevent foreign hauliers from paying for a year, using a vehicle for a month and then reclaiming 11 months. The hon. Gentleman’s amendment would have the effect—although this is not its intent—of removing that.
Jim Fitzpatrick
I accept the explanation about tenths and twelfths and that we do not want to give an advantage to foreign hauliers, but the question that was raised in Committee by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) has still clearly not been answered to the satisfaction of the BVRLA. When someone surrenders VED—a tax disc—they can claim back, but if a vehicle is off the road while it is in the process of being sold, which could take two or three months, and is accruing the levy charge, can that be claimed back? If it can, I think that will answer the problem.
Stephen Hammond
I hope that I am about to address exactly that point. I welcome the hon. Member for Linlithgow and East Falkirk to his place, because he raised the point about the levy rebate, which I hope my opening remarks have addressed.
The BVLRA estimates that rebating the charge in tenths rather than twelfths might cost its members, as the hon. Member for Poplar and Limehouse has said, up to £2.7 million a year. That estimate is on the high side, to say the least, because the BVRLA assumes that half the refunds would be for vehicles in the most expensive levy band, whereas, in fact, only 4% of the UK fleet is in that band. Most UK vehicles—83%—are in bands costing between 36% and 65% less. I would therefore question whether the cost is as high as estimated.
The BVRLA also assumes that all refunds are claimed in the 10th month of the VED cycle for each vehicle, which is a worst-case scenario. In fact, there is a peak in vehicle disposals at around month three or four of the cycle, reflecting the fact that vehicles are often purchased in September and sold in January, to deal with Christmas business. The loss for any vehicle at this point is some 60% or 70% less than the worst-case figure.
We estimate that most vehicles will lose in the region of between £30 and £50 when delicensed. That is not a regular event, but it would happen, for example, when a vehicle is sold. The loss therefore needs to be set in the context of the vehicle’s whole lifetime, which can be about 10 years. For example, a typical vehicle that lasts 10 years and is sold twice during that period at a typical stage in the VED-levy cycle would incur between £60 and £100 in rebate costs over its life, because the loss is incurred only when the vehicle is sold or delicensed for other reasons. That cost equates to about £6 a year. Operators can avoid that cost by selling the vehicle taxed or by disposing of it only at the end of the VED-levy cycle so that there is no amount to reclaim.
As the hon. Member for Poplar and Limehouse said, the BVRLA gave oral evidence to the Committee and raised this point, but it did not give it the prominence that it has been given subsequently. I am pleased that we have been able to discuss it today because it did not feature in our discussion about levy rebates. I am pleased that I have been able to clear the point up. The BVRLA could have submitted written evidence on this point to the Committee, but it did not. It is helpful that it has been raised by way of amendment this afternoon.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
The point I raised on instinct, on looking at the Bill, was that this was not a level playing field between those who come into the UK and pay the levy, and those who are in the UK and pay duty and now the levy. Although the Minister has said that the loss will be 70% less than the worst-case scenario and only about £6, it is still not a level playing field. There will be a loss for the leasing companies in the UK. The companies say that the loss will be £2.7 million a year. If it is 70% of £2.7 million a year, it is still a large hit for British business.
Stephen Hammond
As I have said, the figure of £2.7 million is predicated on half the vehicles in the fleet being in the largest band, whereas only 4% are in that band. There will be a very small loss, if there is a loss at all. The £2.7 million figure is clearly an overestimate.
I seek to persuade the hon. Member for Poplar and Limehouse that under the amendment, all rebating would be done under clause 7(4), which is designed for shorter periods of time than one year. Rebating the annual levy under that subsection would not resolve the tenths versus twelfths issue, but it would allow some foreign operators to drive on the UK’s roads for free for up to two months when they purchase an annual levy. That is because, as we discussed in Committee, they would be able to claim a rebate for whole outstanding months at the monthly levy rate, rather than at the discounted rate.
As well as the potential for free use of the roads, a further consequence of using clause 7(4) as the rebating mechanism would be to allow anyone to make a claim for more than they had paid, without ever driving on the UK’s roads. For example, if an operator purchased a levy starting at a future point in time, say 1 February, and immediately asked for a rebate, they would be able to claim 12 times the monthly rate because the levy period would not have started. That would contrast with the actual cost of the 12-month levy, which is discounted to 10 times the monthly rate.
The consequential amendments would mean that clause 7(4) could also be used for annual rebating and would remove the references to clause 7(3) in clause 7(8), which deals with the level of the rebate. Given the unintended consequences of providing updates only through clause 7(4), and given the relatively small value of the typical loss, which is incurred only if the vehicle is delicensed or sold, we do not propose to change the rebating formula from tenths to twelfths.
I will keep the situation under review. I hope that with those reassurances, the hon. Member for Poplar and Limehouse will withdraw the amendment.
Jim Fitzpatrick
We are very grateful to the Minister for his response. My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) raised this matter strongly in Committee. We supported the inquiry by the BVRLA because this seemed to be an issue that was slipping through the cracks. The Minister reassured us in Committee. He has said solidly that he will keep the matter under review. We do not want to see this develop into a disadvantage for British road haulage.
Given the assurances that the Minister has reaffirmed today, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Third Reading
Stephen Hammond
I beg to move, That the Bill be now read the Third time.
As the House knows, this Bill introduces a new levy for all heavy goods vehicles that weigh 12 tonnes or more and that are kept on, or use, the UK road network. The levy is aimed at recognising the damage that HGVs do to our roads, so that a contribution is made for that.
The Bill has, I am pleased to say, enjoyed cross-party support as it has proceeded through the Ways and Means motion, Second Reading, Committee and now—I hope—Third Reading. With some exceptions and questions it has been broadly welcomed by industry, with agreement on the fundamental point that vehicles that use and cause wear to our roads should make a payment to take account of that. The HGV road user levy will, for the first time, require foreign-registered HGVs to make a contribution to the costs of maintaining the road network that they use.
Subject to the Bill being passed in the House today, although the financial burden of road maintenance will be largely borne by UK taxpayers, from April 2014 it will no longer fall solely to them. Our intention is for the levy to apply to all categories of public road in the UK, and to UK and foreign-registered HGVs equally. The Government plan to implement the levy from April 2014 for UK and foreign-registered hauliers, and I am working to ensure that the process to procure and develop the necessary vehicle payment systems is completed. That is being done to a short time scale, but as I stated in Committee, I am confident it can be achieved.
As stated in previous discussions, UK hauliers will pay the levy in a single transaction with vehicle excise duty—VED—when it is renewed from April 2014. Foreign hauliers do not currently contribute to road maintenance through a vignette or other form of payment, even though such charges are common in other countries and our hauliers pay them when they use roads overseas. Foreign-registered hauliers who have long enjoyed an advantage over our own haulage industry will now have that advantage removed. All main parties have wanted to introduce a measure to correct that imbalance for many years, and I am delighted that this Bill, which will go a long way towards addressing it, is receiving its Third Reading.
HGVs play a crucial role in our economy by supplying businesses and servicing consumers. More than two thirds of goods moved within the UK travel by road on an HGV. It is estimated that foreign hauliers make around 1.5 million trips in the UK annually, and the levy will ensure that they pay a fair amount when they use UK roads, and increase opportunities for UK hauliers in international trade.
As colleagues in the House may be aware, any form of road user charge is subject to strict conditions set out in the Eurovignette directive, in which the maximum daily charge is specified as €11, which is likely to rise to €12 by 2014 to compensate for inflation. By that stage it will equate to about £10 per day, which is what we intend to charge to the largest foreign vehicles that use roads in the UK. I recognise that many trips by foreign hauliers last longer than one day, so they will also be able to pay the levy for different periods—daily, weekly, monthly or annually, for up to one year. For the largest vehicles, the annual charge will be £1,000, and proportionately less for the smallest vehicles. Overall, most vehicles that come to the UK are in the heaviest two bands.
The Government have estimated that the revenue gained by charging foreign hauliers will probably be between £18.7 million and £23.2 million annually. I appreciate—this was discussed in Committee at some length—that that may not be an enormous sum in the grand scheme of things, and I am sure some of my colleagues would like it to be higher, but the levy is set at the highest level allowed by the Eurovignette directive. Other measures—principally the reduction in VED—mean that nine out of 10 UK vehicles will pay no more than they do now. That will ensure a fairer deal for UK-registered HGV operators, who should not, and will not, have to bear an additional financial burden as a result of the levy. As we have announced previously, details of vehicle excise duty will given by my right hon. Friend the Chancellor in due course.
With those brief comments, I hope that the House supports the Third Reading of the Bill.
Jim Fitzpatrick
I delighted that I have been joined on the Opposition Front Bench by the shadow Secretary of State, my hon. Friend the Member for Garston and Halewood (Maria Eagle), and by the newest member of the shadow transport team, my hon. Friend the Member for Makerfield (Yvonne Fovargue).
Despite the previous debate, this is a good Bill, and the Opposition welcome it, as we did on Second Reading. I commended the coalition for introducing it to support British haulage, and I commend the Minister and his predecessor, the hon. Member for Hemel Hempstead (Mike Penning), who was the architect of the Bill—he built on that which Labour left him when it left office. It is clear from pre-legislative scrutiny and debates in Committee that the Bill has cross-party and cross-industry support.
The Opposition raised a number of issues in Committee: hypothecation, visible evidence of payment, rebates, meandering Irish cross-border roads—an issue covered by the hon. Member for Strangford (Jim Shannon) and others—and road safety. We also dealt with the Bill’s timetable, enforcement and reduced pollution certificates. On all those issues, I am happy to say that the Minister was able to respond so positively and provide enough reassurance that none of the amendments we tabled was pressed to a Division. It is to the credit of the Minister and his officials that they responded so positively to the probing to which we exposed them. He reassured both sides of the Committee that the Bill should be supported.
I should make one or two brief comments on the issues we have raised. The Minister made a stout philosophical defence against hypothecation, and the Opposition could not argue against it because we too would have opposed hypothecation. He therefore made a lot of sense when he said that hypothecation was not an appropriate way forward.
On enforcement and the question of using some of the money as supplementary funds for the Vehicle and Operator Services Agency, the Minister reassured us on his confidence in the system. We have moved on a lot—we have the success of the congestion charge in London and the technology for automatic number plate recognition cameras—and the Committee was reassured that we have the technology to ensure that the system works.
The one question on which those on both sides of the House have raised concerns was road safety and the disproportionate number of crashes caused by foreign vehicles. Perhaps the Bill will deter some foreign hauliers from coming to the UK, which might in turn reduce the number of crashes caused by foreign hauliers. In that respect, the Bill will have an impact on road safety.
The Opposition also raised the question of giving a tokenistic measure of support for road safety. We suggested using some of the money raised—either from fines or the levy—for road safety purposes. It was suggested that The Times cycling campaign, which has been championed by my hon. Friend the shadow Secretary of State and other hon. Members, was an appropriate campaign to benefit from the levy. That was clearly not going to happen, but we considered it and demonstrated cross-party support for the campaign and for road safety in general, and so indicated that we need to maintain our rigour in respect of trying to reduce the numbers of people killed and seriously injured on our roads. This measure ought to help in that regard.
The Bill is a good Bill. It will make a contribution to rebalancing the playing field for UK hauliers. The previous Government should have introduced it. I discussed the matter with the Treasury Minister responsible at the time, and he too could not work out why we did not introduce it. I assume it was too late in our legislative cycle. That is slightly embarrassing, but Labour has none the less supported the Bill on Second Reading and in Committee, as we support it on Third Reading.
We appreciate the efforts of officials and my hon. Friends who supported the official Opposition in Committee. We also appreciate the efforts of my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), the Chair of the Select Committee on Transport—she was in the Chamber on Second Reading and is here again on Third Reading—whose Committee helped in our deliberations. We want the Bill to make progress and are pleased we are debating it today.
Neil Parish (Tiverton and Honiton) (Con)
I very much welcome the Bill. I understand that the Minister is bound by the vignette-type legislation from Europe, which means that we can charge a maximum of €11 a day, and in the future we must look to increase that significantly. Someone running a heavy goods vehicle from France is helped significantly by the fact that the diesel is 10p to 20p a litre cheaper. A lorry coming over here can have a couple of tanks of diesel on it and deliver goods all over the country using it—so there is still a very big advantage to be had. Moreover, a British lorry using motorways all the way to the south of France will have to pay nearly €1,000 for a return trip at the péages. It is bad enough with a domestic car, let alone the charges for an HGV.
This is a good start to making the playing field more level, and I recognise that the shadow Minister was graceful in accepting that it should have been done on Labour’s watch. I am glad that he supports the Bill. I welcome the Bill, but our hauliers have suffered greatly over the years from unfair competition, with lower-priced fuel coming across in the lorries, which then do a lot of business in this country because they can outbid our hauliers. I look forward to seeing this levy rise substantially.
I have one final point. Many foreign lorries that come over here seem to have a sat-nav system for domestic cars, and they end up going down some of our rural roads, taking out bridges and walls—even cottages. It is very hard to reverse those huge HGVs when they have gone down a tiny country lane or through a very small village. That also needs to be looked at seriously.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I, too, welcome the Bill and I agree that it has been a long time coming. The Transport Committee first looked at this issue midway through the last Parliament, which is quite a few years ago. We continued in the present Session, and we looked at the issue in two ways. First, we looked at it in relation to the haulage industry, including fair treatment of and fair competition for the British haulage industry. Secondly, we looked at it in relation to road safety. As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) has said, we noted the high proportion of accidents caused by lorries from the continent. We attributed that to lower safety standards, and noted issues that we felt needed to be addressed and action that should be taken.
The Transport Committee in the last Parliament certainly shared the frustration that no action was taken. It did appear at one stage that a Bill would be brought forward on the subject, but it did not happen. I am pleased that the matter has been taken up in this Parliament. It is important that the Bill should have been looked at in such detail in Committee, and it is stronger as a result. I give it my full support, and to those who question the worth of Select Committees, I say that it might have taken at least two Parliaments and many years, but we have got there in the end.
Mr Alan Reid (Argyll and Bute) (LD)
I, too, join the welcome for the Bill from both sides of the House. Until now, foreign-registered lorries using our roads have not paid anything towards their construction or maintenance, whereas UK hauliers pay tolls and other charging schemes when they travel around the rest of Europe. Clearly, foreign vehicles cause a lot of wear and tear to our roads on the approximately 1.5 million trips they make to the UK each year, and it is not right that the UK taxpayer has to foot the Bill for all of that wear and tear. The Bill will change that by introducing a levy on all heavy goods vehicles. For the first time, foreign-registered hauliers will make a contribution towards the wear and tear they cause to our roads.
The introduction of the levy will help to level the playing field between UK hauliers and those from the European mainland. I accept that, because of the European directive that limits the daily charge to €11, the effects of the Bill will be limited, but it is still a welcome step in the right direction and I hope that the €11 limit will be increased significantly in the future. I also welcome the Government’s intention to make consequential reductions in vehicle excise duty to ensure a fair deal for UK HGV drivers. It has been estimated that 94% of UK hauliers will pay no more than they do under the present arrangements.
From a constituency point of view, I welcome the Government’s decision to exempt islands’ goods vehicles—goods vehicles restricted to working on a small island—from the levy. Given the appalling state of the roads on the small islands in my constituency, it would not be right to impose on them the same levy as for those using motorways on the mainland—that aspect of the Bill is certainly fair.
The Bill has gone through the House without amendment—indeed, without any Divisions—so I am sure that Third Reading will be unopposed. I wish it a speedy passage through the Lords.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
I want to raise a couple of issues just to put them on the record. We have had a debate, and eventually an agreement, not to press any of the worthy amendments to a vote. As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) said, the Bill has been a long time in gestation, going back to our time in office. People wanted to see something done, a point made by the hon. Member for Tiverton and Honiton (Neil Parish), and felt strongly that there was an imbalance and a disadvantage to the UK haulage business for many reasons, including diesel prices and the lack of any contribution to our road network.
Some of the points that have been raised are sound. Kent county council made an excellent contribution to the argument for hypothecation on the basis that a large percentage of the vehicles coming into the UK use its road system that it then has to maintain. Given that the Government are now in the ludicrous position of rate-capping every council—they call it council tax freezing; it is rate capping—the money available to Kent through the normal levy powers is diminishing, so it was looking to see whether this measure would bring some money into its coffers to help it to maintain its roads. However, we are told that it will all go into the Consolidated Fund—into the back pocket of the Treasury.
A colleague from the north-east of England made a good case for the need to upgrade the poor quality roads in the north-east of England. The point was made very well that to drive from Scotland to Tyneside, a major European hub for roll-on/roll-off transport and tourism, it is necessary to drive down what is virtually a country road for about 20 or 30 miles. I have done that journey and can verify that feeling of having lost my way because there is no decent road network leading to that major port. I can see why hypothecation would make a lot of sense. I made a bid for hypothecation for a major bridge project in Avon gorge in my constituency, a choke point where accidents happen all the time. It was decided, however, that there would be no hypothecation.
I still question the decision that the money raised should all go to the Consolidated Fund. There are two points about that. One of those points is to level the playing field up in terms of making charges on those from abroad who use the roads, and who at the moment do not do pay. However, everyone who gave evidence from the Freight Transport Association made a bid for some, if not all, of that money to be put into the road network. The idea that some of that money will go into the Vehicle and Operator Services Agency and some into registration recognition cameras is a small point in policing, but that does not raise the quality of the road network, which is what the transport companies were speaking about.
The question we need to ask over the years is whether the money going into the Consolidated Fund comes out at the other end so as to benefit the road user in any way, particularly heavy goods vehicles, which deliver goods to the shops, homes and companies in this country. That is one question that I leave to be considered over time. It should be looked at in the review that the Minister kindly offered during the debate on the amendments. I like the idea of reviews, because although I am sure the Bill is grand and well thought through, there is always the law of unintended consequences to be taken into account.
The second thing I want to address is the question dealt with by our amendments today. In reading the Bill, one thing was clear to me. I do not know the kind of transport detail that the hon. Member for Tiverton and Honiton and others seem to know—including, possibly, the Chair of the Transport Committee—but I have a large number of heavy goods vehicle depots in my constituency, in and around Grangemouth, which is the only recognised totally inter-modal hub in Scotland. It has road, rail and a major shipping port—the biggest container base in Scotland. People tell me that cashing in their HGV licence at particular times can be sensible business; the problem now is that they have to work out how to cash it in at the same time as not losing money on the levy. I know that the Minister said that the figure of £2.7 million that the leasing companies gave us was high—possibly every vehicle had to be in the worst category, and so on. The point I was asking about was the principle and what, on first look, I thought was a dislocation between the fact that someone who does not come into the UK and does not pay their levy—because they are not coming in—faces a zero sum and the fact that someone with a British-registered vehicle who pays the levy but cashes it in at the wrong time will be out of pocket.
The Minister says the figure turns out to be only £6 a year. That may be the case, and that may all right for the industry. However, the industry would not have rung the alarm bells—it perhaps rang a bigger bell that it should have—if it had not felt that there was some justification being made for the concept of placing an imposition on UK hauliers. That was not the point of the Bill; the point was to place an imposition entirely on non-British-registered vehicles coming into the country. If, as a consequence, we put an imposition on what is an already very burdensome industry to work in, with the cost of diesel and all the regulations that have to be faced—I get it all the time, and I sympathise with Malcolm’s, Russell’s and all the others based in my constituency who tell me they carry small amounts, but over a large number of vehicles and a large number of trips, which makes them uncompetitive compared with others coming into the country—we will have failed in what we set out to do. We set out to level the playing field up, not push UK road hauliers up a bit further so that they do not bridge the gap to the point intended by the levy.
We need to ensure that the review is a serious promise from the Minister—that he will look at the consequences and at the figures at the end of the year, and that every year he will talk to the people in the road haulage industry and see whether we have got it right. I commend him and his team for bringing the Bill forward. I know it is difficult—it was difficult for my hon. Friend the Member for Poplar and Limehouse when we were in government to do this—and the Minister has marched a long mile. I just hope that he will continue seriously to review the unintended consequences of the clauses that we were concerned about and that, at the end of the day, if they need amending, he will come back and amend them on the Floor of the House.
Andrew Bingham (High Peak) (Con)
I, too, commend the Minister and the Government for bringing this Bill forward. I fear that it will be lost in the media tomorrow, given the previous business in the Chamber today. However, the wider population would welcome the Bill. When I speak to hauliers across my constituency, I know that they are grateful for the freezing of fuel duty, but this Bill starts levelling the playing field up.
I hear what the hon. Member for Linlithgow and East Falkirk (Michael Connarty) said about hypothecation and Kent, and all the rest of it, but I would make this argument. People might think that the High Peak is a little rural backwater, but believe you me, they probably all walk, sit and drive on the limestone that comes from our area. If we are going to hypothecate, which I do not think we should, I would argue for more money because our roads get so much stick from the wagons that carry that limestone.
Michael Connarty
The hon. Gentleman can be assured that I support him on that point, because the roads are in a terrible state throughout the whole country.
Andrew Bingham
That was what we inherited in 2010, but we will do what we can.
I welcome the proposals, as I have said. We have lots of haulage in the High Peak. I know that the local quarries try to use rail when they can, but road is the best option because of the rurality of the area. I see more and more foreign wagons coming in and out. My hon. Friend the Member for Tiverton and Honiton (Neil Parish), who is no longer in his place, made the point about foreign wagons not following their sat-navs. On Saturday night, I was trying to get through part of my constituency and, lo and behold, a huge wagon was blocking the road for the umpteenth time. It had got stuck under a low bridge, and the driver had probably not seen the road signs. That seems remarkable to me, as Derbyshire county council does everything it can to divert those wagons, but it still does not seem to work. The big operators in the High Peak, many of which have dozens of wagons, and even the small owner-operators who cart stone will welcome the measures, given the amount of foreign wagons that are coming in. This is all about supporting our local British businesses, and the Bill goes some way towards doing that.
I also agree with my hon. Friend the Member for Tiverton and Honiton about what we can charge. I would like to charge more, provided that the discount on vehicle excise duty was available for our own wagon drivers, and I hope that one day we will be able to do so. We shall have to see how the EU goes on that one. There is unfair competition at the moment, and the foreign wagons have the advantage, which is wrong. When our wagons go across to Europe, the drivers have to pay road tolls. That applies, for example, to those who drive the length of France, unless they avoid the main autoroutes. These measures are trying to straighten some of that out. As I have said, I would like to see the maximum charge increased if possible. We have also talked about the damage to the roads. Those wagons are big, and many of us will have had people come into our surgeries to complain about the noise of them going past at all times of the day.
I welcome the Bill. We had a good Committee stage, with quite a few amendments and some good discussions. It was quite a pleasant Committee to be on, actually. I applaud the Minister for bringing forward the Bill. I will resist the temptation to go on about how nothing happened for 13 years, but I have got it on the record anyway. I thank the Minister and everyone involved in the Committee. Let us now bring it on and get the measures up and running by next April, or as soon as we can. I can assure the Minister that I am not saying all these nice words just to get my bypass, but will he bear it in mind?
Jim Shannon (Strangford) (DUP)
I should also like to thank all the Committee members, the Minister and the shadow Minister for working together so well to get this Bill through. It is always good to see positive work coming out of the House. We all like to see that happen, and this is a good example of it. The House can be proud of this good work.
I represent a constituency in Northern Ireland in which road transport is, to put it simply, the key to the economy. It is also the key to the economy of Northern Ireland. The Freight Transport Association and the British Vehicle Rental and Leasing Association have collectively expressed concern about clause 7(3), which deals with the cost burden. They felt that there had been a clear undertaking that there would be no extra costs for UK hauliers. The FTA has stated that there will be a cost of some £2.7 million, but I understand that the Minister has given an assurance that that figure has been greatly overestimated. If that is the case, it will be good news. I hope that he can give us confirmation of that, and reassure the FTA and the BVRLA that the provisions will not adversely affect their industry. It will be important to get such an assurance on the record in Hansard, because the people out there who contact us will want to know the final word on the matter.
The FTA has identified three issues
“where current details are sparse or under review and where further consultation is expected”,
and I would like the Minister to give us some clarification on them. The first point is that the arrangements for the operation of the levy in Northern Ireland involve the only UK land border with another EU member state. The second point is about compensation arrangements for holders of RPCs—reduced pollution certificates—which will be withdrawn following the introduction of the levy. The third point is about the mitigation of the disproportionate increase in charges for operators of 2x2 axle, 28-tonne articulated vehicles—commonly referred to as “urban artics”—used for deliveries to pubs and retail stores in town and city centres. I ask this question because I have some of them in my constituency, and I suspect that other Members will have them in their constituencies as well. We are not being awkward; we are just looking for the necessary clarification. I am sure that the Minister will give us the reassurance we need in his response.
It is not often that all the political parties work together to initiate legislation on behalf of an industry. There seems to be a real willingness to make sure that it all happens—for my constituents in Strangford and for those involved in the freight trade business. There are many of them. I wish to represent them at the highest level in this House. I therefore seek reassurances from the Minister.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to join the voices welcoming this Bill. I remember that when I was elected, the very first oral question I was selected to ask about was on this very topic. Sadly, it was too far down the Order Paper to get heard that day, but we are now three years on and we have finally tackled this problem. It is a big issue when haulage businesses small and large feel that there is unfair competition whereby overseas hauliers can use our roads without paying anything. As we heard earlier, they sometimes do not even buy fuel over here, while our hauliers pay a large amount of money. I think this Bill takes us towards the fairness whereby those who use our services and our roads should pay for them. The Government could do further work in different areas to get to the same place, but that is not for today’s debate.
My view is that vehicle excise duty has had its day, and that its long-established purpose is now usurped by different ways of enforcement. We could move to a stage where we do not need the duty and have a separate charge for all hauliers to use our roads. That would probably be a lot easier to administer than the scheme we are going to end up with, but I guess that the Minister will say that it is a Treasury decision so we cannot get into it today, but I think that is the direction in which we should travel.
I have never been a fan of hypothecation, but I see logic in using this revenue to address some of the issues affecting our main trunk roads. If someone happens to live near them and is blighted by the noise and the pollution, that presents a real problem, and there has been a lack of money to deal with it. I have two sites on the A38 in Amber Valley, which are down as priority sites for noise remediation work. Unfortunately, that means that it will not actually happen until something like 2020, so this money could be used to accelerate that sort of work. The Minister is more than welcome to come and hear how much noise is created. I think it would be a positive step to say, “It is lorries that cause that noise; here is some extra revenue taken from lorries; let us tackle that issue.” That could take away the blight from which nearby residents suffer.
Overall, I give this measure a warm welcome. It is long overdue. I look forward to April 2014 when we will start to see it in place. I wish the Minister all the best for getting in place everything that he needs to progress the Bill.
Stephen Hammond
With the leave of the House, I would like to make a few concluding remarks and to respond to some of the points made in the debate.
My hon. Friend the Member for Tiverton and Honiton (Neil Parish) made the case, as did several other Members, about the size of the fee charged. As I have explained earlier on Third Reading, on the Ways and Means motion and on Second Reading, we are limited to what level of fee we can charge. I am sure that we will, as with other aspects of the Bill, keep it under review. My hon. Friend went down the line of suggesting that sat-navs be used for HGVs, but I am going to leave that issue for another day.
I welcome the support of hon. Members across the House, and I particularly welcome the support of the Chairman of the Select Committee and the points she made about road safety. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned those reports, too, and I think road safety is one issue that has cross-party support, with all of us determined to continue the UK’s good record on road safety and never to be complacent about it. We all want to see it continually improving.
I remember that I was glad in Committee to satisfy some of the concerns of the hon. Member for Argyll and Bute (Mr Reid) about some parts of his community. I also noted his plea for a higher charge.
I was not entirely surprised to hear the hon. Member for Linlithgow and East Falkirk (Michael Connarty) refer to the Tory Chancellor’s back pocket, as he had used the same phrase several times in Committee. Although he expressed sympathy for Kent, he will be unsurprised to learn that I have little. If it were to exchange its proportion of these sums for a hypothecated amount, it would be considerably less than the Chancellor made available for local road maintenance in the autumn statement, and continues to make available.
However, the hon. Gentleman was right in saying that I had promised to bear in mind the views of the BVRLA. I understand the concern that the organisation has expressed about size, but the analysis shows that the number of vehicles likely to be affected is relatively small. Even when the “urban artics” mentioned by the hon. Member for Strangford (Jim Shannon) are taken into account, it is clear that 98% of the fleet in the United Kingdom will be less than £50 worse off. In fact, very few people will be worse off as a result of the Bill.
I am glad that my hon. Friend the Member for High Peak (Andrew Bingham) enjoyed the experience of serving on the Committee. I think that it was an enjoyable experience, although I am not sure that all Bill Committees are quite as enjoyable or, indeed, give Bills such a speedy passage. I am glad that my hon. Friend did not press the point that he raised on Second Reading about the Mottram-Tintwistle bypass. I know that the Highways Agency owes him a letter, and I have chased that up today. He will receive letters from both the agency and me, but no promise that the bypass will necessarily arrive.
My hon. Friend the Member for Amber Valley (Nigel Mills) may not have been able to ask the oral question that he had tabled, but he certainly made his points eloquently this afternoon, and I thank him for his contribution.
The hon. Member for Strangford raised a couple of issues that we also considered in Committee. Our discussions about criss-crossing of the border continue, but I am convinced that we shall reach a satisfactory conclusion with the Government of southern Ireland. As for the small “urban artics”, the hon. Gentleman must bear in mind that although some are in lighter weight categories, they often have fewer axles and are therefore disproportionately damaging to the network.
Vehicles with reduced pollution certificates pay lower rates of VED. Because some are paying the minimum levels set by the Commission, we cannot reduce the levels further. Our solution is to change the nature of the benefit provided for vehicles holding RPCs. In future, such vehicles will receive a grant to the current value of the VED discount. I hope that that addresses the concerns expressed by the Freight Transport Association.
I thank all Members who have taken part in our informed, constructive debates, not just this afternoon but throughout the Bill’s earlier stages. I also reiterate my thanks to the Chairmen of the Committee and the Clerks who supported it. I particularly thank the hon. Member for Poplar and Limehouse for acknowledging that the Bill deserved all-party support. His scrutiny was constructive and sensible, and I was delighted to have his support for the Bill. I wish it a speedy passage.
Question put and agreed to.
Bill read the Third time and passed.
Business without Debate
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
petition
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Roberta Blackman-Woods (City of Durham) (Lab)
First, may I congratulate two of my constituents, Michelle Bainbridge and Stephen Guy, on running such an excellent campaign in Sherburn village against the home to school transport arrangements, and on discovering that the problem lay not with the local authority, Durham county council, but with national legislation? I also thank them for introducing this petition, which has attracted hundreds of signatures.
The petition states:
The Petition of residents of Durham,
Declares that the Petitioners believe that the Home to School Transport Guidance and Education Act 1996 does not make adequate provision for children travelling safely to and from school and that it should be amended to set a new statutory threshold of 2 miles to access free school transport; to properly define a safe route to school as one that considers issues of lighting topography, degree of isolation and other relevant matters and defines a safe route as one that can be walked safely by secondary school aged children without being accompanied by an adult.
The Petitioners therefore request that the House of Commons urges the Government to amend the Home to School Transport Guidance and Education Act 1996 accordingly and ensure that all households in receipt of any earnings replacement or means tested benefit or tax credits shall have access to free home school transport.
And the Petitioners remain, etc.
[P001153]
Epilepsy
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kate Hoey (Vauxhall) (Lab)
I thank Mr Speaker for granting this Adjournment debate, which serves to give the relevant Minister—who I am pleased to see has just arrived in the Chamber; perhaps I rose to speak a little too quickly—an opportunity to update us on how some of the changes to the health service locally and nationally, such as in respect of commissioning, will help to improve the lives of those who suffer from epilepsy.
My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) secured a Westminster Hall debate on epilepsy in November 2011 and my hon. Friend the Member for Walsall South (Valerie Vaz) introduced an excellent ten-minute rule Bill on epilepsy in November 2010. I am pleased to see that the chair of the all-party group on epilepsy, the hon. Member for South Thanet (Laura Sandys), is present.
As is the case for all Members, hundreds of my constituents suffer from epilepsy, and I am grateful to many of them for their input into this debate. I am especially grateful to Ashleah Skinner, who has a great deal of knowledge of and interest in epilepsy and disability issues. No one understands the difficulties and challenges that face epileptics better than those who suffer from the illness.
For the record, I should point out that epilepsy is defined as a tendency to have recurrent seizures, sometimes called fits. The seizure is caused by a sudden burst of excess electrical activity in the brain, causing a temporary disruption of the normal messages passing between brain cells. Epilepsy is, of course, not one condition but a composite of about 40 different types of seizure and up to 50 different syndromes.
An epilepsy diagnosis can be a shattering blow to the individual concerned. All sorts of things that have been taken for granted are no longer automatic: they might lose their driving licence, for instance, or their employment, which might in turn lead to benefit dependency. Approximately 600,000 people have epilepsy, which is about one in 100 people, and every day about 87 people are diagnosed with it, which amounts to 32,000 each year.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Lady on bringing this very important health issue to the Floor of the House. One other issue relating to epilepsy that my constituents raise with me is holiday insurance. Does she think we should be doing more about that, whether directly with the insurance companies, with the overall body or with individuals?
Kate Hoey
I thank the hon. Gentleman for his intervention, and I know of his continuing interest in this issue and the contributions he has made in the House. If we were to get into a discussion about insurance and travel, I could talk a great deal about the discrimination that some travel companies display, and obviously he has particular expertise in this issue. Such discrimination is all part of a lack of understanding and knowledge of epilepsy among the general public, which runs through this whole debate. That perhaps applies to travel companies as well.
About 1,150 people a year die from epilepsy, with three dying every day, and about 40% of all these deaths and 59% of the childhood deaths are potentially avoidable. However, the new research shows that the level of epilepsy mortality is rising. Achieving absence of seizure—freedom from seizure—is key to saving lives and saving money, as well over 100,000 people are living with avoidable seizures. Just last week, Epilepsy Action, one of the important charities within the Joint Epilepsy Council, which brings together all the campaign groups on epilepsy, published a new report “A Critical Time for Epilepsy in England”. Its launch was hosted in the House of Commons by the all-party group on epilepsy, which is chaired by the hon. Member for South Thanet. I recommend the report to anyone who wishes to find out more about what more needs to be done.
Between April and September 2012—the report is very up to date—Epilepsy Action carried out a survey of clinical commissioning groups, acute trusts, local authorities and people with epilepsy. I have read the report and it backs up a number of the trends that I have heard about and a number of the concerns that individual constituents have raised with me.
Jim Shannon
I thank the hon. Lady for her graciousness in giving way again. Some 20,000 people in Northern Ireland have epilepsy, which is one in every 90 people. Does she feel, as I do, that the immensity of the scale of epilepsy in the population is unknown? How can we raise that profile and make more people aware of what is happening?
Kate Hoey
I was pleased to see just how much discussion there had been in the House of Commons on this issue, and it is crucial that we, as individual MPs, raise it more with our local authorities, health acute trusts, hospitals and GPs, as understanding is so important in this matter.
Laura Sandys
It is excellent that the hon. Lady was able to secure this debate, particularly in the light of the recent report. As an epileptic, I find that one of the issues we face is that although the condition affects half a million people there is a stigma around it, and that has stopped clinicians and society in general addressing the underlying issues we face. It is incredibly important that we have this sort of debate and ensure that we are more public about what epilepsy is if we are to give it the right level of attention.
Kate Hoey
I thank the hon. Lady for that. She, along with the hon. Member for Blackpool North and Cleveleys (Paul Maynard), who unfortunately could not be here today and who has also raised this issue as an epileptic, has shown that it is very important that the public understand that people can have epilepsy and still carry on living a normal life—if being a Member of Parliament is indeed a normal life.
Bob Stewart (Beckenham) (Con)
I have dealt with epileptics who have collapsed in front of me and had a fit. Does the hon. Lady think that we are doing all we can to educate our children at school on how to recognise epilepsy and, just as important, what to do with someone who is suffering a fit?
Kate Hoey
Although things may have improved, the position in education authorities across the country is patchy. I hope that the Minister might refer to that in his speech.
I am pleased that my hon. Friend the Member for Walsall South, who introduced a ten-minute rule Bill on this matter, is now in her place. I know that she will want to say something at some stage.
I referred to the Epilepsy Action report, and it is important that people look at it because it showed some worrying results. I am sure that the Minister will have read it. Two thirds of the clinical commissioning groups—66%—do not have or do not intend to produce a written needs assessment of the health and social care needs of people with epilepsy. Only 27% of the 113 out of 149 local authorities that replied included a section in their joint strategic needs assessment mentioning the care of people with epilepsy. Only 17% of the clinical commissioning groups have appointed a clinical lead for epilepsy and only 20% of acute trusts stated that the average waiting time for an adult with suspected epilepsy to see an epilepsy specialist consultant was two weeks or less.
Crucially, only half of the people interviewed by Epilepsy Action told the interviewer that they had seen an epilepsy specialist nurse. I cannot overestimate the importance of specialist epilepsy nurses, and I am sure that other hon. Members will agree. Specialist nurses are vital and there is still concern that there are not enough of them. In its guidance, the National Institute for Health and Clinical Excellence said that they should be an integral part of the medical team providing care to people with epilepsy, but it seems that in 2013 half of our acute trusts and primary care trusts in England still do not have that provision.
The report contains many more worrying statistics, but I shall not go through them all. All in all, however, there seems to have been no major improvement in services although I stress that, as with so many other matters, the provision is patchy, with some excellent services in some parts of the country. My local trust, Guy’s and St Thomas’, does an excellent job with the resources it has. Dr Michael Koutroumanidis leads the team and as well as running the tertiary clinic runs a first-time seizure clinic once a week. Much more could be done, however, with more resources and if greater priority were given to those services.
I have some questions for the Minister. If he has read the report, perhaps as his bedtime reading last night, he will be aware of some of them. Will he ask the Secretary of State for Health to refer the whole of epilepsy services to the National Audit Office and invite it to conduct a value-for-money inquiry? That is one of the key requests from Epilepsy Action. Way back in 2007, the all-party group estimated that the avoidable cost of providing the current poor NHS service was £189 million a year based on the NICE figures. The main reason that such money could be seen as wasted is the shocking misdiagnosis rate, which is 20% to 30%, and the poor access to specialist skills. The financial consequence is that patients receive inappropriate, costly and ineffective treatment at the expense of the NHS and the public, never mind the personal consequences of their true condition not being treated. I hope that the Minister can say that that might be a useful piece of work for the Audit Commission.
I ask the Minister to ask the NHS Commissioning Board to include outcomes indicators in the NHS framework. I hope that people can get to the bottom of what all these terminologies mean. The hon. Member for Beckenham (Bob Stewart) has previously referred to the NHS using terms that mean little to the average member of the public, but it is important that we have the statistics to address the unacceptable number of avoidable deaths and the still unacceptable rates of seizure freedom.
Another issue that I want to ask the Minister about is the revised NHS constitution, where the word “pledge” will be used. We want to give people the right to involvement in discussions about the planning of their care and the right, as opposed to a pledge, to be offered a written record of that agreement. Again, published research shows that only 14% of people with epilepsy have a care plan. All those things are important. If the current review of the NHS constitution recommends making care planning a pledge from the NHS to patients, that should be toughened up to encourage a programme of care planning and by making it a right for people.
The Minister could ensure that as a matter of urgency the chief executive of the NHS raises the lack of engagement by the clinical commissioning groups in assessing the needs of people with epilepsy. It seems that that has been ignored by many of them, or lumped together with a number of other health issues that do not necessarily cover epilepsy’s particularly special nature.
There is a whole debate to be had about children with epilepsy, and not just in relation to their school education. There is a long history of children with epilepsy not achieving their full educational potential, yet with the right support there can be huge improvements. Epilepsy can affect the child’s education either because of the underlying cause or because they might have to miss lessons or interrupt them to take medication.
Valerie Vaz (Walsall South) (Lab)
I thank my hon. Friend for securing this debate, and I congratulate Epilepsy Action on producing the report. This is a wonderful opportunity to remind the Minister of my ten-minute rule Bill, in which I ask for two simple things. First, immediate referrals from GPs to specialists are needed. That is where the costs arise—both monetary costs and the cost in lives. If people can be referred directly to a specialist, they need not go through an interim stage to someone who is not a specialist. This covers a wide range of conditions, although it manifests itself as epilepsy—other related conditions might not manifest themselves at all—so anyone might have absences, and they need to know why. Secondly, we need an action plan for children in schools that is similar to that under the Autism Act 2009.
Kate Hoey
I thank my hon. Friend, and I referred to her ten-minute rule Bill. As the Minister has slightly longer than he thought for the winding-up speech, it would be helpful if he referred to progress on my hon. Friend’s Bill. I appreciate that he is a Health Minister, but I want to raise some issues that relate to employment, welfare and benefit rights. If he cannot answer my questions, I hope that he will ensure that the responsible Minister does so.
There is no doubt that most people with epilepsy want to work, but many of them require additional support. Government schemes, such as Access to Work, can be beneficial to people with epilepsy by getting them off benefits and into work, which should always be a top priority.
I was surprised to learn from a recent parliamentary written answer that the Access to Work scheme in England and Wales between May 2010 and 30 June 2012 helped just 1,360 individuals with epilepsy. In my constituency no one with epilepsy was helped by the Access to Work scheme. There seems to be a lack of awareness of the scheme and inadequate information being given to people. I hope the Minister will continue to address the problem. Many constituents claiming sickness benefits want to work, but have ended up on benefits because they did not have the proper support when they were in employment. The Access to Work scheme could have prevented them from leaving employment. It is in the Government’s interest to take the matter seriously.
Jim Shannon
The hon. Lady has been very kind in giving way. I know she is trying to get as much time on the subject as she can. There is another important issue: disability living allowance for those who have epileptic fits and may need extra help. Does she think that one of the Minister’s colleagues in the Department for Work and Pensions may be able to do more for those with epilepsy to ensure that they get all the benefits that they are entitled to, particularly DLA?
Kate Hoey
That is an area that I am coming to. It is extremely important. I appreciate that the Minister responding to the debate is a Health Minister, but I know he can multi-task on some occasions.
I was disappointed to learn from another parliamentary written answer that between June 2011 and July 2012 only 20 individuals in receipt of employment and support allowance—incapacity benefit—whose reported primary medical condition was epilepsy received what is called a job outcome as part of the Work programme. There are cases in which individuals with epilepsy are unable to work, but it falls upon the Government to provide unconditional support through welfare, such as employment and support allowance.
The NICE guidelines on epilepsy make it clear that epilepsy may sometimes result in significant disability, social exclusion and stigma, which many Members have mentioned, and that people with epilepsy would commonly encounter problems in employment. According to the work capability assessment handbook, the Atos working group panel on epilepsy was clear that if a person has epilepsy which occurs less than once a month, that is unlikely to impact significantly on their ability to work. I urge that consideration is given to the effects of the disorder on each individual, rather than making such a blanket ruling.
From another parliamentary question I discovered that in February 2012, 12,510 people in England with epilepsy as their primary medical condition claimed ESA, which equated to approximately 30 people in my constituency, and during the same period 32,090 people in England with epilepsy claimed either incapacity benefit or severe disability allowance, which equates to 70 people in my constituency. Finally, during the same period, 59,070 people in England with epilepsy claimed disability living allowance, which equates to approximately 100 in my constituency. There is concern that such figures are not always based on knowledge of the person and of epilepsy.
There are obviously cases where an individual who may drive as part of his job, for example, subsequently has a seizure. Under current Driver and Vehicle Licensing Agency regulations that person would be prohibited from driving for 10 years without medication. That sometimes means that he would lose his job and end up on benefit. The whole employment and support allowance system is insufficiently sympathetic in such scenarios and ends up worrying the individual with numerous mandatory schemes, sanctions and loss of benefits. It is one of the flaws in the system that needs to be dealt with to show that people are taken seriously and treated as individuals.
Laura Sandys
I welcome this debate, because the hon. Lady is covering a very wide spectrum of issues. She said at the beginning that a third of people with epilepsy do not have the right treatment, are not on the right medicine or have not seen the right specialist, and that is the Minister’s responsibility. Some of the other problems she mentioned, such as seizures at work and people not being on ESA or DLA, might become less prevalent if, right at the beginning of the process, we make sure that people get the right diagnosis and see the right people at the right time.
Kate Hoey
The hon. Lady is absolutely right. The earlier the true diagnosis is made and the person is referred to a specialist, the sooner they are seen as having an illness that can be treated and have the chance of a positive future. I am sure that everybody in the Department of Health feels like this. However, something more needs to be done at the local level among clinical groups and PCTs, and even GPs, to create this sense of understanding. The hon. Lady heard the very moving testimony from Jemma, who spoke at the launch about the difference between having a good doctor who understands and gets someone the right referral immediately and another doctor who perhaps does not understand and does not take the time to do so.
The hon. Member for Meon Valley (George Hollingbery) asked me to mention that he has a constituent who has very mild epilepsy but has not lost their job because the company they work for, Hambleside Merchandise, a business in Meon Valley, has been understanding about the situation. It is keen for the Government to change the law so that it complies with the European Union change on whether people with mild epilepsy can drive again. It was confirmed in a ministerial answer last year that these changes would happen. I ask the Minister to follow up on that to see what can happen and how quickly.
Someone in London who cannot drive because of their epilepsy may be eligible for the disabled person’s freedom pass. The Epilepsy Society, backed by other disability organisations, is campaigning for the Government to make changes to the pass in London and to the disabled person’s bus pass offered by the national Department for Transport under the English national concessionary travel scheme. In particular, the organisations call for the pass to include travel during peak hours, which is very important if someone is trying to keep a job. In some cases, a free companion pass may be necessary, as is already possible in Scotland and in Wales. If the hon. Member for Strangford (Jim Shannon) were still in his place, I would ask him whether that also applies to Northern Ireland. The Epilepsy Society also says that regional variations are confusing. People move around and it would be much better if there were an overall, agreed way of doing it.
All this comes back to a lack of awareness about information on many of these schemes. There is a lot of help and support around, but people need to be very savvy or to have a very savvy parent, or to have a link into one of the organisations that provide support, to find out all the information. Government cannot do everything, but there may be ways in which they can ensure that local authorities and others with responsibility do a little bit more. For example, people with epilepsy who get continuous anti-convulsive therapy may be eligible for the NHS medical exemption certificate. They have to fill in a form at their GP surgery to get this, and it allows them to get free prescriptions for five years. One would think that anybody in this position would automatically know about that, but it is amazing how many people do not. Perhaps GPs do not always think that they have to tell people about these things. Where it is useful to do so, we can continually raise these issues in a cross-party way within Parliament regarding our own areas.
I will conclude by thanking all the agencies and campaign groups involved for helping people with epilepsy and their carers, who do so much to help their relatives or friends. I also pay tribute to the Joint Epilepsy Council, which continues to provide information and guidance for those affected by epilepsy. Finally, before the Minister responds, I pay tribute to our own all-party group on epilepsy for the valuable work that it has undertaken over the years.
The Minister of State, Department of Health (Norman Lamb)
I think I must have broken the record for the time it takes to get from Committee Room 11 to the Chamber. It took under a minute, even though I bumped into our Chief Whip on a staircase and came off worse.
I congratulate the hon. Member for Vauxhall (Kate Hoey) on securing this important debate and on setting out the issues so clearly. I also thank hon. Members for their valuable interventions, which have been helpful. Occasions such as this are valuable because they expose to public attention issues that do not get debated enough in this place. They also force Ministers to think about particular conditions and their consequences. If I do not have ready answers to all of the issues that the hon. Lady has raised, I would be very happy to write to her to ensure that everything gets a proper and full response.
By way of introduction, I join the hon. Lady in paying tribute to Epilepsy Action for its work and the excellent report it has produced. It is great that we have this opportunity to highlight the issues that it has raised. She referred to the low level of engagement at the local level. She pointed out that there is good practice in many areas, but that there are also too many places where not enough is being done. In a sense, the thing that causes frustration is also the prize: the fact that we know that if we do things better we can improve the lives of people so much. That is a great prize to be secured. Along with Epilepsy Action, the Joint Epilepsy Council, which is the overarching group, also does very important work.
I should also mention that I met representatives of Epilepsy Bereaved before Christmas to discuss sudden, unexpected death resulting from epilepsy, and I found it an incredibly useful session. I learned a lot about the extent to which, through better care, we could significantly reduce the number of people who die in such circumstances. It is, therefore, incumbent on the whole NHS to ensure that we raise the level of care to the standard of the best. If we can do that, we will make a real difference.
I was concerned to hear the hon. Lady say that mortality in epilepsy is rising. Given that we know that if we do the right things we can significantly reduce mortality, that is a real concern. Epilepsy Bereaved made the case for a national register of deaths, which I strongly supported when I met its representatives. It would be a good innovation, because we need to understand much more why things are happening and where failures have occurred.
Epilepsy is the most common serious neurological condition and it affects almost 500,000 people in the United Kingdom alone. Each year a typical GP will treat 10 people with epilepsy, diagnose one or two new cases and care for 20 people who have had seizures in the past but who are currently not in treatment.
The hon. Lady mentioned Jemma, who had spoken at the launch of the report about her experience of good primary care and about the difference that it makes to have a doctor who shows an interest and understands. When one hears stories directly from such individuals, it is so much more powerful.
I should also mention the hon. Lady’s constituent, Ashleah Skinner, who sounds like a true expert patient. The more that we can spread such understanding and allow people to self-care more effectively, the better.
Bob Stewart
If we know pretty accurately the number of people who are suffering from epilepsy in our country, would it be crass or wrong for the Government to write to each of those individuals to ensure that they know exactly what they can do to improve their circumstances and for what benefits they might be eligible? Perhaps that is happening already. If it is, forgive my intervention.
Norman Lamb
I am very grateful to my hon. Friend for that intervention. Whether it is provided by the Government or at a local level by primary care general practices, he is right to highlight the importance of much better guidance on how people can self-care. The role of expert patients can also be powerful. It can be of great value to somebody who is diagnosed with epilepsy to get guidance and support from somebody who already has the condition.
I am aware of the historical problems in this area and acknowledge that the services have not always been good enough for those living with epilepsy. Indeed, I acknowledge that the services are still not good enough in some parts of the country. There was some uncertainty, and perhaps some scepticism, over whether the coalition Government’s reforms would deliver the improvements that were so desperately sought. That was understandable, given that epilepsy has rarely found itself in the same starting position as other long-term conditions.
I am pleased to report that the Department of Health has taken a number of steps recently to improve the diagnosis and treatment of epilepsy. It will work with the NHS Commissioning Board, which takes on its full responsibilities from April, to drive further improvements for those living with the condition.
Laura Sandys
As the Minister rightly recognises, epilepsy has been a Cinderella condition. It has been ignored and has not received the profile that the numbers warrant. He is saying that there will be a step change in how the Department looks at the condition. Will he ensure that there is an understanding of what outputs we expect and that there are barometers to measure them, particularly given that the report states that only a third of commissioners currently put in place programmes for people with epilepsy?
Norman Lamb
I am very grateful to my hon. Friend. Clearly, the role of the Commissioning Board will be central in holding clinical commissioning groups to account. The register that Epilepsy Bereaved is calling for could, combined with action from the Commissioning Board, be powerful in helping us to understand more about the condition and in driving better practice.
I understand that there are no specific tests for epilepsy and that it can be difficult to diagnose. The hon. Member for Vauxhall talked about the problem of mis-diagnosis. Some people are diagnosed as having epilepsy who do not have it, and some people who have epilepsy are diagnosed as having a different condition. Such mistakes result in poor or substandard care. Increasing the awareness of the condition among health care professionals is a key factor in improving its early diagnosis and treatment. Detailed advice on epilepsy has therefore been made available on the NHS Evidence website. That is supported by the updated clinical guideline on the diagnosis and management of the condition that was published last year by the National Institute for Health and Clinical Excellence.
The treatment of long-term conditions is one of the NHS areas prioritised by the Secretary of State for Health, and it has featured prominently in the mandate to the NHS Commissioning Board and the NHS outcomes frameworks. The hon. Member for Vauxhall mentioned the awful jargon with which we all have to deal. I have my own personal war against jargon in the Department of Health, confronted with it as I am on a daily basis. As a quick aside—given that we have a bit more time than usual—we need to use language that people understand, rather than jargon that too often excludes people.
The mandate and outcomes framework set out the Government’s objectives for the NHS, and highlight the areas where we expect to see the biggest improvements. The mandate sets an objective for everyone with a long-term condition to be offered a personalised care plan by 2015 that reflects their preferences and agreed decisions. There is a legal requirement for the Commissioning Board to seek to meet the terms of the mandate, and it is potentially powerful to say that everyone with a long-term condition should have a personal care plan that they have been involved in designing and drawing up. Too often, whether for epilepsy or mental health—another area I have great interest in—people simply do not have such a plan and have never been asked for their views on their care and treatment. If we can effect the transition so that everyone with a long-term condition benefits from it, we can make a real difference. Epilepsy Action and other voluntary sector organisations have been requesting such a plan for some time now, and it should be seen as a positive step.
The NHS Commissioning Board has responded to the mandate and the outcomes framework by incorporating long-term conditions into the structure of the organisation with
“enhancing the quality of life for people with long-term conditions”
as one of its five areas of focus. Strong national leadership for epilepsy services has been raised time and again in the House, and I am pleased to announce that, as part of this work, the NHS Commissioning Board is appointing a national clinical director for chronic disability. They will not deal specifically with epilepsy, but having such a director for chronic disability, including epilepsy, is a positive step.
The NHS Commissioning Board is setting up four strategic clinical networks, which is important. We have seen the benefit of such networks with cancer, and those benefits are now being spread to other areas, including neurological disorders. The networks bring together groups of health professionals to improve services for neurological disorders and other specific conditions. They will receive an investment of £42 million and play an important part in driving up quality and consistency in treating those conditions. If everyone within the service is linked into expert networks, the chances of improving treatment on the ground become greater. Health and well-being boards will play an important role in driving up standards locally, given their role in agreeing local priorities and influencing commissioning decisions.
This year will see the publication by NICE of new quality standards for children and adults with epilepsy—that has been called for repeatedly in this House. Those quality standards, which are expected to be published in February and March, will help clinicians make informed decisions about referrals, tests and ongoing care, and ensure a more consistent application of NICE guidelines in that area.
The Department also understands the importance of providing the best possible information to people with epilepsy and promoting better self-care—the point correctly raised by my hon. Friend the Member for Beckenham (Bob Stewart). GPs have an important role to play in that, and in ensuring that those living with epilepsy have their condition kept under control with correct medication. Ultimately, however, responsibility for self-care lies not with health professionals, but with patients. Through NHS Choices, the expert patients programme, and support from health professionals and voluntary sector groups, people with epilepsy can receive the information they need to stay safe and independent, and to manage their condition on a day-to-day basis.
On the wider Government response, the hon. Member for Vauxhall referred to the role of education and schools. I understand that the Department for Education is working to support children and young people with epilepsy, as some are not reaching their full potential in school and further education. For example, the Department has issued guidance to schools on how best to manage medicines for pupils diagnosed with epilepsy and other conditions. For those pupils who cannot attend school because of their condition, the Department has provided guidance on what alternative provision should be made.
In addition, the forthcoming children and families Bill will introduce a duty on local authorities and clinical commissioning groups to commission services jointly—a much more integrated approach than we had in the past—to meet the needs of young people with special educational needs and disability, including those with epilepsy. The Bill will introduce a streamlined, single assessment for the young person. It will also inform an education, health and care plan for the individual. The plan will enable families and young people to buy services through direct payments—we are putting the individuals in charge and giving them real power—thus extending their choice and control. That approach is currently being piloted across 20 pathfinder sites. I understand that the lessons learned will inform the development of secondary legislation and codes of practice, and help with implementation.
For many adults with epilepsy, employment is a major quality-of-life issue—the hon. Lady rightly raised the importance of employment. Studies have shown that people with epilepsy are up to twice as likely as people without the condition to be at risk of unemployment or under-employment relative to their skills and experience. The Department for Work and Pensions has confirmed that, although it does not target employment programmes exclusively at individuals with particular conditions, its programmes, including specialist disability employment programmes, aim to identify and meet the needs of the individual, including those with epilepsy.
The Department for Work and Pensions also recognises the important role that cash benefits can play in supporting people with a disability or long-term condition to remain independent. Entitlement to disability living allowance, and to its planned replacement, the personal independence payment, is not based on a specific health condition. However, my understanding is that people with epilepsy may be eligible for support, depending on the severity of their condition. The hon. Lady mentioned the Atos-conducted work capability assessments and made the legitimate point that they should concentrate on the individual. We can have guidelines to help to steer assessors, but the individual’s needs should be properly and fully assessed. That is outside my departmental responsibilities, so I will refer her remarks to the right place.
The Department for Work and Pensions has advised that, throughout the development of the new personal independence payments policy, it has engaged and consulted with a wide range of disability organisations. That includes a discussion with Epilepsy Action on the assessment criteria for the new policy. For those who face barriers to work because of their condition, financial support may also be available under the employment and support allowance—that, too, is subject to eligibility.
I should refer to some of the hon. Lady’s specific questions—I will ensure I give her a full reply later. She mentioned bus passes. I understand that some local authorities in England have implemented their own bus pass concessions and extended the hours of free travel to include peak times, but the majority have not. Ultimately this has to be a matter for local decision making. I recognise that such variations are not ideal, but the local authority has the power to do this, and pressure can be put on the local authority in any particular area to do what others have already done.
I was slightly confused because the hon. Lady referred to both the National Audit Office and the Audit Commission. The point is that we should focus on the important issue. She argued the case for some sort of inquiry into epilepsy care to see where we can improve its quality. The right approach is probably through the work that NICE is doing. If we can establish what good care looks like, we can encourage all clinical commissioning groups to seek to deliver that quality of care.
The hon. Lady also talked about outcome indicators, and I will look at that and come back to her. We need to try to understand the jargon, but the important point is that we should, as far as possible, be seeking to focus on the results for individuals. Too often in the past we have focused on processes and not enough on what we seek to achieve through health care. If we can, through the outcomes framework, identify things that we are seeking to achieve for patients—improving their quality of life—and that can then drive the system, that would be a good thing. We will look specifically at that.
The hon. Lady talked about the constitution and the right of involvement. We have been updating the constitution and putting patients’ rights much more centre stage—focusing on the personal rather than a more paternalistic approach. That is the right approach, and through the combination of what the constitution will say with what the mandate will require of the NHS in providing the personalised care plan—with the involvement of the individual and based on their priorities, not just presented to them—we can make real progress in putting the patient centre stage.
The hon. Lady talked about the lack of engagement of CCGs. That point has been heard, and it is good that she has had this opportunity to make the point. The Commissioning Board will do what it can to ensure that the quality of care is improved at local level, and it will be the board’s responsibility to engage with CCGs on that.
The hon. Lady also mentioned children and the fact that they are not achieving their full potential. I think that I have addressed that point already, but I will come back to her if I have missed anything. She and others referred to the absolute importance of a speedy referral from GP to specialist, and the hon. Member for Walsall South (Valerie Vaz) also mentioned the action plan for children in schools. She is right to raise both those issues, which were addressed in her ten-minute rule Bill.
I hope that I have addressed the key issues that were raised in the debate and I apologise if I have missed any. I thank the hon. Member for Vauxhall for introducing this debate, which has given me an important opportunity to highlight some key concerns, as well as the fact that much work remains to be done to improve the quality of care across the country. The Government are working to support people with epilepsy and to keep those living with the condition as safe and independent as possible.
Question put and agreed to.
Ministerial Correction
(11 years, 10 months ago)
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Afghanistan
(11 years, 10 months ago)
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Dr Fox
To ask the Secretary of State for Defence how much has been spent by his Department on cases brought by public interest lawyers against the Government on behalf of Afghan nationals.
[Official Report, 14 January 2013, Vol. 556, c. 591W.]
Letter of correction from Andrew Robathan:
An error has been identified in the written answer given to the right hon. Member for North Somerset (Dr Fox) on 14 January 2013.
The full answer given was as follows:
Mr Robathan
The total cost to date of cases brought by Public Interest Lawyers Ltd on behalf of Afghan nationals (including cases brought on behalf of UK nationals relating to the interests of Afghan nationals) is approximately £1,451,000, excluding the cost of Ministry of Defence (MOD) staff time.
In addition, the MOD has incurred costs of around £683,000 on cases brought on behalf of Afghan nationals by other firms including Leigh Day and Co.
The correct answer should have been:
Mr Robathan
The total cost to date of cases brought by Public Interest Lawyers Ltd on behalf of Afghan nationals (including cases brought on behalf of UK nationals relating to the interests of Afghan nationals) is approximately £1,451,000, excluding the cost of Ministry of Defence (MOD) staff time.
In addition, the MOD has incurred costs of around £483,000 on cases brought on behalf of Afghan nationals by other firms including Leigh Day and Co.
Westminster Hall
(11 years, 10 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
RSPCA (Prosecutions)
(11 years, 10 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
It is a pleasure, Mr Williams, to serve under your firm control. This debate is important, and I should begin by saying that I have some history with the Royal Society for the Prevention of Cruelty to Animals, which will not entirely surprise fellow Members. We go back a good 20 years or so. I am a former chief executive of the Countryside Alliance, and in that role I probably came into contact with the RSPCA as much as almost anybody in this room. I have argued with it on several points, mainly in a civilised manner, and I have disagreed with it on many things, although I agree with it on more things than some people might imagine. There is therefore much on which we can find consensus.
For a start, let us remind ourselves that the RSPCA was created 189 years ago by a Conservative MP—a pro-hunting Conservative MP, I should say—called Richard Martin. He said:
“It would be ill judged for it”—
the RSPCA—
“to become known as a prosecuting society and the prime aim should be to alter the moral feelings of the country.”
Simon Hart
I am sorely tempted to say yes, but I will say no for the moment.
That is why we are here. The RSPCA can be, and often is, a huge force for good, particularly at a local level; that is why I was a member for many years. The debate is not about country sports or the differences of opinion we might have about animal welfare; it is about the RSPCA’s role as possibly the most prolific private prosecutor in the UK.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the hon. Gentleman give way?
Simon Hart
I will give way to the hon. Lady. [Interruption.] She asked more nicely.
Caroline Lucas
The hon. Gentleman quoted Richard Martin a moment ago. Did he not also say:
“If legislation to protect animals is to be effective, it must be adequately enforced”?
Is what the RSPCA is doing with the Heythrop hunt not enforcing exactly that legislation?
Simon Hart
The hon. Lady makes a useful contribution, but I hope she will forgive me if I say I will cover that point later. If I do not, I will take another intervention from her if she so wishes.
The RSPCA is a prosecutor that, in 2012, secured 3,000 convictions at a cost of £8.7 million. That is more than twice the number of prosecutions it brought in 2008, when it prosecuted 1,252 defendants for cruelty to animals, compared with the Crown Prosecution Service’s 240. The RSPCA is a prosecutor that makes claims to comply with CPS guidelines.
Hugh Bayley (York Central) (Lab)
I know that we are not going to agree on hunting, but does the hon. Gentleman agree that the RSPCA plays an extremely important role as a prosecutor in other cases, highlighting and enforcing the law in cases of animal cruelty?
Simon Hart
I will probably disappoint the whole House by not mentioning the H-word at all during my speech, but I take the hon. Gentleman’s point. Nothing I say today will in any way offer comfort to those who wish to break the law of the land; nothing I say will alter that. Anyone who might think there is some kind of scam going on here might be disappointed by my comments.
The RSPCA is a prosecutor that does politics in a big way. It needs to raise about £120 million a year to keep its engines running. The debate is about the conflict that arises when CPS criteria are applied in cases where the RSPCA might have a political or commercial interest.
Roger Williams (Brecon and Radnorshire) (LD)
My hon. Friend and all other hon. Members will be aware that the RSPCA has limited funds, like all charities. Those of us who have worked with animals all our life welcome the presence of local RSPCA officers, who are able to give advice, help and support to people who manage animals. Less of that is happening because more money is being spent in other ways.
Simon Hart
My hon. Friend makes a valuable point, and I would love to be able to quote one or two RSPCA regional officers who have mentioned to me their frustration at being underfunded while reading in the papers of enormous sums being spent on cases in which the animal welfare benefit achieved is doubtful.
Sir Bob Russell (Colchester) (LD)
Is the hon. Gentleman saying the RSPCA should not be involved in prosecutions? If not the RSPCA, who would do it?
Simon Hart
No, I am not saying that. As I will say later, the manner in which the RSPCA goes about its prosecutions needs to be more in line with the relationship between, for example, the CPS and the police: it need not be the closed shop it currently is.
Simon Hart
I do not think that I can resist the hon. Gentleman any further.
Paul Flynn
Is the hon. Gentleman saying that all lawbreakers should be prosecuted, unless they are found to be rich, powerful or Tory?
Simon Hart
I now regret not accepting an earlier intervention from the hon. Gentleman, although it was worth the wait. I will press on, otherwise we will get bogged down. A number of other hon. Members want to make a contribution.
Angela Smith (Penistone and Stocksbridge) (Lab)
Will the hon. Gentleman give way?
Simon Hart
I will take an intervention later, but I want to make a little progress if I can.
The debate asks why the RSPCA prosecutes when pretty much every other worthy charity, whether they deal with animal or human welfare, such as the National Society for the Prevention of Cruelty to Children, relies entirely on the CPS and the police to deal with problem areas they come in contact with in the course of their professional duties. Why is animal cruelty in Scotland dealt with perfectly satisfactorily by the procurator fiscal, rather than by the Scottish Society for the Prevention of Cruelty to Animals, the sister organisation to the RSPCA, as private prosecutions are not permitted in the same form north of the border?
I draw the Attorney-General’s attention to the fact that all those activities have a cost to the taxpayer both through the beneficial tax regimes that all charities benefit from and through gift aid, which assists the RSPCA to the tune of several million pounds a year. Will he comment on what powers the society really has, and its relationship with the police? Even some police officers often assume that the RSPCA’s officers have powers of entry. They do not. Their rank and uniform, although often similar to those of the police, provide no authority whatever in the eyes of the law, yet they can and do liaise with the police to engage in covert surveillance, raids on property and interviewing or cautioning those whom they might suspect. Given the political and commercial activities of the society, is it right that it operates so closely with the police? Should the police exercise some care in the relationship, especially as it applies to the use of cautions?
I want to address how the decision-making process for prosecutions fits with CPS guidance, especially as it applies to the old, sick, infirm, vulnerable and young. Many fellow Members will have examples of constituents who feel that they have been the victims of heavy-handedness from the RSPCA. I will highlight just two.
Chris Williamson (Derby North) (Lab)
The hon. Gentleman talks about the RSPCA being heavy-handed, but does he agree that the common criminals who are in breach of the Hunting Act 2004 should be prosecuted whenever possible?
Simon Hart
The hon. Gentleman and I disagree on many things, but what we can agree on, whether it suits my taste or not, is that the law is the law until such time as it is not. I am not here to defend anybody who breaches the law in this area or any other, frustrating though I may find the law. I reassure him—I refer back to my answer to an earlier intervention—that nothing I say today should offer any comfort to those who wish to break the law. This is about process, rather than policy.
Mr John Leech (Manchester, Withington) (LD)
The hon. Gentleman is being generous in giving way. Further to the last intervention, is the solution not further legislation —I am sure he will disagree—to make it easier for the CPS and the police to prosecute people who break the law? At the moment, they are not able to prosecute, and that is why the RSPCA feels it necessary to take out these private prosecutions.
Simon Hart
I regret that I disagree entirely with my hon. Friend’s comments. I will explain why in a minute. The debate is not about trying to pass yet more legislation to deal with what some people consider to be a problem. This is about how we can actually empower the CPS, and, indeed, for that matter, impose a degree of accountability on those who wish to prosecute privately. I am not here to try to stop people prosecuting privately; I am just trying to ensure that, if they prosecute, they do it in a way that does not conflict with their political or perhaps, commercial objectives.
I remind my hon. Friend that the police had the ability to prosecute in their own right removed in the 1980s, with the creation of the Crown Prosecution Service. The police must gather evidence, make arrests and submit a file to the CPS, which will then apply a stringent and objective test. That process is right, and exists to protect the public from police officers who might, through no fault of their own, be tempted to chase targets or satisfy neighbourhood or other pressures, which might distort their proper objectivity. I am attempting to argue that if any charity were to go about its private prosecutions—and, let us face it, the RSPCA is about the only one that does it—with that degree of objectivity and accountability, we should have achieved something, and my hon. Friend’s fears would not come to fruition.
Angela Smith
Does the hon. Gentleman at least accede to the point that the Charity Commission has agreed that the RSPCA’s approach to prosecutions follows the CPS code—a two-stage evidential and public interest test, which is applied in all RSPCA prosecution decisions and that it believes that the RSPCA’s work is consistent with the duties placed on trustees?
Simon Hart
I am grateful to the hon. Lady for her intervention, which I suspect she wrote before she read The Daily Telegraph this morning. I refer her to a letter written yesterday from the Charity Commission to the RSPCA:
“The charity should ensure that it has fully considered the reputational damage to the charity of adverse publicity; fully assessed the risk of such publicity; and taken steps to mitigate such risk where possible.”
The letter continues that
“although we understand the reasons for the ‘independence’ of the charity’s Prosecution Department…ultimately the trustees are responsible…and…the trustees should review the current arrangements to ensure that they are entirely satisfied with the criteria for prosecutions”.
The Charity Commission has therefore today issued a rebuke to the RSPCA on the manner in which it carries out prosecutions.
Simon Hart
I am not going to take further interventions just yet. Hon. Members may disagree with what I say, but I advise them to have a look at what the Charity Commission has said.
Simon Hart
I am going to press ahead, if the hon. Gentleman does not mind, for a bit. It is nothing personal. I wanted to refer to two examples, and then I hope I will eventually get to him.
Pauline Spoor, a pensioner from Manchester, was convicted and tagged for not putting down her old dog, which had arthritis. She admitted in court that her actions were misguided, but said she could not bear to put him down as he was her constant companion. Would not, in those circumstances, a quiet word from the RSPCA have resolved the problem just as effectively and at considerably less cost? What of Georgina Langley? In 2010, three RSPCA inspectors, with police reinforcement, entered the home of the 67-year-old and took away her 13 cats, four cockerels and dog. Within days, she was told that the RSPCA had put down five of her cats. The Royal Veterinary College carried out an independent post-mortem examination on a ginger tom and an adult female, after being contacted by Miss Langley’s vet. He said:
“There appears to be no good reason why the RSPCA allowed these animals to be put to sleep. The RVC post mortems concluded the cats were healthy with no signs of incorrect feeding or problems with fleas or other illnesses. This lady needed help and support, not hauling through the courts.”
It does not end there. The RSPCA pushed for costs of £28,000, asking magistrates to make an order on the pensioner’s home and calling for her to be banned from keeping animals. Instead, it was ordered that Miss Langley’s dog and cockerels and one cat should be returned. She was given a conditional discharge with no fine or costs imposed. Was the action that was taken that of a responsible and proportionate prosecutor?
Mr Mark Williams (Ceredigion) (LD)
Does not that remind us of the point made by my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) about resources on the ground for the RSPCA’s regional officers, to enable them to give support to such people as my hon. Friend has mentioned?
Simon Hart
My hon. Friend makes a sensible point, and in a way the thrust of the debate is to highlight something of which I think the public are increasingly aware: the gulf between very good activity on the ground carried out by RSPCA inspectors, whom we all know, work with, and value, who do good things in communities, and whose principal function is to deal with animal welfare, and the leadership of the organisation, whose principal function appears to be to deal with animal rights. The animal rights agenda is compromising the animal welfare agenda on the ground, leading to precisely the sorts of example in question.
Mr Mark Spencer (Sherwood) (Con)
I congratulate my hon. Friend on securing the debate. At this time of year particularly—post-Christmas, when there is a lot of pressure on RSPCA kennels to look after pets that have been given as Christmas gifts—education is probably the key to the debate. If the RSPCA could spend more money on educating people to understand animal welfare, that money would be better spent than on prosecutions.
Simon Hart
There must be balance, and I have said in response to several interventions that there are occasions when prosecutions may be the only way forward. I wanted to compare what goes on in England and Wales with what goes on in Scotland. The Scottish Society for the Prevention of Cruelty to Animals does very good work of the sort mentioned by my hon. Friend the Member for Ceredigion (Mr Williams), but is not hampered by also being a prosecuting body, as the RSPCA south of the border is. That relationship seems to work perfectly well, and there is no reason why a similar one should not work for the RSPCA, enabling it to spend more time and money giving people a helping hand.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
I wonder if my hon. Friend agrees that one of the big problems is that when Suzi Leather was in charge of the Charity Commission she confused political charities and charities, and allowed far too much leeway on politics coming into charities. Does my hon. Friend think that that should be addressed, given what we have heard about how the RSPCA has been prosecuting?
Simon Hart
My hon. Friend raises a good point. There is political activity and party political activity. Party political activity is still outwith most charitable law. I suspect that there must be a degree of politics in every charity, but it cannot conflict, I suggest, with the prosecuting role of a charity, if that is the role it wants to pursue.
Simon Hart
I will take one more intervention. We are not making a lot of progress.
Mr McKenzie
The hon. Gentleman has mentioned Scotland and the prosecution service there a few times now. Does he feel that that prosecution service is as successful as the RSPCA in England is, with its 98.2% success rate?
Simon Hart
I think the situation in Scotland is deemed to be perfectly satisfactory from the point of view of animal welfare charities. I do not think that they are particularly governed by statistics. I am intrigued by the 98% success rate, because nowhere in the RSPCA documentations could I find any reference to conditional or unconditional discharges, which I think make quite a difference to the overall figure. I believe—and I stand to be corrected on the point—that those are included in the 98% success rate. I suggest that the lawyers in the Chamber might consider that slightly misleading.
I want to press on somewhat, and discuss something that I think is a commercial disincentive, using the Freedom Food brand as an example. It is a wholly owned brand of the RSPCA, launched in 1994. The society claims that more than 75 million farm animals and salmon were reared to RSPCA welfare standards under the Freedom Food scheme in 2011. So far, so good—I have no problem with that. Yet in the 19 years since the scheme was introduced, the RSPCA has not brought a single prosecution against a Freedom Food member, despite several members of the programme having been prosecuted—not by the RSPCA—for seriously compromising animal welfare standards. It is odd that in that instance the CPS is deemed expert enough to prosecute under animal welfare legislation, whereas in other cases the RSPCA argues that it alone possesses the necessary skills and resources to do so. That raises the question—I put it no more strongly than that—whether in a case where there is a commercial risk to the RSPCA brand, it is dissuaded from bringing prosecutions, whereas it may be tempted in the direction of a tantalising, juicy case that it might want to get its teeth into because of its political or financial benefits. Those are unnecessary and unfortunate consequences of trying to mix prosecution with politics.
Chris Williamson
The more I listen to the hon. Gentleman the more I am convinced that what he is talking about is a smokescreen for the attack on the RSPCA for having the temerity to prosecute the Prime Minister’s hunt. Is that not the real reason he brought the debate to the Chamber today?
Simon Hart
The hon. Gentleman has omitted a declaration of interest, which is his vice-presidency of the League Against Cruel Sports. My response, therefore, is, “He would say that, wouldn’t he?”
This raises further questions for the Attorney-General. Does he agree with the Environmental Audit Committee’s findings on wildlife crime? The Committee states:
“The CPS should review its performance on prosecuting wildlife crime in England and Wales with a view to either employing specialist wildlife crime prosecutors or introducing specialist wildlife crime training for its generalist prosecutors.”
