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Oral Answers to Questions
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Jane Ellison (Battersea) (Con)
1. What recent steps she has taken to tackle female genital mutilation.
The Secretary of State for the Home Department (Mrs Theresa May)
Female genital mutilation is an abhorrent form of child abuse which this Government are committed to eradicating. Across Government we have taken a number of actions, including piloting the declaration against female genital mutilation, issuing guidelines to front-line practitioners and providing funding to support communities to tackle FGM themselves. These actions help raise awareness of the issue, change attitudes, strengthen the legal response and support victims.
Jane Ellison
I thank the Home Secretary for that answer. As she knows, most of the data we use in the UK are based on a 2007 study. The Dutch Government recently issued an up-to-date prevalence study, based on methodology developed at a workshop sponsored by the Home Office. When might we look to doing an up-to-date prevalence study here in the UK?
Mrs May
My hon. Friend raises an important point, and I would like to pay tribute to the work she has done on this issue, which is respected in all parts of the House. We are assessing a funding application for a prevalence study. The Home Office and the NSPCC co-hosted a recent round-table at which prevalence was discussed, and we are considering various ways in which we can collect the data to inform a more targeted approach to ending this practice. Indeed, the Department of Health is exploring the collection of FGM data in the NHS, including in the maternity and children’s dataset.
Pamela Nash (Airdrie and Shotts) (Lab)
One of the best actions we can take to tackle the attitudes that lead to FGM and gender-based violence is to ensure that all our children and young people receive age-appropriate and good-quality sex and relationship education. Has the Home Secretary discussed that with her colleagues in the Department for Education, and will the Government now support compulsory sex and relationship education?
Mrs May
The issue of education is discussed in the inter-ministerial group on violence against women and girls, which I chair. It meets regularly and brings Government Departments across the board, including the Department for Education, around the table. It is correct that education and information are very important aspects of dealing with FGM, which is why I am pleased to say that we have delivered 40,000 leaflets and posters to schools, health services, charities and community groups around the country, raising awareness of this issue.
Stella Creasy (Walthamstow) (Lab/Co-op)
May I associate myself with the Home Secretary’s comments about the work that the hon. Member for Battersea (Jane Ellison) has done on raising awareness of female genital mutilation in the UK? The Home Secretary will be aware of the calls for action to improve awareness of FGM, and to support young people who are facing this threat in coming forward. Given this and her response to my hon. Friend the Member for Airdrie and Shotts (Pamela Nash), may I press her on the question of the level of violence against women and girls in Britain, and ask whether she will give her direct personal support to the One Billion Rising campaign and the vote in this place on Thursday to make sex and relationship education statutory for both boys and girls—yes or no?
Mrs May
I thank the hon. Lady for her comments about my hon. Friend the Member for Battersea. As I said, the Government take this issue extremely seriously and we look across the board at what Government can do to deal with it. It is about helping communities themselves to eradicate this problem. Everyone in this Chamber will be concerned about the lack of prosecutions, and I am pleased that the Director of Public Prosecutions has issued a new action plan on FGM to the prosecutors, with the hope of getting prosecutions. We must recognise that education of a variety of sorts is important, which is why alerting people at various levels in the public services and in schools, and others, and helping girls to understand the threat themselves, is so important.
Andrew Bridgen (North West Leicestershire) (Con)
2. What steps she has taken to control immigration from Bulgaria and Romania.
Mr Philip Hollobone (Kettering) (Con)
3. What steps she plans to take to control the entry of Romanian and Bulgarian nationals to the UK from 1 January 2014.
Mr John Baron (Basildon and Billericay) (Con)
5. What estimate she has made of the potential level of immigration from Bulgaria and Romania after the expiry of transitional controls.
James Wharton (Stockton South) (Con)
6. What steps she has taken to control immigration from Bulgaria and Romania.
The Minister for Immigration (Mr Mark Harper)
Speculative projections about future inflows cannot be made with any degree of accuracy and are, therefore, not particularly helpful. That is why the Government are focused on dealing with the abuse of free movement rights and reducing the pull factors for migration, and so I am chairing a cross-Government group of Ministers to examine controls on immigrants’ access to public services and benefits.
Andrew Bridgen
It has been estimated that some 250,000 Romanians and Bulgarians are currently resident in Germany, and an internal paper produced by the German Association of Cities has noted that that level of immigration creates social dangers. Will any lessons be learned from the German experience?
Mr Harper
My hon. Friend is right to say that it is helpful for us to look at the experience of other European countries. We want to make sure that when people look at the access to our benefits and our public services nobody thinks we are a soft touch in this country, and the Government are taking action to ensure that people will not think that.
Mr Hollobone
My constituents think it is madness to open our borders to 29 million people when we have absolutely no idea how many are going to come to this country. Will the Minister at least introduce a new requirement that European Union nationals seeking to reside here for more than three months have to apply for a residency card? Will he insist that the Romanian and Bulgarian Governments share with the Home Office details of any criminal records of those who come to this country?
Mr Harper
My hon. Friend’s first point about a residency card is something I will listen to and take away with me. On his second point, he may be interested to know that the Metropolitan police and the UK Border Agency been working closely together over the past few months on Operation Nexus, and have removed about 200 very serious and high-harm criminals. That has been very effective, and I hope it will be rolled out across the country in due course.
Mr Baron
Given that the Government cannot produce or are not producing an estimate, and given that the national minimum wage is five to six times higher in this country than it is in Bulgaria or Romania, how confident are the Government that our public services can cope with any surge in immigration, particularly as we got our estimates so badly wrong in 2004?
Mr Harper
My hon. Friend makes a good point. However, it is worth reminding people that even during the whole period of the previous Government, when, as even they have acknowledged, they had no transitional controls for eastern European migration and a significant number came here, four fifths of the net migration was from outside the EU. It is therefore worth seeing things in that context. I go back to the answer I gave to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) in saying that the Government are looking at how our public services work and how our benefits system works to make sure that we are not a soft touch in this country. I hope that reassures my hon. Friend.
James Wharton
It is, of course, thanks to the Labour party that the UK was the only European economy that did not have transitional controls in 2004. Will the Minister confirm that as of 31 December every European economy will be open to the free movement of labour from Romania and Bulgaria, and not just ours this time?
Mr Harper
My hon. Friend makes a good point. It is worth remembering that eight other European countries, including France and Germany, currently have transitional controls, as we do. They will have to remove those controls at the end of the year, which is partly why making a forecast is so difficult and why the Migration Advisory Committee advised against it.
Keith Vaz (Leicester East) (Lab)
There is a Bulgarian word for the position in which the Government find themselves—oburkvane: confused. The Prime Minister is a champion of enlargement, which means the free movement of people, yet the Home Office was considering putting advertisements in the Romanian and Bulgarian press advising people not to come here. There is a simple way of dealing with this matter. First, by working with the Romanian and Bulgarian Governments to find out the cause for people to move here. Secondly, by commissioning research so that we have proper predictions as to how many people will come here.
Mr Harper
On the first part of the right hon. Gentleman’s question, he has been in this House long enough to know not to believe everything he reads in newspapers when they talk about what the Government might or might not do. He may even occasionally have been the author of some such stories himself. [Interruption.] No, I am not. On his second question about working with our European partners, we will of course work with the Romanian and Bulgarian Governments, as we do on a number of important and serious issues. For example, we work closely with the Bulgarians on combating terrorism. We will continue to take that approach and we will look at ways of making sure that this country is not a soft touch when it comes to benefits and access to public services. The MAC advised against trying to forecast the numbers, because it said that that simply would not be helpful to policy makers.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Is the Minister satisfied that the fines levied on employers who do not pay the minimum wage are sufficient to deter such employers from employing on the cheap the very Bulgarian and Romanian workers his hon. Friends are asking about?
Mr Harper
The hon. Gentleman makes a good point. If anyone takes on people who do not have the right to work in the country, we fine them up to £10,000. I will take away the point that he has made. One thing we are looking at is the regulation of the labour market in general. A number of bodies are involved—HMRC for the minimum wage, the Gangmasters Licensing Authority and the UK Border Agency. It is sensible to consider whether those organisations are all working as closely together as they should be. That is something that the group I am chairing will indeed be looking at. I hope that is helpful to him.
Andrew Gwynne (Denton and Reddish) (Lab)
But poor housing from rogue landlords, where they sometimes cram 20 to 30 people into some pretty shabby conditions, is also a major problem and a driver of immigration, particularly from places such as Romania, Bulgaria and other eastern European EU states, so will the Government commit to introducing a statutory national register of private landlords so that we can drive up housing standards in the private sector and drive out some of those crummy conditions?
Mr Harper
I am grateful to the hon. Gentleman for his question. Last Thursday morning, at an unearthly hour, the Minister for Housing and I accompanied UK Border Agency officers and housing officials from the London borough of Ealing on a raid to deal with exactly such landlords with houses in multiple occupation. It was a successful operation and we detained a number of people who had no right to be in the country. Such partnership working between the London borough of Ealing and central Government is working well, and it is the kind of activity that we will continue.
Chris Bryant (Rhondda) (Lab)
I am delighted that the Minister is tackling that one element, which has already been referred to, but last week the Attorney-General admitted that in 2011 and 2012 there was not a single prosecution of those breaching the national minimum wage. Would it not be a good idea, first, to impose the national minimum wage—enforce it properly—so that unscrupulous landlords could not turn people into virtual slaves in this country and, secondly, to double the fine?
Mr Harper
I am not quite sure what landlords have to do with the national minimum wage, but I think I answered the other part of the hon. Gentleman’s question in responding to one of his colleagues. The hon. Gentleman needs to explain why all those problems were singularly not dealt with when Labour was in power. Labour made mistakes on immigration and failed to apologise. Until it does, no one will take it seriously.
Mr David Ruffley (Bury St Edmunds) (Con)
23. Are the Government considering taking new powers to curb benefit tourism undertaken by Romanians and Bulgarians—welfare tourism that can only add to British public spending, not reduce it?
Mr Harper
My hon. Friend makes a good point. The committee that I am chairing will indeed consider how our benefit rules work. We want to ensure that we offer what we need to under the treaties, but no more. If we think that there is abuse of free movement rights, we will continue, as my right hon. Friend the Home Secretary has already started to do, to work with our European partners to drive out that abuse, which is what the people of this country want.
Lindsay Roy (Glenrothes) (Lab)
4. What assessment she has made of the recent performance of the UK Border Agency and the UK Border Force.
The Secretary of State for the Home Department (Mrs Theresa May)
The performance of both organisations is improving. Border Force efforts mean waiting times at airports are now considerably better. I am pleased to say that, between July and September last year—an important time for the UK—99% of passengers were cleared within service standards. UKBA is working to ensure that more illegal immigrants leave the UK this year than last, but we recognise that there are some deep-seated problems that need sustained effort. We are driving that effort forward.
Lindsay Roy
I thank the Secretary of State for her answer. I think the message is, “Still could do much better.” My constituent, Lynn Wyllie, has been waiting two and a half years for confirmation of her immigration status. Her children stay in Scotland and both have British passports. Despite her full co-operation, and that of my office team and her lawyer, she has had no response whatever with regard to her status. Her current application ran out on Friday. Will the Secretary of State arrange an urgent review—I am happy to give details—because Lynn is intensely stressed and worried about her situation and her family?
Mrs May
On the hon. Gentleman’s first comment, as I indicated in my answer, there are some issues that still need to be addressed in relation to the operation of the UK Border Agency. I am happy to look into the case that he has raised. If he provides the details, my hon. Friend the Immigration Minister will look into that with care.
Dr Julian Huppert (Cambridge) (LD)
The Home Secretary will be well aware of many of the long delays, and I, like many Members, have a number of constituents waiting for responses from the UK Border Agency. This is causing great concern for businesses and the universities in Cambridge, as are some of the over-bureaucratic controls that they feel they are being forced to apply on academics and students. Will she come to Cambridge to meet university and business representatives in order to discuss the details of how that is working?
Mrs May
I understand that the Immigration Minister has already agreed to come to Cambridge to meet representatives of the university on the issue. I met representatives of the Russell group and Universities UK when we were developing our policy on ensuring that we can drive out abuse of the student visa system. We have a student visa system that ensures that the brightest and the best students—those who are coming to an institution that is genuinely providing education, to study a genuine degree course or educational course, and are intending to be students and not to use the visa to work—can come to the UK, while we are driving out abuse. I am pleased to say that tens of thousands of people who were coming here or would have come here to work rather than to be students will not do so, as a result of the action that this Government have taken.
Fiona Mactaggart (Slough) (Lab)
The Home Secretary was kind enough to write to me after the last Home Office questions to say that she is working on the group of lost cases, but I have a number of current cases of constituents who are losing their jobs because the Home Office has not replied to in-time applications, so they have no papers that they can show their employer and there is no way they can prove their right to work, as a result of which they are being sacked. Will she stand up in this Chamber and say that nobody who has an in-time application and who had permission to work should be sacked because of the Home Office’s inefficiency?
Mrs May
What I say to the hon. Lady is that we are working through and with UKBA to ensure that we can improve the processes that it operates in relation to applications. If she has particular cases that she wishes to raise with Ministers, she is free to do that. It is important that we ensure that, through the work that is developing to deal with the problems that still exist, UKBA is able to provide the efficient service that we all want to see.
Greg Mulholland (Leeds North West) (LD)
Too many UKBA decisions are still wrong and the process is taking far too long, in which case does the Home Secretary not think it extraordinary that, notwithstanding the clear ruling of a judge on 29 November and previous tribunal decisions, UKBA is still seeking to prevent Roseline Akhalu from staying in this country, despite the fact that if she is deported she will die?
Mrs May
I will respond to my hon. Friend in relation to the individual case that he has raised, but he starts off by saying that too many decisions by the UK Border Agency are wrong. One of the problems for UKBA is that very often entry clearance officers take decision on the basis of the information in front of them, which may perfectly well be the right decision on the basis of that information, then further information is provided before an appeal is heard. That is an issue that we need to look at.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Further to the comments of my hon. Friend the Member for Slough (Fiona Mactaggart), I have many constituents who have submitted an in-time application and have not even received an acknowledgement from the UK Border Agency. When my office chases up some months later, it turns out that they have not even been input into the UKBA computer system. Perhaps the Home Secretary can tell us whether this is an attempt by the Home Office to massage figures about the number of applicants and the speed with which it is dealing with them.
Mrs May
No such attempt is being made in relation to what the hon. Lady says. She will have heard the answer that I gave. I acknowledged that there are problems in some areas of the operation of the UK Border Agency. That is why we are looking at the UK Border Agency, and why work is being done to improve the processes within it to ensure that we have a system that provides an efficient and effective response to those who are applying.
Julian Smith (Skipton and Ripon) (Con)
8. What assessment she has made of the effectiveness of the College of Policing since its establishment.
The Minister for Policing and Criminal Justice (Damian Green)
The Government have established the College of Policing to protect the public and support the fight against crime by ensuring professionalism in policing. The college is a core element of the police reform agenda. It began providing services on 1 December 2012 and has already begun training the next generation of police leaders.