That would enable the CPS to be better equipped to handle prosecutions, by aligning it with the procurator fiscal and reducing the need for prosecutions to be brought by a politically motivated charity. As was mentioned earlier, there are means by which we can achieve the same ends without the uncertainty about conflicts along the way and whether people are being dragged into the court system at great expense to themselves when they should not be there in the first place.
Joan Walley (Stoke-on-Trent North) (Lab)
The hon. Gentleman quotes from the recommendations of the Environmental Audit Committee somehow to give credence to his argument. The professionalism of the CPS and proper funding for the enforcement of police activity through the wildlife crime unit were important considerations when we produced the report.
Simon Hart
I think that I agree with the hon. Lady, and I think that she will have been pleased to see the announcement this week or last by the Department for Environment, Food and Rural Affairs of the funding for the wildlife crime unit.
Joan Walley
Much as I welcome the debate, as an opportunity for all concerns about the issue to be put on the record, I point out that whereas our recommendation was that we should have certainty about future funding, the funding of the wildlife crime unit has been secured for only one further year.
Simon Hart
I suspect that you will reprimand us both, Mr Williams, if we go down the route of discussing DEFRA funding, so I hope that the hon. Lady will forgive me for nodding but not proceeding too much with that side of the debate.
There are numerous examples of the RSPCA failing to prosecute when there is evidence with which to do so, and vice versa, and that gets to the nub of the debate. The charity sometimes pursues tantalising cases, at not only considerable public and private cost but to the cost of some innocent victims, some of whom plead guilty simply because of the fear of the huge cost risks of doing otherwise and finding themselves on the receiving end of this massive financial machine. What is the Government’s view about how members of the public can guard against a campaigning charity with a political and commercial agenda also acting as a prosecutor in its own right? Are the Government happy with the situation as it is, and are they aware that the Charity Commission only yesterday advised the RSPCA of the need to review its prosecution procedures in the light of recent complaints?
The Charity Commission’s intervention yesterday is a serious rebuke, as others have agreed. The CPS was created to ensure that prosecutions are free from any possible suggestion of political interference, commercial influence or personal beliefs. It protects the public while ensuring that crime is properly dealt with. Over the weekend, I spoke to a police office—a former wildlife officer—who told me that it is the only check in the process that protects the public. It is a check that simply does not independently exist within the RSPCA.
I will finish with a reference to Her Majesty’s Crown Prosecution Service inspectorate. The HMCPSI carries out the vital role of ensuring high standards in all CPS prosecutions. The Attorney-General already has the powers to
“ask HMCPSI to inspect other prosecution bodies for which he has responsibility, or to inspect bodies where they are agreeable to voluntary inspection, and to undertake reviews of high profile cases.”
Surely, if that is good enough for the CPS it is good enough for a big, responsible charity such as the RSPCA. Will the Attorney-General consider in what circumstances the CPSI might be asked to review high-profile cases, as is its right?
I hope that nothing I have said compromises the RSPCA and the state’s ability to deal with animal abuse. That is particularly important. The debate raises questions about process. It makes a distinction between an agenda that we all used to be able to support, driven by genuine animal welfare concerns that united not only the House but the country, and an agenda that seems to be increasingly driven by some kind of animal rights ideology. It seems unfortunate that that division is affecting support and potential income for the society. If anything comes out of the debate that enables us to draw a line between what are claimed to be the legitimate political and commercial activities of one of Britain’s biggest and best-known charities and its role as an objective and independent private prosecutor, we will not only have achieved some good from the point of view of members of the public, who may from time to time come into contact with the RSPCA, but, ultimately, we will have done a favour in the interests of animal welfare.
Hywel Williams (in the Chair)
Order. There are 10 right hon. and hon. Members seeking to catch my eye. I intend to start the winding-up speeches at 10.40 am, so I appeal to right hon. and hon. Members to keep their speeches brief, at about four minutes please—but it is, of course, up to their own discretion—and for interventions to be short and to the point.
Paul Flynn (Newport West) (Lab)
Bore da. Mae’n bleser gwasanethu o dan eich cadeiryddiaeth am y tro cyntaf, Mr Williams. It is a great pleasure to serve under your chairmanship. I shall be uncharacteristically brief because a number of others want to speak.
The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) said that he was not going to use the H-word this morning, but he did not say what it meant. May I suggest that it possibly means hypocrisy? We are asked to believe that the apostles of cruelty, who for many years have campaigned in the House to keep gratuitous killing as part of hunting, now want to be compassionate to animals, and to ensure that the animal societies have enough money to prosecute cases. That is not convincing.
I am delighted, however, to see that the hon. Gentleman has broken cover. During his election campaign, he described himself as a chief executive of the Countryside Alliance, but he did not go into the details of his involvement in campaigning in this House on one subject alone that the Countryside Alliance took up: halting the great reform in animal welfare that is the stopping the killing of animals for fun and amusement.
I speak from a constituency that had an MP, Peter Freeman, who introduced a Bill in 1935 to ban hunting with dogs. It took a long time for Parliament to agree that the practice was unacceptable, along with bear-baiting and other barbarous activities that use animals as objects for sport and entertainment, but we have got that far, and those who lost that debate are coming back now and trying to refight the battle by attacking the splendid work of the RSPCA. It was absolutely right to prosecute—the law had been broken.
If the hon. Gentleman wants to save the charity money so that it can concentrate on its other work, he should persuade his friends to stop breaking the law. As the Hunting Bill went through the House, he and others sought to introduce amendments, which Members generously accepted, saying that perhaps they were genuine or there were special conditions here. All kinds of loophole were put into the law, which hunters have since used every possible means to exploit. We need another Bill. We need to define what the will of the population of this country is, and it is to take the gratuitous cruelty out of hunting. There is no objection to people dressing up and charging around the countryside following a trail, if they want to.
Hywel Williams (in the Chair)
Order. Will the hon. Gentleman address the subject of the debate, which is the role of the RSPCA in prosecutions?
Paul Flynn
The RSPCA is a charity with a splendid record of investigating cruelty against animals. We have come to a situation—I will conclude on this point—where a case has drawn attention because of a particular prosecution involving high-profile people, including the Prime Minister of the land, who is a member of the hunt, and all we have today is the malice and spite of the pro-hunting lobby fighting again. Let them have a debate in this House to restore hunting as it was in the past. They cannot do that because they know they lack a majority, as people of good will and sense in their own party also want to see hunting continue to be banned. That ban must be strengthened and reinforced.
Glyn Davies (Montgomeryshire) (Con)
Thank you for calling me so early, Mr Williams. I wish to make only a short contribution that is effectively an observation. It is a huge pleasure to serve under the chairmanship of a fellow Welshman, and a proud Welshman at that.
I congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) not only on introducing an important debate, but on the tone in which he did so and, indeed, on focusing on an essential point that the Government must address. He could easily have been tempted into other areas where Members who disagree with him may have wanted him to go.
I was a huge supporter of the RSPCA for most of my life. I was born on a livestock farm, and I became a huge supporter of animal welfare mainly because of the annual ritual of slaughtering the family pig. Anyone who remembers that will know what a terrible thing it was. Children who experienced it became supporters of animal welfare, and I was one of them. As I became older, it stayed with me. When I took over the family farm, I abandoned rough shooting on the farm, which had been a tradition. Indeed, for a while I stopped any form of hunting on the land simply because I wanted my farm to become a wildlife centre. At some later stage, I realised that that was not the right way to go to benefit wildlife, so I changed the entire policy. The farm had rough shooting and people investing in shooting, and I welcomed back the hunt. The hunt now meets on my farm because I was so outraged by the previous Government’s hunting ban.
This debate is on the specific role of the RSPCA and the way it is carrying out its job. The RSPCA is doing a range of things, but we are addressing the specific role of prosecutions. For most of my life, I was a huge supporter of the RSPCA. When I was a member of the National Assembly and chair of the relevant Committee, quite often the advice of the RSPCA was hugely beneficial and a big part of our decisions, but in my mind it was always an animal welfare body; I now find the RSPCA to be what one might loosely describe as an animal rights body. My personal support has disappeared. I do not feel that sense of support, and I think a huge number of people in this country who were previously big supporters of the RSPCA and saw it as making a huge contribution to the cause of animal welfare no longer see the RSPCA like that.
I say to Opposition Members who are very supportive of the RSPCA that, with its current focus on prosecutions, including high-profile political prosecutions, the organisation is losing the support of a huge number of people. We will find that the RSPCA effectively becomes an animal rights body in deep conflict with an awful lot of people like me, who have been great supporters of animal welfare.
Richard Drax (South Dorset) (Con)
Does my hon. Friend agree that, sadly, there is evidence of the increasing politicisation of many organisations, and the RSPCA is just another very sad case?
Glyn Davies
I agree with my hon. Friend. I know Opposition Members will say that there is a law and that the RSPCA’s job is to pursue the law, but the RSPCA then becomes a prosecution body and an animal rights body, and it loses the support of all those people who care about animal welfare first and foremost. I am one of those people.
Simon Danczuk (Rochdale) (Lab)
Does the hon. Gentleman accept that upholding the law is not a political act? Prosecuting lawbreakers is not an overtly political act, and a range of organisations that bring private prosecutions are not particularly political.
Glyn Davies
I thank the hon. Gentleman, but he would surely agree that almost all coverage of the RSPCA in the media today gives the impression of it simply as a prosecution body because it has pursued high-profile political prosecutions. The RSPCA has become that sort of body, and it is losing support.
Animal welfare is hugely important to many of us, and I want my RSPCA back; it was a body I felt supportive of, and I want it back.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is good that the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) has secured this debate, because it is important that we both discuss how prosecutions are pursued and address the allegations made against one of the country’s most admired charities. I make it clear that I am not a member of the RSPCA and never have been.
The RSPCA is a vital member of our charitable sector and its work across the country is invaluable and widely appreciated. The RSPCA is supported, for a range of reasons, by Members of all parties. I know, as do most MPs, just how important the RSPCA’s campaigns are for my constituents, who care about animal welfare and who welcome the opportunity through their membership to ensure that their concerns are heard. I have never felt that a campaign to highlight animal cruelty, bad practice and neglect has been run for purely political reasons. Under the Labour Government there were innumerable campaigns to raise awareness and to enable MPs to ask questions and seek answers from Ministers. It is absolutely right for a charity to inform Members of this House, because, ultimately, we are the people who write the laws.
The main thrust of the RSPCA’s work is to investigate, thereby hopefully changing behaviour and making people aware of the mistreatment of pets and livestock. So much mistreatment arises from ignorance. However, there are those who are only too aware that their actions are outside the law and that they are laying themselves open to prosecution, private or otherwise.
The RSPCA’s investigations rarely end in prosecution, and it is important to emphasise that the RSPCA’s prosecutions department is independent and separate from the investigators. The RSPCA had every right to investigate and prosecute the Heythrop hunt and those involved in the maiming of foxes last year.
Those seeking to criticise the work of the RSPCA, and ultimately defend hunting as a sport, have pointed to the significant figure that the RSPCA spent on the case to bring about, in their view, a fairly insignificant punishment. Criticising the RSPCA for pursuing political motivations in bringing the prosecution is completely unfair. The RSPCA does not prosecute unless there is just cause, and it considers the public interest test of the code for Crown prosecutors before deciding whether to prosecute. The RSPCA is supported by, and has good relationships with, Members on both sides of the House.
I listened to the hon. Member for Carmarthen West and South Pembrokeshire in the early hours of this morning on Radio 4, when he talked about the RSPCA being the only charity that seems to be pursuing—[Interruption.] As my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) says from a sedentary position, that is not true. We should remember that, historically, charities such as Shelter and the National Society for the Prevention of Cruelty to Children have faced persistent allegations of the politicisation of their work. Both charities have assisted or encouraged prosecutions, in Shelter’s case against rogue landlords and in the NSPCC’s case to protect another group that is unable to protect itself—children.
We make the laws in this place, and we make them for a reason. We do not sit here and make laws just for fun. Laws are there for a reason, and if they are broken, there are consequences, irrespective of whether someone is Joe Bloggs or a member of the Heythrop hunt.
Simon Hart
In some cases, the charities the hon. Lady mentions have not brought private prosecutions for nearly 20 years. Will she share what the reasons for that might be? Will she also comment on the fact that the Charity Commission has today instructed the RSPCA to review its prosecuting procedures?
Alison Seabeck
The hon. Gentleman is being extremely partial in his interpretation of the Charity Commission’s letter. Yes, the Charity Commission pointed out to the RSPCA the role of its trustees, but it has also stated that it will not investigate the RSPCA, which is testament to the fact that the RSPCA acted within its remit and has a right to private prosecution.
The prosecution could not have happened without the work of the RSPCA. If its powers are revoked in any way, hundreds of cases of animal cruelty in the UK will go unchallenged each year. Its role is vital. The hon. Member for Montgomeryshire (Glyn Davies) suggested that it ought to concentrate on animal welfare. The bulk of what the RSPCA does is on animal welfare, and to suggest otherwise is grossly misleading. That work would not be carried out by any other body. The Association of Chief Police Officers has stated that if the RSPCA were to decide not to do it, no other public service could pick it up, and animal welfare would be significantly damaged.
I am a south-west MP, so the matter is important to my constituency. One reason why I wanted to speak today was the weight of interest among my constituents. Public opinion on fox hunting is divided in my constituency, as it is elsewhere in the country. This is not about fox hunting; it is about prosecutions and the RSPCA’s ability to continue taking prosecutions forward where it thinks they are appropriate.
I do not support hunting, but neither do I condone illegal behaviour by those who are either pro or anti-hunting. I want our legal system to be the guardian. The RSPCA’s decision to test that in the courts was, in my view, absolutely the right thing to do. I hope that the Attorney-General will not be chased to ground by the baying pack of Back Benchers sitting behind him.
Sir Edward Garnier (Harborough) (Con)
I congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this debate. He has done the House a service in doing so. Of course there are different views about all sorts of underlying issues; the hon. Member for Derby North (Chris Williamson) demonstrated that from the outset. He was outed by my hon. Friend as a member of the League Against Cruel Sports. I had not the slightest idea who he was or what his membership consisted of, but I am delighted that he called in to see how we get on. That said, we would be naive if we did not think that the underlying current of debate about hunting infects some of the views expressed in this debate, although it is specifically about the RSPCA’s role as a prosecutor, which is what I will do my best to concentrate on.
My hon. Friend also told us that the RSPCA is a prolific private prosecutor, and the statistics tend to support that allegation; more than 2,000 private prosecutions were brought in 2012. However, the problem that the RSPCA faces is the public perception, whether true or false, that it has become a political prosecutor.
Sir Edward Garnier
I suspect that the hon. Gentleman reads The Daily Telegraph more often than I do, but there we are; I am sure he enjoys doing so.
I want to make it clear that as a Member of Parliament, a private citizen and a former Law Officer, I have no objection in principle to private prosecutions. Equally, however, Parliament has controlled in one way or another private citizens’ ability to take private prosecutions. I think the most recent example—my right hon. and learned Friend the Attorney-General will correct me—was the alteration in how prosecutions may be brought for the international reach of war crimes. I do not have the detail in my head right now, but I think that the situation has been altered to require that the Director of Public Prosecutions take over that sort of prosecution. We should not shy away from alterations to the rules relating to private prosecutions.
Simon Danczuk
The hon. and learned Gentleman will accept that the Law Commission considered the issue of private prosecutors in 1998 and found that adequate safeguards were in place. That was relatively recent. Does it not explain the situation? Everything is okay and should continue as it is.
Sir Edward Garnier
That is rather complacent. The whole point of being a Member of Parliament is to express one’s view on the basis of indirect or direct knowledge. Yes, the Law Commission considered the principle of private prosecutions not very long ago, but that does not prevent me from having a different view about particular types of private prosecution, and I am about to express it.
We must be watchful of the ability of the citizen—by “citizen” I mean either a corporate organisation, such as a charity, or an individual—to convert a legitimate public interest activity, namely the bringing of a prosecution in an appropriate case, into an arm of a political campaign. We all have different views about particular public issues—that is why we are elected for our separate parties—but we must be careful that the prosecuting system does not allow itself to become an arm of any one political campaign or a number of campaigns. That is the whole point of having a Crown Prosecution Service.
Certainly during my time in government, the Crown Prosecution Service subsumed the prosecuting wing of the Department for Environment, Food and Rural Affairs. Within DEFRA, there is a group of prosecutors who take on animal welfare cases, among other things, that were previously dealt with by Ministry of Agriculture, Fisheries and Food prosecutors. That subsection of DEFRA has now moved into the Crown Prosecution Service, which seems a sensible place for those people to carry out their work.
We must be careful. Although we do not wish all private prosecutions to be brought to an end, we are entitled to issue a warning to the RSPCA that if that sort of conduct—that is, the prosecutions referred to by the hon. Member for Derby North and others, in which the costs of £300,000-plus incurred were described by the judge as quite staggering—
Chris Williamson
I refer the hon. and learned Gentleman to a letter from the Charity Commission dated yesterday and stating that
“the Commission does not consider that the trustees have breached their duty of prudence in the case of this prosecution”—
that is, the Heythrop hunt. Does he not therefore agree that the RSPCA was perfectly within its rights to prosecute the Heythrop hunt, and is doing a sterling job ensuring that animal abusers are brought to justice?
Sir Edward Garnier
Of course the RSPCA as presently constituted was within its rights to do whatever it thought appropriate in that particular case. Whether it was wise to do so is another matter. It seems to me that if it continues to prosecute at such huge expense in such a disproportionate way, it will be open to public criticism. It cannot do something of that nature in public—that is, prosecute suspected criminals—without expecting to be criticised either by the judge, as it was, or by Members of Parliament, or by contributors to The Daily Telegraph or even The Guardian, or by ordinary members of the public.
Angela Smith
Will the hon. and learned Gentleman not acknowledge, however, that the prosecution costs in the case that he referred to were so large mainly because those prosecuted resisted the charges for so long before deciding in the end to plead guilty? Could the costs not have been reduced significantly if those prosecuted had done the right thing?
Sir Edward Garnier
The hon. Lady was in court and clearly knows more about the detail of the case than I do, but it strikes me that anybody who manages to run up prosecution costs of more than £300,000 on a summary case in a magistrates court is rightly subject to criticism for being responsible for a disproportionate piece of activity.
My simple point is that if the RSPCA does so, it cannot expect to escape public criticism, either in this Chamber or elsewhere, and I am entitled to make that criticism. Were such a prosecution brought by the Crown Prosecution Service, whether on the evidence or the public interest test, as it could well have been, there would have been a far greater grip on the management of that case. I do not imagine that, when the cost of prosecutions in magistrates courts are in the low thousands of pounds, rather than the low hundreds of thousands, the CPS would have gone about it in quite that way.
We need dispassionate intervention from the CPS in such cases. This is not to say that the RSPCA should not or may not investigate but, like the police, it should hand the evidence to the CPS for it to make a dispassionate judgment.
Mr Henry Bellingham (North West Norfolk) (Con)
My hon. and learned Friend makes a good point. I am a member of the RSCPA and support its prosecutions, but this was a summary case before the magistrates court, so why did it not, in the first instance, use its own in-house team of lawyers—which I as a member have to pay for—and go to expensive Queen’s counsels only when the case goes to the higher court? Surely, it was an error of judgment on the part of the RSCPA to use up such huge amounts of its members’ money.
Sir Edward Garnier
I am very fond of expensive QCs, but it is a matter of judgment. The RSCPA, in that case, made a misjudgment. I am not criticising, for one moment, the quality of the representation that it had, but any private organisation, whether a charity or an individual, spending such an amount of money on that sort of prosecution is open to criticism. If I were a member of the RSCPA, I would want to know that my money was going to the purpose that I thought it was intended to go towards, that is to say, protecting animal welfare, rather than—as it appears, from comments made by many—the pursuit of some political agenda.
Last October, I asked the Under-Secretary of State for Justice, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright), an oral question in Justice questions about why the courts rarely seem to make costs orders against the RSCPA when it brings prosecutions that fail, either because it got the law or the facts wrong, and cases collapse. Although the Minister promised to write to me, he did not, but the Under-Secretary of State for Justice, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), kindly replied with a somewhat opaque letter, which did not contain any information of interest or value relating to the discussion that I intended to have.
Undoubtedly, the RPSCA is fortunate because it is not subjected, as the CPS is, to orders for costs when it makes a mess or fails to bring home a prosecution. The CPS set aside £154,000 in the financial year 2005-06, and more than £1.5 million in 2010-11, in relation to costs awarded against it by the courts. Whether those costs fell under section 19 or section 19A of the Prosecution of Offences Act 1985 does not much matter: these are big numbers. The CPS has a turnover of some £600 million and I understand that the RPSCA has a turnover of about £120 million. One would think that there ought to be some read-across for the sums paid in response to costs orders, but we do not see that.
Finally, I think it was my hon. Friend the Member for Carmarthen West and South Pembrokeshire who suggested that Her Majesty’s Crown Prosecution Service inspectorate should, either of its own volition or with the encouragement of the Attorney-General, consider the way the RPSCA conducts its prosecutions, whether thematically or by looking at particular cases. I agree with my hon. Friend, and I encourage my right hon. and learned Friend the Attorney-General to do that. When he and I worked together—it was a joy—we encouraged the Serious Fraud Office to invite the inspectorate to look at its prosecuting activities. That was a beneficial and useful inspection. I encourage my right hon. and learned Friend, in the little spare time that he has, to encourage Mike Fuller to look at how the RSPCA conducts its activities as a prosecutor.
Of course, I respect the right of the RSCPA to conduct itself as an animal welfare charity with all the vigour and all the money that it can lay its hands on, but it needs to be careful that it does not move away from being an animal welfare organisation and becomes a political campaigner, using the state prosecuting system as a weapon to promote its political campaigns.
Sir Edward Garnier
The hon. Gentleman, whose constituency I do not know, but who is a member of the league, mumbles that it should uphold the law. Of course, it should. Nobody doubts that we should uphold the law. My central point is that it must be done dispassionately, proportionately and without turning a charity into a weapon of political campaign.
Caroline Lucas (Brighton, Pavilion) (Green)
It is a pleasure to serve under your chairmanship, Mr Williams. I have to put it on the public record that I am a proud member and vice-president of the RSCPA. I am also proud of the fact that the UK has laws protecting animals from abuse and neglect. There is always room for improvement, but, taken as a whole, this legislation is a marker of a civilised society that refuses to condone cruelty or tolerate the exploitation of other species.
Nia Griffith (Llanelli) (Lab)
I should like to say, as a member of the Committee that considered the Animal Welfare Bill in 2006, that when we make legislation we want it to be enforced. Does the hon. Lady agree that there is no point designing legislation and ensuring that it is workable and enforceable if it is not enforced?
Caroline Lucas
I agree, which is why it is so extraordinary that, somehow, upholding the law can be regarded as a political or, worse, a party political act. I do not get that.
It is interesting to note that the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), who secured the debate, has coyly not mentioned the H-word. That is probably because he realises that he has lost that case. We have clear guidance from the Charity Commission, which says that
“the Commission does not consider that the trustees have breached their duty of prudence in the case of this prosecution.”
Having lost that case, the hon. Gentleman is now hitting out wildly with a lot of accusations, not based on evidence, about prosecutions more generally.
Like the vast majority of members of the public, I strongly support the Hunting Act 2004—I am not afraid of using the H-word—and I am committed to strengthening its provisions, as well as to seeing the ban on the use of dogs in chasing and killing wild mammals rigorously upheld. As the hon. Member for Llanelli (Nia Griffith) said, as with other legislation designed to protect animals, or anything else, enforcement is critical. That is why bringing prosecutions is so important. The RPSCA is uniquely placed to carry out that task.
Colleagues know that in 2005 a Select Committee concluded that the RSCPA was the only organisation with the requisite expertise to undertake animal welfare prosecutions. The Association of Chief Police Officers has also gone on the record to pay tribute to the importance of this role and its fulfilment by the RPSCA, saying:
“Were the RSPCA, as a charity, to decide next week not to do this work any more none of the rest of us in the public service could pick it up. Animal welfare would not be furthered; it would be significantly disadvantaged.”
Thanks to its excellence and consistent best practice, in 2010, the RSPCA secured the convictions of 2,441 defendants for animal welfare offences and gave out 86,354 welfare improvement notices under the Animal Welfare Act 2006. In 2011, a total of 3,114 convictions were secured, further reinforcing the message that the law is essential to its work as a charity charged with protecting animals from abuse.
This work as a private prosecutor is clearly identified in the RSPCA’s constitution as part of its charitable aims, which include preventing or suppressing cruelty towards animals In the charity’s own words:
“Upholding the law is not a political act but is in direct furtherance of the RPSCA’s charitable purpose.”
That said, it rightly has a clear duty to ensure that any prosecutions undertaken both meet a public interest test and are backed up by strong evidence that animal cruelty is taking place. The Charity Commission says:
“If considering a prosecution, charities must consider whether bringing a prosecution is a reasonable and effective use of the charity's resources, what the prospects of success are, and whether the public interest is served by a prosecution.”
Let me take each of those considerations in turn in relation to the decision to prosecute the Heythrop hunt, as that case in particular seems to have prompted this debate.
Nigel Adams (Selby and Ainsty) (Con)
Does the hon. Lady agree with the district judge who thought that the amount of money was not proportionate? He said that £320,000-odd on the particular case referred to was staggering. Could donors’ money not be put to better use?
Caroline Lucas
I shall come on to that in a moment. There are many reasons why that amount of money had to be spent. I do not suppose that any of us would choose to spend money in that way, but, to return to the wonderful comment by the hon. Member for Newport West (Paul Flynn), if people stopped breaking the law the RSPCA would not have to keep spending the money.
Given that the RSPCA has a 98% prosecution success rate, compared with 50% at the CPS, it would seem to be pretty well practised at assessing whether a case looks set to succeed. In the instance of the Heythrop hunt, the charity’s judgment was correct and a conviction secured. It was a landmark case, the first time that a hunt has faced corporate charges for illegal hunting and the first case brought by the RSPCA for breaches of the Hunting Act. That case was based on footage of foxes being chased by dogs, filmed on several occasions in Gloucestershire and Oxfordshire during November 2011 and February and March 2012. Expert analysis verified that the offences were deliberately committed.
All that indicates that the charity thought carefully before bringing a prosecution under the Hunting Act. It considered the evidence and judged accurately that the case was likely to be won. It assessed the impact of the case in acting as a deterrent and in sending out a clear message about upholding the ban on dogs chasing and killing wild mammals, thus preventing animal cruelty. Judging by the interest that the ruling has attracted, the charity made a pretty smart call on using resources effectively.
John McDonnell (Hayes and Harlington) (Lab)
To defend the organisation, is it not true that this has nothing to do with a false concern about the expenditure of money, and that it is about neutralising the RSPCA before a new onslaught to repeal the hunt legislation?
Caroline Lucas
The hon. Gentleman is quite right: there is a smoke screen, and I want to show how the case is not coherent and has no real rigour.
Much of the interest has been about the amount of money spent, with concerns expressed that the expense was not justifiable. I disagree. It was a test case and one based on a high volume of evidence, which needed careful examination to determine whether it constituted a strong enough case to bring to court. Ironically, many critics of the cost are also questioning the RSPCA’s judgment on the prospects of success, even though the charity’s thoroughness in considering whether prosecution was appropriate and its experience of other high-profile criminal prosecutions were what allowed it to budget accurately and appropriately.
It is also worth noting that the defendants indicated right up until trial that they would defend all charges rigorously. Given the importance of the case, and that the evidence and public interest tests were met, the RSPCA had a duty to respond with equal rigour and not to back down in the face of lawbreakers and those guilty of animal cruelty. Indeed, the Charity Commission has vindicated the RSPCA’s decision, stating in the letter I just quoted that it did not consider the trustees to have
“breached their duty of prudence”.
The public interest test is important. Enforcing such an important piece of animal welfare legislation is in the interests of the public, for both those who support the law and those who wrongly believe that they are above it.
Kerry McCarthy (Bristol East) (Lab)
Rather than worrying about whether the RSPCA is misusing its funds in bringing the prosecution, should we not as taxpayers be criticising the CPS for not being prepared to spend its funding on bringing fox-hunting prosecutions?
Caroline Lucas
The hon. Lady makes an incredibly good point. That is exactly where the focus of our ire should be, and not on the RSPCA, which had to step in to fulfil such work.
The Attorney-General (Mr Dominic Grieve)
The assertion that has just been made is entirely and completely incorrect, as I will explain in my speech. The CPS will prosecute cases referred to it.
Caroline Lucas
I thank the Minister for his intervention, but the evidence and experience that we have is that the CPS does not prosecute in the number of ways in which the RSPCA would. I am sorry that he disagrees, but that is our experience in the area.
Eighty per cent. of people in Great Britain feel that, where there is evidence of people hunting illegally with dogs, such people should be prosecuted. In addition, 70% support animal welfare charities bringing private prosecutions against those whom they believe to have been hunting illegally, provided there is strong evidence and if the police or CPS, for whatever reason, do not proceed. In other words, the public want the RSPCA to prosecute in cases such as that of the Heythrop hunt; to do so is justified by their charitable aims.
Jim Shannon (Strangford) (DUP)
Does the hon. Lady agree—she may not, of course—that the RSPCA is in danger of being not only a charity and a campaigning organisation, but an investigatory and prosecuting body that is pursuing a militant animal rights agenda? That is a concern that we have.
Caroline Lucas
The hon. Gentleman is probably not surprised that I do not agree. That was an extraordinary statement. I return to the words of Richard Martin, a founder of the RSPCA, quoted at the beginning of the debate:
“If legislation to protect animals is to be effective, it must be adequately enforced.”
The evidence is available, and I have quoted from the police and other authorities that if the RSPCA did not prosecute, it would not be done.
Caroline Lucas
I am sorry, but to accept more interventions would not be fair to other Members. I have been generous.
Simon Hart
I emphasise that nowhere in any of my comments have I ever suggested that the RSPCA should not be allowed to prosecute. The hon. Lady is misleading the House by suggesting that that is what I am recommending. I am recommending that the process needs to be reviewed, not the policy.
Hywel Williams (in the Chair)
Order. I think I heard the hon. Gentleman say that the hon. Lady was misleading the House. She certainly was not, or I would have told her so.
Simon Hart
If I did, I did so in error. I know that the hon. Lady will take my comments in the spirit in which they were intended.
Caroline Lucas
Yes, I think I thank the hon. Gentleman for that.
I will not go back over the motivation for introducing the debate. We all have our views and nothing can be proved.
I will finish, Mr Williams, as you want us to move on. I simply want to ask why the case was brought to the attention of the Charity Commission. I can only conclude that those who did that wanted to undermine the RSPCA—that was what it was about, not about the hunt per se. That move is cynical and not worthy of anyone acting in the public interest or in the interests of animal protection.
The UK has a body charged with the oversight of charities, the Charity Commission. That body has confirmed that it is not investigating the RSPCA, because there is nothing to investigate. A Press Complaints Commission case on misleading and inaccurate media coverage is pending, yet some have persisted in attempting to smear the RSPCA and to question its role as a prosecutor.
Angela Smith
Does the hon. Lady agree that the so-called rebuke referred to earlier, from the Charity Commission, was actually the usual advice issued to organisations that have been under the media spotlight, and that the RSPCA has already started a review of its procedures, because it is confident that they are robust?
Caroline Lucas
The hon. Lady is right: the RSPCA began that review before the Charity Commission mentioned anything.
I welcome the opportunity both to put on the record my understanding of how the Heythrop hunt prosecution and other prosecutions demonstrably further the pursuit of the RSPCA’s charitable objectives, and to represent the large number of constituents who have written to me, as to many hon. Members, about the importance of protecting the RSPCA’s important legal work.
Hywel Williams (in the Chair)
We need to start the winding-up speeches at 10.40 am. I call Cheryl Gillan—briefly.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Thank you, Mr Williams. I am grateful you called me. I am also grateful to my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) for initiating the debate.
I am going to make a speech that others will probably not expect from someone on the Government Benches. In my constituency, I have been grateful for the RSPCA pursuing a high-profile prosecution and, effectively, putting out political signals through that prosecution. The RSPCA has done us all a great service in its contribution to animal welfare and in its prosecution of those who treat animals inhumanely. When the Attorney-General winds up, I hope that he bears it in mind that the terrible case to which I will refer took place in Buckinghamshire, and he is a Buckinghamshire MP.
I am second to none in my admiration for the RSPCA. Sadly, cases of multiple animal abuse appear to be on the increase, and the RSPCA is well placed to bring and carry through the sort of prosecution that it did in the case of Spindles farm. In January 2008, more than 100 horses, ponies and donkeys were removed from the most horrific conditions at Spindles farm. I went to see some of the rescued animals, many of which had to be put down. Many had been treading on the carcases and bodies of other animals. I have never seen animals with deader eyes or in worse condition in my life, and I have farmers in the family in Wales and have spent a lot of my life around animals. The RSPCA worked with the Redwings horse sanctuary, World Horse Welfare and the Horse Trust, and they are all to be commended.
The prosecution cost some £2.3 million, but the investigation was highly complex. The number of animals involved, the cruelty, the defendants’ obstruction and intimidation of RSPCA inspectors, the need for expert reports, and the problems of identifying ownership of many animals contributed to a long and complex case. It is difficult to see how any organisation other than the RSPCA could have mounted such a complex and difficult operation and investigation. Indeed, the judge praised the RSPCA.
Mr Adrian Sanders (Torbay) (LD)
Is it not the point that if it were not for the RSPCA, we would expect the police to put together such cases, and they do not have the expertise or, certainly in the current austere world, the resources?
Mrs Gillan
The hon. Gentleman almost took away my finishing line. Would others give the matter the priority that the RSPCA gave it? I am pleased to report that James Gray was sentenced to six months in prison, fined £400,000, and banned from keeping horses for life. It is a good job I was not the judge, and that a greater sentence was not available, because he would have had a much bigger one.
Emily Thornberry (Islington South and Finsbury) (Lab)
It is a pleasure, Mr Williams, to serve under your chairmanship. Many Tory MPs in this debate seem to be disappointed that their coalition Government have decided not to change the law on hunting, or to make it legal, and it seems that there will not even be a free vote. Their fury has been turned on another organisation, and it seems that the RSPCA’s prosecution of the Heythrop hunt has put its head above the parapet, so it is now in the firing line.
The hunt was frequented by the Chipping Norton set—Charlie and Rebekah Brooks, Jeremy Clarkson, and formerly the Prime Minister, whom I understand is currently too busy to be involved in the hunt. Let us hope that he will be freed of the burdens of office in the near future and able to resume legal drag hunting—to coin a phrase, tally-ho!
I turn to serious matters. The British are rightly famous for our love of animals, and the public take animal mistreatment very seriously. It is a matter of public policy and blights not just animals’ lives, but if unchecked leads to serious social problems. The illegal trade in wild animals, for example, is worth £12 billion, and that money is not put to good use. Underground dog ownership means that animals are brutalised and used as weapons in parks and cities; they are used in dog fights, and by gangs of poachers and hare coursers. As my hon. Friend the Member for Llanelli (Nia Griffith) said, we have laws and they should be enforced. The question today is, who should be enforcing the law?
The hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) said that we should review the Crown Prosecution Service’s priorities, and that it should pick up the burden instead of leaving it to a politically motivated charity. The difficulty in practice is that the Crown Prosecution Service is suffering a 25% reduction in income over the tenure of this Government. He called for renewed emphasis on animal welfare, but the Crown Prosecution Service constantly announces new priorities. Hon. Members may remember that last week it said that its new priority would be tax evasion. Recently, it was violence against women and girls, and before that it was child abuse following Savile and Rochdale. All those matters are important and must be priorities, as are others that it has referred to, including driving up advocacy standards and improving support for victims and witnesses.
Given the difficulties that the Crown Prosecution Service is working under, and the importance of its priorities, on which we all agree, can it begin a new priority of animal welfare? That is not to say that it does not prosecute. This morning, the Attorney-General kindly gave me a table—I do not know whether he knows that he gave it to me, but he did—of prosecutions by the Crown Prosecution Service, and I understand that it will be put in the Library. The reality is that the Crown Prosecution Service works with the RSPCA, and the RSPCA works with the Crown Prosecution Service.
Jim Shannon
The Crown Prosecution Service must be independent, fair and effective. A concern felt by about half of hon. Members in the Chamber is that the RSPCA is not independent, fair or effective.
Emily Thornberry
The hon. Gentleman has made an important point, and I will make one more before moving on to it. The national wildlife crime unit is a small group of 10 people. They work with the RSPCA, and the RSPCA works with them. They have done important prosecution work involving badger baiting and reptile smuggling. They are experts, but unfortunately it seems that their funding will end at the end of next year, so we will fall back even more on the need for the RSPCA. The question will then be, can we trust the RSPCA? The truth is that the vast majority of the public believe that we can.
In any event, we have a series of checks and balances in our legal system that allows prosecutions to go ahead without the process being abused. In fact, a process may be stayed on the basis that it is unfair, wrong and an abuse of the process. It is for a magistrate to decide that, not the RSPCA. A prosecution may be brought before a court, and it is for the magistrate to stop it if necessary. There are checks and balances before warrants such as search warrants are issued. There are always checks and balances in our system. In our view, the RSPCA does a good job, and is bringing prosecutions on behalf of the public and ensuring that we remain a civilised society. It is for the courts to ensure that prosecutions are not brought wrongly.
It is, of course, open to the courts to award costs against the RSPCA if it loses a case, and it seems that some sense has been spoken this morning about whether the courts should look again, if necessary, at awarding costs against. Many of the complaints that we have heard about this morning have been about successful prosecutions when the case was proved, yet the gripes continue. It seems that the RSPCA was right to bring its prosecution, the court accepted that the evidence was right, offences were committed, and the RSPCA had a public duty and protected an important constitutional right: the right to prosecute privately when the public authorities are unable to do so.
Alison Seabeck
Does my hon. Friend agree that, inevitably with new legislation, test cases need to be brought to court to ensure that it is absolutely clear how the law will be applied?
Emily Thornberry
That is absolutely right, and it is right that if, to use the H-word again, it is illegal to hunt in this country and people are hunting, there are prosecutions to stop that so that people understand that the law is serious. If we simply pass laws and do not enforce them, that radically undermines our constitution. In those circumstances, it seems to me that the RSPCA should be applauded.
The Attorney-General (Mr Dominic Grieve)
It is a great pleasure, Mr Williams, to serve under your chairmanship. I congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this debate. I know from discussions with him that he has considerable experience of the matter and feels strongly about it. I think the matter has been passed to me because, although my Department does not cover hunting—far from it—I superintend the prosecutorial services in England and Wales.
I shall start by dealing straight away with the point raised by the hon. Member for Brighton, Pavilion (Caroline Lucas). The Crown Prosecution Service prosecutes cases instituted and referred to it by the police. They include hunting and wildlife offences. Since 2005, the CPS has prosecuted 378 offences under the Hunting Act 2004, and it regularly prosecutes other wildlife offences. In 2011-12, it prosecuted 298 offences under the Animal Welfare Act 2006, 16 offences under the Deer Act 1991, 43 offences under the Protection of Badgers Act 1992, and 54 offences under the Wildlife and Countryside Act 1981. The CPS publishes legal guidance on prosecutions under the Hunting Act 2004 and of prosecution of wildlife offences generally on its website. If I have time, I will return to that.
Caroline Lucas
The RSPCA has a 98% success rate in prosecutions, compared with around 50% for the CPS.
The Attorney-General
I am not sure whether the hon. Lady is talking about a general figure for the CPS or about wildlife figures for the CPS.
Caroline Lucas
I am talking about wildlife cases—comparable cases, so we are comparing like with like.
The Attorney-General
That may well be, but the point remains that the hon. Lady suggested that the CPS does not take on those cases. If a case is referred to the CPS by the police, it will be considered for prosecution, and if it passes the code test for Crown prosecutors, it will be prosecuted.
The RSPCA, on the other hand, is a private prosecutor when bringing prosecutions. It is an unusual set-up, but the right to bring a private prosecution in England and Wales is an ancient right, which has existed from the time when the state did not have prosecution authorities and citizens were required to prosecute cases themselves. That certainly was the position when the RSPCA was set up. Although most prosecutions are now conducted by public prosecuting authorities, the right to bring a private prosecution remains, preserved by Parliament in the Prosecution of Offences Act 1985.
Speaking personally, I once threatened to bring a private prosecution when I was dissatisfied because the police were not taking action, which did at least lead to my getting a proper explanation from the police as to why they were behaving in the way they were. I believe that it is a fundamental and important right that we have in a free society. Private prosecutions allow an individual to bring a prosecution when the state, for whatever reason, does not. Prosecutions by the RSPCA are, however, just that—private prosecutions. It has no public or special status as a prosecutor. The RSPCA sets out, in accordance with its charitable aims and in its own literature, that it applies the full code test for Crown prosecutors. If I may say so—I do not mean this in any way pejoratively—that is a self-assertion. The RSPCA may well be correct, but it certainly cannot be independently verified, and it is in no position to do that.
To pick up on something that was said, I have no doubt that ACPO may well be correct in saying that were it not for the work of the RSPCA, the burden that would be placed on the police to investigate such crimes would be considerable. I am the first to recognise, as I am sure everybody in the room today does, that the RSPCA, through its charitable work, has performed an extremely valuable role in dealing with animal welfare and cruelty issues.
Emily Thornberry
Is it not right that the police go further than that? They actually say that no other public body would pick the work up, which takes that further and underlines the work of the RSPCA even more.
The Attorney-General
There must be no doubt that if the police do not feel they have the resources or expertise to take on that work, in those circumstances it might be difficult to do it, unless some other private body were to emerge. The point I picked up from the hon. Member for Brighton, Pavilion is that the CPS will take on cases referred to it and consider them.
The Attorney-General
I must make some progress.
A point was made about cautions. The RSPCA has no power to grant cautions at all. That must be done by the police. Obviously, if the police are involved with the RSPCA in an investigation, although they are fully entitled to use the RSPCA’s expertise to help them on a joint investigation, the police must apply their own criteria and codes when deciding how a case should be disposed of—whether it should be prosecuted or dealt with in some other way. The police should not be influenced—I have no reason to consider that they are being influenced—by any private organisation with its own agenda.
Although the 1985 Act preserves the right to bring a private prosecution, it also provides—this is absolutely key to the debate—that the DPP can take over the conduct of such proceedings. The CPS will always consider a request to exercise that power and take over such a private prosecution, including from defendants, and has received requests in relation to some RSPCA cases. I will come back to that in a moment. The approach that the CPS will take in such cases is published on its website. It will review the case in accordance with the full code test contained in the code for Crown prosecutors and consider first whether there is sufficient evidence to provide a realistic prospect of conviction, and if there is, whether a prosecution is in the public interest. It will also consider whether there is a particular need for the CPS to take over the prosecution, either to stop it or to continue it. That is entirely a decision for the CPS. The DPP’s policy is that a private prosecution should be taken over and stopped if, upon review of the case papers, either the evidential sufficiency stage or the public interest stage of the full code test is not met. The Supreme Court has recently upheld the DPP’s policy on private prosecutions in the case of Gujra.
The RSPCA says that it applies the full code test when deciding when to prosecute. It undoubtedly has its own prosecutions department and is seen as having expertise in this field, both as an investigator and prosecutor. However, if an RSPCA prosecution is referred to the CPS, and the CPS considers that the prosecution does not satisfy the code for Crown prosecutors, the CPS will take over that case and discontinue it. Since the CPS began to keep records in that area, it has been asked to review RSPCA prosecutions on only four occasions. One of those requests is still under consideration, but in relation to the other three, the CPS saw no reason to take over the prosecution, and it continued in the hands of the RSPCA. There are also safeguards in the trial process itself, including the court’s ability to exclude evidence from the trial, and to stop a case entirely if it is satisfied that the proceedings amount to an abuse of process—for example, when the court judges that a fair trial will be impossible.
As some hon. Members have mentioned, the Environmental Audit Committee’s report on wildlife crime reported in September last year. It recommended:
“The CPS should review its performance on prosecuting wildlife crime in England and Wales with a view to either employing specialist wildlife crime prosecutors or introducing specialist wildlife crime training for its generalist prosecutors.”
The Government are finalising their response to the recommendations in that report, and that will be sent to the Committee shortly. The response is being prepared by DEFRA in liaison with the CPS.
The CPS is prosecuting wildlife crime where wildlife crime is referred to it, and where it considers that such a prosecution is justified. It has a multi-agency approach and works closely with the police and other relevant agencies in case building, so that cases can be effectively prosecuted. There are 13 area co-ordinators. To support its wildlife specialists in assessing evidence in cases, the CPS has published legal guidance. It delivers wildlife training to prosecutors and has done so for some time. In particular, in 2006 and 2009, the CPS worked closely with the police and other stakeholders to hold a Partnership for Action against Wildlife Crime court training day, exploring how to investigate and prosecute cases involving wildlife issues. It is likely that further such events will take place. In February 2011, the CPS held a seminar on prosecuting wildlife and heritage crime for CPS prosecutors, which looked at specific cases involving the Hunting Act 2004, the convention on international trade in endangered species of wild fauna and flora, and the Control of Trade in Endangered Species (Enforcement) Regulations 1997, as well as the National Wildlife Crime Unit, the Bat Conservation Trust, gamekeeping and trade in plants. Those are offences that the CPS takes very seriously, and when cases are brought to it that pass the full code test, they will be prosecuted.
Another issue raised by hon. Members is that when the RSPCA prosecutes, a cause for concern is that if the RSPCA prosecution is unsuccessful, costs are awarded to the defendant from central funds, and not from the RSPCA. I want to make it clear that, first, that will happen only on indictable offences, and secondly, exactly the same rules apply to any other public or private prosecutor. The reason is that if somebody is acquitted, it does not necessarily mean that the prosecution was wrong in principle. There would be a detrimental effect on prosecutors if they were liable to pay costs each time a defendant was acquitted. That may result in prosecutors being more reluctant to bring prosecutions if they feared the cost consequences. Cases that are properly brought can end in an acquittal. Even those cases that are dropped before the trial begins may well be properly started. Although the decision to prosecute anyone should not be taken lightly, I suspect that nobody in the House would wish prosecutions to be brought only if there was an absolute certainty of success.[Official Report, 4 February 2013, Vol. 558, c. 1MC.]
However, in the event that a judge or magistrates thought that the prosecution had been wholly inappropriate, they would have enormously wide discretion in how to deal with the matter, including the possibility of ordering a prosecutor to pay the defendants’ costs out of their own pocket. Or on a conviction—as happened in the Heythrop case—they have the power to say that only a small part of the costs should be paid by the defendant, and the rest has to be borne by the RSPCA itself. It is a matter for the court’s judgment.
Finally, I have been asked whether Her Majesty’s Crown Prosecution Service inspectorate could review the work of the RSPCA. That produces quite a big problem. The HMCPSI exists to review prosecution arms of the state. Applying that to a private prosecution would, I think, be extremely difficult.
Radlett Aerodrome (Green Belt)
(11 years, 10 months ago)
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Mrs Anne Main (St Albans) (Con)
It is a pleasure to speak under your chairmanship, Mr Williams. We have a very short debate, so you will have to excuse us if we rattle through it. We need to explore the history of the Radlett site and the role of the metropolitan green belt in protecting communities from harm. We need to explore the professed support or otherwise given to green-belt land by the coalition Government and by the previous Labour Government, and the views of key players such as the Minister concerning the appropriateness of development, particularly in the green belt, to see whether there has been any slackening of resolve to protect communities such as mine in and around the Radlett site.
It is worth restating that green-belt land serves specific purposes. It may fulfil one or more of its five designated functions: to check unrestricted sprawl of built-up areas; to prevent neighbouring towns from coalescing; to safeguard the countryside from encroachment; and to preserve the setting of historic towns while encouraging the recycling of derelict and other urban land. The Radlett green-belt site fulfils all those functions, so it serves a very valuable purpose, even if it is not all beautiful woodland. There is no bad green belt. We ditch that principle at our peril. My constituents in St Albans and those of my hon. Friend the Member for Hertsmere (Mr Clappison), who will speak in this debate, need to know whether the green belt is safe under this Government, or will the economic imperative to get the country building mean that we ditch those worthy principles when it suits us?
Given the “minded to grant” decision by the Minister on a rail freight interchange on the Radlett aerodrome site, which comprises 300 acres of metropolitan green belt—the site represents 10% of the entire green belt around St Albans—it is important to explore whether is fully supportive of protecting green belt policy or if he believes it to be an inconvenient blockage that stands in the way of the drive for growth. Is he to stand accused of supporting the green belt when it is politically expedient to do so but jettisoning his principles when the need arises or under pressure from the Treasury?
David Simpson (Upper Bann) (DUP)
I accept the hon. Lady’s point about protection of the green belt, but does she agree that where established businesses have been there for more than 25 years and need to expand, it would be right to move into that?
Mrs Main
I think that each green-belt application should be decided on its merits; that is very firmly the case. Indeed, I will go on to show that there is very little merit in the application for St Albans. I will not give way any more, because my hon. Friend the Member for Hertsmere and I must get everything down in this particularly important debate.
Can the Minister convince the House and my constituents that he does have a passion for the green belt and that he has a coherent and consistent approach to planning decisions? Some people have tried to suggest that this green belt site in Radlett is not really green belt, so it is important that we briefly explore the history of the site and its role as green belt.
Radlett was used as a grass aerodrome in the 1930s. In 1947, the runways were upgraded to concrete. All that was before the introduction of the metropolitan green belt protections, which were fully implemented in 1955. By 1970, the runway was no longer in use; most of the structures on the site were removed and it was restored to farmland. However, for a second time the community of Park Street was required to allow its land to be utilised for the greater good of the country when it was revealed that significant sand and gravel deposits lay under the site. In common with communities across the country that have such deposits, a firm undertaking was given that full restoration and landscaping of the land would occur and that it would be returned to the community as an open green space—in our case, green belt.
In 1978, 1985 and 1990, the site was used for gravel extraction, with the runways dug up to access the gravel. That ceased in 1997. The site has undergone a full environmental restoration, which has nearly been completed. The people of this community, like other communities that endure mineral extraction, rightly expected the restoration of the site as a community green space and nothing else. They were horrified to be targeted by developers for a massive rail freight site in 2006. That application was made because the Government of the day had a stated mission to deliver three or four new rail sites that would be
“located where the key rail and road radials intersect with the M25”,
and developers were scrabbling around to find land that would deliver on that goal.
In 2007, the hon. Member for Glasgow South (Mr Harris), who was then a Transport Minister, said that the importance of rail freight had been acknowledged in terms of its significant contribution to the economy and productivity. In 2009, Lord Adonis said:
“Rail freight has become a vital driver of UK economic growth...The government remains fully committed to supporting...the development of a Strategic Freight Network”.
It has therefore always been a battle between the economy, the need to build and the protection of our countryside. The economic imperative has been a material planning consideration whenever a proposal to build on the site at Radlett has been considered. However, the question has always been whether the strength of protection afforded by green-belt status would be overridden. It has been a David-and-Goliath struggle, costing my local council more than £1 million, and STRiFE, a valiant group of local residents to whom I pay tribute, huge amounts of time, money and effort in fighting for their community and, importantly, for the green belt.
The case has been tested twice, in 2008 and 2010, and the green-belt designation saved Radlett on both occasions. It is worth noting what Ministers said when they reached those decisions about the weight given to Radlett’s green-belt status. Every application for the site has been for an almost identical scheme. In 2008, the decision was as follows:
“The Secretary of State considered that the need for SRFIs”—
strategic rail freight interchanges—
“to serve London and the South East was a material consideration of very considerable weight”,
but the then Secretary of State went on to say that
“very special circumstances to justify the development had not been demonstrated.”
She
“concluded that the proposal would constitute inappropriate development in the Green Belt and…attached substantial weight to that harm. She also identified that it would further harm the Green Belt because it would cause a substantial loss of openness, significant encroachment into the countryside and would contribute to urban sprawl”.
That is all contrary to green belt design. It is pretty damning stuff, with real harm to Radlett being identified and every one of the five green-belt purposes being compromised.
In 2010, the plans were considered again. We had a new Secretary of State and a similar decision; it had almost the same wording. In May 2010, he said that he was
“not satisfied that the appraisal of alternative sites”
had
“clearly demonstrated that there would be no other suitable location in the North West Sector that would meet the need for an SRFI in the foreseeable future in a significantly less harmful way than the appeal site.”
He went on to say that the benefits of the proposal, taken either individually or cumulatively, would not clearly outweigh the harm to the green belt and other harm. He did not therefore consider that there were special circumstances. He concluded that there were no material considerations of sufficient weight that would require him to determine the application other than in accordance with the development plan. It was refused.
It is clear that despite the need for an SRFI somewhere near London, the green-belt protection always held firm for very similar applications. Then the mood in the Government appears to change. A few colleagues are shuffled off into other areas, and we start to hear a lot of talk about the need to get Britain building. Those who stand in the way are dismissed as luddites.
Other Departments put in bids for construction projects, particularly in relation to transport, with High Speed 2 and rail freight suddenly hot topics. In 2011, the previous Secretary of State for Transport made a statement on rail freight and stressed its economic benefits, saying that
“the Government believe that rail freight could make an even stronger contribution to the country’s economic recovery.”
That sounds like a rehashing of the old Strategic Rail Authority statement and comments that I have quoted in my speech. I am concerned that the coalition Government may now be using a flatlining economy as a justification to take a less than robust view on green-belt protection—to ditch protection of our countryside in a massive push for activity. I want to test that in this debate. If it were to be the case, it would have worrying implications for many communities across the countryside.
That Secretary of State went on to say in her statement:
“The Government are therefore taking measures to unblock the development of strategic rail freight interchanges”—[Official Report, 29 November 2011; Vol. 536, c. 57-8WS.]
What is meant by unblocking? I am extremely concerned that the convenient overriding of green-belt policy may be seen as the solution to unblocking the wants of the Treasury and the Department for Transport, yet historically Ministers and senior politicians have sworn that the green belt is dear to their heart and safe in their hands.
The Prime Minister, reassuring the National Trust in September 2011, said:
“We must ensure the appropriate protections for our magnificent countryside. This is why our reforms will maintain protections for the green belt”.
In 2011, the Secretary of State for Communities and Local Government said in response to oral questions that
“we intend to ensure that the green belt is held solid and absolutely inviolate by this Administration. We are not going to follow the tenets of the former Labour Government by concreting over the green belt.”—[Official Report, 4 April 2011; Vol. 526, c. 731.]
Much was made in opposition of the concern that Labour could not be trusted with the countryside. In 2005, my right hon. Friend the Member for Meriden (Mrs Spelman) said:
“Under John Prescott’s watch, Green Belt protection has become worthless.”
In 2008, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), then shadow Housing Minister, when challenged on the flexible reassigning of green belt, said that
“we will rigorously protect the Green Belt and won’t pull the wool over people’s eyes by saying that we’re enlarging it, whilst simultaneously deleting parts and creating new green belt…We’ll protect the Green Belt and we won’t play tricks by deleting one part and creating it elsewhere”.
The hon. Member for Lewes (Norman Baker), who was then the Liberal Democrat environment spokesman, said of Labour:
“They are designating land as Green Belt land simply to fiddle the figures”.
Both coalition partners agreed that we cannot swap the green belt around conveniently, but there appears to have been a seismic shift in sentiment. It is now being touted by the Chancellor of the Exchequer as a way of getting round the awkward nature of the green belt. On “The Andrew Marr Show” in September 2012, he said:
“When it comes to the Green Belt...we are not proposing to tear that up but if you look at, for example, around Cambridge…they’ve been pretty smart about swapping some bits of the Green Belt for other bits...Those powers already exist but they’re not widely used, I’d like to see more of that.”
There is a bit of a change of mood there.
I am very concerned that the mood and rhetoric around planning and development has changed. We have a new Minister in place, and I am sorry to say that I do not have confidence that he truly understands the value communities up and down the country place on the green belt, nor does he have the confidence of my constituents, who will be unsure of what we as a Government stand for if this departure from green belt protection goes ahead. I am sure that many of them, who have copied me in on their correspondence, will let him know that.
In January 2012, in a speech to the Tory Reform Group, the Minister said:
“Business investment is also deterred by the bureaucratic rigidity of our outdated planning regime. So it is essential that we press on with our planning reforms and do not allow the hysterical scare-mongering of latterday Luddites…to strangle developments”.
On “Newsnight” he said:
“We’re going to protect the green belt”,
but he went on to say:
“The built environment can be more beautiful than nature and we shouldn’t obsess about the fact that the only landscapes that are beautiful are open—sometimes buildings are better.”
May I inform the Minister that 6 million square feet of industrial development on the green belt will never be regarded as beautiful or better? It will not deliver any local benefit, either in economic terms or through homes for local people.
This flip-flop, inconsistent approach to decision making is infuriating residents, who have a right to expect protection from inappropriate development and to lean on green-belt policies to defend them. In response to my constituent who contacted him about his “Newsnight” comments, the Minister wrote:
“We recognise the importance of the countryside to the well-being of communities, which is why the National Planning Policy Framework guards against inappropriate development in valued areas such as the Green Belt”.
Given that reassuring response, my constituents now regard his decision to be minded to grant a desecration of 300 acres of local green belt as somewhat hypocritical. He can drop a conjoined inquiry for Radlett with no explanation—which is being challenged by my council, so I will not investigate that here—but it seems that he can oppose developments when it suits him.
In a letter to the Secretary of State for Energy and Climate Change, the Minister sought to clarify his position on inappropriate locations for wind farms:
“We should be working with communities rather than seemingly riding roughshod over their concerns”.
My constituents are being ridden over roughshod and they are not being worked with. They were informed on the Friday before Christmas that the Secretary of State for Communities and Local Government was minded to sacrifice the green belt at Radlett, and have concluded that the Minister cannot be trusted on the green belt, and my post bag reflects that.
We need to ask who is now deciding planning policy—the Minister and his Department or the economic drive of the Treasury? He knows that if the development goes ahead, it will hugely harm St Albans. The fatal decision letter of December 2012 said that
“the appeal proposal would be inappropriate development in the Green Belt...it would cause further harm through loss of openness and significant encroachment into the countryside...would contribute to urban sprawl…would cause some harm to the setting of St Albans. The Secretary of State has attributed substantial weight to the harm that would be caused to the Green Belt”.
Surprisingly, substantial weight having been given to the need for an SRFI in the other appeals of 2008 and 2010, it now appears to trump green-belt protection. It seems that the hunt for shovel-ready sites is paramount, but I hate to inform the Minister that this site is green fields and does not have a hope of being developed for years. It certainly is not shovel-ready.
The letter went on to say:
“The Secretary of State considers that the factors weighing in favour of the appeal include the need for SRFIs to serve London and the South East, to which he has attributed very considerable weight.”
That is the only thing that has changed, which leads me to believe that there has been a shift in green-belt policy. The words are almost the same as those used in previous refusals. Have we had a change in green-belt policy? Do national economic factors now outweigh green-belt planning protection? Is it really, “The economy, stupid”? Perhaps the Chancellor’s recent words when discussing High Speed 2 give us a clue to the new approach:
“As with all these things unfortunately somebody is going to be affected, but that’s life.”
It might be life for some, namely my constituents living cheek by jowl with a noisy, intrusive 24/7 industrial development, but it is not life for privileged Ministers fortunate enough not to be affected by their aggressive decisions to build on Britain’s beautiful landscapes and green belt. The Minister needs to demonstrate by his deeds that he truly supports the green belt and to rethink the dangerous precedent he may be setting by sacrificing our historic landscapes on the altar of No. 11’s economic strategy.
Mr James Clappison (Hertsmere) (Con)
I am grateful to my hon. Friend the Member for St Albans (Mrs Main) for giving me permission to take part in the debate and for the leave from appropriate quarters. I congratulate her on securing the debate.
As anybody listening to the debate will have gathered, my hon. Friend has been absolutely indefatigable in her opposition to the planning application. It would be disastrous for the green belt in Hertfordshire, for her and my constituents and for anybody who has a fondness and affection for the city of St Albans. I join her in paying tribute to STRiFE for its hard work against the behemoth that is seeking the planning application.
It is entirely right that we debate the decisions not to hold a conjoined inquiry for the Colnbrook and Radlett proposals and to grant permission for the Radlett proposal—two decisions announced just before Christmas. Those decisions can be described only as perverse and unreasonable, in view of what the Government said previously. As recently as 19 September, the Secretary of State for Communities and Local Government wrote to interested parties to say that he was of the view that there should be a conjoined inquiry. I shall briefly quote from his letter, which is absolutely clear:
“The Secretary of State is of the view that the two schemes raise similar and inter-related issues. He considers it likely that their comparative merits will be a significant material consideration in his determination of the Radlett proposal. Furthermore, he considers that a decision on the Radlett proposal and the reasoning for that decision may have a significant bearing on his determination of the Colnbrook proposal. Given this, he is of the view that re-opening the inquiry into the Radlett appeal and conjoining it with the planned inquiry into the proposed SRFI at Colnbrook is likely to lead to a more coherent and consistent decision-making process overall.”
The Secretary of State’s view on 19 September could not have been clearer, nor could the subsequent U-turn. How can he take the view in September that a conjoined inquiry is the right way forward, then simply take the opposite view in December, without giving any proper explanation, and decide that one is unnecessary?
The majority of respondents to the Secretary of State’s letter of 19 September were in favour of a conjoined inquiry, and, in any case, all the responses to the consultation were what would have been expected from the relevant parties. The Minister needs to explain to my constituents and those of my hon. Friend how that change of mind came about. It is not good enough to say, “I have changed my mind.” Ministers need to give reasons. We cannot have capricious decision making. As matters stand, the Minister is, according to his Department’s own argument on 19 September, taking a course likely to lead to inconsistent and incoherent decision-making processes overall. That was the view in September.
Any reasonable person observing the contortions of ministerial decision making in such a short time would be driven to the conclusion that the process had been thoroughly perverse. The Minister owes it to those affected by the decision to give a proper explanation. As matters stand, the process bears the marks of a capriciousness that one would more readily associate with a mediaeval despot than a Minister in a modern democracy. I know my hon. Friend the Minister, and I do not think that it is in his nature to be a despot, but on this occasion he is giving a passable impersonation of one.
There is also capriciousness in the Secretary of State’s assessment of the harm associated with development on the two sites. In his letter of 20 December 2012, he said that he sees
“little reason to conclude that Colnbrook would meet the needs for an SRFI in a less harmful way than the appeal site”.
That stands contrary to the position the Secretary of State took when he reached his first decision only two years earlier, on 7 July 2010:
“The Secretary of State considers that if an application were to be made for a SRFI at Colnbrook of about the size indicated in evidence to the Radlett inquiry, then harm to the Green Belt might, subject to testing in an alternative sites assessment, be found to be significantly less than the harm caused by the Radlett proposal.”
Mr Clappison
My hon. Friend hits the nail on the head. It is another matter that the Minister needs to explain. The residents of the two areas, and those who are interested in the environment, deserve an explanation as to why there has not been an alternative sites assessment. We have a Minister saying in 2010 that the alternative site could be less harmful and then saying in 2012, “No, it will not be less harmful.” I do not think that Slough has moved since July 2010 and I am certain that St Albans has not moved. What other explanation could there be? He is saying the exact opposite of what was said just over two years ago.
The decision is no small matter as far as my constituents and those of my hon. Friend are concerned. As she spelt out in graphic and correct terms, it has profound implications for the green belt in Hertfordshire. Everyone, apart from the applicant, who has looked at the application can see that it is very damaging for that green belt. As previous Secretaries of State and inspectors have concluded, this development would have a substantial impact on the openness of the green belt, result in significant encroachment into the countryside and contribute to urban sprawl, to mention but some of the highly undesirable consequences that flow from it. This development would damage the environment and reduce the quality of life for my constituents and for those of my hon. Friend in St Albans.
Mr Clappison
My hon. Friend is again right.
The decision is deeply flawed, because such a decision should be taken only when the alternatives have been properly considered, and, they have not been in this case. Ministerial decision making has been flawed, unreasonable and perverse. It does not stand examination, and questions are not being answered. An onus now falls on the Minister to explain such clearly flawed decision making and to demonstrate that the Government really care about the green belt. As my hon. Friend has appropriately explained, as matters stand the Government’s commitment to the green belt is questioned by the decision-making process in this case, which is very damaging to the green belt in Hertfordshire.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate my hon. Friend the Member for St Albans (Mrs Main) on securing this debate, and my hon. Friend the Member for Hertsmere (Mr Clappison) on contributing to it. They are both entirely tireless, passionate and committed in fighting for their constituents’ interests, and I completely understand their strength of feeling and that of the constituents whom they are representing about the decision taken just before Christmas.
I hope that you, Mr Williams, and my hon. Friends will understand that, unfortunately, I am not able to comment specifically on this proposal, because it may be subject to judicial review, as my hon. Friends know very well. It is entirely open to the local authority or any other party to ask for that. Unfortunately, that means that I, with my quasi-judicial function, cannot go into the reasons for the Secretary of State’s decision before Christmas about being minded to allow the proposal, which are set out in the decision letter. Although I completely accept that the specific reasons do not satisfy either my hon. Friends or their constituents, I am afraid that that is all I can say about them.
In the short time available, I will try to reassure my hon. Friends that, although they and their constituents profoundly disagree with the decision, that decision flows from existing policy, which is unchanged and was set out in the national planning policy framework. The framework states:
“The Government attaches great importance to Green Belts. The fundamental aim of Green Belt policy is to prevent urban sprawl by keeping land permanently open”.
It explains that the green belt is often highly valued by communities and provides a vital “green lung” around many towns. In its original draft, as approved by Parliament, the framework states that many types of new building are inappropriate development and should not be granted permission
“except in very special circumstances”.
The key test, as set out in the framework, is whether a particular development meets such very special circumstances. I entirely accept and respect the fact that neither of my hon. Friends believes, and nor do their constituents believe, that this proposal meets that test, and I suspect that nothing could be said or any evidence produced that would persuade them, any more than that we will be able to persuade other hon. Friends of the need to grant permission for HS2 to pass through their constituencies, although in the Government’s view the test of very special circumstances may have been met.
Mrs Main
I thought that I had made it clear in my speech—through reprising the 2008 and 2010 decisions, as well as the latest one—that the wordings have been almost identical; all that has happened is that the decision has changed. Neither my hon. Friend the Member for Hertsmere (Mr Clappison) and I, nor our constituents, understands what special circumstances have suddenly occurred, given that there has always been the need for the SRFIs, which have been an economic imperative since 2006. We do not know what those circumstances are.
Nick Boles
I entirely accept that my hon. Friend does not understand why there has been that shift in the assessment of whether the condition of very special circumstances has been fulfilled. I can only repeat that, although I cannot go into the reasons and the arguments behind them, the proposal is open to further challenge in the courts if necessary.
The policy on the green belt is clear, and I assure my hon. Friends that it genuinely has not changed. It is as it was set out in the national planning policy framework, which is the most important text on the green belt. However, the framework also has important text on the need to support sustainable development, stating that planning should
“proactively drive and support sustainable economic development to deliver the…business and industrial units, infrastructure and thriving local places that the country needs.”
It continues that local councils should
“develop strategies for the provision of viable infrastructure necessary to support sustainable development, including large scale facilities such as rail freight interchanges”.
The framework therefore captures the potential competition between two very important interests—that of preserving the green belt permanently as open space around towns, so preventing sprawl, and that of supporting sustainable development, specifically including—the framework is specific—
“large scale facilities such as rail freight interchanges”.
Of course, it is then up to the decision maker. As both my hon. Friends will be aware, local planning committees sometimes have to make a difficult decision between two competing demands in their local plan, and have to be able to explain to local people why they have come down on one side and not the other. Similarly, when the decision maker is an inspector or, in this case, the Secretary of State, there has to be a process of adjudicating, given the difficult tension between two priorities in the framework.
Mrs Main
I completely accept that. The Minister mentions rail freight interchanges. Significantly, this one is a strategic rail freight interchange, which therefore means that there are also regulations about its having a sustainable work force. It has been acknowledged that this site will have no sustainable work force, and that there will be no economic regeneration. Indeed, it is anticipated that the work force will come from Luton, which is the very site area that wants a rail freight interchange. That is why there is incomprehension. That is what we do not understand; it is not that we cannot read the words on the page.
Nick Boles
I do understand, and I profoundly regret that the decision letter has been as unsatisfying to my hon. Friends as it clearly has been. I would never have expected them to be persuaded by its contents, but I might at least have hoped that it would explain why a decision with which they disagreed had nevertheless been reached, and I regret that the letter clearly failed to do that.
Mr Clappison
Does the Minister agree that any reasonable person who looks at the two letters would regard this decision letter as unsatisfactory?
Nick Boles
I am afraid that I will again have to disappoint my hon. Friend. I am not permitted to comment further on the decision letters, either those produced earlier or the current one, but I nevertheless say that I wish such letters had been more satisfying to my hon. Friends, and had at least explained to them why the position seems to have changed in the decision letter about the Secretary of State being minded to allow the proposal.
In the remaining time, I simply say that the planning job is one of the most difficult ones at any level of government. I am not pleading for sympathy; I am simply observing that the job is one in which we have to balance very difficult and important but entirely contradictory or competing demands. Of course, a good planner tries to do whatever they can to resolve those demands, by finding a way as much as possible to meet both of them. However, there are some occasions—when building a new prison, new nuclear power station or, as we are discovering, a new vital high-speed rail infrastructure that will connect our major cities—when decisions unfortunately have to be made that will never be acceptable to local people or win their support, and which will always cause them a level of pain, misery and disappointment that they feel can never be alleviated by any mitigating measures. That is profoundly to be regretted, and is not something that any decision maker, whether a local councillor, an inspector or a Minister, does lightly or with relish.
Political Party Funding
(11 years, 10 months ago)
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Dr William McCrea (South Antrim) (DUP)
It is certainly a privilege to serve under your chairmanship today, Sir Roger. I realise that another debate is taking place in the main Chamber in which there is a lot of interest. However, the issue that I want to bring to the attention of my hon. Friends and hon. Members is also worthy of the attention of Members of Parliament and the Government.
It has been said that a week is a long time in politics, but the issue of the continued payment of taxpayers’ money to a political party that refuses to fulfil its obligation to represent the constituencies to which it has been elected has been rumbling on for almost 20 years. In that regard, the issue has a lifespan that represents a political aeon. Despite the repetitious nature of the argument, there is a fundamental principle at stake: those who do not take up their seats in this House should not receive the benefits that come from being represented in this United Kingdom Parliament.
That is an important principle and should not be casually tossed aside or ignored no matter how politically inconvenient it has been for successive Governments, both Labour and Conservative-led, to examine. The previous Government have been indicted on many issues by those who now form the current Government—the handling of the economy and the present financial situation being chief among them. However, some of those who are now in the Government were also deeply critical of the previous Government for their decision to grant special treatment to no-show MPs that enables them to claim Westminster allowances and receive their own specially crafted version of Short money.
I sincerely hope that our friends on the Government Benches, members of the Conservative party, will not now forget their previous utterances on this important matter. Today, I take the opportunity of reminding them just what they had to say about this disgraceful situation.
When we are elected to the House of Commons, we represent our constituents. We therefore know what is expected of us. We should be diligent in attending to our constituents’ needs and in speaking up for them in important debates in this House. Before this situation developed, every Member of Parliament was equal in that regard: from the Prime Minister down to the most humble Back Bencher such as me. Everyone knew what they were required to do.
By granting the request of Sinn Fein for special treatment, the previous Government broke that important principle, and in so doing they created two classes of MP. The ending of that situation would create a truly level playing field, and would bring to an end the present discriminatory situation. My party has opposed the situation from the start.
I came to this House in 1983, some 30 years ago. I represented the constituency of Mid-Ulster, which had been part of a previous redrawing of the boundaries and a part of the gerrymandering process at the time. It is where I was born, reared and grew up. In fact, as a child, I was privileged to have my music lesson in the home of our Member of Parliament, the late Mr George Forrest.
In 1997, after the gerrymandering of the boundaries for the Mid-Ulster constituency that divided it in two, I stood for election. I lost my seat to Martin McGuinness, who is now the Deputy First Minister in Stormont. I can remember the abstentionist views that were expressed by Sinn Fein down the years. The seat had been represented by Tom Mitchell, an abstentionist MP; Bernadette McAliskey, or Bernadette Devlin as she was known; and George Forrest, the Unionist Member, who was initially not connected with any political party.
When I lost that seat, the post was taken up by a Member of Parliament who did not come to the House. In fact, on a number of occasions, I and other Members of Parliament have been asked to raise issues by people in that constituency—my son represents the seat in the Northern Ireland Assembly—because the sitting Member of Parliament was not there to raise them. While those MPs were not here, they were receiving representative money—that was the fancy term that was used.
My party opposed that situation from the very start. When the idea of paying special allowances to Sinn Fein was raised by the Labour Government, we were forthright in our opposition. Others were equally forthright when they were sitting alongside us on the Opposition Benches—now they are on the Government Benches. That is why the Democratic Unionist party backed Conservative proposals to end the payment of these moneys to Sinn Fein. The Conservative party correctly judged that the prospect of lavishing taxpayers’ largesse on a party that does not come to this place or represent constituents here was an intolerable concession made for cynical political reasons. The decision was connected with buying Sinn Fein’s complicity in the political process in Northern Ireland—serving up goodies to them to bring about the complete ending of the IRA criminal enterprise. We supported the Conservative opposition to that concession, and we are now calling on the Conservatives to make good in government the promises they made in opposition.
Let me give the background to this situation. While making much of their public contempt for this House and the other institutions of our United Kingdom, Sinn Fein has devoted considerable time and energy lobbying to enjoy access to the financial resources of an institution that they profess to hate. As we say in Ulster, “They hate the Crown, but they love the half crown.” They first raised the issue in 1997, and it was raised again in 2001.
There are some of us who have had the privilege of sitting under the wise judgments of the formidable Baroness Boothroyd of Sandwell. I regarded her as one of the best Speakers that I have ever had the privilege of meeting. She was a no-nonsense Speaker who defended the integrity of the House of Commons and its rules with an honesty and an impartiality that was second to none. When asked to rule upon this matter in May 1997, she was clear in her judgment. She said that
“those who choose not to take their seats should not have access to the many benefits and facilities that are now available in the House without also taking up their responsibilities as Members.”—[Official Report, 14 May 1997; Vol. 294, c. 35.]
The logic of that argument is impossible to argue against. Sinn Fein thought otherwise and decided that it would use legal recourse to gain access to the money. This culminated in the issue being fought out in the European Court of Human Rights—a favoured avenue for those who seek to challenge the authority of the House.
The European Court ruled against Sinn Fein and upheld the validity of the Speaker’s ruling on the matter. This is an important point. Not only does the ECHR ruling recognise that Baroness Boothroyd made the correct judgment, but it debunks totally the idea that the current arrangements are a recognition of the rights of the people who choose to be represented by Sinn Fein abstentionist MPs. No one is being discriminated against if the policy of paying allowances to Sinn Fein is ended. On the contrary, equality and balance are restored.
The present situation was created by a previous Labour Administration. In 2001, they tabled a motion that would overturn the decision that the Speaker had made. The then Government made it clear that their decision did not apply to Short money. The decision was rightly seen as an unmerited concession to Sinn Fein as part of the political process under way in Northern Ireland. Sinn Fein was to be encouraged down a purely political path at the expense of the rules of the House of Commons, and of course regardless of the cost to the taxpayer.