Julian Smith
With the new college now in place, surely the Association of Chief Police Officers is now well past its sell-by date. It seems to spend more time protecting its members than helping the Government with their reform programme. Should taxpayers still be funding this organisation?
Damian Green
Most of the ACPO business area work has been integrated into the College of Policing. I pay tribute to ACPO’s work in ensuring a smooth transition towards the establishment of the college, which is very important. ACPO is a private limited company; it is not owned or controlled by the Home Office. It is therefore for ACPO itself to determine its future as a company. Home Office grant-in-aid funding to ACPO headquarters ceased at the end of 2012 when the College of Policing was established.
Mr David Hanson (Delyn) (Lab)
Undercover policing is extremely important. Does the Minister think that it would be improved, and public confidence in it maintained, by investigating the allegations that have been made about the identities of dead children in London being used as passports for police undercover names? Does he agree that improving standards in undercover training is one of the key elements of the College of Policing?
Damian Green
On the right hon. Gentleman’s last point, I absolutely agree. The College of Policing is there precisely so that we can improve professionalism in all areas of policing, and clearly that applies to undercover policing, which is, as he and the House will know, a particularly sensitive area at the moment. On his previous point, if he can be patient for just a few minutes my right hon. Friend the Home Secretary is about to say something about that.
Steve Rotheram (Liverpool, Walton) (Lab)
9. What financial and logistical support she is offering to the Independent Police Complaints Commission for its inquiry into Hillsborough.
The Minister for Policing and Criminal Justice (Damian Green)
I have committed to ensuring that the IPCC has the resource and powers necessary to investigate the findings of the Hillsborough independent panel thoroughly, transparently and exhaustively. The IPCC is working with the Home Office to determine the level of resource it requires and any logistical help that the Department can offer.
Steve Rotheram
Given that the investigation into the Hillsborough disaster will be the biggest and most complex in the IPCC’s history, what assessment has the Minister made of its capability to carry out the job competently? What assurances has he received that give him comfort that the IPCC’s processes will be scrupulous and, importantly, acceptable to the families?
Damian Green
The hon. Gentleman gives many of the more sensitive issues an airing. We have received assurances from Jon Stoddart and from the IPCC that, for example, no officer or investigator employed to work on the investigations will have had any prior connection with the Hillsborough disaster. I have personally checked that those assurances are being met, and I am able to reassure the hon. Gentleman that they are. As he will know, my right hon. Friend the Home Secretary has promised that the resources will be made available to the IPCC so that it can conduct this investigation as thoroughly as it and, more particularly, the families of the victims of the disaster deserve.
Mr Robert Buckland (South Swindon) (Con)
There is a real concern that the IPCC is having to deal with a huge number of complaints, some of which are relatively trivial in the great scheme of things. What mechanism will be put in place to ensure that the IPCC can focus its resources on important and significant cases such as the one that has been raised in questions today?
Damian Green
As I said to the hon. Member for Liverpool, Walton (Steve Rotheram), in the particular instance of the Hillsborough investigation my right hon. Friend the Home Secretary has already made that commitment on resources. There is clearly a wider point about the IPCC’s resources and how it operates, and a statement on that will be made very shortly.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
10. What steps she plans to take to increase the use of CCTV in response to community demand.
Ian Lavery (Wansbeck) (Lab)
11. What steps she plans to take to increase the use of CCTV in response to community demand.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The Government support the effective use of CCTV to cut crime and protect the public. It is a matter for local agencies to determine how best to deploy and use CCTV systems to meet local needs.
Luciana Berger
In Liverpool, the City Watch team have used state-of-the-art CCTV to deter crime and antisocial behaviour and to identify and convict those guilty of offences. As a result, according to the UK Statistics Authority, Liverpool is now the second-safest city in the country. Given this success, why does the Minister want to make it harder for the police and other local authorities to get CCTV for communities who want and need it?
James Brokenshire
We certainly recognise the important part that CCTV can play in making communities safer, and the hon. Lady has mentioned the City Watch programme in Liverpool. The Government are not seeking to make it harder to use CCTV; rather, we are seeking to put in place steps to ensure that its use is effective and commands the support of the public and, in so doing, that it can continue to carry out its important work.
Ian Lavery (Wansbeck) (Lab)
Local communities and local authorities are looking to install yet more CCTV cameras, which make them feel safer, more secure and more assured. Why are the Government, through the bureaucracy involved in accessing CCTV, preventing more cameras from being installed on the country’s streets?
James Brokenshire
I do not accept that more bureaucracy is preventing CCTV cameras from being adopted. Under the previous Government, a centralised control mechanism was put in place, but it did not actually assess whether the CCTV systems were effective or cutting crime. We think that these decisions are better made locally, but we also want to ensure, through a code of practice, that CCTV is proportionate and effective, and delivers what it needs to deliver.
Philip Davies (Shipley) (Con)
CCTV provides courts with unbiased evidence; leads to people changing their plea from not guilty to guilty; saves the police and the courts time and money; brings criminals to justice; and proves people’s innocence. The Government should be doing all they can to roll out CCTV as far as possible, but they are not doing so. Why do they not want to roll it out to more local communities?
James Brokenshire
I say to my hon. Friend that the Government support the use of CCTV and that it can be a very important way of bringing criminals to justice. He may wish to speak to his police and crime commissioner, who will hold a new community safety budget, part of which they may wish to apply to support CCTV projects.
Mr Speaker
Order. The hon. Member for Islington South and Finsbury (Emily Thornberry) gesticulating the hon. Member for Shipley (Philip Davies) in the direction of the Opposition Benches is a triumph, surely, of optimism over reality.
Rehman Chishti (Gillingham and Rainham) (Con)
Medway council is being developed as a regional CCTV hub, helping prevent crime and saving other councils money. What is the Minister’s policy on encouraging the development of CCTV hubs?
James Brokenshire
I recognise my hon. Friend’s point and, equally, how it is possible to pool together resources and systems to make CCTV systems that much more effective. Those are precisely the sorts of approaches that we are seeking to advance through the code of practice, and I am sure that the surveillance camera commissioner will also examine my hon. Friend’s point.
Stuart Andrew (Pudsey) (Con)
12. What recent steps she has taken to tackle gang and youth violence.
The Minister of State, Home Department (Mr Jeremy Browne)
On 27 November, the Government published our “Ending Gang and Youth Violence Report: One Year On”, setting out achievements and further commitments. Over the past year practical support has been provided to 29 local areas. Support for four more areas was announced in December.
Stuart Andrew
My constituent, Lorraine Fraser, has long campaigned against gang violence after tragically losing her son in an unprovoked attack. She has spent considerable time with young people, warning them of the consequences of being involved in gangs. What action is the Department taking to improve such intervention in our schools to tackle gang violence?
Mr Browne
I give my sincere commiserations to Lorraine Fraser. It must have been an extremely harrowing ordeal for her. It reminds me of a case in my constituency shortly after I was elected in 2005, when a young man called Lloyd Fouracre was murdered. His brother, Adam, was extremely energetic in promoting safety among young people in schools and elsewhere. I commend the work of the hon. Gentleman’s constituent and of mine. Our work on ending gang and youth violence includes elements of programmes in schools, and I commend that type of work right across the country.
Hazel Blears (Salford and Eccles) (Lab)
A few weeks ago in my constituency, there was an horrific incident when a totally innocent shopkeeper was attacked by an individual wielding a nine-inch kitchen knife. It subsequently transpired that that person had mental health problems. My chief constable tells me that violence is increasingly perpetrated by people with mental health problems. What is the Minister doing with his colleagues in the Department of Health to tackle this increasing danger to people in our communities?
Mr Browne
I am very sorry to hear about that appalling case. I again pass my commiserations to everybody involved. We try across Government—with the Department of Health in this case—to ensure that policy is effective in combining all the elements needed to reduce criminality. Although it is no consolation to the family in this case, it might help the House to know that, according to the crime survey for England and Wales, in the year to June 2012 there was a 14% reduction in homicides, a 9% reduction in violent incidents involving knives or sharp instruments, and an 18% reduction in gun crime. It might not be much consolation to victims of crime, but, overall, violent crime in this country is falling.
Mr David Ward (Bradford East) (LD)
13. What steps her Department is taking to ensure that applications for residence cards from citizens of the European economic area which have been referred for policy guidance are processed promptly.
The Minister for Immigration (Mr Mark Harper)
We aim to process all applications from EEA residents promptly. When a case has to be referred for policy guidance, there are sometimes delays, particularly if policy has changed. We obviously try to keep those delays to a minimum.
Mr Ward
Many people think that “referring for policy guidance” is a euphemism for disappearing into a big black hole. I am particularly concerned about spouses’ applications for residence cards, which are delayed for a long period before they are dealt with. What checks are there to ensure that cases are not neglected and are not allowed to run on for an inordinate time?
Mr Harper
This is an area where there are often legal judgments by the European Court of Justice that we have to take into account. We have to change the immigration rules accordingly before we can process applications. That is the sort of thing that tends to cause the delays, rather than what my hon. Friend suggests. If he has any particular cases that have to be dealt with urgently for whatever reason, I suggest that he write to me and I will do what I can to expedite them.
Simon Wright (Norwich South) (LD)
14. What steps she is taking to enable local communities to tackle antisocial behaviour.
The Minister of State, Home Department (Mr Jeremy Browne)
The Government have published a draft Bill that sets out measures that will put victims and communities at the heart of the response to antisocial behaviour. It includes the community trigger, which will give people the power to make agencies take persistent problems seriously; the community remedy, which will give victims a say in the punishment of offenders out of court; and faster, more effective powers to enable front-line professionals better to protect the public.
Simon Wright
Much of the antisocial behaviour experienced by my constituents in Norwich is associated with excess alcohol consumption. I welcome the new early morning restriction orders, but I urge the Government to end the abundant supply of pocket-money priced alcohol in response to their recent consultation on alcohol pricing.
Mr Browne
My hon. Friend is right to remind the House that in October the Government introduced early morning restriction orders along with a provision on the charging of a late-night levy as part of a package of measures to deal with concerns that had been brought to our attention about alcohol licensing and consumption. He will know that the consultation on minimum unit pricing and other alcohol-related measures finished last week. We will consider properly the representations that we have received and make an announcement in due course.
Bill Esterson (Sefton Central) (Lab)
Under the Government’s new policy on antisocial behaviour, people will have to complain three times. Why on earth should people have to wait so long before receiving help?
Mr Browne
This is frustrating for me, because we have explained this policy so painstakingly and carefully, and the concept is so simple, but let me have one more go. We want every council in the country and other relevant agencies to respond straight away whenever problems are brought to their attention. However, it has been brought to our attention, including in a lot of areas with Labour councils, that people keep bringing complaints, particularly lower-level complaints, about individual incidents that do not always warrant immediate attention. We want to ensure that there is some measure of cumulative impact. That is why we have put this measure in place, and it is popular. In the pilot schemes, people are running with it. I commend it to councils around the country, including Labour-run councils.
Kelvin Hopkins (Luton North) (Lab)
15. What recent assessment she has made of the detection rates for violent crimes against the person; and if she will make a statement.
The Minister of State, Home Department (Mr Jeremy Browne)
In 2011-12, the police detected more than 353,000 offences of violence against the person. That represents a detection rate of 46.4%, which is up from 44.7% in 2009-10.
Kelvin Hopkins
I thank the Minister for his answer, but my statistics suggest that police officer numbers are at their lowest in a decade, and that 7,000 fewer crimes of violence against the person were solved in the past year. Does the Minister understand that simple connection, and is it time to stop and reverse the police cuts?
Mr Browne
I took the trouble to look up the crime figures for Bedfordshire, which I know will be of interest to the hon. Gentleman; he can tell the House how he sees the correlation. Recorded crime is falling in Bedfordshire. Figures for the 12 months to September 2012 compared with the corresponding 12 months in 2011 show a total reduction in crime of 12% in just one year. Violence against the person was down by 15%, and the Government should be pleased with that record while not being complacent and trying to drive crime down further.
Diana Johnson (Kingston upon Hull North) (Lab)
Official figures show that 30,000 fewer crimes were solved last year—the first time that figure has fallen in more than a decade. Does the Minister think that the 11,500 fewer police officers on the front line have anything to do with fewer criminals being caught and convicted?
Mr Browne
Two things make Labour MPs look really glum: unemployment falling and crime falling. Any party whose interests conflict so directly with the interests of the people it purports to serve has got political problems. The most recent figures from the crime survey for England and Wales show an 8% fall in crime, and recorded crime statistics are down 7%. The Government have got crime down to the lowest point since records began in 1981, so there are fewer crimes to detect. I hope we will carry on and get crime down even further.
John Robertson (Glasgow North West) (Lab)
16. How many people are subject to a terrorism prevention and investigation measure.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
In the last quarterly report on the exercise of powers in the Terrorism Prevention and Investigation Measures Act 2011, for the reporting period 1 September to 30 November 2012, 10 people were subject to a TPIM notice during that time.
John Robertson
It is nearly 50 days since Ibrahim Magag went missing and the now famous absconding black cab shows that the Home Secretary made a mistake with TPIMs. Will the Minister say whether Ibrahim Magag was under surveillance at that time—nothing technical, a yes or no will do?
James Brokenshire
The operation to locate Ibrahim Magag is ongoing and the police are doing everything in their power to locate and indentify that individual. The hon. Gentleman would perhaps agree that the best place for a terrorist is in prison, and that is why the Government have committed additional resources to supplement the TPIM regime and ensure a balance of preventive measures as well as ensuring that people are brought to justice.
Paul Goggins (Wythenshawe and Sale East) (Lab)
21. Lord Carlile recently confirmed that no individual absconded while subject to a relocation order. Is the fact that Mr Magag did not abscond while he was relocated but did abscond when he was allowed back to London clear evidence that the decision to remove relocation powers was a serious mistake? Will the Minister look again at that decision?
James Brokenshire
I do not accept the right hon. Gentleman’s point. Indeed, in evidence to the Home Affairs Committee, the Metropolitan Police Commissioner did not say that a parallel such as that the right hon. Gentleman seeks to make could be drawn. We are reviewing the incident closely, as we would any incident of this kind, and if practical issues need to be adopted we will certainly consider and adopt them.
Mr David Amess (Southend West) (Con)
18. what steps she has taken to tackle human trafficking groups in their country of origin.
The Minister for Immigration (Mr Mark Harper)
The UK works closely with partners in source countries to disrupt organised human trafficking gangs. We work hard to apprehend criminals both in those countries and in the United Kingdom.
Mr Harper
That issue was raised during a recent debate in Westminster Hall, and the Government continue to keep it under review. My hon. Friend may be interested to know that this afternoon I will meet officers of the all-party group on human trafficking, including my hon. Friend the Member for Wellingborough (Mr Bone), the Baroness Butler-Sloss and Anthony Steen, and I hope we will have further discussions in due course.
Dr William McCrea (South Antrim) (DUP)
Does the Minister believe that the sentences available to the courts are stringent enough to stop unscrupulous agents misleading and forcing women into harsh domestic labour and the sex industry in the United Kingdom?
Mr Harper
I think the sentences that are available are harsh enough. It is sometimes difficult to get evidence to prosecute people for the right offences. For example, people are often not necessarily prosecuted for trafficking offences when other offences are more easily proven. The range of sentencing powers is available: it is our job to make sure that they are properly used by prosecutors.
Nicola Blackwood (Oxford West and Abingdon) (Con)
19. What assessment she has made of the operational readiness of the National Crime Agency.
The Secretary of State for the Home Department (Mrs Theresa May)
Excellent progress is being made in establishing the new National Crime Agency which will be an effective operational crime fighting agency, under the leadership of Director General Keith Bristow.
Operational activity is already taking place under the NCA’s four commands, building on the previous work of the Serious Organised Crime Agency. I am pleased to say in particular that the shadow border policing command is doing work to improve collaboration at ports.
Nicola Blackwood
My constituents are daily hearing truly shocking evidence of child sexual exploitation emerging in the ongoing trial of nine Oxford men at the Old Bailey. I know that the Home Secretary is unable to comment on the case, but can she tell me how she intends to work with Keith Bristow, Peter Davies and others at the NCA to strengthen our national policing response to child sexual exploitation in our communities?
Mrs May
I am grateful to my hon. Friend for raising this difficult issue, which I know will be a concern to Members on both sides of the House. We all agree that child sexual exploitation is an abhorrent form of abuse, and I know that the police are committed to tackling that crime in all its forms. An increasing number of cases are being brought before the courts, which reflects the increasing attention that the police are paying to this issue.
Work is being carried out to co-ordinate a response under the organised crime strategy and the child sexual exploitation action plan, which of course includes the vital work of the Child Exploitation and Online Protection Centre. I referred to the shadow border policing command in my previous response: it has been working with CEOP so that, for the first time, the team has been able to target high-risk outbound flights to identify and interdict sex offenders.
Stuart Andrew (Pudsey) (Con)
T1. If she will make a statement on her departmental responsibilities.
The Secretary of State for the Home Department (Mrs Theresa May)
Several news reports have recently alleged improper practices and conduct by the Metropolitan police’s former special demonstration squad. The activities of that squad are being investigated by the Metropolitan police’s professional standards department, under the supervision of the independent police complaints commissioner. The investigation is called Operation Herne.
Given the seriousness of the latest allegations, the Metropolitan Police Commissioner, Sir Bernard Hogan-Howe, and the chairman of the IPCC, Dame Anne Owers, have agreed that it would be appropriate for a senior figure from outside the Metropolitan police to take over the leadership of the investigation. Chief Constable Mick Creedon of Derbyshire police has agreed to take on the role, and he brings to the case many years’ experience as a detective. He has also led several major investigations, including police corruption cases and reviews of investigations by other forces, such as the Rhys Jones murder on Merseyside in 2007. The investigation will be under the direction and control of Chief Constable Creedon, but it will remain under the supervision of the IPCC, which will provide further external and independent scrutiny.
Stuart Andrew
Can my right hon. Friend tell the House what steps her Department is taking to reform the UK’s extradition arrangements?
Mrs May
I am happy to confirm to my hon. Friend that it is obviously in the overwhelming public interest that we have sound extradition arrangements that function properly. The public need to have confidence in those arrangements, and it is vital that decisions are not only fair, but are seen to be fair. As I indicated to the House earlier, the Government have recently tabled amendments to the Crime and Courts Bill to introduce a forum bar to extradition, which will make decisions in concurrent jurisdiction cases clear and more transparent.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I welcome the Home Secretary’s announcement on undercover policing, which we have also called for.
I know the whole House will send its sympathy to the family of Frances Andrade, who took her own life after giving evidence against her abusers in court. She was let down by the criminal justice system, whose job it was to help and protect her. It has emerged that Greater Manchester police supported Mrs Andrade getting counselling, but that Surrey police did not. The Surrey police and crime commissioner has said in the last couple of days that
“it’s the responsibility of the police to present evidence to the court with the victim in a way which is untainted. That means they will not and should not refer a victim for counselling until after they have given their evidence.”
Does the Home Secretary agree that this approach by Surrey police is completely unacceptable, and that victims of sexual abuse should never be denied the support and counselling they need? Will she tell all police forces that they need to make sure that counselling is available, and will she ensure that a proper review takes place of the handling of this entire case, so that lessons can be learned from this dreadful tragedy?
Mrs May
I am indeed sure that everybody across the House sends their sympathy and condolences to the family of the lady concerned. This was a terrible case and we all have sympathy with the family for what they have gone through. Improving the way in which the police deal with rape cases has been looked at by Governments over a number of years, because we all recognise the difficulty victims feel in coming forward. Sadly, when we see such incidents I fear that others may be put off, rather than encouraged, from coming forward. We need to look very carefully at what has happened in this case, and very carefully at how we can further improve the system to ensure that victims feel that they will be believed when they come forward and have the confidence to take their case through the courts.
Yvette Cooper
I welcome the Home Secretary’s concern, but I press her to do two specific things in response to this case, the first of which is to tell forces that they need to make sure that counselling is available in these cases. Guidance drawn up in 2002 by the Home Office, Department of Health and Attorney-General states very clearly that
“vulnerable or intimidated witnesses should not be denied the emotional support and counselling they may need both before and after the trial.”
The 2010 guidance from Association of Chief Police Officers and Crown Prosecution Service is similarly clear, yet did not apply in this case and the Surrey police and crime commissioner is saying the opposite. Will she give very clear instruction to forces across the country that they must ensure counselling is available in line with national guidance? Will she also ensure that a proper review takes place of all aspects of this case, so that we learn lessons from this terrible tragedy and ensure that vulnerable victims get the help and support that was denied to Frances Andrade?
Mrs May
As I indicated to the right hon. Lady, we will of course look to see what lessons should be learned from this case. She will be aware that the Home Secretary does not instruct police forces to take particular routes. They have operational independence on decisions about how they deal with particular cases. It is important for the guidance to be there, for police forces to be aware of the guidance, and for police forces to operate within the guidance. I will reflect on the right hon. Lady’s remarks on the attention being given to that guidance. I am sure that all of us across the House want a system in which rape victims feel able to come forward and that we are able to see more prosecutions taking place.
Mark Pawsey (Rugby) (Con)
T2. Does my right hon. Friend agree that there is absolutely no contradiction between having a robust immigration system with an efficient visa system and an economy that is open for business?
Mrs May
My hon. Friend puts it extremely well. There is absolutely no contradiction between having an efficient visa system that enables us to protect our borders and operate appropriate immigration policy, and having a United Kingdom that is open for business and which encourages the brightest and best and those who will be of benefit to the economy to come here. There is no contradiction in doing that and it is possible to do that—indeed, it is what the Government are doing.
Nick Smith (Blaenau Gwent) (Lab)
T3. Mephedrone offences have increased significantly in Wales since October 2011. More girls are using it than any drug in the past, and dealing is more open than ever before. What are the Government doing to promote cross-border action between England and Wales to tackle the supply of this dangerous drug?
The Minister of State, Home Department (Mr Jeremy Browne)
I am extremely sorry to hear about the experiences in the hon. Gentleman’s constituency. Drug consumption overall in England and Wales is falling, and there is a lot of different statistical evidence that all points in that direction. However, I take his point that there are differing threats, and that some drugs do not fall in line with other types of drugs. I am happy to meet him if he would like to discuss what more we can do to improve the situation in his constituency.
Harriett Baldwin (West Worcestershire) (Con)
T4. What overall progress is the Minister making on reducing net migration into the UK to a more sustainable level?
The Minister for Immigration (Mr Mark Harper)
I am pleased to tell my hon. Friend that the last set of immigration statistics saw a fall of a quarter in net migration, and we are on track to reduce it from the unsustainable hundreds of thousands that it was under Labour to a much more sustainable tens of thousands, which is what the vast majority of the British public want.
Andrew Gwynne (Denton and Reddish) (Lab)
T5. The reality of the Government cuts is that local councils are switching off CCTV cameras and losing local antisocial behaviour officers; that local housing companies cannot get rid of problem tenants; that police stations are closing; and that neighbourhood policing is becoming more remote. Is the Home Secretary as concerned as I am about the retrenchment into a silo budget mentality, and if so, what will she do about it?
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The hon. Gentleman makes a point about CCTV that, as I have already established, simply is not the case. I am surprised he does not seek to welcome the cuts in crime in his own constituency and the fact that the Government are taking the tough decisions, at a difficult time financially, to ensure that we get the right reform to establish police and crime commissioners and make those decisions locally, as well as cutting crime and making communities safer. I would have thought he welcomed that.
John Glen (Salisbury) (Con)
T8. The Minister will be aware of the excellent work done by the freedom programme for female victims of domestic violence. In my constituency, the refuge is keen to explore the possibility of a parallel scheme focused on male victims. Will he join me in endorsing this endeavour and indicate what resources are available to support this worthwhile scheme?
Mr Jeremy Browne
My hon. Friend raises an important point. Approximately one fifth of the victims of domestic violence are men, but most of the services—understandably, because the majority of victims are women—are designed to help female victims of domestic violence. Where services can be provided to help men, however, it would seem to be an entirely commendable and virtuous form of service provision. I congratulate those involved on what is happening in his constituency, and hope it can be applied more widely where it is seen to be valuable.
Toby Perkins (Chesterfield) (Lab)
T6. The Minister has come to these questions armed with some excellent answers, but unfortunately they are not relevant to the questions he is being asked. The specific question is this: he stood for election on the basis of having 3,000 more police officers, but is now part of a Government presiding over 7,000 fewer, and at the same time 30,000 fewer crimes are being solved, so does he still recognise the link between more police officers and fewer crimes being solved?
Mr Browne
The crime survey for England and Wales began in 1981, when I was at primary school, and we now have the lowest reported crime in England and Wales since the survey began 32 years ago. I am proud of that record, and I am surprised that the hon. Gentleman does not share my pride.
Mr James Clappison (Hertsmere) (Con)
Have Ministers seen the estimate from Migration Watch of 50,000 people migrating from Bulgaria and Romania? It has a good track record in these matters. May we have the earliest possible announcement of concrete results from the ministerial group on ease of access to benefits?
Mr Harper
I have indeed seen that forecast, but, as I said, I do not think that the Government engaging in speculative forecasts is helpful; what is helpful is our carrying on the work of the committee I am chairing on access to public services and benefits to ensure that we are not a soft touch. I am sure that my hon. Friend will support us in that valuable work.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
T7. We have seen some great co-operation between the UK and the EU on crime and justice through the European arrest warrant, as has been seen in the investigation into the sale of illegal horsemeat. May I therefore encourage the Government not to oppose the arrest warrant, to drop the work they are doing and to take a “mare” responsible attitude to this issue?
Mrs May
As the hon. Gentleman knows, we are looking at all the measures that fall under the so-called 2014 opt-out. It is the Government’s current intention to opt out of those measures and then negotiate to opt back into those we believe to be in the British national interest. He cites an example of where the European arrest warrant has been used successfully, but hon. Members will know of cases where people have been held for lengthy periods in pre-trial detention, while the proportionality issue worries not only the UK, but other member states. That is why we are discussing the future of the European arrest warrant with other member states.
Caroline Nokes (Romsey and Southampton North) (Con)
Can my right hon. Friend tell us what success Hampshire constabulary has had in cutting crime in the Eastleigh area?
The Minister for Policing and Criminal Justice (Damian Green)
I am happy to report to my hon. Friend and the House that I can give her that answer. I am extremely happy to report that in the 12 months to September 2012, there was a fall of 17% in offences recorded by the police in Eastleigh, showing the great success of the Hampshire police.
Gavin Shuker (Luton South) (Lab/Co-op)
T9. The damping mechanism that has been applied to Bedfordshire under successive Governments has left it with £22 million less than it should otherwise have. When the Home Secretary met new police and crime commissioner candidates and new police and crime commissioners earlier this month, she said the mechanism would be reviewed, but it has now become clear that it will not be until after the next general election. For how much longer will Bedfordshire have to fight urban levels of crime with rural levels of funding?
Damian Green
I am happy to tell the hon. Gentleman that recorded crime in Bedfordshire is down 12% in the year to September 2012. I hope he will welcome that. As he says, this Government have continued the damping mechanism, which was put in place by the previous Government in 2006. We are conducting a review of it. One reason why the review needs to be thorough is precisely so that we can involve the newly elected police and crime commissioners—including the one in Bedfordshire —so that they can make a full contribution to the debate to ensure we have better mechanisms in future.
Mr Christopher Chope (Christchurch) (Con)
Does the Home Secretary share my concern at the very small number of foreigners convicted in the summer 2011 riots who have been deported? What is going to be done about it?
Mr Harper
My hon. Friend might be interested to know that we are actively pursuing deportation in 150 of those cases and have successfully removed 15 people already. The Government will continue to do so and I am confident that the vast majority of foreign national offenders involved in those riots will be removed from the country once their sentences are complete.
Mr David Winnick (Walsall North) (Lab)
I welcome the inquiry that the Home Secretary has announced into undercover agents. Would it not be appropriate, at this stage at least, for the Home Secretary herself to give an apology to the parents of the dead children whose names were taken for undercover policing? What happened was absolutely disgraceful; such an apology is absolutely appropriate.
Mrs May
The hon. Gentleman makes the point that if it is indeed the case that this has happened, it is absolutely disgraceful. The investigation to establish the facts in relation to this is still ongoing. It is important that we say anything we wish to say about the facts of what has taken place following that investigation.
Petition
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Rosie Cooper (West Lancashire) (Lab)
I wish to acknowledge the work done by the members of Burscough Action Group to collect 4,016 signatures alongside securing a 96% opposition vote in a parish poll on proposals in the West Lancashire Local Plan to develop Yew Tree Farm in Burscough. In particular, I would like to thank Gill Bjork, Michelle Blair and Gavin Rattray for their commitment to keep fighting the corner of Burscough residents. I am presenting this petition to the House this evening to give the residents of Burscough who have signed it the voice that they feel they have been denied by West Lancashire borough council. I would therefore like to present a petition of residents of West Lancashire.
The petition states:
The Petition of residents of West Lancashire,
Declares that the Petitioners reject the proposed developments by West Lancashire Borough Council in their West Lancashire Local Plan because of the following detrimental effects; the loss of Green Belt and agricultural land, the loss of a safety buffer between residential and industrial areas, the further strain on inadequate infrastructure; roads, sewers, health services and schools, the damage to the environment through pollution and loss of habitat, the devaluation of property, the loss of identity as a village and finally because there is no guaranteed benefits to local residents.
The Petitioners therefore request that the House of Commons urge the Government to stop the proposed developments in the West Lancashire Local Plan by West Lancashire Borough Council.