The right hon. Member for Maidenhead (Mrs May), who is now the Home Secretary, identified the weakness in the Government’s position when she said in the debate on the unwanted changes:
“The issue before us is not about the Northern Ireland peace process or about the resumption of the Assembly; it is about the role of Members of Parliament, what it means to sit in the House and the nature of the job of being an elected representative of this place. It is primarily on that basis that we oppose the action that the Government are seeking to take and will be voting against the motions.” —[Official Report, 8 February 2006; Vol. 442, c. 912.]
The Conservative party was equally forthright in its public pronouncements on the issue, inside the House and outside it. The proposals represented, one spokesman said,
“more unreciprocated concessions to Sinn Fein...treating the rules of the House of Commons as the currency for such concessions.”—[Official Report, 18 December 2001; Vol. 377, c. 160.]
Both the right hon. Member for Maidenhead and the Conservative party generally were absolutely correct in their assessment of the situation. The reality was that the previous Government used taxpayers’ money and disregarded the rules of this House to facilitate republican dogma around the issue of the Oath or affirmation.
Sinn Fein is not the only Irish nationalist political party represented in the House of Commons. The SDLP has representatives elected for Foyle, South Down and Belfast South, who, although seeking to remove Northern Ireland from the United Kingdom, come to this House and make their arguments to that effect. I do not agree with those arguments and I will strongly argue against them, but does anyone seriously believe that they are any less committed to the goal of a united Ireland because they come and sit in the House of Commons, represent their constituents and fight their constituents’ corner? This is a taboo that exists only inside the heads of Sinn Fein schemers, and it is disgraceful that public money should be used to subsidise such self-indulgence.
David Simpson (Upper Bann) (DUP)
I congratulate my hon. Friend on securing this debate. When we look at the economic situation in this country, where families have to struggle to make ends meet, a political party, over the lifetime of a Parliament, is receiving some £500,000. It does not come to this House, does not take the Oath and does not carry out the day to day functions that every other party has to do.
Dr McCrea
I thank my hon. Friend for making such a valid point. We are constantly being reminded that we are in a deep hole economically, yet we find that representative money is without the same scrutiny and accountability that applies to Short money and to every other political party and elected representative. We all know that the Independent Parliamentary Standards Authority has stringent rules for MPs’ expenses. There is a proper accountability, and rightly so. However, unlike every other party in this House, Sinn Fein can use that money for political ends and political purposes, rather than being subject to the accountability of using it for representing constituents.
On the scrutiny of MPs’ expenses, it was interesting to note that one Sinn Fein Member made a single flight to London from Northern Ireland, yet they claimed £18,000 that year for accommodation. I do not know what hotel they were staying in or what champagne they were drinking, but it must have been very expensive. They claimed for one flight and £18,000 for accommodation, yet this House and the scrutinisers did not lift an eyelid in surprise. Of course, we should not be surprised, bearing in mind the other things that Sinn Fein-IRA were up to at that time. It was a cynical ploy, which it has used right up to this present moment.
Pensioners are not able to get appropriate moneys and there are cutbacks in the welfare budget and every other budget, yet we are told we will still play the game for one political party in opposition to every other party. Every other party has to play by the rules of the game in politics, so it is not right that one political party is able to absent itself from that situation. It is a disgrace. It is discriminatory and therefore totally unacceptable. Why should pensioners, young people and the unemployed or people who are endeavouring to get into work find themselves in difficult situations financially when we have a political party walking away and enjoying the fruits of not representing its constituents in this mother of Parliaments?
Sinn Fein also sits in the Northern Ireland Assembly. It says it does that because of its political allegiance to a united Ireland, so it is showing its distaste and objection to the United Kingdom and being a part of a British institution. Let us examine that. Sinn Fein sits in the Northern Ireland Assembly, an institution created by statute of this House of Commons. It is a British institution. The laws passed there, just like the laws passed here, go to Her Majesty the Queen to receive Royal Assent. Sinn Fein Ministers participate in that process on a day-and-daily basis. As a benefit of its participation in the Northern Ireland Assembly, Sinn Fein receives money for party administration and support staff, just like every other party. It takes that money as a benefit of its participation in the Assembly at Stormont—participation that it does not undertake here, yet it is paid the money without representation.
The argument that the special arrangement at Westminster is equivalent to that at Stormont is simply not true. In opposition, the Conservatives drew the same distinction as we do. The then shadow Secretary of State, Quentin Davies, said:
“There is in fact no comparison at all between the position in Stormont and that in the House because Sinn Fein-IRA have agreed to take their seats in the Assembly at Stormont and in the Executive there”.—[Official Report, 18 December 2001; Vol. 377, c. 162.]
Given subsequent developments, and Mr Davies’s departure to the Labour party, I appreciate that some Conservative Members might not want to hear a quote from him, but I believe that he was entirely correct in his annunciation of the party position, and I trust that he and his colleagues still hold to that.
In the run-up to the 2010 general election, the Conservative party made several clear-cut commitments on the continued payment of allowances to Sinn Fein MPs. The previous Secretary of State for Northern Ireland, the right hon. Member for North Shropshire (Mr Paterson), was equally vocal on the issue. In the Daily Mail of 8 April 2009, he said:
“It is completely unacceptable for Sinn Fein representatives, who won’t even sit in Parliament, to claim hundreds of thousands at the taxpayers’ expense.”
Although he is no longer Secretary of State for Northern Ireland, and he might consider that he has been given a higher position in government, he is a member of the Cabinet. Who can argue with his statement? On one of his many visits to Northern Ireland during the European election campaign, he made clear what direction the Conservative party would take on the issue—I ought to know because my constituency was one to which he seemed to pay special attention. He said that
“it is inconceivable that incoming Conservative MPs would vote to continue paying millions of pounds of public money to elected Members who do not take their seats.”
That is a clear statement. There is no ambiguity and no way round it, and there is no justification for his shifting from the position he announced before the election.
David Simpson
Does my hon. Friend agree that Gerry Adams, the leader of Sinn Fein, has clearly stated that there will never be any circumstance under which Sinn Fein MPs will take their seats in the mother of all Parliaments?
Dr McCrea
With the greatest respect, Gerry Adams has said a lot of things. He has said that he was never a member of the IRA, yet he was seen as one of its leading members in the city of Belfast, so we have to be careful with what he has to say.
That highlights something else that is galling to the Unionist community and, indeed, to every law-abiding citizen. There seem to be elected representatives in Northern Ireland, and now even in the Irish Republic, who are treated differently from other Members of Parliament. I suggest that everyone is equally subject to, as well as equal under, the law. That ought to apply to Gerry Adams and to Martin McGuinness; it certainly applies to my hon. Friends and colleagues and to every other Member of this House. As far as Adams, who now sits in another Parliament, is concerned, I would take certain statements from him with a pinch of salt.
Given such a catalogue of publicly stated positions, there can be no doubt as to the stance of the Conservative party, which is the major partner in the coalition Government, on this issue. The chickens have come home to roost. It was easy for the Conservatives to point the finger at the Labour Administration. It was easy for them to go through the voting Lobby whenever a proposal came from the Labour Government, but now the responsibility rests with this Administration and they will not be able to get out of facing up to it. That is what government is all about, and we are told day-and-daily that government is about taking hard decisions. I suggest that this Government have taken many harder decisions than this, on cutting benefits and so on, and they believe that they do so in the interests of the economic well-being of the country. I do not doubt their sincerity or the premise on which they present their case, but if they make such decisions on those grounds, there are no grounds whatever for them to move away from the principle of every Member and every party in this House being equal and being treated with equality.
There were clear and unambiguous statements that an incoming Tory Administration would mean the end of the wasteful and anti-democratic use of public resources. I can imagine the Government spokesman, the right hon. Member for Carshalton and Wallington (Tom Brake), preparing the argument that this is not a Conservative Administration, and that is true. But it is a Conservative-led Administration, and the Prime Minister is a Conservative Prime Minister. He might say that there is a coalition and, as a consequence, some things that were said on the assumption of an overall Tory majority have to be reviewed. The logic of that argument is correct, and it means that we need to consider the matter of the Liberal Democrats.
The Liberal Democrats, for whatever reason, did not adopt a formal position on the issue back in 2001, choosing instead to afford their Members a free vote, and I have not heard or seen anything from the Liberal Democrat leadership to indicate a change in that position. Liberal Democrat Members can vote freely on the matter, and I have no doubt that a great many of them, perhaps even a majority, would be persuaded by the arguments made so eloquently by their coalition partners. I certainly hope that that will be so. The coalition has taken hard financial decisions to try to rescue our country from the economic pit that it finds itself in, so it has to face the hard decision concerning this money.
The logic for introducing the changes back in 2001 was flawed. Not only was it based on handing out concessions to a political party that at the time refused to come up to the same minimum democratic standards as the rest of us, but it served to create two classes of MP and to render as nothing the rules of this House. In practice, it has demonstrably failed. If the plan was to kill off abstentionist politics through financial inducement, it has not worked. The Sinn Fein position is as immovable as it was 20 years ago. Despite the fact that Martin McGuinness can meet the Queen or that Sinn Fein Ministers participate in the institutions at Stormont, Sinn Fein has indicated repeatedly that it would not, even if the Oath or affirmation were removed, attend the House of Commons. Its Members receive allowances from the Northern Ireland Assembly as a benefit of their participation there, and the same logic should apply here. No show should mean no pay. I urge the Government to act in that regard without further delay, and make good their many and repeated public promises on this issue.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate my hon. Friend the Member for South Antrim (Dr McCrea) on securing this debate.
The obligations of Members of Parliament are many. One of the additional onerous tasks on a small number of Members of Parliament, usually one in each party, is to be a treasurer. I say “onerous task” because I had the misfortune of agreeing to have that post foisted upon me many years ago. I have lived to regret it—I mean, never to regret it—ever since.
With that post, of course, comes part of the onerous task of ensuring that the political party’s accounts are supplied, maintained, updated and kept in order on a regular basis. That includes the money known as Short money. I say that because I have a number of years’ experience of knowing how rigorous and assiduous each political party has to be in giving its returns through the Electoral Commission on all income and expenditure, including the money known as Short money.
Each and every treasurer in each and every political party is in that position, with one exception, which is the political party so comprehensively alluded to by my hon. Friend: Sinn Fein. Members should by now know—and if they do not, they will know by the end of the debate—what the representative money was about when it was devised. If we cut through all the red tape and all the diplomatic doublespeak, representative money was about the Government here in Westminster attempting to roll out a green carpet in the House of Commons or a red carpet in the House of Lords—any kind of carpet—in the hope that, at some point in the future, Sinn Fein Members might say, “Okay, guv, the game’s up. We’ll enrol, we’ll sign up, we’ll take the pledge and we’ll come.”
As my hon. Friends the Members for South Antrim and for Upper Bann (David Simpson) have indicated, Sinn Fein has made it clear that it does not intend to change its position. Sinn Fein has made numerous claims that have been abandoned, of course, but it is fairly clear at the moment that it does not intend to abandon that position. Even if it does, what we are suggesting does not run counter to any position it might adopt. We are simply saying that a system should be put in place that represents a level playing field, and that is rigorous and exhaustive for every political party so that no one is exempt and no one can operate under a different set of rules.
Sinn Fein has for many years had an abstentionist policy, to which it is entitled. If Sinn Fein puts that policy before the electorate in a number of constituencies and Members are legitimately returned on that basis—however illegitimate all the other things that Sinn Fein stands for may be—it may legitimately say, “We were elected on an abstentionist ticket, and therefore we are not going to take our seats.” It should be spelled out in advance that, if a party does that, it will not receive money for which an integral part is attendance in the House to carry out duties here. If Sinn Fein wishes to forgo that money, that is a matter for the party.
We all know that representative money was an attempt to bring Sinn Fein in from the cold. We also know—I more than others—that the rules for income and expenditure for my political party, and all other political parties, are different from those for Sinn Fein, because of the rigorous nature of the rules on accountability for what representative money, the money known as Short money, may be spent on.
We should recall the scale of Sinn Fein’s income, including representative money. According to the most recent accounts submitted by Sinn Fein, the party had an income of £1.25 million in the last recorded year. To give an idea of the pro rata scale of that income, it would be similar to the Labour party having an income of some £35 million and spending about £33 million or £34 million. The difference is that the Labour party would not be spending more than £30 million on employing hundreds of people, many of whom used to kill people, which is what Sinn Fein does. Sinn Fein employs scores of “former combatants.” When Sinn Fein runs out of money to employ people on that basis, as has been the case in the Stormont Assembly, it sometimes tries to employ one of the “former combatants” as an adviser to a Minister until there is a furore and it has to sideline that person and bring in someone else. That is what Sinn Fein uses the money for.
Sinn Fein is a wealthy political party. Indeed, according to the most recent figures in the public domain, it is the wealthiest political party in Northern Ireland. No one should get caught up in some sort of false sympathy and think that such a measure might in some way impinge on Sinn Fein’s capacity to represent people.
Our contention is simple: Sinn Fein should abide by the rules in the same way as everyone else. Abiding by the rules is a concept that, up to 15 years ago, was not really something Sinn Fein could do very well. Sinn Fein did not abide by the rules. It thought, “Rules are for others, not for us.” Sinn Fein now has to abide by rules.
Dr McCrea
I appreciate my hon. Friend’s point, but is it not true that the fact we are having this debate means that, up to this moment, Sinn Fein is not abiding by the rules? The Government are not making Sinn Fein abide by the rules by which every other political party has to abide. The inequality being accepted here runs contrary to many of the other decisions that the Government have taken; they are telling us that there must be equality.
Mr Campbell
That is why there must be a review of the rules of this House. We spent a long time with the Conservative party when it was in opposition before the last election, and with the Government since the election, reminding them of their commitment before 2010 on the need to ensure that people in Northern Ireland had a degree of assurance that moneys were being spent appropriately.
Every Member of this House, from every political party, knows that even perfectly legitimate expenditure and income is questioned and examined by our constituents. If that is the case for rigorously accounted income and expenditure, we can imagine what people are thinking about other moneys that are set aside separately for one party and for one party alone. There is rising resentment in Northern Ireland, and it is not confined to Northern Ireland, because on occasion I have had correspondence from residents in other parts of the UK who are equally annoyed and angry at the lack of accountability that exists for one political party.
Whenever this issue arises—other hon. Members will see this, too—we get correspondence from Sinn Fein Members saying that they will arrive here on sporadic visits to inform people and Members about the situation in Northern Ireland. We had a flying visit a couple of weeks ago by an abstentionist Member to inform other MPs about what was happening in Northern Ireland. Those visits normally coincide with the issue we are debating coming to the fore again. Why is that? It is not just a cynic who would be led to believe that when Sinn Fein Members see the prospect of this special money being reviewed and possibly taken from them, they hop on a plane from Belfast to London, and a hurriedly arranged meeting to update Members is on the cards. People are asked to come along and hear what is happening with the flag protest or the austerity measures. Members are perfectly entitled to ask questions about those issues and be updated on them, but not on the basis of Sinn Fein sporadically trying to justify the moneys it gets.
For that and a number of other reasons, I believe and hope that the Minister will respond by giving some assurance. We use the phrase “hard-pressed taxpayers” lightly, but people are suffering. They are examining each and every aspect of Government policy. They are looking at welfare reform and every pound they spend, as well as every pound the Government spend. When people see an unjustifiable and indefensible position such as this, they say, “The time has come to review, to change and to abandon the special status.”
Dr McCrea
Does my hon. Friend agree that Sinn Fein’s most recent ploy of holding little seminars and little meetings is in many ways an affront to democracy? Over the years, Sinn Fein Members have become used to concession and appeasement whenever they raise their voices, and they feel that, if they raise their voices in opposition to what has been suggested today, the Government will somehow back down again.
Mr Campbell
I agree with my hon. Friend. We know that some of the representative money can be used in a creative fashion. Sinn Fein are masters not only of financial creativity, but of a series of other creative measures. Anyone who denies that Sinn Fein is not just misusing this money, but using it for purposes for which it was never intended, is living in cloud cuckoo land. The time for this matter to be reviewed has long since passed. Time needs to be set aside for a review. Every Member who is elected to this House has to be treated on an identical basis. If we take our seats and make representation, whether it be good or bad, we are judged at the following election by our electorates in our constituencies. If we decline to take our seats and are elected on that basis, we should not get representative money for failing to represent our constituents.
Jim Shannon (Strangford) (DUP)
I congratulate my hon. Friend the Member for South Antrim (Dr McCrea) on bringing this matter to the House. I also congratulate my hon. Friend the Member for East Londonderry (Mr Campbell) on his contribution. Both of them made heartfelt contributions. They espoused the concerns that we all have on this issue.
The issue greatly troubles my party, and it should trouble every party—the Conservatives, the Lib Dems, Labour and all the other parties too. The tremendous scrutiny of expenses is essential for us to be able to stand by every pound that is allocated. It is important for us as parties to account for all that money. It is also important for Sinn Fein as a political party to account for the moneys that it receives in this House.
The issue of Short money being paid to those who do not take their seats has been raised, and I cannot see how any Member of this House can justify the unjustifiable. We in the Democratic Unionist party can use Short money only to carry out parliamentary duties, and rightly so. This matter is of some importance, not only to us as MPs, but to our constituents. I receive regular correspondence about it. Members of my party and members of other parties ask, “When will the Government address the anomaly of Sinn Fein expenses at Westminster?”
David Simpson
Does my hon. Friend agree that not only is there an inequality in this House, where all Members should be treated equally, but an inequality in the press and in the BBC today? If the Democratic Unionist party was identified as doing the things we are talking about, the press would crucify it—it would be the same for every other democratic party—but for some reason they do not touch Sinn Fein.
Jim Shannon
I thank my hon. Friend for that contribution. It is clearly an issue that we all feel particularly peeved and concerned about. There seems to be a double standard when it comes to Sinn Fein compared with every other political party.
The 1999 resolution on Short money did not specifically state that it could not be used by parties who had not taken the Oath. It was understood that, as it was specified for the carrying out of parliamentary duties, those who do not sit in Parliament should not access it. That is clearly the position, and that is where we stand on the matter. The 2008 motion, however, which was specifically for those who do not take their seat, allowed such a party to access the money for its representative business. As I was listening to my colleagues, I thought, “Sinn Fein are the hokey-cokey party.” They are in, they are out and they are shaking it all about. They are in for the money, but they are out for representation. If money is going they are part of it, but then they get outside and they do not want to represent their people here in the mother of Parliaments.
I have had occasion to speak to some Sinn Fein Members when they come here. I spoke to the Deputy First Minister, and I said, “It’s great you’re here. Are you now coming in here to represent your constituents?” and he said, “No, I’m not.” I had occasion to speak to the Member for Belfast West two or three weeks ago on the same issue. He was here expressing concern about benefits and welfare reform, but he was not prepared to express them in the Chamber to try to change the Government’s mind and support those who have concerns about welfare reform. Sinn Fein Members are in when it comes to taking the money, but they are out when it comes to representing the people. Many of us are concerned about that.
It is completely unacceptable that Sinn Fein Members refuse to take their seats and that they use funds for press and publicity that the rest of the Commons cannot use. Where is the parity between Members? Members will be aware that Sinn Fein was the largest-spending political party by a mile in the past year. It spent £1.16 million out of a total of £1.27 million. Those figures are confirmed by the Electoral Commission, which means there is clear support for what I am saying. The Electoral Commission records party political direction and expenditure across the whole UK and compares them.
If Sinn Fein was spending money to carry out its activities in this House for the democratic process, I would understand, but the fact remains that Sinn Fein Members still do not attend this House in the full way that they should. It has five MPs. My hon. Friend the Member for Upper Bann (David Simpson) referred to the £500,000 that Sinn Fein has drawn down, and our concern about that is on the record.
Sinn Fein members do represent their colleagues at the Assembly and on councils, so there is a democratic process that they feel committed to. Since we are all under the democratic process of this House, we acknowledge the status of Westminster and the position of Her Majesty. We also have that in our chambers in the councils back home and at the Assembly, so there is clearly an issue for us there as well.
My right hon. Friend the Member for Lagan Valley (Mr Donaldson) has raised the matter of funds being raised overseas and suggested that it is time it was brought to an end. He has said:
“We have had concerns for some time that Sinn Fein can raise significant sums outside of Northern Ireland and in any review of funding of parties in Northern Ireland this should come to an end.”
Other issues are involved—not just the House expenses that those Members draw down without representing their people, but what they do in other countries. The Political Parties, Elections and Referendums Act 2000 banned donations by foreign nationals. We support that principle and oppose the anomaly that permits a political party to be funded by citizens and organisations from another state. That is not the practice anywhere else in the UK, and the DUP supports it being brought to an end. As well as political allowances for parties, we want to consider the question of funding from overseas.
In 2011 my right hon. Friend the Member for Belfast North (Mr Dodds) raised the subject and made it clear that the practice had to stop. That is why today’s Westminster Hall debate is happening. In 2013, I ask again what has been done to stop the practice in question. What action has been taken and by what date will the issue be addressed? The issue is of some importance to the Democratic Unionist party and all Unionist parties throughout Northern Ireland, but Labour Members are also concerned, and have asked questions, and so are Conservative Members, some of whom unfortunately cannot be here today because of the debate in the other Chamber. They want the anomaly to come to an end. The DUP has brought the matter to the House, but it concerns us all.
Dr McCrea
I appreciate my hon. Friend’s remarks. Would he, like me, be interested in knowing what consultation the Government have held since coming into government? The question greatly exercised the mind of the Conservative party before the election—including in my constituency—and even exercised the Prime Minister, when the Conservatives tried to get someone else, namely Sir Reg Empey, into the South Antrim seat instead of me. Since then, have there been meetings or consultation about the matter with Her Majesty’s Opposition and the rest of the parties?
Jim Shannon
Indeed, we have concerns about the involvement of other parties and their opinions. In response to a parliamentary question the Secretary of State said:
“I have had a number of discussions with representatives of political parties on this issue. These discussions are continuing.”—[Official Report, 29 February 2012; Vol. 541, c. 314W.]
Nothing was done. In response to a question from a Labour Member he replied:
“I have had no discussions with the House of Commons Commission in relation to this issue.”—[Official Report, 30 November 2011; Vol. 536, c. 955W.]
Again, nothing was done. The same Member asked again about donations to such parties, and the reply was:
“We will legislate to deliver this as soon as we can.”—[Official Report, 19 October 2011; Vol. 533, c. 886W.]
There are words but no action. That is the problem we have. Perhaps hon. Members can gauge the frustration that we experience as representatives, when our people regularly bring the issue to our offices and doors and when we meet the Members in question swanning in and out and not making any contribution.
Since 2008 the Government have deplored the situation in which Members will not take their seat and honour the Queen as they should, but will gladly accept the Queen’s head on notes, as has been said. I do not ask for an assurance. I ask for an action—something to say that the current grossly unequal practice will stop. All of us in the House are conscious of the taxpayer, and of what money is available. We must be mindful of taxpayers, as my hon. Friend the Member for East Londonderry said; it is important to stress that. Taxpayers will be happy if the unequal practice stops, and so will every MP who takes pride in their seat, and in being appointed to the seat of democracy, with the privilege it brings. We will also be heartened by the fact that absenteeism will no longer pay greater dividends than involvement, and that more money will not be shelled out for disrespect than for basic respect for the great process that we all work hard to be part of.
Mr Nigel Dodds (Belfast North) (DUP)
First, I apologise for not being here for the beginning of the debate to hear the speech of my hon. Friend the Member for South Antrim (Dr McCrea), as I was taking part in the debate on the Electoral Registration and Administration Bill. That debate is of considerable interest and importance and, if it were not for that, many hon. Members who are in support of the debate here, and of the view that my hon. Friends have put—hon. Members who have told us so, and who would welcome a debate in the main Chamber, to which we will no doubt shortly be treated—would be here too.
I congratulate my hon. Friend the Member for South Antrim on securing the debate. I want to make some brief remarks. As has been mentioned, I raised the issue in Westminster Hall on 30 June 2010. The then Deputy Leader of the House, the hon. Member for Somerton and Frome (Mr Heath), who, like the current holder of the post, is a member of the Liberal Democrat party—said:
“Over the coming months, Ministers will be talking to all Northern Ireland parties to address how to take the issue forward”—
not “if” or “possibly” but “how” to do so—
“in light of the views and clear issues of principle we discussed today.”—[Official Report, 30 June 2010; Vol. 512, c. 253WH.]
To continue the theme that my hon. Friend the Member for Strangford (Jim Shannon) was developing, about there being plenty of commitments, but no action, at business questions on 7 July 2011, the then Leader of the House, who is now the Government Chief Whip, said in response to a question from the hon. Member for Vauxhall (Kate Hoey) about the inequitable situation in which there are two classes of Member, that
“the Secretary of State for Northern Ireland is having discussions with the parties in Northern Ireland”.
For what purpose was he doing so? It was
“with a view to bringing that unsatisfactory situation”—
so it is acknowledged by the Government that it is unsatisfactory—
“to a satisfactory conclusion.” —[Official Report, 7 July 2011; Vol. 530, c. 1661.]
We very much welcome those commitments. That question followed one that I raised in business questions, and have consistently raised on the Floor of the House.
Government spokespersons have on several occasions said that the matter is being discussed, and that it is hoped that satisfactory solutions will be brought forward. Today we want to highlight the need to get on with it, and bring about some kind of conclusion—now that we are more than halfway through the Parliament—and reach a decision. We heard in the debate in the main Chamber about the need for certainty—drawing lines under issues and moving ahead. We heard a lot of talk about equality and fairness, in relation to Members and the constituencies that they represent. People in all parties are concerned about fairness and equality among Members of the House. Some parties may not be represented here today, but it has been made clear in their discussions with us that they do not accept as proper and fair a situation in which, although they are confined to spending parliamentary allowances on constituency and parliamentary work—as everyone accepts is right and proper—under the representative money arrangement, Sinn Fein can spend that money on party political campaigning and activities, without reprimand or possibility of its being taken away. That immediately puts it at a considerable advantage over other parties.
The advantage is not just over the Democratic Unionist party, or other Unionists. Sinn Fein is also put at a considerable advantage over its nationalist rivals for votes, who take their seats in this House. Its nationalist rivals—who, to be frank, are more likely to garner votes from Sinn Fein than we are—are at a severe disadvantage, because they play by the rules. They come here and have to spend their money, in accordance with the rules of the House, for parliamentary constituency purposes. Sinn Fein Members do not have to take their seats, do the work or come here, yet they can spend their representative money on party political campaigning. There is absolutely no justice in it at all.
Dr McCrea
Does my right hon. Friend accept that the Social Democratic and Labour party is indeed at a disadvantage? Although its Members are here in the House representing their constituents, their opponents in Sinn Fein can use the money from Westminster on political propaganda against them. Is it not also true that nobody will be discriminated against if action is taken on the policy of paying allowances? On the contrary, we are asking for equality and balance to be restored.
Mr Dodds
I agree, and that absolutely backs up the points that I was making.
Sinn Fein says in a statement published this afternoon that this debate and the efforts of Members from different parties to raise these issues in the House are
“an attempt to disenfranchise our constituents, and it’s unacceptable”.
That is utterly preposterous. No attempt whatever is being made to disfranchise the constituents represented by Sinn Fein; it is Sinn Fein Members who are disfranchising their constituents by not representing them properly in the House to which they were elected. They are the ones who chose not to take their seats.
Sinn Fein Members could take their seats and have access to all parliamentary expenses and allowances on the same basis as everybody else, but they have chosen not to. Ultimately, if they are saying, “We are elected on the basis that we abstain, and on principle we are not going to take our seats,” one would think that the same principle would extend to not taking the money either, but obviously there are limits to principle when it comes to Sinn Fein.
Mr Gregory Campbell
Does my right hon. Friend share my sense of irony that one of Sinn Fein’s magic mantras is equality? That word is normally used in any debate in which they engage, yet they seem to want to shy away from this debate. That is what we are demanding: equality in how moneys are given out in the House and how they are reported and accounted for.
Mr Dodds
My hon. Friend is absolutely right. Equality is one of their great mantras, and we hear it over and over again, but in this situation, they want a unique position, in which they have a special class of MP who can avail themselves of the moneys without taking their seats and enjoy an advantage over everybody else in the use of those moneys. It is a totally iniquitous position. This is not about disfranchising anyone in Northern Ireland. It is Sinn Fein who disfranchises its own constituents by not coming here or engaging in parliamentary work.
Sinn Fein has long since conceded the point of principle. Its members are prepared to take their place in the Northern Ireland Assembly, accept posts as Ministers there and enact legislation under the Queen. They are prepared to take their seats in Dail Eireann and to be part of structures that they once denounced as separatist, partitionist and illegitimate. They are prepared to take their seats in the European Parliament and denounce the European Union, but uniquely, they will not take their seats here, although they want all the financial advantages and privileges that go with it, and indeed special privileges and advantages. This is not about principle and it is not about disfranchising anyone. For us, it is about equality and fairness.
To put the latest figures on the record, in the year 2005-06, Sinn Fein Members received £35,163 in representative money. In 2006-07, they received £86,245; in 2007-08, £90,036; in 2008-09, £93,639; in 2009-10, £94,482; in 2010-11, £95,195; in 2011-12, £101,004. In the current year, 2012-13, they will get another £105,850. By the end of this financial year, they will have pocketed almost £750,000 since the introduction of the money in 2005, for activities not necessarily to do with parliamentary, constituency or any other type of work. They may have spent it on party political campaigning.
Taxpayers throughout the United Kingdom are entitled to be outraged at that abuse of public money. We have been told that it will be addressed, and it is now time for the Government to take action. We look forward to hearing when that action will happen.
Angela Smith (Penistone and Stocksbridge) (Lab)
Sir Roger, it is a pleasure to serve under your chairmanship. It is not the first time, and I hope that it will not be the last.
I congratulate the hon. Member for South Antrim (Dr McCrea) on securing this debate, and on his clear and comprehensive exposition of the history and background of the topic. I also thank him for his passionate articulation of his strongly held views on the matter, which were echoed by the hon. Members for East Londonderry (Mr Campbell), for Strangford (Jim Shannon) and for Belfast North (Mr Dodds). It is worth putting on record how consistently Democratic Unionist party Members have presented their arguments and their case.
The measure to provide representative money was introduced by the previous Government in 2006 as a result of negotiations with Sinn Fein on a range of issues. Since then, we have made great progress in Northern Ireland, and despite the scenes that we have seen in the last few weeks, the political landscape has changed dramatically. DUP and Sinn Fein Ministers have sat together in a power-sharing Executive for six years. Policing and justice is devolved, and support for the Police Service of Northern Ireland is required of all parties in the Executive.
Jim Shannon
There is no better illustration of how the landscape has changed in Northern Ireland than Liam Neeson’s comments yesterday on receiving the freedom of the borough in Ballymena. He thanked the DUP publicly for our contribution to making life in Northern Ireland better.
Angela Smith
I pay tribute to the efforts made by all politicians, including those from the DUP, to make life better in Northern Ireland. One can only hope that the peace process continues and progresses as it has done in recent years, despite the problems experienced in the past few weeks.
Much, too, has changed in the House. How public money is used has never been under greater scrutiny. MPs’ allowances and funding for opposition parties are carefully monitored, as is right. It is clear that representative money is an anomaly that needs to be looked at. Our view is that it is a matter for the House and must be decided by the House.
The DUP has consistently argued for the removal of all moneys paid to Sinn Fein and its MPs. However, this debate focuses on representative money. Sinn Fein will receive more than £108,000 in public money in the form of representative money in the current financial year, in addition to the Members’ allowances to which each of the five MPs are entitled. Its Members do not receive a salary, of course, but it is important that there is an equal playing field among opposition parties in how financial support for their work is calculated and what activities they can use such money for.
In June 2010, the then Deputy Leader of the House, the hon. Member for Somerton and Frome (Mr Heath), said that the Government would look into the issue and discuss it with the Northern Ireland parties. The Prime Minister has repeated that commitment inside and outside the Chamber since then, as has the Leader of the House. It is clear that the DUP’s patience on the matter has been tested. The Government should indicate where they are and how far they have progressed in reviewing the situation, as they said they would.
We believe that all Members should take their seats and play a full role in the business of the House. Representative money was introduced in a different political context, both in Northern Ireland and in Great Britain. It is right that it should be looked at to ensure that it meets the standards set by this House and demanded by the public.
The Deputy Leader of the House of Commons (Tom Brake)
It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for South Antrim (Dr McCrea) on securing this debate, and I congratulate the hon. Members for East Londonderry (Mr Campbell) and for Strangford (Jim Shannon), the right hon. Member for Belfast North (Mr Dodds), and the hon. Member for Penistone and Stocksbridge (Angela Smith) on taking part.
The hon. Member for South Antrim said that there was an important debate going on elsewhere today, but the debate in this Chamber is equally important. He made his representations in a calm, focused manner. He encouraged me perhaps to speak for Conservative Members when they were in opposition and for a former Conservative Member who defected to the Labour party. I am not particularly well placed to do that. In the debate in the main Chamber, the Leader of the House was asked to comment on the Liberal Democrat manifesto, but felt unable to do so. I am not in a position to comment in any detail on what Conservative Members may have said in opposition.
The hon. Gentleman mentioned the audit that applies to parties’ financial expenditure, as did the hon. Members for East Londonderry, for Upper Bann (David Simpson) and for Strangford. If hon. and right hon. Members have suggestions about how improvements could be made to that audit process, I am sure that the Government would be happy to ensure that they were passed on to the appropriate place.
Mr Campbell
So that the Minister is not under any misunderstanding, we are not asking for any adjustment to how the representative money is monitored and scrutinised. We want a level playing field, so that all Members and parties in this House are treated the same.
Tom Brake
I thank the hon. Gentleman for his intervention. I understood the point that he and his colleagues made.
In an intervention, the hon. Member for South Antrim asked what meetings had taken place. I confirm that my right hon. Friend the Secretary of State, her predecessor and ministerial colleagues have discussed this issue on a number of occasions with representatives of the party, both in the House and in the Northern Ireland Assembly.
In passing, in his willingness to take on financial responsibilities for his party the hon. Member for East Londonderry is a braver man than me. In my experience, that normally involves people taking out their own cheque book to cover the difference, but I hope that is not so for him.
The right hon. Member for Belfast North mentioned that in a previous debate in this Chamber, my hon. Friend the Member for Somerton and Frome (Mr Heath), then Deputy Leader of the House, gave certain undertakings. I hope that, at the end of the debate, the right hon. Gentleman will feel that we have made some progress. I should like to put some things on the record. It may be helpful for me briefly to set out the financial assistance available to opposition parties, specifically those whose Members have not taken their seats, without going over too much ground that has already been covered.
Short money for opposition parties in the House of Commons was introduced by resolution of the House in 1975 to assist opposition parties in carrying out their parliamentary business. Although that is not defined precisely, the money is used largely for the employment of research staff and support to the Whips’ Offices. In addition, Short money is used for funding for opposition parties’ travel and associated expenses, and funding for running costs of the office of the Leader of the Opposition. Levels of funding are calculated with reference to the number of seats won at the previous general election, with a sum for the number of votes gained by the party. I had wondered whether other parties from Northern Ireland might attend, to ask why they were not entitled to that funding. In the House of Lords, Cranborne money, the equivalent of Short money, was introduced in 1996. Hon. Members know that Short money is available only to parties whose Members have taken their seats, so Sinn Fein is not eligible.
In July 2005, the IRA formally announced an end to its armed campaign and undertook to pursue its aims by exclusively peaceful and democratic means. That paved the way for the provision of a new representative allowance payable to Members not taking the Oath, which is the subject of the bulk of this debate. On 8 February 2006, the House passed a resolution providing financial assistance to such Members towards expenses
“wholly, exclusively and necessarily incurred for the employment of staff and related support to Members designated as that party’s spokesmen in relation to the party’s representative business.”—[Official Report, 8 February 2006; Vol. 442, c. 897.]
Expenditure is audited in the same way, whether it is Short money or representative money. The term “representative business” is not specifically defined, although it is understood to include expenditure on press, publicity and related purposes. The sums provided are calculated on a similar basis to, and can be seen as an equivalent of, Short money. The right hon. Member for Belfast North set out the expenditure incurred by Sinn Fein.
In the context of this debate, it is important to note that both this House and the political situation in the Northern Ireland have changed significantly since the debates of 2001 and 2006. I know that all hon. Members would acknowledge that. In Northern Ireland, Sinn Fein Members play a full role in the Assembly. Despite attempts by dissidents to undermine the peace process, Northern Ireland’s devolution settlement has set it on a political path. Sinn Fein has accepted the consent principle set out in the Belfast agreement, which states that all parties
“recognise the legitimacy whatever choice is freely exercised by a majority of the people of Northern Ireland with regard to its status”,
and that
“it would be wrong to make any change in the status of Northern Ireland save with the consent of a majority of its people”.
It is true that Sinn Fein is elected on an abstentionist platform, so the electorate are well aware of its stance on taking seats and vote for it anyway. Nevertheless, the Government’s view, as the Prime Minister said in January 2011, is that
“we should be aiming for all Members who are elected to take their seats in this House.”—[Official Report, 26 January 2011; Vol. 522, c. 290.]
It is the Government’s view that the issue of representative money for parties that do not take the Oath is primarily a matter for the House itself to resolve.
In 2001 and 2006, the previous Government introduced motions to facilitate decision and debate. In 2010, this Government introduced proposals from the Wright Committee to establish a Backbench Business Committee, giving Back-Bench Members direct access to the scheduling of business on the Floor of the House. When my predecessor as Deputy Leader of the House responded to a debate on this issue in June 2010, which was mentioned earlier, the Backbench Business Committee was in its infancy, having elected its Chair only the previous week and not having met to schedule a debate. It was right then that the Government decided that at such an early stage it was not appropriate to ask the House to come to a swift resolution. The Backbench Business Committee is now an established, successful part of the House of Commons and has scheduled debates on a wide range of issues that might otherwise not have come to the Floor of the House.
The hon. Member for South Antrim may wish to consider approaching the Backbench Business Committee to demonstrate that the House should come to a view on this issue, on which there may well be a range of opinions that would benefit from being debated and, if appropriate, voted on.
Dr McCrea
I appreciate the attention that the Minister has given to the matter in his speech, but the Government cannot abdicate responsibility. They should be leading. There is an inequality among Members of the House which has been acknowledged by everyone, as enunciated by the Prime Minister and others for some time. Surely it is time for decisions, with Government leading rather than relying on a humble Back Bencher to bring the issue to the Floor of the House of Commons.
Tom Brake
I thank the hon. Gentleman for his intervention, but the agreement to provide representative money to Sinn Fein Members was made through a resolution of the House. He should go to the Backbench Business Committee because, in my experience, it is now in a position to provide for debates promptly. If it looked favourably on his approach, I am confident that the debate could be held soon after he sought it.
The subject generates strong views and is clearly an important matter of principle. Hon. Members have used the short debate today to set out some of those views. I hope that, in providing some background and a route open to Members for achieving a resolution, I have been able to assist hon. Members who wish to make progress.
David Simpson
I have listened to what the Minister has said on the different points, but, as the Minister, he must accept that the situation is intolerable and needs to be addressed as soon as possible.
Tom Brake
The hon. Gentleman and his colleagues have made some forceful points. I hope that, in responding to the debate, I have provided a route by which he and his colleagues could ensure that the matter was debated in the House, which would allow for the views of all Members to be expressed. Indeed, depending on how the motion was presented, it could be something on which the House might vote.
Dr McCrea
From what the Minister is saying, the Government are clearly not going to take the issue to the Floor of the House themselves. I will certainly be making the approaches suggested, but the notion of a Government who pride themselves on enunciating the principle that inequality must be done away with does not sit well with a Government who are afraid somehow to bring the subject of our debate to the Floor of the House. The Government should act, because every Member ought to have equality and, equally, ought to be treated fairly.
Tom Brake
I have noted what the hon. Gentleman has said and his request that the Government should undertake the matter. I will ensure that that is communicated appropriately, but he and his colleagues have the opportunity to bring the subject to the attention of the House by using the Backbench Business Committee, which has been successful in bringing often controversial matters up for debate. I hope that he will use that opportunity.
Young People (Employment and Training)
(11 years, 10 months ago)
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Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
It was, as ever, with pleasure and surprise that I realised that I had secured a debate on youth unemployment and the raising of the participation age, in which subject hon. Members will know that I have a long-term interest. As responsibility for this area stretches across the Department for Education, the Department for Work and Pensions, the Department for Business, Innovation and Skills and, as ever, the Treasury, it is a complicated matter. I want to say a few words to introduce the debate, and to emphasise that I do so in a non-party political way.
We are at a crossroads for so many young people in our country. All parties agree that we want the very best outcomes for young people. We do not want, as a think-tank that reported this morning on youth unemployment said, a lost generation of young people in our country. We all want to achieve at least as well as the very best countries, particularly in Europe.
The last investigation I carried out as Chair of the former Select Committee on Children, Schools and Families looked at the problem of NEETs—young people not in education, employment or training. Our most convincing experience of how to handle that challenge was when the Committee went to the Netherlands, where we found better organisation and an emphasis that young people do not automatically gain social benefits until they are almost into their mid to late 20s. That emphasis on the need for every young person to be in education, training or some form of work experience is absolutely the way to tackle youth unemployment.
It was clear from our visit that an holistic approach is needed. Young people in the places we visited near Rotterdam would pitch up at a centre where they were assessed medically and their aptitude was rigorously tested. In one wing, there were private trainers, state trainers and people from colleges and education, while in the other wing there were employers—the presence of employers is particularly important—and private sector trainers. In addition, there were seminar rooms where, with professional leadership, these young people and those who used to be like them investigated how to get into further education or work.
I asked for this debate because at the moment this country has a fragmented approach, not a holistic one. I want to ask some challenging questions. Is 14 the new 16? What does it feel like to be a 14-year-old moving through the education system today? What choices does a 14-year-old—
Sir Roger Gale (in the Chair)
The start time should have been 4.19 pm, so I propose to add 13 minutes of injury time.
Mr Sheerman
Thank you, Sir Roger. Some of us were told emphatically by a normally well informed source that there would be two votes, one after the other. We were obviously misinformed. I will get back to the question that I finished on, if I can catch my breath.
What choices does a 14-year-old have to make about their education, training and future plans? One piece of research, which I will come back to in a moment, suggests that the countries that do rather better than the United Kingdom are those with well formulated dual education systems. What does that mean? It is not rocket science; it means that there is not just one trajectory. In our country, it is far too often the belief that there is only one path that anyone cares about.
Mr Andrew Smith (Oxford East) (Lab)
I am grateful to my hon. Friend for giving way and it may give him a little time to catch his breath. I am very grateful to him for introducing this enormously important debate, especially with all the expertise that he brings to the subject. Does he agree that, especially with the increasingly free-for-all institutional arrangements that we have with our schools, whereas there is at least some common framework of expectation for academic achievement—five GCSEs at grades A to C and all the rest of it—there seems to be nothing equivalent on the vocational level? Does he further agree that that is particularly damaging for those youngsters whose self-esteem is perpetually knocked back by academic underachievement and that therefore urgent attention needs to be given to good vocational options?
Mr Sheerman
My right hon. Friend is absolutely right. I was talking about that rather obscure way of describing it—a well formulated dual education system. It is right to say that, too often, our education system is predicated on the expectation that children will go to school, go through the primary and junior years, go into secondary education at 11, take their GCSEs at 16 and be successful, and go through to the sixth form and get the qualifications to go into higher education. That does not apply to the majority of young people in our country yet. The majority of our young people do not actually do that, yet if people listened to most of the chattering classes, they would expect that that was the case.
The rest of the young people in our country have a much less certain future, only because we—all parties and all Governments—have tinkered with and changed the alternative. We have not changed the route through to higher education that dramatically, although there has been some change in nuance and there are some changes going through now. However, the fact is that we have been frantically trying to find ways in which to engage young people in meaningful further education, whether that be in colleges, by which I mean FE colleges, or whether it be through young people going into apprenticeships, going directly into employment—employment with training or, sadly, without training—or, of course, going into the hands of private trainers. There has been a range of opportunities.
The private training sector is very underestimated. I know the private training world very well. Unlike most parts of the education system, there are brilliant private sector educators and trainers, and there are some average ones and some not quite so good, but the market in private training is such that if someone does not perform, they are more likely to go out of business or see their business shrink quite dramatically than if they are running a college. That is the truth of the matter.
There is a cold wind coming through the education system and particularly in relation to the area that we are talking about today—the employability of young people and their getting the right skills for employability. That suggests that increasingly we must have greater transparency in the outcomes of the alternatives and accountability for what is delivered, whether it is the private sector through the Work programme, Jobcentre Plus and anything that it contributes, or what colleges do.
We all have to be very conscious of the last annual report of the chief inspector of schools. I was surprised that there was such a critical evaluation of the quality of FE in our country, which I felt, as a former Chairman of the Select Committee, was a slumbering giant. I was recently on the Skills Commission, looking at specialism in further education. Where further education is good, it is really good. We need only look at Newham and Hackney. We need only look at the brilliant experience in Cornwall. A fantastic-quality education is being delivered off six sites. People there know absolutely what the labour market is like and are engaging absolutely with small and medium-sized enterprises, not just the easy big ones, and delivering relevant skills training.
Caroline Dinenage (Gosport) (Con)
I commend the hon. Gentleman for the incredible work that he has always done in wanting to improve the life chances of our young people. Does he agree that there has been a tendency in recent years for the FE sector almost to compete for the low-hanging fruit, rather than seeking ways in which it can engage those who are not in education, employment or training by offering innovative and inspiring courses?
Mr Sheerman
I absolutely agree with the hon. Lady. There is no doubt that the blemish on the record of our country, under several Governments, has been the inability to deliver high-quality education and training to about 25%—it is sometimes as high as 30%—of the population. They are a lost generation in many ways.
How do we have a system that allows so many children to underperform in primary school? We can predict by the time they are 10 that a significant percentage will never get the GCSEs to take them into a fulfilling career. By then, all the odds are stacked against them. What have we done wrong in primary school education? It is the new frontier. More people will look at the quality of primary education outcomes over the next few years, especially given the enormous pressure on places due to the boom in population growth. There will be a crisis in primary education. I am looking at the Minister, because he must know that.
We are not talking about primary education today, but when one goes into schools, and I still go into many schools over the year, every head says that they can predict NEETdom—the likelihood of a child becoming not in education, employment or training—very early, as the child emerges out of pre-school and into the early years of primary education. That is how challenging the problem is.
I am not sure, Sir Roger, how much time we have left for the debate.
Mr Sheerman
How much time is left in the debate? I am being tentative, because I do not want to speak for too long.
Sir Roger Gale (in the Chair)
That was the issue under discussion, which is why I was not paying attention. I am terribly sorry. I do not want to be ungenerous, so due to the interruption, the hiatus and some confusion over whether there would be a second vote, if the hon. Gentleman takes no more than another five minutes and we finish the debate at 4.45 pm, that would be fair.
Mr Sheerman
Thank you, Sir Roger. I shall carry on the journey.
At 14, a young person is likely to be in school and studying full time. However, they could also enrol at a university technical college, study full time at a further education college or go to a studio school. Their older sibling may be starting an apprenticeship and their other sibling may be starting a different sort of apprenticeship —one in a different sector and perhaps of a different length—or a traineeship. What should the 14-year-old do? Should they stay in school or choose another option? What support are they given to make that choice? Are the options of equal value? Does each lead to a decent job? What happens if a young person chooses one option, changes their mind and wants to transfer?
At a time of record youth unemployment, the educational choices made by young people have never been more important. At the same time, the participation age is rising to 17 by September and 18 by 2015. The structures and institutions that make up our 14-to-19 education system are not evolving but being radically reshaped in design. That gives us a problem. It is a difficult path. There are no clear, simple pathways to progression.
This is the only party political bit of my speech: the Government seem to have given up on careers information, guidance and advice. They have more or less said, “If you want that sort of thing, it is up to a school or you do it on the internet.” I was on the Skills Commission inquiry into careers information, advice and guidance, and about 17% of young people were using the internet to access such information then—that percentage is probably in the 20s now. All the research shows that the key to getting through the pattern of complex choices is face-to-face guidance from a human being with experience, knowledge and networks.
I recently talked to a head of history in a school, who said, “I have just been asked to look after careers. I have no history of knowing about careers. I’ve had two interviews, which said, ‘Go into that classroom and show us you can teach.’ I know nothing about choosing a career, but I’ve been asked to teach careers.” Careers guidance is an important profession, but we have got rid of the system. If we do not do something about that, we will be in grave danger.
Raising the participation age means that we face a fundamental change. There are two choices: ignore it and fill schools with people who do not want to be there, or proactively ensure that when young people stay on at 17 and then 18, they are given opportunities for high-quality work experience. I have never been one of the naysayers about work experience. It is important. Having four brushes with work experience at school increases the likelihood of a person getting a job by 10 times. Young people at those ages must have opportunities for good traineeships and apprenticeships. Most of the good apprenticeships in Holland, Germany and the Nordic countries last three years; our average is one year.
The debate is a little chaotic for all sorts of reasons, but my plea in the truncated time available is about quality. We must ensure that we stop the party political shouting match and agree that we want our young people up to 25 never to be unemployed. They must always be in education, training or doing work experience, and should not be living on the margins of society on tiny bits of benefit, otherwise we will have intergenerational worklessness for the foreseeable future. Our young people should not be forgotten. We must deliver high-quality guidance and ensure that our country can be proud of what every young person, whatever their background, achieves.
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
I am grateful for the opportunity to set out what the Government are doing to tackle NEETs in the context of raising the participation age. I am particularly pleased to hear from the hon. Member for Huddersfield (Mr Sheerman). He has experience and a long-held passion. He was Chairman of the Select Committee on Education and Skills in the previous Parliament and clearly has a huge amount to say. It is important and valuable for young Ministers such as me to listen to what he has to say. I strongly agree that there is cross-party consensus on tackling youth unemployment, which rose too much in the good years and, although it is still far too high, is thankfully now falling.
The only point of partisan contention was the rather disappointing part about information, advice and guidance. The new duty on schools to provide independent and impartial advice, the age range for which has since been extended, came into force only in September and is now in place. It did not replace a system. The Connexions system was widely regarded as a failure. It is incumbent on us all to ensure that the information, advice and guidance duty on schools is in place. Misrepresenting it, as the hon. Gentleman did—for party political reasons, he said—is unhelpful, because this is an area with broad party political support.
I shall take the opportunity to answer the series of questions the hon. Gentleman raised. I will try to get through as many of them as possible, but I am happy to answer them all in more detail if I cannot get through them in the seven or eight minutes I have left. The debate about the future of 16-to-18 education takes place in the context of raising the participation age, which was set out in legislation in 2008 under the previous Government and which we are taking forward. Since 2009, participation in education and work-based learning has risen from 78.8% to 82.2%. It is going in the right direction, but we must ensure that the tools are in place to make it go further. I shall touch on six areas where we are taking action to achieve that aim.
The hon. Gentleman rightly mentioned apprenticeships and their value and importance. Doug Richard’s recent review of apprenticeships puts employers in a central role, setting standards, overseeing testing and becoming more demanding purchasers of training. We can all sign up to and agree with that. He wants a shift from what he saw as a box-ticking assessment to having clear standards towards the end of an apprenticeship, accompanied by a more open and innovative training market, with greater freedoms in how people are trained and greater emphasis on the outcome. I am very attracted to that model, which builds on some of the principles being tested through the employer ownership pilot. We will respond formally to the Richard review in the spring, and we will consult employers, educators, providers and apprentices, but we welcome the review’s direction of travel.
We know that, as apprenticeships become more rigorous, many young people are highly motivated by the prospect of work, but need support to get into it. I strongly endorse the hon. Gentleman’s support for work experience. The statistic that four episodes of work experience lead to a 10 times greater chance of getting a job was new to me; I am interested in the analysis behind that and want to know more about it.
The idea behind having a high-quality apprenticeship programme is that, as employers often tell me, young people lack the right skills and attitudes to succeed in the application process. When they have to compete against adults for jobs, they risk being passed over because they do not have such skills. Traineeships will support a significant number of young people into apprenticeships. We are consulting very broadly on their design, but our aim is for them to be available for young people from September 2013. They will offer a combination of extended work placements, work skills and English and maths, together with other flexible training and support to suit individual needs.
Caroline Dinenage
I completely endorse everything that the Minister says about building links between business and students, which will give students much more experience of the real world. I wonder whether, like me, he was very impressed by the “We made it” school exhibition earlier today? It has encouraged young school kids—often from year 9 upwards—to get involved in innovation and invention to build the entrepreneurs, engineers and inventors of tomorrow. We should encourage more such projects.
Matthew Hancock
I am extremely excited by that project and many similar ones that are springing up. Part of the duty on schools to give information, advice and guidance to that age group is to encourage inspirational people to get into schools to show what they can do with their life, and to motivate pupils by bringing a plethora of opportunities and those from different industries face to face with them, so that they can understand what is available.
Mr Sheerman
The only point that the Minister and I have fundamentally disagreed about is that if a school has no independent voice with experience about careers information, guidance and advice, all the emphasis is on keeping children in school, because bums on seats means income and money: if they go off to an apprenticeship or anywhere else, the school loses money. There is a terrible agenda in schools and colleges to keep children on one track, which is often not the one that is good for them.
Matthew Hancock
There is a duty on schools to provide independent and impartial advice. Ofsted is conducting a thematic review of how that is being implemented, which will report in the summer, and I shall look closely at its outcomes.
In my remaining minute, I will touch on the strengthening of vocational education and further education through a new FE guild and through stronger intervention in failing colleges, which is an important step, and on the introduction of progression through vocational education by ensuring that the highest quality vocational qualifications are supported and recognised. Those will include a Tech Bacc to ensure that, for students at 18, there is a high-quality and well-recognised suite of qualifications. When vocational education rightly becomes as rigorous and demanding as academic education, it will be seen as on a par with academic education, and that is what we hope to achieve.
I welcome this debate and the insights of the hon. Member for Huddersfield. I am sure that there can be plenty of cross-party collaboration to improve the life chances of our pupils and young people in this country for many years to come.
Sir Roger Gale (in the Chair)
I thank both the Minister and the hon. Member for Huddersfield (Mr Sheerman) for their understanding. I am sad that the debate has had to be concluded in this way, but that is owing to the business of the House, and I am afraid that we all have to live by it.
Council Tax (Benefit Claimants)
(11 years, 10 months ago)
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John Hemming (Birmingham, Yardley) (LD)
I am pleased to serve under your chairmanship, Sir Roger, and I thank Mr Speaker for allowing such an important debate.
A single person on jobseeker’s allowance or income support gets £56.25 a week if they are under 25 or £71 a week if they are over 25, but the Welfare Reform Act 2012 means that those people’s income will fall about 56p or 71p behind inflation next year. Some councils are proposing to charge them £3.55 a week, or even more, for council tax. Birmingham city council intends to ask for 20% of the full amount from people on a subsistence income.
The financial position in western countries is bad. Between the fourth quarter of 2011 and the fourth quarter of 2012, UK GDP grew from an index of 102.8 to 102.9. People who have not looked at the source data think that the economy flatlined, when it in fact crawled up a single tenth of an index point, but the consequences are much the same. I have argued for some time that the high price of oil, and hence the high price of energy, will reduce economic activity. Unless we see a material reduction in energy prices, we will continue to have a stuttering economy.
That affects the public finances, because tax revenue is anaemic and more people are out of work. To keep sovereign debt interest rates under control, we need to control public spending. Unless there is a very high economic spending multiplier, additional spending will not result in a sufficient increase in tax revenues to allow a reduction in borrowing. Little of the fiscal debate concerns the key issue that we are in fact borrowing to keep up revenue spending, and that there is no space for additional spending. Furthermore, we must reduce Government spending to reduce the deficit and show sufficient commitment to keep gilt interest rates down. It is important to remember that every one percentage point on gilt interest rates increases costs by more than £10 billion a year in additional cuts or additional taxes.
The welfare bill cannot be immune to savings, although the £3 billion-plus arising from the 2012 Act is small in comparison with the deficit. I supported that legislation, although I am concerned about what will happen to the cost of living, and we may have to revisit that either if there is greater than expected economic growth—that currently looks unlikely—or if the cost of living goes up by more than expected.
Historically, local government had a great ability to increase central Government financing merely by putting up the council tax, because a major proportion of council tax was paid by central Government through council tax benefit, with an increase of the council tax resulting in an increase in central Government funding. The total central funding was around £5 billion; in Birmingham, it was about a quarter of council tax revenues.
We needed to put tight controls on central Government spending, but there also needed to be a change in the relationship between councils and the central Government in the operation of council tax benefit.
Sir Roger Gale (in the Chair)
Order. I am sorry to interrupt the hon. Gentleman. He does realise that he can speak until 5.15, does he not? The time has been extended.
John Hemming
Thank you, Sir Roger. I am trying to ensure that I can make my speech and allow time for interventions, but I will slow down a little.
On council tax benefit, it may be that that relationship can be changed, but I would expect it to be needed for at least a decade. Any additional funding could be only by discussion, not through automaticity, as has previously been the case. The old system gave people such as Sir Albert Bore a local hand in George Osborne’s central Government pocket.
Thereafter, local councils will have the difficulty of a 10% cut in that support, but they will have the ability to raise additional costs from empty properties, flexibility as to how to provide support for people on lower incomes and the offer of grant support, which would be £2.1 million for Birmingham. There is an argument that it is a good idea for everyone to contribute something towards local government spending. A contrary argument is that it is silly for all of someone’s income to come from benefits and for there also to be an additional tax transaction.
My own view is that we need to look at things from the perspective of someone on £56.25 or £71 a week after rent. They have certain fixed costs, such as water and energy bills, for which there is no support. Without a phone, such a person will have more difficulty getting a job. I was uncomfortable about their falling behind inflation by 56p or 71p, but Labour is proposing to charge those in band H—some people in band H are on benefits—up to £8.50 a week in Birmingham. The food budget is about £20 a week for somebody on £71 a week, and Sir Albert is asking for more than a day’s worth of that budget for the council. Furthermore, food costs are expected to increase and energy costs do not look as though they are on the way down.
It is true that the average stay on JSA is about four months, but we must have a system that enables everybody to cope. I accept that some people have no recourse to public funds. We cannot say with certainty that everybody who cannot get a job in 12 months is a scrounger. There is a baby and bathwater problem—if we make the system too tough, we start hitting a lot of people who are trying hard to get a job and just find the economic situation too tough.
The good news, if it can be called good news, is that the courts will only attach benefits of up to £3.55 a week—5% of the 25-plus JSA figure—for council tax and so on. Hence, in the end, the council can only get £3.55 a week, but that is five times the cut that the Opposition opposed last week. The figure of £3.55 a week includes the £65 summons fee. Hence on Birmingham’s figures after collection costs, there would even be a cash shortfall for people in band A. The council has not taken that into account in its calculations.
It is worth looking at the figures behind the calculations. In 2012-13, Birmingham expects £88.2 million of council tax grant, and it is likely to get £79.5 million in 2013-14. That is a shortfall of £8.7 million. Using a 98% collection rate for the new charges, the council can get £6 million from additional empty homes charges, with only an 80% collection rate on the 150% charge.
The council is offering a grant of £2.1 million, which leaves a shortfall of £600,000. That can be covered by changing the rules on backdating, which will potentially bring in £883,199. In any event, that allows the council to cover the costs of the cut without charging people on JSA a penny. The Government grant allows a charge of between zero and 8.5%, and I believe that the passing of the Welfare Bill justifies the zero charge.
We then come to the sting in the tail of Sir Albert Bore and Birmingham Labour’s approach on charging people on JSA council tax. They put out a misleading consultation that argued that they should keep support costs within the level of Government funding. That means taxing poor people to pay for benefits for the poor. They estimate a 1.45% increase in the cost of council tax more generally, an increase of £1.3 million. The real sting in the tail, however, is the taxing of a “contingency” figure of £882,316 on those people on JSA.
The absurdity of such a policy is obvious in the long term. It will require a further increase in the proportion of tax on those on JSA for each year that the council tax is increased by 1.45%. However, the key is that we should ask for the burden to be shared, not simply hit those people on the lowest incomes with a tax to pay for people who also have low incomes. Yes, that does mean that somehow the cost of £1.3 million should be found from the general fund. Furthermore, the contingency risk, which could go either way, should be borne by the general reserves. However, the general fund is getting an additional £1.4 million from an increase in the tax base in any event.
Sir Albert, in his “jaws of doom” graph, says that inflation will go up by £18 million from £8.2 million in 2012-13 to £26.2 million in 2013-4. He has recognised that that is too high by more than £5.3 million, but there is still an increase of £12.7 million. That is more than a doubling in the council’s assessment of inflation and easily allows the £1.3 million needed to avoid taxing the poor to be found.
There is a problem with low pay. The biggest problem is the driving of wages down towards the minimum wage and it may be worth having visas for Romanians and Bulgarians from 2014 to reduce that effect. However, Sir Albert Bore’s “jaws of doom” graph suggests a cost to the council of £11.5 million in 2016-17 for increasing the pay of the employees of contractors. That is a nice thing to do, but when we are taxing the poor—including those people affected by that increase—in part to pay for it, that has to be questioned.
Those on the minimum wage are not paying council tax, and Labour’s proposals would increase their costs also by the full amount of 20% of JSA. Given the wage increase and the tax increase, someone in band C would get an additional £28 a week after tax, but lose £9.46 in additional council tax. Those who do not work for contractors would just pay the additional tax.
The Government, however, cannot come out of this without having to think carefully about the future. The funding provided in this year should also be provided in future years. This issue may not have got the media attention of the cut in child benefit for higher earners, because inherently very few people in the media are on JSA—they have jobs—whereas quite a few are affected by the cut in child benefit. It is, however, a very important issue for those people facing this tax. I do not think the Government can use financial constraints to justify this tax while increasing foreign aid.
Richard Burden (Birmingham, Northfield) (Lab)
I am grateful to the hon. Gentleman for giving way. I am pleased and reassured that he has drawn breath before anything more serious happened in the Chamber. I think he might agree with me that all this takes place in a context. As I recall, at the time when Labour was in power, the hon. Gentleman was very vocal, both as a councillor and subsequently as a Member of this place, in saying that Birmingham did not get enough money from the Government. He is now quoted in The Birmingham Post as saying that the authority
“has done relatively well in the local government settlement in comparison to other authorities.”
Does he think that a cut in spending power of £149 for every single Birmingham resident, compared with £74 as a national average, really counts as doing well?
John Hemming
The argument is about whether it is best to compare people on the basis of the percentage cut in spending power or the total cut. If another council is spending only £40 and it has the whole amount cut, that is going to cause it a lot more problems. There is no doubt that it is the percentage that matters, and Birmingham’s percentage in this particular spending round is relatively good. It has to be accepted that all the figures are better than the average. Unquestionably, Birmingham has done relatively well. If the Labour party goes round whinging, no one will give them any credibility whatever. I am happy to take further interventions.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The hon. Gentleman’s words may come back to haunt him. Most people in Birmingham expect their MPs to stand up for them. If I have understood the hon. Gentleman’s position, he is trying to suggest that Birmingham council is deliberately over-charging the poor. In doing that, he is managing completely to ignore the fact that it his Government who are cutting council tax support.
The hon. Gentleman seems to be advocating that Birmingham should accept the transitional grant. I have just read the Institute for Fiscal Studies report. Will he tell me whether he accepts that this is a one-off, one-year grant that is designed to persuade councils not to cut council tax support by as much as the Government are cutting council tax funding? Despite his maverick use of figures, does not it ultimately mean that further services will be cut to make up the shortfall? If that is his position, why does not he tell people?
Sir Roger Gale (in the Chair)
Order. There is a limit to what I am prepared to permit.
John Hemming
I thank the hon. Gentleman for his questions. On the first one, which is fighting for the city, the right hon. Member for Wentworth and Dearne (John Healey) and I campaigned considerably, including in this Chamber, for an increase in fire funding, because the proposals from the Government were unfair. The Government indeed changed those proposals, and it is now accepted that the new proposals on fire funding are completely fair. However, when the city does relatively well out of the funding settlement, I will have no credibility at all if I go around whinging about it, which is what Sir Albert Bore does whatever happens. On the first point, of course I will fight for the city, but when we get a reasonably good deal I will say just that, because it is foolish to complain about things when we are actually doing quite well.
I accept that I have gone through a lot of figures. I can give hon. Members the spreadsheets if they want to see them. If the Government grant is £2.1 million, it is true that £1.3 million is needed from the general fund. However, if houses are built and people move into the city, there is more council tax. The estimated figure for next year is £1.4 million more. The Government grant leaves a shortfall of £1.3 million. If we then use the £1.4 million of extra council tax to prevent ourselves from having to pay the poor, we are far better off.
Steve McCabe
Is the hon. Gentleman saying that any additional council tax revenue that is generated by new growth should all go towards the council tax support scheme, and that there should be nothing to deal with any of the other cuts being inflicted on Birmingham?
John Hemming
I have highlighted areas in which there are reserves within the council. I have particularly identified the over-budgeting for inflation. I quoted the figures from the council’s background papers, and I am happy to share the spreadsheets with all Birmingham Members if there interested. The issue is about choices. It is clear that the administration in Birmingham has decided that its choice is to try to charge poor people council tax. My view is that it has a lot of alternatives. To say, “We must do it,” is complete nonsense.
I accept, as the hon. Gentleman said, that the grant is a one-off scheme at the moment, but in my speech I said—I did not say it all that quickly—that we should extend it into further years. I hope that the Minister is listening. I repeat that I want to see the Government extend the grant to further years, because it is important that we try to protect the poorest people in society. The argument of the administration in Birmingham is that we need work incentives. We already have things such as the Welfare Benefits Up-rating Bill, but the administration is pushing it too far.
Steve McCabe
I am interested in the hon. Gentleman’s point about work incentives. Does he accept that the change in council tax support will fall on those who are of working age? They are the people who will be hit.
John Hemming
I accept that. That is why the Labour party administration in Birmingham argued that it wanted to do this—to encourage people to work. I want to encourage people to work, but let us recognise that the Welfare Benefits Up-rating Bill is coming in. If we ladle things on top of people, it gets very difficult. They are householders, so they are having to manage being in a household. The courts will not enforce the whole tax bill, and the council has ignored that, but the point is serious. It is a political choice made by the authority. The grant that I want to be continued costs only £100 million. I say “only”—£100 million is quite a bit of money, but it is not difficult to find from the national budget.
It was a real struggle to get the information that I have used in this speech from the Labour administration in Birmingham. In its report, its reason for not taking the Government grant was:
“The deferral of the scheme for 12 months may not truly promote positive work incentives or support people back into work.”
It seems to me, however, that it wishes to tax the poor in order to blame the Government and for party political gain.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
It is a pleasure to serve under your chairmanship today, Sir Roger. I am grateful to my hon. Friend the Member for Birmingham, Yardley (John Hemming) for providing us with the opportunity to debate the policy of localising council tax support, which will be delivered through the Local Government Finance Act 2012. I will touch on the salient points generally as well as the specific points about the council in Birmingham if time allows.
There is widespread recognition that welfare spending needs to be targeted better. My hon. Friend made that point. More needs to be done to tackle poverty by getting people off benefits and into work. Council tax benefit expenditure more than doubled between 1997 and 2010 under the Labour Government. Localising support for council tax delivers a 10% saving on council tax benefit expenditure, making a vital contribution to deficit reduction.
Importantly, however, this reform also gives local authorities control over how this saving is delivered, and it gives them a direct financial stake in supporting local people into work. I am clear that councils are best placed to understand local priorities and the needs of residents on low incomes. Localisation enables them to take local factors into account when deciding on levels of support and programmes.
Localising council tax support gives local authorities a real stake in the economic future of their areas. We want local authorities to do more to grow their local economy and reap more of the benefits of local economic growth. Making local authorities responsible for council tax support reinforces the positive benefits of driving economic growth in their areas. Funding for local council tax support schemes is being provided through the retained business rates system itself, further strengthening the incentive for local authorities to grow their local economy and get more people into work in the first place. In doing so, local authorities will not only be helping to create jobs, but will be increasing the income from increases in business rates and, therefore, the amount that they can spend on other valued local services.
Through our other local government reforms we have been clear that we want local authorities to be fully accountable for the decisions that they take. At present, councils can put up council tax without considering the impact on council tax benefit costs. Localising council tax support will change that and encourage greater local financial accountability. It will also strengthen the incentives to drive down fraud and error. We have shown that local authorities can do far more about that.
Councils have choices about how to design their schemes and manage the reduction in funding. As well as being able to choose whether some awards should be reduced, they can also manage the reduction by reconfiguring funding for other services through efficiency savings, using reserves, or using the flexibility that we have now given over council tax charges. I am aware that some local authorities, such as East Hampshire district council, Bristol and the London borough of Merton have decided to do just that, so that council tax benefit claimants in their areas see no reduction in the support that they receive, which shows that it can be done.
Local authorities have until this Thursday to agree their local schemes. I am aware of a range of options that are being considered across different authorities in addition to the examples I have given.
John Hemming
Will the Minister confirm that if a local authority has not agreed a scheme, central Government will impose a scheme where people on JSA pay no money?
Brandon Lewis
I will come back to that point in a moment.
Let me give another example. Mansfield district council has agreed a scheme that will see claimants pay a maximum of 8.5% of their council tax bill and no change to the support that they receive on top of that for six weeks after returning to work, which is better than the current four. The council has also set up a hardship fund to assist people who experience genuine financial difficulties as a result of the changes. That is the kind of sensible, forward-thinking approach that I hope to see other local authorities adopting. The debate is a good opportunity to put on the record some of the great work that authorities are doing.
Richard Burden
In reality, Birmingham is losing £11 million in Government support to help people on low incomes or on fixed low incomes with their council tax. It is being told by the Government that for two years, perhaps—no commitment after that—it might get £2 million back if it does what the Government say. The Government’s financial envelope, looking forward to the next five years, will leave Birmingham with a shortfall of £625 million, although it is being told that if it freezes council tax, it will get another bung, but only for two years. This sounds like a loan shark offering a payday loan that will leave Birmingham’s citizens much worse off in the space of two years.
Brandon Lewis
I will touch on a comment that was made by my hon. Friend the Member for Birmingham, Yardley earlier. To be fair, he made the point very well. Some hon. Members are confusing their role as Members of Parliament in representing their residents when they criticise my hon. Friend and make comments about supporting Birmingham. The job of an MP is not to support the council; it is to support, defend and stand up for the residents. There is nothing wrong with a Member of Parliament standing up for the residents and challenging the council on whether it is doing the right thing and putting in a good scheme. I have already given examples of councils that are doing the right thing by their residents. If Birmingham does not choose to do that, that is a decision that Birmingham residents should consider carefully when they get their opportunity at the ballot box.
John Hemming
Does the Minister agree that if the council produces massive figures by exaggerating, for instance, inflation, it gets misleading results?
Brandon Lewis
That is a fair point. Obviously, anybody can use figures in a way that suits them. The reality is that we have put in some money to help councils through the first year or so, and I will come back to that in a moment. However, if councils have not done anything by Thursday, the current scheme stays in place.
I see the most variation in the amount that local authorities propose to charge benefit claimants who have previously received 100% support. Suggested amounts range from 6% to 30% of council tax bills.
Steve McCabe
Will the Minister confirm what the Institute for Fiscal Studies has said, which is that the support that has been offered is worth 25% of the cuts? Is that not the difficulty?
Brandon Lewis
I will come back to that point in a moment, but as it happens I do not agree that that is the difficulty; it is just part of a wider package. As ever, Opposition Members tend to pick on one thing rather than look at an issue as a whole. The flexibilities that we have given to local government, along with councils’ ability to crack down on fraud and error—£200-odd million last year alone, which in most people’s books is a lot of money—give local government enough to deal with the measure. Across the country, that comes to more than its cost.
I am disappointed that some councils have failed to rise to the challenge to explore every option, and that they are taking what they perceive to be the easier route of looking at double-digit across-the-board cuts. That is a short-term approach that slashes entitlements for the poorest without looking at other ways in which to manage the funding reduction, and it is not sustainable. It is common sense that asking the poorest to pay contributions of 30% is simply unreasonable and, in the longer term, as the funding for council tax support is built into the baseline level of business rates funding, councils have everything to gain from helping people back into work. That is where their focus should be.
It is, of course, for local authorities to consider the appropriate funding to be applied to support local taxpayers as part of their wider budget decisions. Making councils financially responsible for providing support creates stronger incentives for them to get people back into work and to reduce costs.
Richard Burden
Why is the support scheme that the Government are offering only temporary?
Brandon Lewis
That issue was raised earlier, and I said that I would come to it, so if the hon. Gentleman will bear with me I will do so.
We want to ensure that councils are doing all the right things. They should be looking at back-office functions, tackling fraud and error, and carrying out every one of the “50 ways to save”, especially an authority such as Birmingham, where the spending reduction for 2013-14 is just 1.1%.
To provide the space and the support for local authorities to design a scheme that protects the poorest by making the most of opportunities to find savings elsewhere, the Government announced in October the provision of an additional £100 million transitional grant for 2013-14. The money will be available to councils—billing and major precepting authorities—that choose to design their local schemes so that people currently on 100% support pay between 0% and no more than 8.5% of their liability, the taper rate does not increase above 25%, and there is no sharp reduction in support for people entering work. Details of how the grant can be claimed were sent out on Friday.
As time is of the essence, I will skip to the core query about the grant being for only one year. I recommend that authorities that have not yet looked at their schemes do so very quickly now so that they might qualify for the grant. It is for only one year because it is, effectively, pump priming. It gives councils that year—that opportunity —to redesign their schemes, to consider how they fund other services and look at what they do with the flexibilities we give them regarding council tax and encouraging local growth. The benefits will come during and towards the end of the first year, and we are putting the money in up front to give the councils a cushion to get them through that year. I will be very clear about this: we will closely watch the decisions local authorities take on their schemes and the impact on the poorest people in their communities before deciding whether to take further action.
Localising council tax support is an important step towards reducing the welfare bill. The measure will not only reduce spending by £470 million, but give local authorities significant local control. It will give them an opportunity to make council tax support an integral part of the council tax system. Ultimately, the new localised system will enable councils to take decisions locally about the provision of council tax support in their areas, and it is consistent with the drive for greater local financial accountability and decision making.
Question put and agreed to.
Written Ministerial Statements
(11 years, 10 months ago)
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Revocation of the Yorkshire and Humber Regional Strategy
(11 years, 10 months ago)
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The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I have today laid in Parliament an order to revoke the last Administration’s regional strategy for Yorkshire and Humber. This follows an assessment as outlined in the written ministerial statement of 25 July 2012, Official Report, House of Lords, columns WS66-68.
The revocation of the regional strategy for Yorkshire and Humber and its flawed top-down targets heralds another important step for localism. It delivers a decentralised planning system where local councils and local people can own the planning agenda for their communities and so shape and deliver development where they live. Such engagement is the key to creating a planning system that works with, not against, local communities.
The City of York does not currently have a local plan in place with defined green belt boundaries. The environmental assessment process indicated that revocation of the York green belt policies before an adopted local plan was in place could lead to a significant negative effect upon the special character and setting of York. Following careful consideration of the consultation responses received, we have concluded that the best solution would be to retain the York green belt policies. This approach expresses the importance that the coalition Government place upon the green belt and our recognition of its invaluable role in protecting our treasured environmental and cultural heritage.
Once the order takes effect, development plans across the former Government office region, with the exception of York, will comprise the relevant local plan, and where they exist, neighbourhood plans. In York, the development plan will continue to include the regional strategy’s green belt policies.
The reasons for the decision to retain the York green belt policies, and to revoke all other parts of the regional strategy, are set out in a post-adoption statement, which has been placed in the Library of the House and is available online at: www.gov.uk/government/consultations/ strategic-environmental-assessment-about-revoking-the-yorkshire-and-the-humber-regional-strategy-environmental-report
The order is laid under the negative resolution procedure and will take effect on 22 February. Further announcements on the other regional strategies will be made in due course.
War Pension Scheme Uprating 2013
(11 years, 10 months ago)
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The Minister of State, Ministry of Defence (Mr Mark Francois)
The new rates of war pensions and allowances proposed from April 2013 are set out in the tables below. The annual uprating of war pensions and allowances for 2013 will take place from the week beginning 8 April. Rates for 2013 are increasing by 2.2% in line with the September 2012 consumer prices index.
(Weekly rates unless otherwise shown) | 2012 Rates | 2013 Rates |
|---|---|---|
War Pensions | ||
Disablement Pension(100% rates) | ||
officer (£ per annum) | 8,756.00 | 8,949.00 |
other ranks (weekly amount) | 167.80 | 171.50 |
Age allowances payable from age 65 | ||
40%-50% | 11.25 | 11.50 |
over 50% but not over 70% | 17.25 | 17.65 |
over 70% but not over 90% | 24.55 | 25.10 |
over 90% | 34.50 | 35.30 |
Disablement gratuity (one-off payment) | ||
specified minor injury (min.) | 1,069.00 | 1,093.00 |
specified minor injury (max.) | 7,978.00 | 8,154.00 |
1-5% gratuity | 2,667.00 | 2,726.00 |
6-14% gratuity | 5,931.00 | 6,061.00 |
15-19% gratuity | 10,373.00 | 10,601.00 |
Supplementary Allowances | ||
Unemployability allowance | ||
personal | 103.65 | 105.95 |
adult dependency increase | 57.60 | 58.85 |
increase for first child | 13.40 | 13.70 |
increase for subsequent children | 15.75 | 16.10 |
Invalidity allowance | ||
higher rate | 20.55 | 21.00 |
middle rate | 13.30 | 13.60 |
lower rate | 6.65 | 6.80 |
Constant attendance allowance | ||
exceptional rate | 126.60 | 129.40 |
intermediate rate | 94.95 | 97.05 |
full-day rate | 63.30 | 64.70 |
part-day rate | 31.65 | 32.35 |
Comforts allowance | ||
higher rate | 27.20 | 27.80 |
lower rate | 13.60 | 13.90 |
Mobility supplement | 60.40 | 61.75 |
Allowance for lowered standard of occupation (maximum) | 63.24 | 64.64 |
Therapeutic earnings limit (annual rate) | 5,070.00 | 5,174.00 |
Exceptionally severe disablement allowance | 63.30 | 64.70 |
Severe disablement occupational allowance | 31.65 | 32.35 |
Clothing allowance (£ per annum) | 216.00 | 221.00 |
Education allowance (£ per annum) (max) | 120.00 | 120.00 |
Widow(er)s Benefits | ||
Widow(er)s’—other ranks (basic with children) (weekly amount) | 127.25 | 130.05 |
Widow(er)—officer higher rate, both wars (basic with children) (£ per annum) | 6,766.00 | 6,915.00 |
Childless widow(er)s’ u-40 (other ranks) (weekly amount) | 30.48 | 31.15 |
Widow(er)—officer lower rate, both wars (£ per annum) | 2,350.00 | 2,402.00 |
Supplementary Pension | 85.12 | 86.99 |
Age allowance | ||
(a) age 65 to 69 | 14.50 | 14.80 |
(b) age 70 to 79 | 27.90 | 28.50 |
(c) age 80 and over | 41.35 | 42.25 |
Children’s allowance | ||
Increase for first child | 19.95 | 20.40 |
Increase for subsequent children | 22.35 | 22.85 |
Orphan’s pension | ||
Increase for first child | 22.80 | 23.30 |
Increase for subsequent children | 25.00 | 25.55 |
Unmarried dependant living as spouse (max) | 124.90 | 127.70 |
Rent allowance (maximum) | 47.95 | 49.00 |
Adult orphan’s pension (maximum) | 97.75 | 99.90 |
Early Education and Childcare
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)
Today I am publishing a report “More great childcare” which sets out this Government’s plans for improving quality in early education and child care. The report also incorporates the Government response to Professor Cathy Nutbrown’s report—“Foundations for Quality”—on qualifications for the early education and child care work force.
Over the next 10 years we want to substantially increase the supply of high quality, affordable and available child care. The evidence is clear that a good start in these early years can have a positive effect on children’s development, preparing them for school and later life. This is important for individual children and families. It is also important for our wider society and economy.
The proposals set out in “More great childcare” will help providers to thrive, by delivering more for the investment currently made by the Government and parents. This will be achieved through:
Raising the status and quality of the work force;
Freeing high-quality providers to offer more places;
Improving the regulatory regime;
Giving more choice to parents.
This Government want to increase the supply of high quality, affordable child care and early education. We want to see providers striving to raise the quality of provision of early education and child care for babies and young children, an inspection regime that responds with support and constructive challenge, and a clearer, simpler regulatory structure where more money reaches the front line.
The evidence tells us very clearly how important it is for successful outcomes for children that staff are well qualified. As Professor Nutbrown acknowledged, there has been recent progress in developing a more professional work force, and raising quality for children.
But we believe we need to go further, with reform needed to enable early years providers to break out of the low-skills, low-pay, low-status cycle in which the sector has been stuck for too long. Our report, therefore, specifically proposes:
Raising the status and quality of the work force
Graduate level early years teachers, specialised in early childhood development and who will work with our youngest children;
Examining how to attract bright graduates into early years teaching;
A programme of early years educators qualified to level 3, with good GCSEs in English and Maths, trained in child development and with strong practical experience.
Incentives for the first early years educators to work with providers offering early education for two-year-olds from low-income families.
Freeing high-quality providers to offer more places
Changes to rigid rules on staffing to give greater freedom for professionals to tailor group care to children’s needs, with more choice for parents.
Improving the regulatory regime
Reinforcing the emphasis on provider responsibility for quality, with skills and knowledge of staff at the forefront;
Increased involvement of HM Inspectors to further improve the quality of early years inspections;
Targeting inspections on providers most in need of improvement;
Encouraging rapid improvement by enabling providers to request a paid-for re-inspection;
Ensuring Ofsted is the sole arbiter of quality in the early years by removing any duplication of quality assessment by local authorities.
Giving more choice to parents
Increasing choice and diversity for parents, and encouraging new providers into the market;
Developing new childminder agencies to offer training, support and regular quality assurance of childminders;
Reducing obstacles to schools providing care for younger children, down the age range and able to open nurseries on site;
Supporting good providers to expand and respond to parental demand with clearer national standards and expectations and greater funding transparency.
Two of our specific proposals—allowing paid-for re-inspection and introducing childminder agencies—will require a change to primary legislation and we will bring forward measures to do this as soon as parliamentary time allows.
Our report further supports the commitment that this Government have made to ensuring that this country is the most family friendly in Europe. It supports what we have already done to increase early education for all three and four-year-olds to 15 hours per week, and the introduction of the two-year-old programme for children of lower-income families from September 2013. It also supports the revised early years foundation stage statutory framework, introduced from September 2012, and our longer-term ambitions around an integrated review.
We will, subject to consultation, bring forward plans to amend specific elements of the early years foundation stage statutory framework and these proposals will be subject to parliamentary approval in the normal way.
We are, alongside “More great childcare”, today launching a public consultation on how staff:child ratios might be framed in the early years foundation stage statutory framework from September 2013. We will also shortly launch further consultations on: the requirements that qualifications for those working in sector should fulfil; and changes to the welfare requirements set out in the EYFS.
We are clear that we want to give parents more choice of early education. Parents should be able to decide whether home-based care, nursery care, or a combination of the two is best for their child.
Our reforms will benefit both society and the economy by delivering high-quality education in the early years at the same time as helping parents back to work. This will complement the Government’s wider commitments: reforming education, so that we produce bright graduates and skilled school leavers; and reforming welfare, so that it always pays to work.
We will place copies of our report in the House Libraries.
Lake District and Yorkshire Dales National Parks
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
Today I am announcing a public inquiry to hear representations to the variation orders to extend the Lake District and Yorkshire Dales national parks, including objections from six local authorities.
The National Parks and Access to the Countryside Act 1949 requires Natural England to consider from time to time what areas there are in England that meet the criteria for national park status, and whether it is especially desirable that such areas should be designated. In November 2011 Natural England issued variation orders to extend the boundaries of the Lake District and the Yorkshire Dales national parks. The orders were submitted to the DEFRA Secretary of State in January 2012.
Over 3,000 objections, representations or expressions of support were received in response to the proposals, including objections from five local authorities. It is a statutory requirement that a public inquiry is held if at least one local authority with land in a proposed extension raises an objection to a relevant variation order. I have therefore commissioned a public inquiry into the recommended boundary changes and an inspector from the Planning Inspectorate has been appointed to conduct the inquiry.
As a first step, a pre-inquiry meeting will be held in early March with the inquiry itself expected to open in early June; lasting approximately four weeks. Following the inquiry the inspector will make recommendations to the Secretary of State as to whether he believes the proposed extensions meet the designation criteria as set out in the National Parks and Access to the Countryside Act 1949.
Once the Secretary of State has received the inspector’s report he will then take a decision as to whether the case for designation has been made and he will either confirm the variation orders (with or without modifications) or reject them.
Grand Committee
(11 years, 10 months ago)
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Employment and Support Allowance (Sanctions) (Amendment) Regulations 2012
(11 years, 10 months ago)
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Lord McKenzie of Luton
That the Grand Committee takes note of the Employment and Support Allowance (Sanctions) (Amendment) Regulations 2012 (SI 2012/2756).
Lord McKenzie of Luton
These regulations are subject to the negative procedure, so the Motion to Take Note is an opportunity for us to bring some focus to these provisions. This follows on from the report of the Secondary Legislation Scrutiny Committee’s 15th report, which draws the regulations to the special attention of the House on the grounds that they give rise to issues of public policy. Indeed they do.
ESA was introduced in 2008 as the replacement for incapacity benefit. It was designed to focus on what individuals could do rather than what they could not, placing emphasis on their functional capabilities. This was all part of the broad consensus concerning the importance of work and of helping people move nearer to the labour market. The introduction of ESA has not been without its challenges, although the basic concept has been validated, but with periodic reviews bringing improvements to the process. However, concerns remain about the process and the role of Atos, so perhaps we can use this opportunity to get an update on some of these matters.
Can the Minister give us an update for last year on how many appeals are entered against decisions, either to access the support group or to the work-related activity group rather than JSA? What is the current rate of success? I probe these points because the quantum of appeals on a success rate is clearly indicative of how effectively the system is making the judgments that it should. It is these judgments, made by DWP decision-makers, which drive the conditionality in the regime and the sanctions which flow from it.
The regulations under consideration introduced from 3 December 2012 a new sanctions and hardship regime. As the Explanatory Memorandum makes clear, the rationale of the change is to align as far as possible the sanctions regime with the equivalent category under universal credit. For those claiming ESA, and in the work-related activity group, conditionality involves attendance at a work-focused interview and undertaking work-related activity. No conditionality of course applies to someone in the support group, but obviously greater conditionality applies to somebody placed on JSA rather than in the WRAG.
These new sanctions have an open-ended period which can be brought to an end when the claimant meets a claimant condition followed by a period of one, two or four weeks, depending upon the number of prior sanctions. The effective date of the sanctions to operate is to be brought forward in comparison with current arrangements. In addition, the amount of the sanction is to be increased; rather than 50% or 100% of the work-related activity component, which is currently some £28, the sanction will be 100% of the prescribed ESA amount, currently £71. This will leave the individual with only £28 plus any premiums to which they might be entitled.
We accept that the regime should involve conditionality and that this implies some form of sanction, but this level of sanction is frankly draconian and unacceptable. Our concerns are about not only the huge reduction of income that it entails but the risks of the system for vulnerable people. There is provision for hardship payments; we can ask about any differences between the regime which is being introduced by these regulations and the existing position in terms of eligibility for payment and the amount of any payment.
The Explanatory Note to the regulations says that in determining whether hardship payments are appropriate, a decision-maker will take the following matters into account: whether a member of the family satisfies the requirements for a disability premium or an element of child tax credit in respect of a disabled child or young person; the household’s likely resources without hardship payments, including whether the claimant can seek assistance from others, such as family and friends; the difference between the claimant’s likely resources and the amount of a hardship payment which can be made; the difference between the claimant’s likely resources and the amount of a hardship payment which could be made; the risk that the claimant’s household will not have access to essential items such as food, clothing or heating, or will have access to such essential items at considerably reduced levels without a hardship payment; and the length of time that these factors will continue.
To what extent does that description differ from the detail of the current regime? I am particularly interested in the suggestion that people have to go outside the household, not only to family but to friends, and that resources that friends may have are taken into account in whether or not the hardship payment is made. We need to know particularly about the protections built into this whole regime. As we have discussed on many occasions, individuals in the WRAG, even if properly judged to be capable of work-related activity, could suffer from a wide range of conditions. There are concerns in particular about those with a mental health condition, with fluctuating conditions, and indeed with hidden conditions. It was the prior intent that nobody with a mental health condition would be sanctioned without a face-to-face visit. Is this still the case?
Can the Minister say something about the process attached to these sanctions and the extent to which it differs from that attaching to JSA? Are the good cause rules identical to the current ones? My understanding is that the following still apply as constituting good cause: if there is any misunderstanding on a person’s part because of learning, literacy or language difficulties, or misleading information given by the benefit authority; attending a doctor’s or dentist’s appointment; difficulties with transport where no reasonable alternative was available; the practice of a religion that prevented attendance at a set time; attending a job interview; the need to work in a business if you are trying to become self-employed; if you or a person for whom you were caring had an accident, illness or relapse; attending the funeral of a close friend; a disability that makes attendance impracticable; and any other relevant data. Are those the rules that still apply? I want confirmation of the extent to which they differ, if at all, from those applying currently. The Explanatory Note makes reference to a comprehensive suite of products being developed for operational staff. This is welcome, provided that the DWP has the staffing resources to cope. For the latest year available, how many individuals in receipt of ESA were subject to a sanction, how many appealed, and what was the outcome of those appeals?
We will be watchful regarding these regulations. We note the monitoring review proposals. Finally, how soon will the revaluation of the JCP offer be forthcoming? I beg to move.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his Motion to Take Note, and for giving us the opportunity to discuss these new regulations. Standing back a bit, I think it is worth saying from the start that there is a widespread consensus that the welfare system in this country is in need of a great deal of change. Clearly some of that change is in the structural area, where we are bringing in universal credit, while some changes address the cost of welfare and the fact that the bill for welfare is unaffordable.
Under the heading of structural change, and building on what the previous Government did and on what the noble Lord, Lord McKenzie, referred to, we are putting the emphasis on helping people to get back into work, and on making sure that those who are able to work and those who have been diagnosed as being unable to work but who may be able to return to work at some point in the future have the support that they need in order to return to the workforce. That is what people want. When they are on benefits and find themselves in the very difficult situation of being out of work, particularly at the end of a long illness, they want to know that there is an opportunity for them, as there is for all of us. We proposed the tighter sanctions regime because we place so much importance on the requirements to help people back into work.
As the noble Lord, Lord McKenzie, said, these regulations came into force on 3 December last year. They provide for a more effective and proportionate ESA sanctions system, but they also preserve the important safeguards and clarity that are required to ensure a fair and balanced system. The regulations make no change to the assessment of who is eligible for ESA or to the requirements placed on ESA claimants. They form part of the wider package of reforms that move the employment and support allowance and jobseeker’s allowance sanctions systems substantially closer to that intended for universal credit, helping staff and claimants to prepare for the new benefit.
ESA is designed to place greater emphasis on what the claimant can do, and on the importance and benefits of moving towards work. I will be clear that we never ask ESA claimants to apply for jobs—only to prepare for work if they are able to do so, and to meet their Jobcentre Plus or other trained advisers to discuss this. Most claimants value this support and meet the requirements placed upon them. It is only fair to those who meet the requirements that the sanctions system places due importance on these obligations and provides incentives for all claimants to meet them.
I will now set out how ESA works. Claimants in the work-related activity group have been assessed as having a limited capability for work and are required to attend work-focused interviews to meet a personal adviser and discuss the support available to help them to take steps towards employment. Claimants placed in this group can also be required to undertake work-related activity where this is appropriate in their personal circumstances, such as attending a training course or updating a CV. Whether these work-related activity requirements are imposed by a Jobcentre Plus adviser or a work programme adviser, they must be reasonable in the claimant’s circumstances and cannot include requirements for the claimant to look for work or undergo any form of medical treatment.
If claimants do not meet suitable work-related activity requirements and work-focused interview requirements without good reason, a sanction can and should be applied. This is not new. Sanctions have been a feature of ESA since the benefit was launched in 2008. The regulations we are discussing today did not change what the claimant is expected to do or who might be sanctioned. But until these regulations came into force, the financial consequences of the sanction did not give sufficient weight to the importance of the requirements they enforced. As the Social Security Advisory Committee found, claimants do not always realise that they have been sanctioned. If claimants are unaware that they are losing benefit as a result of a sanction, there is little incentive for recompliance.
An ESA award for single claimants who have been found to be capable of work-related activity is made up of two elements: the work-related activity component of £28.15 and the personal amount of £71. Until December 2012, when these regulations came into force, claimants who failed to attend a work-focused interview or to undertake work-related activity without good reason received an open-ended sanction that was lifted when they re-engaged. The effect of the sanction was to reduce the work-related activity component of their award—£28.15—by 50%, which meant that their award of £99.15 a week would decrease by £14.17. After four weeks of non-engagement, the sanction increased to a 100% reduction of the work-related activity component, so claimants lost the full amount of the £28 which was on top of the original £71.
Lord Wigley
I will raise another question which has not been covered; it might give the Minister a little more time to get answers to the questions. On the information that has been given to me, it is noted that a full impact assessment has not been published for the instrument because it has no impact on the private sector or civil society organisations. I am surprised that this does not have some impact on civil society organisations. Many such organisations deal with the people who are impacted by these changes. I would be glad of some clarification, to know exactly when impact assessments are made and when they are not.
Baroness Stowell of Beeston
I am afraid that I will have to write to the noble Lord on that one. I do not have the answer immediately in front of me.
I can at least respond to one of the questions put to me by the noble Lord, Lord McKenzie. On appeals against WCA outcomes—the decision as to whether to put somebody in the work-related activity group or the support group—42% of appeals heard by the tribunal in the first quarter of this financial year were successful. What I do not have is the number of actual appeals. Regrettably, I will have to follow up in writing to the noble Lord on the other question that he raised about appeals. That notwithstanding, I hope that I have been able to provide enough information to satisfy the Committee today that these new regulations, which introduce this new sanctions regime, as I stressed at the start, very much emphasise the importance of the requirements on people in the work-related activity group as to how they can return to the workforce at the right time. That is what most people in work-related activity definitely want. It is our responsibility to make sure that they are clear on their requirements and that those requirements help them in that regard.
The Countess of Mar
My Lords, when the noble Baroness mentioned the evaluation review, she said that the department was looking at people’s satisfaction with the receipt of their benefits. Two major ME/CFS charities have done reviews with their clientele, amounting to well over 1,000 people in each case. Would the department be prepared to accept these reviews as part of its evidence?
Baroness Stowell of Beeston
I am sure that if evidence is there that would be relevant to what we are doing, it would be very welcome.
Lord McKenzie of Luton
My Lords, I thank the Minister for her response and for dealing with quite a lot of detailed questions. There is not a difference between us on the importance of encouraging people into work and the difference that that can make to their lives as well as to the economy of our country. The key issue around these particular regulations is how these things operate for a range of people who might have a mental health condition, autism, learning disabilities or fluctuating conditions—a whole range of circumstances—where the approach needs to be particularly sensitive, particularly knowledgeable and sometimes very specific, if not individual. I do not think I got the flavour of that from the response.
The statistics for the appeal success rate, which I thought was going to be declining, are worrying because they seem to suggest that the process under way for people in the WRAG or support group, or left on JSA, is still not working as well and effectively as it should be. It has a chequered history. I think the approach is right—indeed we legislated for that approach—but how it works, and is working, in practice, particularly with Atos, remains a cause for concern. That point is not unrelated to these regulations—it is germane to the starting point, so I have residual concerns about that. Helping people to understand their obligations under the system to take advantage of facilities, work-focused interviews and work-related activity is fine. However, a sanction of £71 a week to concentrate the mind is, frankly, outrageous. For us, it is totally unacceptable.
Over the past 12 months, there have been sanctions for people on ESA, and one of the few questions that was not answered was the extent to which there have been appeals and the outcome of those appeals. That goes to the heart of the resources that the DWP will need to address this regime. I would be very grateful if the noble Baroness, in the fullness of time, could follow up on that. The noble Lord, Lord Wigley, made a very pertinent point about the impact assessment and the impact on civil society. Perhaps the noble Baroness will share her answer on that with Members of the Committee. Having said that, we have had one go at this and will keep it in our sights because it is of concern.
Public Bodies (Abolition of the Disability Living Allowance Advisory Board) Order 2013
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Stowell of Beeston
That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of the Disability Living Allowance Advisory Board) Order 2013.
Relevant documents: 12th and 15th Reports from the Secondary Legislation Scrutiny Committee, 8th Report from the Joint Committee on Statutory Instruments
Baroness Stowell of Beeston
My Lords, this order was laid before Parliament on 15 October last year under the powers of the Public Bodies Act 2011. It provides for the abolition of the Disability Living Allowance Advisory Board.
The board provides independent advice to the Secretary of State on matters relating to disability living allowance and attendance allowance. It cannot provide advice unless specifically asked to do so and cannot be asked to provide advice on issues other than those relating to DLA or AA. It is not a representative body for disabled people and plays no role in the decision-making process for benefits.
The Disability Living Allowance Advisory Board Regulations 1991 specified that the board’s function was,
“to give advice to the Secretary of State on such matters as he may refer to them for consideration”.
The Secretary of State usually commissioned work on medical matters relating to specific conditions or illnesses. For example, the board undertook a study of cases where the highest rates of benefit had been awarded under special provisions for people who were terminally ill and not expected to live beyond six months, yet a number of such awards had been in payment for more than seven years. The board was supportive of the fact that special rules exist and should continue to exist but nevertheless it recommended that such cases should be reviewed after three years.
Clearly, the board provided some excellent advice in its time. However, the defined scope and membership of the board means that there is a limit to the type of advice it can provide. In fact, the last time the board was commissioned to do any work was in 2008, two years before the end of the previous Government. Since coming into government, we have found that using time-limited, tailored advisory groups and targeted professional advice—as we did with the Harrington reviews of the work capability assessment—is better than the prescriptive approach of a standing board.
We have used this more dynamic approach in relation to the design and development of the personal independence payment, involving experts and consulting disabled people and their organisations. The Secondary Legislation Scrutiny Committee commended the department for its extensive consultation on PIP, including our work with voluntary organisations that represent the interests of disabled people. I will return to this in a moment.
In its 15th Report of Session 2012-13, the Secondary Legislation Scrutiny Committee made a number of points that need to be answered in this debate, particularly on the tests laid down in the Public Bodies Act. I will address the points in turn. The report is clear that it expects me to use this forum to answer some of the points. I hope that noble Lords will forgive me if it takes me a little while to go through them systematically.
I will start with our decision not to consult on the proposal to close the board. The Secondary Legislation Scrutiny Committee accepted the department’s explanation of why there was no legal obligation for us to consult but it did not consider this to be in keeping with the spirit of the consultation requirements. I should restate that the board was not outward facing and did not have free rein to examine the policy, operation or administration of DLA, being able to respond only to concerns expressed by the Secretary of State. In our view, to offer a consultation to groups with no ability to influence the work of the board would not be in the spirit of meaningful consultation.
Moreover, disability organisations have shown little interest in the board over the years. Back in 2007 when it was reviewed as part of the normal process of reviewing non-departmental public bodies, more than 100 organisations of and for disabled people were contacted, but only 11 responded. Out of those, three reported that they could not spare the time to comment and the remainder had little to say about the functions of the board.
During the design of the personal independence payment, which as noble Lords know will replace disability living allowance, we undertook three consultation exercises. I acknowledge absolutely that no specific questions were asked about the board during those consultations, but the respondents had the opportunity to raise anything they wanted to about the reform of DLA. We received more than 5,500 responses, and again not one of them mentioned the board. We also discussed the board in both Houses during the passage of the Public Bodies Act, and the department has not received any correspondence or parliamentary Questions on the subject. There have been several meetings between disability organisations and Ministers and officials, and again the future of the board has never been an issue.
Perhaps I may turn to the issue of efficiency and effectiveness, which is another one of the tests under the Public Bodies Act. The department has an existing medical policy team covering a wide range of policy areas who can provide medical opinion or who can commission work by others, if needed. This is a more flexible resource than that provided by a standing board. The team also produces guidance for operational staff, advice on operational issues and audits the quality of outsourced medical advice. It is our view that short-life working groups can be set up quickly when work is needed, which is more efficient and effective than retaining a standing collection of eminent people whose expertise is not necessarily being put to good use consistently. For instance, during the development of PIP, we set up a group to help develop the assessment criteria. The group encompassed a wide range of expertise across health, social care and disability, including from occupational therapy, social work and a representative from Disability Rights UK. Very importantly, we also sought the views of user-led organisations and disabled people themselves through our implementation stakeholder forum. This group involves more than 60 user-led, grass-roots and national organisations working with us to get the design and delivery arrangements right.
Legislatively maintaining the status quo for the board places a burden on the department because the regulations require that the membership contains specifically qualified personnel. Therefore, if a member leaves the board either by choice or because their tenure has ended, the department is required to recruit even though there may be no actual work to do. The recruitment process is expensive, resource intensive and, in my view, verges on being disrespectful to those people who apply for the post. We consider that using time-limited groups is more effective than maintaining a standing body. We continue to use the expertise of other disability groups, and our recently launched Disability Action Alliance has convened a wide range of disabled people and their organisations who will work alongside the department to deliver results in a less prescriptive manner.
I shall move on now to the test of economy. As the Secondary Legislation Scrutiny Committee acknowledges, it is cheaper to run one NDPB rather than two, while Equality 2025 is a body representing disabled people that helps the Government to understand their needs and wishes. It has been in existence since 2006 and there have been no additional costs to that body since the DLA board has not been used. In addition, I can assure noble Lords that the medical policy team has absorbed some of the work previously undertaken by the board at no extra cost. Commissioning independent advice on an ad hoc basis is more economical than commissioning it from board members because they were paid fees for attending meetings and for contributing to reports, whereas the individuals and organisations who advised the department on the development of the PIP assessment did not receive a fee.
The Department of Work and Pensions considers that the use of time-limited groups will increase accountability. The scrutiny committee is of the opinion that accountability remains the same, as the Minister will commission time-limited groups, much in the same way as the board could meet only at the Minister’s direct request; it disagrees with our view that accountability will be enhanced. However, the board’s composition was laid down in statute. It is required to have members with professional knowledge or experience of physiotherapy, occupational therapy, social work, nursing people with disabilities and medical practice, as well as six or more members who are themselves disabled and at least one carer. Now we can target individuals with the specialist knowledge that we require. For instance, if the department wants up-to-date information on people with mental health conditions, it can specifically target mental health professionals who may be better placed to provide that advice.
In addition, the board could report only to Ministers and only at their request. Time-limited groups have the flexibility to engage with and report to a range of parties. For example, in his independent reviews of the work capability assessment, Professor Harrington took evidence from hundreds of organisations and individuals and ultimately presented his report to Parliament.
On safeguards, I do not consider that the abolition of the board will remove any necessary protection or prevent any person continuing to exercise any right of freedom. I say that because, as I have already mentioned, there is a range of ways in which Ministers receive and seek advice, and consult. There have been scores of stakeholders meetings with Ministers and officials. These will clearly continue.
This is a good and sensible reform, formally closing a body which, although of considerable help to the department in its time, has not been asked to give any advice since 2008. Before I close, I pay tribute and offer sincere thanks on behalf of all current Ministers at DWP to the current chair, Anne Speight, her predecessors and all members who have served on the DLA board over the years.
I hope that I have been able to give the Committee the information necessary to demonstrate that, in abolishing the DLA advisory board, we are in no way diminishing the way in which we will consult properly with experts and ensure that all ranges of advice are taken properly into account. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the noble Baroness for her introduction to this order which, as has been described, abolishes the DLA advisory board. I join the noble Baroness in paying tribute to those who have served on the board over the years and all the work that they have done. We acknowledge the extensive consultation that has taken place on the creation of PIP. The extent to which it was always spot on is something we will have the chance to discuss when we discuss the regulations quite shortly. However, we acknowledge that that has been an extensive process.
We have of course debated the proposition of the board being abolished when we considered it during the passage of the Public Bodies Act. Since then, we have had time to reflect on those discussions and the Minister will be aware of the debate at the other end, particularly the strong points made by my right honourable friend Anne McGuire, former Minister for the disabled.
Paragraph 4.6 of the Explanatory Memorandum makes it clear that the board satisfied the three tests of performing a technical function whose activities require political impartiality and needing to act independently to establish facts. Can the Minister say a little more about the assessment that was undertaken to make the judgment that the DWP is better suited to the in-house team of medical advisers? Can we have an update on the size of that in-house team and the range of skills which it encompasses? Paragraph 7.2 of the Explanatory Note refers to “a larger resource”, but how does the range of skills match that which is available to the board? The Minister ranged over the skills that the board has. Paragraph 4.4, on the constitution of the board, sets out the range of skills which the board should have. It should include people from the fields of,
“physiotherapy, occupational therapy, social work, nursing disabled persons, medical practice, and at least one member with experience of caring for a disabled person”.
Baroness Stowell of Beeston
My Lords, I will start by responding to the question the noble Lord asked about why the DLA advisory board could not become what is commonly described as a “task and finish group”. The noble Lord may not have noticed, but I resisted using that phrase in my opening speech because until I had my briefing for this debate I had never come across it—so I asked the officials to remove it. I will answer some of the noble Lord’s other specific questions in a moment.
It is possible that the DLA advisory board could become a task and finish group, but it is set up in statutory terms, which specifically lay out what it exists to do and how it can operate. Instead, we are introducing a regime that is much more flexible and allows us, quite rightly, to draw on the expertise that we need for our work, but to do so in a way that we believe will work better. Indeed, there were current members of the DLA advisory board on a group that was put together to advise us on something recently. It is not that we do not want that expertise; we want to be able to use it in a way that is much more flexible and responsive to immediate needs.
The noble Lord asked what assessment we had made of the PIP assessment development group and the in-house medical policy team, and how they compared with the DLA advisory board in terms of resources and expertise. The department’s medical policy team consists of six officials, all of whom are qualified doctors. The medical policy team has taken on some of the work previously done by the advisory board—for example, producing guidance on medical conditions.
Where the department requires advice from a wider range of professionals, this can be commissioned, as was the case for the development of the PIP assessment. Some of the DLA advisory board members were in that group, as I have said. The group includes people from Equality 2025: Liz Sayce of what was originally Radar and is now part of Disability Rights UK; Professor Tom Sensky, a psychiatrist; Itai Chikomo, a community psychiatric nurse; and Hugh Constant, a social worker—so a whole range of different areas of expertise is covered.
The noble Lord asked who will now advise on attendance allowance and how that would be dealt with. I can confirm that the medical policy advisers in the department are responsible for that and that they will use what he has calls “task and finish” and I call “time-limited” groups, where that specific expertise is needed.
I covered the more general point about consultation in quite some detail in my opening remarks and acknowledge the criticism in the scrutiny committee’s report. However, as I said previously, the board did not attract much comment on how it was operating when we gave that opportunity to a large number of groups. Most importantly, it was not a question of not consulting disability groups because we did not want to hear what they have to say but that the board exists for a specific function, as I have already described, and it would seem almost insulting to consult disability groups about a board over which they have no influence in terms of how it did its work. There was no intention to prevent consultation because we did not want to hear what people wanted to say. We felt that the way in which we were carrying out our general process of consulting on the policies that we were developing was very extensive and that people had the opportunity to influence the design and development of those policies. I take on board the point that he made but would only say again that this is a board that had not met since 2008—so had not met under the last two years of the previous Government, not just during this Government. I am convinced that, in its place, we are putting arrangements which will ensure that we have the right expertise and advice coming to us as we develop policy and that we are consulting widely as we roll out that policy and taking on board the responses and the feedback that we receive.
National Health Service (Clinical Commissioning Groups—Disapplication of Responsibility) Regulations 2012
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Northover
That the Grand Committee do report to the House that it has considered the National Health Service (Clinical Commissioning Groups—Disapplication of Responsibility) Regulations 2012.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments
Baroness Northover
My Lords, the draft National Health Service (Clinical Commissioning Groups—Disapplication of Responsibility) Regulations 2012 set out the persons for whom a CCG will not be responsible, where it otherwise would be. We are here to discuss them today because the Delegated Powers and Regulatory Reform Committee recommended that they be subject to the affirmative procedure. The committee advised that the power being exercised to make the regulations, Section 3(1D) of the National Health Service Act 2006, relates to a fundamental provision of the new commissioning arrangements. In theory it could be exercised in such a way that some groups of people were left without a body responsible for commissioning their healthcare services. But I hope to be able to reassure noble Lords that this has never been the policy intention, nor is it the effect of these regulations.
It may be helpful if I first explain these draft regulations in their wider context. As with PCTs, each CCG will cover a geographical area defined in their constitution, and the whole of England will be covered by CCGs, with no overlap. Under Section 3(1A) of the National Health Service Act 2006, CCGs will have continuity of commissioning responsibility for all patients registered with a GP practice member of the CCG, and anyone usually resident in the CCG area who is not registered with a GP practice anywhere. They will be under a duty to commission secondary care health services to meet the reasonable requirements of the people they are responsible for, with the exception of certain services commissioned directly by the NHS Commissioning Board, and those public health services commissioned by local authorities.
Additional provision relating to the responsibilities of CCGs is made in the NHS Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012. This includes imposing on CCGs responsibility for every person in their area in relation to the provision of ambulance services or accident and emergency services. That instrument also makes provision about the services to be commissioned by the NHS Commissioning Board. Taken together with this affirmative instrument, this will ensure that the board and CCGs do not have overlapping responsibilities for particular services or particular patients. There will be no gaps, and a commissioner will not be able to dispose of a commissioning obligation by moving the patient out of area.
It is also important to emphasise that both sets of regulations concerning commissioning responsibilities do not introduce any new policies, but apply the existing principles of PCT responsibilities to CCGs, taking into account, of course, some necessary differences to reflect the responsibilities of the board and local authorities.
These draft regulations for affirmative resolution prescribe, by way of exception, categories of people and circumstances where CCGs will not have the duty to commission services. I will briefly describe the provisions set out in these regulations. Regulation 1 defines the terms used throughout the regulations and sets out a coming into force date of 1 April 2013.
I have already explained that under Section 3 of the 2006 Act, CCGs will have commissioning responsibility for all patients registered with a GP practice member of the CCG, and anyone usually resident in the CCG area who is not registered with a GP practice anywhere. However, within the categories of people for whom a CCG will otherwise be responsible, there will be some for whom, and some circumstances under which, it is appropriate that the responsibility will lie with another CCG or another health body. These are set out in Regulation 2, which has the following provisions.
People registered with a GP in England, but who are usually resident in Scotland, Wales or Northern Ireland will not be the responsibility of the CCG of whom the English GP practice is a member. Instead, under Regulations 2(2)(a) to 2(2)(c), the responsible body will be the health body in the relevant Administration – the Scottish Health Body, the Welsh Local Health Board or the Health and Social Care Board in Northern Ireland.
Where a person, normally the responsibility of one CCG, becomes the temporary patient of another, the first CCG will not be responsible for them; instead, under Regulation 2(2)(d) the patient temporarily becomes the responsibility of the CCG where they access GP services. This is to ensure that the patient can access any subsequent care he or she needs while remaining a temporary patient; otherwise, there could be delays in their receiving prompt treatment. The provision also ensures that the receiving CCG has responsibility for commissioning services to meet the needs of temporary patients—particularly important in CCG areas with significant numbers of such patients, for example in areas containing holiday resorts.
Regulation 2(2)(e) provides that, if a person is provided with primary medical services by a member of a CCG and these do not include essential services within core hours, that CCG is not responsible for that person. Instead, they would be the responsibility of the CCG, a member of which does provide those services, or, if not, the CCG in whose area they usually reside. This reinforces the principle that a core requirement of CCG membership is to be a provider of essential services.
Under Regulation 2(2)(f), CCGs will not be responsible for people detained in an immigration removal centre, secure training centre or young offender institution. In such cases the responsible commissioner will either be the board or another commissioning body such as the Home Office. Under Regulation 2(2)(g), a CCG will not be responsible for people for whom another CCG is wholly responsible under Regulation 4 and Schedule 1 of the corresponding negative responsibilities regulations.
Where another CCG or a local authority has placed a person in a CCG’s area, the second CCG will not be the responsible commissioner. Like the other provisions in these regulations, this continues the current policy under PCTs. This occurs, for example, for the purposes of NHS continuing healthcare, whereby the responsibility remains with the placing commissioner. However, in these cases the disapplication of responsibility relates only to the services for which the other CCG is responsible. For example, where a person receiving continuing healthcare is placed outside a CCG’s area, the placing CCG would be responsible for nursing care but not for secondary care.
Regulation 2(3)(a) makes it clear that a CCG that has responsibility for a person on the basis of GP registration or usual residence in its area is not responsible for securing the provision of ambulance services or accident and emergency services if that person is present in the area of another CCG. Responsibility for this falls to the CCG of that other area. For the avoidance of doubt, Regulation 3 sets out the rules for determining where a person is usually resident for the purposes of Regulation 2.
Noble Lords may have noticed that these regulations cross-refer in places to “the Responsibilities Regulations 2012”. These are the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 that I mentioned. We are not here today to discuss them, but since they are so closely related I will briefly set out the content of relevant parts so that the noble Lords may have the full picture before them.
Regulations in Parts 2, 3 and 4, with their associated schedules, make provision about additional commissioning responsibilities for both CCGs and the board. Regulation 4 and Schedule 1 make provisions effectively mirroring Regulation 2 of the draft National Health Service (Clinical Commissioning Groups—Disapplication of Responsibility) Regulations 2012, in prescribing the categories of people for whom a CCG will be responsible for commissioning—
Lord Hunt of Kings Heath
My Lords, I am sorry to interrupt the noble Baroness. She said that we were not here to discuss the standing rules today, but are they not subject to the regulations that we are debating? I would like to clarify that.
Baroness Northover
My understanding—no doubt I will get clarification on this—is that the Delegated Powers and Regulatory Reform Committee picked up certain elements of this and thought that they should be subject to the affirmative procedure. What I seek to do here is lay that out, but also lay out a fuller picture so that noble Lords can set it in context. I will continue and seek clarification. It is to give that fuller picture, which I hope will help noble Lords, that I am outlining this.
Regulations in Parts 2, 3 and 4, with their associated schedules, make provision about additional commissioning responsibilities for both CCGs and the board. Regulation 4 and Schedule 1 make provisions effectively mirroring Regulation 2 of the draft National Health Service (Clinical Commissioning Groups—Disapplication of Responsibility) Regulations 2012, in prescribing the categories of people for whom a CCG will be responsible for commissioning health services in addition to those set out in the 2006 Act.
The list in Schedule 1 includes people placed by their local authority or a CCG in a care home, children’s home or independent hospital outside the CCG’s area. It also includes two other categories of person: the first is all persons in the CCG area who are resident outside the UK and who are not provided with primary medical services by a member of any CCG. The second is all persons resident in Scotland, Wales or Northern Ireland and present in the CCG’s area who are “qualifying persons” within the meaning of Section 130C of the Mental Health Act 1983 and who are not provided with primary medical services by a member of any CCG. Qualifying persons are broadly those persons detained under the Mental Health Act 1983, conditionally discharged restricted patients, those subject to guardianship under the Act and supervised community treatment patients.
Paragraph 6 of the schedule also includes provision for continuity of responsibility where a PCT has made arrangements and is then succeeded by a CCG. Part 3 of the regulations sets out additional services that will be commissioned by the board under Section 3B of the 2006 Act. Under Regulation 6, the board will commission all hospital and community dental services; a list of the hospital services is included in Schedule 2.
Regulation 7 provides that except for emergency services which are, of course, the responsibility of CCGs, the board will be responsible for all secondary and community services for members of the Armed Forces and their families where they are registered with Defence Medical Services. This includes fertility treatment services. Regulations 8 and 9 require the board to commission fertility services for those who have lost their fertility in service, generally due to injury caused by a blast, and are in receipt of compensation from the Armed Forces Compensation Scheme.
Regulation 10 sets out the requirements for prisoners and other persons detained in prescribed accommodation. The services concerned are, except for emergency services, all community and secondary services. The prescribed accommodation includes all prisons, whether public or private, all but one young offender institutions and, as specified in the schedules, some secure children’s homes, secure training centres and immigration removal centres. Regulation 11 and Schedule 4 require the board to commission specified specialised services for rare and very rare conditions. Regulation 12 requires the board to make arrangements for the continued provision of services currently provided by certain independent sector treatment centres under contracts currently held by the Secretary of State. Regulation 13 requires the board to commission specialist mental health services for people who may pose a risk to prominent people or locations.
Finally, Regulations 14 and 15 require CCGs and the board respectively to commission mental health aftercare services for certain groups of people who have been detained in hospital for treatment of their mental disorder after their discharge from hospital; this is under Section 117 of the Mental Health Act as amended by the Health and Social Care Act 2012. These regulations make it clear that the responsibility for commissioning aftercare services should, wherever possible, sit with the CCG commissioning services to meet that patient’s other healthcare needs. However, the board would be responsible for commissioning services as part of a person’s aftercare under Section 117 if it, rather than any individual CCG, would otherwise be responsible for commissioning the NHS part of the aftercare package.
I realise that I have described these regulations at some length, but I hope that I have demonstrated that CCGs’ commissioning responsibilities under the 2006 Act, when looked at as a whole and as supplemented by regulations, form a coherent set of responsibilities. I commend the draft regulations to the Committee.
Baroness Jolly
My Lords, I shall be brief. The main purpose of this secondary legislation is to transfer responsibilities for patient care and commissioning from the PCTs and SHAs of the old world on to the CCGs and the National Commissioning Board of the new. It seems complicated, but it is relatively straightforward. I note as well that some individuals are actually covered by the board, and I welcome developments such as the board’s responsibility to fund fertility treatment for members of the Armed Forces. I shall be asking the Minister for assurance and clarification in a few areas.
I note that care needs to be taken at the borders of Wales and Scotland as far as residence is concerned so that the appropriate arrangements are made with the NHS bodies in Wales, Scotland and Northern Ireland.
I note that my noble friend said that the commissioning groups would be responsible for commissioning ambulance services and accident and emergency services. If there is a major disaster in a CCG area, how is that covered? It would certainly be a big, unexpected hit on a CCG’s budget so I would assume that the board might pick that up. I would welcome clarification on this.
I note, too, that the board has responsibility for those in immigration removal centres, secure training centres and young offender institutions. My noble friend also indicated that some services might actually be commissioned by the Home Office. Can she give the Committee some assurance that in all these areas the mandate will be adhered to and reported, that health inequalities will be addressed and that governance will be transparent, so that reporting would be available on an annual basis as to what is commissioned in each of these establishments, and the outcomes?
In Committee on the Health and Social Care Bill, and elsewhere, we were all very concerned to ensure that everybody was going to be covered by CCGs. There was a lot of debate about people who are at the margins: Gypsies and Travellers; those who are homeless; people with chaotic lifestyles, substance dependence, mental health issues, and so on. I am sure that these groups are now swept up into these regulations.
I welcome the clarification on temporary patients. In Cornwall, our population rises by several hundred thousand during the summer and it is welcome news that it is really clear how that is going to be commissioned.
In conclusion, clearly much work has been done in this piece of secondary legislation to ensure that everybody is covered. The way that it is laid out is very complex. I would be grateful if my noble friend could explain who is the arbiter in future should either a category of person or a certain individual not fall into any of the areas covered in this secondary legislation. Who should decide who should commission these services?
Lord Hunt of Kings Heath
My Lords, I, too, thank the noble Baroness for her explanation of the two statutory instruments that are covered in the Explanatory Memorandum that we have received. I particularly noted her reassurance in relation to temporary arrangements, which is very helpful, as I do not think the instrument itself is particularly easy to follow.
As far as the affirmative instrument is concerned, perhaps I could ask the noble Baroness about the situation with regard to patients from Northern Ireland. Indeed, some of my remarks would apply to patients from Scotland and Wales as well. Regulation 2(2)(a) refers to,
“a person usually resident in Northern Ireland who is provided with primary medical services by a member of the CCG”,
and says that for such a person,
“a CCG does not have responsibility in relation to its duty to commission services”.
But what if the person who comes from Northern Ireland, Scotland or Wales needs services that a GP cannot give—for example, in a hospital—and this is regarded as secondary care? Who has responsibility for commissioning secondary care services in such circumstances?
I would like to ask the Minister about abortion services, because I have asked a number of questions recently about the eligibility for abortion services in England of people normally resident in Northern Ireland. On 8 January, I received a response from the noble Earl, Lord Howe, which referred to the fact that the Secretary of State,
“has a duty under Section 3 of the National Health Service Act 2006 to provide a variety of secondary care services to such extent as he considers necessary to meet all reasonable requirements. This duty is delegated to primary care trusts … in Regulation 3(2) of, and Part 2 of Schedule 1 to, the National Health Service (Functions of strategic health authorities and primary care trusts and administration arrangements) (England) Regulations 2002”.
The noble Earl went on to say:
“Regulation 3(7) of the regulations sets out who a PCT is responsible for exercising functions (including the Section 3 duty) in respect of. Under Regulation 3(7), there are two sets of limited circumstances in which PCTs would be able to exercise their delegated functions to provide abortion services to women resident in Northern Ireland. The first is set out in Regulation 3(7)(a)(iii), which provides that a PCT shall exercise its delegated functions in so far as those functions consist of the provision (or securing the provision) of certain services to ‘qualifying patients’ resident in Scotland, Wales or Northern Ireland who are present in its area and do not fall under the responsibility of another PCT. This essentially covers persons resident in the above countries with serious mental illness who are present in a PCT’s area. The second is set out in Regulation 3(7)(b)(i), which provides that a PCT must exercise its delegated functions in so far as those functions consist of the provision (or securing the provision) of accident and emergency services for the benefit of all persons resident in its area”.
He then said:
“A PCT’s functions under Regulation 3(7)(a)(iii) will clearly be exercisable only in respect of the limited number of women who fall within that provision. A PCT’s functions under Regulation 3(7)(b)(i) will be exercisable in respect of any person present in the PCT’s area”.
He then went on to say, I think rather controversially:
“There is no absolute right for a patient to receive particular treatment under the NHS. A PCT has delegated powers to provide abortion services to a woman who is ordinarily resident in Northern Ireland but present in the PCT’s area in so far as that provision falls within Regulation 3(7)(a)(iii) or (b)(i) and is considered by the PCT to be necessary to meet all reasonable requirements”.—[Official Report, 8/1/13; cols. WA 1-2.]
I am well aware that of course the noble Earl was referring to the current legislation and that the 2012 Act made amendments to the 2006 Act, including changing the words around “reasonable requirements”. However, I hope the noble Baroness will be able to reassure me that women coming to England from Northern Ireland for an abortion service will continue to be able to be eligible to receive that service. I would be very grateful for any reassurance she can give me on that.
I now want to come on to the standing rules. The noble Baroness said we were not debating these this afternoon but I must confess to being a little surprised, because the two had been put together in one Explanatory Memorandum and the noble Baroness has referred to them, so I had assumed we would be able to discuss them. I will ask four questions and see how we go.
First, there is the issue of consultation. Paragraph 18 of the standing rules says that the board “must consult” persons specified, including Healthwatch England. The noble Baroness will probably know what is coming. She will know that, in a week or so, we are debating the NHS bodies and local authorities partnership arrangements. This relates to the issue of whether local Healthwatch organisations can campaign. There has been some controversy. Healthwatch England has not made any public comment on the regulations. Did it respond to them? If so, why did it not publish its response? The noble Baroness responded for the Government and said that there was a great deal of debate. She assured us that Healthwatch England, despite coming under the CQC, would be independent. So far, we have seen very little sign of that independence. Will the Minister reassure me that when the board consults the CQC, CCGs, Healthwatch England, Monitor, the Secretary of State and such other persons as the board considers it appropriate to consult, those submissions will be published?
My second question relates to the issue of commissioning and relevant bodies in paragraph 34. This concerns the duty of any relevant body in respect of the funding of the commissioning of drugs and other treatments. The noble Baroness will know that this can often be a controversial area. She will also know that there is continuing concern about the local accountability—or lack of it—of clinical commissioning groups. They can, in accordance with the Act, make judgments about whether a treatment will be available to local people. Will the Minister consider amending the rules to make sure that when a member of the public wishes to appeal against a decision of the commissioning body, a panel must be convened to hear the appeal? I noted from paragraph 23(3) of the standing rules, which relates to decisions about continuing healthcare that are equally controversial, that panels must be established to hear appeals by people who do not agree with the decision reached about their eligibility. Why is it not considered necessary that a similar arrangement should be put in place when it comes to commissioning decisions either by the CCG or by the NHS Commissioning Board?
CCGs are about to start work formally. In Birmingham, I have been very impressed with the leadership of the two CCGs with which I am in contact. However, nationally I do not think that the public have heard very much about them. I do not get any sense that clinical commissioning groups feel that they are accountable to the local population when it comes to making commissioning decisions. If a CCG turns down a request for a certain drug or treatment to be given to a patient, surely there ought to be a way in which that member of the public can challenge the decision.
My fourth question relates to paragraph 39, which covers the important issue of patient choice. Can the Minister say anything about how that choice is to be exercised? In particular, what information needs to be given to any member of the public to make a choice, and who will be available to offer advice to that patient? It is all very well talking about patient choice, but we all know that that is very difficult to exercise unless there is a mechanism by which a member of the public can obtain help and advice in exercising it.
My final question relates to Schedule 5, which I am sure all noble Lords have studied with great care. It relates to the panels that must be established to review decisions about continuing healthcare. Schedule 5(1) disqualifies a number of persons from being a chair, CCG member or social services authority member of a review panel, including a Member of Parliament, a Member of the European Parliament and a member of the London Assembly. Can the noble Baroness tell me why that is so? Why is it deemed okay for Members of the House of Lords to serve on such a panel while Members of Parliament may not? I would be grateful for a response to that.
Baroness Northover
My Lords, I thank my noble friend Lady Jolly and the noble Lord, Lord Hunt, for their consideration of what I have presented. Perhaps I may clarify for the noble Lord, Lord Hunt, that the Delegated Powers and Regulatory Reform Committee recommended that only the National Health Service (Clinical Commissioning Groups—Disapplication of Responsibility) Regulations 2012 should be subject to the affirmative procedure, and that is why they are before us today. The NHS Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012 are subject to the negative procedure, which is why they do not form part of today’s debate. However, I sought to set out all the elements so that noble Lords could see what we are looking at in context. Noble Lords may table Motions on negative regulations, should they wish to do so, although I am happy to answer questions as far as I can. However, it may be that in these other areas the noble Lord, Lord Hunt, may either wish to flag them up in future or we will write comprehensively to answer any questions that I have not responded to satisfactorily.
My noble friend Lady Jolly asked about a major disaster in a CCG area. I want to assure her that all NHS organisations are required to maintain preparedness to respond safely and effectively to a full spectrum of significant incidents and emergencies that could impact on health or patient care. From April 2013, all NHS organisations will be required to contribute to co-ordinated planning for emergency preparedness and service resilience through their local health resilience partnerships. No doubt she will also be pleased to note that the board has a duty under Section 252A of the 2006 Act to take steps as it considers appropriate for ensuring that each CCG is properly prepared for dealing with an emergency, and funding is a matter for the board.
My noble friend also asked about the arbiter in terms of patients. As set out in the NHS Commissioning Board’s guidance as to who pays, the underlying principle is that there should be no gaps in responsibility, and obviously she knows that. The NHS Commissioning Board expects that all disputes would be resolved locally, ideally at the CCG level, but in cases that cannot be resolved at that level, local area teams of the NHS Commissioning Board should be consulted and should arbitrate where necessary.
My noble friend asked about the mandate in terms of reporting on this and on inequalities. We will of course be using a range of evidence in addition to the NHS outcomes framework to assess the performance of the board and CCGs against the objectives and legal duties, including asking CCGs and other stakeholders for their feedback. As she will know, the first mandate between the Government and the NHS Commissioning Board was published in November. It states that the NHS Commissioning Board is under specific legal duties to tackle health inequalities, and the outcomes framework will be used to help monitor that.
The noble Lord, Lord Hunt, asked a series of questions. I would like to write to him with a response on abortion services in Northern Ireland.
Lord Hunt of Kings Heath
My Lords, I am grateful to the noble Baroness and I realise that it is a complex question. However, I am concerned about this order going through the House without me knowing the answer. The key question here is whether, under these regulations, CCGs are allowed to provide NHS services for persons normally resident in Northern Ireland, including abortion services. It is a very important question. I do not know when this order is going back to the Chamber, but if it goes back tomorrow it does not give me very much time to decide whether or not to call for a debate in the Chamber. It might be a matter for the usual channels to deal with. I accept that the noble Baroness will need to write to me, but the question is: how soon?
Baroness Northover
I would like to be able to give a fuller answer. I hope that BlackBerrys are buzzing behind me and that, perhaps while I respond to his other questions, I will be given a fuller answer because I would prefer that. I will speed along any such response, bearing in mind what he has just said.
Lord McAvoy
Would the Minister be good enough to copy me into that correspondence as I also have an interest in the subject?
Baroness Northover
I shall be very happy to copy it to anyone who would like to see it.
I think I may not have answered fully my noble friend Lady Jolly—I hope that I did—when she asked about where a patient might come in terms of who is responsible. I would like to emphasise what I said in my introductory remarks, that the default position is that the 2006 Act applies, covering everybody. So a CCG where the person’s GP is a member would be responsible for them, and if they are not registered with a GP, it would be a CCG in which the person usually resides. Perhaps I may emphasise, in relation to temporary patients, that if a person is registered with a GP in England but is not resident here, the Scottish, Welsh or Northern Irish body commissions secondary care, assuming the person is in one of those areas.
I am seeking answers to some of the other questions. The noble Lord, Lord Hunt, flagged up the point about Healthwatch England, and I remember very acutely giving the assurance that Healthwatch bodies could campaign. He asked whether any public comment on regulations has been published. I am looking for an instant answer to that, which seems not to be coming. I may need to return to him on that in a moment.
In terms of local accountability, the noble Lord wanted to know whether a member of the public might be able to insist on an appeal if certain treatments were turned down. CCGs will be under a statutory obligation to arrange for provision of care to meet the reasonable requirements of the people for whom they have responsibility. The CCG must work closely with the local authority through the health and well-being board to assess local needs and to develop a strategy to meet them which will inform their commissioning plans. Where a CCG chooses not to commission a service, as in the kind of instance the noble Lord is talking about, it would have to be satisfied that it was not necessary to do so in order to meet the reasonable requirements of its patient population. The CCG will be under a duty to involve patients in the planning of their commissioning arrangements. The noble Lord will be aware that not everything is possible under the NHS and never has been, but obviously, as before, it is important that all reasonable requirements are provided for, and the CCGs, just like the PCTs, have that responsibility.
The noble Lord asked about the membership of panels. Again, I am hoping that a light bulb will suddenly come on and I will be able to inform him as to why there should be those differences and answer some of his other questions.
To clarify further on Northern Ireland and the issue about abortion, but unfortunately I have some difficulty reading writing that is not as clear as it might be, so I do not think I will provide that answer in case it is not what it is supposed to be. I can assure the noble Lord that I will not move the approval Motion until he gets his response.
Lord Hunt of Kings Heath
My Lords, that is very helpful. I thank the noble Baroness.
Baroness Northover
The noble Lord is extremely welcome.
I am hoping that clarification will suddenly appear in my brain for the answers to the other questions that the noble Lord has put because I would like to be able to answer as much as I possibly can. My brain is moving very slowly, I am afraid, and I will write to him to address anything that is outstanding. We will not expect anything to be finally agreed until we have those answers for the noble Lord. I hope that, with those reassurances, noble Lords will accept the regulations.
Lord Hunt of Kings Heath
My Lords, I am very grateful to the noble Baroness. Of course, I do not want to detain the Grand Committee any longer. The issue of the panels that are to be convened to hear appeals by members of the public against decisions to restrict treatment made by clinical commissioning groups is something that I hope will be given further thought. CCGs are different from primary care trusts. A CCG is essentially a group of professional people. Most CCGs will have only a limited number of lay people who could be said to represent the public interest. If those CCGs make decisions that restrict drugs or treatment, there should be some mechanism whereby a member of the public can refer such a decision to an independent panel. I hope that this will be given some consideration by the noble Baroness’s department.
Baroness Northover
I am very happy to take the noble Lord’s suggestion back for it to be given further consideration.
Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2013
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Randerson
That the Grand Committee do report to the House that it has considered the Control of Donations and Regulation of Loans etc. (Extension of the Prescribed Period) (Northern Ireland) Order 2013.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
My Lords, this order was laid before the House on 5 December 2012. Put simply, it will extend the period in which donations and loans to political parties in Northern Ireland can be made confidentially.
Noble Lords will no doubt be aware of the significant difference in the rules that apply to political parties in Northern Ireland compared with those elsewhere in the UK; namely, that donor and lender identities be kept confidential. Otherwise, the rules governing the reporting of donations and loans in Northern Ireland are the same as those that apply elsewhere in the United Kingdom, as set out in the Political Parties, Elections and Referendums Act 2000. It is the Government’s firm intention, set out in our January 2011 consultation response, to modify the law in the primary legislation to be introduced when parliamentary time allows and to make more information available about donations and loans to political parties in Northern Ireland. We intend to publish draft legislation on this matter next week.
The draft Bill will create a power to expand what can or must be disclosed by the Electoral Commission. The power will allow us to permit information about past donations and loans—the amount, the nationality of the donor; whether they are a corporation or an individual—to be published, but not information that reveals identities of donors. In relation to future donations and loans, the power will allow us to increase transparency incrementally. If and when it is appropriate to do so, the Government are committed to achieving full transparency of donations and loans, consistent with the position in Great Britain. However, that Bill is for another day.
As far as this order is concerned, the reason for extending the current regime on donations and loans is simple. The existing legislation providing for confidentiality of donations and loans made since 1 November 2007 falls on 28 February. The Secretary of State for Northern Ireland has considered carefully whether it would be appropriate to allow the current arrangements to lapse. While there is a strong case for increasing transparency about donations and loans to political parties in Northern Ireland, she came to the conclusion that it is right to extend the current regime for two reasons.
First, the identities of those who made donations or loans during the prescribed period—that is, since 1 November 2007—would be revealed if we were to let the provisions lapse without introducing primary legislation to provide retrospective anonymity. The guidance given to donors and lenders at the time they contributed did not make this clear and it would be wrong to release their identities retrospectively when they had a reasonable expectation at the time the donation or loan was made that this would not be the case. We therefore need to introduce primary legislation to provide for continuing anonymity for donations and loans made since 1 November 2007 until it can be made clear to donors and lenders that, if they choose to make a donation or loan, their details could potentially be published.
Secondly, the general threat level in Northern Ireland remains at “severe”. As recent events have shown all too clearly, there remain those who are willing to use violence against individuals with whose political views they disagree. PSNI statistics show that there has been no general reduction in the incidence of violence or intimidation since this matter was last considered in 2010. Indeed, in light of recent events in Belfast, it is highly likely that the overall number of incidents will have increased. Any decision to publish the personal details of donors and lenders will need to be made by the Secretary of State taking into account up-to-date information about the risk of intimidation of donors and lenders at any given time.
As I have set out, I believe that there is room to increase the transparency of the donations and loans regime without compromising the security of individuals or businesses. However, this requires the introduction of primary legislation to allow the donations and loans regime in Northern Ireland to be amended in a way that creates future transparency while protecting those who have made donations in the past. At present, the regime does not allow for that flexibility. The Secretary of State is only able to decide between maintaining and removing the current regime.
I am sure we all agree that transparency and accountability in matters relating to the financing of political parties are important to ensure that fraud and corruption can be avoided. The publication of donations and loans made to political parties supports democratic decision-making by enabling the electorate to know how and by whom candidates and elected officials are funded. However, we need to consider the security of individuals and businesses in Northern Ireland, and to ensure that we do not create a deterrent to political donations that damages the ability of political parties to contest elections and unduly restricts the choice available to voters.
This decision has not been taken lightly. We all wish that the situation in Northern Ireland had improved sufficiently that the measure would not be necessary. The Electoral Commission was consulted prior to the order being laid. It confirmed that it was content with the proposal to extend the prescribed period on the basis that forthcoming legislation will address the question of protecting the identities of those who have made donations and loans since 2007, and that no further extension of the prescribed period will be necessary.
I have the greatest respect for those who argue for the utmost transparency in electoral finance in Northern Ireland. The Government agree that a transition to the system used in Great Britain is essential. However, we believe that the transition to that system will be managed most effectively through a gradual increase in transparency, reflecting a security situation that is still very difficult.
The existing legislation will fall on 28 February, and the provisions ensuring that reports of donations and loans in Northern Ireland remain confidential need to be extended for a further period to allow time for primary legislation to be introduced. The order will extend the current regime to allow for this. I hope that noble Lords will agree this piece of legislation. It will enable us, in time, to increase the transparency of donations and loans in Northern Ireland. I commend the order to the Committee.
Lord Lexden
My Lords, this order is plainly necessary, and I thank my noble friend for explaining it so fully and clearly. As she said, it would be entirely inappropriate to make changes that would oblige the political parties of Northern Ireland to divulge to the public at large full details of their donations and loans when the state of politics in the Province is so unstable and the security situation so fraught. In today’s volatile circumstances, those Northern Ireland parties that feel strongly that the identities of their donors and lenders should continue to be protected must remain free to protect them—certainly for the time being. I know that that remains the view of the Ulster Unionist Party, which is the party to which I have always felt closest during the 45 years in which I have taken a keen interest in Ulster’s politics. This interest was sharpened in the late 1970s when I worked as an adviser to Airey Neave.
At the same time, unionist principle demands that as soon as possible the same general arrangements for the disclosure of donations and loans should apply throughout all parts of our country. That, rightly, is the Government’s aim, as it was the aim of their predecessors. Understandably, the independent and highly regarded Electoral Commission, to which my noble friend rightly paid tribute, is pressing for that aim to be accomplished as soon as possible. In 2010, a full consultation exercise took place in the Province. Research carried out by the commission last year suggested that only 7% of the public there favour the retention of confidentiality, with nearly two-thirds supporting disclosure and over 30% declaring themselves happy with either. Nevertheless, I am sure that the Government are right to hasten carefully and slowly in this matter. As in so many other areas, decisive action needs to follow the emergence of widespread consensus among the local parties in accordance with the principles of the Belfast agreement. It does not exist at the moment.
Let us hope that, proceeding with patience and understanding, our Government are able to move forward on the basis of consensus when this order expires at the end of September next year. In the mean time, those Northern Ireland parties that wish to publish information about their donations and loans, and have the agreement of those involved, are of course at perfect liberty to do so. Such steps may well help hasten the overall pace of change.
Much controversy naturally attaches to the question of retrospective disclosure when this order is replaced by new legislation in due course. The Electoral Commission, the advice of which is valued so highly, is all for it, while retaining the confidentiality of information that would enable individual donors and lenders in years gone by to be identified. For my part, I am deeply sceptical about the expediency of any retrospective disclosure. Would it not be best to draw a line under earlier years and apply new rules of transparency and disclosure from the point at which they are introduced?
I support the order wholeheartedly. Along with my noble friend Lord Bew, who cannot be here this afternoon, I look forward eagerly to the forthcoming legislation that will replace it, providing for fuller transparency in future.
Lord Lyell
My Lords, I support the forthright comments of my noble friend Lord Lexden. He mentioned a period of 45 years. My period of nearly five and a half years in Northern Ireland was luckily not connected too much with financial provisions in politics; I got into quite enough trouble with agricultural financial provisions.
I seem to remember taking part in this debate the last time we discussed this, probably in 2010. I take on board everything that has been said by my noble friend Lord Lexden about the need to continue being discreet, secret or reasonable about donations and where the money comes from. I hope nothing much has changed gravely in that time.
Might the Minister be kind enough to explain the significance of the date of 30 September 2014? It seems odd. Is it the end of what is expected to be the parliamentary Recess? Is the Assembly going to be dancing with delight? Are we to be in here? I am curious as to why that particular date was chosen— “19 months”, as it is spelled out.
The Minister could write to me later on the second line of the Explanatory Note. It starts with, “Special provisions”, et cetera, and then refers to,
“loans and donations made to political parties and,”—
I love this phrase—
“other regulated recipients (such as members of political parties and holders of elective office)”.
I am curious. Has anything changed since this last was defined, or is anything new? Would I be a recipient as a past officeholder in Northern Ireland? Would I be regulated as a recipient? Fortunately, I would keep my oar out of Northern Ireland political donations. I would be grateful for guidance from my noble friend as to what has changed, particularly since we last discussed this. Again, can she clarify to me the significance of 30 September 2014? I hope that I shall still be around, active and not brain dead, in your Lordships’ House. When we come to discuss this again, I hope to be able to congratulate the Minister, my noble friend Lord Lexden and all those who come to speak. I am grateful for the Minister’s clear exposition this afternoon.
Lord McAvoy
My Lords, I, too, thank the Minister for her clear and full explanation of the order. I think that it was appreciated by everyone. The forthright contribution made by the noble Lord, Lord Lexden, and the fascinating speech made by the noble Lord, Lord Lyell, which took us down memory lane, did no harm to our discussions. I think that everyone in this Room understands why the legislation was passed in the first place, and while there is a desire for uniformity throughout the United Kingdom, the kingdom is also flexible and realistic enough to know when it has to bend, when it has to manoeuvre, and when it has to bring forward different legislation for different parts of the country. Unfortunately and tragically, this legislation was necessary, and indeed most folk would deem that it is still necessary. The Minister has mentioned the recent events which serve to underline the fact that when it comes to measures like these in Northern Ireland, the word to use must be “caution”. We have to be very careful that we do not introduce any unintended consequences.
Let me state right away that the Official Opposition support the Government in their position on this order. We hope, of course, that we can move as quickly as possible to a situation of full transparency regarding these donations, but nevertheless it is clear that that will have to be a gradual process. As has been mentioned, the Electoral Commission is much respected and the Opposition is practically foursquare with its views on the order. We want to see it amended as soon as possible so that voters can see how parties are funded, but as I mentioned earlier, caution must come first. I also welcome the announcement about the timing of the draft Bill to see how quickly it is envisaged that we can move forward.
When it comes to the draft Bill, I want to put one inquiry to the Minister today. Will that Bill raise the issue of double-jobbing? I am not quite sure about all the intricacies, but I have been told to put the question and to get a response. As I say, we support the order and the retrospective principle contained in it. It is only right that there should be retrospection, apart from any information that would enable donors and lenders to be identified. It has to be a mixture of innovation and caution. In Northern Ireland matters, that is always the right thing to do.
Public opinion research shows consistent support for the introduction of transparency into the funding of political parties in Northern Ireland. The Electoral Commission has informed me that the most recent survey, carried out in December 2012, found that 62% of the respondents felt that information about who donates to political parties should be made available to the public. Some 7% said that it should remain confidential while 31% did not mind either way. That sounds like a familiar figure. We need to deal with this situation so that the Electoral Commission is not legally bound to publish something. We would like to see a fully transparent scheme, but surely we all understand why we are moving slowly on it.
In conclusion, as I have said, the Official Opposition support what the Government are doing here. Our Front Bench Members have discussed these matters with the Government and we are prepared to support an extension of the prescribed period, it is hoped for a final time, having received the assurances announced by the Minister that very soon there will be moves to bring Northern Ireland into line with the rest of the UK in terms of transparency around political donations. There needs to be a change, but we acknowledge that there is no agreement between the political parties in Northern Ireland about thresholds and the amount of information to be made available on individuals, security matters and other issues. However, they are not drawbacks or obstacles but opportunities to further advance the situation in Northern Ireland so that it comes more into line with the rest of the United Kingdom. We support the order.
Baroness Randerson
I thank all noble Lords who have contributed to this debate and welcome the fact that the order has received so much support. I shall endeavour to answer as many points as I can.
The noble Lord, Lord Lexden, accepted that there should be a move to full transparency in time, and I believe that that feeling is shared around this Room. Both the noble Lord, Lord Lexden, and the noble Lord, Lord McAvoy, pointed to the 2010 consultation, in which two-thirds of respondents supported disclosure and transparency. I liked the comment that we should proceed with patience and understanding.
I believe that it was the noble Lord, Lord Lexden, who made the important point that political parties can publish, if they wish, these details. It is my understanding that the Alliance Party has commenced that process. Once some political parties start to publish, I believe that others will follow—the Alliance has started; others will follow—and I hope that that will hasten the eventual move to full transparency.
Several noble Lords referred to retrospective disclosure. To avoid confusion in relation to whether disclosure will apply to past donations or future donations made during the extended prescribed period—that is, until September 2014—we intend to provide that the identities of those who have made donations or loans in the past without knowing that their details might be released are not published when the prescribed period ends. People donating now, during the current prescribed period, will not find their names and details published. Retrospective disclosure is therefore addressed and dealt with and will not apply.
The Government are, however, committed to the disclosure of other information which would not identify donors. That information might include whether the donation came from a corporation or an individual, the nationality of that individual and the amount of the donation, but none of those would identify the name or address of the individual.
It is important to emphasise that the Electoral Commission does very rigorous checks in Northern Ireland on donations and loans. Although the general regulations on disclosure to the Electoral Commission are the same as those in the rest of Britain—beyond the publication, of course—the checks that the Electoral Commission does in Northern Ireland are more rigorous than in the rest of Britain. In other words, it goes to greater lengths to satisfy itself on the genuineness of the information that it is given.
The noble Lord, Lord Lyell, asked about the significance of 30 September 2014. Its significance is that it is the earliest possible date. The Electoral Commission requires that the system moves to greater transparency as soon as possible. That needs primary legislation. The estimate is of how quickly primary legislation can go through this House and the other place and, following that, how quickly the regulations can be implemented. Responses to the Electoral Commission are made quarterly and that is the end of the quarter when this can reasonably be expected to happen. As I said, and as noble Lords will have noted, a draft Bill will be published next week.
The noble Lord, Lord Lyell, also asked about the definition of “regulated recipients”. It is defined in Schedule 7 to the Political Parties, Elections and Referendums Act 2000. It applies throughout the country, including Northern Ireland. It covers members of political parties, members of associations and holders of elected office, so I think that it probably would apply to the noble Lord in his previous life and career.
I am pleased that the noble Lord, Lord McAvoy, has pledged his support. It is important that we have the widest possible support, particularly cross-community support in Northern Ireland. I am pleased that he accepts that the process will be gradual. He asked a specific question about whether double-jobbing would be addressed in the draft Bill. The issue was covered in public consultation last year and, although I cannot at this stage reveal the contents of the draft Bill, it is clearly on the agenda of the Secretary of State for Northern Ireland.
I am pleased that the order has received such a warm welcome, which I hope will ensure its speedy acceptance in the Chamber next week.
Civil Enforcement of Road Traffic Contraventions (Representations and Appeals) (Wales) Regulations 2013
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Randerson
That the Grand Committee do report to the House that it has considered the Civil Enforcement of Road Traffic Contraventions (Representations and Appeals) (Wales) Regulations 2013.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
My Lords, these regulations were laid before the House on 19 December 2012. They form part of a package of statutory instruments that will enable local authorities in Wales to enforce bus lane and some moving traffic offences. Similar civil enforcement provisions under the Traffic Management Act are already in force in Wales in respect of parking contraventions. The package of legislation will enable enforcement in Wales to be carried out by civil enforcement officers acting on behalf of local authorities, in addition to police officers and traffic wardens.
By way of some background, Part 6 of the Traffic Management Act 2004 provides power to the “appropriate national authority” to make regulations for the civil enforcement by local authorities of parking and waiting restrictions, bus lanes and some moving traffic offences. In Wales the appropriate national authority is Welsh Ministers. The Act also confers powers on the Lord Chancellor to make regulations dealing with the notification and enforcement of penalty charges, representations to the enforcement authority, appeals to an independent adjudicator by those on whom penalties are imposed, and the appointment of adjudicators. Section 89 of the 2004 Act provides the Lord Chancellor with express powers to make different provisions for Wales.
The regulations before the Committee set out procedures whereby persons upon whom civil penalties have been imposed for parking, bus lane or certain moving traffic contraventions in areas where civil enforcement applies, or persons whose vehicles have been immobilised on account of such contraventions, can make representations to the relevant enforcement authority against the imposition of the penalties in particular cases and can appeal to an independent adjudicator if their representations are rejected by the local authority in Wales.
Lord Jones
I will be brief. Does the noble Baroness have any intention, in the course of these proceedings, to give the Committee any statistics on the number of appeals and representations under the regime that is to be replaced by new legislation?
Baroness Randerson
It is not my intention to do so. As I will make clear later when responding to the questions and comments of noble Lords, it is very difficult to know the extent to which this will spread throughout Wales, because it will be a devolved issue and not one for your Lordships’ House.
I will return to what I was saying in introducing the regulations. Persons who have received penalties can make representations to the relevant enforcement authority against the imposition of the penalties in particular cases and can appeal to an independent adjudicator if their representations are rejected by the local authority in Wales. The regulations set out the grounds for making representations and for appealing, and the schedule contains rules for the conduct of proceedings before adjudicators.
Using their executive powers in the Traffic Management Act 2004, Welsh Ministers propose to expand the range of offences for which civil enforcement may be used by local authorities in Wales to include bus lane contraventions and some moving traffic offences; for example, restrictions applying to cycle lanes, left or right turns and box junctions. These specific regulations are necessary to ensure that persons on whom civil penalties have been imposed in Wales can make representations against the imposition of the penalties and can appeal to an independent adjudicator if their representations are rejected by the local authority in Wales.
The regulations should be read in conjunction with a further set of regulations, the Civil Enforcement of Road Traffic Contraventions (General Provisions) (Wales) Regulations 2013. Assuming that the regulations before the Committee today are approved, these regulations will be made by both the Lord Chancellor and Welsh Ministers and laid before both Parliament and the Assembly, subject to annulment. A copy of the proposed regulations is attached as an annexe to the Explanatory Memorandum.
The general provisions regulations must be signed by both the Lord Chancellor and Welsh Ministers. They provide detail in relation to the service of penalty charge notices and the immobilisation of vehicles. They also prescribe requirements in relation to the use of income generated from penalty charge notices and deal with the appointment of adjudicators by enforcement authorities.
Welsh Ministers will need to make several sets of regulations in addition to both these sets of regulations, subject only to Assembly procedure, to complete the package of legislation. The first of these, the Civil Enforcement of Road Traffic Contraventions (Representations and Appeals) Removed Vehicles (Wales) Regulations 2013, deals with the appeal process where a vehicle owner does not agree that a vehicle should have been removed and/or disposed of by the local authority in Wales.