And the Petitioners remain, etc.
[P001155]
European Council
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Mr David Cameron)
I am sure the whole House will join me in sending our best wishes to Pope Benedict following his announcement today. He has worked tirelessly to strengthen Britain’s relations with the Holy See and his visit to Britain in 2010 is remembered with great respect and affection. Pope Benedict’s message on that visit—of working for the common good—is something that spoke to our whole country, and I am sure his successor will continue to provide a voice of inspiration for millions around the world.
Last week’s European Council agreed the overall limit on EU spending for the next seven years, starting in 2014. When these multi-year deals have been agreed in the past, spending has gone up, but last week we agreed that spending should come down. By working with like-minded allies, we delivered a real-terms cut in what Brussels can spend for the first time in history. As the House knows, the EU budget is negotiated annually, so what we were negotiating—initially at the Council last November and again last week—was not the individual annual budgets, but rather the overall framework for the next seven years. This includes the overall ceilings on what can be spent—effectively, the limit on the European Union’s credit card for the next seven years.
During the last negotiation, which covered the period 2007 to 2013, the last Government agreed to an 8% increase in the payments ceiling, to €943 billion. Put simply, this gave the EU a credit card with a higher limit, and today we are still living with the results of allowing the EU’s big spenders to push for more and more spending each year.
In fact, only last year, while member states were having to make tough decisions to tighten their belts at home, the big spenders succeeded in increasing the 2012 European budget by another 5% compared with the previous year. If no deal had been reached, the existing ceilings would have been rolled over and annual budgets could have continued to soar for the next seven years. Because annual budgets are negotiated by qualified majority voting, it can be difficult to constrain spending in these annual negotiations. By contrast, the seven-year limits are agreed by unanimity, so this was our chance to get the ceilings down in line with what could be afforded.
The European Commission produced an initial proposal for increasing the payments ceiling still further to €988 billion. This was strongly supported by a number of member states. The first negotiation took place at the Council in November, and although the President did then reduce this during the Council itself, it was still some way short of the real-terms cut we were looking for. So together with like-minded allies from a number of countries, including Germany, Sweden, the Netherlands and Denmark, we rejected the deal on the table and told them to think again.
At this Council, we made further progress. Together with allies, many of whom like Britain write the cheques, we achieved a proper look across all the areas where spending in the Commission proposal could be cut. While there are areas where we could and should go further, not least on reforming the common agricultural policy and reducing the bureaucratic costs of the European Commission, we agreed a real-terms cut in the payment limit to €908 billion. That is €80 billion lower than the original proposal; €35 billion lower than the deal agreed by the last Government, which is still in operation today; and €60 billion lower than the emergency arrangements that would have come into place if there were no seven-year deal. My aim was not simply to cut the credit-card limit; I wanted to set the limit at a level that would deliver at worst a freeze and at best a cut in actual spending over the next seven years. That is what this deal delivers—a real-terms cut.
If we take the latest complete budget—the one for 2012—and freeze spending at that level for the next seven years, we would have spending limits of €932 billion. Our new payments limit means spending cannot rise above €908 billion, so we have slashed €24 billion off a real freeze on the last completed budget. Of course, the budget set in 2012, which Britain voted against, was unacceptably large, but even against the average of the last two completed years—2011 and 2012—this deal still delivers a real-terms cut.
This deal must now, of course, be voted on by the European Parliament, and the European Council has said it is prepared to accept some flexibilities about how spending is divided between different budget years and different areas of spending, but we are absolutely clear that this must be within the framework that the member states have now agreed. The EU’s seven-year budget will now cost less than 1% of Europe’s gross national income for the first time in its history.
Let me say a word about how this deal is likely to affect the UK’s contribution; a word about how it is likely to affect what the UK receives from the EU for research, for our regions and for our farmers; and a word about what this means for growth and competitiveness across the European Union as a whole.
On the UK’s contribution, the House will remember how the last Government gave away almost half of our rebate. This has had a long-term and continuing effect on the UK’s net contributions. It is worth remembering why. It is because when the European Union spends money on structural funds and cohesion payments in eastern European countries, for example, the UK no longer gets a rebate on this money. As a result, almost whatever budget deal was done, our net contributions were always likely to go up. As a result of this deal, however, they will be going up by less. The only two sensible things we could do to protect the British taxpayer in these negotiations were to get the overall budget down and to protect what is left of our rebate.
The Prime Minister
The right hon. Gentleman keeps on saying “Hear, hear”, but he was the one who gave away our rebate in the first place. Even he is welcome on a happy day like today. That is exactly what we have done.
While the actual amount that the UK contributes will depend on technical factors, such as the size of the annual budgets, economic performance and exchange rates, as a result of this deal we now expect the UK’s contribution to the EU to fall as a share of our gross national income. As for the rebate that this Government inherited, it is now completely untouched. As ever, throughout the negotiations the rebate was attacked repeatedly, but I successfully rejected all the calls for change, and under this Government the British rebate is safe.
In terms of what the UK receives, I wanted to make sure that our universities were well placed to receive research work, that our less well-off regions were treated fairly compared with others, and that our farmers continued to receive support for the environment schemes that they put in place. Let me deal with each of those points.
The section of the budget that includes spending on research, innovation and university funding is up by over a third. The money is handed out on the basis of quality, so Britain’s universities are particularly well placed to benefit. We have ensured that structural funds will continue to flow to our less well-off regions, and Britain’s share will remain broadly the same, at around €11 billion. While we have cut spending on the common agricultural policy overall, we have protected the flexibility that will allow us to direct funds to support both the environment and the livelihoods of our farming communities.
Overall, this is a better-framed budget in terms of growth, jobs and competitiveness. It is disappointing that administrative costs are still around 6% of the total, but overall spending on the CAP will fall by 13% compared with the last seven-year budget. Research and development, and other pro-growth investment, will now account for 13% rather than 9% of the total budget.
Reform of EU spending is a long-term project, but this deal delivers important progress. Working with allies, we took real steps towards reform in the European Union. This is a good deal for Britain, a good deal for Europe, and above all a good deal for all our taxpayers. That is what we have delivered, and I commend my statement to the House.
Edward Miliband (Doncaster North) (Lab)
I thank the Prime Minister for his statement. Let me first join him in paying tribute to Pope Benedict XVI. He is a spiritual leader for 2 billion people in the world, and a theologian of great distinction. His visit to the United Kingdom will be long remembered as a proud moment for millions of Catholics in this country, many people of other faiths, and, indeed, many Members of the House. His decision to stand down will not have been reached lightly, and it is right for Members in all parts of the House to acknowledge his service.
I also join the Prime Minister in welcoming the agreement that has been reached on a cut in the seven-year payment ceilings for the European Union budget. At a time when so many budgets were being cut at home, the House voted for a real-terms cut last October, and it was right to do so. No doubt it was just an oversight that in his statement he forgot to express his thanks to Members on his own Benches and on those of the Opposition for giving him such a strong negotiating mandate. Even he must see the irony of his having sought to vote down a proposal that turned out to be the outcome of the negotiations. He was against it before he was for it: that is the reality.
As well as restraint in the budget, however, we needed reform. We needed to prioritise growth within a smaller budget by cutting back even further on spending that was not a priority.
Let me deal first with agriculture. The common agricultural policy fell as a proportion of the budget from 46% in 1997 to 33% in 2010. We welcome the modest continued decline in agriculture spending as a share of the European budget from 31% in 2013 to 27% by 2020, but does the Prime Minister agree that with agriculture making up just 1.5% per cent of the total output of the European Union and still accounting for nearly 30% of the budget, there is still much more to do?
Secondly, we welcome the increase in funds targeted towards growth, infrastructure, research and development and innovation, but can the Prime Minister confirm that the achievement of a declining budget compared to November’s proposal came not at the expense of agricultural spending but, in part, at the expense of that funding for growth?
Thirdly, the Prime Minister and I agree on the need for the EU to play its part in effective development, diplomatic and governance support in north Africa. Can he say what discussions took place about how the EU could play that enhanced role in the context of the decision in this budget round to effectively freeze the European development fund, which provides assistance for the region? Given the new emerging challenges across the Sahel, what information can he give us about how funding for that region will be affected? In that context, can he take this opportunity to say something about the transition road map for Mali, which formed part of the Council’s conclusions, or at least part of its discussions?
Fourthly, given the very significant and unprecedented difference between the ceiling on payments—to which the Prime Minister referred in his statement—and the ceiling on commitments agreed on Friday, can he tell the House what discussions took place about how this would be dealt with in the years ahead?
While this budget brings restraint, Europe still needs a plan for recovery and growth. The Council’s conclusions talk about the importance of trade agreements. Will the Prime Minister update the House on developments on the possible EU-US trade agreement and on how he sees that being developed this year, including at the G8 summit? Does he recognise, however, that the long-term changes to the budget and the possible EU-US trade agreement are no substitute for a growth strategy for Europe? There are 26 million people looking for work in the European Union, and nearly 6 million unemployed young people looking for work—shamefully, 1 million of them here in the UK. The European economy is struggling and the British economy is flatlining. What Europe now needs, and what Britain now needs, is a plan for jobs and growth. That is the way Europe must change, that is the change that we need for Britain, and that must be the priority for the months and years ahead.
The Prime Minister
I suppose we should take the welcome. We should take it from someone who never got a freeze, let alone a cut, who never protected our rebate but who gave it away, and who told us that we were going to be marginalised, isolated and picking fights in an empty room. But I welcome the right hon. Gentleman’s welcome. Thank you. I did not quite get a thank you, but I will give him a thank you for the non-thank you.
The right hon. Gentleman asked a lot of questions. Let me go through them. On agriculture, he asked whether there was more to do on reducing the budget, given that it represented only 1% of European industry. Yes, there is, although we have taken some steps forward. The common agricultural policy budget pillar one goes from €320 billion to €277 billion, which is a significant change. In terms of what grew in the budget that can help to deliver growth and jobs, we have the Connecting Europe Facility, which is about energy, transport and broadband networks. That goes from €8 billion in the last seven-year period to €19 billion in this period, so I do not think it is entirely fair to say that the right things were not increased or that the right things were not cut. I said in my statement that I was disappointed that we did not go further on the central bureaucracy.
We did have a discussion on north Africa and Mali. The right hon. Gentleman is wrong to say that the European development fund will go down; it will go up by €1 billion. On Mali, there was very little time left at the end of the marathon Council to discuss those issues, but I took the opportunity to praise the French President for the brave action that the French have taken, to offer our strong support, and to say that we would contribute by training troops from west African nations. I have spoken to the Nigerian President, who is in London today, about that issue. Most of all, however, a political strategy is needed alongside the military efforts.
On the gap between ceilings and payments, the gap is between €960 billion on commitments and €908.4 billion on payments. That is just over 5%, which is not untypical, given the experience of recent years. The European Commission thought that that gap was deliverable, so I think that answers that question. On EU-US trade, I spoke to President Obama about half an hour ago, and I think we are making progress. I will continue strongly to push and support that measure. On the issue of how we use the European Union to encourage growth, one of the greatest things we can do is to complete the single market in digital, in energy and in services, and it is this Government, working with allies, who are delivering precisely that.
On the overall deal, there is a real need to ensure that the European Parliament supports it. We are often challenged about the friends we have in Europe, but I would challenge the right hon. Gentleman about his friends there. What is he going to say to his friends in the Party of European Socialists who are condemning this deal, condemning the British action and saying that we should not be constraining European spending? Will he confirm today that Labour MEPs will be voting for this budget? Answer? The head moved a little bit. While he is at it, is it not time to confirm whether his party will back an in/out referendum? Labour’s claim is that the greatest problem is uncertainty, but what could be more uncertain than not knowing whether you are for it or against it? Any progress? It is not a day for answers, but it is a day for celebrating the fact that we have cut the budget for the first time in history.
Sir Malcolm Rifkind (Kensington) (Con)
The Prime Minister has been successful in winning the most important reform of the EU budget since Margaret Thatcher in Fontainebleau in 1984. Does my right hon. Friend agree that his achievement, and the success last week of a most acceptable reform of the common fisheries policy, demonstrates how many of the United Kingdom’s objectives can be achieved by serious and professional negotiation with our allies? Does he accept also that our objectives—for example, the working time directive—can be achieved, as he did with the EU budget and as the United Kingdom did with the CFP, by working with the close allies we have on so many of these subjects?
The Prime Minister
I agree with my right hon. and learned Friend, and it is worth paying tribute to Baroness Thatcher, because what makes the British rebate different from the other rebates is that it does not have to be renewed in each seven-year term: it is there as part of the architecture of the budget, and unless you are foolish enough to give some of it away, which the last Government did, it is there and can only be amended by unanimity.
I agree with what my right hon. and learned Friend says about working with allies, but I would also say this, which is relevant to what Margaret Thatcher achieved at Fontainebleau: everyone in the European Union has got to understand that you are prepared to say no if you do not get what you want.
Mr Jack Straw (Blackburn) (Lab)
In welcoming the progress that was made, may I ask the Prime Minister about further efforts to cut the administrative costs of the European Union? He will be aware that, even in Germany, the high cost of salaries and the benefits that officials enjoy is now a matter of great public controversy. What progress does he think could be made on this budget to ensure that those who work for the European Commission are paid a reasonable salary and not one that offends European taxpayers?
The Prime Minister
The right hon. Gentleman is right to raise this. The Commission proposal—heading 5, on EU bureaucracy—was €63 billion over the seven-year-period. That was cut back to €61.6 billion, but it is disappointing. Looking at levels of pay, levels of benefit and some of the special payments that people receive, there is a range of reforms that could be made. We must go on arguing for them in the annual budget process and go on working with allies. I think it is now understood across Europe that there are generosities that simply are not defendable.
Mr John Redwood (Wokingham) (Con)
I congratulate the Prime Minister heartily on a very professional outcome to the negotiations. Will he take this opportunity to ask all party political leaders in this country to urge their MEPs to uphold this deal and to vote for it in the European Parliament? I am sure Conservatives will, but the public would not take kindly to being let down by MEPs after he has done so well.
The Prime Minister
My right hon. Friend makes an important point. All the UK MEPs account for a decent percentage of the European Parliament, so it makes a real difference if socialist MEPs and Liberal MEPs from Britain vote for this budget, and they should do so in an open, transparent manner. The idea of having a secret ballot in a Parliament seems to me completely wrong. The fact is that you send MEPs to Brussels—and, regrettably, to Strasbourg—so you can see what they do on your behalf.
Mr Peter Hain (Neath) (Lab)
But will the Prime Minister confirm that the entire EU budget accounts for just 1% of the gross national income of all 27 European member states? Should not his real priority be to end the disastrous policy of austerity that he and his fellow leaders are imposing right across Europe, and instead kick-start growth and investment to bring hope and prosperity instead of despair and stagnation?
The Prime Minister
I am afraid it is this attitude—a little bit of billions here and a little bit of billions there does not really matter very much—that has got us into so much trouble. Yes, it is 1%, for the first time, of Europe’s GNI, but the fact is that it is many billions of pounds that we pay into the European Union, and it is very important that we keep the budget under control.