The regulations dealing with appeals against removed vehicles were laid in draft before the Assembly on 19 December and are subject to a resolution of the Assembly before being made. A further set of regulations subject to annulment in the Assembly is expected to be laid in due course. The Civil Enforcement of Road Traffic Contraventions (Approved Devices) (Wales) Order 2013 will deal with technical specifications for devices used by local authorities in Wales to capture road traffic contraventions; for example, camera enforcement. My department continues to work closely with the Welsh Government on the delivery of the overall package.
In the interests of simplifying this area, the opportunity is being taken to consolidate the law. Provisions relating to civil enforcement of parking, bus lanes and moving traffic offences are being consolidated throughout the package of statutory instruments.
Under the Tribunals, Courts and Enforcement Act 2007, parking adjudicators are a “listed tribunal” which is required to be consulted on these regulations. We have therefore consulted the Administrative Justice and Tribunals Council on the draft regulations and the council has confirmed that it is content.
The regulations before your Lordships today are entirely in line with the division of responsibilities between the Lord Chancellor and Welsh Ministers for civil enforcement provided for in the Traffic Management Act 2004. The regulations have been considered by the Secondary Legislation Scrutiny Committee, which has determined that the special attention of the House need not be drawn to them. They have been considered also by the Joint Committee on Statutory Instruments, which has approved them without comment.
The Government’s role in bringing the regulations forward demonstrates our commitment to observing devolution arrangements and, where appropriate, to collaborating with the Welsh Government to enable them to deliver their commitments in Wales. I beg to move.
Lord Anderson of Swansea
My Lords, I have reassuringly good news for the Minister: I think it unlikely that these regulations will be contested. Clearly they are, as she said, part of a package of representation and appeals procedures that appear to be eminently sensible. Obviously, the regulations are not controversial. There is a strong consensus in favour of the regulations in Wales. As the Minister has said, they are part of a process of devolution, and of working together at both London and Cardiff levels.
I also agree with the Minister that the mischief aimed at is very clear. It is the assessment of the Welsh Government that the heavy workload of the police in Wales means that a relatively low priority is given to the enforcement of the bus lane offences. Therefore, the case is made that local authorities, which clearly have an interest in the enforcement of these regulations if they so choose, are likely to lead a more speedy and effective enforcement process. Indeed, the process is likely to encourage a greater use of buses. It is relevant and related to the good work of the Assembly done over “park and ride”, for example. It may well lead to a reduction in congestion, along with many other measures in the urban areas.
Briefly, to put this in context, bus lanes are by definition overwhelmingly relevant to urban areas. However, we have just heard that the financial support for buses and rural transport has been substantially reduced. The Assembly has just announced that in the coming financial year, 2013-14, the sum available for rural transport and buses is £25 million, whereas in the current year it is £33 million. That is a more than 25% reduction and obviously has implications not only for the increasing isolation of rural areas but for the elderly and low-income groups within those areas. It has relevance, too, to young people seeking jobs.
I obviously have a few questions for the Minister. Looking at the process which she has outlined, based on the 2004 Act, it is clearly highly convoluted and lengthy. I would be grateful if she could indicate whether she agrees with that, and what proposals she has for cutting that down. One obvious conclusion is that the involvement of the Ministry of Justice and the Lord Chancellor is really a fifth wheel to the coach. This is a series of decisions which should properly be made in and for Wales. There is no real contribution. Think of all the forests in Finland which have been cut down and the time wasted at the Westminster level for this type of regulation. I hope that the Minister and the Wales Office will be considering how best one can streamline these procedures. That, I am sure, would be much supported in Wales.
Lord Wigley
My Lords, I am not sure whether this is the first order that the noble Baroness, Lady Randerson, has brought to the Committee as part of her responsibilities for Wales—I know she has done it for Northern Ireland before—but I cannot imagine that she was waiting in awe for the excitement of this order when she took up her responsibilities in the Wales Office.
To pick up the point made by the noble Lord, Lord Anderson, it really is beyond belief that we need to apply ourselves to this sort of detail at Westminster. If devolution means anything, surely this sort of detail should be handled down the road in Cardiff. I understand that they had a committee that looked at it for all of 30 seconds and that those who have looked at it up here have no comments to make on it. It is all detail that, no doubt, was appropriate for consultation, but it is beyond belief that a consultation on something like this should take three years. If a consultation is to be meaningful, one would imagine that all the interests would have been taken on board, including those of people who run shops.
Lord Anderson of Swansea
The consultation did not take three years; that was the period following the end of the consultation.
Lord Wigley
I understand fully that it took about four months to receive comments from the consultees and then three years to digest what came back. If it is taking that long, surely interests such as those of shopkeepers should be taken on board. If bus lanes have an impact on anyone, it is on shopkeepers. There can be serious problems for people who need to stop and pick up their purchases.
Let me pick up the point about finance. We are told that this is self-financing. Do we therefore assume that those involved are keeping some of the money arising from the fines that are imposed? If so, who gets the money? Is it the local authority or the National Assembly? If the money is not adequate for the costs of running the new system, who pays the difference? Is it the local authority? Who pays for the appeals, for which no doubt there will be a cost? At a time when there is a tremendous squeeze on local authorities, I would have thought that the last thing they want is additional costs.
We are told that Welsh Ministers can extend the range of contraventions and are involved in the mechanics in a pretty fundamental way. Therefore, at an appropriate time—I realise that this goes beyond the scope of what we are debating today—should we not consider transferring this matter lock, stock and barrel, so that it can be handled in Cardiff without taking up our time in this Chamber?
Lord Jones
My Lords, I will be brief. I am grateful to the Minister for her considerate introduction to the regulations. However, do we have no statistics whatever from 2010 or 2011 on the number of immobilisations or appeals? Has the Welsh Local Government Association made no representations to the Government or to the Welsh Assembly Government? Is there an estimate of the amount of work that we are passing to local government in Wales? Do we have any insight into what the four constabularies have put on record about this change? It would be helpful for the Committee to know the scale of the work that we are passing on. That seems to be a foundation question.
Baroness Gale
My Lords, I thank the Minister for bringing these important regulations before us today. We welcome them, as they are what the Welsh Government have requested and have been working on for some time. The package gives powers to local authorities effectively to manage traffic, which will help to reduce delays and tackle congestion. I am aware that the Welsh Government have worked closely with local authorities, the British Parking Association, the police, the UK Government and their legal services in preparing the regulations, which will complement and consolidate the powers that local authorities were given on 31 March 2008 to take civil enforcement action against parking contraventions.
It is important to note that these powers will not stop the police from taking action where necessary, although the main rationale for the changes is that the police are not able to make the enforcement of bus lanes and road traffic contraventions priorities for action. I can give the example of Cardiff where there are bus lanes which, of course, only buses should be using. However, Cardiff Council is unable to take action against other vehicles using those lanes because they do not have the enforcement powers to do so. The Welsh Government believe that these regulations will help improve the punctuality and appeal of local bus services because if the bus lanes are clear, the buses can get to their destinations a lot more quickly. The Welsh Government think that this will help to further the sustainability of bus services, which we know are so important to many of our communities in Wales.
This is a key part of the Welsh Government’s economic and social objectives and is consistent with their national transport plan which was published in December 2011. However, it is important that these powers are used appropriately and that the public can trust the decisions made by enforcement officers. The enforcement of the bus lane and road traffic contraventions will be based on evidence captured on camera and other approved recording equipment and devices. Another set of regulations will be brought forward to deal with those, as the Minister has explained.
The Welsh Government are in discussions with the Vehicle Certification Agency on the terms of the technical service agreement to certify on behalf of Welsh Ministers that the cameras and associated equipment used to enforce parking restrictions in bus lanes and certain road traffic contraventions are fit for purpose. It is important that local authorities are accountable for their decisions and that residents know how the money raised from fines is used, a point made earlier by other noble Lords.
In terms of accountability, the local authorities using these powers will be required to send copies of their income and expenditure accounts to Welsh Ministers as part of an annual report about their enforcement activities. This will highlight the impact on journey times along key routes. It is also important that the appeal system and the independent adjudicator are set up, which is what we are dealing with today. The regulations specify the procedure for making representations and ensure that people given a penalty charge will be able to see the evidence against them and are given the opportunity to challenge it. For example, they may not have owned the vehicle at the time the penalty was incurred.
Following the results of the consultation, the regulations stipulate that local authorities must be responsible for handling representations themselves rather than the responsibility being contracted out. That is to be welcomed as it ensures that people will know that they can go directly to their council, thus maintaining a direct and transparent link. It is planned that the regulations will be backed up by statutory operational guidance that will provide more detailed advice on the use of the new powers. It is important that that guidance is well publicised. The Welsh Government are planning to work closely with local authorities, the British Parking Association and others to prepare the guidance, which they plan to publish this year.
These are sensible regulations that should make a difference to road travel in Wales, especially in town centres and other busy areas. In supporting these plans, I understand that the Welsh Government are anxious to go ahead with implementation at the earliest opportunity. Can the Minister tell us when the regulations will be put before the House of Commons, as I understand that no date has as yet been fixed? Will she also agree to use her influence to ensure that there are no further delays in order to enable the Welsh Government and local authorities to move forward quickly on the implementation of these regulations? In the mean time, I thank the Minister for placing these regulations before us, and of course we fully support them.
Baroness Randerson
My Lords, I thank all noble Lords for their contributions. I will preface my remarks and my attempts to answer all the questions—of which there were many—with a key point that I must stress. It is important to recognise that under the Traffic Management Act, the decision to expand the civil enforcement regime in Wales falls within the executive competence of Welsh Ministers. They have concluded that they should now make use of their powers under the Act in relation to bus lane and some moving traffic offences. That decision having been made by Welsh Ministers, these regulations are necessary to ensure that people upon whom civil penalties have been imposed are able to appeal to an independent adjudicator if their representations are rejected by a Welsh local authority. In other words, we are here today—as several noble Lords pointed out—to carry out the desires, wishes and policies of the Welsh Government, but we are doing so within the framework of UK legislation.
The noble Lord, Lord Anderson, called attention to the Welsh Government’s view that the police give low priority to traffic and bus lane offences because of their heavy workload. That is undoubtedly the case. I recall the police saying to me on several occasions when I was an elected representative that they did not have the time or resources to pay attention to such issues. It was one of the more frustrating parts of my role as an elected representative to try to deal with the concerns of local residents about things that were very important to them but which the police did not regard as a priority—for good, logical reasons in the larger scheme of law enforcement. The noble Lord referred to the fact that bus lanes are issues in urban areas. He called attention to the reduction in financial support for bus routes within Wales. I must point out that this is a budgetary decision entirely of the Welsh Government.
The noble Lord rightly pointed out that this is a lengthy and complex process. The intention is that all four instruments to which I referred will be made simultaneously, once Parliament has approved the Civil Enforcement of Road Traffic Contraventions (Representations and Appeals) (Wales) Regulations, and the Assembly has approved the Civil Enforcement of Road Traffic Contraventions (Representations and Appeals) Removed Vehicles (Wales) Regulations 2013. The general provisions of the regulations will come into force a minimum of 21 days later.
The process is complex because both the UK and Welsh Governments are involved. Noble Lords expressed frustration about this, which I understand. Perhaps I may gently point out that the Silk consultation is ongoing, and if noble Lords wish to make representations on this issue to the commission, that would be entirely in order in terms of the work that it is doing.
The noble Lords, Lord Anderson and Lord Wigley, referred to the considerable length of time since the consultation exercise was concluded. The time lapse can be explained by further work which was undertaken to develop the regulations with the adjudication service, with the British Parking Association and with local authorities. However, as noble Lords have said, this is a complex issue. We are working here entirely to the timetable of the Welsh Government. This is the Welsh Government’s policy. We are working with them to implement that policy. I am sure that we would all wish that it is now implemented as soon as possible.
Statistics were raised by the noble Lords, Lord Wigley and Lord Jones. These are, of course, new enforcement powers which local authorities will be able to use. Previous statistics do not fit these powers. The previous traffic offence statistics which exist are supplied by the police. They are not supplied on the same geographical basis. They are not, as far as I am aware, broken down into individual offences—although I will check that out and write to noble Lords if I am incorrect. Of course, those statistics reflect a police service which has said that it does not have the time to do this job as effectively as it would wish. Any previous statistics are therefore of relatively little application to the current situation. Of course, the police will continue to have the powers to do this, as they have at the moment. We are looking at local authority enforcement, but there will be a two-strand approach, as the police will also continue to enforce.
Lord Anderson of Swansea
The police will still have the powers but it is fair to assume, given the low priority, that in most cases they will try to pass this on to the local authority. There must be some guesstimate in government of how many additional employees there will be among the local authorities, otherwise one is totally in the dark on this.
Baroness Randerson
Annual parking enforcement reports are already in existence on the enforcement activities of those authorities which have civil enforcement of parking. In future, these annual reports will include bus lane and moving traffic offences. Although the concern for statistics is entirely correct, and although I am saying to noble Lords that the current statistics are of limited use, in future the desire to get more statistics will be fully satisfied. There will be annual reports.
I will review what is available and consult the Welsh Government over this. If I believe that they can add anything useful to our discussion today, I will write to noble Lords. However, from what I know of the statistics that exist, they will be of little relevance when applied to the future.
On the Lord Chancellor’s powers, it was thought appropriate that provision about appeals, notification and adjudication should be made by the Lord Chancellor. This is not a devolved matter. The UK Government have worked closely with the Welsh Government to introduce the package together. The process of co-operation between the two Governments has worked well in this case. The noble Lord, Lord Wigley, asked about the estimated cost passed to the local authorities. There is no estimate of the cost. The enforcement is not being entirely transferred to local authorities, because, as I have already said, the police will retain enforcement alongside local authorities. However, I emphasise that local authorities have welcomed the opportunity to enforce these contraventions. It is expected that the schemes will be self-financing within a year.
Lord Wigley
If there is no estimate made of the cost, how on earth can they say they are self-financing?
Baroness Randerson
That is the basis on which the provisions, in terms of the parking regulations, have been applied. This is not an entirely new scheme, in that this approach applies already in London, so there is the example of London to be followed. But there is also the example of how the parking enforcement has worked, and that has been very successful. For example, in Cardiff it has been possible to apply that self-financing approach very effectively. In the event of there being a surplus generated by civil enforcement at the end of the year, it must by law be spent on transport purposes. Those purposes are listed within the regulations, so it is very tightly controlled.
Local authorities have welcomed the opportunity to enforce these contraventions. They believe that it will lead to a more effective and efficient bus service and an easier traffic flow. It is not an approach that would immediately attract rural areas, perhaps; we are talking primarily about urban areas. I emphasise that local authorities are not obliged to take up these powers; they do so only if they wish. It is for them to determine the suitability of the scheme.
The noble Lord, Lord Anderson, referred to the bodies which were sent the consultation documents. The Welsh Government’s consultation documents are published on their website and were issued to numerous organisations. If the noble Lord wishes I can ask Welsh Ministers for a copy of their consultation circulation list.
Lord Wigley
I am sorry to delay the Committee, but I cannot allow this point to go by. Will the noble Baroness refer to page 21 of this document, where at the bottom of the Explanatory Note there is a reference to the Welsh Government’s website? Will she look at it and decide for herself whether “www.xxxxxxxx” is an appropriate address?
Baroness Randerson
I assure the noble Lord that I will deal with that as a matter of urgency after this debate finishes.
Lord Jones
When the noble Baroness looks at that, will she see if there are any statistics?
Baroness Randerson
I will respond to noble Lords in general afterwards on any issues that arise from this debate.
Finally, when I write about the statistics, noble Lords should bear in mind that we do not know how many local authorities are going to opt in to this scheme, so it is difficult to talk about the statistics.
The noble Baroness, Lady Gale, asked when the debate in the House of Commons would be. It will be on 12 February. As the noble Lord, Lord Wigley, said, it may not be a cause for great excitement. I am a citizen of Cardiff. The noble Baroness, Lady Gale, gave a very good example of Cardiff lacking the power to take action on bus lanes. I remember the South Wales Echo featuring a heated debate as to whether Cardiff Council should have the power to enforce parking restrictions. It was probably one of the most heated local debates within the Welsh capital city in many years. It is important to remember that these issues may seem to us relatively minor, but they are of considerable importance not only to local residents but to bus companies, commuters and, of course, the democratically elected councils that run our cities and towns and try to make sure that we have an effective and efficient transport system. I commend the regulations to noble Lords.
Legislative Reform (Hallmarking) Order 2013
(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Viscount Younger of Leckie
That the Grand Committee do report to the House that it has considered the Legislative Reform (Hallmarking) Order 2013.
Relevant document: 10th Report from the Delegated Powers and Regulatory Reform Committee
Viscount Younger of Leckie
My Lords, the primary purpose of the draft order is to enable the UK’s assay offices—that is, the bodies which test and hallmark articles of precious metal—to set up hallmarking operations in offshore locations. The Hallmarking Act 1973, which governs hallmarking in the UK, currently prohibits such operations, limiting the striking of UK hallmarks by the assay offices to within the territory of the UK.
The Hallmarking Act makes it an offence, during the course of trade, to describe a non-hallmarked article as being wholly or partly made of gold, silver, platinum or palladium, or to supply, or offer to supply, it with such a description attached. Section 2(4) of the Act defines a non-hallmarked article as one which does not bear the “approved hallmarks” and a sponsor’s mark. The definitions of approved hallmarks in Section 2(1) include one to the effect that approved hallmarks are,
“marks struck by an assay office in the United Kingdom, whether before or after the commencement of this Act, under the law for the time being in force”.
This imposes on the UK’s assay offices a geographical limitation, preventing them striking UK hallmarks in overseas locations. It places them at a serious competitive disadvantage to certain EEA competitors whose law does not prevent their assay offices from operating offshore.
The draft order is designed to remove this geographical limitation, thus redressing the competitive imbalance by enabling the UK assay offices to operate offshore, thereby helping to ensure their future viability and, in the longer term, protecting UK jobs. A feature of the scheme to permit offshore marking is that the British Hallmarking Council will authorise offshore-struck marks, which will be clearly distinguishable from the existing domestically struck marks. In order to make clear the distinction between the two sets of marks, the council will also issue guidance to the new offshore marks. This will help to introduce clarity for consumers, retailers and the enforcement community alike.
The market in articles of precious metal, and the hallmarking of such goods, has moved on. It is now a global business in which vast amounts of high-volume, low-cost jewellery are produced, mainly overseas. In order to capture this market, some of our EEA competitors have been busy setting up hallmarking operations within or in close proximity to manufacturers’ premises. They are able to do so because their national laws do not prohibit it. The advantages to both parties of such an arrangement are obvious and it is equally clear that failure to adapt to this changing market will pose an ever greater threat to the existence of the UK assay offices.
In addition to the main change to the Act, two other changes effected by the draft order are directly related to the broadening of the scope of the Act. The first concerns the widening of the choice of marks for sponsors and manufacturers, referred to in the Act as a “sponsor’s mark”. These are unique marks which identify the person or organisation submitting an item for hallmarking. Currently such marks must include the initial letters of the name of the sponsor. As there are only so many permutations of letters possible, these are beginning to run out. The order will therefore remove this requirement, making it easier for sponsors to register their marks. To ensure that some sort of rationale applies to the extended range of marks that will become available, the British Hallmarking Council will be issuing guidance on the limits that will apply to such marks.
The other change corrects an anomaly in the Hallmarking Act whereby articles of silver, gold and platinum cannot be coated with platinum without the written consent of an assay office. The change will permit articles of silver, gold and platinum to be coated with platinum without having to obtain such consent.
Why are these changes being made only now, given their obvious value to the UK hallmarking fraternity? The answer is severalfold. The changes being effected by this order represent the culmination of a lengthy journey. It has its origins, in fact, in the previous Administration, which began the process back in 2009 under the stewardship of the noble Lord, Lord Drayson. The Government of the day had to ensure that the legislative process they chose to pursue was the right one. As noble Lords will appreciate, such a process takes time. In addition, it was essential to secure the agreement of the British Hallmarking Council, which supervises the activities of the UK assay offices and includes assay office representatives, as to the detail of the approach to be taken. By 2010 this had been achieved and the order process was set in motion.
In the intervening period, the Government have necessarily focused on making sure that the order is fit for purpose, which has involved clearing a number of legislative and parliamentary processes designed to do just that. The important issue is that the order that has been forged from all these processes will achieve our original aim of opening up new opportunities for the UK assay offices.
In conclusion, a simple accident of drafting has led the assay offices to the situation in which they now find themselves. It is sobering to think that four words in the original drafting of the Hallmarking Act—“in the United Kingdom”—have led to this unfortunate situation. Were it not for that, the assay offices would be competing on level terms in overseas markets and we would not be having this debate today.
The UK hallmarking community has been the driving force in the case for legislative change. The consultation also revealed strong support from the trading standards community for the proposed changes. If the order becomes law, it will provide invaluable support to the continuation of hallmarking in the UK, which has centuries-old traditions. By so doing, it will have the potential to protect UK jobs while helping to ensure that the British public and retailers can continue to rely on a domestic market offering jewellery and other similar articles of precious metal bearing predominantly UK hallmarks. I commend the draft order to the Committee.
Lord Hodgson of Astley Abbotts
My Lords, I thank my noble friend for his careful and detailed explanation of the order, and I thank the officials in his department for the very extensive explanatory document they have provided. Before I go any further I have to declare an interest. I am a liveryman of the Goldsmiths’ Company, but I should make it clear that I am not speaking for the company; indeed it does not even know that I am going to make this speech and I am not sure that it will much like what I am going to say anyway.
I understand the reasons for the regulation. As my noble friend has made clear, this is about removing the restrictions on hallmarking within assay offices in the UK because they put those offices at a clear competitive disadvantage. The explanatory document talks about Thailand, India and Holland, so I quite understand that. I also understand, particularly when wearing my hat as a goldsmith, the extensive and high reputation of the UK assay offices; indeed, the word “hallmark” has a much wider use in the English language than merely being applied to the issue of jewellery made of silver, platinum and so on. It has become a word used to denote quality everywhere. So far, so good, but I want to probe a couple of issues.
We have two sets of people with different objectives as far as this regulation is concerned. The assay offices wish to increase the hallmarking model and they do not much care who does it, while UK jewellery manufacturers are anxious to build and develop their trade and who, by having an absolutely clear and unequivocal UK hallmarking standard, may have some competitive advantage. Because it is not tackled very clearly in the explanatory document, I would like the Minister’s reassurance that we are not in danger of hollowing out the UK industry in our efforts to protect the position of the assay offices.
Paragraph 9 on page 12 of the explanatory document reads:
“The Government agrees that it is likely that some jobs will be lost as a result of the setting up of hallmarking operations by the UK Assay Offices in overseas locations”.
That is surely true because elsewhere in the document it says that 35% of the jobs are going to be lost, or at least that is one of the estimates. Further on, paragraph 12 states:
“The Government therefore rejects the notion that no benefit will accrue to the UK as a result of the proposed changes to the Hallmarking Act. The unanimous expression of support for change by both the BHC and Assay Offices is a reflection of the fact that the demand for change emanated in the first place from within the hallmarking community”.
Of course it did, because it is looking for ways to boost its trade. It is not going to say anything other than just, “Right on, Government”. We need to be careful that we do not, by advancing the position of the assay offices, remove the competitive advantage from our manufacturing industry—an important industry.
My second point is the potential loss of quality and reputation. This is going to be an interplay between individual assay offices, the British Hallmarking Council and the international hallmarking convention. It would be helpful if my noble friend could say a little about this when he winds up the debate. The British Hallmarking Council is made up, I hope, of representatives from the assay offices; I think I heard the Minister say that. Is there a third party? Are representatives of manufacturers and others involved in this industry part of the hallmarking council? I ask because there must surely be a danger of some regulatory capture if only the assay officers are represented on the Hallmarking Council. In turn, how does it relate to the international hallmarking convention, which obviously only some countries belong to, because it is referred to in the explanatory document?
Lord Stevenson of Balmacara
My Lords, I thank the Minister for his very clear and interesting opening remarks and for setting out the background to this order. I am also grateful to the noble Lord, Lord Hodgson, for us being not just a duet. We have not only an extra speaker but somebody who actually seems to know a little more about this. I may be taking a step in the wrong direction to say this but neither I nor my opposite number have anything like the expertise that has just been displayed. I have a number of points to make and would be very interested to hear how the Minister responds to the points made by the noble Lord, Lord Hodgson, particularly on the worry he has about regulatory capture, which I certainly recognised as a worry from reading the notes.
The noble Lord also asked about who actually benefits from this. It is apparently being done for the benefit of the four assay offices, but possibly at the cost and expense of those who design, make and sell excellent quality jewellery and related articles within the UK. We need to have regard to that. One could imagine a scenario in which this legislative reform order was not required because a strong, export-led provision of services dominated the world markets and the quality of hallmarking and assay services offered in Great Britain was sufficient to make the rest of the world take us as the standard without inventing others. However, that clearly is not happening.
It is interesting to note that hallmarking is one of the oldest forms of consumer protection. As the notes make clear, it has been in existence in the UK for some 700 years. The main thrust of my argument is about protecting consumers. As I understand it, hallmarks serve three functions: they are distinguishing marks struck on articles, such as items of jewellery, that are made of platinum, gold, silver and now palladium, which guarantee to the world the purity of the precious metal content of the article; they are an indication that the articles have been independently assayed; and, currently, they confirm that, in the UK, the assaying and hallmarking of precious metals has been carried out by one of the four assay offices, which are located in London, Birmingham, Sheffield and Edinburgh.
The law that governs hallmarking in the UK is the Hallmarking Act, as we have heard, and a number of pieces of subordinate legislation. The draft order contains a number of proposals to amend the Hallmarking Act, but the main one is to enable offshore hallmarking by the UK assay offices and for items bearing those hallmarks to be treated in the same way as items bearing hallmarks struck in the UK. It is on this issue that I wish to respond.
When the Minister responds to the debate, I would be grateful if he could answer the following questions, as well as those asked by the noble Lord, Lord Hodgson. The explanatory document provided by the National Measurement Office, dated November 2012, points out in paragraph 16 that,
“the proposed change to existing law represents a radical broadening of the hallmarking operations currently legally permitted (UK-based only) to the striking of UK hallmarks on, potentially, a global basis”.
Notwithstanding that the consultation process revealed widespread support for this change—although “widespread” has to be interpreted carefully, given the volume of consultees who were approached—the document goes on to explain that it was “the Minister” who decided that the order would be taken under Section 17 of the Act, using an affirmative resolution process, and not under the super-affirmative resolution process that is provided for in Section 18 of the Act. However, the document is rather vague about what evidence was used by the Minister to justify the decision to utilise the Section 17 procedure? Can the noble Viscount enlighten us further on that point?
One of the main risks to this proposal is that control of the hallmarks in the offshore locations will be lost, which might lead to the possibility that all UK assay office marks will be become so tainted as to be devalued. Will that not require continuing and intensive supervision by the Hallmarking Council and indeed by HM Government? Has any assessment been made of that risk? If it is thought to be a real risk, why has no continuing cost been ascribed to it? All we have is the rather small sum of £25,000 allegedly for set-up costs.
Given that hallmarking is at heart a consumer protection measure, as I said, what steps will the Government take to make sure that consumers are aware of these changes? We are, after all, talking about a global trade, worth about £4 billion per annum within the UK at present, with articles increasingly being produced and hallmarked in low labour-cost countries such as Thailand and India. Hallmarks authorised by EEA counterparts will also be sold in the UK. To compound it all, our current style of marks is being changed. It seems to me that this will call for a major, proactive consumer information programme. Who will lead on that in the absence of Consumer Focus? Will it be Citizens Advice? What sort of budget are the Government thinking of? I would be grateful for more information on that, if possible.
The main responsibility for enforcing the Hallmarking Act lies with local authorities through their trading standards departments, although often assisted by the assay masters, as the document puts it. As one of the accompanying documents says, and it puts it rather well:
“Trading Standards Departments have a wide brief, but limited resources, as a result of which the level of surveillance and enforcement activity has reduced over recent years”.
No surprise there. Clearly it is vital now, and even more so if this LRO is passed, for all concerned to ensure that hallmarking law is enforced for the benefit of consumers and, indeed, the trade.
The Minister will be aware, though his work on the ERR Bill and elsewhere, of a number of additional responsibilities that are being transferred to trading standards departments, so I would be grateful if he could confirm that the additional workload on these departments has been adequately assessed. For example, they will need to keep up to date on the number of new offshore assay offices being established, the new marks that are being introduced and the impact of the other changes in this order. It is clearly important that adequate funding and training are provided. I could not see this item in the otherwise very comprehensive impact assessment, so will the Minister spell out the situation?
Finally, there are currently four UK assay offices permitted to apply the UK hallmark. According to the document they all work independently of one another, and, being based in London, Edinburgh, Birmingham and Sheffield, they are apparently very different organisations. What steps will the Government be taking, if any, to ensure that we do not get a glut of offshore hallmarking offices around the globe, perhaps competing against each other? The mind boggles at the prospect of seeing UK assay office London, UK assay office Sheffield, Birmingham, Edinburgh—noble Lords will get the point—in direct competition in gold and silver factories across the globe, when we are in essence talking about a UK standard.
As my noble friend Lord Hodgson asked, will job losses in the UK offices—a risk pointed out in the document—not adversely affect UK-based designers and manufacturers? The British Hallmarking Council is in the lead here and we have to take its advice, but the council’s role is only to advise government on hallmarking policy and any need for legislative change, so the buck stops, I respectfully point out, with the Government. I would be grateful for the Minister’s comments.
Viscount Younger of Leckie
My Lords, it has been a somewhat lonely debate, but I am most grateful to the noble Lord, Lord Stevenson, and my noble friend Lord Hodgson for their considerable contributions. The paucity of contributors to the debate has been counteracted by the considerable number of questions, notably from the noble Lord, Lord Stevenson, and I will do my best to answer them all. If I cannot, I will of course follow up in writing.
I also thank the noble Lord, Lord Stevenson, and my noble friend Lord Hodgson for their acknowledgement of the risks facing the UK hallmarking regime. I am particularly pleased that the efforts of the hallmarking community in helping bring about this order have not been in vain. The Government’s task in opening up fresh opportunities for UK hallmarking is nearly complete. It is now for the UK assay offices to grasp such opportunities as they wish and as their commercial judgment deems desirable. As I see it, the most important outcome of this whole venture is that there will be a level playing field between the UK assay offices and their competitors in the European Economic Area, now that the metaphorical bonds tying the hands of the assay offices have been undone.
Also worth mentioning is the widening of choice of sponsors’ marks. This is in its own way a radical step. It is also an eminently sensible one, in that it will make life easier for sponsors, who range from craftsmen operating a small business to large manufacturers. Anything which simplifies the presentation of articles of precious metal for hallmarking is to be wholeheartedly welcomed.
My noble friend Lord Hodgson, supported I think by the noble Lord, Lord Stevenson, raised the issue of the cost benefits of this exercise and change. It is best to be frank and to make the point that it is expected that a limited number of new jobs will be created where assay offices choose to set up offshore hallmarking operations, which is good news. Having said that, the hallmarking community itself acknowledges that there are likely to be some job losses in the UK as a result of the setting up of overseas hallmarking operations.
However, my main point is that the alternative would be far worse. Failure to grasp the opportunity to tap into the demand for offshore marking of high-volume jewellery would further reduce the competitiveness of the UK assay offices, which are already losing business to those competitors who are able to hallmark offshore. For example, one assay office has already lost about a third of its core staff—15 people—with this figure likely to increase to some two-thirds of existing staff, simply because of the inability to compete. Ultimately, failure to change the UK hallmarking law could lead to the closure of one or more assay offices and even greater job losses.
My noble friend Lord Hodgson raised the important question of the potential loss of reputation, as he put it, or loss of quality, as a result of the changes. I can reassure him that different marks are required to distinguish between onshore and offshore hallmarking operations. No diminution of reputation or quality is foreseen, as the British Hallmarking Council is responsible for all hallmarking operations.
My noble friend also raised the issue of the removal of the competitive advantage of UK jewellery manufacturers. Again, I can reassure him that UK manufacturers are mainly bespoke manufacturers, whereas overseas manufacturers focus mainly on the mass produced market, so there is no removal, as I see it, of competitive advantage.
The noble Lord, Lord Stevenson, asked why the procedure was not super-affirmative. We do not consider that the changes being made by this order are of such significance as to require the use of the super-affirmative procedure. There was general agreement among consultees on the proposals. Moreover, a committee in the other place concluded that the affirmative resolution procedure was appropriate. The Delegated Powers and Regulatory Reform Committee of this House did not call for the order to be subject to the super-affirmative procedure.
The noble Lord also raised the issue of state aid and funding for change; in other words, with the changes, whether there would be some state aid. The assay offices are entirely self-financing and, as such, no government money will be used to effect this change.
Lord Stevenson of Balmacara
I do not think that I can let that pass. Unfortunately, I have just given away my notes, but I am sure that a close reading of Hansard will show that I never said such a thing and I did not raise that point. It is an interesting one and I am grateful to have heard it, but I did not in fact make that point.
Viscount Younger of Leckie
I do apologise; I was under the impression that the noble Lord had raised that issue.
The noble Lord, Lord Stevenson, raised the issue of how to inform consumers about these changes. The procedure is that a dealer’s notice is required to be displayed in all premises selling hallmarked items, and this will include both the onshore and the offshore marks.
Finally, the noble Lord asked about the representation of the British Hallmarking Council. The council consists of 19 members covering eight assay offices, 10 government appointees and one chairman. The 10 government officers include four from industry, while the others are from consumer protection and the independents. I hope that that answer helps the noble Lord.
In conclusion, although there may well be some other questions that need to be answered—
Lord Hodgson of Astley Abbotts
I thank my noble friend. I do not doubt that his officials will be able to answer my question very quickly. Am I right in reading from the explanatory document that the profit expected from this is £400,000 a year? Have I read the explanatory document right? It seems to be an incredibly small sum of money for us to go through all this, but perhaps I have misunderstood or misread the explanatory document.
Viscount Younger of Leckie
Indeed, I have read the document and I can confirm that that is in the notes that I have read. I believe that it is an estimate, but I note what my noble friend has said in terms of the actual sum of money.
In conclusion, I hope sincerely that the introduction of this order will mark a turning point in the fortunes of UK assay offices, and I commend the order to the Committee.
Immigration and Nationality (Fees) (Amendment) Order 2013
(11 years, 10 months ago)
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Lord Taylor of Holbeach
That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) (Amendment) Order 2013.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, this is a draft amendment to the Immigration and Nationality (Fees) Order 2011. The order concerns charging for visa, immigration and nationality services and it enables the UK Border Agency to specify applications, processes and services for which it intends to set a fee. I thank the noble Baroness for attending this debate, which is playing to a rather empty Room this evening. However, that does not belittle the importance of the measure, because specific fee levels will be set in separate legislation to be brought before this Committee in due course. For applications and services where we charge more than the administrative cost of delivery, the regulations are subject to the affirmative procedure. Noble Lords will have the opportunity to ask questions about the fees themselves in the debate which follows that second piece of statutory legislation.
In accordance with our legal powers, this amendment to the Immigration and Nationality (Fees) Order 2011 sets out new applications and services for which we intend a fee to be paid in future, and clarifies the powers under which some existing fees are set. The amendment enables the UK Border Agency to simplify its current charging structure for optional premium services and to widen the scope to develop and offer new optional services in the future. For example, there are currently two fees specified within the regulations for each application type made in the UK, depending on whether a migrant makes a postal application or one at a public inquiry office. Instead, there will be a single application fee and a single additional uplift fee payable for optional premium services that an applicant may wish to take up, such as making their application in person or seeking an expedited consideration of their application. This means that about 30 fees will be removed from the regulations, thus simplifying the legislation as well as giving greater flexibility to how the services are provided.
We want to extend the premium services that we offer to sponsors, and this change will give us greater flexibility to tailor services to meet sponsors’ needs. Rather than specifying applications for a change in the status of a sponsor licence, we want to clarify these as requests for optional services. As a first step, we will then look to extend premium sponsorship to tier 4 sponsors, building on the premium offer already available to those in tiers 2 and 5.
We also want to take the opportunity to make several clarifications. First, we wish to put on an appropriate statutory footing the basis on which fees are charged for tests administered for the purposes of the Immigration Rules. In addition, we are adding a power to set fees for the process of enrolling biometric information. We consider defining this as a process rather than as an application better fits the terminology used in the legislation that deals with the enrolment of biometrics.
We continue to value the economic, cultural and social contribution made by legal migrants to the UK and seek to ensure that the fees for visa, immigration and nationality services demonstrate that the UK retains its position as an attractive destination to work, study or visit.
As I have said, this order provides the enabling powers to set fees and we will return to Parliament in due course to debate further regulations, under the affirmative procedure, specifying the fee levels that rely on the powers in Section 51 of the Immigration, Asylum and Nationality Act 2006 and additional powers in the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, as amended by Section 20 of the UK Borders Act 2007.
Noble Lords would want to ensure that the immigration system is paid for in a fair and sustainable manner, balancing the contribution made by taxpayers and those who use and benefit most from the system. The amendment contained within this statutory instrument will ensure that we can continue to strike the right balance, and I commend it to the Grand Committee.
Baroness Smith of Basildon
My Lords, I thank the Minister for his very thorough and helpful explanation of the order. He need not worry; I have no fears of not playing to a full house. One thing I have learnt in my short time looking at immigration issues in your Lordships’ House is that these matters are always widely read afterwards. I am sometimes taken aback by the number of e-mails and the amount of correspondence that follows any legislation in your Lordships’ House relating to immigration. That is very helpful because it helps to inform our debates.
I do not disagree with the noble Lord’s comments. He is right when he talks about balancing the contribution between those who use the system and the taxpayer. I have a couple of questions about the order which perhaps he can help me with. First, looking at the policy background, the Minister made it clear that the key part of delivering the immigration system which the public expects is acquiring the necessary resources to fund delivery and improvements in the services we offer.
We are all aware, particularly from the reports of John Vine, about the backlog and the delays in the system and how urgently improvements are needed. The Minister may have heard a Mr Hearne on Radio 4 the other morning, who is about to celebrate—if that is the right word—his first wedding anniversary next month and yet his wife, having gone over the various hurdles that people should when seeking to make their home in this country, still has not had a final decision about whether they can live a normal married life together. I have had an e-mail today from a couple who were told that they would have to wait six months for a decision; they have now been told it will be another five months. It is those delays in the system that bring it into dispute. I do not blame entry clearance officers, the people making the decisions; I think it is a resources issue. If the Minister is able to say anything about when he thinks we are going to see some improvements in the length of time it is taking to make decisions and the ability to clear the backlog, that would be very helpful, given that it is specifically referred to in the Explanatory Notes.
Another point I am unclear on, looking again at the helpful Explanatory Notes to the order, is that under the heading “Legislative Context”, in paragraph 4.1, the first bullet point says that the purpose of the instrument is,
“to allow the UK Border Agency to set fees for providing optional arrangements for processing immigration and nationality applications (currently the cost of such services is reflected in the relevant application fee)”.
If the cost of those services is currently reflected in the application fee, is the Minister proposing to reduce the current application fee and have a separate fee, or will there be an additional and separate fee? The fourth bullet point says that,
“currently such fees are treated as part of the application fee”.
This seems to mean that there is going to be an additional cost on something that is already included. I am not quite clear about what it means.
The third bullet point says that the purpose of the instrument is,
“to put arrangements for charging fees for tests administered by the UK Border Agency (or those acting on its behalf) for the purposes of the immigration rules on a statutory footing”.
Who are those who would act on behalf of the UK Border Agency? It is something that I should be aware of but perhaps the Minister can enlighten me. I am not clear which organisations or individuals would act on behalf of the UK Border Agency.
It is entirely reasonable that there should be charges. When we look at the level of the charges, that may be an issue to debate as well, but I appreciate that that is not before us today. If the Minister is able to clear up those points I would be very grateful.
Lord Taylor of Holbeach
My Lords, I am very grateful to the noble Baroness, Lady Smith, for raising these issues. She is quite right that in this area performance lies at the heart of everything. I am very grateful for the work being done by John Vine. He is driving improvements in the service by identifying points of weakness and the processes and individual cases about which the noble Baroness has communicated with me—and of which I was myself aware—in which there were delays in the consideration of someone’s personal position. Consideration has often been deferred, putting people in uncertainty.
The driver behind these changes is to make sure that the income that can be generated by fees is used to improve the service. This accounts for the pursuit of a premium service—which, I hasten to add, is not at the expense of the normal service but enables people for whom this is very important to have their cases dealt with in the most efficient way to suit their personal needs. It is exactly what we want to turn UKBA into: a consumer-oriented organisation that seeks to serve the people who wish to use its services.
I turn to the issues on which the noble Baroness questioned me. Most of the backlog in marriage cases was accounted for by people who had been refused by the normal process but were trying to circumvent the formal appeals process—the noble Baroness will know that there is an appeals process—by requesting an informal reconsideration. The 2,000 cases that were identified as requiring a decision have now been dealt with. The details of those who requested an informal reconsideration are being passed to Capita, who will contact them on behalf of the UK Border Agency as part of the work to ensure that those with no right to remain in the United Kingdom leave the country. If they refuse, I am afraid that their removal will have to be enforced.
Baroness Smith of Basildon
I appreciate and fully understand that. I was not suggesting that somebody who is not entitled to remain in this country should be able to do so. I am a little concerned about the Minister’s reference to circumventing the process. My understanding is that the process by which people were refused and then looked to have their case reconsidered was part of the system. They were not going against the rules, but acting within them.
Lord Taylor of Holbeach
I accept that. That is why we were concerned about it and why John Vine was right to draw the attention of Parliament to the situation. We are very concerned to make sure that it does not continue. This statutory instrument is about trying to engage the involvement of the consumer in the payment of fees, to strengthen the service that can be provided by UKBA.
The noble Baroness asked which companies act on behalf of UKBA. Within the UK, the Post Office uses biometrics and provides a check-and-send service. Overseas, two commercial providers offer assistance with processing applications and premium services. I cannot provide the names of those organisations now, but I will drop a line to the noble Baroness. She also asked why the fee was not included as part of the application fee. That is because the UK Border Agency awarded the contract for the provision of the third-party biometric service to the Post Office. I hope she will understand that that is separate from the fee that is charged for the application.
Baroness Smith of Basildon
I am sorry; perhaps I was not quite clear. I understood why, at the third bullet point, it says,
“arrangements for charging fees for tests administered by … those acting on its behalf”.
My point is about it including the relevant application fees on the first one, whereas at the moment it says,
“the cost of such services is reflected in the relevant application fee”.
I am not sure why legislation is needed to have a charge if it is already included in the current application fee. It is the first bullet point.
Lord Taylor of Holbeach
Yes, I agree with the noble Baroness. It might sound like a tautology but I am sure that it is relevant. I hope that the noble Baroness will excuse me if I do not explain the full details of that. I will certainly write to her about it.
The noble Baroness asked about the backlog of cases. The UKBA’s website would accept a reconsideration request if it was submitted before November 2012, when the question first arose. I hope that the noble Baroness is content with those responses. I have given an undertaking that I will write to her. I will do so, and put a copy in the Library. I commend the order to the Grand Committee.
Misuse of Drugs Act 1971 (Amendment) Order 2013
(11 years, 10 months ago)
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Lord Taylor of Holbeach
That the Grand Committee do report to the House that it has considered the Misuse of Drugs Act 1971 (Amendment) Order 2013.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, this order, which was laid before Parliament on 8 January, fits within the Government’s drug strategy and policies to tackle the threat posed by new psychoactive substances sold, in popular parlance, as “legal highs”. The Government welcome the recent contributions made by Parliament to inform our considerations in this area of our work. We are indeed much engaged in discussions and reviews of our policies.
Keeping our drug laws up to date remains a key element of this Government’s drug strategy to reduce drug harms, and we make no apologies for our third drug control order since coming into power. The order will implement the Government’s decision, in late 2012, to accept the advice of our independent experts—the Advisory Council on the Misuse of Drugs—to control a number of new psychoactive substances as class B drugs. The order will amend Schedule 2 to the Misuse of Drugs Act 1971 accordingly.
It will add O-desmethyltramadol to the list of class B drugs. This compound, currently sold as a legal high or as an undeclared but active ingredient in similar products in Europe, has not been detected in the UK. However, the ACMD advises that it poses a serious health threat. It has been associated with a number of deaths in Sweden. We agree with the ACMD that there is compelling evidence of harm to justify pre-emptive control to protect the UK public.
Noble Lords previously considered the 2009 drug control order on synthetic cannabinoids. These are man-made chemicals that mimic the effects of cannabis but also present similar harms. Over 140 of these compounds became controlled class B drugs. This was achieved by using a generic definition comprising five chemical families to capture these drugs. As these have mostly disappeared in the UK, as far as we can identify, new compounds have emerged. We have been monitoring them with the ACMD through UK and EU drugs early-warning systems.
The order will update four of the five chemical families identified in 2009 and increase their number to eight so that the generic definition captures more of the chemically related compounds. These include AM-2201 and MAM-2201, which have been identified in samples of the legal high products going under the brand names—if that is the phrase to use—Black Mamba and Annihilation, which have been linked to several hospitalisations.
The order will also make methoxetamine a controlled class B drug, as recommended by the ACMD. Noble Lords will recall that this drug has been subject to a temporary class drug order since April last year. The ACMD has also provided a generic definition to control the drug so that similar compounds which could replace it in the legal high market are also controlled.
The order will be complemented by two negative instruments in relation to the designation and scheduling of the drugs which will become controlled under the Misuse of Drugs Regulations 2001. In line with the ACMD’s advice and following consultation with the healthcare sector and industry, they will be designated as schedule 1 drugs, meaning that activities relating to them will be permitted for research or other special purposes subject to the relevant Home Office licence.
The Government take seriously the protection of public health, and protection against the threat posed by potentially harmful emerging drugs in the UK and abroad is necessary. I commend the order to the Committee.
Baroness Smith of Basildon
My Lords, I feel that I may have been a little unkind to the Minister last week when I suggested that he might have to read out in full the names of all the drugs that we would be looking at today. It is perhaps more useful to use the street names, which are, for good reason, a lot easier.
I suspect—if it is not a very bad pun—that there is not a cigarette paper between us in looking at what we can do to end the scourge of drugs and the damage that they cause to so many young people in society. We therefore welcome the order and support action to protect young people from these substances. It is always wise, as is evident in the order, to act as early as possible. I welcomed the temporary ban placed previously on “mexxy”—MXE. The Minister may be aware that when we considered the relevant order—I appreciate that he was not the Minister at the time—I raised a couple of issues. Despite our full support for the order, we were concerned that it had taken a long time to get to your Lordships’ House. We were behind a number of other countries, such as Russia, which had already taken action. We welcome the fact that O-desmethyltramadol is being added to the list of class B drugs before any evidence is widely available in the UK. We know that the drug travels across Europe and that young people get it, and it is right that, based on the evidence of the danger that it causes, action should be taken as soon as possible.
When discussing the previous order, I asked about the Government’s relationship and co-operation with the European Monitoring Centre for Drugs and Drug Addiction—EMCDDA. We were concerned then that the EMCDDA had identified 90 new substances in 2010 and 2011 and, I understand, even more in 2012. At that point, the Home Office’s early warning system had identified only 11 of those drugs. The noble Lord, Lord Henley, the Minister at the time, was unable to answer that point in Committee—I appreciate that the Minister may not have information today, but, again, I would be happy for him to write to me. I am concerned that we should not lag behind what the EMCDDA is doing. In the case of O-desmethyltramadol, it is clear that the Government are not lagging behind, but given that 90 new drugs were identified up to 2011 and even more in 2012, it would be interesting to know how many of them have been identified by the Home Office’s early warning system. How do the Government and the Home Office co-operate with the EMCDDA? It is quite clear that if the centre has information that is useful to us and allows early action to be taken, as with this particular drug, it would be very welcome.
Lord Taylor of Holbeach
I thank the noble Baroness very much indeed for her support. The drugalyser is rather a focused piece of kit at the moment and deals with drugs that are commonly available and well recognised as impairing people’s ability to drive properly. I have no doubt that we will have an opportunity in future to debate how that particular piece of equipment will be used. It is a Department for Transport area of activity but of course we are very much involved and, indeed, it was included in the Crime and Courts Bill, which was led by the Home Office. We will continue to monitor it. The short answer is, of course, that such a piece of equipment will be unable to pick up all drugs, but that does not invalidate its introduction as a useful piece of equipment to monitor people’s misuse of drugs while driving.
This order has two elements, which are innovative and have been recognised and welcomed by the noble Baroness, the first of which is the pre-emptive strike. To pick up on the example of the chemical O-desmethyltramadol, we are making clear, before it gets here, that this highly damaging drug is illegal within this country.
The second is generic protection. As the noble Baroness said, this is difficult to put into legislation. However, I must say that page 2 in particular is an impressive piece of drafting. I had a modest education in organic chemistry and can see exactly what the drafters of the legislation sought to do. Almost all the manufactured, synthetic drugs are based on organic chains with psychoactive elements. The legislation recognises the derivation of these compounds, and their reassembly and reformulation to get round the ban will be very much more difficult through the construction of this generic, family-type ban. It will be very useful.
The noble Baroness asked a question to which I do not have the answer, although I should have had. She asked about the progress being made on the internet sale of drugs. I will find out if I can update her on that. Clearly it is an area where illegal marketing goes on. This is of concern and we would want to take every measure to try to stamp it out. I hope that noble Lords can see that this measure is particularly useful in addressing the advent of these legal highs, and I commend the order to the Committee.
House of Lords
(11 years, 10 months ago)
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Kosovo
(11 years, 10 months ago)
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The Earl of Sandwich
To ask Her Majesty’s Government what steps they will take to encourage greater international recognition of Kosovo as an independent state.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, we will continue to encourage others to recognise Kosovo, using opportunities in bilateral and multilateral fora, and we will provide support to the lobbying efforts of the Kosovo Ministry of Foreign Affairs. The Government are also part-funding a project to deepen Kosovo’s links with EU member states that do not recognise it, and to improve Kosovo’s image abroad through public diplomacy.
The Earl of Sandwich
My Lords, that is a very encouraging Answer. The only problem is that this Government do not take enlargement seriously enough. I looked all through the Prime Minister’s speech and I could hardly find any mention of it. He mentions the Second World War and the fact that we brought peace and stability through enlargement. However, is there not much more than that? Should we not take a much closer interest in the dialogue between Serbia and Kosovo, which are to become independent European states?
Baroness Warsi
The noble Earl raises an important issue, and I can assure him that we are steadfastly supportive of EU enlargement. We think that it is crucial, as he said, to bringing security and prosperity to the western Balkans and to wider Europe. The Prime Minister’s speech, which talked about a more diverse, competitive and flexible Europe, relies on an ever-enlarging Europe.
Lord Anderson of Swansea
My Lords, I hope that the Minister will agree that those countries, particularly the EU countries, which have so far failed to recognise Kosovo, have done so for good—or at least for domestic —reasons, be it Catalonia, the Basque country, or Northern Cyprus. It is most unlikely that there will be any fundamental change by those countries unless and until Serbia and Kosovo itself reach an agreement. Therefore, the talks led by the noble Baroness, Lady Ashton, and brokered by the EU, stand the very best chance of resolving this problem of recognition.
Baroness Warsi
I congratulate the noble Baroness, Lady Ashton, on her work in securing discussions between Serbia and Kosovo. She has personally led great efforts to secure these further discussions, supported of course by us and many others. Whatever individual countries’ reasons are for not recognising Kosovo, the UK’s position is very clear. We support Kosovo’s progress as an independent state which we recognise, and recognise that the independence of that state is irreversible.
Lord Dykes
My Lords, does my noble friend agree that this imbroglio has gone on far too long already? Are the British Government capable of persuading Serbia that the recognition of Kosovo would be a spur to its own EU membership and would be the best result for both countries? Will she personally, and other Ministers in government, support the respectable lobbyists in this country and elsewhere, who are now pressing hard for Kosovo’s recognition and independence?
Baroness Warsi
The noble Lord is, of course, aware of the discussions with Serbia about its aspirations for EU membership. It is not being discussed as a precondition at the moment but, of course, Serbia recognises that stability in the region has to be the way forward in ensuring that every country can make its own individual journey towards further involvement in the EU.
Lord Foulkes of Cumnock
My Lords, when the noble Baroness and other Ministers go around Europe steadfastly supporting European enlargement and encouraging other countries to join, as she put it, at the same time as Ministers are talking about the possibility of the UK’s withdrawal from Europe, does it not cause some confusion?
Baroness Warsi
My Lords, it certainly does not cause confusion on this side of the House. However, if I can assist noble Lords opposite in the confusion that they may have, of course we believe that a reformed EU—a much more flexible and competitive EU—is better. That message is completely consistent with having an enlarged EU. The noble Lord’s confusion may well be in relation to some of the briefings that he has been getting from his Front Bench.
The Lord Bishop of Wakefield
My Lords, what assurances can the Minister give the House that the opening of accession negotiations between the EU and Serbia will not be considered by the European Council until such time as Serbia has achieved a necessary degree of compliance with the membership criteria, in particular the key priority of taking steps towards a visible and sustainable improvement of relations with Kosovo in line with the conditions of the stabilisation and association process?
Baroness Warsi
I can inform the right reverend Prelate that the UK is not asking Serbia to recognise Kosovo at this stage but we are making it clear that the future of Serbia and Kosovo lie in the European Union, as independent states, and that Serbia must accommodate itself to this reality before it joins the EU. Neither should be able to block the other’s path to the EU. As the right reverend Prelate will be aware, the accession discussions with Croatia were much tougher than those on previous accessions, and we will ensure that any future country wishing to be part of the EU family satisfies those very stringent preconditions.
Baroness Royall of Blaisdon
My Lords, in response to the exchange between the noble Baroness and my noble friend about the European Union, I can assure noble Lords that we, too, seek a reformed European Union but wish to do so in co-operation with colleagues rather than by threatening them. We, too, believe that peace and stability in the Balkans is a matter of the enlargement of the European Union but, on the current enlargement, I wonder when the Government will publish their figures in relation to those people who may come to this country from Bulgaria and Romania at the end of the transition period.
Baroness Warsi
The Government are making appropriate preparations in relation to people from Bulgaria and Romania who may wish to come to the United Kingdom. As the noble Baroness will be aware, the transition provisions for Bulgaria and Romania come off for the rest of the European Union at the same time, so the option for Bulgarians and Romanians to travel elsewhere in the European Union will also be open. I hope that the mistakes that were made—this is not a political point—in relation to Poland’s accession will not be made this time, because of the way in which we implemented the transition provisions.
Lord Browne of Belmont
My Lords, can the Minister confirm that the Government welcome the resolution passed by the Serbian Parliament on 13 January 2013, which calls for talks with the interim institutions of self-government in Pristina with the aim of securing security, peace, stability and better living conditions for the Serb community and for all other national communities in Kosovo and Metohija?
Baroness Warsi
I am not familiar with the specific resolution to which the noble Lord refers but I can assure him that in our discussions with Kosovo we regularly talk about the issue of minorities there, and we ensure that all such discussions cover the views of the minority communities, including those of the Serbs.
Housing: New Homes Bonus
(11 years, 10 months ago)
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Lord Greaves
To ask Her Majesty’s Government what assessment they have made of the regional impact of the New Homes Bonus.
Lord Greaves
My Lords, I beg leave to ask the Question standing in my name and remind the House that I am a member of a local authority.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, the new homes bonus is not a regional grant. It is allocated to individual local authorities based on increases in their housing stock. Councils that build more new homes receive more funding. My department no longer produces regional statistics, not least because policies such as the new homes bonus do not operate on a regional basis.
Lord Greaves
My Lords, I thank the Minister for that practical Answer. It is the same one that she gave me on a Written Question on the same issue. I was appalled to find that the Government no longer keep regional statistics and therefore do not know the regional impact of their policies. If the Government do not know, then I will provide the information.
Is the Minister aware that in relation to the new homes bonus, which is a grant given to local authorities, the three northern regions of England, the north-east, the north-west, and Yorkshire and Humberside, get on average per head of population £8.78 new homes bonus in the current year, and that the four southern regions, the east, London, the south-east and the south-west—
Lord Greaves
This is a question. The four southern regions get £15.07 per person in their regions, which is getting on for twice as much. Is it fair that this particular system is resulting in a movement of funding from the north to the south of England?
Baroness Hanham
My Lords, I am a little bit surprised by the noble Lord’s statement, and particularly his suggestion that there is a per person sum involved in this. The new homes bonus is paid against the background of new homes. It is based on the number of homes that are provided in any particular area and on the average of the council tax base across the country. Where there is a number of band A properties, a certain amount of money will be produced, across the country, and bands G and H will produce the same. If I could just correct the noble Lord, in the top 30 recipients of the new homes bonus, there are seven in the north. Bradford, Durham, Leeds, Manchester, Salford, Sheffield and Wakefield are working hard and doing well.
Baroness Whitaker
My Lords, can the Minister say how much of the new homes bonus has been spent on sites for Gypsies and Travellers and, if she cannot, would she write to me?
Baroness Hanham
I cannot say specifically for a new home, but if new homes were being provided for Travellers, the new homes bonus would be paid. To the specific question about numbers, I will have to write to the noble Baroness.
Baroness Gardner of Parkes
Can the Minister assure me that all councils are well informed of the existence of this bonus and understand what they have to do to get it?
Baroness Hanham
My Lords, I think that they are all more than aware. The new homes bonus has been an extremely important contribution to ensure that councils willingly accept new housing in their areas. This supports them, at least in terms of the housing provided, and gives them an incentive to ensure that new homes are built.
Lord Bates
Is my noble friend aware that in the north-east of England, the North Tyneside Council has used the new homes bonus to undertake a welcome £3.1 million refurbishment of a public library in North Shields? That is welcome, but is not the point of the new homes bonus to act as a catalyst for the construction industry? Will she therefore join me in welcoming the news that in the north-east of England new housing starts increased by 25% over the previous period last year, which is an increase of 47% over the period in 2009?
Baroness Hanham
My Lords, I am always grateful to my noble friend, because he knows the figures, and he has given them on several occasions. They show that the north-east is in fact working very hard to produce new housing. Of course, he is right: the new homes bonus is not specifically given for housing; it is given as a contribution to areas where new housing has been built. Refurbishing a new library to help with the increased population seems to me to be a perfectly acceptable use of that money.
Baroness Royall of Blaisdon
My Lords, the noble Baroness said that the Government hold no national statistics on the impact of the new homes bonus. I wonder whether they have any statistics that show the impact on housing associations, region by region, of the bedroom tax. I speak as someone who lives in the Forest of Dean, and my own housing association, Two Rivers Housing, is being severely impacted by the bedroom tax.
Baroness Hanham
My Lords, I have said that we do not keep regional statistics. We do not have regions any more; we have local areas. The regions are not recognised. We work on local areas now, which is far more exact and precise. I do not know the exact answer to the noble Baroness’s question about bedroom tax, but I am very happy to write to her.
Baroness Farrington of Ribbleton
My Lords, I am fascinated to discover that part of the country I live in is no longer recognised by the Government, but I am not surprised. Will the Minister accept that I live in the north-west of England, as does the noble Lord, Lord Greaves? Would she care to provide the House with figures on the impact of the RSG, plus the housing association grant, plus the new homes allowance, across the area which the noble Lord, Lord Greaves, and I live in?
Baroness Brinton
My Lords, is it not true to say that we have to collect data on a regional basis for submission to the EU? I am somewhat perplexed by the Minister’s response.
Baroness Hanham
My Lords, the Department for Communities and Local Government works on the basis of areas. There might be other parts of the Government that work on a regional basis, but the DCLG does not.
Lord Greaves
My Lords, is it not the case that the south-west gets twice as much per head of this new homes bonus as either the north-east or the north-west, and that London gets more than twice as much? These are the facts, and the Government cannot deny that there is a transfer of resources from the north of England to the south of England through this bonus. Is that not right?
Baroness Hanham
My Lords, I am afraid that the noble Lord is not correct about the basis of the new homes bonus. I have explained to the House that the bonus is based on the average across the country of council tax bands. In the north of England, the chances are that the councils provided are in band A, and in the south of England it is very possible that they are provided in bands E, G and H. Consequently, of course, the sums will be larger in some areas than in others, but then, of course, the cost of living is different across this country.
Children: Speech and Language
(11 years, 10 months ago)
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Lord Ramsbotham
To ask Her Majesty’s Government what plans they have to co-ordinate their response to the recommendations of the Better Communication Research Programme; and how they plan to ensure that those recommendations are reflected in local authorities’ local offers.
Lord Ramsbotham
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare an interest as chairman of the All-Party Group on Speech and Language Difficulties.
The Parliamentary Under-Secretary of State for Schools (Lord Nash)
My Lords, my department and the Department of Health are working with the Communication Trust and its partners to disseminate this excellent research, and I am grateful to the noble Lord, Lord Ramsbotham, for giving the House the opportunity to discuss this today. The research will help those who plan, commission and deliver support for children and young people with speech, language and communication needs to improve the way they identify those who need help and the effectiveness of the support they provide. We will take account of the findings of the research in developing plans for the local offer.
Lord Ramsbotham
My Lords, I am grateful to the Minister for that reply. We have been waiting for the government response to this quite excellent programme since last June, and I remind the House that it consists of a report, two volumes of findings, four thematic reviews and 10 technical reports, which have been drawn up by experts over a considerable period and represent an absolute mine of evaluation, information and advice. I feel that we have not yet heard who will actually be responsible for driving the whole thing forward. The Minister mentioned the Departments of Education and Health, but there is also the Department for Communities and Local Government, the Ministry of Justice, the Department for Work and Pensions and others whose contribution must be aggregated to make the best of what is in this report for all the children in this country.
Lord Nash
My Lords, I agree with noble Lord, Lord Ramsbotham, that this is landmark research which is undoubtedly the most extensive of its kind into the subject. The issues that it raises are so wide-ranging that they are clearly not the province of one agency or government department, as the noble Lord says, which is why we want to make sure that the research is widely available and disseminated as widely as possible. My department and the Department of Health are working closely with the Communication Trust to co-chair the communication council which the Communication Trust is facilitating. The council brings together representatives from government, local authorities, health agencies, the Royal College of Speech and Language Therapists, early-years settings, and schools, parents, young people and the voluntary sector. The council will keep up the momentum by developing a comprehensive dissemination plan for the research, sharing learning about effective approaches to supporting children with SEN and promoting better awareness of speech, language and communication needs.
Baroness Whitaker
My Lords, my profound apologies for over-eagerness, especially in view of the noble Lord’s excellent question.
The Better Communication Research Programme places great emphasis on regular monitoring of children’s language development over time so that when they need support, they can get it in the right way. How will the Government ensure that the need for regular monitoring is reflected in local authorities’ local offers?
Lord Nash
We regard the solution to this issue as a local one. That is why we will be setting up the local offer involving children and young people with SEN and their parents and we will publish details of where parents can find all this available in one place. As young people will have an education, health and social care plan which will be reviewed every year, this will monitor the issues to which the noble Baroness refers.
Lord Storey
My Lords, the Better Communication Research Programme report looked at speech and language therapy support in schools, and according to the report only 10% of mainstream secondary schools have such support. My noble friend the Minister will be aware that the provision of speech and language therapy throughout the country is very patchy. How can the Government ensure that anybody who needs this service can access it as quickly and efficiently as possible?
Lord Nash
My Lords, I know that the noble Lord has vast experience in education and I am grateful for his question. We are sharing widely the good practice in the better communications research where speech and language therapists work with teachers and teaching assistants to provide support. He is absolutely right about a divergence in provision around the country and the shortage of funds, but it must be for local authorities and their partners to assess local needs and to make better use of resources so that they are directed where they are needed. Our proposal for a local offer will do this and will put parents and young people at the heart of decisions.
Lord Howarth of Newport
My Lords, the Minister told us just now that the Department of Health and the Department for Education are working closely together in this area. With respect, for many years the two departments have claimed to be working closely together but when it comes to determining who pays for what, they have been quite unable to agree. Can the noble Lord assure us that he will personally use his own best endeavours to ensure that, in future, there is a proper complementarity of responsibilities in terms of how the funding is found for special needs education and for speech therapy in particular?
Lord Nash
I thank the noble Lord for his question, and he is absolutely right about the poor record in cross-departmental work, particularly in this area. I shall investigate the matter and write to him further about it. I think he will be pleased with what he sees in the forthcoming Bill on this.
Lord Hunt of Kings Heath
My Lords, we have heard from the noble Lord’s colleague from the Department for Communities and Local Government that the north-west has been abolished as a region. Does the Minister’s department recognise the north-west?
Legal Services Commission
(11 years, 10 months ago)
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The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the Legal Services Commission decided to cease the Community Legal Service grants programme following careful consideration of all the issues involved and a public consultation exercise. These grant-funded projects and activities do not necessarily provide direct advice to the individuals eligible for legal aid. Following the Government’s legal aid reforms, the commission’s focus must be on providing advice to clients who qualify for legal aid through its contracted providers.
Lord Bach
My Lords, I thank the Minister for his Answer, but is it not rather depressing that these three highly respected and proven organisations are no longer to receive any public funding and are being put at some risk, and all for £650,000 per year? I am sure the Minister will agree that they all have a superb record over many years of helping often poor and disadvantaged people to obtain access to justice. Is it just coincidence that these changes to legal aid are coming at precisely the same time as radical reform of the welfare system is about to begin or is it, as seems much more likely to some of us, deliberate government policy to link these two things together so that if mistakes are made as a result of welfare reform—as they will be—there will cease to be any effective legal remedy for many people?
Lord McNally
My Lords, I am always fascinated by the way in which the noble Lord dismisses £650,000 as a mere bagatelle, but let us also look at the facts. This scheme for funding such bodies was introduced in 2000 and the three bodies in this consultation were awarded three-year contracts at the end of the previous Administration. Since then, we have twice extended their contracts by one year so that what was originally a three-year contract became a five-year contract. However, as I have explained to the House before, I am afraid that we have to concentrate limited funds on bodies that are giving sharp-end legal aid advice. These three bodies, particularly the Advice Services Alliance and the local Law Centres Network, are umbrella bodies that do not give such advice. Therefore, although in happier days they could win such contracts and do such work, there is simply no money.
Baroness Butler-Sloss
My Lords, is the Minister aware or does he appreciate the significance and importance of the Royal Courts of Justice citizens advice bureau? Having been a judge in that court for many years, I had personal experience of the advantages of the citizens advice bureau looking after unrepresented families in my court. Does the Minister realise that taking away the core funding at this moment, when the Government are also taking away legal aid for private family cases, is going to leave the public and the courts in absolute disarray?
Lord McNally
The CAB at the Royal Courts of Justice is able to apply for legal aid contracts in the normal way for the part of its work that is directly legal aid work. As regards broader CAB work, the Government have carried out a number of initiatives to provide funding while voluntary organisations make the transition to a much more difficult economic climate. I very much appreciate the record and work of the Royal Courts of Justice CAB in providing legal advice to individuals. However, I can only say to the House—as I have done frequently as we have gone through this exercise—that we are concentrating our resources on the sharp-end providers and will continue to do so.
Lord Mackay of Clashfern
My Lords, does my noble friend know of any organisation that provides legal advice more cost-effectively than these bodies do? Has the Legal Services Commission worked out what the effect would be in respect of their former clients if the funding were withdrawn from them?
Lord McNally
My Lords, again, I emphasise that the RCJ CAB was able to apply to the Advice Services Transition Fund and this has helped it to continue. How many times can I say this? I look at a budget each day and I see that hard decisions have to be made. Hard decisions are being made by charities and we have tried to give them help in the transition. Quite simply, the days when large amounts of government funds were available for these bodies are over and we all have to face that fact.
Baroness Hollis of Heigham
My Lords, why do those hard decisions have to be at the expense of the very poor and those needing help and advice? As my noble friend Lord Bach said, from next April, and particularly from next October, a brand new architecture of benefits—universal credit—will roll out to people who will, simultaneously, be losing large sums of money. Moreover, their claims will not be paper-based but will have to be online, even though something like a fifth of claimants do not even have access to a computer. As a result, they are going to need extensive help, support and advice at the very same time as the noble Lord is taking 40% of funding away from CABs across the country.
Lord McNally
The legal aid welfare spend will still be some £50 million. We are also in talks with the legal profession and with charitable organisations to help them with adjustments. The noble Baroness is right that we are talking about the poorest. Two years ago, when I announced this exercise, I said that if you cut a programme designed to help the poorest in our society then you will hurt the poorest in society. We are doing what we can to concentrate limited funds on the needy, but it is simply not good enough for the Opposition continually to be willing to sign every blank cheque and never tell us how they would save the money.
Mali
(11 years, 10 months ago)
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Baroness Garden of Frognal
My Lords, on 14 January, my honourable friend the Under-Secretary of State for Foreign and Commonwealth Affairs gave a Statement in the House of Commons outlining the UK’s deployment of two C-17 transport aircraft to provide logistical support to France as well as a small detachment of technical personnel deployed to Bamako airport to assist with the reception of the C-17 aircraft.
Since the announcement on 14 January, we have decided to extend our support to the continued provision of one C-17 in support of France for a further three months. There are currently around 20 people deployed in Bamako supporting liaison with French forces. Following a French request for additional surveillance support, we have deployed a Sentinel R1 aircraft to Dakar, Senegal, with supporting ground crew and technical support amounting to around 70 people.
EU Foreign Ministers agreed on 17 January to establish an EU Military Training Mission to Mali (EUTM) and work is ongoing to scope that mission. Today in Brussels, representatives from EU member states, including the UK, will meet to discuss the individual member state contributions to the mission. The UK is prepared to contribute up to 40 personnel to the EUTM, either in an HQ or a training team role. We do not envisage UK personnel fulfilling a force protection role, and it is quite possible that 40 personnel will not be required, dependent on the contributions from other member states. However, we will not contribute UK personnel to any mission until we are satisfied that adequate force protection arrangements are in place.
Also, today in Addis Ababa, the African Union is hosting a donor conference to discuss how the international community can support the African-led intervention force, AFISMA. The UK will offer £5 million for two new UN funds to support the strengthening of security in Mali—£3 million of this would be directed to AFISMA, and £2 million to activity in Mali that would facilitate and support political processes for building stability. The UK is also prepared to offer up to 200 personnel to provide training to troops from Anglophone west African countries contributing to AFISMA, though the numbers required will be dependent on the requirements of the AFISMA-contributing nations.
In addition, we have deployed a small number of advisers to Anglophone west African countries who will contribute to the AFISMA mission to assess their needs and to gain situational awareness. Ministers in the Foreign and Commonwealth Office will provide an update to the House on the outcome of the discussions in Brussels and Addis Ababa at the appropriate moment.
Lord Rosser
My Lords, I thank the Minister for repeating the Answer given to an Urgent Question in the other place. Under what circumstances would we agree to extend further our military deployments beyond those set out in the Minister’s Statement? What is the minimum period of time we anticipate being deployed on our surveillance and training activities? Will any of our resources deployed, whether personnel, aircraft or other equipment, be resources which would otherwise be deployed in Afghanistan? What is the estimated numerical strength of the forces in Mali against whom action is being taken? Will we extend our support operations if those forces move into neighbouring countries and our continued assistance is sought? Are there any circumstances in which our military personnel deployed in the support operations could be involved in a combat role other than in self-defence? What is the Government’s definition of “success” which would lead to the end of our deployments to Mali? Finally, will there be a Statement shortly on the work presumably now being undertaken by the Department for International Development and the need to achieve stability in Mali through a political process?
Baroness Garden of Frognal
The noble Lord asked a number of questions and I will try to answer them. I may not have noted all of them. As to the question on the combat role, there is no question of our troops being sent out there in a combat role. Their terms of engagement in Bamaco are in self-defence. We are there in support of a French-led operation and in the expectation that the African countries round about will be in a position to pick up any of the military activities that are needed there. There will be a Statement shortly. We have these two conferences going on today and from both of those a Statement will come. We are not anticipating extending our position there but, of course, all these things need to be under discussion. However, we have made sure that this is a finite contribution for a short period in order to ensure that the African countries and Mali have stability. It is in our interests both to support the French in this operation and to ensure that Mali does not become ungovernable. We do not want to leave space for terrorism in this. The noble Lord asked about the strength of the Mali troops in the north. Our understanding is that their numbers are relatively small at the moment. We would hope that the engagement will be short and swift and that following this the Malian community can come together to build itself up.
Lord Craig of Radley
My Lords, can the Minister confirm whether the cost of this additional involvement in Mali is to be met from the contingency fund and whether the Treasury has set any upper limit on the amount of money that may be devoted to these operations?
Baroness Garden of Frognal
My understanding is that this money will indeed come from the contingency fund and that currently no extension or upper limit has been set. However, all these things are under discussion because, at the moment, we are still awaiting the ongoing discussions in that area to find just what the extent will be.
Lord Palmer of Childs Hill
My Lords, as the worry is about mission creep, can the Minister confirm that the training by our troops is going to take place in Bamako or in the countries providing the African forces and that our troops will not be training the Malian troops in the advance guard?
Baroness Garden of Frognal
Our troops will largely be working with the Anglophone nations there: Nigeria, which is taking the lead, Gambia, Sierra Leone and Ghana. Their training will be in such areas as economics, the law of armed conflict, human rights and good governance. That is the sort of range of aspects where our troops are very well equipped to play a training role, but there is no suggestion from this initial engagement that they will go further than that. We certainly do not wish them to be involved in a combat role.
Lord Davies of Stamford
My Lords, I congratulate the Government on having taken the right decision. There are always, of course, unpredictabilities and uncertainties in an operation of this kind, but we have the same interest as every other member of the EU in the stability of north and west Africa and in preventing any al-Qaeda-linked regime from turning any country there into a base for terrorist operations to be subsequently directed at us. Does the Minister agree with me that it is very important in these cases that there should be the maximum degree of cohesion and co-operation between the AU and the EU and that developments in that respect have been quite encouraging so far but need to be sustained?
Baroness Garden of Frognal
The noble Lord is absolutely right that this action is in support of stability in that part of the world. It is a well-leveraged contribution in support of the French activity and the French are taking the lead on this. Co-operation between the EU and the African countries is ongoing because there is a mutual interest in ensuring that this situation is contained and stability is restored.
Lord Wright of Richmond
My Lords, does the Minister accept that there is a worrying contrast between the very welcome assistance that she has announced to help Mali confront Islamic terrorism and our behaviour in Syria where we have recognised a national coalition working in cahoots with al-Nusra and al-Qaeda to overthrow what is, for all its faults, a legitimate and secular Government?
Baroness Garden of Frognal
The noble Lord takes me into territory outside the remit of this Question. Obviously, he is a great expert on that part of the world. There are concerns across the countries in north Africa and further into Africa and, with this support for the French, we will certainly wish that to be contained within Mali.
Baroness Oppenheim-Barnes
My Lords, how many of our EU partners are making contributions of anything like that which my noble friend has described in this Statement?
Baroness Garden of Frognal
That is what is under discussion at the moment. The EU is currently meeting to discuss how it can contribute to that. We have said that we will offer up to 200 personnel for training. They may not all be required because other EU countries may submit more. That is what we are waiting to see from the outcome of these discussions, but we have set a maximum on our contribution.
Lord Soley
This has been a very impressive operation by the French and I take this opportunity to thank them. I ask the Minister to be very cautious about statements either for or against putting British troops in there, because, frankly, if we have learnt anything in the past 13 years, it is that you cannot predict the outcome of these situations. It would be wise to be cautious about that. However, I really do think that we need to congratulate the French on the way they have handled it so far.
Baroness Garden of Frognal
I thank the noble Lord for that. Indeed, we need to exercise caution. We are well aware of mission creep and the danger of that. We have learnt lessons from other interventions and are applying those here. That is why we are doing what we can to find out as much as possible about the situation there. For example, the CDS and the UK’s special envoy on the Sahel will be travelling to the region this week to discuss further with the countries there what form the training could take and to give an assessment of what the threats and dangers are.
Lord Stirrup
My Lords, the Government, like their predecessor, have seen the key response to the risks posed by ungoverned spaces to be an increase in the levels and quality of governance in those spaces. Given the French Defence Minister’s reported statement that the aim is total reconquest of that divided country, can the Minister tell the House what structure and system of governance the military intervention in Mali is designed to support?
Baroness Garden of Frognal
The UK troops are there to provide training and not to impose any form of pre-arranged governance. They are to provide training so that they are better able to secure their land and to provide a peaceful resolution to the conflicts that have long pertained between the north and south of the country.
Lord Anderson of Swansea
My Lords, it is surely right that we support our French partners and allies in Anglophone and Francophone Africa. Without that urgent intervention, Bamako would have been taken and there would have been a terrorist base in west Africa. Does the Minister agree that the intervention was wholly in accordance with international law, following the United Nations resolution, and that ultimately there will have to be national reconciliation and some political solution rather than a military intervention against the Tuaregs and others in the north?
Baroness Garden of Frognal
Indeed, as the noble Lord will be aware, there was a draft UN resolution in December, which authorised the deployment of an African-led mission to support efforts by national authorities to recover the north. Events moved more quickly than that, which is why the French intervened in the way that they did and why we are supporting them to try to ensure that stability is restored.
Succession to the Crown Bill
(11 years, 10 months ago)
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Economy: Growth
(11 years, 10 months ago)
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Lord Deighton
That this House takes note of the United Kingdom economy and the Government’s role in promoting growth.
The Commercial Secretary to the Treasury (Lord Deighton)
My Lords, as a newcomer to your Lordships’ House, I feel an enormous responsibility in opening this debate on one of the most critical issues for our country: the challenges facing our economy. I value this opportunity to draw on the extensive experience of this Chamber.
The trauma caused by the global financial crisis and the ensuing recession required urgent action. This Government responded with a radical programme of reform, designed both to meet the immediate danger to our public finances and to raise the performance of our economy to ensure our competitiveness in a fast-changing, global environment. This programme has four key components and we are driving forward on each one of them. Let me briefly explain.
The first and principal building block upon which all other policies depend is the return to fiscal stability. In 2010, the UK’s budget deficit was forecast to be the biggest in the G20 and in our own peacetime history. This record deficit has been reduced by a quarter over the past two financial years, restoring market confidence in the UK and keeping interest rates lower for families and businesses. We have avoided the predicament of such large economies as Italy and Spain by gripping our deficit problem and securing financing rates close to those of Germany. This credibility has been hard won, but would be easy to lose.
Although recovery is taking longer than any of us would like, principally because of continuing problems in the eurozone, the economy is moving in the right direction. According to the IMF, our growth rates for both 2013 and 2014 are expected to exceed those of France and Germany. More than 1 million private sector jobs have been created since 2010—more than 1 million—with 2012 seeing the largest annual increase in jobs since 1989.
We cannot risk this restored confidence by compromising the disciplined management of our public finances. I anticipate many suggestions for where we may productively invest or spend. However, to retain credibility, as it is not possible to borrow our way out of a debt crisis, any extra spending has to be financed either by other spending cuts or by tax increases. As noble Lords will appreciate, we do not live in a world of easy choices. None the less, to mitigate the impact of the recession on ordinary families, the Government have prioritised reducing the income tax burden on 24 million people and cancelling the planned rise in fuel duty. The remaining three components of the Government’s programme are geared towards helping the economy to recover and grow within the framework of fiscal discipline.
The second component of this programme is monetary policy. The Bank of England has maintained a record low level of bank rate and has engaged in significant quantitative easing to stimulate nominal demand. This quantitative easing is estimated by the Bank of England itself to have had a positive impact in terms of reduced gilt yields, higher asset prices and a 1.5% to 2% rise in GDP. Last summer the Government and the Bank of England launched the Funding for Lending scheme, which aims to increase lending to businesses and households by reducing bank funding costs.
The third component involves reforms to our financial system. Many noble Lords present today will have seen the Financial Services Bill receive Royal Assent a few weeks ago. This legislation will strengthen the financial regulatory structure and establish a new system of focused financial services regulators. In addition, the forthcoming Banking Reform Bill will deliver structural measures to reform the banking system and promote stability and competition, including the complex issue of separating retail and investment banking functions. Our aim is to retain a vibrant finance sector, but one structured to avoid the systemic instability that caused the recent crisis.
I will concentrate my remaining remarks on the fourth and final component. That involves a comprehensive package of structural reforms aimed at rebalancing and strengthening the economy for the future, including an ambitious agenda of infrastructure investment. This is at the heart of my new responsibilities in government. These supply-side reforms will help British business compete in the global marketplace and will make Britain an even more attractive place to do business. The result will be to draw valuable foreign investment to the UK and drive our competitiveness forward.
Imperative to creating an attractive business environment is the tax landscape. The Government have cut the rate of corporation tax from 28% in 2010 to 21% from April 2014. This is the lowest rate in the G7—significantly lower than in France, Germany and the USA—and will act as a spur for job creation on these shores. Other tax reforms to encourage investment include increasing the annual investment allowance, which will enable firms to invest in new plants and machinery, while increased support through research and development tax credits and legislation for a patent box will give real financial incentives for innovation and creativity. In addition, £600 million has been allocated to the research councils and other projects to drive innovation and science.
Of course, while we want to promote a competitive tax environment for businesses, we must also ensure that multinational companies are paying the right amount of tax. This cannot be done in isolation; therefore we are working closely with the EU and the G20 to improve international tax transparency and identify gaps in the international tax standards.
For small businesses to grow, access to finance is essential. I have already mentioned the Funding for Lending Scheme, which facilitates more bank lending. We have also set up the Business Finance Partnership to improve non-bank lending channels, the Green Investment Bank to accelerate private sector investment in the green economy, and the business bank to bring together all the existing lending schemes under one roof. These are part of a whole array of incentives put in place to support entrepreneurs and small business.
To rebalance our economy, it is also crucial to develop our export markets aggressively and to support those companies with overseas opportunities. Up to £1.5 billion of loans will be made available through direct lending for the purchase of UK exports. In addition, the UKTI programme budget will be increased by £70 million per year, a measure that will help us to deliver services to more SME exporters and will refocus UKTI activities on the highest value opportunities and the key emerging markets. We are reinforcing the success that has recently led to our becoming Germany's chief trading partner and in 2012 setting a record for car manufacturing exports. Rebalancing our economy requires that we support growth in every corner of the UK. In line with the recommendations of my noble friend Lord Heseltine, we will be devolving more spending to local areas.
We are continuing our root and branch reform of the burdensome and costly planning system. We have already cut more than 1,000 pages of planning policy down to just 50. Under our better regulation agenda, we continue to cut red tape in many areas to protect business and society from unnecessary bureaucracy.
Developing our workforce through training and skills is critical to our current and future competitive success. Consequently, we have made sure that our higher education system gives better information about graduate employment prospects, and we have overseen nearly 1 million young people starting apprenticeships.
The final area that I want to address this afternoon, and a key priority, is our economic infrastructure. By modernising the UK’s transport, energy, water, waste and digital networks, we will create the right foundation on which businesses can compete and grow efficiently.
Total investment in infrastructure has increased from an average of £29 billion a year between 2005 and 2010, to £33 billion a year between 2010 and 2012. At the Autumn Statement, the Chancellor unveiled a further £5.5 billion of investment including £1.5 billion for our road network. This switch to capital expenditure was financed by reductions in current spending, consistent with our commitment to fiscal discipline.
My focus is on developing and delivering our national infrastructure plan. As I see it we need to do five things. First, we must get the right projects built that match our sector-by-sector strategy and ensure that these projects are mutually supportive. For example, the conception and delivery of our road and rail networks must be integrated.
Secondly—and I am really familiar with this—we need to build projects on time and on budget. This means that projects must be properly scoped, structured and resourced and rigorously overseen and managed. My Olympic experience over the past seven years has given me clear ideas about what is possible and about how to forge that critical collaboration between the public and private sectors.
Thirdly, we have to make sure that we deliver projects at the lowest possible cost. We are targeting savings of 15% against the current pipeline.
Fourthly, we must maximise the flow of private finance to avoid burdening the public purse, while still considering affordability in the long term for consumers. This may involve new government-sponsored programmes such as the up to £40 billion of infrastructure guarantees —the scheme that supports the Northern Line extension which has unlocked the huge development around Battersea Power Station or the recently re-launched PFI initiative; PF2 as it is now called. Alternatively, it requires us to ensure that the policy environment we create allows for sizeable private investment, which is the challenge that we are currently addressing in the energy sector, where a significant amount of this investment needs to take place.
In addition, the pension infrastructure platform has been established to consolidate the efforts of UK pension funds investing in infrastructure projects. The fifth and final point in this infrastructure plan is that we are conducting an infrastructure delivery review within Whitehall because we need to ensure we have the appropriate scale and range of skills in the Civil Service to deliver these major infrastructure projects.
To sum up, the UK is dealing with the consequences of the most severe economic crisis in our recent history. This is a global phenomenon and our room for manoeuvre is constrained. But, despite this challenging backdrop, I know that we can deliver growth. Our policies to stem the initial deficit crisis that would have otherwise devastated our country have worked. The Government have made great strides in getting spending under control, but that is a continuing battle. We have put in place a series of reforms, all within a disciplined fiscal framework, that will support our economy's recovery and contribute to the rebuilding of the confidence necessary to fuel growth. The financial markets are performing strongly because our strategy is working.
Our focus is now on the effective delivery of these reforms so that they are fully realised in the real economy. I emphasise delivery. My Olympic experience tells me that having a good plan is important, but all that matters in the end is the impact of what you actually deliver on the ground. What this country showed this past summer is that we have the people, the know-how, the creativity, the teamwork and the determination to deliver in a way that can take the world's breath away.
I accepted the invitation of my right honourable friend the Chancellor to join this Government to see whether we could apply some Olympic and Paralympic inspiration to our broader economy. I look forward with relish to that challenge and welcome your advice and support.
Lord Eatwell
My Lords, it is a particular pleasure for me to welcome the noble Lord, Lord Deighton, to the Dispatch Box and to congratulate him on his appointment to the Treasury team. It is always a special delight to see one’s former pupils do so well. When I marked his economic essays back in the mid-1970s, I never imagined—nor do I suppose did he—that we would find ourselves in this situation. I think it is appropriate to report that his essays were typically examples of excellent economic analysis, and I hope and believe that he will put those skills to good use in re-educating the Treasury. It certainly needs it.
Today, he has been placed in an extraordinarily difficult position. It is rather difficult to defend the Government’s growth record when there is none—growth, that is. The latest figures are truly awful, with no growth at all in 2012, despite the heroic efforts of the noble Lord, Lord Deighton, and his team at the Olympics.
Taking the longer view, since the Government’s spending review in the fourth quarter of 2010, when it might be said that coalition policies replaced Labour policies, the UK economy has grown by just 0.4% over that entire period. Over the same period, the USA has grown by 4.2%, Germany by 3.6% and France by 1.5%. Accordingly, while the UK economy is now still over 3% below its pre-crisis peak, the USA is 2.5% above and Germany is 2% above.
The question before us today is: in the situation in which we find ourselves, what is to be done? How can we get Britain back on to a secure growth path? Should we follow the recommendations of the Chancellor of the Exchequer that we stick with austerity, accepting his declaration that “Britain is on the right path”? Let us call this plan A. Or should we adopt plan B, following the advice of Adam Posen, former member of the Monetary Policy Committee, and particularly of Olivier Blanchard, chief economist of the IMF, who said last week,
“if things look bad at the beginning of 2013—which they do—then there should be a reassessment of fiscal policy … We think that slower fiscal consolidation in some form may well be appropriate”.
That is the IMF view on Britain.
The answer to our question, “What do we do?”—the fundamental issue in this debate—rests on a consideration of three issues. First, how did the Government get into this mess and are they tackling it in the best way? Secondly, what is necessary to restore the UK economy to growth? Thirdly, what is there to prevent us following this path of restoration?
So, first, how did we get into this mess? As the noble Lord said, the Government inherited the terrible economic consequences of the international financial crisis—everyone agrees about that. These consequences were and are particularly severe for a country as dependent on financial services as we are. But then the crucial question is: in the past two and a half years, have the coalition’s policies made things better or worse?
The previous Chancellor, my right honourable friend Alistair Darling, had been battling the crisis since 2008, and by the spring of 2010 he had succeeded in beginning to turn things around. Recovery was under way at a similar rate to that in the US and Germany, so that George Osborne inherited an economy growing at an annual rate in excess of 2%. He killed that recovery stone dead. He destroyed business confidence by preaching the coalition dogma of austerity and by foolish and demeaning comparisons with the plight of Greece and other eurozone countries without their own currency and exchange rate; he slashed public investment so that in the past three years the Government have spent £12.8 billion less in capital investment than Alistair Darling had planned; and, with savage glee, the coalition set about shrinking the state and impoverishing the poor. This is all justified in terms of the Tory manifesto commitment to eliminate the deficit in one Parliament—a commitment, by the way, which will not be kept, for the deficit is not falling.
Recent figures published by the Office for National Statistics show that public sector net borrowing in the first nine months of fiscal 2012-13 was about £107 billion compared with £99 billion in the same period last year—a rise of 7.3%. I repeat: the deficit is over 7% up on the equivalent period last year. So the answer to the first question is that the coalition inherited a very difficult but recovering economic situation and proceeded to make it much, much worse.
What should be done to turn the position around again and to set the economy on a new growth path or, to put the question in a more practical fashion, how can businesses be encouraged to invest? Firms invest because they are reasonably confident in the future demand for their products. Without demand, if they are shackled by a framework of fiscal discipline, as referred to by the noble Lord, it does not matter how much cheap money there is, as no one will invest. That is why monetary policy is not working. Interest rates can go no lower and the first positive announcement effect of quantitative easing has now worn off. Quantitative easing may be inflating asset prices and ruining pension funds but cheap money will not encourage investment when the Government are intent on slowing the growth of demand.
However, if there is a prospect of growing demand then, to invest, firms need finance and access to the very best skills and technologies to secure markets in a competitive world. Demand is the key to making all the measures that the noble Lord referred to as his fourth pillar work.
That is why my right honourable friend Ed Balls has proposed a temporary cut in VAT to boost family incomes, together with the boost to demand and capacity that would result from bringing forward infrastructure investment, including building thousands of affordable homes. Enhanced demand prospects would then be underpinned by a British investment bank to boost lending to small businesses, complementing fundamental regulatory reform of the banks. To sustain confidence there should be a compulsory jobs guarantee for the long-term unemployed and, further up the employment chain, investment in skills and in transformational science and technology. That is plan B.
Why cannot this be done? “Because”, cry the coalition, “it’s a policy for borrowing more when debt is the problem”, and we heard a similar statement from the noble Lord today. But hang on, at the moment, as we all know to our cost, spending cuts are resulting in a growing deficit. How can this be happening? The IMF has provided the answer and it, at least, has acknowledged its earlier mistaken commitment to austerity.
The answer lies in the relationship between changes in spending and the overall performance of the economy. This is measured by what, in the economics jargon that the noble Lord and I used to discuss, is called the multiplier. If a cut in government spending of, say, £2 billion results, for whatever reason, in a fall of output of just £1 billion, then the multiplier is a half. That is what the IMF believed the multiplier to be back in 2009. The share of taxes in output is about 40%, so if government spending is cut by £2 billion and output falls by £1 billion, tax revenues fall by about £400 million. The fall in tax revenues is much less than the cut in spending, and so the deficit falls by £1.6 billion. That was the policy that the Government thought they were implementing.
However, what if the multiplier happens to be bigger than that? Supposing that it is as large as 2.5, the cut in spending results in a fall in tax revenue of exactly the same amount. You can go on cutting taxes until the cows come home and there will be no change in the deficit at all. All that will happen is that the economy will be driven further and further into the mire of depression.
In acknowledging a previous error, the IMF estimated the multiplier to be a bit less than two, so a £2 billion cut in government spending will drive the economy down by about £4 billion and, when cuts in revenue are taken into account, the deficit will fall by only £400 million. Throw in a depressed European Union and you arrive at our current miserable situation: ever bigger cuts and a growing deficit. But the good news is that what goes down can also go up. What if government spending is increased by £2 billion and the multiplier, optimistically, is 2.5? The economy then grows by £5 billion and the increase in tax revenues pays for the extra spending; there is no extra borrowing at all. I repeat: increased spending results in no extra net borrowing. Plan B is a strategy to cut government spending. And there is more. The government cuts—particularly those disastrous cuts in government investment—not only reduce output now by cutting demand; as the OBR has pointed out, they also cut future output by reducing the real productive capacity of the economy.
Lord Forsyth of Drumlean
My Lords, I am a simple lad. Can the noble Lord tell me what the difference is between his party’s policy and that of the government Front Bench? He gave the figure of £2 billion as the extra borrowing and the extra expenditure that would be required. In quantitative terms, what separates the Opposition from the Government? How much money are we talking about?
Lord Eatwell
The figure of £2 billion was purely for illustrative purposes; it was a simple number. I thought that people could do the arithmetic in their heads. The issue is directly whether we continue with a policy of cutting government expenditure or whether we are committed to an increase in expenditure, particularly on infrastructure. Your Lordships will note that the noble Lord did not say that his infrastructure plans fell outside the tight vice of austerity policy. That vice must be unwound. That is what I am talking about today.
As I was saying, there is more to it than that. As the OBR has pointed out, government cuts in investment cut future output by reducing the real productive capacity of the economy. This long-term loss of output brings with it a long-term reduction in tax revenue, in addition to the medium-term effect that I have just outlined. In other words, the Government are not just failing to cut the deficit now; they are increasing deficits for years to come. By contrast, if the IMF is right, the measures proposed by my right honourable friend will be substantially self-financing in the medium term and will stimulate tax revenues in excess of spending in the longer term. This point has also been argued by the Harvard professor and former US Treasury Secretary, Larry Summers.
Before we sign up to plan B, however, another issue must be confronted. Today, any Government’s finances can be devastated by a loss of confidence in the international bond markets. The noble Lord referred to this. After a particularly violent example of sovereign bond market hysteria, James Carville, the political adviser to President Clinton, famously remarked,
“I used to think if there was reincarnation, I wanted to come back as the President or the Pope … But now I want to come back as the bond market. You can intimidate everybody”.
Well, the bond market certainly seems to have intimidated the coalition. Whenever its destructive policies are challenged, it argues that unless the vice on Britain is tightened, the financial markets will lose confidence, interest rates will rise and any prospect of recovery will be destroyed.
There are three things wrong with that argument. First, no one is suggesting a spending spree. Plan B is a cautious expansion to begin the task of building the foundations for growth. Secondly, it is austerity that is now undermining market confidence. All three of the main credit rating agencies—Standard & Poor’s, Moody’s and Fitch—have put Britain on “negative outlook”, citing concerns over the weak recovery and the public finances.
Thirdly, let us consider the experience of the United States, which lost its AAA rating last year. Would you rather have our AAA rating and zero growth or the lower US rating and 3% growth in the last quarter? I know which I would prefer.
The noble Lord, Lord Deighton, outlined in his speech a number of desirable measures that the Government can take to help to build productive capacity—the structural measures to which he devoted the majority of his speech. However, the Chancellor’s commitment to cutting demand and shrinking the state—less Bullingdon Club, more Tea Party—is eliminating any significant impact of those worthy measures. The Government’s attempt to stimulate growth has been a failure; the Government’s attempt to cut the deficit is a failure; and, if informed predictions are correct, even the Government’s attempts to preserve Britain’s AAA rating in the markets will prove to be a failure.
The coalition is now responsible for the longest slump in the British economy in the past century—longer than the great depression—yet last week George Osborne said something truly chilling. He said:
“We can either run away from these problems or we can confront them and I am determined to confront them”.
What is it in the word “failure” that George Osborne does not understand? For the sake of this country’s economy, it is time for him to run away. He is the living embodiment of plan A and must accept responsibility for its failure. Perhaps I may suggest that an excellent replacement as Chancellor would be my former pupil, the noble Lord, Lord Deighton.
Lord Skidelsky
My Lords, I join the noble Lord, Lord Eatwell, in welcoming the noble Lord, Lord Deighton, to the Treasury Bench; I hope that he enjoyed the experience of renewed contact with the supervision of his former teacher.
When George Osborne took over the controls at the Treasury, he decided that fiscal policy would be governed not by the state of the real economy but by the state of the public finances, as measured by preset fiscal targets, particularly the rate of deficit reduction. Those targets were designed to reassure investors in government debt that the state was solvent and would remain so. Half-way through the life of this Parliament, we can say that the effects of that policy in terms of output and growth have been disastrous. Britain, like the eurozone, remains stuck in the slow lane. We did not grow at all last year, and we enter 2013 with a realistic prospect of a triple-dip recession. Despite our freedom to devalue and massive open-market operations by the central bank, British output is 3% lower than in 2008. The results of the fiscal targets are correspondingly dismal. A state with high debt where no growth has become the new normal will not retain the triple-A rating on its sovereign debt.
What has gone wrong? The central design failure is that the targets were set on the heroic assumption that the economy would recover despite the tightening of fiscal policy implied by the targets themselves. In a balance sheet recession, when the private sector is cutting spending to reduce its overindebtedness, that assumption was just wrong. Put simply, we cannot all deleverage at once. To save more, you spend less, and if everyone does that, including the Government, the economy shrinks. That is lesson number one to which the noble Lord might respond.
George Osborne blames the failure of Britain to grow on the eurozone, but that argument is circular, as it is following exactly the same policy as we are. It is the Chancellor’s own policy which explains the stagnation of the British economy, not the eurozone.
Mad economists are emerging from the woodwork to say that George Osborne is not cutting deep or fast enough. For example, Andrew Lilico appeared on the “Today” programme this morning telling us that the reason that the deficit is not going down is that austerity has not started. Apparently we are in the middle of a Keynesian boom. We need more cutting. Cut benefits, cut the welfare state, cut government, cut everything that can possibly be cut—and behold, the private sector phoenix will rise from the ashes. These Einsteins of finance never explain how bigger cuts are supposed to produce recovery, or, indeed, even cut the deficit itself. It makes one despair of economics.
The Chancellor can claim that the unemployment figures are slightly lower than they were some months ago. How can this be when output has not grown and may even have fallen? There is a puzzle here, but it is not a large one. The reason is that today, with a more flexible labour market, a fall in output is not necessarily, or immediately, reflected in a fall in employment. It may simply lead to a movement of workers into lower-paid, part-time or intermittent jobs or work training schemes, none of which count towards recorded unemployment. This has certainly been happening. It also explains why the Government can claim success in increasing private sector employment faster than the public sector is shedding employment.
I have no doubt that if the Chancellor continues cutting as hard and fast as Mr Lilico wants, those of us left with decent jobs or incomes will be able to have as many drivers, gardeners, trainers, cleaners, nannies, domestic servants, chefs, butlers and waiters as we can possibly want, and, no doubt, at the equivalent of Victorian wage levels. In other words, back to the world of “Downton Abbey”. After two centuries of industrialisation, what a wonderful solution to the unemployment problem.
The obvious alternative to blind faith in fiscal targets is action to restore the economic trajectory that underpinned the targets in the first place. The international organisations are now saying this; the noble Lord, Lord Eatwell, has quoted Olivier Blanchard, who has just said that the Chancellor should “ease up” on fiscal austerity, which is as near as an international civil servant can come to saying that his policy is dead wrong. Even Boris Johnson says we should junk the word “austerity”.
In plain English, “easing up” on austerity means stimulating investment. Public capital spending is not included in the current deficit target, so the Government can restart the investment machine without breaching their own targets on current spending. That is the only way to get the deficit down, or to meet their targets.
In this context, I welcome the Government’s announcement that they have approved the second phase of High Speed 2. However, I have two questions. Why will it take so long? The first phase is scheduled to be completed in 13 years’ time, and the second phase in 2033. Two years ago I asked the noble Lord, Lord Adonis, who had just stepped down as Secretary of State for Transport, how long it would take to complete this project with any sense of urgency. He said that it would take about five years. He is in his place, and I hope that he does not tell me that I have remembered that wrong. As I have said before, if only we had a Lloyd George in charge of this programme, we would get some movement.
My second question is: how will it be funded? According to the Financial Times, the Government will have to,
“start raising private sector finance to part fund the £34bn project”.
Why? Here is an opportunity for the Government to take advantage of the spectacularly low cost of their own borrowing—why it is so low is the subject of another discussion—to finance the whole thing itself. It is a genuine capital investment, which will yield an identifiable rate of return. Perhaps the noble Lord would give us some indication of how the Government will finance this project. I hope that they will not repeat the disastrous PPP schemes which made such a mess of the London Underground and Channel Tunnel projects.
Will an investment strategy such as I have proposed not cause the public debt to increase? This is the crunch question. The Minister said in opening that it would not be possible to borrow our way out of our debt crisis. If indeed the project starts reasonably expeditiously, the debt will go up. There is no doubt that it will be higher in 2015 or 2017 than it would have been otherwise, but so will the capital stock and the economy itself, while the increased output can be taxed to finance the interest cost of the extra debt.
There are, of course, obvious risks. The risk of a pro-growth strategy is that borrowing more than initially planned may spook the bond markets and lead to a rise in borrowing costs. However, it is a much smaller risk than putting one’s faith in pre-set fiscal targets which produce a stalling economy, without any guarantee that this will actually deliver on the fiscal numbers. Which strategy does the Chancellor really think is more likely to keep our AAA rating with the credit markets?
If the growth-first strategy makes sense for Britain, it should make sense for Europe as well. This country was a pacesetter in adopting fiscal targets as a guide to policy after the financial crisis. Why not be the first mover in showing how to reset policy and help lead Europe out of self-defeating austerity?
Lord Lamont of Lerwick
My Lords, I join with other Members of the House in congratulating the noble Lord, Lord Deighton, on his maiden speech from the Front Bench. Like other noble Lords on this side, I am delighted to find that he is not entirely still under the spell of his former distinguished teacher.
Growth ought to be the natural state of an economy. Most economies tend to grow over time. Financial crises, bad harvests and various other factors can, of course, delay or obstruct that growth. But growth is the natural order over time, because human beings have a natural instinct to make two blades of grass grow where one grew before and a natural instinct to innovate. Growth, it is worth remembering, does not come from Governments; it comes from individuals.
What, then, should our reaction be to the figures which were released last week and showed a 0.3% drop in GDP in the final quarter? The figures can always be sliced in many different ways. One can portray them, as indeed the noble Lord, Lord Eatwell, did, as saying that four out of the last five quarters have been negative; that the economy was flat all last year; and that the economy is still below the 2008 peak. On the other hand, you can formulate them a slightly different way: the economy grew by 0.3% in the last six months; although the economy is below the peak of 2008, if you exclude North Sea oil production it is only a whisker below that peak, and North Sea oil has been in dramatic decline with interruptions to production. The fact that there has been no growth last year is the same as in France, while the 0.3% drop in GDP in the last quarter compares with a drop of 0.5% in Germany; and, collectively, the whole of the eurozone is currently in recession. What I draw from all that is that when the dust settles and this is all in the history books, I suspect we will find that almost all the countries in this part of the world had a broadly similar experience, whichever way one tends to look at the figures at any particular moment.
We heard a lot about the views of the IMF, but we have not actually had the views of the IMF; we have had the views of Mr Blanchard. Christine Lagarde, the director-general of the IMF, has been extremely supportive of the Government’s strategy and we will only officially hear the views of the IMF in May, when we hear the results of the article 4 consultation. The noble Lord, Lord Eatwell, talked a lot about the multiplier effects. Interestingly, there was a report in the press at the weekend that the IMF has concluded that the multiplier effects, both of austerity or of any deficit spending, are extremely slight in the case of the UK. No doubt we will hear more about that when the article 4 consultation takes place.
There is no doubt that the figures for the last quarter were extremely disappointing, but the idea that some extreme excess of austerity is holding back the British economy seems to me very much open to question. The Government have shown that they are prepared to be flexible in their deficit reduction programme. They have relaxed the programme twice and put back the date at which they expect, and are aiming for, a fall in the total debt-to-GDP ratio. As my noble friend Lord Forsyth said, the difference between the Government and the Opposition is much exaggerated by both sides for the purposes of both sides. I do not think that the noble Lord, Lord Eatwell, is right in saying that the capital expenditure planned under the last Government was higher than that of this Government; in fact, the cuts that Alistair Darling put forward were bigger than those of this Government, some of which have been reversed. Can the Minister comment on that precise point?
Despite the small differences between the planned reductions in expenditure, it is true that if you compare the outcome of expenditure with the original Darling plan for reductions in expenditure, the latter was much tighter and more austere than what the Government have implemented. If you compare our austerity programme to that in other EU countries, it is difficult to argue that these cuts are savage or that this fiscal consolidation is sudden and dramatic. At the beginning of this crisis we had a deficit to GDP of around 12%. That was almost exactly the same as Greece’s. I am sorry to say that today Greece has a considerably lower deficit than the UK’s. Italy, France, Ireland, Portugal, and Greece all have lower deficits than we do. These have not been caused by growth—a solution somehow magicked out of the air by the party opposite. That is not how they have reduced their deficits. They have done so by making more savage cuts and far severer fiscal consolidations than we have made.
With a debt-to-GDP ratio of around 70% to 80%, which is where it is expected to peak out, if we go on adding to that overall stock of debt at the rate of 12%, as it was when we started off, or 7% or 8%, because the annual deficit is the amount that we add to it each year, we would soon get to a situation in which a debt-to-GDP ratio would be 100%. As economists such as Reinhart and Rogoff have argued, that is the level at which the overall stock of debt becomes dangerous for the long-term growth of an economy. They would argue that that is why Japan has had such a bad time for such a long period. If deficits really solved long-term economic growth, Japan would not have been stranded in the situation in which it has been for such a long time.
If deficits of 7% to 8% per annum have left the country not growing, is it credible that one of 10% or 12% will suddenly cause the economy to leap into life? We hear about the multiplier effects, but never about what is going to happen when these so-called stimuli are withdrawn. Anyone who thinks that this would be the real world experience of deficits ought to read the diaries of Mr Morgenthau, President Roosevelt’s treasury secretary, who expressed his disillusionment with the deficits being run in America in the 1930s. He wrote that all the United States had to show for it was unemployment at much the same level and no increase in production. In the UK today we are running deficits that are considerably higher than those run by the Roosevelt administration.
Lord Skidelsky
The noble Lord mentioned a point of history. Of course, American unemployment fell very rapidly in the 1930s, so if he wants to leave the House with the impression that it did not fall, I must say to him that that is just wrong.
Lord Lamont of Lerwick
No. President Roosevelt initiated back to work programmes—that is true—but the private sector, the economy, was not generating growth. If the noble Lord, who is a very eminent historian, wishes to doubt that, just let him read the Morganthau diaries, because they are full of deep disillusionment about the pointlessness of the programme that he himself was implementing and the effect that it was having on the growth of the economy.
I am not arguing that deficit financing can never be of use or play a part in taking up the slack in the economy when the private sector is unable to borrow, but we are in a position where both public and private finances are under pressure at the same time. It is a much favoured parlour game to decide what Keynes would have thought of doing in this scenario today. Of course, the House is very fortunate in having the eminent historian, the noble Lord, Lord Skidelsky, who knows more about this subject than anyone else, to tell us. Indeed, we also have the noble Lord, Lord Eatwell, a most distinguished Cambridge economist—a university that is profoundly affected today by the shadow of Maynard Keynes. I am sure that the noble Lord, Lord Eatwell, remembers Milton Friedman’s comment about Cambridge academics and their theories, which have applications within 25 miles of Cambridge University.
This recession is indeed different from a normal cyclical recession. It is, as the noble Lord, Lord Skidelsky, said, a balance sheet recession, but it is a recession that has followed a severe banking crisis. As economists such as Rogoff and Reinhart have shown, I think quite tellingly, such recessions tend to last much longer than normal, cyclical recessions, and are much deeper.
So what can be done to stimulate growth? I believe that there are things on the supply side that can do this—training; lifting and relaxing planning controls, as the Government have done; infrastructure spending, very much as the Minister outlined, although if infrastructure spending is to be financed by cuts in current spending, that will squeeze consumption further, which has been one of the problems of the economy, because inflation has not come down, and it has been inflation that has been squeezing consumption and living standards.
However, the real problem of the economy, I believe, is not fiscal policy but the lack of credit in the economy and the failure of the banking system still to make credit available. The risk is that the new businesses that drive innovation and produce the new products will be strangled because of the lack of credit. The Government have introduced the Funding for Lending scheme. It is too easy to say what the effects of that are, but if it has a good effect, maybe it ought to be expanded further. However, they have been piling regulation upon regulation on and demands for more capital from the banks, and that, in the last analysis, is incompatible with more lending and makes more lending more difficult and more expensive for the banks.
The Government have said that they want to see new entrants into the banking sector, which I think would be highly desirable, but I am not sure that that message has got through to all parts, particularly the lower parts, of the Financial Services Authority. I noticed that the chairman of Metro Bank said the other day that if he had known what was involved in starting a new bank in the UK, he is not sure that he would do it again or would have done it in the first place.
We await the arrival of Governor Carney, and there are great expectations of him, but he will not exactly be a man on a white horse, and I think it would be unfair to regard him as that. He has talked a lot already about central banks doing more to promote growth. I hope, however, that the Bank and the Government will be cautious about more quantitative easing. There is in this situation, even now when we do not have growth in the economy, a danger of creating more asset bubbles. We have seen the consequences of the “Greenspan put” in the past, where central bank action has been taken to keep the financial markets buoyant and the result has not been that we have avoided a crisis but that the crises have got successively worse. When I look at the level of the stock market, which of course can be interpreted favourably in one sense, I wonder whether it is reflecting the prospects for the economy or the consequences of quantitative easing.
The Opposition have inevitably been very critical and the Government inevitably are in a difficult situation. I think it was Boileau, the French writer, who once observed that those who come to tell the people they are not well governed will never lack a welcome. The only surprising thing is that those who are telling the people they are not well governed are those who were in charge five minutes ago and helped to create the situation we are in. It is not an easy situation and, most of all, I think what we need are what Tolstoy called those two grand old warriors—time and patience.
Lord Hollick
My Lords, I, too, would like to congratulate the Minister on his leading role in a brilliantly successful Olympic and Paralympic Games last summer. He is the living embodiment of the vital role the Government can play to promote growth in the short term and, thanks to the legacy infrastructure, in the long term too. His appointment provides welcome substance to the Government’s claim to wish to boost infrastructure investment but will the Government provide the means to do it? He and his partners at the ODA received £9.3 billion from the previous Government, a level of support that was maintained by the coalition. We must hope that he will be successful in persuading his new boss that the entire economy is badly in need of this kind of commitment to invest in infrastructure.
As we have heard from other noble Lords, the UK economy is profoundly stuck. Real GDP is more than 3% below the 2008 figure and a significant 15% below where it would have been if long-term growth trends had been maintained. This sustained underperformance can be expected to impact adversely on the underlying production capacity of the economy and our skill base. The corrosive effect on the social fabric is high and under-investment in education, housing and public services is all too evident. Unemployment is up from 5.2% to 7.8% despite the recent downward trend and more than 900,000 young people are unemployed with a similar number of the total workforce out of work for more than 12 months. Yet the Chancellor’s response to this grim state of affairs was to say in his Autumn Statement that,
“turning back now would be a disaster”.
Turning back from his failed and indeed nonsensical policy of “expansionary fiscal contraction” would have been a wise choice. Expansionary fiscal contraction works as an oxymoron but not as an economic policy. The belief that cutting the fiscal deficit would boost business and consumer confidence and lead to economic growth and that private sector investment would fill the gap left by the coalition’s austerity plan was and remains profoundly flawed. In 2010, the OBR predicted that business investment would grow in real terms by 8.1% in 2011 followed by average annual growth of 9.5% in the following four years. In reality, it grew by 2.9% in 2011, 3.8% in 2012 and is forecast to grow by 4.9% in 2013. Many of our larger companies hold high levels of cash on their balance sheets but uncertainty about the outlook for demand—a word that was curiously missing from the Minister’s remarks—is proving to be a deterrent to investment. This flawed approach was in part sustained by a naive belief in the sanctity of the UK’s credit rating as measured by discredited rating agencies. Markets are sophisticated enough to realise that without growth the deficit will continue to balloon leading to further austerity and further weakness in the economy—a spiral of doom. As Larry Summers has pointed out, we are facing not just a fiscal deficit, but also growth, jobs, investment and skills deficits.
If the Chancellor is to address these deficits, he must first address the UK’s dramatic lack of aggregate demand. This is not just the view of his opposite number, my honourable friend Ed Balls, whose analysis has, most gallingly for the Chancellor, proved to be all too correct, but is also the view of the IMF, the World Bank, the WTO and many other major economic institutions which have all warned that austerity was hurting growth and have urged economies—not just the UK—to embrace stimulus.
The Chancellor is, of course, a realist. He knows that he must alter course and boost growth. Over the past year, he has introduced a number of supply-side measures, many good, some less so, but taken together they are unlikely to have much impact in the near term. The Funding for Lending scheme is to be applauded. The 89 steps of the noble Lord, Lord Heseltine, to leave No Stone Unturned in pursuit of growth are most welcome and were warmly embraced by the Government. However, his principal recommendation to gather together all business funding in Whitehall and pass it to the regions appears, unsurprisingly, to have encountered some resistance at the centre. All these supply-side measures provide evidence of a quickening pace but no real determination to boost demand, which is essential if these measures are to achieve their purpose.
However, I detect a change in the economic weather. Surely the most significant step towards a more balanced policy is the appointment of Mark Carney—not on a white horse—as the next Governor of the Bank of England. The Chancellor was initially rebuffed in his quest to hire Mr Carney but, to his credit, he persevered, upped his offer and landed his man—a man with a record of openness to monetary policy innovation, who has advocated that central banks target both inflation and nominal growth and believes that monetary policy measures to help the economy grow are not exhausted. Last week in Davos he advocated an activist monetary policy with the immediate aim—indeed, priority—of ensuring that the economy reaches “escape velocity”. I take this to mean that growth in the economy reaches a sustainable level where increased tax receipts can take over from austerity as the principal driver of debt reduction—a virtuous cycle of growth replacing a vicious cycle of cuts and persistent recession.
Therefore, Mr Carney is part of the plan B that dare not speak its name. He may deploy a range of initiatives such as forward guidance targeting growth and expanding the supply of Bank reserves to purchase a range of long-term assets with the aim of increasing spending. However, monetary policy can, as Mr Carney himself has emphasised, only take us so far. Bold fiscal measures are needed to help the economy move forward. Mark Carney has shown that he is adept at taking full advantage in a sellers’ market. I expect that in his discussions with the Chancellor he has emphasised the limits of monetary policy, however innovative, and secured an acknowledgement from the Chancellor that a series of fiscal measures need to be introduced to create the demand the economy so badly needs. It is vital that the Chancellor and his new governor work closely together to develop a co-ordinated monetary and fiscal approach to reach “escape velocity”. For his part, the Chancellor must adopt the most effective fiscal initiatives to increase demand and promote investment, particularly in infrastructure.
Temporary fiscal measures which boost growth will make it more likely that the medium-term targets can be met and will, I believe, so long as the medium-term framework remains intact, be welcomed by financial markets which have become increasingly concerned about the depressive consequences of untrammelled austerity, as we have heard from other noble Lords. I would like to see the Chancellor introduce a UK version of the successful temporary payroll tax cut in the US and reduce employees’ NIC by 2p in each of the next two years. The cost, after taking account of the tax generated by the additional economic activity, will be around £5 billion a year.
This weekend, the Deputy Prime Minister acknowledged that the coalition made a mistake in cutting much of its capital spending. Now is the time to reinstate the capital spending on the school build programme and on social housing. If we are to tackle the growing investment deficit in infrastructure and in energy, estimated to be £350 billion and £175 billion over the next 30 years respectively by McKinsey Global Institute, the Government must take action. Offering loan guarantees is a welcome step but only if it is accompanied by measures, such as the introduction of road pricing on motorways, which can provide private investors with an adequate rate of return.
Funding infrastructure remains a challenge, despite the Government’s exhortations to the pension funds to invest. The Government could consider the introduction of tax-free infrastructure bonds for individuals, taking advantage of historically low long-term interest rates and providing hard-pressed savers, who have been badly penalised by low interest rates, with improved returns. Many infrastructure projects are, inevitably, medium-term or long-term in nature and so is their effect on demand. Boosting short-term demand could be achieved by a reduction in VAT on building works at domestic residences from 20% to, say, 5% over the next two years. This would encourage households to invest to improve their properties and utilise the currently under-employed pool of construction skills.
The Government have a vital role to play in promoting growth. The Chancellor made a bold move in appointing an activist and innovator as the Governor of the Bank of England. He now needs to display a similar appetite for activism and innovation by adopting bold measures to promote investment and growth.
Lord Wolfson of Aspley Guise
My Lords, I also welcome the Minister and am pleased to see a fellow businessman on the government Front Bench. As a serving FTSE 100 chief executive, employing around 50,000 people, I declare a very real interest in this debate. For the past four years, the economy has felt like walking up the down escalator. You have to work very hard just to stand still, and with real effort you might just move ahead.
The Minister has found himself, as a businessman, in the middle of an intensely political debate with a very simple business solution. To characterise the debate so far, we have, on the right, the belief that any expenditure—capital or otherwise—merely adds to national debt and, as such, undermines the financial health of the Government. It increases debt because you cannot borrow your way out of a recession, particularly a debt-led one. On the other hand, you have the equally misguided belief that all the Government need to do is pull the demand lever, loosen the reins and become the spender of last resort, boosting the economy and lifting it by its boot straps. We are told such spending would be good no matter what it is on. The Government will be the investors of last resort.
If I was a diplomat, I would say that both sides are right. As I am a businessman, I must say that both sides are wrong for one very simple reason. What matters, and will make both arguments right, is not how much is spent but what the money is spent on —that is, the quality of the investment. It is extraordinary to me, when I hear the Government talking about investment plans or the Opposition talking about how much money they would inject into the economy, that they talk about the amount spent, not the return on that money. Ultimately, it is the return on the money that matters. If the Government can invest in infrastructure that provides them with a cash return in excess of the interest on the money borrowed to build that infrastructure, not only will that not increase the deficit, it will actually reduce it because it is a good investment.
There is, however, a word of warning for those who take courage from these words and think that capital investment is all we need. It depends on the type of capital investment. If taxpayers’ money is to be invested, it must be invested profitably. I hear the very good point about HS2 made by the noble Lord, Lord Skidelsky. There is a very simple reason why the investment is not being accelerated and that is because, although the cost-benefit analysis currently shows a profitable project, the returns to government are, over 60 years, about one-third of the total capital cost. As far as the Government are concerned, it is a loss-maker. For as long as the Government invest in loss-making assets, their finances will be undermined, wealth will be destroyed and the economy will be pulled back.
How are we to reconcile the very simple principle of profitable investment? I use the word “profitable” in a very special sense—a sense in which it is not often meant, particularly in another House in this great Palace. I do not mean “profitable” in the sense that it is likely to win votes; nor do I mean it in the sense that it will be socially beneficial, but in the sense that it will produce a cash return. Where are such investments to be found? History would say that Governments have not been particularly good at investing in truly profitable assets.
The answer lies in a little story that I should like to share with noble Lords. I recall from my time as a young retail apprentice at the age of 10, being taken out with my dad around the local village. Every Saturday morning at 9 o’clock there was a queue of between 10 and 15 people outside the baker’s shop. One day, rather foolishly, I said to my dad, “He must be a very clever baker to have that queue outside”. The answer came back: “No. That is a wasted opportunity. That is money that is not being made. That baker should be opening his doors half an hour earlier and he would make more money”. There is a clear lesson there. Where there is a queue, there is demand; and where there is demand, there is potential for profit.
If we want to find a queue in this country, we need to look no further than virtually every part of the road network at 8.30 am and 4.30 pm. Here we have a government monopoly—a business that only government can effectively invest in. It would produce, by my calculations, 10 pence of government revenue for every passenger mile travelled. Projects and roads could easily be built that would pay for themselves and therefore fulfil our criteria of truly profitable investments. They would not meet that terrible test of all government ventures: they are not politically popular. None the less, if you need any convincing of the economic potential tied up in our road network, do a little mental experiment—it is always fun. Imagine a London in which the M25, the M1 and the Westway were permanently closed. Imagine the havoc that that would wreak on our economy and very quickly you can see how much damage it would do. Now reverse that concept and ask yourself: why not build more great motorways? A flyover from Croydon to central London could get commuters into London in 12 minutes—that journey takes about an hour and a half today at the wrong time, if you are lucky. Such projects could easily be built and financed. It requires a level of focus and discipline that the Government simply do not have but the answers are there.
Not only are there measures by which the Government could invest profitably in the economy, there are other free ways that they could do so. Legislation is relatively free and it can do much to liberate demand. I take issue with the noble Lord, Lord Eatwell, when he said that there is no demand. As a retailer, I can tell him that there is an enormous amount of pent-up demand in the UK. In my company, we have identified 1 million square feet of trading premises that we would like to open, but this year we will open barely 250,000 square feet. That is not because we do not have the money. We are generating £250 million more cash than we can profitably invest in our business, after paying taxes and dividends. That £250 million cannot be invested because at least 700,000 square feet is tied up in a chronically slow planning system that has no sense of the time value of money. For example, it took us nine months to get planning permission for a stock room for a shop that we wanted to open in Surrey Heath. The opening of the whole shop was held up for that time. There was no sense of remorse. The attitude was, “If we make the decision tomorrow, next month or in nine months’ time, it really makes no difference. We will make the decision when we get to it. Wait your turn”.
This is amazingly debilitating but, above and beyond that, there is a more profound problem with our planning system. The essence of it is that the shape that our economy should take is determined from the top down, whereby decisions are based on what activities take place in which locations, through a system of zoning and restrictions on use that is, frankly, Soviet in its approach to economic development. I am used to it now, but it still surprised me two months ago when I went to see the chief planning officer of a big town. We were proposing to open a store that would have taken £15 million. The planning officer said, “No, I don’t want you to open it there; I want you to open it here, on the wrong side of town, next to the single-lane road that is always blocked”. That store would have taken around £4 million, rather than £15 million. That was bad news in itself, but the really bad news came when he told us that we would have to wait four years for that site to become available.
Our planning system replaces the initiative and intelligence of hundreds of thousands of entrepreneurs with the uncomprehending dead hand of a small number of extremely overworked planners. Since the time of Stalin, the world has lost faith in planned economies. We prefer free markets; we need to take that lesson to county hall. The pent-up demand held back by our planning system runs not into the hundreds of millions but into the tens of billions. The message is very clear: liberate pent-up demand rather than try to push, encourage and incentivise demand that will not happen of its own accord. If we really want to be brave in our economy, we should not just free up use of brownfield sites; we should take a small fraction of the 92% of this country that is greenfield. We should take the ugliest sites closest to London and turn them into beautiful new garden cities, because then those tens of billions will become even more tens of billions.
The potential is there; the Government do not need to spend a penny. It is in the hands of the planner’s pen—we can create wealth and stimulate growth in this country. The rules of effective government intervention are very simple indeed, and they come down to one simple, pleasing principle: follow the demand that is already there. We must liberate the demand that is pent-up within our economy and abandon the crowd-pleasing subsidies, pet projects and announcements that we have to endure every two or three weeks about some brand new stimulus for some small part of our economy. We must seize instead the big structural opportunities and liberate the private sector to invest where it wants to and the public sector to invest where it can make money, not just for the taxpayers but for the whole country.
Lord Mitchell
My Lords, I am afraid to say—yet another businessman. It is getting rather dangerous. In many cases anniversaries mean little— just dates in the calendar—but sometimes they are useful moments to take stock. Tomorrow will be the thousandth day that this coalition Government have been in office and it is a good moment to take stock of the economy. I must therefore thank the noble Lord, Lord Deighton, for securing this debate. As one of his sponsors at his recent introduction, I feel that I bear a personal responsibility, because for him it is going to be very tough to defend this Government’s record.
Any way we look at it, the scorecard on this thousandth day is lamentable. Last week, as has been mentioned by several speakers, we received the GDP figures for the final quarter of 2012. As we all know, growth was minus 0.3%. We are heading for a triple-dip recession—unheard of in modern times. It is no wonder that the Prime Minister was anxious to distract attention with his speech on Europe. I know that the Government get tetchy when my right honourable friend the shadow Chancellor talks about flat-lining, but with only 0.4% growth over the past couple of years, what else can we say? Noble Lords should compare this with Germany, which has experienced growth of 3.6% over the same period, or better still, the United States, where the figure is 4.1%.
America is a very pertinent comparison. In many ways, the American economy and ours are parallel. Yet, while we wallow, the Americans are experiencing improving growth. There is no need to take my word for it. Noble Lords should look at the Dow Jones index, which is racing ahead. Indeed, the Nobel laureate Paul Krugman, in a notable column in the New York Times last week, totally debunked the deficit hawks in his own country. The United States did not pursue a policy of austerity, but instead chose stimulus through massive public investment while interest rates were kept at rock bottom. The result is that deficit and public spending as a share of GDP have started to decline of their own accord. Contrast this with George Osborne, who slashed public investment and raised taxes on families. In doing so, he has killed business confidence and growth and we know the result. The deficit has increased as a share of GDP and is up more than 7% on the equivalent period last year.
The facts in America, as they are in our own country, are that, when the financial crisis hit, the economy went into a tailspin, tax receipts fell and unemployment benefits rose. However, unlike us, the Americans held their nerve, re-invested and, as the economy recovers, the deficit as a share of GDP is falling. It is really easy economics to understand, so why does our Chancellor take a totally different position? If our economy were recovering, perhaps it would all have been worth the pain, but it is not. Everything is heading south. Indeed, in America, recent forecasts suggest that the federal deficit will be below 3% of GDP by 2015, a number that I am sure we, too, could live with.
So, where are we on the 999th day of this totally misguided policy? Our economy is static; our people are suffering; our businesses lack confidence; the banks are not lending; companies are sitting on piles of cash instead of investing; and our trade gap is widening. It is a total disaster, much of which could have been avoided were it not for the obsessions of the Chancellor of the Exchequer.
My Front Bench brief is SMEs, an acronym, by the way, that I loathe. Combining small businesses with medium-sized businesses shows how out of touch people are. Small and medium-sized businesses have very little in common, except for the fact that they are not large. But as everyone else uses this definition, I guess I will have to live with it. Interestingly, SMEs have held their own during this economic crisis. Employment figures have been pretty constant over the past five years and so too have export achievements. It has been large companies and the public sector that have shed their workforces. It should never be forgotten that SMEs contribute more than half of the UK’s GDP.
This sector should be promoted and helped and it is here that I have some of my greatest concerns. It is absolutely true that this Government have spawned a multitude of financial initiatives to help SMEs. At one point, it seemed like a monthly occurrence that one programme or another was being announced to a baffled world. Although the Government may feel that they are doing well, the fact is that, in the SME sector, the situation is dire. No matter what programmes are announced, very little financial assistance seems to be getting through to the sector.
Many believe that the commercial banks take a significant cut out of government programmes in order to boost their own balance sheets. It is all so complicated and so difficult to understand one programme from another. To me, it all smacks of insufficient thought. I believe that the Government are making a grave mistake in looking to the high street banks to deliver their programmes. The truth is that the banks have forgotten how to relate to the SME sector. Five years of saying no, of being sceptical, of consigning troubled companies to the intensive care unit, now means that saying yes is hard to do.
Last month, I had the opportunity to visit the German Sparkassen banks. I know noble Lords are probably familiar with the German system, but what a contrast. More than 40% of corporate debt in Germany is channelled through these local savings banks. What impressed me was the long-term commitment that these banks have to their business customers, often going back decades. They stand on the touchline cheering their customers on. What a contrast to banks in our country. How many small companies have even met their bank manager? How many loans are accepted or rejected solely based on an online application, with never a human being in sight? In Germany, when a company gets into trouble, it seldom comes as a surprise and, if a banker is close to his customer, he can make an assessment based on something more than a computer print-out. I know some people say that we have had enough banker bashing, but until I see banks offering a real helping hand to SMEs, I will continue to criticise.
I would like to end by referencing my own area of business passion and that is technology. As some noble Lords will know, my whole business career has been in IT services, an area that I really care about. The Prime Minister seems to be captivated by technology, particularly the new business hub at Tech City. I am always sceptical about this. I have seen too many politicians who somehow think that they have become tech-savvy just because they can use the on/off button on their BlackBerrys. It is a lot more than that. We are blessed in this country, especially in London, in having all the constituent parts that are able to feed the new tech revolution—not just in IT but in fashion, media, advertising, pop music, and so on. All these are now converging into a new and very exciting tech revolution, much of it powered by smartphones and tablet devices. Mobile computing is here to stay and is becoming as ubiquitous as the pen and pencil of yesteryear. In addition, we have been swept away in the use of technology. This country does more online shopping than is done in any other developed county.
I end my speech today by asking the Minister a question that matters to the sector that I really care about. The Minister has been given the brief to speed up and manage infrastructure projects. Finally, we have had an announcement on HS2 and HS3, the first and second stages, and no doubt a major announcement on new airports will be forthcoming—if those in government can stop fighting among themselves—although, for the life of me, I cannot understand why it has to wait so long. Of course I know the answer, but why do party politics always have to take precedence over the national requirement?
When the Labour Government left office, we were ready to unroll universal broadband to all households by the end of 2012, but the coalition Government failed to make-good this guarantee. As a result, 5 million people are still denied access to even the most basic broadband coverage. Millions of families and thousands of rural businesses are suffering as a result. We have to be right at the forefront in IT technology, but we cannot do it without superconnectivity. Can the Minister give your Lordships’ House assurances on this development?
Lord Forsyth of Drumlean
My Lords, it is a pleasure to follow the noble Lord, Lord Mitchell. I just wonder whether he is a little overenthusiastic in his belief in the Government’s ability to pick winners, especially in the IT sector. As I recall, billions were lost in the health service and elsewhere through IT projects that were not properly sourced and not subject to the disciplines of the marketplace—projects that arise from people spending other people’s money. It is also a great pleasure to welcome the noble Lord, Lord Deighton, to the Front Bench.
I have been surprised that, so far in the debate, people have concentrated on the deficit rather than the debt. The noble Lord’s predecessor, the noble Lord, Lord Sassoon—whom we miss so much—was subject to regular questioning from me, asking why we continue to refer to reducing the deficit and not the debt, when, of course, the deficit is simply the rate at which the debt is increasing. I never got a satisfactory answer to that. Therefore I ask the noble Lord, in briefing himself into his department, to look at the ComRes ITV poll that was carried out just before Christmas—which may have got lost in the tinsel and bright lights of the Christmas period—where people were asked whether they thought that over the course of this Parliament the Government were going to increase the debt by £600 billion, reduce it by £600 billion, or leave it much as it is. Only 6% got the right answer, which is that the debt will increase by £600 billion. I regard that as a really serious problem, because if you are asking people in the country to make sacrifices and to realise that Governments face difficult choices, first you have to make them aware of the extent of the problem. I really do not think it helps for politicians—from whichever party—to shy away from explaining just how serious a problem we have.
The problem, in short, is that the state is growing and the economy is shrinking. The latest OECD figures show that state spending has now gone up to 49% of our GDP. That is an extraordinary amount. I used to define communist or socialist states as states where the Government spent 50% of the GDP. In the year 2000, when Gordon Brown was Chancellor of the Exchequer, the Government spent 37% of GDP. I am sorry that the noble Lord who said that it is ridiculous to talk about a massive Keynesian boom is not in his place, because I must point out that there has been an astronomical increase in the share of our GDP that is being spent by the Government. Out there in the country, real wages and living standards are falling. The first thing that we have to explain is that we have been living beyond our means. We have been spending about 10% more than we earn and we have been saving nothing. We need to save about 10%. Now 10 plus 10 is 20%, so to put that right, living standards are going to fall by 20% unless we can get growth. It should come as no surprise that this has come about.
The national debt is now 70% and rising. It rose by £15 billion last month alone. I know that we are all supposed to take the line that the Chancellor has cut the deficit by 25%, but the truth is that he met the target last year only by putting in Billy Bunter's postal order, which is the £3.5 billion that will come from the 4G spectrum sale—money that we do not have now and will come around only once—and by throwing in the proceeds from the interest on the bonds that have been purchased by the Bank of England printing money.
We are engaged in a completely new scheme of quantitative easing, which has been done on a stupendous scale. We are now relying on the interest on that money that we have created to say that we are closing the debt cycle. I am profoundly concerned by that. Every time I ask an economist or someone I respect about this, I find it very difficult to get the kind of reassurance to which the country is entitled.
On the Government's policy, if you ask a Minister what they think will happen to the growth in the economy in the next 12 months, they will say, “We are not responsible for that. We have an independent body called the OBR”. But the OBR has been consistently wrong in all its forecasts. My noble friend Lord Lamont said quite rightly that all forecasters are consistently wrong. But it is worrying to say the least that this independent body that Ministers now rely on has been so far off the mark.
The truth is that the Government are stuck in a Bermuda Triangle. We have low growth, which means that the Government cannot make cuts in spending, and we have high spending, which is preventing us from getting the growth that we need. People may have forgotten this, but much is due to the efforts that were made by my noble friends Lord Lamont and Lord Baker, my noble and learned friend Lord Howe and others in the 1980s in making supply-side reforms and changes to the trade union law; the changes to our labour market policies. That is why employment has not gone up in this dreadful recession. Workers are now able to make arrangements with their employers to be flexible in the teeth of economic adversity.
The Government have made some mistakes, and we should admit to those mistakes. The noble Lord, Lord Eatwell, sent me a note to say that he had to leave the Chamber so I know that he will read this in Hansard, but it was sheer bare-faced cheek for him to argue for capital expenditure, which is right, and against the Government’s capital expenditure cuts, when the mistake that the Government made was to implement Alistair Darling's cuts in capital expenditure but actually reduce what was planned by Alistair Darling. The point is well made. Capital spending is required and we need further supply-side changes.
My noble friend Lord Wolfson made the key point in this debate. You have to look at the return on the money, and, on the whole, Governments are not very good at picking winners. Therefore, to choose a well-known liberal's favourite phrase, if you leave the money in the pockets of the people to fructify, you will get far more growth and far more for your money than if it is decided by committees in Whitehall with one eye to the next election. An example of that is this high-speed train. The high-speed train is the ideal political project. It is absolutely fantastic. It enables a Government to say that they are spending a large amount on infrastructure. It has a visionary appeal about it. And, of course, the planning, the implementation and the execution are so far ahead, you do not have to spend a single penny on it. In doing so, it creates all kinds of difficulties for the local economy and the blighting of property and so on. I would rather see the money being spent now on improving our transport structure and looking, as my noble friend Lord Wolfson said, at issues like road pricing and others that will help to make the changes necessary to get our economy to grow.
Again and again we hear complaints from both sides of this House about the banks not lending money to small businesses. I want to ask my noble friend, who I know has a background in banking and will be turning a fresh eye to this matter: how are the banks supposed to lend money to small businesses when at the same time they are being asked to increase the amount of capital that they have in order to support the lending that they have got? How are the banks supposed to find the money to lend to new businesses when they are being asked at the same time not to foreclose on mortgages and to try and keep businesses going? How are the banks supposed to find the money when there are companies—many of them now—substantial public companies, zombie companies, that are simply kept alive by low interest rates and by the banks not wishing to consolidate the loans on their balance sheets.
Of course, we are very conscious of the banking crisis and the impact that it had on our economy, but are we now not in danger of fighting the last war? Should we not be adopting a counter-cyclical approach to the capital requirements on banks in order to solve the problem? Frankly, producing lots of government schemes is not the answer. Better to have banks making commercial decisions with the balance sheet flexibility to be able to lend to these small businesses. This was a point that my noble friend Lord Lamont touched upon in his excellent speech.
How are the banks supposed to operate when the regulators, as a regulatory requirement, are requiring them to take Government gilts? We all know what is going to happen to Government gilts as the interest rates go up and quantitative easing unwinds. What is going to happen then to the losses being made as a result?
The reason that we are becalmed as a country is because the tax burden has become unbearably high. I am not here making a plea on behalf of people who pay high marginal rates of tax. If you earn between £8,105 and £42,475, taking the income tax and the national insurance payments that you and your employer has to pay, it is no less than 40.25% of earnings. Is it any wonder that we see so many part-time jobs, not full-time jobs? The costs of labour are unbearably high because of the burden of taxation.
For those on the other side who say it is all about tax dodgers and finding rich people, the top 1% of taxpayers now provide 24% of all the income tax but only 10.8% of the income. That is why the tax burden is now hitting people on low incomes and hitting them hard.
Indeed, I had the pleasure of chairing the tax commission for the Chancellor while we were in opposition. I remember that we agreed that we needed lower, fairer, flatter, simpler taxes. What are we doing? According to the TaxPayers’ Alliance—an excellent body—we have created 299 separate tax increases and 119 reductions. Whatever happened to that great crusade to have a simpler, flatter, fairer tax system? I tell you this: if we do that, the revenues will go up and the deficit will go down.
I welcome the rise in thresholds. The Liberals claim the credit as their policy. I see my noble friend is nodding with enthusiasm. I refer him to the speeches made while we were on the Benches opposite by the noble Lord, Lord Saatchi. It was also one of our recommendations in the tax commission report in 2006. My cautious right honourable friend the Chancellor felt that our programme of tax changes, which would have amounted to £25 billion, was more than could possibly be afforded in a Parliament where borrowing now goes up by £15 billion every month.
On quantitative easing, I would like my noble friend to explain exactly how it will be unwound. The Bank of England made gains on the gilts which have been bought through this process of about £60 billion a year ago. What is the value today? What will happen when interest rates go up? How will that gap be closed?
My noble friend Lord Wolfson is a grand and successful retailer and I echo what he said about planning. Perhaps the House will allow me one indulgence. My eldest daughter has just started her own business and opened a shop on the King’s Road in the worst possible circumstances of recession. Kensington and Chelsea is a Tory council but it took eight weeks to give her planning permission to put her name above the door—eight weeks while she was unable to trade and while it charged her rates for the privilege of waiting on it to give planning permission. It should be utterly impossible to operate in this way in the difficult circumstances that we have in the marketplace now. We have heard from my noble friend Lord Wolfson of the experiences of big businesses. At least he will have some clever people in his department who will be able to take on the planners. If you are setting up your own business, there is only you. In all the speeches we make about deregulation and supply side reforms, let us get down to the detail that is preventing businesses expanding and growing.
I have said that the economy appears to be becalmed. If you are becalmed, you need a wind of change, and that will come from reducing costs to businesses and reducing costly regulation. I have some sympathy with what the noble Lord said about reducing the cost of national insurance. We should stop thinking of new schemes that make life more difficult for business, such as changing the rules on paternity leave or introducing 1% pension schemes. I read in today’s Times that all businesses are to be asked to produce information on the ethnicity of their employees when they want to be out there selling to customers and winning exports.
What is going on in this country when, since 2008, our currency has been depreciating and our exports have gone up by 1% while exports in Germany, France and Holland have gone up by 9%? What is going on? Why are we not more successful in our export efforts?
On energy costs, what are we thinking of? By adding to the cost of energy on business, all we are doing is importing carbon from China, and China is lending the money to enable us to run a deficit while our businesses are disadvantaged as a result.
Lord Lea of Crondall
The noble Lord mentioned that we are devaluing the pound but nothing is happening. Why is that? Does he think that devaluation no longer works?
Lord Forsyth of Drumlean
I have been saying for the past 15 minutes that we need to create an environment in which our businesses can go out and sell and are encouraged to do so. I was not making a particular point about devaluation: I was saying that we are more competitive as a result of the falling value of the pound relative to other currencies.
To conclude, my advice to my noble friend is to say to his right honourable friend the Chancellor of the Exchequer that no U-turn is necessary but a touch on the tiller is required.
Lord Birt
It is a pleasure to follow the keenly felt and eloquent speech of the noble Lord, Lord Forsyth. It was not the first in this excellent debate. As the noble Lord, Lord Barnett, has reminded me, I am not qualified to add to the powerfully expressed views of some of our leading economists during the course of the debate, with others still to come. However, I shall offer some perspectives from the front line of the real economy.
I am involved as a director in a number of leading businesses in Europe and the UK, as well as a promising internet start-up. I am also an adviser to one of Europe’s leading private equity houses; as a result, I am exposed to a great number of portfolio businesses, chiefly operating in the UK and Europe. Anyone who works in the ever more complex and competitive global economy, or anyone who has ever happened across the rusting industrial archaeology of the old Eastern bloc—I am sure this is common ground on all sides of the House—will testify that government cannot substitute for entrepreneurs or for genuine corporate expertise. The noble Lord, Lord Lawson, reminded us of that at the beginning of the debate.
What can Governments do to promote growth? First and foremost, as others have said, they can maintain a stable economy in which business can plan with confidence—something we have resoundingly failed to do in this last period of our history, as we all recognise, whatever the mix of reasons for that. Surely it is plain that the route back from the dire circumstances we find ourselves in, whether it is route A or route B, is a long one.
Secondly, from Governments, we need tough regulation of our financial institutions—and we are probably about to have it. They have let us down. We need that regulation to ensure that they manage risk responsibly, which they patently failed to do; that they lend sensibly; and that they do not hoard huge rafts of assets—which they are still doing—that they have neither the skill nor the means to develop and grow. That is undoubtedly one of many causes of the absence of growth in the real economy.
Thirdly, Governments need to ensure that the climate for investors is friendly and internationally competitive. In my experience, the incentive regime for business start-ups in the UK works well. But there is a particular failing in the capital markets that I do not understand, and which needs investigating. Investment in start-ups by business angels or small venture capital companies is thriving. As a result, early stage companies in the UK are prospering in large numbers at the moment, particularly in the new technology sector. However, UK capital to grow these successful young companies into major regional or global players appears mysteriously absent. There are many strange failures in our capital markets that we need to work harder to understand. With a lot of these younger companies, highly professional and acute US players fill the void and snap up our best companies before they can grow in a UK or European environment.
There is a further difficulty in attracting substantial global investment into the UK, which I do not think anybody has mentioned so far. Major investors are nervous still about the instability in the eurozone. I am exposed to many of these investors—the giant US pension funds, or sovereign funds in the Gulf—and they have trillions to put to work; there is no absence of funds in the wider world. Rightly or wrongly, they wrap up the UK into their concern. So it is in our interest as a country, though perhaps we cannot do very much about it, to help to accelerate the painfully slow process of resolving the eurozone crisis.
Fourthly, Governments can help to ensure that UK business has access to the right skills, as several noble Lords have mentioned. As we all know, we have some educational institutions of global renown, but we do not begin to produce all the skills that we need for the UK economy. In business meetings in the UK now, I regularly find that I am the only British citizen in the room.
We need to motor our economy to attract rare skills from abroad, but our immigration rules may begin to handicap us. President Hollande’s early actions, and the response of France’s business elite to them, remind us that talented individuals with rare skills in great demand globally are highly mindful of the overall tax regime when they decide where to settle.
As the noble Lord, Lord Mitchell, noted, Britain is currently the most advanced e-commerce environment in the world. However, we saw the lack of critical skills in areas of rapid development such as mobile and data mining. Without resorting to an entirely directive approach to designing resources within our education system, the departments for business and education need to be more alert and fleet-footed in spotting critical skill shortages and speedily encouraging and incentivising the relevant educational institutions in the UK to meet them.
I have left until last our area of greatest comparative weakness, which many noble Lords have already mentioned: the UK’s persistent failure to invest in infrastructure. As others have mentioned, I note that the Deputy Prime Minister acknowledged last week that it was a mistake to cut into the Government’s capital investment programme when the deficit reduction programme was first agreed. Mr Clegg may not be aware that we as a country have been here many times before. He should ask his officials to dig out the analysis conducted by the Cabinet Office Strategy Unit during my time at No. 10 on why we had by far the worst transport infrastructure in the developed world. I wholeheartedly support all that the noble Lord, Lord Wolfson, said about that, particularly the wonderful passion that he expressed about our impoverished road system. A large part of the reason for that chronic underinvestment over many decades—indeed, for the past 40 years, as the study identified—was that Governments of all persuasions had cut capital ahead of revenue expenditure when a downturn occurred. This is not just a recent occurrence.
At the time of that study, I concluded that the main root cause was the culture of the Treasury itself, understandably determined at such times of national reverse to rein back public spending. Officials aggressively target the easy wins first, and tomorrow’s capital spending tends to carry far less political pain than today’s welfare cut. Thus we continually fail to invest in infrastructure to modernise our economy and, as many have said, make it more productive.
Last Friday, I journeyed from Düsseldorf to Frankfurt Airport, a distance of about 120 miles. It took no time at all. I travelled by a high-speed train, which reached a top speed of 200 miles per hour. The train stopped, most conveniently for me, not in the city centre but at Frankfurt airport itself. Frankfurt airport has four runways. Heathrow—our lead airport—is not integrated into our main rail network. As we all know, it has only two runways, and, as we are all painfully aware, it is always—especially in winter—absolutely bursting at the seams.
This month, the Chinese Government announced plans to build a seven-runway airport for Beijing. In the last decade, China has built a fraction under 4,000 miles of high-speed rail track. The UK currently has a paltry 68 miles of high-speed rail track, and we are already experiencing an almighty struggle to build only another 330 miles of track by 2033, in 20 years’ time. Why will it take 20 years’ time to build that absolutely critical national arterial train line?
We need a considered 20-year plan—we needed it long ago, but we are where we are—for modernising our road, rail and air infrastructure in the UK, and for incentivising the private sector to fund it. We also need a sense of urgency. Beyond that, we need a full-bodied integrated and strategic approach within Government to UK national productivity, encompassing skills and incentives as well as planning and infrastructure.
The Minister has resoundingly proved his ability to focus on a big challenge and to deliver it emphatically. Will he offer any hope that in the midst of this intensive and prolonged economic crisis, we can at long last begin a process of focusing systematically on UK productivity?
Lord Howell of Guildford
My Lords, I join in warmly welcoming my noble friend Lord Deighton to his Front Bench responsibilities. I listened with great interest to his opening speech. I must confess, however, that I am reluctant to join in this great argument between austerity versus Keynesian inflation, of which we have heard both sides in this debate. That is not least because both sides are in fact based on a wildly exaggerated view of the degree to which our economy in this country can be steered, manipulated, adjusted, rebalanced or anything else magically, by purely domestic economic actions, somehow to create growth and pull it out of a hat. In fact, I go further and say that the naivety of some of our economic gurus who pronounce on these matters never ceases to amaze me. It really is laughable to see the so-called expert analysts twisting themselves in knots, to coin a phrase, over whether GDP grew in the last quarter by 0.1% or shrank by 0.3% or more, when GDP itself is a questionable and highly inaccurate measure of economic activity and progress. I believe that it was invented only in the 1930s and it has in any case now been distorted beyond recognition.
Now the experts tell us that infrastructure spending can somehow be switched on overnight to “kick-start”—that is the phrase—the economy. I do not know what system they believe they are dealing with. They have obviously never worked in the construction industry or they would know that the rather ugly phrase “shovel-ready” is a meaningless term and that the best infrastructure projects take a minimum of two years to prepare—the best projects, that is—and to wind their way through all the permissions and controls that we still have in this country, even after certain reforms. I note what was said earlier by my noble friend Lord Forsyth, who reminded us that the HS2 scheme announced yesterday will take 13 years to get to its first phase. I am not at all sure where I shall be in 13 years’ time, or indeed where even the economy should be. I am not sure that these issues fit into our present concerns at all.
The reality is different. It is that our fate lies very largely overseas and it is our sagging exports, especially to the eurozone, that have hurt us. That is the problem now. That is what the December economic review from the Office for National Statistics emphasises, quite rightly, and the Office for Budget Responsibility also makes that crystal clear. I am sorry that my noble friend does not think they are always right but on this they are pretty clear indeed.
In the past six years, goods exports to the poor old European Union have fallen by 5%, while goods exports to non-EU countries have risen by 65%. Since 2009—that is, just over three years ago—our total exports of goods and services to non-EU countries have risen by 35% and to the EU by 6%. At this moment, 60% of all our overseas earnings come from outside the European Union. That trend will probably accelerate and will certainly continue.
On the domestic front, I am not against more major projects here at home to repair and upgrade our dilapidated infrastructure. On the contrary, we need a bit of the imagination shown by the Victorians and some of what has been called the lunatic optimism of the Brunels—father and son—and other great Victorians. I believe that some of these projects could be financed without spooking the international bond markets.
I see that a certain Professor Pissarides, a Nobel prizewinner, has been telling a Davos audience that good energy and transport projects with a strong payback in return, both in narrow and wider economic terms, can be financed with minimum impact on the public finances if sensible accounting practices are used. Some of us have been touting this idea around for at least the past two years. It is all brilliantly laid out in American Gridlock, a book by one of America’s best and most original economists, H Woody Brock, in which he speaks of the need for a completely new capital stock of higher quality. There is nothing very new about these ideas; it merely seems as though economists over here, on this side of the Atlantic, are at last waking up to them. They ought to be ideas that, frankly, transcend party politics and are not turned into a political football.
Still another domestic key to recovery is going for a policy of lower energy and power prices instead of the higher ones that we have at present. Again, my noble friend Lord Forsyth emphasised that. Energy costs here are stupidly high. We may not be able to match America’s low gas and electricity prices at present, for obvious reasons, but anyone who doubts that the value of cheap and abundant power supplies is key should look at the industries now flowing back into America—especially petrochemicals—and the hundreds of thousands of new jobs being generated. Britain is in fact superbly placed over the next decade for gas supplies, with both our own substantial resources and half the world trying to sell us more of both piped and frozen gas. It is a true buyer’s market and we should be making the most of it, rather than the least.
As I say, the real recovery is in export markets—whatever we do at home—and in our ability to be quick-witted enough, agile enough and far-sighted, innovative and creative enough to adjust to totally new world conditions in a network world. If we are looking for the queues that my noble friend Lord Wolfson, in his remarkable speech, said had to be there for demand, then that is where the queues should be forming for us to perform much better in the export market.
While we must of course remain constructive Europeans in a reformed and redirected European Union—we will be debating that matter in this House on Thursday—and while we remain close but not subservient allies of the United States, which is still a colossal market for us, the central priority must be the repositioning of the UK as a global network power. We must build with the utmost vigour on the networks available, of which the Commonwealth is certainly one, and other strong networks and bilateral links outside the Atlantic area.
We have to recognise that the global energy pattern has undergone two successive and enormous revolutions —the first towards lower carbon and greener energy forms on both the supply and demand sides, and the second towards shale gas and oil, and the associated new extractive technologies—entirely altering the global map of energy resources and the corresponding political significance, influence and market power of many countries, many of them with Commonwealth connections, to which we must have access, as well as being sources of savings and wealth to invest back in this country, as the noble Lord, Lord Birt, referred to just now.