Simon Hughes (Bermondsey and Old Southwark) (LD)
May I congratulate the Prime Minister on the outcome of the deal and tell him that my colleagues here and our MEPs are supportive of the deal agreed in terms of the size of the budget? Given that the deal achieved with like-minded partners protected niche areas such as police co-operation, will he join me in saying to people such as the leader of the UK Independence party that they cannot, on the one hand, make arguments that we should not have Bulgarians, Romanians and others flooding our shores, and on the other hand not have the European arrest warrant and arrangements like it, which provide European police co-operation?
The Prime Minister
I very much welcome the commitment by the Liberal Democrats in the European Parliament to support this budget. That is two down—the Conservatives are up for it and the Liberals are up for it—so what about Labour? What are you going to do when all those other socialists in Europe tell you that this is a terrible deal and that we should not be cutting spending? When are we going to see some leadership from the Labour party?
On the issue of Bulgaria, the right hon. Gentleman makes an important point about the European arrest warrant. I would also make the point that it is important that we do have structural and cohesion funds that help countries recovering from decades of communism to raise their living standards. We should be proud of the fact that we do support a European Union in that way.
Keith Vaz (Leicester East) (Lab)
What discussions took place about the justice and home affairs agenda? As the Prime Minister knows, last year 100,000 people crossed illegally from Turkey into Greece. Does he not think that support for Frontex and its ability to deploy the RABITs—Rapid Border Intervention Teams—is essential to protecting the border? Is that going to be preserved?
The Prime Minister
There was not a specific discussion about Frontex, but under the so-called heading 3 the home affairs heading, spending is going up from €12.4 billion to €15.7 billion. That is an area where there are new responsibilities, not least because of the new member states, which is why the spending under that heading is going up.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
May I congratulate my right hon. Friend on demonstrating that when a British leader takes a resolute, reasoned and constructive approach on what is good for Britain and good for Europe, we can succeed in carrying other people with us, and on disproving the craven prediction of the Leader of the Opposition that by articulating Britain’s distinctive vision for the future of Europe we would undermine our influence?
The Prime Minister
I am very grateful to my right hon. Friend for that. What is required is not only building these alliances and making those arguments, but, as I said, making it clear that if you cannot get a reasonable deal, you are prepared to go on negotiating right through the night, as we did, or, as we did in November, saying, “This deal isn’t acceptable. You have to go back and think again.”
Kate Hoey (Vauxhall) (Lab)
May I, on behalf of my constituents, congratulate the Prime Minister on getting this overall reduction in the budget for the United Kingdom, which will be very welcome indeed? Does he agree that it would be very helpful if all MEPs voted for it? Will he outline to the House exactly what will happen should they not do so?
The Prime Minister
Obviously, if we cannot agree a budget, the situation would be very serious. That point was made at the Council repeatedly because, although of course there are emergency arrangements for just continuing with the existing ceilings and rolling them forward, it would be impossible for countries to plan their cohesion spending, their structural fund spending, what roads to build and what networks to put in place. That would be a very unsatisfactory outcome. I hope that the Parliament will look seriously at that, recognise that having no deal would be very bad for all countries that want to see proper planning and proper budgeting, and recognise that this is a good deal and it should accept it.
Mr William Cash (Stone) (Con)
May I congratulate my right hon. Friend on this significant success? He carried it through in line with the most important of his five Bloomberg principles, namely that the root of our democracy and accountability lies in this Parliament, which recently voted for such a reduction. Does that not prove that the UK national interest is best served when the Government and Parliament are at one?
The Prime Minister
I absolutely agree with my hon. Friend. A number of leaders of different European countries kept referring to what they thought the European Parliament would do if we agreed this figure or that figure, so the point had to be made fairly frequently in the Council that we should also, and more importantly, be listening to the individual national Parliaments, because of course it is our Parliaments that have to vote the money. The European Parliament does not have any responsibility for voting the money, and it is to our Parliaments that we should account.
David Miliband (South Shields) (Lab)
I am sure that the Prime Minister is right to say that no deal would be very damaging, both for Europe and for Britain. Could he say something about the part of his statement that referred to a new power for the European Parliament to negotiate flexibilities over years, and I think also over budget heads? On one reading, that is a sensible bit of flexibility; on another, it is a chance for the modicum of reform that has been achieved to be rolled back. That would obviously be very damaging indeed. Could he say a bit more about that?
The Prime Minister
I would be delighted to. First, we have to remember that the answer to the question, “Why is it that the European Parliament has any say over this budget at all?” is the Lisbon treaty, which the right hon. Gentleman’s party, in government, passed. Having said that, and given that we have to try to ensure that there is a deal, and it is better to have a deal than no deal, it is right to say to the Parliament, “It is important you can look at flexibilities between different years—between different budget headings—to try to ensure that spending is planned properly,” but I was very specific, and it was very specifically said at the Council, that this flexibility cannot result in the €908.4 billion ceiling being increased. That cannot go up. Money can be moved around to plan spending more effectively, although, of course, all that has to come back to the Council to be agreed, but the €908.4 billion, in my view, is inviolable.
Richard Ottaway (Croydon South) (Con)
At a time when the democratic link between the EU and the people of the EU is wafer thin, does the Prime Minister agree that any attempt by the European Parliament to ratify the agreement by secret ballot should and would be treated with contempt?
The Prime Minister
My hon. Friend is right. A secret ballot in a Parliament is an extraordinary concept. MPs and MEPs should vote transparently so that their constituents can hold them to account. They have to account not only to their electorates but to their countries, which will suffer if a deal is not passed through.
Mike Gapes (Ilford South) (Lab/Co-op)
Will the Prime Minister confirm that his Government are still in favour of future enlargement of the EU beyond Croatia to countries in the western Balkans and, potentially, elsewhere? Given that this budget lasts until 2020, what provision is there in it for any further accessions of new states after Croatia?
The Prime Minister
We are in favour of further expansion of the EU to the countries of the western Balkans and others, as the hon. Gentleman says. Obviously, there is room in the budget for cohesion and other payments, but the fixed amount of payment ceiling— €908.4 billion—cannot change.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
May I add my congratulations to my right hon. Friend on returning from Europe with a very good deal for the United Kingdom? [Interruption.] I see him wincing. The ongoing, long-term reductions in staff of the European institutions has been close to his heart. Does he now expect to see a reduction in staff, as well as a return to perhaps less generous remuneration and retirement packages than EU officials currently enjoy?
The Prime Minister
I reassure my right hon. Friend that I was wincing at a piece of paper I was passed, not at all at anything she said.
The Prime Minister
That’s for me to know and you to find out.
I absolutely agree with my right hon. Friend that we need to make more progress. It is disappointing how far we have come but I think there is a sense in Brussels that, somehow, its officials are higher beings, and they even referred to civil servants elsewhere as burger flippers, compared with their lofty role. That really needs to be beaten down and we need to recognise that its civil servants have to live within proper budgets, just as ours have to.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I hate to tell the Prime Minister that my predecessor apparently left that piece of paper behind in Munich, so whatever piece of paper he had I hope he brought with him.
Were there any discussions on the proposed bail-out for Cyprus, in particular the suggestion that uninsured deposits in Cypriot banks be written down as losses, which would have considerable effect for people here?
The Prime Minister
There was a brief discussion about Cyprus, not least because President Christofias was attending his last European Council. Herman Van Rompuy gave a moving eulogy and described him as everyone’s favourite communist, which received widespread assent. ECOFIN is meeting and will properly discuss those things. There was not an in-depth discussion about the Cypriot financial situation.
Martin Horwood (Cheltenham) (LD)
I welcome and support the Prime Minister’s statement. I am sure that no horsemeat was on the menu in Brussels, but can he reassure us that Europol’s budget will be protected in the multi-annual framework, given its recent success in identifying 103 people-smuggling suspects and 425 people implicated in football match-fixing, and its emerging role in tackling the cross-border crime involved in the horsemeat scandal?
The Prime Minister
If my hon. Friend looks at heading 3, which is the money spent on home affairs, justice and Europol issues, he will see that that budget is going from €12.4 billion to €15.7 billion. I join him in saying that the horsemeat issue is extremely serious. As my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs said, this is predominantly an issue of food safety, food labelling and truth telling to consumers, but we need to do everything we can to get on top of it.
Hywel Williams (Arfon) (PC)
The Prime Minister wants to repatriate regional policy. As a sign of his good intentions, will he guarantee to make up in full any shortfall in cohesion funding for west Wales and the valleys?
The Prime Minister
Overall, the amount of structural funds that will be coming to the United Kingdom at around €11 billion is a small reduction, but broadly the same—maybe 2% less. We then have to decide how that money is fairly divided up between the different regions. Of course, west Wales is one of the less developed regions so should benefit from that. We will be making final determinations about how the money is divided up when we know more about the overall figures and the proposal has been passed by the European Parliament.
Mr Edward Leigh (Gainsborough) (Con)
May I warmly congratulate the Prime Minister on being more sceptical than the sceptics and delivering an even better deal than the cash freeze that some of us voted for in public last autumn? On the day that Pope Benedict has announced his resignation, surely some people in Europe will come to realise that the ideal of Europe lies in western civilisation, not in a bunch of MEPs voting in secret to preserve their perks and pay.
The Prime Minister
My hon. Friend is entirely right. A secret ballot would be wrong. We need an open ballot, but I would encourage every MEP from right across the United Kingdom, whatever their party, to support the budget, because it is better to have a deal than to have no deal, and this deal is right for Europe’s taxpayers.
Jeremy Corbyn (Islington North) (Lab)
During the summit the Prime Minister clearly had talks with President Hollande about the situation in Mali, but strangely he has made no statement to the House of Commons on this. Can he tell us how long the French troops intend to be there, how many more British troops are going, the cost of them, and above all, the military objective of the British participation in this enterprise?
The Prime Minister
There was a brief discussion about Mali, which President Hollande led, and I did have a discussion with him. I strongly support what the French have done. I do not believe it is their intention to keep their troops there a moment longer than they have to. The intention is to train up African forces from the west African states. Britain is prepared to contribute some 200 troops to that purpose. I spoke this morning to President Goodluck Jonathan of Nigeria to offer our support to train Nigerian troops. It is our intention and that of the French that those west African troops will replace the French troops. Then two things need to happen—a political agreement in Mali that helps to bring that country together, and the rapid training of Malian forces so that they can take responsibility for their own security. No one wants foreign troops to stay in Mali a second longer than is necessary, and that is certainly not our intention.
Andrea Leadsom (South Northamptonshire) (Con)
The Prime Minister has achieved two incredible firsts recently—not just the rolling back of the multi-annual financial framework, but the double majority lock for European banking union voting. Does he believe that this means that austerity has led to a new realism in the European Union? Does he think the support that he has gained for his reforms recently will lead to a greater acceptance of the need for reform and repatriation in achieving a new settlement for Britain as a member of the EU?
The Prime Minister
I thank my hon. Friend for what she says. Two things are happening. First, there is a growing sense right across Europe, not just in the UK, that we must have proper control of EU spending, and that if we are tightening our belt at home, we should not be spending more through the EU. That had strong support.
Secondly, countries are seeing that as the euro requires a further tightening of parts of the European Union, proper arrangements need to be put in place for non-euro countries. The banking union agreement was a really good example of that, and I hope that it is the precursor to more such arrangements, which would be helpful for non-euro countries like Britain.
Wayne David (Caerphilly) (Lab)
Quite a few Members on both sides of the House have been generous to the Prime Minister this afternoon. Will he reciprocate and congratulate his Back Benchers and the Opposition on giving him such a strong negotiating mandate?
The Prime Minister
I thank everyone who had this incredible foresight. I would like to argue today that it was all part of a careful plan. Perhaps on a day like this I will just leave it at that.
Mark Reckless (Rochester and Strood) (Con)
May I congratulate the Prime Minister on a hugely impressive achievement that saves every household £150? Will he confirm that as well as the new ceilings being well below the old ceilings, even more impressively they are below the 2011-12 actual payments, and that as well as gross contributions being lower under this deal, it is conceivable that, despite the Labour rebate giveaway, even net contributions will come down?
The Prime Minister
I am very grateful to my hon. Friend for what he says. It is difficult to foresee net contributions coming down because it would not be right to keep trying to spend more on agriculture, where we do get a rebate, than to spend more on cohesion for the poorest countries in Europe, where we do not get a rebate. As I said, the best way to protect our net position which makes sense is to keep the rebate and keep the overall level of spending down. I absolutely agree with my hon. Friend that the key is to set the ceilings at a level where they are not just coming down but constrain the budget, and that is what we have managed to do.
John Healey (Wentworth and Dearne) (Lab)
Will the Prime Minister welcome the budget agreement to introduce transition regions, which should give a useful boost to economic growth and investment and should be worth an extra £300 million to us in South Yorkshire? Will he pay tribute to the local authorities, led by all political parties, that argued so strongly for this support? Will he explain why the Government remained opposed to transition regions right until the very end?
The Prime Minister
I can confirm that Britain will benefit in terms of transition regions. We always go into these negotiations arguing that we need to look at all levels of spending and all economies, because it is rather hypocritical to argue, “You’ve got to cut the overall spending but you’ve got to protect every single bit of what Britain receives.” The good news is that 11 regions are likely to benefit: Tees Valley and Durham, Lincolnshire, Merseyside, Shropshire and Staffordshire, Highlands and Islands, South Yorkshire, Lancashire, Cumbria, East Yorkshire, North Lincolnshire, Northern Ireland and Devon. Those will all, we hope, be transition regions under the new plans.
Mark Pritchard (The Wrekin) (Con)
May I congratulate the Prime Minister on winning for Britain in Brussels and put on record my thanks and recognition for his clearly formidable negotiating skills? Does not this show that any British Prime Minister is strengthened when there is a Commons vote behind him, whether it be for an EU referendum or an EU budget cut?
The Prime Minister
I am very grateful to my hon. Friend for his support. It is absolutely right to say that the British Parliament speaks clearly about these issues and is listened to carefully in the corridors of Brussels. That is true. We should always respect the fact that it is to this Parliament that Prime Ministers have to answer.
Hugh Bayley (York Central) (Lab)
What did other leaders say to the Prime Minister in the margins about a British referendum? Does he believe that this budget deal makes the case for Britain staying in Europe stronger?
The Prime Minister
I would say that the reaction that I have had to the speech I made a few weeks ago has been, on the whole, fairly positive, because people can see that it is not some simplistic argument about an immediate referendum—it is a well-argued case, I would say, for how Europe should reform and how we should secure Britain’s place within it. These discussions show that Britain can get good deals done with partners in Europe having made a speech on that subject. I think that actually it strengthens Britain’s place in Europe.
Jane Ellison (Battersea) (Con)
May I congratulate the Prime Minister on what The Economist blog described as a “budget blinder”? Does this give him heart as he pursues the wider reform agenda to which he has just referred?