In this new landscape we must deploy with confidence and without apology our exceptional British qualities, historic associations, English-language strengths and worldwide cultural influence to our direct advantage in rising Asia, Africa and Latin America. In doing so, we need to use the full range of soft power techniques, new and conventional, to protect and promote British interests, and to promote the British global reputation and powers of influence and attraction for our goods and services.
The potential is colossal. I wonder how many people know, for example, that the Association of Commonwealth Universities, based in London, connects up to 530 universities across this planet in an amazing network of common interests, services and exchanges. That sort of thing is as important for our prosperity as many a conventional trade mission. It also opens up, though exchange between individuals and scholars, avenues for enterprise for small and medium-sized businesses. I should certainly like to see the chambers of trade play a far bigger role in the international export scene, as my noble friend Lord Heseltine recommends, and I declare an interest as the economic adviser to the British Chambers of Commerce.
There is a hopeful message to be distilled out of this. It is not a disaster at all. The message is particularly and almost uniquely favourable to Britain. The essence of it is that we now live not in a world of power blocks and superpowers but in a world of networks. That is what the microchip and the worldwide communications revolution have brought about, and many economists do not yet seem to understand that. It is not just a question of Asia and the southern world awakening, with their vast cities of the future and their cultures and values—which incidentally are often superior to ours when it comes to family cohesion and education—and generally pulling ahead of us in technology. That is the story of the past 10 years and it is almost over. Those schoolbooks that we had about capital flowing from the West to the developing world are history. The wealth, as well as the research and technological skills, are now flowing the other way. The debt-laden western powers are now turning east and south for desperately needed investment and capital from the massive savings and the huge sovereign wealth funds of Asia. We have so much to learn and gain from India and China; it is not the other way round. They certainly do not want lectures from us.
This time round we also have to get even closer alongside not just the BRICS—Brazil, Russia, India, China and South Africa—but the great new energy powers, such as Australia and Canada, two of Britain’s most stalwart friends. They are in the lead, followed by a whole raft of new players such as Mozambique, Tanzania and Kenya in east Africa, and in west Africa Ghana, Sierra Leone and the Nigerian giant, which will soon be overtaking South Africa if it can manage its internal politics. There are also South Korea, where I have just been, with its once direct alliance with the United Kingdom, Turkey, Mexico, Vietnam and other new players and new markets alongside which we must move very tightly.
For Britain, once we have navigated through the present dangerous seas, it means that our luck will be in—unless we screw it up. We will be sitting plum in the midst of the world’s best network. We will be, even more than we are now, a safe haven for the world’s investors. We will be increasingly well placed energy-wise, as I have described. That is the good story of where we are going as a nation—the purposeful narrative, worth telling, even while the cold wind of recession keeps gusting around us. It means that in the totally transformed world ahead, Britain is promisingly placed to become the networking nation par excellence.
Europe of course remains our region, where we have to step forward and work out how to lead, for once, in the reform of the European Union that half the continent is waiting and longing for, and we shall debate this next Thursday. America obviously remains our close ally and a gigantic market but the evolving Commonwealth network is our family and lucky legacy. We should stake our hopes and future prosperity on the connections and gateways to the great new markets that it offers. That is where the demand will come from. Whatever measures we take here at home, that is the source from which our return to full and sustained economic performance will come.
Lord Barnett
My Lords, like other noble Lords, I welcome and congratulate the noble Lord, Lord Deighton. His predecessor, the noble Lord, Lord Sassoon, and I had many lively exchanges, and I am happy to tell him that although we disagreed most of the time, the noble Lord, Lord Sassoon, and I are now very good friends and we will share a meal shortly.
I agreed with the noble Lord, Lord Deighton, when he said that getting spending under control is difficult. I spent five difficult years as Chief Secretary to the Treasury, and I know from my stress at that time how difficult those years were, so I sympathise with him very much indeed and hope he has a bit of success in that job.
I recognise all that the Government are trying to do on infrastructure and in other areas. Unfortunately they have not yet had great success, according to the levels of GDP and growth that we have seen in the past two and a half years. That said, the best hope is that in the forthcoming year we will not have a recession. I am not one of those who like to think that a triple- dip recession is going to happen. It may well amend the figures, as we have seen already.
Despite everything, borrowing has increased, as my noble friend Lord Eatwell pointed out. Despite all the austerity that we have seen over the past nearly three years, borrowing has increased and little or no growth has come of it. I am bound to ask, with all the Minister has told us and all that we have heard, what the Government are doing to get growth going. That is what everybody wants to hear now, not next year, not at the end of 20 or 30 years when we see HS2 going—I may not be around at the time.
Blaming the EU, the eurozone, the world, the snow and everything else does not help us. There are two obvious reasons. The first is the deficit reduction plan. It was inevitably bound to result, as my noble friend Lord Eatwell explained so clearly, in what we have. Infrastructure has been promised. Many Governments, not only my own but many others since, have failed to achieve it. The present Government are doing their best, and I understand that the noble Lord is now the Minister for Infrastructure, so I hope his plans will succeed, but when will they succeed?
We are told that much money has been put into infrastructure. One of the Minister’s first Written Answers to me told me about the £5.5 billion that the Chancellor had promised for infrastructure plans. It is worth quoting what he said. Unfortunately he has already learnt from Treasury officials, because I asked,
“how much of the £5.5 billion … has been spent”—
to date. His answer is worth repeating:
“The majority of the £5.5 billion of additional capital committed … was allocated”—
note “allocated” not “spent”—
“for 2013-14 and 2014-15. £70 million was allocated”—[Official Report, 22/01/13; col. WA189.]—
not spent—this year. That is what it is. When I asked about the spending, he said that he does not hold data about spending. Perhaps he will have a word with his officials and look more closely at the Answers he is given.
As a number of noble Lords have said in this debate, we have not yet seen the expenditure. That £5.5 billion was inside the deficit reduction plan. It is not extra. We have not had any extra. We have not even had the £5.5 billion yet, and I doubt that we are going to get it before 2015, certainly not if HS2 is an example.
I shall not repeat everything that has been said, because my noble friend Lord Eatwell said very concisely and well what is wrong with the whole situation. It is no use blaming anybody. I am not blaming the Government particularly. We should not listen to the chief economist of the IMF too closely. Perhaps we should listen to somebody else in the IMF who arrived fairly recently: the new lady in charge. The fact is that the chief economist of the IMF has told us what the Government should now be doing. The Governor of the Bank of England has even had some new ideas about new supply side measures, and on infrastructure we have even heard that the Deputy Prime Minister did not realise what the Government were doing for the past two and a half years. They did not exactly get on with the job of dealing with infrastructure or, indeed, anything else.
Why we do not have money being spent can be summed up by that Answer I have just quoted. It is not being spent, and that is the problem. There is no use talking about why we do not have growth when the money is not being spent today. I know that developing major infrastructure plans is difficult, and it is as much the previous Government’s fault as anybody else’s, but the fact is that we are where we are now, and this Government have unfortunately not been spending money on infrastructure now. With all the good intentions in the world, it has all been allocated, not spent.
The other fine schemes that we have heard of are very good. The Funding for Lending scheme is a very good scheme, but again it is not being taken up to the degree required now for the obvious reason, which has been said, that there is not enough demand to force people to want to borrow. They are being told not to borrow. They should not borrow too much, and they are not willing to borrow. I wish all companies were like those that the noble Lord, Lord Wolfson, was speaking about. His company is highly successful. If every other company in the country was as successful as Next, we would be in a much better position than the one we are in today. Unfortunately, they are not, and they are not willing to borrow, whether guaranteed or not guaranteed. The Funding for Lending scheme is a very good scheme, and I hope it will eventually be hugely successful, but for the moment it is not. Others have been mentioned.
I have always had a great deal of respect for the noble Lord, Lord Heseltine. He did a great deal of work and produced a huge book. The Government support his plan, but he has said that even if all the bids that he advocates are in by this coming April, it will be 2015 before those schemes get off the ground, and I very much doubt whether those bids will be in by April this year. Unfortunately his schemes, although fine on paper, like everything else will not achieve what we require.
What are the other hopes for the economy? One “hope” is Mark Carney, the new Governor of the Bank of England. He said recently that he wants to see his target changed to nominal GDP. Some people do not appreciate that that does not mean dropping inflation but combining it with inflation. My noble friend Lord Peston and I tabled an amendment to the Financial Services Bill, which the noble Lord, Lord Newby, rejected, to delete the three little words in the Bank of England Act: “subject to that”. If the amendment had been accepted, the new Governor of the Bank of England would have had his powers immediately, but that was rejected.
Indeed, the noble Lord, Lord Newby, told us the other day that the Chancellor has rejected the new governor’s proposals, although he did not put it as bluntly as that. He said that they are not changing the target. If I may put it this way, they are typical Treasury words—as the noble Lord, Lord Deighton, is already learning—that do not answer the question. Have they dropped Mark Carney’s ideas? He did not say that they had not dropped them, just that they were keeping the same target. So we are stuck with it. My hope for Mr Carney is that he will ignore the target and just do it. The Chancellor cannot sack him because he is now the best in the world, as the Prime Minister has told us. He is unsackable, so my advice to Mr Carney, if he ever hears or reads it, is to ignore the target and just get on with the job of co-operating with the Chancellor and helping him to achieve what we all want to see—growth in the economy. As I said, that in no way means abandoning the idea of keeping inflation under control.
With or without the agreement of the Chancellor, I hope that the co-operation on monetary and fiscal policy that has been referred to will be achieved. I hope so, but I am not terribly hopeful. We are told that what the Government are doing now is because they cannot borrow any more, and that if the previous Government had not borrowed so much they would not be in this difficulty. In 2007-08 the previous Government themselves inherited a global financial catastrophe. It was not made in Downing Street. If the then Government had not borrowed, the present Government would have borrowed not only a huge debt but a recession as well—yet another recession. They saved that. The previous Government did at least leave them growth. That growth has gone and the debt is still there, so the inheritance is not the reason for a deficit reduction plan. Austerity is clearly not an answer. If nobody else can see it, I hope that Mark Carney can and will help the Chancellor to see it as well. The question remains for the Chancellor: what is he going to do about growth now? Is he going to spend any money? He has told us that he will not, that he cannot borrow any more.
In 2010, we were told that the Budget deficit reduction would be brought into balance in five years. The latest figure I have seen is from the Office for Budget Responsibility, which I am bound to say is not the greatest forecaster in the country on any list. The last I saw it was fifth out of 10. It is not my favourite forecaster, but it is the Chancellor’s favourite forecaster, and he said the annual Budget deficit will be down to 1.6% of GDP not in 2015 but in 2018. This was before the latest set of figures that we have seen, so if we are lucky it will be 2020 or beyond. I hope that long before then the Chancellor will be changed. We might even have one in the House of Lords, now that we can discuss these matters, so my noble friend could take over.
We have had lower growth for too long and we need to increase it. I hope, and it is only a hope, that the Chancellor, nearer to 2015, will see that he cannot go into another election with high borrowing and no growth and will do something to resist that policy and change it himself, if he is not changed.
Lord Lang of Monkton
My Lords, it is a pleasure to follow the noble Lord, Lord Barnett, who has often been a distinguished participant in these economic debates, even though I certainly disagree with what seemed to be the central thrust of his argument today, as so often in the past. Like other noble friends, I welcome my noble friend Lord Deighton to the Front Bench and wish him all success. I thought his opening speech was crisp and lucid with a number of very good fours to the boundary.
Before I go further I should like to declare my interests as per the register, with particular reference to Marsh & McLennan Companies Inc, which has a subsidiary by the name of Mercer. Mercer is heavily involved in pensions and I hope to say a word about pensions in the course of my remarks. However, I have had no input from Mercer over this speech and indeed, it does not know that I am making it, which may cause it some concern.
My first point is that the whole debate of austerity versus growth is completely facile and futile. It is totally misguided. The distinction is spurious because austerity is fundamentally a growth policy. It is at the core of our economic management. Unless we reduce the deficit and tackle the debt, confidence will fall, interest rates will rise and the crisis that we have inherited and are emerging from will return.
Like my noble friend Lord Howell, I will not enter into the sterile argument on which the Opposition seem to be salivating about one quarter’s provisional figures on the deficit. For the past year we have been flat-lining—the figures add up to zero. They may be adjusted more favourably once the fourth quarter is studied further. However, it is perfectly normal, after a serious recession, that there is an early bounce back and then a period of flat-lining or even a further fall. It has gone on longer in this case because we inherited a bigger crisis. Our banks are constipated. The continuing euro crisis all last year affected both confidence and our markets. In passing, oil accounted for 0.2% of the deficit in the fourth quarter because production has been substantially lowered, mainly as a result of maintenance programmes which are now being completed. Therefore we may feel a compensating bounce back in the next and subsequent quarters.
I think that GDP is really only one measure of performance and not a particularly reliable one. Here I again agree with my noble friend Lord Howell. However, it is one on which there are grounds for cautious optimism. Some City forecasts expect growth of 1% this year, rising possibly to 1.5% towards the end of the year. That is slower than the United States but faster and higher than the eurozone. Employment, not much mentioned from the Benches opposite today, already gives grounds to support that theory. Indeed, even between September and November, in the fourth quarter, there was an increase of 113,000 jobs. Another indicator, the savings ratio, is now around 7.5% which is higher than at any time since 1997, so the private sector seems to support a tight fiscal policy, although ironically that may in fact slow growth a bit when coming from the private sector. However, with real disposable incomes up by more than 2%, there is now the beginning of empowerment of the housing sector and the private sector generally. The Funding for Lending scheme is widely supported by the banking sector. It is helping to reduce banks’ funding costs and in the past two or three months there has generally been a sharp rise in credit availability, not least with £50 billion worth of guarantees for infrastructure projects.
Standing firm on our deficit reduction targets is absolutely vital but as progress is made—it is already being made with the deficit down from more than 11% to less than 8%—gradually some leeway will emerge and gradually new policies will be developed. That is as it should be. It does not undermine plan A. It simply builds on the progress that plan A will be delivering. I particularly welcome the way in which my right honourable friend the Chancellor has advanced his policies in reducing corporation tax. At long last we are becoming competitive there and I think that will reap dramatic and relatively early benefits to us —the Laffer curve will kick in. There has been a massive rise in the tax threshold for the low-paid, taking 24 million people out of tax. That is a very valuable growth policy because the money released back into the private sector recycles very quickly.
The focus by many commentators on our austerity programme is actually somewhat misplaced. There is a view among commentators, including those of the IMF, that the impact of tax rises and spending cuts, necessary for other obvious reasons, does not impose a major drag on growth. Other factors do come into play. I believe that lack of credit and liquidity are very serious ones. They are the real problem. Banks, to a unique degree in the United Kingdom, were massively overleveraged and underregulated for the first decade of this century. That was the distinguishing feature of the United Kingdom’s crisis. As they struggle to retrench, their lending is paralysed. They have also neutralised any benefit that quantitative easing might have delivered because they hoard the resources that it has delivered to them instead of getting them out into the economy.
The World Economic Forum competitiveness table shows the United Kingdom climbing to eighth position from the 13th that it occupied under the previous Government. However, overall productivity has still not recovered fully from the decline of those years. In part, I think this is caused by the chilling effect of banks not feeling able to force the issue on their huge portfolios of exposed loans because to crystallise them would severely affect their own balance sheets, as my noble friend Lord Forsyth said. Therefore, those loans are stuck in damaged and unproductive companies instead of being directed to new, more viable growth opportunities. Lack of credit is still a huge brake on growth.
There is another serious problem that many companies face. Quantitative easing has driven down yields on gilts which company pension schemes are obliged to hold in substantial quantities. As a result, the Pension Insurance Corporation tells us that since quantitative easing began British companies have had to pump an extra £150 billion into their pension schemes, denying themselves the use of that money and, incidentally, denying the Treasury some £30 billion in lost taxes.
My noble friend spoke of the need for structural change to rebalance our economy and revive the manufacturing sector. I welcome that very much and have a suggestion to make in the field of pensions. I was glad to hear my right honourable friend the Chancellor say in the Autumn Statement that the Government are determined to ensure that defined pensions regulation does not act as a brake on investment and growth. That is a very welcome chink of light but I would like to hear what action is contemplated and when it may happen. I hope that, in winding up, my noble friend may be able to enlighten me.
While quantitative easing is one factor, and a significant one—I hope it will not be resumed—I believe that at the root of the problem was the stealth tax of 1997 that withdrew tax credits from pension schemes, estimated then at around £5 billion per annum. Just as sustained deficits lead to accumulating debt, this revenue raid has by now deprived the trustees of such schemes of some £100 billion of capital. Further imposts have resulted from the levies to the Pension Protection Fund and the introduction of more demanding projected solvency requirements in 2004. Pensions regulators have often obliged trustees against their better judgment to forgo equities in favour of bonds. This toxic cocktail was completed by the credit crunch recession, the lengthening of life expectancy and, as I have mentioned, the impact of quantitative easing on gilt yields, with all the implications for the discount factor in calculating future liabilities.
Most of the burden of meeting the funding demands has fallen on employers dealing with a legacy of departed former employees. If and when interest rates rise, part of those deficits will bounce back. However, at present, many companies, mainly SMEs in manufacturing, are being starved of working capital and the ability to invest by the overhanging shadow of inherited liabilities to their pension schemes. It is no wonder that so many defined benefit schemes have been closed to new entrants. With the dramatic decline in the manufacturing sector in past years, many firms have contracted and have often diversified into specialist sectors with smaller workforces. They have closed their pension schemes but still have the bloated burden of the past and face regulation and enforcement powers that are volatile, onerous and sometimes very damaging.
I do not have time to elaborate more fully on this problem or to list some of the possible measures needed to mitigate this blight, but blight it is. I hope that the point has registered with my noble friend, and I am sure that it has. I am sure that he is already well aware of it and of the fact that things can be done. I hope at least that he may be able to assure the House that relief is at hand.
Lord Forsyth of Drumlean
I am most grateful to my noble friend for giving way. I wonder whether I might tempt him on this very important point concerning how quantitative easing has artificially lowered gilt yields, which are used to calculate the liabilities, and therefore businesses are having to contribute money. Would a simple change not be to take the yields on corporate bonds as the measure instead of gilt yields?
Lord Lang of Monkton
My noble friend is absolutely right. That is one of the possible solutions and I hope that it is being considered. Indeed, there are others as well. This blight engulfs companies large and small, damaging—even destroying—their balance sheets. However, the SMEs that form the core and future of our manufacturing industry are the least able to cope with it. Their working capital is diverted, new investment is forgone, innovation and new technology are unaffordable, productivity suffers, credit worthiness is damaged, jobs go and companies subside.
In my past ministerial career, I have always sought to attract inward investment to this country, which is still very important indeed for the future. However, to focus effort and resources on that, while failing at the same time to bring justified and much needed succour to our home-grown existing companies, is surely most unwise. Therefore, I welcome the chink of light that the Chancellor has given us. I hope that the door will be flung open wide and the light will shine more brightly very soon. To relieve the problem would be to reawaken an engine of growth.
Lord Monks
My Lords, I am grateful to the noble Lord, Lord Lang, for mentioning the pensions issue which is a gathering storm for this country as private sector pensions reel under the present problems. Those problems are complicated for all the reasons that he gave and are intensified by the economic crisis.
Like others, I welcome the noble Lord, Lord Deighton, to his new hot seat. I hope that he enjoys it and that he proves to be as good a student as he was all those years ago in Cambridge. There are many good tutors around the Chamber.
I think we all recognise the difficulty of the situation that we are in. We all agree with the noble Lord, Lord Heseltine, that this is the worst crisis that this country has faced in modern times. I happen to be in the camp—unsurprisingly, perhaps—which believes that austerity leads to more austerity. While we are discussing economic history, I think that President Roosevelt has a better record than President Hoover when confronted with the problems of the time. I think that the chorus of calls for change and greater expansion, which are growing much more widely than on these Benches, are now reaching into the Government. I hope that they will be heeded quickly.
However, my main purpose is to address some of the longer-term problems of the UK economy which have contributed to our being in the mess that we are in. It is very important that when we get through the present problems we do not just slump back to a situation of business as usual. This country is not a basket case—I agree with Boris Johnson on that note of cheer—but it has some long-standing weaknesses which need addressing and which we have been able to put on one side at different times of our recent history. The weaknesses are well known and I will not labour them but the shrinkage of the manufacturing sector has not been fully compensated by the rise in the services sector, with the consequence of a widening balance of payments.
The noble Lord, Lord Forsyth, referred to the record of Mrs Thatcher’s Government but we should remember the costs of some of those changes on the supply side in terms of the action that was taken against trade unions. About 3 million jobs were lost in the manufacturing sector. A heavy price was paid for that in some of the old industrial areas and some of the political ramifications are still very much reverberating. Both the noble Lords, Lord Lang and Lord Forsyth, were on the front lines of the battle in Scotland. That battle still goes on, albeit in a different form. Social discord was very high and the costs of all that were borne to some extent—quite a large extent—by the fact that the North Sea oil revenues were flowing and the Exchequer was benefiting greatly from that.
We still have the problem of the shrinkage of the manufacturing sector. We have been consumers and borrowers rather than savers and investors. Too few of our companies think long term and we have a relatively low spend on innovation. Indeed, at present, investment in new machinery appears to be at a lower level than in Austria, Turkey or Mexico. R&D figures are better: the UK is fourth in the EU, but efforts are disproportionately concentrated on defence and pharmaceuticals.
Low productivity levels were referred to by the noble Lord, Lord Lang, and others as reflecting inadequate skills and low capital investment. Industrial relations are still poor in some places and communication at work also leaves a lot to be desired. We must face the fact that a high proportion of our economy—the commanding heights in some sectors—is in foreign ownership. This raises the question of why there are relatively few British entrepreneurs able or willing to take on some of these sectors. We also know that we have a systemic tendency for rewards for top executives to outstrip performance and those of other employees. This inequality can have a downward effect on growth and this is important for this debate, as well as for equality. We have a concentration on traditional markets. As the noble Lord, Lord Howell, said, we have an improving presence in China, India and Latin America but it is still relatively weak compared to our major European competitors. Behind it all, we have the imbalances in our economy between the relatively prosperous south-east and eastern regions and the rest of the UK.
So what can we do about this? We know it is very complicated but there are some glaring weaknesses that the complexities should not stop us from addressing. First, can we learn some lessons from Germany and put an obligation on employers, widely accepted there, to train, not just young people but others as well? Can we not use the public procurement process to encourage all contractors to reach the high standards of training achieved when contracts were awarded for the Olympics, in the human relations side of which huge project the noble Lord, Lord Deighton, was so successfully involved? Furthermore, we know that many in this House would favour deregulation of the labour market and we heard the Prime Minister talk about that in his Bloomberg speech just last week. Why is it that the other economies around the North Sea, if I can call them that, all have regulated labour markets? They did not follow the deregulation, easy hire-and-fire, route of the English-speaking world: collective bargaining is still strong at sectorial level, as are extensive information and consultation arrangements and worker representation in boardrooms. This style of corporate governance has greatly assisted the development of long-termism, a more equal spread of rewards and good economic and export performance.
We also need to look at management culture and education. The UK often boasts of its world-leading business schools and universities but they often seem to be a transmission belt to put people into the financial services sector. How can they be more like staff colleges for a new North Sea economy and impregnate the other areas of industry and services? The noble Lord, Lord Lang, also referred to taxation. At present, the tax system favours borrowing over savings, debt over equity, capital gains over income and tax breaks for the wealthy rather than help for the poorest. Those emphases need to be changed. Can we restore a requirement in major takeovers to examine the social implications of bids and make takeovers a little harder? Perhaps we could re-examine the scope for the state to take golden shares in key UK companies while we still have some of these left. Every time we devalue, as we are doing now, British companies become cheaper for people in stronger currency zones.
The national investment bank, an idea espoused by the noble Lord, Lord Skidelsky, is clearly a way of trying to produce a more patient and readily available source of capital for research, innovation and SMEs. I would also like to see, as proposed in the report of the noble Lord, Lord Heseltine, regional policy restored and those regions that are particularly hard hit, because they are dependent on the public sector, given some help with new dynamism and entrepreneurial flair which needs to be extended beyond the capital and its favoured environs. I do not expect answers to these questions today, though I am sure we will continue to debate them. I have one particular question: are the Government likely to respond to the report of the noble Lord, Lord Heseltine, No Stone Unturned in Pursuit of Growth? That report got a good reception in the House and it is important that, with all the differences on display in this debate, we find things we can unite around. Many of the proposals in the report are very attractive to very many of us.
Lord Bilimoria
My Lords, I remember coming to this country as a boy in the 1970s, when my father was posted here as the Indian Army liaison officer with the British Army, and seeing a country on its knees. Just a quarter of a century before that, this country had the largest empire that the planet has ever known but, at that time, the world had written off Britain as a has- been. When I came back to England as a 19 year-old student in the early 1980s, Britain was the sick man of Europe.
I welcome the Minister and congratulate him on his amazing leadership in the Olympics. He has an impressive track record—to use a pun—of delivery, which is what this debate is about. If you fast-forward to today from the 1970s and 1980s, we are a country which is possibly entering a triple dip recession. Yet this country has shown, over the past three decades, that it can completely reform its economy and that, despite all these problems, we are one of the 10 largest economies in the world. With no empire we are still a very wealthy country with so much going for us. So what are we doing wrong? We cannot blame everything on the global situation or Europe. We seem to have come to a binary way of looking at the world: in or out of Europe, austerity or spending, tax cuts or tax rises. If only the world was so simple. As the noble Lord, Lord Forsyth, said, we know that public expenditure of 50% of GDP is not only unaffordable but not right. We also know that the coalition Government’s tough talk of austerity seems to mean that we cut everything, including higher education and defence, no matter how vital some of these areas are, as the noble Lord, Lord Skidelsky, said. Just look at what is happening, unpredicted, in North Africa now. How short-sighted are our defence cuts, particularly in regard to troop numbers, now that we are intervening in Mali?
We know that, even with the Government’s tough talk, expenditure is going up not down. As the noble Lord, Lord Forsyth, said, debt is going up, not down. We have heard throughout this debate that austerity may have actually worsened our chances of recovery. At the very least, it has sent out a very negative signal and sapped the confidence of our consumers and our businesses. The only thing this tough-talking austerity has achieved is maintained our triple-A credit rating, but it seems that we might be on the cusp of losing that, too. It is ironic that our current global financial crisis was caused by the lowest prolonged level of interest rates we had known. I am talking about interest rates of 5%. We have now had three years of interest rates 10 times lower at 0.5% and that is what is propping up our economy. What will happen when those interest rates increase?
The Government have, to be fair, tried a great many measures: quantitative easing, injecting liquidity, fixing the regulatory and supervisory banks and putting more power in the hands of the Bank of England. That is terrific. The Government are doing absolutely the right thing on schools and welfare. However, the Government need to be fair and firm and they need to go further in some of these areas. Our welfare bill, including pensions, is over £200 billion a year. There is still a benefits trap and it pays not to work. A trial of a scheme which requires compulsory community service for jobseekers has been successful. Could the Minister confirm that this will be rolled out nationwide? I remember an event organised by the noble Lord, Lord Forsyth, at which I spoke to the former Australian Prime Minister, John Howard, about Australia’s very successful welfare-to-work scheme. He explained that he thought it was going to be very unpopular but it proved to be very popular, including with the jobseekers themselves. That is not austerity—that is the wrong word. It is about being firm and fair, and that would be in the best interests of this country because work pays and it is good to work. Of course, if you genuinely cannot work, the safety net should be there to assist those who genuinely need it.
How do we therefore get this economy into growth? The appointment of the incoming Governor of the Bank of England, Mark Carney, sends a very positive signal—the appointment, for the first time in history, of someone who is not British shows what an open country and economy we are. It is going to bring in fresh thinking. For example, he has suggested that apart from inflation targeting we should have GDP growth targeting. Does the Minister agree?
To get the economy growing, not only do we have to cut wasteful, unfair public expenditure but we need to change the mindset and attitude from that of an entitlement culture to an aspirational culture. To generate growth, we need to be competitive. We have a situation in this country in which our taxes, overall, are far too high. Time after time, we have seen that reducing taxes not only increases investment in the form of entrepreneurship and foreign investment but creates employment. Increasing taxes, on the other hand, stifles the economy, jobs and consumers. As the noble Lord, Lord Forsyth, said, just today it has been revealed that this Government have implemented almost 300 tax rises. These increases are harming business. In my industry, the brewing industry, the beer duty escalator has contributed to killing our pubs—the heart of our communities. Our alcohol duties in this country are up to six times higher than in some of our colleague European countries.
As a proud manufacturer in this country, I know the huge potential that manufacturing has to spur the growth in our economy. Manufacturing creates jobs, not only through the people who work in the factories but through the supply chains and the service sector. We face an uphill battle in terms of balance of trade. Manufacturing is key to increasing our exports. My business has exported to more than 40 countries. The noble Lord, Lord Howell, said that the potential for exporting is enormous. At last the Government have woken up to the need to rebalance our economy in favour of manufacturing, but we need to go further. We need an industrial policy that targets a specific level of manufacturing as a percentage of GDP. Does the Minister agree?
It is good that the Government are reducing corporation tax to 21%, but are we being bold enough? What about Ireland reducing it to 12.5% and sticking to it, with all the problems that that country has gone through? Employers’ national insurance is one of the most unfair taxes. We should be offering a break to SMEs that create jobs. We should not be taxing the creation of employment but celebrating and incentivising it. We need to support SMEs, as the noble Lord, Lord Mitchell, said, particularly in raising finance. I have said it before and I will keep saying it: despite all the government schemes intended to encourage SMEs, they are not working. Finance is still very difficult to raise for all businesses, particularly SMEs, as the noble Lord, Lord Lamont, stressed.
We need to do much more to encourage our businesses to engage with emerging markets. I am the founding chair of the UK India Business Council. I have seen what UK Trade and Investment does and I applaud its efforts, but we need to do much more, particularly to correct the negative image of our economy created through the rhetoric of austerity that continues. It is spoiling a lot of the work that UKTI is trying to do.
One of the most important elements of recovery will be the creation of new businesses. If we invest in entrepreneurship, we could create those extra 1 million jobs that we are looking for, with tens of thousands of new businesses—small businesses. They have to employ just a handful of people and one can create a million jobs. Entrepreneurship needs to be celebrated and embraced. Businesses and the whole of Britain needs continually to understand and appreciate, as my noble friend Lord Jones constantly says, that it is businesses that create the jobs that pay the taxes that create the growth in our economy. We need policies to encourage optimism among our entrepreneurs, rather than gloomy rhetoric about cuts and tax rises.
One of the reasons that the United States consistently bounces back, year after year, is that it invests much more than we do in research and development. The Minister outlined some measures that the Government are taking to encourage it, but we need to do much more, not only in university research but in helping the private sector. Can the Minister really say that the Government are doing their best on this? Our higher education sector is the best in the world, along with that of the United States, despite our sector being underfunded proportionately by up to three times when compared with America. Just imagine how much more we could achieve if we had the same proportionate level of funding that the Americans put into higher education and research and development.
This has become a bit of a Cambridge University debate, with the noble Lord, Lord Deighton, and his supervisor, as well as the noble Lord, Lord Eatwell, followed by the noble Lord, Lord Wolfson, who was treasurer of the Cambridge Union when I was its vice-president. It goes on. He spoke about the quality of investments. We all know that infrastructure investment must happen, but it has to happen fast. HS2 is going to take 20 years. Is that some sort of joke—a high-speed network being delivered at slow speed? It baffles us all over here. What about airports? What is happening about that strategy? That needs to be implemented fast. These large infrastructure projects are desperately needed for our competitiveness.
The mindset of the Government needs to change and, in the words of our inimitable Mayor of London, Boris Johnson, this Government should “junk talk of austerity”. We need to do that because the Government have to be seen to be firm and fair, and positive and aspirational in their outlook. They need to make the cuts required in areas such as welfare, but they also need to show that we want to be more competitive in cutting taxes. We need to look outwards and work much more with developing nations, such as the BRICS countries. We must be confident that despite all our problems, we have so much going for us. Just imagine what we could achieve. On 26 January, it was India’s Republic Day. I am reminded of the words of Mahatma Ghandi, who said:
“Your beliefs become your thoughts. Your thoughts become your words. Your words become your actions. Your actions become your habits. Your habits become your values. Your values become your destiny”.
The time has come to change our beliefs and to believe in ourselves with confidence. Then we can determine our destiny.
Lord Higgins
My Lords, it is always a pleasure to follow the noble Lord, Lord Bilimoria, because he always introduces an element of optimism in what has otherwise been a pretty grim debate. Like everyone who has spoken, I congratulate the Minister on his appointment and wish him well. I certainly share the views of those who congratulated him also on his role in the most successful Olympic and Paralympic Games ever. I particularly urge him not simply to be a government spokesman in this House but to take an active role in his department. This is not always easy, particularly regarding financial matters, where this House is inhibited in some respects. However, the issue is important because we now have not only a generation of professional politicians in the other place, but we are getting pretty close to a generation of professional Ministers, and an injection of more realism from these Benches on those who are serving as Ministers would be welcome.
One of the curiosities of the present situation is that we have to put the question of growth, investment and so on in the overall economic context. It is true, as all Cambridge economists would say—there are more around the Chamber—that it is difficult not only for economists to forecast the future but to forecast where you are. This is certainly true at the moment because we have the strange situation where we appear to have an economy that we are told is about to have a third dip but, at the same time, the stock market is not doing at all badly and employment is increasing rapidly. The answer to this is probably to be found in the fact that wage inflation is virtually non-existent and it would seem almost that the unions have come to the view that they should go more for an increase in employment, rather than sustaining their members’ living standards. This clearly has serious implications for what might happen in the future, but none the less, this appears to be the case. The trouble is—as the noble Lord, Lord Skidelsky, pointed out—that the implication of that is that productivity is actually going down in the circumstances I have just described, at a time when we certainly, as an economy, want to have productivity going up. Therefore, the answer has to be that we must do something important to encourage aggregate demand.
Perhaps I might add just one other word in reply to the comments of my noble friend on the Front Bench. He actually referred to a “national infrastructure plan”. Those who have been in this place or another place for a long while have nasty echoes of George Brown and his ill-fated national plan, but I am not clear whether my noble friend will find that this has capital initial letters in Hansard. Perhaps he might clarify whether it is his intention that it should do so. There may be some argument for such an approach in the present circumstances with regard to infrastructure, but it is absolutely clear that the Government must continue to press on with their deficit reduction plan.
I am now rather puzzled by the position of the Labour Party. We were told originally, “Well, the Government are doing it too fast and too soon”—the implication being that something ought to be done. It was clearly the case that one could not go on as one was going on at the time when we came into power. What is the position now? The noble Lord, Lord Eatwell, with his usual reference to Keynesian multipliers and so on, seems to be saying that we should now take fiscal measures to stimulate the economy. In other words, he is saying that we should not cut the deficit but go on increasing it even more. He shakes his head; in that case, I am not clear where he stands on this issue. What does he want to do about the deficit? It is not apparent what he wants to do about the deficit, and whether it involves the multiplier as well. We look forward to some clarification in the wind-up speeches from the Front Bench.
The trouble is that if it is not possible to do it by fiscal measures one has to find other means of doing so, and lowering interest rates further is clearly not a possibility. Therefore, one inevitably has to resort to the question of quantitative easing. I share the qualms expressed by my noble friend Lord Lang and others about the effect of this on pension funds. The Treasury Committee is now, I gather, going to carry out a full report into quantitative easing, which will be helpful, but it does not seem to me that there is much alternative for the moment. It is certain that its impact is diminishing, but it seems to have some stimulating effect at the present time, which is something that we need in present circumstances.
Having said that, I am concerned about the fact that our monetary policy is confused and divided between the Treasury and the great Gordon Brown’s invention, the Monetary Policy Committee—a very unaccountable body. I am not at all clear that monetary policy is operating as it should. Until the innovation of quantitative easing, it was not a monetary policy at all: it was a Monetary Policy Committee without a monetary policy. All it had was an interest rate policy involving one interest rate. We are not clear as to how responsibility for overall economic management is divided between the Governor of the Bank of England—now incoming—and the Monetary Policy Committee on the one hand and the Treasury on the other. It is not clear to what extent there is a degree of co-ordination and—as I pointed out as the legislation was going through—they are working on two different forecasts. That is an extraordinary situation to find ourselves in. Having said that, I think it is important that we should continue to cut, but cuts must be made in a sensible way. Yesterday at Question Time, the issue came up about what is happening in south London, and the protests going on there on a large scale because of the proposal to downgrade the maternity unit at Lewisham Hospital. I have an interest in this, because my daughter was born in Lewisham Hospital. We went there because of its high reputation. Even more remarkably, her son was also born in that hospital because events happened much more rapidly than was expected; she had to drive 60 miles to get to the hospital and she and the baby arrived there at the same time. The hospital responded magnificently. To downgrade that hospital now would be a really appalling example of how not to do cuts—cuts made simply because another part of the NHS had overspent. It would be better to fire the people who overspent rather than affect Lewisham Hospital. I have digressed—but I am merely saying that I have a qualification in respect of my views on cuts. The cuts must be sensible and well judged.
On infrastructure, I would like to make two points. First, there is absolutely no point in having totally uneconomic infrastructure projects. In this context, whatever the political arguments may be on global warming and so on, to have a structure where the cost of the investment is to be met by imposing higher costs on existing consumers—some of whom may be dead before the new wind farms come in—is not a sensible way of proceeding. I am sure that my noble friend on the Front Bench, with his knowledge of microeconomics, will accept that if the pricing policy was right in the first place, loading the cost of the investment on top of that is certainly not going to give an optimum solution. But that tendency not to carry out a normal investment appraisal but to put the costs on the existing consumers appears to be happening with our normal, rather than high speed, railways. The regulators seem to have changed their view on what is the right way in which to make investment proposals in these large infrastructure areas. I hope that my noble friend in the Treasury will look carefully as to whether the regulators are really doing the job in this respect that they ought to do.
I gather that the Treasury Committee—of which I was chair for many years—has just made a report on the mini-Budget Statement. It says that it is important that the Chancellor should not create uncertainty with regard to his determination to reduce the deficit. I believe that that is the situation that ought to be avoided; it is important that we should remain resolute. At some stage, obviously, it will be possible to reverse the present policy, but that time has not come yet if we want to get growth in the economy.
Viscount Hanworth
My Lords, I, too, welcome the noble Lord, Lord Deighton. I must also express my condolences to him for the frustrations that he will inevitably face. There is a level of exasperation that is liable to render one speechless and that is how some of us on these Benches have been reacting to the Government’s economic policies. Others have been able repeatedly to highlight the failures and fallacies of these policies, with a seemingly undiminished fervour. The Shadow Chancellor, Ed Balls, is one such person. He has observed what should be clear to all of us, if we are not blinded by ideological preconceptions or by political allegiances.
The policies of the Government have been holding the economy in recession and causing untold misery to great numbers of working people, to people who are seeking to work and to people who, for one reason or another, are incapacitated. Perhaps the first thing that needs to be explained is the insensitivity of the members of the Government to the effects that their policies are having on a multitude of ordinary citizens who fall into the middle and the lower reaches of the spectrum of income and wealth. That such insensitivity is not an inevitable concomitant of Conservative politics is surely indicated by the nation’s experiences under the post-war Conservative Governments which, by and large, shared a consensus on social and economic policies with the Labour Governments. It was well understood by the post-war Conservatives that a necessary condition for the growth in the country’s prosperity was an assurance in the minds of the majority of its citizens that they would profit from their labours within a society that was destined to become increasingly egalitarian. The egalitarian instincts of one Conservative Prime Minister, Harold Macmillan, are deservedly well remembered. As Churchill’s Minister responsible for housing from 1951 to 1954, he was charged with the task of fulfilling the promise to build 300,000 houses per year, and he achieved the target a year ahead of schedule.
The present Government are also mindful of the manner in which a house-building boom can serve to alleviate a recession; and they may have been mindful of the effects of the house-building boom of the 1930s, to which local authorities contributed largely by providing social housing. However, in a manner that seems to be utterly perverse, the Government seek to relieve building contractors of their obligations under Section 106 of the Town and Country Planning Act 1990 to provide a modicum of social housing. Their thought is that the obligations to provide social housing are imposing a constraint on the profits of the building contractors. Here is a prime example of an economic argument, conceived in the abstract, that has no basis in fact and that bears no examination.
There is now a growing recognition, which is reflected in much recent literature, that better national economic performance is correlated with greater social equality. There is plenty of evidence for this among our European neighbours. In Britain, in recent years, the degree of inequality has been increasing rapidly and exorbitant rates of pay have become common in our financial sector. The justification that has been offered for such remunerations is that they provide incentives to effort and that they are necessary for attracting talented people to serve in the financial sector. The Government appear to have accepted such spurious assertions. The Government have gone further in reviving the doctrine of the trickle-down effect. This asserts that the economy is best stimulated when the greed and the enterprise of the rich are activated by abundant rewards. To this end, there has been a reduction in the top rate of income tax.
This Government have been influenced to a remarkable degree by tendentious economic doctrines that they have failed to re-examine in the light of our present circumstances. One such doctrine concerns the supposed crowding out of private economic enterprise by government initiatives that pre-empt the supplies of labour and capital. A misplaced faith in the alacrity of private enterprise has led to the mantra that social provision should be open to any willing provider. The willing providers have not been forthcoming, except where there have been easy pickings, such as in the provision of manpower services and in security. In the case of the private provision of health services, the Government are contemplating tilting the playing field so as to favour private providers.
The fallacy of willing providers has been evident in connection with the major infrastructure projects that this country so urgently needs to undertake, if it is to retain its competitiveness in the global economy. There is a further fallacy of economic thinking that is operative in this area. This is a belief that social and national economic decision making can be, and ought to be, conducted within the same framework as commercial decision making and according to the same decision rules. Within such a decision-making framework, one of the essential elements is the commercial rate of interest, which is allied to the concept of the rate of discount. The basic nostrum is that future earnings and economic benefits should be measured and compared via their discounted present values. A pound promised tomorrow is judged to be of lesser value than a pound given today, by virtue of the fact that today’s pound could be invested profitably to generate a return that is determined by the market rate of interest. Notwithstanding that the current interest rates are markedly lower, commercial project evaluation continues to be based on a target rate of return of some 6% per annum. This implies a rate of discount that diminishes the value of next year's pound by 94%. Some simple arithmetic will reveal the fact that, in these terms, a pound promised with certainty 15 years hence will have a present value of only 40 pence. At this rate, it is no wonder that commercial enterprises are concerned with the here-and-now at the expense of making provisions for the future.
It is precisely in making provisions for the future that the obligation of Governments must lie. It is in this respect that the present Government are in serious dereliction of their duty, which is to initiate and finance the major infrastructure projects upon which our future prosperity depends. Many of these projects must be seen within perspectives of time that extend well beyond 15 years. To finance such projects, which are the only sure way of stimulating the economy and of overcoming the recession, without causing a balance of payments crisis, the Government must borrow from the banks and on the open market, or they must guarantee the borrowing of public bodies. They must also raise taxes from those who can afford to pay them, including from large corporations that have proved adept at avoiding taxation. Unfortunately, it seems that the Government are incapable of contemplating such actions.
Lord Northbrook
My Lords, I welcome this opportunity to discuss the UK economy and the Government’s role in promoting growth. Before I do so, I should like to extend a warm welcome to the noble Lord, Lord Deighton, in his new role as Commercial Secretary to the Treasury. His success as the chief executive of LOCOG in delivering the Olympic Games and the Paralympic Games last year deserves high praise. His previous eminent position at Goldman Sachs will also stand him in good stead not only in understanding the UK economy but also globally with his former firm’s contacts in, for instance, the US Government. His role is to lead on infrastructure and economic delivery, but I hope that he will also have time to assist our deliberations on the all-important banking Bill coming before your Lordships’ House later this year. His experience and background will be a vital influence on the success of that legislation. My noble friend Lord Sassoon has set him a high standard to follow, but I know that he will be more than equal to the task.
I move on to examine the state of the UK economy. Clearly, the latest GDP figures were disappointing. According to the FT, it was small and troublesome sectors, such as construction, and North Sea oil, which were particularly affected by maintenance problems, that had a big impact on the quarter. Excluding those, the economy actually grew by 0.7% over the last three months of 2012—a better performance but not a healthy one. However, it is encouraging that, according to the ONS, our volume of exports to non-EU countries has increased by around 35% since 2009, and I hope it will continue to be a source of strength.
There are some other, more encouraging signs according to the FT: broad money supply growth is picking up and mortgage rates have fallen as the Bank of England’s funding-for-lending scheme starts to help the flow of credit from banks to the real economy. The FTSE index of leading companies is at its highest level in four and a half years and there are signs of recovery in some major economies. The other bright spot is that people are continuing to find jobs. Half a million more people are in work compared with a year ago and these jobs, according to the ONS, have all been created in the private sector. I am not an economist but I find it difficult to reconcile the continuing poor GDP figures with the continuing good news on private sector job creation. I am not sure whether the diagnosis of the noble Lord, Lord Skidelsky, is correct.
Public sector net borrowing has also fallen from its 2009-10 peak of £159 billion to an OBR forecast of £108 billion for 2012-13. That is a major improvement but the one-off factor of the Royal Mail deficit transfer has helped the figures. However, unless growth picks up, I see that borrowing will decline much more slowly. Table 4.18 in the OBR December 2012 forecasts shows that it is not overall public sector current expenditure that is decreasing but the rate of increase in this expenditure. Therefore, if the economy does not grow, public sector net borrowing will not decrease significantly.
However, the Autumn Statement contained the most encouraging measures that the coalition has produced to encourage growth. The £5.5 billion capital package and support for long-term private investment in roads and science infrastructure is very welcome. The cancellation of the 3p rise in fuel duty was well received, especially by small businesses. The cut in corporation tax and the significant increase in investment allowance will be of great help to companies. The idea put forward by my noble friend Lord Heseltine of devolving a greater proportion of growth-related spending to local areas from 2015 has been welcomed by the CBI. However, I maintain my concern about whether the quality of the local enterprise partnerships, which have replaced the regional development agencies, are up to the task.
Measures to ensure that businesses—particularly smaller businesses—can access finance and support include plans to create a business bank, deploying £1 billion of additional capital. In addition, the Autumn Statement included funding to enable UK Export Finance to provide up to £1.5 billion of loans to finance small-firms exports. Both measures were particularly welcomed by the Federation of Small Businesses.
Looking at Labour’s reaction to the Autumn Statement from Ed Balls, and listening to the noble Lord, Lord Eatwell, I note their criticism, but I have yet to see a detailed Labour Party alternative plan to get us out of the mess that they created. Their general alternative seems to be to spend more. This is a dangerous path to pursue since it could well lead to our borrowing costs going up considerably.
I move on to the second part of the debate—the Government’s role in promoting growth. I am not of the belief that the Government should intervene to pick industrial winners. In a paper entitled Industrial Policy in Europe Since the Second World War, written last year, Geoffrey Owen of the LSE makes a tour through UK, French and German industrial policy since 1945. His conclusion is that, in the main, government intervention has not worked and that, instead, it would be far better to create the right economic conditions for the industry that I referred to a moment ago. UK government intervention failures included the de Havilland Comet, Concorde, the advanced gas-cooled reactor, British Leyland and ICL. British Aerospace and Rolls-Royce were the major successes. So, with some exceptions, these interventions were generally unsuccessful. Policy- makers tended to overrate the risks and costs of market failures and underestimate those associated with government failures. There is also a mistaken assumption that there were certain technologies that a country somehow needed to have, and that they were more likely to be achieved through centralised direction than through competitive markets. The cost to the taxpayer of ill-judged industrial policy was high.
I believe that it is more important for the Government to create the right business regime to encourage growth through simple and lower taxes, less but sensibly targeted regulation, speeding up the planning application regime—as my noble friend Lord Wolfson mentioned—better business education and encouraging bank lending.
We must not allow ourselves to become too pessimistic. I conclude by giving two examples of company bosses—at completely opposite ends of the spectrum in terms of size—who, despite their concerns, feel optimistic for 2013. Rob Law is a businessman who was turned down by “Dragons’ Den” but has still done well in the field of producing children’s suitcases. He summed up matters well in a recent interview in the Hargreaves Lansdown investment magazine, saying:
“I think the holy grail for government is to simplify the tax system. When you start out in business, unless you have an accountancy background, which most people don’t, it is hugely complicated. I think if you had a simpler tax system, you’d get a lot more multinationals coming here”.
Despite his concerns, his company has done well. He goes on to say:
“We’ve had a brilliant year”—
in 2012.
“We started production in the UK, grew our team to about 30 people and launched a couple of new products. We are now exporting to 97 countries”.
At the other end of the experience scale, Sir John Parker, chairman of Anglo American, has recently made some very optimistic comments. He has said:
“I think we mustn’t become too pessimistic. There are some reasons for optimism ... I think the fundamentals for UK companies are looking stronger than for many years. Non-financial companies have been generating significant cash surpluses over the last few years. Whilst profits have recovered, uncertainty has prompted companies to save rather than invest. But over the next few years I expect this uncertainty to fade, which should encourage companies to start investing again. I regard this as the key to a sustained economic recovery in the UK in the medium term”.
The Earl of Listowel
My Lords, I also welcome the Minister to the Front Bench and thank the Government for this important debate. I declare my interest as a landowner, detailed in the register of interests. I am also vice-chair of the parliamentary group for children and young people in care and leaving care; treasurer of the parliamentary group for children; and a trustee of the Michael Sieff Foundation, a charity promoting child welfare.
I rise in part to take issue with the very interesting speech of the noble Lord, Lord Wolfson. In the detail of it, he rather dismissed the idea of social investment at the current time—I hope that I am being fair in conveying what he said. We must not underestimate the importance of investing in early intervention, even at these difficult times. If we want to have a skilled workforce and if we need to compete with China and other nations around the world, we need to invest early in our children, because what happens in the early days and years of a child’s life is the most important determinant of whether they will do well in education and employment.
I welcome the Government’s commitment to early intervention. The right honourable Iain Duncan Smith has championed for many years this notion of intervening early to get the best outcomes. I was cheered recently to hear Andrea Leadsom, a Conservative MP and vice-chair of the parliamentary group for children’s centres, really highlighting the difference that can be made if one gets in early with children and children’s lives, or indeed in terms of the pregnancy of a mother and at certain times in adolescence as well. There is a flexibility to the mind where the neural pathways are able to be rejigged in certain ways, which can help people to do far better in education, in work and elsewhere.
Of course, there have been some positive outcomes with respect to the 100,000 troubled families that the Government have been focusing on recently and the Government’s investment in health visitors, which is very welcome indeed. However, I repeat that what happens early in life is the determinant, to a large extent, of future employability. Too often business people think, “The education system has failed. We need to put in our skills now at the age of 16, 17 or 18”—but that really is too late. We know from the research on early years education that good-quality early years education gives a huge boost to the educational outcomes of children. Indeed, a good early years experience can protect children against bad later educational experience. For instance, children having good early years experiences going to poor or middle-quality primary schools will do as well as other children going to good primary schools because of that good early experience. China is investing hugely in early years provision because it recognises its importance to its future economy.
I am afraid that despite the welcome attention from the Government in early intervention, the global picture is worrying in terms of children and family services, and in particular in terms of child protection. The 28% cuts across the board to local authority spending, the cuts in the number of youth workers and the cuts in other services are really impacting on children and families. Local authorities are maintaining their statutory services, so they are ready to protect the most vulnerable children, those harmed the most. However, all those other services around children and families are gradually being picked off. Statutory services are moving on to the back foot. Year by year we see more and more children being taken into care. All those good services that could have intervened earlier on are not there. To use an analogy, it is as if this is a football match. Over time, one is seeing one’s forwards being sent off, then one’s mid-field players and then one’s backs. One is left with the goalie at the back—the child and family social worker—trying to step in and feeling overwhelmed.
I have an example to express better what I mean. I draw noble Lords’ attention to the National Grid Transco young offender programme which is closely associated with Sir John Parker, the former chairman of National Grid Transco. In 10 years it has provided the programme to 1,000 young people. It has seen recidivism rates drop from a norm of 70% to less than 4% for those young men and women. Sir John Parker always highlighted—he was a tremendous advocate in business for adopting this programme—the cost to the nation of keeping these adults in prison. The year before last that was about £38,000 each per annum.
Recently, I have been hearing stories about some of the young men who have come through this programme. I heard how well they were doing in their jobs in the utilities. We have an ageing workforce and they were meeting a real need for new men and women in these areas. They were rising up the ranks and taking on responsibility very effectively.
I also heard about a man who got a home for himself so that he could be a lone parent to his two sons. Another man had lost custody and contact with his children but made sure that he quickly got a home so that he could have shared contact with his sons. In my own experience of visiting presentation ceremonies for National Grid in the past, I have been touched to see fathers with their young children. These young children now have fathers. A chief indicator for offending is that one’s parent was an offender themselves. Instead, these infants and young people are now seeing their fathers in a decent job, able to provide income to the family and setting a good example to them.
I hope that that example shows what a difference good social investment can make to the economy. I hope that the Minister will give an ear to the concerns of the chief economist at the International Monetary Fund and others about the risks of making cuts that are too deep. I am no economist, and cuts may be necessary in the current circumstances, but I am very concerned that we have seen this all before in the 1980s and 1990s. Youth services and children's services are cut and cut and we pay the cost in the long term. We will not get the educational outcomes we need for our population if we do not give families the strong support that they need.
The noble Lord, Lord Howell of Guildford, emphasised that one of the strengths of the east Asian economy was the cohesion of its families. In terms of our society, the noble Lord, Lord Alton of Liverpool, emphasises again and again the crisis in fatherhood with so many children growing up without fathers. We cannot overlook the need to support families as best we can, even in these difficult times, if we want the children and young people of the future to be productive citizens and not to end up on benefits or in the criminal justice system at great cost to the taxpayer.
Lord Sheikh
My Lords, I am very grateful to have the chance once again to contribute to a debate on what has been and continues to be our Government's number one priority: promoting growth to reduce our national debt and restoring stability to our economy. It is important that we continue to have such discussions in order to continually monitor progress and exchange ideas about how we can assist our recovery further. I congratulate my noble friend Lord Deighton on his excellent speech at the outset of this debate. I also congratulate him on his ministerial appointment.
Concerns were raised last week following Friday's announcement that our economy contracted in the last quarter, so this debate is most timely. The Chancellor was clear in the Autumn Statement that, despite the inevitable blips, our economy is ultimately improving. The deficit has been reduced by a quarter since the Government came to power in 2010, significantly lightening the further pressure on our debt each year. Employment is of course a key driver of growth and recovery and we have seen more than 1 million new jobs created in the private sector in the same period. Unemployment is at its lowest level for 18 months and the number of people in work has reached another record high. Demand for manufacturing orders is also expected to rise in the next quarter. Taking such indicators into account, it is fair to say that we are still on a stable path to long-term recovery.
We also received extremely positive news just yesterday that the FTSE 100 index rose to above 6,300 points for the first time since May 2008. It has now gained nearly 7% since the beginning of the year. The fact that the value of our top 100 companies is at its highest for nearly five years can only be seen as a bold endorsement of the direction in which the City of London and our economy as a whole is heading. Such a rise will only increase investor confidence further and continue to build its own momentum—which in turn allows business to expand, provides further employment opportunities and increases dividends, ultimately giving people more money in their pockets and a greater sense of financial stability.
I refer to an encouraging report recently produced by UKTI which found that 46% of major financial service companies in the UK are actually overseas-owned. In particular, it emphasised how the United States uses the UK as a springboard from which to access the rest of Europe and that we are particularly well placed to benefit from the ongoing boom in the world’s emerging markets. One of the Government's key targets on the economy has been to ensure that Britain is seen as open for business, and this report evidences just how accessible we have made ourselves to overseas investment.
This does of course remind us of the wider global context within which we are operating and to which our own economy is closely linked. In such a globalised economy, we cannot be fully confident of future prosperity unless our neighbours, allies and trading partners are also in positions of reasonable financial health. Just last week, the IMF downgraded its global growth forecast for the next two years, mostly due to the continuing crisis in the eurozone, which is now expected to remain in recession throughout 2013.
We will continue to be vulnerable for some time and must not be knocked off our disciplined course of austerity. The more severe the illness, the more cautious the treatment will be and the longer it will take to recover. Now more than ever it is important that we have strong leadership. Our Prime Minister was clear last week in Davos that trade, tax and transparency are our economic priorities heading forward. As a businessman, I fully support this approach.
The Government have already been taking numerous measures to stimulate growth: local enterprise partnerships and enterprise zones have been established; our corporation tax is now the lowest in the G7; and just earlier this month the expansion of the start-up loans scheme was announced. In particular, I commend the Government's continued commitment to seeing through the plans for the High Speed 2 railway line. I appreciate that there is some controversy surrounding these plans, but the wider long-term benefits to the United Kingdom simply cannot be underestimated. As the Prime Minister said, this project is an engine for growth in itself, ultimately creating tens of thousands of jobs. Reducing journey times between some of our major cities would be a significant step in addressing the north-south divide that currently exists in our economy and would regenerate regions that are sometimes overlooked.
I think that we would all agree that overseas trade is one of the most important elements to ensuring healthy, consistent growth. The Government understand this—one of their four aims to achieve growth is to encourage investment and exports. This is where we must create and maximise any and all opportunities.
I am concerned by the long-term decline in our share of global exports. We will not reach the great heights that we once did if we continue to buy so much more than we sell. That is why I am so pleased that the Government have developed a renewed focus in this area, with UK Trade and Investment actively encouraging small and medium-sized businesses to increase the exporting of their goods and services, particularly to emerging markets. I also welcome the wider commitment to double British exports to £1 trillion by the end of this decade.
I have previously mentioned in your Lordships’ House that over the past two and a half years I have travelled to a number of countries abroad and promoted trade between the United Kingdom and overseas countries. There are of course growing opportunities in countries such as Brazil, Russia, India and China. There are also prospects to do more business in the Middle East, central Asia and several African countries. I know some of these countries very well.
We should maintain and in fact strengthen our trade links with the USA and with other European countries. I am a great believer in the Commonwealth. We should build stronger trade links with other Commonwealth countries. I totally endorse what my noble friend Lord Howell said with regard to the Commonwealth countries. I believe that we have a good story to tell about provision of our services and manufacture of our goods. We must, however, make sure that our businesses are world-leading and globally competitive in order to attract inward investment and continue to increase further the potential for us to export to the rest of the world.
Our motor vehicle industry is a good example of where this is already happening. Last year 82% of all cars made in the United Kingdom were exported overseas. The total was 1.2 million vehicles—the highest ever. Britain is set to produce 2 million cars in 2017, following £6 billion of investment in the motor industry in recent years.
We have greatly improved our manufacturing methods and produced impressive vehicles which are now in greater demand. From trade comes growth, and from growth comes prosperity and stability. As a businessman, I have always believed that a successful organisation needs to produce very good products which should be competitively priced. It should then undertake an active marketing campaign. In doing so, it must always keep a close eye on its expenses. The Prime Minister has said that he wants every department in Whitehall to be a growth department, and he insists that every Permanent Secretary has growth as a key objective.
The Government are playing their part by giving business a positive and supportive framework around which to build and project itself. The Government are actively involved in improving infrastructure which will provide employment, attract investment and help businesses. Building up skills is also an important objective of this Government. We all believe in cutting red tape and giving more powers at local levels.
None of us has been naive to the fact that it was never going to be easy and would take some time for our economy to heal. The combination of the previous Government's financial mismanagement and the wider global situation was a mix so toxic that it caused damage on a monumental scale. However, I believe that these measures and a continued ideological drive towards growth as a means of rebalancing our economy will ensure that we continue on our path to recovery. I am confident that we will promote growth and cut the deficit if we maintain the course that our Government are pursuing. It will be a hard task that requires the co-operation of government departments, various sectors of the industry, the business community—in fact, everyone in the country. I am sure that Britain will live up to its name of being great.
Lord Desai
My Lords, I, too, congratulate the noble Lord on his new appointment. I am afraid I was out of town when the Olympic Games were going on, so I missed the full glory of his achievements, but I am sure that he will match them in his new position.
It is a strange debate in which 25 men and only one woman are speaking. What is wrong with economics that it puts off women? It happened to us last Thursday when we discussed the banking union, and only the noble Baroness, Lady Falkner of Margravine, from the Liberal Democrats was speaking. The noble Baroness is also the only Lib Dem spokesperson, so she is unique in two different respects.
My perspective on this crisis has been different to that of many other noble Lords. It is a much deeper crisis than we think and will take much longer to sort out than we think. The idea that we will get rid of our deficit in five years was never on. We will have to work much harder for this because the roots of this crisis go much deeper.
There are three parts to this. First, around the early 1970s we started de-industrialising, losing our industry, and our industry started migrating to Asia. This happened not only to us but to many other European countries. Germany is an exception, to which I will come. Incidentally, Germany has never adopted any Keynesian policies that I know of. It has always been a non-Keynesian-run country and has always taken horrendous cuts in real wages. Even now, its consumption to income ratio is lower than in the UK, regardless of what growth it has. It is a very different kind of economy and we are not about to replicate Germany. We can forget that.
Conservative voters do not like infrastructure development, such as HS2. Forget about Labour; our prosperous people are anti-growth with regard to HS2. Our prosperous people are against the third runway. We have a deeply anti-growth mentality. This is not my main point, but I want to point out that we are somewhat perverse in our desire for growth. When it actually comes to our doorstep, we say, “Take it somewhere else, thank you very much”.
But to go back to my point, we got into de-industrialising early in the 1970s, and this happened to quite a lot of other countries. When we finally lost a lot of industry, some of which we could not keep here because we had priced ourselves out of international markets, we replaced it with a service sector through much of the 1990s. Economics is a strange subject. In neoclassical economics, it does not really matter whether you dig ditches or make a car or make candyfloss. It is all income. If you make candyfloss and not cars, you are still growing. In the 1990s, we had the longest boom, for 15 years, but it was entirely based on the growth of the financial services sector. Our wealth creation was in the financial services sector. I know it is no longer fashionable to like the financial services sector and we find it not socially useful, but we lived off that sector for 15 years. We did not reindustrialise or do anything about upskilling. I have been in this country for 45 years and every year we say, “We should have more apprentices, German-style”. Wow, there we go again. We have not reindustrialised; we have been happy with the financial services sector.
As a part of that, we stopped saving. Households stopped saving, and Governments stopped saving. Our crisis has arisen from over-spending, under-saving and over-borrowing. It was not only us; almost the entire western world under-saved and over-borrowed, and the poor, fast-emerging Asians were lending us a lot of their money. They were not only lending us money, they were also exporting goods to us which we bought with the money they had lent us. So, in a vicious circle, we went on having balance of trade deficits thanks to the money they had given us. It was like a drug dealer giving you money to buy drugs and then you need more drugs.
Getting out of an over-spending crisis is not easy, as the noble Lord, Lord Skidelsky, pointed out. This is a portfolio of a stock disequilibrium crisis, and it will take a long time for our savings to recover to anything like a decent standard. The noble Lord, Lord Lang, talked cogently about our problems with the pensions industry, and so on but, given our demographics, we need to get to a level of savings higher than what it was in the 1990s. The question is what we are going to do to get our level of savings higher than it previously was. How are we going to get to that stage?
I know that there is a clear division between Keynesians who think that one more bout of spending will get us out of this crisis. I have studied Keynesian economics and I have been a Keynesian economist, although I am not one during this crisis. Our problems arise from what we did during the prosperous years about spending. It is not what we borrowed after 2008 that is the problem; our problem is that we borrowed at the top of the boom and that our debt to GDP ratio went up in the good years. Had it been the case that borrowing was self-liquidating, we would not have been in this situation. So, to some extent, there is a problem, not about borrowing but what you spend it on. Some spending is self-liquidating, while other spending is not. Obviously, we had a balance between the public sector and private sector or, perhaps, between the wealth-creating sector and the welfare-creating sector. That balance went awry somewhere during the boom years. We started at 36% of GDP being spent by the state in 1997, when Labour came to power; it was 44% by 2007 before the crisis hit us. At the end of all the misery that this is going to cause us, we are going to return to 44%. All the adjustments, no matter how long they take, will only get us back to 44%, and there will still be a lot more structural adjustment to do when we are through with this. After we have eliminated the deficit and stabilised the debt level, we will start rebuilding the economy. This is just patchwork. We have to think about this problem more seriously.
I believe, and have always believed, that QE was a disastrous mistake. When you need to raise your savings, if you cut interest rates you discourage savings, a point made by the noble Lord, Lord Lang. Furthermore, we know that while households and Governments are in debt, corporates are in surplus cash and no one is investing. One reason could be, of course, that there is no demand, but another problem is the uncertainty about interest rates. Everyone knows that one of these days QE is going to come to stop and interest rates are going to go up. Until I see how interest rates are going to go up, why would I invest? Why would I invest now, when interest rates are 0.5%, when I know that they are going to 6% further down the line?
One thing that Mark Carney can do—although I do not think he will listen to me, if anyone—is to stop QE. Let us get out of QE as fast as we can. A very loose monetary policy and a very tight fiscal policy have so far not had much effect on the economy. We are bumping along at the bottom. Minus 0.3% is neither here nor there because, in any of these things, the standard error is plus and minus 1%. It is like opinion polls; we are always told that error is plus to minus 3%, so do not take the actual numbers assessed as serious numbers. We have been bumping along at the bottom for roughly three years, as has the eurozone economy. The Americans are doing slightly better. However, relative to their potential growth rate, they are also quite far down, and this is a problem of the entire western world.
It is not easy to be convinced, and I am not convinced, that a reinvigoration of the Government’s spending programme on the capital side will necessarily lead us out of this problem. This is partly because, if you are going to spend on investment projects, the pay-off is delayed and long. So your spending today is not going to bring economic growth immediately. The IMF studies show that if in one year the multiplier is one-half and in the second year it is two-and-a-half, the model needs re-examination. What sort of model is it? Next year it may be three-and-a-half or one-quarter, I do not know, but it is not a Keynesian problem—it is a very different problem—and we will have to bump along on the bottom.
Many of the policies suggested will not work, partly because of the delays which feature in infrastructure, as the noble Lord, Lord Birt, pointed out, and as we well know. So even if we planned to spend money, even if the Government were to announce £50 billion of investment, that £50 billion is not going to enter the economy at any time soon and, if it does, it will not lead to income growth rates. I am very gloomy about bumping along the bottom until confidence revives in the private sector and it starts investing again. The noble Lord, Lord Sheikh, mentioned that stock markets are feeling very happy. They must know something that we do not, but they are clearly feeling euphorious. People are into junk bonds and equity markets, so maybe there are some undercurrents of optimism, but we do not know what it is.
Everyone else has spoken about infrastructure, so I will not talk about that. One reform that I hope we can accomplish, I do not know how soon, is to start not taxing income but taxing expenditure. It is a long-delayed reform. If you have an economy which needs to save more, you do not tax income, you tax consumption and expenditure. Secondly, I do not think we should tax profits. We should tax material consumption or carbon emissions, but not profits. Nor should we tax employment, as we do with national insurance contributions. We are doing everything wrong. If we are going to permanently change the economy, stop taxing income and tax expenditure; stop taxing profits and tax material consumption; and stop taxing employment, as far as possible. If we begin to make those kinds of long-term changes, perhaps we will get back into the spending habit and, if the savings are there and interest rates fall back into the normal pattern, we will have growth coming from the private sector and not necessarily the public sector.
Lord Selsdon
My Lords, when the noble Lord, Lord Desai, joined this House in 1991, I always found myself speaking on economic and trade debates from one of these Benches—either this side or that side—but there was something strange about it: he always seemed to be at a much higher level. I thought that perhaps the seats were higher. However, this was part of his life and I learnt much from him. When he first arrived, I wanted to know why we had so many economists. I had already asked the Department of Trade why we needed economists connected with trade, and I found that there were about 230 of them. This started when we had the desire for a relationship with eastern Europe. Somehow people felt that economists came from eastern Europe, where they were more intelligent or more highly trained. The noble Lord, Lord Skidelsky, is someone totally different—he is a trader at heart. He has entertained and amused me over a long period of time.
As I stand up to speak today, I am slightly worried. I did not want to insult the noble Lord, Lord Deighton, but I was not sure how to pronounce his name: “i” before “e” except after “c” or before “g”. Although Hansard cannot correct our pronunciation, it would be wrong of us in your Lordship’s House to get someone’s name wrong.
I stand here today to speak on behalf of the remains of my “gang”: the noble Lords, Lord Ezra and Lord Stoddart of Swindon, and the noble Viscount, Lord Falkland, who is in his place. We had the honour of serving on a Select Committee on overseas trade, back in 1985. We are going to make an approach and ask whether that committee can be re-established, and the Chairman of Committees will already have received a message from the noble Lord, Lord Ezra.
I was put on that committee because I would be young enough when it became important to do something serious about everything. This has been much the story of my life in your Lordships’ House. No one realised that I might be able to do something on my own. However, I did write a report. The Select Committee was called the Aldington committee, after Lord Aldington, and it had some quite bright people on it. We had an enormous amount of support and interviewed people from well over 100 companies. Our report asked, “What do we do when the oil runs out?”. This was in the 1980s—the committee was formed in 1985—and the oil was steadily running out. Everybody was spending the money from oil but not investing it. As it ran out, the balance of payments deficit began to grow, because people were not interested in the balance of payments. The deficit soared, particularly on visibles. It became so enormous that we could hardly support it. As we know well, today we have quite a lot of deficits on visibles. The total figure is around £50 billion, although there are some good aspects. In the pharmaceutical field we have a surplus of perhaps £20 billion; in food, excluding alcohol, it is minus £20 billion; with alcohol, it is a little less, because the whisky which my family used to make historically is probably doing quite well abroad.
However, does a balance of payments matter? I think that it does, but it is trade that I am interested in. I sail very happily in the wake of my noble friend Lord Howell in recognising that, if we do not trade with the world, we will no longer have an economy. Your Lordships know well that our visibles deficit with the EU is very significant. We have a surplus with non-EU countries—Egypt and the Middle East are among the greatest—but with that form of deficit and no investment following, we have a certain difficulty.
I declare an interest in that, having been involved in trade and the financing of trade, I do not like economists quite so much as they always find reasons why you should not do something rather than why you should. We have a scenario where we are looking for new technological growth and trade which is technology-led. We have forgotten that over a short period of time new technology has been developed in the United Kingdom. Because my father spent most of his life and all our family money motor-racing, I have an interest in cars. The success of Formula 1, which was built and designed over here, led to a revitalisation of the automotive industry. Our friends from India worked that one out, so they came over here and in a relatively short space of time completely revitalised Land Rover and other areas.
The same happened with the Japanese and Nissan. In my early days, surprisingly enough, I was meant to be doing economic, industrial and trade research. We acted for the Japanese. They said that they would like to invest in England, when we were more interested in selling to them. On the automotive front, it took a long time to get the go-ahead. We did a study on cars and forgot that the Japanese drove on the same side of the road as we did. That was quite a problem, but it was one of the reasons why we said, “Why don’t you come and make cars over here, because it will be more economic?”. However, they just wanted to make cars that lasted. So those were two areas of success.
For a while I was rapporteur of the European Council of Ministers of Transport, responsible for the standardisation of heights of bridges, bogie couplings, and so on, and the building of bridges across the Bosphorus, across Sicily and in Denmark. When you are on a committee and are young, the others know that they may have someone who can actually type. One of the things that I learnt in the Navy was to type seven copies and put holes through the a’s and the e’s. So I still believe in the written word.
We have considerable experience in transport. However, if we confine our experience, desires and ambitions wholly and exclusively to our own country, we will have forgotten what my noble friend Lord Howell described—the opportunities in the world and the willingness outside, in the Commonwealth and in a whole range of other countries, to co-operate with us on development. If we look at the mineral sector, it is logical that our Canadian and Australian cousins have experience and knowledge which we could easily put together to create and develop added value and wealth wherever we may be on the face of the earth.
I look back at the old-fashioned maps and charts. To me, Greenwich is the centre of the earth. To get to the west coast of America, you have to go east and right the way round; otherwise you have to go through the Panama Canal or round the south. Looking at our own relationships—not using the British language but the background, trading and culture—I believe that in co-operation with the Commonwealth and with other territories we could succeed very quickly and very well.
I turn to the doubtful area of taxation. I had a great regard for Michael Heseltine—now the noble Lord, Lord Heseltine—not at first, but when he set up the enterprise zones. That was when I went to Toxteth. We looked at what happened in Docklands and the regeneration. Although there were people who normally would never have invested in these sorts of doubtful ventures—we have only to look at the slightly disastrous beginning of Canary Wharf and the complete failure of developments of any significance to get off the ground economically in Docklands—it was the ability to claw back tax that permitted people to take an added risk. We should look at this again. Rather than having our foreign friends who want to live in London being told they will have to pay mansion taxes or things of that sort, I should like to set up a fund that would enable them to invest in infrastructure development and claw back that tax for a period of time.
I am not a dreamer. I am quite happy to think that, as age goes by, the things that are happening now will be history. We talk in this House about five, six or seven years before an economic upturn, but to me that is too long. I would rather see it happen at the moment. I should like my noble friend Lord Howell and others to go out in the world and sign the sort of Elizabethan treaties that we used to have, where we would buy the “turds of birds” from South America, as someone said; where we bought things because we needed them or could trade them on. Where are the great trading companies? They all seem to have died. I am happy to admit that I am in trade and that normally I sit below the salt.
Lord Kirkham
My Lords, I add my rather hoarse voice to other speakers, who, almost to a man, congratulated my noble friend Lord Deighton, and welcome him to the Treasury Bench.
It is probably appropriate and relevant to declare an interest. I am a director of a food retailer that employs more than 24,000 people here in the UK. We trade from almost 800 stores today although, interestingly enough, 40 years ago, we had just the one store—as you can see, from tiny acorns. I am also involved in motivational speaking to new and growing SMEs and I mentor young entrepreneurs, so I see first-hand the vital role that those fledgling and expanding companies are playing in the success of growing the UK economy and dealing with the pent-up demand that my noble friend Lord Wolfson told us about. They create employment opportunities, they pay tax and in many cases they generate exports as well.
For our economy to grow, we have to liberate the energy and creativity of those companies and their people. The Government are able to offer a helping hand here by laying the foundations for lasting prosperity, and of course they are doing that, but in many areas the most useful thing that the state can do is step out of people’s way and allow them to get on with it. I want the Government, wherever they can, to make life as simple as possible for business to do business—particularly those businesses just starting out. They can do that by making the necessary processes of regulation as straightforward and easy as possible.
Bureaucracy and death by red tape have always been the bane of business, particularly SMEs, which are generally time-constrained and which, understandably, want to focus their often limited resources and all their efforts and energies on the prime objective: generating turnover, sales and sustainable profits and, as my noble friend Lord Wolfson said, a cash return. That is the life blood of business. Then the business grows and creates jobs. That is how capitalism works.
It was good to hear the Minister’s commitment to cut red tape here and now in the UK. I am delighted that the Prime Minister’s approach to our future relationship with the European Union reflects his determination to remove unnecessary regulation by Brussels, but there is still much to do at home. My noble friend Lord Wolfson spoke passionately. He highlighted the ways in which his company’s efforts to create jobs and wealth have all too often been frustrated by the planning system and by officials taking a top-down view of what is best for business and families rather than simply liberating the pent-up energies of the private sector and helping people to live, shop and work where they want to.
I could not agree more strongly that the way to encourage businesses to grow is by making the lives of business people easier and simpler. It is important for those microbusinesses, but it is also important for huge organisations. We need to encourage more people who do not even know that they have it in them to create businesses to realise their potential.
In quiet moments, when we relax and contemplate some of the riveting data on our economy and the global debt crisis, it might seem ludicrous to suggest that any meaningful contribution to solving our problems can be made by encouraging one person to follow their dream and start up in business, whether that business be building a better mousetrap or opening a shop. I speak as someone who spent 42 years building a business that started with just one small shop and ended up employing several thousand people in British retailing and manufacturing. Although I am no longer involved in that company, the other privately owned British retailer of which I am a director employs around 24,000 people. That, too, started as a single shop set up by two young men.
Today, we call such people entrepreneurs, and throughout the country there are potential entrepreneurs, similarly minded young strivers who could lead the way in creating jobs and wealth if we could just give them the confidence that it is worth taking the risk. Confidence, the feel good factor, is vital—as was mentioned by several noble Lords—not only in tempting the consumer to spend but in encouraging business to invest in growth. I meet so many entrepreneurs at conferences, business workshops and networking events that I know that there is a huge pool of talent, energy and enthusiasm out there. We just need more people from that pool to start making a bit of a splash.
It is tremendous that the Government have expanded the pot of start-up loans for young entrepreneurs and that we are helping them to get access to mentoring as well as capital to translate their ideas into action. It is also excellent news that the Government are increasing the annual investment allowance for SMEs and have cut both personal income tax and corporation tax. The many initiatives and incentives, illustrative of the Government’s commitment, are important and very welcome. They are steps in the right direction. We know that they are working because we have seen—I will not put a number on it because so many people have mentioned it—so many jobs created through the private sector. The figures that came out last week show all-time record numbers in employment. They are the best sign we have seen so far that the economy is moving in the right direction. To my mind, that is a far better guide than the marginal and so-often revised statistical fluctuations in GDP.
I know from my experience that young people starting a new business venture do not take the decision to push the button by studying learned papers on our economic prospects, whether they come from government experts or investment banks. They rely on their gut feeling; they rely on sniffing the air. The scent that they are hoping to pick up is the smell of confidence—confidence that things are moving in the right direction and that therefore it is a good time to invest.
A lifetime of experience in business tells me loudly and clearly that the elusive feeling of confidence is there. I say that without caveat or reservation. I accept that it is a delicate plant and needs nurturing. We must encourage it to blossom by emphasising the real progress that we are making in cutting the deficit, reducing the tax burden on most people and companies, keeping borrowing costs low and, above all, creating jobs. We need to redouble our efforts to simplify and streamline the workings of the Government, put as few obstacles as possible in the way of those who want to start their own business, and create even more employment.
You know, you do not need to be an international business school professor, a high-flying accountant or a Treasury wizard to recognise that job creation is fundamental to any turnaround. Every job that we can assist our entrepreneurs to create helps reduce the burden on the welfare budget and puts money into the economy. Even more important, it creates in people’s hearts the feeling of pride and self-worth that is beyond price. That has huge spin-off benefits.
I commend the actions of the Government to date and hope that they will do even more in the next two years to provide the incentives, the conditions and the supportive environment to encourage and liberate entrepreneurship. That has the potential to create a truly virtuous circle of job creation, increasing individual prosperity and growing national economic strength.
Lord Davies of Stamford
My Lords, I begin by adding my voice to the many expressions of congratulation and welcome which the noble Lord, Lord Deighton, has received warmly and genuinely from all sections of the House this evening. It is very good to think that there is now going to be someone in government with an economics background. However, I have to tell him—if it is not already blatantly apparent—that he has joined the board of a company that has been extraordinarily mismanaged over the past two and a half years. The record is extremely bad and was quite unnecessary. In the first two quarters of 2010, our growth rate was 0.3% in the first quarter and 0.7% in the second quarter. Then it just fell off a cliff because of the negative confidence impact of the declarations of the new Government.
In the light of experience, there must be very few people in this country who are not politically signed up to the Government or otherwise engagés in a party-political sense who would not agree that it is very regrettable that we did not continue on the trajectory set out by Alistair Darling in his Budget of March 2010 to reduce the deficit on a much slower path. That would have been a much better idea.
Remarkably, those things were predicted by a number of people at the time. Everybody has to pay tribute to my right honourable friend Ed Balls, the shadow Chancellor, who did something which I would never have dared to do as a Minister or shadow Minister, which was to make a very specific economic prediction. He said that the policies adopted by the new Government would bring about a double-dip recession. Sadly, he was all too right. The dangers which the Government were running were quite clear at the time, but so far we have had not a word of recognition of their mistakes. Not only was the basic macroeconomic judgment clearly wrong, but the manner in which economic policy has been adopted has been extraordinarily cack-handed and clumsy over that time. I will give one example in relation to VAT, which I mentioned in this House at the time.
I thought that it was quite reasonable to increase VAT, but not by 2.5% at one go, and certainly not to do so on 1 January. If you want to increase a consumption tax like VAT, and maximise the revenue impact but minimise the negative demand impact, which presumably any sensible person would try to do, the one thing you do not do is to deliver it on 1 January. Any shopkeeper, restaurateur, car salesman or anybody else could have told the Government that that is the lowest seasonal moment in consumer demand in the course of the year. The effect of putting on an enormous consumption tax at that point is to exacerbate the downturn of the economy and increase the volatility of the economy, when the aim of a stabilisation policy should be to reduce it. That was not a very intelligent thing to do, and it is a very bad record. That is the first, and fundamental, mistake. I will list five fundamental mistakes—five stupidities—of which this Government have been guilty over the past two and a half years, and that is the first one.
The second stupidity relates to infrastructure. Of course, it is a rather good thing to spend money on in a recession, because factor costs, labour costs, land and interest rates are lower. I am sure, by the way, that the noble Lord, Lord Deighton, learnt all that when he studied economics under my noble friend Lord Eatwell all those years ago. Indeed, in what he said this evening he showed signs of having done so and genuinely wishes now to put them into effect. I congratulate him on that. Perhaps this is a new broom in the Government, which is very welcome.
He mentioned infrastructure; the trouble is that a lot of opportunities have been lost irrevocably. We should have been spending that money on infrastructure over the last two years, as we have been in recession. It is not much use—or it is better than nothing but very much less use—now to plan to spend more money on infrastructure several years hence. In the case of HS2, that money will not be spent until the 2020s. I hope that we shall be back in power long before then and that the economy will be booming. That infrastructure spending might be contributing to an overheating of the economy, requiring an increase in interest rates. It will still be a desirable investment for the long-term productive capacity of the economy, but opportunities have been lost.
Particularly important opportunities have been lost—the broadband plan has been mentioned. They were all ready to be implemented in 2010, but the new Government simply cancelled them. The third runway at Heathrow was all ready to be implemented. Work could have been going on now—we really could have done with that infrastructure spending. Those opportunities have been gratuitously lost by the Government.
The third stupidity perpetrated by the Government relates to monetary policy. I can quite see that with such a very restrictive fiscal policy the Government’s only hope of generating some demand and compensating for the collapse of private sector demand was through monetary policy. Monetary policy obviously cannot be conducted by reducing interest rates, considering the level at which they now stand. A number of people around the world have come to the conclusion that quantitative easing is the best tactic in current monetary conditions, and one can understand that. An argument is to be had as to whether the type of quantitative easing adopted by the Bank of England in this case was the right one, or whether it would have been much better to have bought paper from the non-banking sector, thereby putting money directly in the pockets of the private sector, rather than to buy paper from the banking sector.
Be that as it may, it was completely crazy to pay interest—and as far as I know the Bank of England is still doing this—on the deposits of the Bank of England, which were being inflated in this way. I think that the interest rate that the banks receive is 75 basis points; the Minister can perhaps correct me if I have got that wrong. I should be delighted if the Minister tells me that this particular stupidity has come to an end. It really is quite extraordinary. There is no point whatever in having the banks simply accumulate deposits at the Bank of England. That is not the money supply; it may be a figure included in some of the indices, but it is not conceptually the money supply, it is not at all cash held for the purpose of transactions in the economy, and is absolutely useless from the point of view of investment, consumption or demand. The only purpose of this exercise is to get the banks to leverage on those deposits by extending their lending; by credit creation. The penalty for not doing that is being reduced by paying the banks for keeping those deposits on deposit at the Bank of England, by paying them the 75 basis points. To put it another way round, this is reducing the incentive for the banks to lend. This, therefore, is a question of the Government putting their foot on both the accelerator and on the brake—not perhaps as much on the brake as on the accelerator—but why do that? It is completely crazy.
I see that the Minister is good enough to nod. I hope that one of his early tasks will be to look at what is going on in this particular field, come to the right conclusion and get rid of this particularly foolish policy. That is what I believe it to be.
My fourth example of quite gratuitous stupidity on the part of this Government is, again, a contradiction between two different policies adopted simultaneously by the Government. One is the Government’s desire to see the banks lending more; to see greater credit creation, which is a sensible objective. The real problem for credit creation is confidence. The Government are doing nothing to contribute to confidence, so against that background, all these other technical attempts to generate greater bank lending are unlikely to be enormously successful. Nevertheless, the Government are apparently sincerely signed up to the cause of increasing credit creation in this country. However, at the same time, they are telling the banks that they are about to impose on them higher capital adequacy ratios, introducing Basel III.
I had this out several times in this House with the noble Lord’s predecessor, the noble Lord, Lord Sassoon. When I raised it, he said, “Ah yes, but we have had two or three exchanges in this House on this subject in the past two years. These new capital adequacy requirements will not come into force until 2018, so that’s all right”. It is not all right. I hope that the noble Lord will look at this again, because it is certainly not all right. I sat for a number of years on the board of an investment bank, with a lending book of many billions of pounds, and I can assure him that if the regulators—the Bank of England in those days—had said to us, “We want to increase your capital ratios in five years’ time”, we would have had to start right then. At the next board meeting we would have been discussing how to change our policies. In a market in which it is very difficult to raise new capital because the bank shares are on the floor, and for the same reason you cannot really reduce your dividend, and banks, for less estimable reasons will not reduce their bonuses, there is no way of achieving higher capital adequacy ratios other than reducing their lending book.
Banks will, therefore, now be adopting policies that are designed to follow a trajectory to get them to the capital adequacy position they need to get to by 2018. That goes completely counter to the Government’s expressed desire to get banks to increase their lending. It does not make any sense at all. Again, it is a complete and utter contradiction, and I hope that the Government look at that again and not take too long about it.
Finally, the fifth stupidity the Government have gone in for—again, not for very creditable reasons—is the decision to hold a referendum on our membership of the EU. This, of course, is a subject which I know we shall have a chance to debate in greater detail in two days’ time, and I will not trespass on this ground for very long. Nevertheless, it must be brought into an economic debate. This is a way in which a Government, who should have as a priority the creation of the maximum degree of confidence in the economy, reducing the risk of the environment in which investment and consumption decisions will be taken, are doing exactly the opposite. They are gratuitously, deliberately and unnecessarily creating a whole new area of risk, which is about whether or not this country will still be part of the European Union in a few years’ time. In the past three weeks, two Cabinet Ministers have said that from their point of view they can quite easily see their way to our leaving the European Union. You cannot do a worse day’s work in terms of undermining confidence in the economy than to do what this Government are doing on that particular front.
Once again, just as some infrastructure decisions such as abandoning the third runway at Heathrow were basically driven by party-political considerations, marginal votes and seats in west London and so on, I fear that this decision about a European referendum has been based on party-political considerations such as the need to appease the eurosceptics in the Tory party at the expense of the national interest. It is time that the national interest came first and last, because this economy is in a very difficult situation and we need to get out of this recession as quickly as possible. It is about time that the Government, in addressing that task, make sure that they adopt a position that is purely based on national interest, not on such short-term party-political considerations.
Baroness Kramer
My Lords, the Minister is going to be tired of being welcomed to his new role, but let me join with others there. I also want to congratulate him on sponsoring what is not an easy debate so early in his ministerial career. It speaks of leadership and this House, on all sides, likes and appreciates leadership. I also want to thank the House for its indulgence. After the first four speeches, I had to join the Parliamentary Commission on Banking Standards or it would not have been quorate. I think we can all agree that getting the banks into a stable financial situation is a priority. Everything else that we may do for growth in the economy will all be reasonably for naught if we cannot sort our banking structure out, so again I thank the House for that.
I was able to hear the first four speeches and was then in plenty of time to hear the noble Lord, Lord Desai. Those speeches were all a sort of tour de force with the combat of different schools of economic thought. I dare not trespass into that territory—that is not where my intellectual capacities are—but I found it fascinating and I suspect, like many people, that I concluded that is very hard to listen to abstract theory and come away with conclusions. I hope that the House will not mind if I try to be simpler and perhaps a little more practical.
I do not think you have to have a grasp of economic theory to recognise that the previous Labour Government hideously overspent from about 2004, ramping up public spending so that when the financial crisis hit in 2008, because of our spending and debt levels we had no resilience and no cushion to deal with that crisis. I do not think you have to come with a background in economic theory to recognise that the very laissez-faire attitude towards the banks essentially led to the booking of absolutely false profits by those institutions and ephemeral tax revenues, which were taken as a permanent tax stream by the Labour Government.
I do not think you have to have an economics background to recognise that over a longer time than the Labour period—over a generation—we allowed our economy to become unbalanced. The noble Lord, Lord Desai, described that exceedingly well. We became overly dependent on the financial services sector. We failed to make sure that vigour extended beyond the south-east and covered the rest of the country. In perhaps the cruellest rub of all, we neglected providing the kind of skills to our young people who were not going to take the academic route but needed vocational training and apprenticeships. They could have generated the kind of jobs and economic strength that would come from those skills. We chose to neglect all those things; that whole series of imbalances is now being tackled by this coalition. Taking that long-term view and taking on the challenge of dealing with these absolutely fundamental weaknesses in our economy strike me as being some of the most important measures that this coalition has taken.
I want to name check in some sense Vince Cable—he has not been mentioned, at least while I have been here—for bringing forward, fostering and pushing an industrial strategy, something which we have seriously neglected. He has finally provided sector-specific support to industries that can lead us into growth, whether they are pharmaceuticals, green industries or aviation, and the development of the domestic supply chain—an area that really had no focus in the past. There has been investment in innovation and R&D and there is now an absolute sea-change in capital allowances, to encourage investment in new technologies by business. There is action on finance to deal with absolute market failure, which even those changes that we are making will not address. That is, in the Green Investment Bank, the British business bank and very substantial increases in export guarantees.
When the noble Lord, Lord Deighton, spoke, what excited me the most about his extraordinary speech was his focus on doing and delivering. In that context, I would like to add something slightly different to this debate, because as a doer and deliverer I am going to ask him if he might be willing to think small. We have such a bent in this country for looking at the large—the large business, the grands projets and the big bank—while we neglect the heartland of our economy. SMEs as a sector, not just in the UK but overall in the EU, account for all of our new job creation. That is not just in tough times such as these; it has also been true in the years of prosperity. New start-ups and small businesses are absolutely key to our growth and we have an enviable range of SMEs in the UK. Some 20% of all the SMEs in the EU are in this country. I do not think that registers on the general consciousness.
I recognise that this Government have taken steps to strengthen small businesses, from tax breaks to investors through the EIS, regulatory preferences, new support through UKTI and Funding for Lending. However, let me suggest that it is not enough and it is not brought into a coherent strategy and programme. The problems of SMEs are incredibly granular. I listened yesterday to Xavier Rolet of the LSE talking about the problems of raising equity for SMEs, in large part because all the rules are a scaled-down version of those written for blue-chip companies, rather than being designed for the small players.
I am on the SME Select Committee on exports, where I hear about the problems of protecting intellectual property for small exporters, especially for SMEs that decide to try to export to the BRICs. Again and again, this House has heard the complaint that small companies and microcompanies cannot access credit from the traditional banks. We lack those networks that supply such credit in successful countries, such as the community development finance institutions in the USA and the Sparkassen in Germany. This list could go on for several pages; I suspect that in today’s debate many more issues concerning SMEs will have been raised.
There is no point in trying to tackle this as a piecemeal add-on to various different policies in different departments. I wish that the Government would consider having a dedicated team working across departments, going through obstacle by obstacle with the single mandate of releasing growth in our SME sector. Frankly, the big guys can take over themselves; this is where we can make change and with small companies, small changes make an immediate impact. We all know what the impact on jobs would be if SMEs which were planning to expand, perhaps to hire just one more person, did it six months earlier than they had originally planned. The gain that we can get, with its impact on growth, could be tremendous if we agree to focus.
I move into the area of the noble Lord, Lord Deighton, by referring to small infrastructure. I am very supportive of the big infrastructure projects such as HS2. There is a whole range of them. We have neglected infrastructure in this country; I would not argue with that. However, as many people have said, large infrastructure has a long lead time and I want to make a plea for small infrastructure projects. In the Local Government Finance Act 2012, the Government put in place the legal framework for tax increment financing though a structure known as TIF1. This would allow local authorities to receive part of the uplift in business rates resulting from new infrastructure and, on that promise, to obtain the financing to enable those projects to go ahead in the first place. A perfect arrangement, your Lordships might think, for transport links to enable a new industrial park or for an opportunity to finance key housing.
This is not the time to go through the details of the legislation but, in effect, what the Government did was to give with the one hand, by creating the framework for TIF1. They then took away all the potential by severely limiting the period during which local authorities could capture those business rate increases. The argument is about general accounting and the relationship with the Treasury, and whatever else, but given that we need growth this is absolute madness. Just about every local authority in the country will have a few good, but small, infrastructure projects that would stimulate economic development locally. We need those to be breaking ground and I urge the Government to go back and capture that low-hanging fruit of small, local infrastructure projects which could feed quickly into growth.
Lastly, on small lending, this House is well aware that we are quite unique in the developed world in having so much of our banking service dominated by five huge players, all of them so like each other that few individuals or businesses ever bother to move their accounts, despite high levels of dissatisfaction. Everyone recognises that competition for these banks is one of the best ways to challenge what became a tainted culture and a lack of focus on the customer. But while new, big players may have a role, I want to argue for change to include a network of small players. This means community banks, specialist small business banks, crowd funders, peer-to-peer lenders and credit unions—in other words, to have real variety and choice capable of meeting much wider needs than our banks currently meet.
A lot of the enabling legislation is now in place, but to take it from a possibility and a theory to reality, recognition, action and support from our Government and our regulators are needed. It makes for a messier world but, I would argue, a more stable, capable and honest one. That is the argument that I would like to put to the Minister. Of course he must act on large projects and, with infrastructure, they would be a large part of his plate. Will he look at the small and the quick? We need economic growth now, not in 10 or 15 years’ time. It seems to me that we have many quick wins of which we are not taking advantage.
Lord Davies of Oldham
My Lords, this has been a most fascinating debate, which has covered a wide range of issues and it is therefore a testing ground for the new Minister, whom of course I welcome to his place. I am sure that he will enjoy these debates, as we all do, while recognising that replying to a debate with nearly 30 contributions, all of which merit real thought and response, is challenging. This is not least because the Minister is also replying to the debate about the most fundamental issue before the country, which is the present state of the economy.
The Minister will have noted that from the beginning the noble Lord, Lord Skidelsky, from the Cross Benches, wasted no time in emphasising two things. We should not be deluded by false claims on infrastructure, or the way in which the Government are recovering the economy. Mention of HS2 and HS3, which are more than a decade, or certainly several years away, before any work on them is done, scarcely fits into the pattern of the urgency of our need for recovery in the economy. My noble friend Lord Barnett buttressed that position by identifying how little has been done in the specific area of infrastructure investment, on which he had challenged the Government.
The Minister might have thought at that stage that at least we were on home ground in talking about infrastructure. The noble Lord, Lord Lamont, raised the very real and significant issue about regulation of the banking sector. The Minister will appreciate that behind these issues that we are discussing is the financial collapse a few years ago. This has thrust the financial sector into considerable turmoil. For the Government, it has presented a very real challenge in how we seek successfully to regulate the banks, so that nothing like the disaster of the past decade can occur again.
There were other issues in this debate that I hope the Minister will find time to address. In an interesting contribution from the business perspective, the noble Lord, Lord Wolfson, appeared to indicate that one of the best infrastructure projects in which we could get involved was building roads. Behind it he raised, as regards finance for the roads, the possibility of some system of road pricing. I have no doubt that the noble Lord, Lord Deighton, has already been warned about going where others have feared to tread in the past, but he would be wise not to be too enthusiastic about the concept of road pricing in anticipation of where the Government might go in due course.
The issue of quantitative easing came up. The noble Lord, Lord Forsyth, raised the matter first. He was supported from my Benches by my noble friend Lord Desai. Both of them were really asking what happens when quantitative easing ceases, and we seek to establish a more normal framework for our economy and currency. This is an interesting question, which I hope the noble Lord will recognise as germane and important to this debate.
The noble Lord, Lord Birt, stressed the issue of the development of the right kind of skills in an economy. This is a long-term process. We all recognise that, but we have heard too much analysis of what is wrong with our skills sector without effectively producing the strategy to cope with it. There is no doubt that for the long-term health of our economy we need to ensure that our people are readily skilled for a world in which technical change occurs so quickly. If that was not enough the noble Lord, Lord Lang, brought up pensions and the challenge that they present to the Government, and in this significant issue he was supported by my noble friend Lord Monks. The agenda is moving up, without the noble Lord, Lord Bilimoria, not failing, as he usually does, to give us an overview of the issues that are at stake and how they affect business. He was full of a somewhat doleful message. Of the Chancellor’s targets, which he set two and a half years ago against which his achievements must be measured, only the tattered banner of credit rating 3A remained, and one was not too sure how long that banner would last before it was shredded.
The noble Lord, Lord Higgins, picked up on this debate as having a certain dismal quality. It is certainly one that has raised fundamental issues. The noble Lord introduced a dismal element because he thinks that some of the solutions are difficult to achieve in the time that we need to achieve them. The Opposition agree with him. Meanwhile, my noble friends Lord Hanworth and Lord Hollick emphasised the failings of the Government in relation to the policy that has been pursued so far. I am not sure that the suggestion that the noble Lord, Lord Heseltine, had produced a document to which the Government should give their fullest attention was quite the response that they have so far given. While we know that that document is to be taken seriously, “seriously” is different from “being acted upon”. We await the Government’s indication that they are actually prepared to implement some of the suggested reforms of the noble Lord, Lord Heseltine.
The noble Lord, Lord Sheikh, suggested that the Prime Minister has committed himself to every government department having a growth objective. I do not know all government departments intimately, but I can think of one or two that would resist that concept. There is another challenge for the noble Lord as he beds himself down into Treasury matters. As he will be only too well aware, the Treasury is at the centre of all these issues, and the responsibility that he has taken on needs to measure up to that.
Those are the issues that have been raised in debate, but the fundamental point is the charge that is being made from this side of the House, buttressed by a number of contributions from elsewhere in the Chamber. That charge is straightforward—that we are quite possibly on the brink of a triple-dip recession. We are taking longer to emerge from recession than at any time in the past. The objectives and measures that the Chancellor put forward for success in his handling of the economy are all representations of failure.
The noble Lord, Lord Howell, found a glimmer of optimism in opportunities for improving exports. No one doubts the necessity for that, but when the pound is slumping to the extent it is, if we do not capitalise on that to develop our export potential, we are in a very serious position indeed. However, although the noble Lord, Lord Howell, is certainly better informed on these matters than I am, I do not think that exports are based too much on sentiment. I understand the markets that may obtain within the Commonwealth, but I am not sure that we get any favourable treatment as far as those sovereign countries are concerned.
This debate has laid bare the weaknesses of the Government’s present policy. We are at a crossroads because it will not be long before the Government recognise that they cannot pursue these policies for much longer without pushing the country into total despair. One speech was quite enlightening on these things. It was made by the noble Earl, Lord Listowel, on child welfare. I appreciated his contribution. At last we got to the costs which are being born of failure. The cutbacks that are occurring affect our people so grievously, and we have not seen anything yet. The vast bulk of the cuts in welfare are still to be enforced and implemented upon our people. The noble Lord must recognise that this leads to the parlous state which the economy is in. I hope that he will recognise serious authorities, such as the chief economist to the IMF, the chairman of the bank to which he had some connection, who indicated that he thought that the Chancellor is on the wrong path, or Boris Johnson, who takes a rather different view on the policies that are being pursued at present. We are at a crossroads, and the Government had better start making the right choice of route to follow, otherwise the Minister’s role will be less happy than he would wish it to be.
Lord Deighton
My Lords, I thank all noble Lords for the serial welcome. It was very kind of noble Lords to recognise the extraordinary work that went on to deliver the Olympic and Paralympic Games in the summer. That was a big team effort. In fact, many of the team are distributed around this Chamber. I appreciate all those kind words and receive them on behalf of a magnificent national effort.
I shall clear up a few housekeeping points. My name is pronounced Deighton, as in height, if you want the precedent for the English pronunciation, not as in weight. Thank you for pointing that out. There was also a suggestion that it would be useful to spend as much time as possible in the Treasury. The arrangement with my right honourable friend the Chancellor is that I should concentrate my time at the Treasury, which is why I will be supported very closely by my noble friend Lord Newby in this Chamber.
I found the debate highly stimulating. I will be able to do my job better for having listened to all the contributions. I shall leave this debate feeling hugely positive, despite the many challenges that we face with our economy. I propose to make my comments not speaker by speaker but rather consistently against the most important themes in the debate. I shall begin with a review of what I think we heard about fiscal policy—the macroeconomic policy—and I shall then review monetary policy. I shall then talk about reform of the financial sector and finally I shall talk about the selection of things that we discussed that might generally fall into supply-side reforms, including all the discussion around infrastructure and capital projects. If I do not manage to address everybody’s points, I shall certainly write afterwards. I shall also try to focus my comments on what my noble friend Lady Kramer called “doing and delivering”. I think that is what I am here to do, so my focus will be on what we can accomplish rather than on the more esoteric elements of economic theory.
I thought there was a lot that was agreed on. The way I have always operated, particularly in business, is by finding the areas of collaboration and forging ahead on them rather than labouring on the areas of disagreement. However, with respect to fiscal policy, it seemed to me that there was one fundamental disagreement between us, at least in simple theory. I think it boiled down to a very simple question. Should we inject more demand into the economy to boost growth? It is a very fair question. It is quite extraordinary to me that nearly 40 years later we are still arguing about Keynesian economics, how effective monetary policy is and the size of the multiplier. I think that was in the first week. It also convinces me that I made the right choice not to be an academic economist. The debate does not seem to have moved on in those 40 years—we are still talking about the same things—so I am glad that I went out and did something, which I was probably better at because that was not going to work.
It all sounds very easy—we should just go out and borrow more, spend it, and hey presto everything is better. That feels an awful lot like the situation we found ourselves in between 2008 and 2010 when we overborrowed and overspent when the economy was right at the peak of its performance. There has been a lot of discussion about confidence. When deficit levels are at the levels they are, I do not think you reintroduce confidence into the economy by going back on a spending spree. It just does not make any sense to me. I have listened very carefully to what everybody is describing as plan B. I do not think plan B is a plausible alternative. How does it get financed? More borrowing. How does that stack up against the bond markets and interest rates? We have saved £33 billion by being able to borrow at lower rates than had been originally projected because of our success in winning the confidence of the markets. We do not want to lose that. It is absolutely critical.
It is also not entirely clear to me that there is such an enormous difference between us. We were unable to surface just how much extra money the alternative strategy would involve borrowing and whether that would make a huge difference. I was much more persuaded by the argument, which I think matches the analysis in the independent OBR, that the principal problem with demand has been external demand, particularly the reduction in demand in the EU. The right strategy in the long term, which is part of the supply-side solution—my noble friend Lord Howell was very clear about that—is all the work being done to switch our focus in markets to the rest of the world— the so-called BRIC economies—where growth is actually occurring.
We also had a lot of discussion around the capital budget and whether it had increased since the original plans of the previous Government. I do not really want to argue about too many statistics because we have had a lot thrown both ways. Essentially the plan we have now is about £10 billion more than the previous Government’s original plan.
I accept the points made by the noble Lord, Lord Barnett, about when the money is being spent but we have to understand that capital spending and infrastructure spending are not, as the noble Lord, Lord Howell, said, a tap you turn on and off. There are long lead times. There are even longer lead times if you want to do this properly. A lot of this capital spending is not a panacea to solve a very short-term problem. In fact, thinking of it that way could create all sorts of difficulties and much more focus should be on ensuring that the projects that are mid-way through their gestation are now delivered into the economy in the right way. They are the ones that are going to have the immediate impact.
My noble friend Lord Lamont mentioned his concern about inflation. That was certainly one of the problems in 2011. The rise in commodity prices pushed our own inflation rate up, I think, above 5%. That had a significant impact on the cost of living. However, all the forecasters are looking at inflation stabilising over 2013-14 down towards the Bank of England’s target rate.
We have all referred to external agencies as supporters of our own cases. One side can produce the economists—the IMF. The other side can produce the chief executive. I could give a quote from the OECD that this is the right plan and we should stick to fiscal stability. We are all capable of producing people to support either argument. It just is not possible to bless your own strategy with the utterings of an external economist.
The noble Lord, Lord Desai, gave a very eloquent exposition of the long-term issues underlying the problems in the economy. I am not going to repeat that. I do not think that anybody particularly disagreed with much of it. However, I have a growth mentality and one of the things that attracted me to join this Government was that the Prime Minister and the Chancellor were very clear in their mandate to me. They said, “We need to deliver growth in this economy. We will support you to get that done in whichever way you can”. They convinced me that they were as committed to performance excellence as any of the other high performing organisations I have worked in. That is really what got me interested in doing this job. I was also very interested in the noble Lord’s comments on welfare. An absolutely key criterion in any of this has to be fairness. We can all argue about marginal decisions but I assure noble Lords that in my work at the Treasury the distribution effects of what we do are absolutely at the top of the criteria for assessing which measures we take.
On monetary policy, I was delighted to hear what I thought was pretty universal agreement that Mark Carney’s appointment was a good thing, if only because it speaks so highly of my right honourable friend the Chancellor’s recruiting skills. I was also a product of that although I was much cheaper.
We had a very interesting discussion about the impact of quantitative easing. Clearly, the noble Lord, Lord Eatwell, is less convinced about its current efficacy but I think we are all interested in what the new regime will have by way of new ideas. However, we should all be extremely cautious before we suggest that ditching the inflation target is the obvious alternative thing to do. That is far from clear and is certainly not the Treasury’s position. In answer to the question asked by the noble Lord, Lord Davies, I think that the Bank of England is paying 0.5% on the commercial bank reserves held by the central bank.
On banking reform—
Lord Forsyth of Drumlean
I am most grateful to my noble friend. Before he leaves quantitative easing, will he answer the question that a number of us raised about what happens when you unwind it?
Lord Deighton
I thank my noble friend for reminding me about unwinding quantitative easing. In summary, the central scenario predicted by the OBR is that it is expected to make a profit over its lifetime as the scheme is wound down but, as always with these things, that depends on a number of assumptions about the future yield curve, the exit, the pace of that exit, bank rate policy at the time and, of course, any changes to the size. However, those are the variables that go into that decision.
I think that all those who spoke about banking reform agreed that it was important to develop financing, particularly for smaller businesses, and that the Funding for Lending scheme, although in its early days, was showing every sign of being a successful scheme, so we are delighted with that introduction.
On the broader question of structural and regulatory reform, I could not agree more with the comments of a number of my noble friends that although it is absolutely critical to ensure that we have more resilience in the banking system so that the same mistakes are not made again, we have to be extraordinarily careful—I think the timing of the introduction of some of the measures reflects that—that we do not overshoot and significantly damage the banking system which exists to provide finance to the real economy. In my own mind, the real issue with many of these institutions has less to do with capital or liquidity rules and much more to do with the culture of leadership and management in those firms. We are beginning to see some promising signs of improvement there.
As regards the supply side, we have had many interesting contributions on small and medium-sized enterprises. I apologise to the noble Lord, Lord Mitchell, for the SME labelling, and note the comments of the noble Lord, Lord Birt. The United Kingdom is an extraordinarily successful incubator for small businesses. I absolutely take on board what my noble friend Lady Kramer said about thinking small. Two days ago I attended a small business forum. Everybody there was very supportive of all the initiatives that are going on. The discussion was all about implementation and taking advantage of things that are happening.
We have had a number of contributions on planning. No one ever puts forward the case that there should be more red tape, so we are all heroes in terms of our desire to cut it out and to enable faster planning permissions. As I think I mentioned in my opening speech, we have already cut 1,500 pages of planning policy and have speeded up the rate of approval of planning applications. My personal approach to this will be to follow through some of our projects to see where there are barriers and to use those as pilots for seeing where there are thematic problems that are holding up our delivery in the broader economy.
My noble friend Lord Lang referred to the defined benefit pensions issue. Rather than going through the details in my response, I will write to him separately on that. On the question of industrial strategy, I have sat in a number of meetings with my colleagues in BIS and they are absolutely focused on picking out where this country has competitive advantage and reinforcing that advantage in every way the Government can.
There has been a lot of debate on the subject of infrastructure. I want to focus on the fact that our investment in infrastructure is not about pump-priming the short-term economy. It is about modernising and improving our economy so that, over the longer term, its productive capacity is significantly enhanced. If, in the short and medium terms, that has the extremely attractive by-product of generating a significant number of jobs and short-term growth, then that is a dream package. However, that is the way around we should refer to it. There was quite a lot of discussion about roads: the ones that we have announced and have not built yet. There are a very large number of roads that we are currently building that were announced the time before: those are the lag periods. I am very interested in looking at schemes which allow us to take a longer-term perspective on creating the right investment package to support them.
The noble Lord, Lord Mitchell, was rightly concerned about broadband rollout. I have been focused on that as part of our rural broadband rollout and the urban strategy. Last month, the Chancellor announced a further £50 million to help 12 more cities deliver their ambitions for superfast broadband and I am working closely with my colleagues in DCMS and Broadband Delivery UK as well as the Economic Affairs Committee to drive delivery of that important rollout.
I see the value of smaller infrastructure projects, particularly those in local areas. This is highly consistent with implementing the reforms contained in the report by my noble friend Lord Heseltine, No Stone Unturned. For example, we have already launched 27 schemes with local authorities to help deliver that.
Lord Davies of Stamford
Before the Minister sits down, may I thank him for his answer to me that the interest rate paid by the Bank of England on bank deposits is 50 basis points, not the 75 basis points that I thought? Does he agree that any interest rate paid by the Bank of England to banks in those circumstances is undesirable, because it runs counter to the whole object of the exercise, which was to maximise the incentive on the banks to lend as much as possible?
Lord Deighton
I thank the noble Lord for the follow-up question. The scheme which we have employed to encourage banks to lend—the Funding for Lending scheme—is a very effective mechanism to improve lending to businesses and households.
Arts and Culture: Economic Regeneration
(11 years, 10 months ago)
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Baroness Quin
To ask Her Majesty’s Government what is their policy on the future role of cultural projects and the arts in regional and economic regeneration.
Baroness Quin
My Lords, I welcome the opportunity to introduce this debate on a subject which I feel strongly about but which also has great topicality, given the cuts to arts budgets which are taking place, both nationally and in many regions and localities. These are, not surprisingly, the subject of widespread concern.
First of all, may I say what a pleasure it is that the Minister is replying to this debate? I have not previously had the chance to congratulate him publicly on his appointment but I now do so warmly. We have made common cause in the past on agricultural issues, not least in our concern for the survival of the red squirrel. Given that he will have to defend the Government’s record in the area we are discussing, I have a feeling that our former harmony might be temporarily dissonant—but I very much hope that that will, indeed, be only temporary. I am also delighted that my noble friend Lady Jones is on the Front Bench for the Opposition, as I know how much she cares about the issue being raised this evening.
I do not have any financial interests to declare but the register of interests does list that I am president of the Northumbrian Pipers’ Society, an important cultural organisation in the north-east which promotes the playing and appreciation of our own regional musical instrument. I have also for many years been a volunteer tourist guide for the great city of Newcastle upon Tyne and, perhaps most relevantly to this debate, I was also a Member of the other place representing Gateshead. The arts and culture have been hugely significant in that town’s economic regeneration but—through projects such as the “Angel of the North”, the Baltic art gallery, the Sage music complex and the award-winning Gateshead Millennium Bridge; this is not an exhaustive list—the benefits have also been felt throughout the whole of Tyneside, the north-east and the country. I feel hugely proud of Gateshead Council and the remarkable way that its members, many of whom come from a traditional industrial background, grasped early on the cultural agenda in the way that they did. I therefore take every opportunity to pay tribute to them and the way that they worked in partnership with other parts of the public and private sectors in the many projects that they pursued.
Indeed, given Gateshead’s record, it is frustrating that in the important Newcastle-Gateshead partnership of recent years, Gateshead’s achievements are often ascribed to Newcastle by those who do not come from the area. I am sure that the noble Lord, Lord Shipley, as a former leader of Newcastle City Council, will understand my frustration, while none the less recognising, as we both do, how important the Gateshead-Newcastle partnership has been in recent years, and how it has promoted economic regeneration..
The wording of the Question for Short Debate speaks of the contribution of the arts to regional and economic regeneration more generally in order to bring in the wider national and UK dimensions to the subject. Many of us believe that the arts, culture and the creative industries are a crucial part of our national economy, and it is my contention this evening, therefore, that supporting the arts and cultural projects nationally and regionally has to be a vital part of our economic growth strategy and policies for national economic recovery.
In documentation produced by the Arts Council, it is pointed out that our creative economy, as a proportion of GDP, is the largest in the world. Our cultural sector accounts for nearly 70,000 businesses and contributes £28 billion each year to the UK economy. The creative industries provide 1.5 million jobs and our arts and culture attract millions of overseas tourists, helping to promote Britain as a world hub of creative talent. However, if arts and culture are important to our economy nationally, they are also vital to our regions and localities and have played a crucial part in the economic successes of many towns and cities in recent years. Examples that come to mind include Liverpool, Birmingham, Bradford, Bristol and east London. Cultural projects and initiatives have also revitalised and reversed the decline of some of our traditional seaside resorts such as Folkestone and Margate, where the Turner Contemporary has attracted approaching half a million visitors since it opened in 2011. In the north-east, the Sage Gateshead has contributed £146 million to the north-east economy since it opened and currently supports 660 or more jobs. In 2011, the entries for the Turner Prize that were exhibited in the Baltic art gallery attracted a record number of visitors and had a positive economic effect. Overall, culture and the arts have contributed to a dramatic growth in the tourist industry in the north-east—a growth rate that has by far outperformed any other sector and brought our tourism industry right into the economic mainstream.
There is no doubt that arts and culture have made a great contribution nationally and locally in recent years. However, there is now considerable concern about the future arising from the Government’s current approach. I, like my party, am concerned that with the arts, as with the rest of the economy—as we have been discussing this afternoon—the cuts are too deep and too fast. To begin with, the Arts Council itself has had its budget cut by 30% since 2010. While I applaud the Arts Council in its work and recognise that, in implementing these reductions, it has sought to protect the artistic front line—by which we mean support for cultural projects and productions in some of the least well-off parts of our country—none the less, cuts of the order demanded now and for the future, on top of the economies already made, threaten the front line in my view. This is a view that is shared by many in the cultural sector both nationally and regionally.
My noble friend Lord Beecham had a Written Question on arts funding which was answered by the noble Viscount, Lord Younger, on 8 January, and I would like to ask the Minister some questions about it. My noble friend asked what proportion of central government funding for the arts in 2011-12 and 2012-13 was for capital funding, and what proportion was for revenue funding. The Answer surprisingly began by saying that the Government were unable to provide information on potential funding for the arts across central government because they did not hold the information centrally; it said that the information could be provided only “at disproportionate cost”. This begs the question: if central government spending plans are not held centrally, where are they held? The Answer gave information about the reduction in Arts Council funding and about DCMS funding in addition to Arts Council funding. This showed that the additional funding was being reduced overall from £2.198 million to £1.025 million and that for this year, 2013, no capital funding was envisaged at all in that part of the DCMS budget. Can the Minister explain this?
The Government have claimed that philanthropic giving might help fill the funding gap. The Culture Secretary herself has expressed hopes that this might double over the coming years. However, the figures that I have seen—and I do not know whether the Minister can confirm them—which were released in 2011, show a reduction in corporate giving of 11% and a reduction in individual giving of 4%. Neither of these figures augurs well for the future. Also on this question, I refer the Minister to comments from Sir Nicholas Hytner, director of the National Theatre, who, writing in the Observer, said that,
“80% of philanthropic giving to the arts benefits London, and almost invariably private funding follows public funding”.
If Sir Nicholas is right—and he obviously speaks from great experience—then charitable giving will not fill the gap and will not, in any case, help the regions, about which I will now speak further.
If the reductions in funding at national level are causing concern then the situation is even worse at regional level. As we know, the local government spending review was debated in your Lordships’ House on 17 January. Considerable concern was expressed about the cuts that local authorities were facing overall. The cuts—the result of the squeeze in local government spending—have already been felt in the arts and culture sector, but the likely effect of current and future cuts are even worse. It is not that local authorities want to cut back spending on arts and culture or that they think that such money is unimportant, but they have their overriding responsibility to continue providing services such as social care and child protection, waste collection and all the other main areas of service which local authorities have an overriding duty to provide.
I express my sympathy with councils such as Newcastle in the current situation. I think that it really does find itself between a rock and hard place—although I note that the council is continuing to discuss ways forward with arts organisation locally. Instead of cutting Newcastle’s money further, I hope that the Government will work with the city, and with other cities in a similar situation, to ensure that arts spending is not reduced in the way that is currently proposed in the consultation that Newcastle City Council has embarked on. What I say about Newcastle also applies, surprisingly, to places like Westminster, where they are also suggesting a total cut in the arts budget.
Unfortunately, I am rapidly running out of time. I shall conclude by referring to the coalition Government’s recent mid-term review. It is both regrettable and astonishing that the creative industries and culture and the arts have played so little a part in the review. In particular, no goals seem to be set by the Government for arts and culture for the next two years. Of the five commitments that are mentioned by DCMS in the mid-term review document, not one of them mentions culture or the arts. I wonder how the Government can explain that.
It seems to me that the Government need to demonstrate through new words and deeds that the arts, culture and the creative industries are indeed an indispensable part of this country’s growth strategy and that such a growth strategy should extend to all parts of the country. Nothing less than a fundamental change of heart by the Government will do in the face of the current crisis.
Baroness Northover
My Lords, I remind noble Lords that this is a time-limited debate. When the clock reaches 10, noble Lords have had their 10 minutes.
Baroness Hooper
My Lords, it is a great pleasure to follow the noble Baroness, Lady Quin. We worked together in the early days of the directly elected European Parliament in a number of areas, when she represented Tyne and Wear and I represented the great City of Liverpool. I congratulate her on securing this debate on a topic which is close to my heart.
In the European Parliament and later as a member of the delegation to the Council of Europe, I took a great interest in cultural heritage and arts issues and I have no doubt about their relevance and importance to economic regeneration. It will come as no surprise that I intend to use Liverpool as an example of what can be achieved. As a former trustee of the National Museums Liverpool, I have always been aware of the wealth and diversity of what is on offer there, from the traditional Walker Art Gallery to the very modern Tate and from the Maritime Museum to the International Slavery Museum.
Michael Heseltine’s initiative after the Toxteth riots, way back in the 1980s, the garden festival and various other events led up to 2008 when Liverpool won the bid to become European Capital of Culture. Liverpool is one of the great old industrial cities, which has had to come to terms with its past in order to transform itself and to find a new image and identity. As we saw when Glasgow was the European Capital of Culture, there can be no doubt that the effect on Liverpool and the wider north-west region has been substantial. Apart from the many jobs that were created in preparing the infrastructure, thousands of jobs have proved to be long lasting. The Museum of Liverpool project was a physical result of that year, although it was not completed by 2008. However, since it opened fully in July 2011, more than 2 million people have visited it. Those numbers are way ahead of the projection.
I believe that Liverpool’s transformation into an educational and academic centre of learning, with its four universities and other institutions, owes much to its cultural and arts heritage and the way in which that was highlighted during the Capital of Culture year. Certainly the tourist figures are well up and now the port is beginning to revive with cruise ships calling in and finding so much of interest virtually at the foot of the gangway, in terms of the city’s artistic and cultural heritage.
This year, building on that experience, Derry—Londonderry—is the first UK City of Culture and a nationwide competition has been announced to find the UK’s City of Culture for 2017. I hope that my noble friend the Minister will be able to give us more information about these two events and their impact to date on Derry.
I think that we all still share a very warm feeling about the success of last year’s Olympics and Paralympics, and indeed of the Cultural Olympiad, which, apart from anything else, led to the regeneration of Stratford and has an ongoing legacy. I was delighted to learn, as a result of participating in this debate, that the Lord Mayor of the City of London has decided to make arts and culture one of the central themes of his mayoralty and is even now publishing a report on the economic, social and cultural impact of the City’s arts and culture cluster and its effect not only on the City but on the surrounding boroughs. However, I agree with the noble Baroness, Lady Quin, that the importance of government policies must reflect not only what London has to offer but the wider nation and the regions.
Funding is of course important, and the noble Baroness has pressed my noble friend on this score. Much is being done and I hope will continue to be done—and said—to support the work going on in many of the regions. I look forward to hearing the views of other speakers in this debate and, in particular, hearing what my noble friend has to say about future government policy in the area.
Lord Shipley
My Lords, I thank the noble Baroness, Lady Quin, for initiating this debate. I also extend my welcome to the Minister in his new role and look forward very much indeed to hearing his response.
I should declare that I am a trustee of Audio Visual Arts North East and a patron or supporter of several of the cultural venues in Newcastle and Gateshead. I spent several years over the past decade helping to build up arts and cultural venues in the north-east. I did it for three main reasons. The first was to widen knowledge and participation, because a more civil, equal and inclusive society is created when learning opportunities, the performing arts, libraries and museums are available to all. There is also evidence that health and well-being can improve as a result.
Secondly, we wanted to make the north-east an attractive venue for tourism and inward investment. I pay tribute to the leadership role of Gateshead, which the noble Baroness, Lady Quin, mentioned. The Sage Gateshead and the Baltic were major contributions to changing the image of Tyneside and the north-east and increasing tourism to the area. Newcastle, of course, played its role with a number of cultural buildings and venues, which were either expanded or newly built in the past decade—for example, Seven Stories, the National Centre for Children’s Books.
Overall, the cultural provision in the north-east of England is very strong. That has an economic value through the multiplier effect. I was interested recently to see that Durham’s Lumiere festival in 2011 brought £4.3 million into the local economy against spending by the county council of £400,000.
Those three principles still stand today; nothing has changed. Of course, that list would apply to all parts of the United Kingdom, not just the north-east. Generally, it would seem that for every £1 of public money invested in a cultural venue, there will be an average return of £4 to the wider economy.
For Newcastle Gateshead this has meant a major expansion in economic benefits. There are more than 2,000 full-time equivalent jobs across the north-east run by the 10 cultural venues in Newcastle Gateshead, with 1,200 full- and part-time jobs in Newcastle Gateshead itself. There have been 3.6 million attendances at cultural venues in Newcastle Gateshead and 900,000 learning and participation opportunities. Helpfully, nearly 900 volunteers are involved in delivering support. I quote those figures because they are impressive and we should recognise the enormous achievement of arts and cultural organisations in the region and congratulate the staff and the boards of those organisations on their achievements. We do not want to lose that, which is a point that I will return to later.
Underpinning all of this is the issue of free access. That is an absolute cornerstone of a civilised society. Free access to museums, galleries and libraries provides opportunities for individuals to develop themselves, to encourage reading, seeing, listening, thinking, learning and taking part. Free access is about ensuring that we actually deliver equal opportunities. Where payment has to be required in the performing arts, schemes that help those on low incomes must continue to be promoted by the Arts Council and all receiving organisations.
The fact that spending cuts would have an effect around now is not a surprise. Several years ago, we knew in Newcastle Gateshead that we had to ensure that the large increase in capacity in the number of existing and new cultural organisations could withstand a reduction in public spending whatever the Government, and that this would inevitably need to be done whoever won the election in 2010. Of course, in the north-east, the collapse of Northern Rock and the loss of so much of its cultural funding support from its high point a few years earlier have not helped. Close working, joint marketing, better procurement and maximising charitable donations can all help even if they cannot solve the impact of all of the cuts.
I pay tribute to Arts Council England because it has managed its funding cuts thoughtfully. Rightly, it demands excellence when it allocates money and it is right to emphasise the interrelationship of libraries, museums and cultural organisations. There is a crucial role now for the Arts Council to ensure that its support is not overconcentrated in London and is distributed across England to develop greater equality of funding and thereby of access. A very small switch in the proportions of Arts Council funding between London and the rest of England could have a major impact on the viability of organisations outside London.
Account must be taken by the Arts Council of the capacity of a region to develop its philanthropic base. So many firms are headquartered in London it is little wonder that levels of sponsorship are so very much higher in London. Nevertheless, more is now being done by the Arts Council to develop the potential for private giving across England through its funding streams and I want to recognise the progress that is being made.
Councils have an enhanced role now through increasing localism. I referred earlier to health and well-being. Now that substantial funds are being redirected from the National Health Service to local councils from April for the promotion of public health through health and well-being boards, the application of that money needs a lot of thought. Well-being is about the whole person and it seems to be right that public health moneys could be used to alleviate cuts in arts, culture, libraries and learning where a benefit in terms of well-being could be the identified. I refer, for example, to neighbourhood libraries, where closure could reduce well-being.
I turn now to the pupil premium. In the north-east of England it is worth more than £100 million additional money in the year from this coming April. I raise this because more than 600,000 children participated in an event at a cultural venue in Newcastle Gateshead in 2011-12. It is reasonable to suggest that some of this growing pupil premium could be used by the schools receiving it to ensure equal opportunities for their children. Children need their horizons expanding and it cannot all be done within the boundaries of the school itself. I am unaware that there are any discussions or initiatives taking place on this matter, but given the scale of the pupil premium now and from April it needs to be.
I want to mention the importance of artist development programmes. I am impressed by the potential here and cite as an example the record of Generator—the leading music development agency in the UK set up 20 years ago with the aim of developing a more sustainable music industry in the north. It was later asked by the Arts Council to assist other fledgling agencies in policy and programme development, governance and funding. It has managed to lever in £4 for every £1 received from the Arts Council, which has enabled it to support new talent, help create 50 new businesses, assist 107 SMEs and a further 173 new SMEs, as part of its business support programme which was completed in December. Generator works with emerging bands and artists; mentoring and showcasing talent; providing key help such as PR, booking agents, sources of funding and securing media exposure. Such a comprehensive and progressive artist development programme fills a gap in the market for effective development of artists at any stage of their careers. There may be potential for replicating it.
In conclusion, we need some clear thinking given the budgetary position of cultural organisations—not just in the north east but across England. I very much hope that all of those involved in current discussions on funding for arts and cultural venues, libraries and museums will think carefully about how each can help. By this I mean councils, venues, the Arts Council, sponsors, universities, colleges, and schools—particularly those in receipt of significant sums from the pupil premium. If you close a venue, you cannot reopen it easily. The loss and the damage could be profound.
Common sense demands that everyone works just a bit harder to find a solution. I want to agree entirely with what the noble Baroness, Lady Quin, said about the need now for people to take a step back and to work out how they can move forward and protect the cultural and artistic venues and libraries which are currently under such very great pressure.
The Lord Bishop of Wakefield
My Lords, I also begin by thanking the noble Baroness, Lady Quin, for seeking out the opportunity for this debate, which is so timely and important for us all. Married to a Northumbrian—and an adopted Northumbrian myself —I was delighted to hear of her links with the Northumbrian pipers and also to hear the noble Lord, Lord Shipley, talking more of the north-east. However, I shall start elsewhere.
A decade ago when I arrived in Yorkshire—in Wakefield—there was much feverish talk of regeneration: a new hospital, new railway stations, a new shopping centre at the heart of the city and a new art gallery. There was the usual flood of scepticism, enhanced by a strong dash of Yorkshire realism. Would any of this ever happen?
The most extreme reactions in all this were to the art gallery. Here, west Yorkshire bluntness could find its ideal target: “We need a new art gallery like a hole in the head. There is enough modern art in the sculpture park already and no one can understand that anyway”. And so it went on.
Now, 10 years on, all these regeneration projects are complete—even the work on the railway stations has begun. We are amazingly fortunate to have received all this, and in the midst of one of the deepest recessions in modern history, as we have heard this afternoon. Most amazing, however, is the Hepworth gallery. The largest new-build gallery outside London for over a century, Sir David Chipperfield’s building has received universal accolades. With a target of 175,000 visitors for the first year, we achieved over half a million, and now we are heading for 400,000 in this second year.
The Hepworth effectively has placed the moderately-sized city of Wakefield, still recovering from the death of both the woollen industry and coal mining, on the map internationally. Barbara Hepworth, a daughter of Wakefield, and Henry Moore, a son of Castleford, just seven miles up the road, have given birth to the west Yorkshire sculpture triangle. That includes the Henry Moore Institute in Leeds, and the Yorkshire Sculpture Park and the Hepworth in Wakefield. The sculpture park is a great triumph, unique in England, and also a tribute to the passion and energy of Peter Murray, its founder. The Hepworth has already hosted at least one national book launch and also the nation’s salute to the 1662 Book of Common Prayer, the 350th anniversary of which was last year.
Talk of prayer moves me on to the cathedral in Wakefield, the nave of which will re-open in a month’s time after a year cocooned in scaffolding. A £3 million regeneration project supported by the Heritage Lottery Fund will make it a flexible venue for the worship of God, for which it was built, and an equally flexible venue for other cultural purposes. The largest venue in the very heart of the city, the cathedral will bring further economic benefits to the city and region just as the Hepworth has done. Of course, it is not only about the actual place itself in the case of the museum, the gallery or the cathedral but what it brings to the rest of the city and everything else thereabouts.
Talk of cathedrals comes close to my heart, having been the Dean of Norwich for some eight years. Here I declare an interest as a member of the Cathedrals Fabric Commission for England. In so many of our cities, cathedrals are responding to the needs of a changing society. In Norwich, we embarked on providing new facilities, which have further opened up that great building more effectively to the wider community. The development there is indeed the largest single development within a medieval cathedral since the Reformation.
Twelve million people visit our cathedrals every year. In 2004, a report showed that English cathedrals alone brought £150 million into the various local economies. That would be £186 million at present-day levels. Visitor numbers have increased since then by some 50 per cent, so noble Lords can do their own calculations on today’s figures—I think that it is probably about £200 million.
The benefits do not end there, of course. Cathedral music thrives here in this country as it does nowhere else in the world. Furthermore, speak to so many of our outstanding musicians, conductors, soloists and instrumentalists and you will find that their musical education began in cathedral choirs. With the advent of girls’ choirs, that is now equally true of women.
There is one more essential by-product of arts and culture in regeneration. This time it is not about finance and economics but, instead, about the nurturing of our common humanity. One serious impact in our area of the death of the coal industry has been a loss of sense of purpose in so many communities. That undermines what I would call our corporate self-esteem. The Hepworth and similar projects have begun to repair this essential element in community life. Every one of us will know how serious the loss of self-esteem is for individuals, sometimes even to the extent of people talking their own lives. It is no less serious corporately in communities.
I have tried not to drown noble Lords too much in statistics, but even the few that I have quoted tell their own dramatic story. My message to Her Majesty’s Government is that even a minimal increase in funding for our cathedrals and their upkeep, for example, will yield a bonus proportionately way beyond what any other investment can offer in these tough times. So, too, with the arts. In Wakefield we are grateful this year for Arts Council support for the Art House, another unique institution in our city which works particularly with the less well off, and sometimes the disabled, in the area of the arts and the creative arts. Frank Matcham’s fine Theatre Royal has also received funding.
However, still all these institutions and agencies are up against it. Spending on the arts and on culture is tiny proportionately to our national spending and budgeting, but the benefits that it brings in regeneration, economic development and, as I said, in terms of corporate self-esteem exceed what any of us might expect. I ask the Minister in his response to please be both realistic and generous in supporting regeneration by this most imaginative route.
Lord Wigley
My Lords, we are all very grateful to the noble Baroness, Lady Quin, for facilitating this debate. At the very outset I should declare several interests, in that my wife, daughter, son and daughter-in-law are all involved professionally in the creative arts, mainly in the music-related sector.
I realise that this debate has been projected by other speakers, largely in the English context, as addressing cuts in arts funding in England. Ministerial responsibility in this Chamber for the arts is primarily geared to England, though responsibility for the tools which encourage economic regeneration are not fully devolved. In any case, I believe that the nations of these islands can learn one from another in such matters. I hope that our experience in Wales with regard to the role of the creative industries in regional economic regeneration may be of assistance to others.
A debate was held in the National Assembly in Cardiff last Wednesday by my party. The Motion for the debate called on the Assembly to recognise and celebrate,
“the enormous contribution that the arts and creative industries make to the economy and culture of Wales”.
In his comments, our former Minister for Culture, Alun Ffred Jones, said:
“It is worth remembering that our culture is also an industry. It employs some 30,000 people in Wales, with an economic output worth around £0.5 billion”.
However, he emphasised that,
“we do not have to and should not justify expenditure on the arts by listing economic statistics. The arts have a value in their own right. It is an activity that develops confidence and creates interesting and imaginative people—the kind of people that employers want to employ”.
I wholly concur with that sentiment. Indeed, while the global companies of the past were largely concerned with manufacturing—that still has its place—key corporations of the future will increasingly be in the fields of communication, information, entertainment, bio-medical science and technology. These require high levels of creative imagination, a feature the arts are ideally placed to nurture.
The creative industries and the arts in Wales are supported through the complementary roles of the Arts Council of Wales and the activities of the business and enterprise department of the Welsh Government. That reflects the essential link between culture and the economy. The arts nurture the imagination, which generates the flow of new ideas and new products, which lend themselves to economic application via the creative industries. These industries in Wales overwhelmingly comprise small businesses. Of the 1,800 businesses in the sector, 94% employ fewer than 10 people. They make a significant contribution to the GVA of Wales and of the UK.
Many aspects of the cultural industries have a significant economic consequence for other sectors. They are a vital ingredient for tourism, with a knock-on effect on transport, hotels and catering. Major cultural projects can bring benefit not only to the city or region in which they are held, but to a wider economy and, indeed, to the Treasury and the UK generally. There is a danger that some people believe that the significant cultural activities of these islands occur only in London. That is patently not the case. One has only to think of the huge international significance of the Edinburgh Festival or, indeed, of the Hay book festival in Wales.
Showcase Scotland opens tomorrow in Glasgow. It brings into Scotland 180 holiday operators from overseas—an excellent example of how Scotland has succeeded in using the arts to underpin its economy. This autumn, Cardiff will host the WOMEX world music exhibition, an event that previously has been held in Gateshead. WOMEX will bring some 2,700 delegates to Cardiff, mainly from overseas, together with some 400 journalists. This represents not only an immediate input into our economy, but the potential of much more if we succeed in projecting a positive message and image.
WOMEX would not be coming to Cardiff were it not for the excellent Millennium Centre, a £100 million facility which has functioned as a concert hall, an opera house and a theatre. It attracts visitors from all over the world. It is a metropolitan, more than a regional facility, but without such infrastructure, it would not be possible to sustain, support and project the activities which now occur.
One does not have to look only at such major cultural infrastructure facilities. I give an example which may interest others in the Chamber. In my home town of Caernarfon, we succeeded a decade ago in establishing the Galeri Creative Enterprise Centre, at a cost of just £7 million. We could have secured 15 of them across Wales for the cost of the Millennium Centre. Galeri is the home of some 20 creative arts enterprises, ranging from music to graphic arts, cinema to drama, websites, television and arts-related PR companies. It generates some 400 events and performances a year within Galeri itself, and many more in the surrounding communities.
Galeri employs directly 36 full-time-equivalent staff and supports more than 50 full-time-equivalent jobs in the surrounding community, contributing some £3 million a year to the local economy. Galeri raises 75% of its turnover, but it is supported by a modest £300,000 a year grant from the Welsh Arts Council. An economic impact assessment recently concluded that for every £1 of grant funding, it generates £9.65 in the local economy.
Incidentally, the William Mathias Music Centre, which is based at Galeri, bringing music tuition and experience to adults, including some with learning difficulties, itself gives work to 30 part-time self-employed music teachers, providing a basic income without which they almost certainly would not all be able to remain living in north-west Wales. That activity also spawned the William Mathias Schools Music Service, which has outgrown its home in Galeri and now provides 80 peripatetic music teachers to support music education in schools in three counties in north-west Wales. Galeri is also the venue for the quadrennial international harp competition, which attracts competitors from 20 or more countries. Without that facility, none of that would be occurring in Caernarfon. Galeri represents a private and voluntary sector partnership with the public sector. I suggest that it is a model worth emulating.
Another vehicle for bringing cultural enterprise to communities across Wales is our national Eisteddfod. We may not be able to replicate that in all parts of these islands, but it is held annually in different centres, alternating between north and south. It costs about £3 million a year to sustain and is supported by a grant of about £500,000 annually from the National Assembly—again representing a very good gearing of public to private funding, bringing creative arts to every corner of Wales and stimulating interest as a result.
One problem with creative activities which are peripatetic, as with events organised by different host communities at different times, is that there is perennially a need to reinvent the wheel. Experience is not rolled forward. There is the danger of repeating the same mistakes. To avoid that, there is the need in the cultural sector to ensure adequate post-facto evaluation, which should be planned from the outset and perhaps should be a condition of public funding to ensure that ongoing maximum benefit is attained.
The physical facility is one thing, but we also need people with vision and a proactive attitude, and a framework to enable the arts to be an economic driver, not just a hobby. For example, more artists are active in Pembrokeshire than, probably, in any other rural area in Britain, but very few of them succeed in making art their full-time, primary source of income. With a little help, many of them could do that and work full-time at their art—not just in Pembrokeshire; I am sure that that is applicable more generally. Often, a support framework can make all the difference.
Whether it is major events and activities, and facilities, such as in Cardiff; in micro-grassroots activities such as Galeri in Caernarfon; or in a peripatetic festival such as the Eisteddfod, they all need a public, private and voluntary partnership. They all stimulate economic activity in the areas massively greater than the sums of public money that they require to sustain their viability. Surely the Government should think carefully before cutting funds for such a worthwhile dimension.
This debate matters to avoid us going down a blind alley of being penny wise at the cost not only to our diversity of cultural activities but, in the long term, to the regional economies in these islands.
Baroness Jones of Whitchurch
My Lords, I thank my noble friend Lady Quin for initiating this debate, and for the characteristically powerful way in which she set out the importance of the arts in regional regeneration. She made a compelling case, drawn from her own experiences, the themes of which have found resonance from all around this Chamber this evening.
I welcome the Minister to his role and look forward to his response. I hope that he will be able to give some reassurance that the future policy of arts in the regions will be an improvement on our experience of the coalition’s record over the first half of its term of office.
At a time when our economy is stagnating, and business leaders vent their frustration at the Government’s lack of a growth strategy, investment in regional regeneration ought to be an obvious priority. It makes sense in helping to tackle the growing disparity between rich and poor, and between those in work and the unemployed, which holds back our recovery. We know, for example, that since May 2010 the number of long-term unemployed has risen by 60% across the UK as a whole, but by 83% in Yorkshire and 123% in the north-east. Similar disparities exist for youth unemployment. Meanwhile, figures for individual and business insolvency also show disturbing patterns, with the north suffering more than the national average.
Unfortunately, the current Government do not appear to have a coherent regional strategy. They were all too quick to scrap the regional development agencies when they came to power, but the local enterprise partnerships put in their place have limited scope and have been widely criticised for failing to distribute grants and loans effectively. Incidentally, I would be interested to hear from the Minister what proportion of LEP funds have been used to support the creative industries.
The lack of a regional strategy was confirmed recently by a government-commissioned report by the noble Lord, Lord Heseltine, No Stone Unturned in Pursuit of Growth. It is a searing indictment of the Government’s lack of understanding that the impetus for growth, based on new ideas and enterprise, will be driven not from the centre but from communities, cities and regions.
These same criticisms equally apply to the Government’s arts policy. The Government give every impression that, at the time of austerity, culture is expendable. We take the opposite view. Culture is not a fluffy add-on. Culture and tourism account for 7% of the UK economy, providing more than 3.5 million jobs; with a spread throughout the UK.
We believe that this is a key part of growth strategy for our economic recovery, as well as being the lifeblood of an innovative, diverse and civilised society. The cultural sector should be at the heart of the regeneration of our towns and cities, providing new leisure activities for families, encouraging businesses to move to the area and providing new talent and enterprise.
The record of the previous Government is a testament to the development of the UK as a world leader in creative talent. I point to initiatives such as free access to national museums and galleries; investment in regional theatres; the Renaissance in the Regions programme which revitalised regional museums; and the Creative Partnerships that worked with more than 1 million children around the UK.
As we have heard today, and in the last decade a number of northern cities have used the arts to drive their renaissance. These were cities such as Liverpool, the European City of Culture, which generated £800 million for the regional economy; Bradford, where the National Media Museum created an extra 536 jobs; the Birmingham Creative City initiative, which aims to create 100,000 jobs by 2020; and the Newcastle/Gateshead collaboration, which has created 1,200 new jobs. As we have heard from the noble Lord, Lord Wigley, not only the cities but small businesses and small enterprises from around the country are being revitalised, which can help to drive culture forward.
Unfortunately, instead of building on these initiatives, under this Government investment in regional and local culture has gone into sharp reverse. They have been hit by a perfect storm of squeezed funding. As we have heard, the Arts Council budget has already been cut by 30%, resulting in 21% staff cuts and a halving of their regional sites. Numerous arts organisations around the country have been forced to scale back their activity. Meanwhile, the cuts of 33% in local authority grants are squeezing local arts projects, with the LGA reporting that by 2020 up to 90% of cultural budgets will disappear and that high-profile councils such as Newcastle were already facing a 100% cut in their arts activities.
The regional impact of these cuts has been confirmed by the Audit Commission, which has said that,
“the most deprived areas have seen substantially greater reductions in government funding as a share of revenue expenditure than councils in less deprived areas”.
Can the Minister give details of any discussions held between his department and DCLG to seek to ensure that arts provision in the most deprived areas is protected?
Then there is the issue of corporate giving, initiated by the previous Culture Secretary, Jeremy Hunt. My noble friend Lady Quin referred to this. His idea was that the shortfall would be filled by boosting philanthropy. In fact, as we have heard, the contrary is the case. Figures released in 2011 have shown that corporate giving was down by 11% and individual giving down by 4%. There is also a widespread view among arts leaders around the UK that this strategy fundamentally misunderstands how philanthropy works, and how little it is likely to benefit smaller arts organisations outside London. Perhaps the Minister could clarify the department’s current thinking on this.
Finally, as we have debated on several occasions, the policy of Michael Gove, the Education Secretary, in excluding creative subjects from the EBacc sends a longer term message about the downgrading of the arts in the Government’s growth plan. As the noble Lord, Lord Rogers, has argued:
“Our writers, artists, designers, dancers, actors and architects are the envy of the world”.
I share the passion of the noble Lords, Lord Rogers and Lord Shipley, for the importance of arts in education. However, for the future it seems that these will not be the skills and attributes that the Government expect to drive our economic recovery. If the Minister disagrees with this analysis, perhaps he could explain what discussions have taken place with Michael Gove to ensure that creative skills are put back in the centre of the curriculum, where they belong.
If we are to measure the actions of the coalition so far, we can conclude that it does not see investment in the arts and culture as a central plank of regional regeneration. There has been little leadership on the issue from Ministers, little investment in new regional and local arts initiatives and no attempt to make it a statutory obligation for local authorities to fund the arts. It is a sad indictment, and a depressing legacy for a Government who took over at a time when the UK arts were renowned as being world-leading. What will change in the future to rebuild the confidence of the arts sector in the policies of the Government? What positive symbols of change might we expect to see by 2015, and how does the Minister expect the arts to generate the funding essential for them to play their part in ensuring that regions and localities can thrive again? I look forward to hearing what the Minister has to say.
Lord Gardiner of Kimble
My Lords, I congratulate the noble Baroness, Lady Quin, on securing this debate. I am confident that we will continue to work on many campaigns in great friendship. I would also like to thank your Lordships for your very kind remarks.
The role of art and culture in the wider economy cannot be overstated. The Government’s priority is growth; heritage, the arts and tourism are essential for this. Perhaps I may say straight away to the noble Baroness, Lady Jones of Whitchurch, that the recent Cabinet meeting in Leeds was precisely about regeneration and growth, for these activities are a valuable asset for local and regional regeneration. Indeed, the right reverend Prelate the Bishop of Wakefield particularly mentioned regional regeneration; the recent Cabinet meeting was an indication of that. The reception tonight of the Royal West of England Academy in your Lordships’ House highlighted for me just how vibrant and important the arts are in engaging in education, which my noble friend Lord Shipley referred to, and that these academies are at the heart of their communities.
In reference to what the noble Baroness, Lady Quin, has said about Gateshead and to what my noble friend Lord Shipley said about the north-east, that part of our country is extremely fortunate to have them both as champions. It is clear that the right reverend Prelate the Bishop of Wakefield is a champion of Yorkshire and of all that is going on there, including the Yorkshire Sculpture Park, the Hepworth gallery and other developments, as well as our great cathedrals. The noble Lord, Lord Wigley, is, of course, a champion of Wales.
My noble friend Lady Hooper referred to the Cultural Olympiad. In London this was a phenomenal success. I say again to the noble Baroness, Lady Jones, that was a positive symbol of is happening in communities up and down the country. Nearly 20 million people took part in more than 1,300 performances and events at over 1,200 venues across the United Kingdom. A lasting legacy of cultural and artistic engagement and participation, and working with the public, private and voluntary sectors, is the Government’s objective.
The Government’s policy on the future role of cultural projects and the arts in regional and economic regeneration is delivered by bodies that have the expertise and the regional presence to do so. These bodies include the Arts Council England, English Heritage and the Heritage Lottery Fund. In addition, VisitBritain aims to draw international visitors to Britain, while VisitEngland encourages domestic tourism. I say to the noble Baroness, Lady Quin, that it is not realistic for there to be cuts in all other areas of the public sector and for the arts, alas, to be immune. But I am conscious of what she and other noble Lords have said. DCMS Ministers are in discussion with the Local Government Association about how local authorities are approaching the pressures on existing budgets, and I acknowledge this.
The Arts Council has a strong regional presence and in turn is working closely with local authorities on arts funding priorities. I know that many councils recognise the important role that arts and culture have in creating and retaining jobs, and stimulating growth. I am very pleased that this Government restored the shares of the National Lottery distribution fund for arts and heritage to 20% each. A lot more lottery money is available to support the arts and heritage.
The noble Baroness, Lady Quin, also referred to funding. The Arts Council is responsible for allocating £2.9 billon of public and lottery funding to arts and cultural bodies over this Parliament, and is investing in capital projects, and supporting theatre, music, visual arts, dance and libraries. I say to the noble Baroness, Lady Jones of Whitchurch, that the Arts Council is investing in a creative people and places programme over the next three years, and £37 million will be allocated to priority areas around the UK where participation in the arts is lowest.
In the area of skills and access to finance, another strand of the creative people and places programme will provide match funding for businesses interested in offering apprenticeships and internships for young people. The aim is to support 10,000 placements between now and 2015. The priority of the Government is to encourage small and medium size enterprises, and many of your Lordships referred to this, including my noble friend Lord Shipley, the noble Lord, Lord Wigley, and the noble Baroness, Lady Jones of Whitchurch. The Arts Council is helping to address problems that artistic and creative businesses can face in accessing finance by providing business development loans of between £5,000 and £25,000 to help create creative enterprises.
A number of noble Lords, including the noble Baronesses, Lady Quin and Lady Jones, and my noble friend Lord Shipley, mentioned philanthropy. The catalyst programme has already seen £30 million being given to arts and heritage organisations to encourage match funding. On top of that, the scheme will also give £55 million to arts and heritage bodies up and down the country to build up endowments. Philanthropy all too often passes unnoticed, yet it is integral to some of our finest arts and culture. We should applaud the profound generosity of those donors across the country who already contribute almost £700 million each year to our cultural sector. I will have to write to the noble Baroness, Lady Quin, about the figures on private giving, if she will forgive me tonight.
Turning to tourism, the UK’s arts and cultural sector is, of course, essential to domestic tourism, as well as to that from overseas. Our diverse and magnificent cultural opportunities are a huge draw for visitors. Between 2011 and 2015, VisitBritain aims to attract an extra 4.6 million overseas visitors and £2.3 billion in extra visitor spend. I am proud to say that the top five UK visitor attractions in 2011 were national museums sponsored by DCMS which attracted 23 million visitors. Many of these institutions take exhibitions across the country. This year, Tate Modern is bringing the Turner Prize to Derry/Londonderry as the UK City of Culture for 2013. Last week, the Government launched the competition for the next UK City of Culture, which will happen in 2017.
My noble friend Lady Hooper highlighted Liverpool. Liverpool City of Culture 2008 saw a 23% increase in visitors over four years. That is a great achievement. The noble Baronesses, Lady Quin and Lady Jones, also referred to the City of Culture in that regard. The competition presents a unique opportunity for cities across England, Wales, Scotland and Northern Ireland to galvanise their culture, heritage, creative industries and tourism offer in a way that can help the local economy and create a lasting legacy for the future.
Our heritage presents the very best of our past and plays a crucial role in the future prosperity of our towns, cities and rural areas. The Heritage Lottery Fund provides funding for visitor attractions on a national and local scale, which has led to a doubling in the regional employment that is dependent on these attractions. I shall refer to two examples: at the National Railway Museum in Shildon, 79 jobs were created and £3.6 million was contributed to the economy of the county of Durham; and the Big Pit: National Coal Museum in South Wales offers a similar story, with 82 jobs created and £2.2 million contributed to Gwent. Visitor numbers went up by 83%.
The noble Baroness, Lady Jones of Whitchurch, made a point about the EBacc. This has come up many times before. The five core subjects account for about 70% of the curriculum. That means that schools have between another 20% and 30% of the curriculum, which I am sure will include creative arts and other activities that are clearly essential. The track record of creative enterprises in this country is very strong indeed. There will be announcements on this matter, but I am confident that we will continue to champion creative activity and the arts for young people.
I conclude by renewing my particular thanks to the noble Baroness, Lady Quin, and to all noble Lords. We have had a very good opportunity to air some legitimate concerns. We clearly all need to work extremely hard and effectively to assist the creative industries, the arts and all that goes with them in these difficult times. We have all accepted in our different ways across the party divide that they are challenging economic times. I emphasise, in particular to the noble Baroness, Lady Jones, that this Government strongly support the arts and culture sector. The investments I have outlined indicate that.
It is now my privilege to work with the Minister for Sport and Tourism and the Secretary of State, who was in Leeds on Monday talking to leaders in Yorkshire about tourism and the opportunities for that important county. These are positive examples of what this Government really think about arts and culture and regional regeneration.
Arts and culture are absolutely key to the reputation of our country overseas and they also make a key contribution to everyone in this country. This is an ongoing programme of work and there is very much more to do. Governments and Oppositions can never do enough. However, it falls to the Government and a number of key strategic bodies to ensure that culture and the arts remain a key element of economic growth and social well-being.
However, I believe that it goes beyond that. The arts and culture undoubtedly raise the spirit of the British people and they are a great source of pride to our nation. I believe these are sentiments that we in your Lordships’ House all share.
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