The Prime Minister
I thank my hon. Friend for her support. This is just one of many steps that we need to take to reform the European Union, all of which should be good for other countries in Europe, as well as for Britain.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I congratulate the Prime Minister. [Hon. Members: “Hear, hear!”] Is it still his understanding that the €36.8 billion described as outside the multiannual financial framework will lead to additional British payments, as he has previously warned, and what estimate has he made of the cost to the UK of those additional payments?
The Prime Minister
There has always been off-EU budget spending and it is important that we control that as well. The Germans have been particularly focused on this agenda and have made some very good proposals for savings there, too.
Mr David Nuttall (Bury North) (Con)
I congratulate the Prime Minister on his statement. Does my right hon. Friend agree that the fact that the United Kingdom gets to have a veto on EU spending limits only once every seven years, and that 4,365 eurocrats are paid more than either my right hon. Friend or the German Chancellor, might just be a couple of the reasons why millions of British people have come to the conclusion that this country would be better off outside the EU?
The Prime Minister
My hon. Friend is entirely right that it is only once every seven years that we have the unanimity lock that enables us to achieve a deal such as this one. I do not share his view that Britain would be better off outside the European Union, but I accept what he says: we need to convince people that Europe and the bureaucracy live on a tight budget. We have taken some steps forward, but I am not satisfied with where we have got to with regard to the costs of the Commission or the other central costs. Six per cent. is still too high and, just as Government Departments here have made and are planning huge savings between 2010 and 2015, the same should apply in Brussels, too.
Kelvin Hopkins (Luton North) (Lab)
The future of the euro remains extremely uncertain. Indeed, a wobble in the markets only last week shows how brittle it is. Are there still European politicians who believe that the euro was a good idea and that it is now safe?
The Prime Minister
The answer is yes. As I have said—we have had this exchange before—I have never supported Britain’s membership of the euro and never will. We are better off outside it, but we have to understand the fact that, for some European leaders and politicians, the euro is an article of faith and they will do everything they can to save their currency. That is why I think we should be planning on the basis of change in Europe; the eurozone requires changes to make sense of its currency, and we should use that opportunity to win changes that are good for countries outside the euro, too.
Mr Henry Bellingham (North West Norfolk) (Con)
This is a superb deal and the Prime Minister deserves many plaudits. However, one area that we surely need to look at again is the EU External Action Service. Does the Prime Minister agree that the European EAS should not be competing with large European countries such as Britain, France and Germany, but complementing us and, therefore, opening missions in those countries where the big countries in Europe are under-represented or not represented?
The Prime Minister
My hon. Friend is entirely right. There is a danger that the European External Action Service, which was, of course, part of the Lisbon treaty that he and I opposed, will start duplicating what is done by individual countries. We need to work very hard to make sure that it is adding value rather than just displacing it.
Nick Smith (Blaenau Gwent) (Lab)
Given the significant difference between the payment ceilings and the commitment ceilings, what does the Prime Minister think is the likelihood of the EU having to increase the annual budgets beyond the level set out in the multiannual financial framework on a year-by-year basis?
The Prime Minister
The hon. Gentleman asks an extremely important question. Over the last MFF, there was something like a 7% gap, on average, between commitments and payments, so I would argue that a 5% gap is perfectly safe. I think that what we will see is lots of efforts by the institutions of the European Union, now that they are on a tighter budget, to try to spend their money more effectively and to try to use the headroom available. That is perfectly understandable and it might lead to better financial planning, but we can be confident that the ceilings are fixed and that, as a result, the spending will be less.
Jacob Rees-Mogg (North East Somerset) (Con)
There is rejoicing in Somerset at the good news that the Prime Minister has brought back. Could he tell the House what example this sets for the renegotiation and whether it bodes extremely well for our getting rule back to Britain?
The Prime Minister
I thank my hon. Friend for his support. I am glad to know that the good people of Somerset are in a hearty mood. This deal shows that those who build alliances, make strong arguments and stand up for what they want can get a good deal in Europe.
Penny Mordaunt (Portsmouth North) (Con)
We have just heard, unbelievably, the Leader of the Opposition claiming credit for the Prime Minister’s achievement. I know that the Prime Minister is a charitable fellow so, given the vocal support of the shadow Chancellor, perhaps we could give them a little credit if they manage to get their socialist MEPs to support the deal.
The Prime Minister
I am afraid that that is the key test. It is one thing saying something in this Parliament. The real test of leadership is whether the Leader of the Opposition can get not only his own socialist MEPs, but all socialist MEPs to support the deal. If he thinks that it is such a good idea and if he is such a leading player in the socialist group, surely he will be able to convince his MEPs, but we have heard not a word about that.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
I congratulate the Prime Minister on rejecting the calls for a further review of our rebate. Does he agree that it is high time for the Labour party to apologise for giving away nearly half the rebate when it was in power, which is costing the country billions of pounds?
The Prime Minister
My hon. Friend makes a good point. I am sorry to disappoint him, but I am afraid that the Labour party has not learned the lesson. Its group in the European Parliament, the Group of the Progressive Alliance of Socialists and Democrats, has called for an end to all rebates, including ours. Its EU budget reform submission stated that the socialist and democratic group
“calls on the Commission to propose to put an end to all form of rebates”.
Far from learning from its mistakes, the Labour party would like to do it all over again.
Mr Robert Walter (North Dorset) (Con)
A number of newspapers in this country have been “banging on” about Europe for many years and have often been cynical about our influence. Does the Prime Minister share my disappointment that on Saturday morning, a number of newspapers, including The Daily Telegraph, relegated his victory to a small article on page 8, while the Financial Times heralded it as a “significant victory” and even Le Figaro described it as a “masterstroke”?
The Prime Minister
I am very grateful to my hon. Friend. I will have to spend a bit more time studying the European press. I hope that the people can see that this is a good deal for Britain and for taxpayers across Europe.
Neil Carmichael (Stroud) (Con)
Does the Prime Minister agree that this excellent budget, which is good for both Britain and Europe, paves the way for Britain to continue to develop alliances and to set sensible targets to reform Europe in a way that creates a more competitive business environment?
The Prime Minister
I agree with my hon. Friend. It is important that we continue the work of shrinking the agriculture part of the budget and growing the part of the budget that goes towards research and development and investment, because we want a modern European economy that can win in the global race.
Mr Peter Bone (Wellingborough) (Con)
In 2011, the Prime Minister vetoed the EU treaty. Earlier this year, he made the Bloomberg declaration, promising an in/out referendum. Last Friday, he forced the EU to cut the budget. Is he not proving that he is a traditional Tory? Surely this statesman is not the heir to Blair, but the heir to Thatcher.
The Prime Minister
I am very grateful to my hon. Friend for that—for those remarks. I am glad that I have made him and, I hope, Mrs Bone happy on this occasion.
Margot James (Stourbridge) (Con)
I congratulate the Prime Minister on a double first last week: the first real-terms cut to the budget and the first time that the overall budget has been less than 1% of GDP. That gives the lie, does it not, to the accusations of the Labour party that Britain has been isolated in Europe ever since he used the veto just over a year ago? Is it not a combination of the red lines that he has drawn, the negotiating strategy and the building of alliances that has led to this successful outcome?
The Prime Minister
I thank my hon. Friend for her remarks. As with the fiscal treaty, it is important that if we cannot accept something and do not want to accept something, we are prepared to say no. It is also vital to build alliances. Britain worked closely with the Swedes, the Danes, the Dutch and the Germans to build a strong alliance for a good deal for Europe’s taxpayers.
Chris Heaton-Harris (Daventry) (Con)
I congratulate the Prime Minister on his exploits last Thursday and Friday and on the build-up work to the summit. He will recall that many people told him that what he achieved in Brussels could not be done. Indeed, one said that there was “absolutely no prospect” of Britain securing a cut in the EU budget. What conversations has my right hon. Friend had with the Deputy Prime Minister since his return from Brussels?
The Prime Minister
Although the Eastleigh by-election is now under way, to be fair to the Deputy Prime Minister there was agreement that we were going to take a very tough line, and if we could not get a good deal we were able to say no.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
May I join the many voices of congratulation for my right hon. Friend and say how much I am enjoying this statement? Not only has he brought back a good deal for the British taxpayer, but it was a good day for the British Parliament—this House voted for a cut, and he delivered it.
The Prime Minister
My hon. Friend is absolutely right. It is important that other European leaders recognise that when we sit round that table, we listen not to the European Parliament, which has its legitimate views, but to our own Parliaments. That goes for the British Parliament and also for the German, Swedish, Dutch and Danish Parliaments. All Parliaments of the net contributors must be listened to.
Mr James Clappison (Hertsmere) (Con)
May I join the congratulations to the Prime Minister on his personal achievement in bringing back a great deal for Britain? For years, the European Union has talked about its growth agenda, but is not the fact of the matter that EU regulation and the EU political project are holding back, rather than promoting, growth in Europe?
The Prime Minister
My hon. Friend makes an important point. Although there are things in the EU budget that can help growth—clearly, if we invest in the brilliance of British universities, that is welcome—we also need to drive the agenda of completing the single market and knocking out unnecessary regulation, as my right hon. Friends in the Cabinet are doing.
Angie Bray (Ealing Central and Acton) (Con)
May I also add my congratulations to those coming from both sides of the House on this significant result in Brussels? I note that the shadow Chancellor is doing his best to cheer himself up. Does my right hon. Friend agree that while we have a Conservative Prime Minister negotiating on behalf of this country, the rebate is safe?
The Prime Minister
Absolutely; I can confirm that I would never agree to changes in the rebate and I think that is very important—[Interruption.] No, never. I would not agree to changes in the rebate; I think that would be completely wrong. Margaret Thatcher got a fantastic deal, and the fact about the rebate is that it lasts through all MFF periods, rather than having to be renewed on every occasion.
It is interesting that the shadow Chancellor is now so in favour of this. Only weeks ago he was saying that we need reform of the budget but that,
“David Cameron…has failed to build the alliances needed to deliver it.”
That was his view, but as he cheers away—I am expecting one of his lasagnes before too long.
George Freeman (Mid Norfolk) (Con)
The people of this country waited nearly four decades for a British leader strong enough to promise them a say on the European juggernaut and to stop the budget from growing, so may I congratulate the Prime Minister on delivering both in nearly three weeks? I particularly welcome the shift of resources to research and development, which will do the economy and Britain a world of good. Le Figaro has described the Prime Minister as a tenacious negotiator, fuelled, no doubt, by Haribo and other great British exports. Does he agree that that suggests that the clarity of his Bloomberg speech reinforces rather than weakens his negotiating position?
The Prime Minister
I am very grateful to my hon. Friend for his remarks. It is because that speech is a proper agenda for reform in Europe, and about all of Europe not just Britain’s relationship with Europe, that it gives us a good platform to take forward talks with our partners.
Mr John Baron (Basildon and Billericay) (Con)
I commend the Prime Minister on this positive development that gives expression to the will of this Parliament. Given that Opposition concerns about isolation prove unfounded, will the Prime Minister say a little more about the longer term ramifications when it comes to negotiations ahead of the EU referendum?
The Prime Minister
As I have said, this shows that we should have a very clear bottom line and set of objectives that we want to achieve, and that we must work very closely with partners and allies to try to build up our arguments and alliances. That is what we have done over the single market, where a huge number of countries are backing our view. That is what we are doing over the EU trade deals—I hope we can make further progress on those—and that is also what we must do with our EU reform package.
Mr Christopher Chope (Christchurch) (Con)
May I thank my right hon. Friend for having listened to the House on this issue, and congratulate him on his good judgment in not taking the Deputy Prime Minister with him to negotiate? May I ask him to build on his success by organising an independent audit of the costs and benefits of our membership of the European Union?
The Prime Minister
I am very grateful to my hon. Friend for his support on this issue. As for the costs and benefits of membership, I think the balance of competences review that will be carried out by the Foreign Office will give everyone the opportunity to make their points about which areas of European endeavour are in our interest and which are not. We should allow that debate to take place.
Mr Crispin Blunt (Reigate) (Con)
This remarkable negotiating triumph follows hard on the heels of the Prime Minister’s referendum promise which has done so much to improve his negotiating hand to further advance British and European interests in Europe. Will he undertake not to take advice from the Opposition, who told him that he was too isolated in Europe to achieve these objectives and whose MEPs are about to vote in secret against the synthetic posturing of the Leader of the Opposition—one of the things that brings the European Union into such disrepute?
The Prime Minister
My hon. Friend makes a good point. In November, the shadow Chancellor said that
“David Cameron has failed to persuade other European leaders to deliver the reform of and real terms cut in the Budget”;
and we were accused by the shadow Foreign Secretary of being “isolated and marginalised”; but importantly, the Europe spokesperson said that
“If he does get a good deal for British taxpayers then we will commend him for that”.
Chris Kelly (Dudley South) (Con)
I heartily congratulate my right hon. Friend who has shown that he is an adept negotiator and demonstrated resilience without the need to wield a handbag. Can he suggest any ways to improve EU negotiations so that they do not involve all-night sittings that are designed to wear down Heads of Government?
The Prime Minister
For the record, may I say that I do not have a handbag, which will reassure my hon. Friends, some of whom I know I have upset recently. I promise that I do not have a handbag and I have no plans to get one—[Interruption.] No, neither a manbag nor a handbag.
On the issue of how the EU does business, I agree that these all-night sittings are not a sensible way to discuss rationally things such as budgets. We need to try to find a way to start our work in the morning and try to complete it, rather than starting in the evening and going all the way through the night.
Mr Julian Brazier (Canterbury) (Con)
In congratulating my right hon. Friend on this triumph, may I suggest to him that the bold bottom line on his long-term renegotiation of our role in Europe seems to have focused some minds wonderfully among other net contributors to the budget?
The Prime Minister
I thank my hon. Friend for his support. There is support in Europe for reform and for the agenda that we have set out, but we will have to work extremely hard to build alliances and win friends in order to deliver what I think would be good for Europe, but also good for Britain in Europe.
James Morris (Halesowen and Rowley Regis) (Con)
May I congratulate the Prime Minister on his historic success? Does he agree that not only has he delivered a budget cut, but this is an important moment for growth in the European Union, with important emphasis on research and development, and competitiveness?
The Prime Minister
My hon. Friend is entirely right. That is why, within a budget that needs to be properly constrained, we need changes to the common agricultural policy in order to deliver more money for research and development and things that can help growth in Europe. We have achieved that: I wish we had gone further in that regard, but we can still make that argument in individual budget negotiations.
Mr Robert Buckland (South Swindon) (Con)
May I echo the support for my right hon. Friend and the work that he and his ministerial team have done, not only in the last week but in the months preceding these negotiations—engaging with countries such as Germany, building alliances, showing that Britain has real influence in Europe and being positive?
The Prime Minister
My hon. Friend is absolutely right. There is strong support for the different agenda items that we want to pursue—whether that is constraining properly the European budget, completing the single market or making sure that we are having the impact that we want in terms of terrorism—and we should build those alliances and work accordingly.
Henry Smith (Crawley) (Con)
I congratulate my right hon. Friend on the great job that he has done, not only for the British taxpayer but for the European taxpayer. One of the problems with the European Union is that it is often far too inward looking. Can he say what progress was made at the European Council on free trade agreements in a global sense?
The Prime Minister
The conclusions agreed at the Council are that we will open discussions with Japan on its free trade agreement, we are enthusiastic about the potential for an EU-US trade deal, and that we are close to completion on the Canada free trade agreement. The paper submitted to the Council was one of the most pro-trade, pro-reform papers I have seen, and that is thoroughly to the good.
Alun Cairns (Vale of Glamorgan) (Con)
I, too, congratulate the Prime Minister on the significant success he achieved at the European negotiations. Does he share my confusion regarding the Opposition’s position? The Leader of the Opposition and the shadow Chancellor are seeking to claim to credit, yet the most senior Labour politician in government, the First Minister of Wales, is critical and is calling for a higher EU budget settlement. Does the Prime Minister share my confusion?
The Prime Minister
I have to admit that it is confusing, because of course Labour MEPs voted against a freeze in the EU budget when they were given the opportunity. What we need to hear from the Opposition is that they will show some leadership and tell their MEPs that this is a good deal for Britain and that they will back it. Let me give the Leader of the Opposition another chance. Will his MEPs be backing this budget: yes or no? [Interruption.] That was a no. [Interruption.]
Mr Speaker
Mr Balls, you are barking in the most bellicose fashion at the Government Benches. I know that whenever you do anything you do not it quietly, but a degree of restraint would be appreciated.
Mr Philip Hollobone (Kettering) (Con)
I am sure my constituents in Kettering would want me to congratulate the Prime Minister warmly on negotiating a real-terms cut in the EU budget. Will he take this opportunity to name and shame those of our European partners who most vociferously resisted attempts to cut the administrative budget?
The Prime Minister
I am afraid to say that the people who most oppose a cut to the administrative part of the EU budget were in the European Commission itself. They made a series of arguments about the extra roles and duties they had to take on, but I do not believe that they have looked properly at what member states have done in terms of pay freezes and pension and allowance reforms. They simply have not looked at what countries are having to do and what they should be doing in Brussels.
Julian Smith (Skipton and Ripon) (Con)
With this wonderful budget the Prime Minister has led the pack on trade and growth. Will he continue to use his pole position to ensure that the Japan and US mega-deals are nailed as soon as possible, as they will mean billions for the European economy?
The Prime Minister
I will certainly do that. Paragraph 7 of the conclusions talks about support for a comprehensive trade agreement with the US, looks forward to the launch of negotiations with Japan, and expects the negotiations with Canada to be concluded very shortly. Britain will continue to lead on this issue.
Philip Davies (Shipley) (Con)
I also congratulate the Prime Minister. He has shown clearly the difference between what happens when a Conservative Prime Minister negotiates for this country and when a Labour Prime Minister negotiates for this country. He has done far better, I might add, than any of the unlikely leadership bidders we have seen on the Conservative Benches in recent weeks, too. Will he set out to the House clearly what he expects the UK’s gross contribution and net contribution to be in each of the next seven years?
The Prime Minister
I am very grateful to my hon. Friend for his steadfast support. The difficulty in answering his question directly is that until we have the exact breakdowns of spending on agriculture, structural funds and cohesion in each year, it is difficult to work out exactly how much the rebate will deliver. The rebate does not operate on the cohesion spending in eastern Europe, but it does operate on agriculture spending. It is only when we know those parameters that we can work out the position. I have been straightforward and said that the British contribution is likely to go up because of the changes to the rebate agreed by the previous Government. However, they will go up by less than they would have done, because we have constrained the budget and because we have kept the rest of the rebate intact.
Michael Ellis (Northampton North) (Con)
I congratulate the Prime Minister. Will he note that the shadow Chancellor has now cheered the Prime Minister more this afternoon than he has cheered his own leader in the past year? What does the Prime Minister make of the shadow Chancellor’s claim in the Yorkshire Post this weekend that Labour has
“absolutely not ruled out a referendum”?
Mr Speaker
I say to the hon. Member for Northampton North (Michael Ellis) that the Prime Minister is responsible for many things, but he is not responsible for the policy positions of the shadow Chancellor and he is certainly not responsible for what quotes are given or attributed to the shadow Chancellor in the Yorkshire Post. However, we will hear a sentence from the Prime Minister.
The Prime Minister
All I can do, Mr Speaker, is reflect on your ruling that the shadow Chancellor is indeed barking—and for clarification, I do not mean barking as in Barking and Dagenham; I mean barking as in woof.
Charlie Elphicke (Dover) (Con)
I also congratulate the Prime Minister on achieving an outstanding deal—we can tell it is outstanding because the French and the Labour party are agreed and are congratulating him on his negotiating stance.
I want to ask the Prime Minister about structural funds, which are very important to many regions of the country, including east Kent. Will he ensure that if the map for the UK is to be changed, Members of Parliament for the relevant areas will be consulted and will have a chance to say where they stand?
The Prime Minister
I am grateful to my hon. Friend for what he says. Under the new arrangements, there will be three different types of support for the regions. There will be the less-developed regions whose GDP per capita is less than three quarters of the EU average. In the UK, Cornwall and the Scilly Isles, west Wales and the valleys will qualify for that support. Then there are the transition regions whose GDP per capita is between 75% and 90% of the EU average—that is the list I read out earlier. However, all regions can of course receive some structural funds for competitiveness and employment goals. We will be able to make more details available as the full figures become available.
Jason McCartney (Colne Valley) (Con)
I congratulate the Prime Minister on another successful victory for the UK in Europe—hot on the heels of Yorkshire’s audacious bid for the Tour de France, which we will now be hosting next July. On the EU budget, does he agree that there is a lot of overlap and duplication in foreign affairs and defence, making them potentially big areas for budget savings?
The Prime Minister
First, I join my hon. Friend in welcoming the fact that the Tour de France will start in Yorkshire. I heard a very good presentation in Leeds. It is an extremely exciting course, and I am sure that it will bring many spectators and enormous support for west Yorkshire.
In response to my hon. Friend’s question about the budget, I think that further works needs to be done on some of the smaller headings—administration and others—where there is room for further savings.
Charlotte Leslie (Bristol North West) (Con)
Given Labour’s record of giving away the UK rebate, given that Hansard is littered with its Members wittering on about us being isolated in Europe, given that the Prime Minister has pledged to give the British people a say on our future in Europe, which Labour denied them, and given that he has now achieved a historic budget negotiation success, what would he now say to Labour?
The Prime Minister
I hope that Labour will turn to its friends in the European Parliament and say to the socialist MEPs, “This is a good deal for Europe and you should vote for it.” Let me give the leader of the Labour party another chance, because this is important. [Interruption.] Oh, he cannot intervene on his own MEPs. What is the point of a Leader of the Opposition, if they cannot lead on occasion?
Rehman Chishti (Gillingham and Rainham) (Con)
First, I congratulate the Prime Minister. Despite the success of the wave of change in north Africa and the middle east, some of those countries, such as Egypt, Libya and Tunisia, are more susceptible to extremism and radicalisation. Were these countries discussed and was any action proposed?
The Prime Minister
I thank my hon. Friend for his support. As I said earlier, there was a discussion specifically about Mali, but there is more to be done to support democracy and the building blocks of democracy in countries such as Egypt and Libya. The EU, with its partnership and neighbourhood funds, has a role to play there.
Andrew Bridgen (North West Leicestershire) (Con)
Has my right hon. Friend received an apology from the shadow Chancellor, who, as we were reminded, said in the Chamber last October that the Government had failed to build the alliances needed to deliver a real-terms EU budget cut?
The Prime Minister
I am not sure the shadow Chancellor really does apologies, but it has been great to be cheered to the echo by him during today’s statement. I will not expect it every time, but it has been a pleasure.
Justin Tomlinson (North Swindon) (Con)
As a business owner, when negotiating with suppliers I was always able to drive down costs when there was a clear alternative. On the same principle, was my right hon. Friend’s hand strengthened by the UK’s Eurosceptic stance ahead of the 2017 referendum?
The Prime Minister
There was an understanding, particularly among the net contributor countries, that it was time for proper budget discipline and that previously countries had gone to these MFF negotiations and not focused on the fact that if we were controlling our budgets at home, there was a case for doing it properly in Europe. I am delighted we were able to achieve that.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Today is indeed a triumph for my right hon. Friend the Prime Minister and I congratulate him—also, I might say that his wife designs very nice handbags, albeit out of my price range. Does he agree with the shadow Chancellor, who told the Yorkshire Post:
“If we allow ourselves…to be the ‘status quo party’ on Europe, or the ‘anti-referendum party’…we’ve got a problem,”
and that
“we would be pretty stupid to allow ourselves to get into either of those positions”?
The Prime Minister
My hon. Friend makes a very good point: we have a clear plan in place for sorting out reform in Europe and putting that reform to the British people. The accusation against us is that this could cause uncertainty, but the argument I would make is this. What could be greater uncertainty than Labour’s position? One minute the Opposition are in favour of a referendum and the next minute they are against it. They really have to sort out their position, come to the House and tell us what it is.
Andrew Stephenson (Pendle) (Con)
I am delighted to be the last hon. Member to offer my congratulations to the Prime Minister on securing such an historic victory in Europe. After an hour and a quarter of delivering his statement and answering questions in the Chamber, and given Labour’s woeful negotiating skills in Europe, can my right hon. Friend tell me whether we are any closer to knowing whether the Leader of the Opposition will be able to convince his MEPs to vote for this deal?
The Prime Minister
I do not think we are any closer to getting an answer. What we have heard though is good news. The Liberal Democrats will be voting for this budget in the European Parliament and the Conservatives will be voting for it in the European Parliament too. We now need to hear from the Labour party, not only about its own MEPs, but about socialists right across Europe. Labour should be convincing them.
Social Care Funding
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Health (Mr Jeremy Hunt)
With permission, Mr Speaker, I would like to make a statement on the funding of care and support in England.
As we get older, none of us can have any way of knowing what care needs we will eventually face. Some will be blessed with a long and healthy life, but many others will be less fortunate. Today, many older people and people with disabilities face paying the limitless, often ruinous costs of their own care with little or no assistance from the state. Although those with assets of less than £23,250 receive support, those with assets above this level receive none. That is desperately unfair, particularly for those who have worked hard all their lives to pay off their mortgage, save for their future or have something to pass on to their loved ones, only to see their property sold and their savings wiped out. This is something that happens to more than 30,000 people every year or 100 people every day.
The system we have also sends out the wrong message: that people are better off not saving for their future because any savings may only disappear in a puff of smoke. So today I can announce the Government’s radical plans to transform the funding of care and support in England—bringing a new degree of certainty, fairness and peace of mind to the costs of old age, disability and living with long-term conditions, while ensuring that the greatest level of financial support goes to those with the greatest need. We propose to introduce a cap on an individual’s financial contributions towards the cost of care and a significant increase in the level of assets a person may hold and still receive some degree of support from the state.
In 2010, this Government asked economist Andrew Dilnot to look at the whole issue of funding for care and support. The independent Dilnot commission published its recommendations in July 2011. In response to those recommendations and following extensive engagement with the care and support sector, we published the care and support White Paper and the progress report on funding reform in July 2012. In the progress report, we accepted some of Andrew Dilnot’s main recommendations, including those for a consistent, nationally set eligibility threshold for care and support, and universal deferred payments, whereby no one will have to sell their home in their lifetime to pay for care costs. I would like to take this opportunity to thank Andrew and his team for their excellent work.
A core principle set out by the Dilnot commission was that people should contribute to the costs of their own care, but those costs should be limited and protected against the potentially catastrophic costs of care. That should come through a cap on those costs and an extended means test. One person in 10 will be faced with care costs in excess of £100,000, with a small number facing costs significantly higher still. To give everyone peace of mind, from April 2017, we will introduce a cap on the amount that someone over state pension age will be liable to pay.
The Dilnot commission’s original suggestion was for a cap of £25,000 to £50,000 in 2010-11 prices—the equivalent of £30,000 to £61,000 in April 2017 prices. Despite the extremely challenging economic situation in which we find ourselves, we have come as close to that range as possible. The cap will be set at £61,000 in 2010-11 prices or £75,000 once it is introduced in April 2017.
The intention is not that people should have to pay up to £75,000 for their care costs, but that by creating the certainty that this is the maximum they will have to pay, they can then make provision through insurance or pension products so that they are covered up to the value of the cap, thereby reducing the risk of selling their home or losing an inheritance that they have worked hard to pass on to their family. Young people who already have care needs when they turn 18 will now receive free adult care and support when they reach 18. People who develop a care need after 18 but before state pension age will be protected by a cap that is below the £75,000 threshold.
The other measure we propose is to increase significantly the amount of assets a person can hold and still receive financial support for their residential care home costs. Currently, this is set at £23,250. If a person has assets valued above this level, including in some circumstances the value of their home, they receive no support. The Dilnot commission recommended this threshold be raised dramatically to £100,000 in 2010-11 prices. We accept this recommendation.
From April 2017, the threshold will be increased so that those with assets worth £123,000 or less, equivalent to Dilnot’s recommended level, will all receive some degree of financial support for their care costs. People with the fewest assets will receive the most support. This will, for the first time, provide financial protection for those with modest wealth, while ensuring that the poorest continue to have all or the majority of their costs paid.
Everyone will benefit from the peace of mind that a cap will bring. The introduction of a cap and the extended means-tested support will help many people in the most challenging circumstances. We expect up to 16% of older people who need care to face costs of £75,000 or more—but, of course, none of us knows whether we will be in that 16%. Everyone will benefit from the peace of mind that these changes will bring, and by 2025 up to 100,000 more older people will receive financial support with their care costs as a result.
The Chancellor and the Treasury have rightly insisted that we identify how we pay for the additional costs of these proposals. In this day and age, making promises that cannot be paid for makes those promises meaningless —so we have identified exactly how to pay for them. These reforms will cost the Exchequer £1 billion a year by the end of the next Parliament. With the agreement of the Chancellor, these will be met in part by freezing the inheritance tax threshold at £325,000 for a further three years from 2015-16. The Chancellor and the Chief Secretary have agreed that the remaining costs over the course of the next Parliament will be met from public and private sector employer national insurance contributions revenue associated with the end of contracting out as part of the introduction of the single-tier pension.
These two new proposals join others previously announced when we published the draft care and support White Paper last summer, and they include from 2015 the ability of people to defer the payment of residential care costs so that no one need sell their own home to pay for them during their lifetime. Also from 2015, a national minimum eligibility threshold will be introduced to end the lottery of local access that can see support provided to someone in one area, but not in another.
Taken together, today’s proposals and those already set out in the draft Care and Support Bill represent a new era of support for the elderly and disabled in England. Thanks to the certainty these proposals introduce, rather than people feeling they have to hoard every penny in case the very worst should happen, or that they are powerless and there is no point in saving at all, people will be able to plan and prepare sensibly for the future. They will be supported by a wider range of financial products becoming available in the market, which will be designed to help people to plan and prepare for their later years and to reassure them about how much they will pay. We will work with the care and support sector—with local authorities, charities, care providers and individuals—and with the financial services industry to develop the plans and introduce them practically.
Our society is ageing. By 2030, the number of people over 85 will double, and the number of people with dementia will exceed 1 million. As the number of older people with such long-term conditions increases, we need to become a society in which people prepare and plan for their social care costs as much as they prepare and plan for their pensions. Sadly, that is an issue that Governments of all colours have long failed to tackle.
While many other things need to be done to prepare for an ageing population, these reforms herald an historic change in the way in which care and support are funded. The economic circumstances are challenging, but these commitments demonstrate our determination to help people who have worked hard, saved, and done the right thing to prepare for the uncertain hand that fate deals all of us in old age. Because we are introducing these reforms within the time scale and at the thresholds set out, they will also be sustainable and consistent with our overriding priority, which is to reduce the deficit inherited from the last Government.
We want our country to be one of the best places in the world in which to grow old. These plans will give certainty and peace of mind in regard to the cost of care, ensuring that we can all have the support that we need without facing unlimited costs, while also ensuring that the most support goes to those in the greatest need.
I commend my statement to the House.
Andy Burnham (Leigh) (Lab)
I thank the Secretary of State for his statement, and for early sight of it. I agree with him that our current social care system in England is the worst of all possible worlds: a cruel lottery whereby people go into later life with everything for which they have worked on the roulette table, and the most vulnerable are always the biggest losers. That needs to change.
The Secretary of State has tabled a modest plan that will make the system fairer than it is today, and we congratulate him on that. We welcome elements of what he has announced today. A cap of £75,000 will protect people from the catastrophic costs of care, and raising the means-test threshold will help more people on lower incomes to obtain some help with care charges. This is a step forward, but it is a faltering one. The House has been presented with a flawed prospectus today. Vulnerable people will still face rising care charges and homes will still be lost, notwithstanding valiant attempts to put the best possible spin on things in the weekend media. Yesterday the Deputy Prime Minister made the big claim that the Government were going to “crack” the care “conundrum”. Today, when we are faced with this meek package, that sounds suspiciously like overselling. Stephen Burke, the director of United for All Ages, has described the cap as
“the dampest of damp squibs”.
Yesterday, on The Andrew Marr Show, the Secretary of State said:
“I've been hauled before the Speaker before and I wouldn’t want that to happen again and so I don’t want to go into the details.”
Now that we have heard the details, perhaps the Secretary of State could explain on which part of his statement the media had not been pre-briefed. It is disappointing that the media rather than the House were briefed first on a statement that was of such importance to so many people. It is also disappointing that the Government have abandoned any effort to build a cross-party consensus before rushing to announce its proposals, and that they have chosen to rewrite the Dilnot report with figures of its own, breaking its careful logic.
More specifically, there are four problems with what has been announced today, and I will address each in turn. First, it fails the fairness test. We will only have a durable solution if it can answer this question: will it help every person and every couple to protect what they have worked for, whatever their wealth and savings? I am afraid that the answer is no. According to Demos, a £35,000 cap would benefit about 3.2 million pensioners. A per-person cap of £75,000 will benefit just 1.4 million. For the average couple, the cap is £150,000. That might be enough to protect detached houses, but it will not protect the average semi-detached home in large parts of England.
As Andrew Dilnot said today, the cap
“is higher than we would have wanted —£11,000 higher than the top end of our range—and I regret that”.
Will the Secretary of State confirm that people with modest to average homes and savings are not protected under his plan? Is this not a plan for the few and not the many, and further proof that we are not all in it together?
The Secretary of State claims that insurance companies will step in with new products to help more people to protect their assets, but in evidence to the Health Committee, the Association of British Insurers said that it did not believe that the capped cost model would result in a market for pre-funded care insurance. So what further confidence can the Secretary of State give the House today that such a market will in fact emerge?
Secondly, the plan is at best a partial solution. With this decision, the Government have prioritised the funding of a cap on care costs with new money, over and above addressing the crisis in council care budgets. Will the Secretary of State confirm that this was against the advice of Andrew Dilnot to the cross-party talks? In practice, it will mean that vulnerable people will continue to face rising charges, as councils put up fees to cope with the growing shortfall in their budgets, making it more likely that those people will, in time, have to pay right up to the new £75,000 cap. To many people, that will not feel like progress.
More than £1.3 billion has been cut from local council budgets for older people’s care since the coalition came to power. Care charges are rising above inflation, and councils are warning that, by 2024, they will be overwhelmed by the costs of care. Does the Secretary of State accept that forecast, and if he does, how will the plans he has announced today help to address it? If he fails to face up to the current crisis in council funding, is it not the case that, with care charges rising, today’s announcement will feel like a con? It is true that the Government have raised the capital threshold, and I have said that we welcome that, but can the Secretary of State give the House any confidence that the extra support that people receive through a more generous means test will not be more than offset by increasing care charges caused by collapsing council budgets?
What people might not know is that the cap reflects not what people actually pay for care but a local authority average, and that it does not include accommodation costs. That was not mentioned in the Secretary of State’s statement. Will not people feel conned if the Government do not make that clearer?
The third problem is that this package disguises yet another coalition U-turn, this time on inheritance tax—[Interruption.] It is ironic, I must say. In 2007, a flagship pledge was made to increase the inheritance tax threshold to £1 million. Just eight weeks ago, the Chancellor said that he would increase the threshold in two years’ time. What has happened in the past two months to make him change his mind? Is not this the quickest coalition U-turn yet? The irony will not be lost on people that the Government are now increasing death taxes to pay for their plan. The Secretary of State has also said the rest will be made up from national insurance. Does he think it is fair to ask the working age population to pay for something else, rather than older people?
Finally, the proposal fails to meet the scale of the challenge of the ageing society. It will not lead to more integration of care. Instead, it will entrench the separation between two separate systems: a free-at-the-point-of-use NHS and charged-for social care. Would it not have made more sense, rather than developing these piecemeal plans in isolation, to have set them out as part of a single vision for a sustainable health and care system in the 21st century? The Secretary of State has made progress, but he has missed an opportunity to produce a long-term plan that is fair to everyone and built on cross-party consensus. He has settled for a timid solution when what older people needed was a far bigger and bolder response.
Mr Hunt
Really! The right hon. Gentleman talked about a flawed prospectus, but what we had from the Labour Government during their 13 years in power was no prospectus whatever. This was in Labour’s manifesto in 1997, then the Government had a royal commission in 1999. There was a Green Paper in 2005, followed by the Wanless review in 2006. The problem was going to be solved in the comprehensive spending review of 2007, but then we had another Green Paper in 2009. Let us compare that with a coalition that commissioned a report the moment it came into office, said after a year that it accepted the principles of the report, and has now, just two years later, announced how it will implement it and pay for that implementation.
Let me go through some of the things that the shadow Secretary of State has said. He quoted one stakeholder, Stephen Burke, but let us look at what some of the others have been saying. The Joseph Rowntree Foundation has said that
“the cap and threshold are welcome measures, and a welcome sign that the government is taking responsibility for addressing care funding.”
Andrew Dilnot said today:
“I recognise the public finances are in a pretty tricky state and it doesn’t seem to me that”—
what the Government are proposing is—
“so different from what we wanted”.
Or we could talk about Age UK, which says it
“has always supported the principle of a cap”
and welcomes the fact that we are increasing what it describes as
“the current miserly upper means test threshold”.
A lot of stakeholders welcome today’s announcement, but recognise that we are in extremely difficult financial circumstances and that that is why we have to be responsible with public finances.
The right hon. Gentleman talked about the cap of £75,000, which is indeed higher than the upper limit proposed by Andrew Dilnot, but to describe this as only helping people on higher incomes is fundamentally to misunderstand how a cap works. First, potentially more than 70% of the £1 billion a year that this will cost the Government by the end of the next Parliament is going to socially disadvantaged families. This is a highly progressive measure, and as well as increasing the cap we are increasing the threshold above which people do not get any help, from £23,000 to £123,000—exactly the kind of thing that some of the most disadvantaged families on the lowest of incomes will benefit from most.
The right hon. Gentleman talks about the Association of British Insurers—he needs to get up to date. It describes this as
“potentially another positive step forward in tackling the challenges of an ageing society.”
[Interruption.] If he wants some more quotes, let us look at what financial services companies are saying. Aegon UK says it
“welcomes today’s announcement and the clarity it brings on state support.”
Legal & General says it is
“pleased the Government has decided to move forward with Andrew Dilnot’s proposals.”
As for local authority budgets—the shocking state of which, by the way, we inherited from the last Labour Government—the Government said in the spending review that the NHS health budget would give £7.2 billion of support for health-related needs to local authorities during the course of this Parliament.
On inheritance tax, what the right hon. Gentleman does not understand about today’s measures is that fundamentally, they are helping people to protect their inheritance from the lottery of social care costs. The randomness of someone not knowing whether they will be the one in 10 who suffers over £100,000 in care costs is eliminated by a proposal that allows everyone to plan and prepare for their own social care costs.
The right hon. Gentleman describes this as a modest plan and says we have neglected the scale of the problem. Of course, in dealing with an ageing population many other issues need to be dealt with. He talked about the problem of integration, which we are solving by devolving power to clinical commissioning groups on the front line, a reform that Labour opposed, and by integrating technology, a reform on which Labour failed. Also, Labour did nothing about dementia, leaving us with less than half the people with dementia being diagnosed. We are now tackling that problem. We saw last week the issues of treating older people with dignity and respect. We are tackling that problem—Labour left it for far too long.
The problem is not that our solution is too small, but that it was too big for Labour to solve when they were in office. When it comes to making Britain a better country to grow old in, this Government are taking action where the last Government failed.
Mr Stephen Dorrell (Charnwood) (Con)
Does my right hon. Friend agree with the view expressed by Tony Blair to the Labour party conference in 1997 that it should be a priority for the British Government to sort out the unfairness that prevails in our system of care for the elderly? Does he further agree with me that when our right hon. Friend the Leader of the House was Health Secretary, he set up the Dilnot commission within weeks of this Government taking office, and that the package my right hon. Friend has announced today was described today by Andrew Dilnot as being not so different from the one recommended by the commission set up by our right hon. Friend?
Mr Hunt
I absolutely agree with my right hon. Friend’s points; he speaks wisely, as ever. I, too, want to pay tribute to the work that my predecessor, our right hon. Friend the Leader of the House, did in laying the ground and making the big call that we needed to have the Dilnot commission, and in last year publishing the care and support White Paper, which moved this agenda much further forward than in any of the 13 years of the previous Labour Government. My right hon. Friend is also right about the fundamental randomness and unfairness. Of course, we are not saying that the Government will pay for all the social care costs we encounter—public finances could not possibly be in a state to allow that to happen. However, this provides certainty and allows people to plan, so that they can cope with the randomness and unfairness of the current system and know that it will not put their precious inheritance at risk.
Barbara Keeley (Worsley and Eccles South) (Lab)
At £75,000 the cap on social care is far too high to help people in an area such as Salford. The Secretary of State has talked about insurance products developing to help people meet the costs of the cap. In our inquiry into social care, we on the Select Committee on Health were told that this country has no market at all in long-term care insurance—not only that, but no country in the world has a working market in pre-funded long-term care insurance. Is it not wishful thinking of the highest order to talk about people being able to rely on products that do not exist either here or anywhere else in the world?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Many Members wish to get in, as this is a very important subject for all our constituents, so can we please have brief questions and short answers?
Mr Hunt
I am afraid that what the hon. Lady says sums up the attitude of the Opposition; they thought it was wishful thinking to try to solve this problem, whereas we are getting on with a solution. We do not have those financial products available at the moment, but the whole point of these structures is that we will help to create a market in which it is possible to have them. The point of the cap is to allow the hon. Lady’s constituents, even people on lower incomes, to plan and make provision, not only for costs of more than £75,000, but for any costs they have up to £75,000. In combination with that, we are increasing the threshold for Government support from £23,000 to £123,000.
Dr Sarah Wollaston (Totnes) (Con)
I warmly welcome today’s statement, particularly the rise in the asset threshold, as I well remember my former patients’ shock when they realised that for anything over £23,250 they would have to meet their entire costs. However, may I ask the Secretary of State to look again at the impact there will be on rural local authorities, for example, Devon’s, which has the fifth oldest population in England?
Mr Hunt
I will certainly do that, and I am grateful for my hon. Friend’s comments. I would just say that it is in some of those areas with the highest proportion of older people that the impact of the current lottery in care provision is so dramatic and needs addressing so quickly. I therefore hope that her constituents will welcome the certainty in these proposals, but I will certainly look at and identify whether any particular issues are raised in rural areas.
Grahame M. Morris (Easington) (Lab)
The Minister has concentrated on the impact on the frail elderly, but does he recognise the other care crisis highlighted recently in a report published by four leading disability charities? What will these proposals do to assist in providing social care to working-age disabled people, who make up about a third of social care recipients? The shortfall we have estimated is about £1.2 billion—that is the gap between social care budgets and needs.
Mr Hunt
These proposals will go some way to addressing that problem. First, children who reach adulthood— the age of 18—with care costs will continue to receive the support they need without any qualification at all. Adults who become disabled during their working life will have a cap, but it will be a lower one. So we will be able to offer very important support to both those groups.
Andrew Percy (Brigg and Goole) (Con)
I welcome this statement as it moves the system on from where it is today. However, for a lot of communities the social care costs are so much more expensive, particularly in rural areas with very elderly populations, and they are more likely to hit that cap more quickly. So can my right hon. Friend assure us that everything will be done to ensure that the cost of care in these more expensive areas is brought down to something more in line with the rest of the country?
Dr William McCrea (South Antrim) (DUP)
No one can deny that elderly and vulnerable people across the United Kingdom live in fear of having to go into care and what that would mean to them. This is not only about England; it is about the rest of the United Kingdom. So what discussions has the Secretary of State held with the devolved Administrations to ensure that our elderly citizens have certainty, fairness and peace of mind about the costs of old age, such as he claims his plan will bring?
John Pugh (Southport) (LD)
I welcome the statement. Regardless of the details and figures announced today, does this overall approach not promise certainty and predictability where previously there was anxiety and uncertainty? Is that not the big gain?
Mr Hunt
That is the main point of what is being announced today. We are not able, with the public finances as they are, to offer a huge amount of support, but what we can do is give the certainty that means that for the first time people will be able to plan and make provision for their social care costs. We will be one of the first countries in the world that does that, which is why this is a very encouraging and very important day for people who care about the tremendous uncertainties associated with growing old.
Hazel Blears (Salford and Eccles) (Lab)
The Alzheimer’s Society has said today that capping care costs is a step in the right direction, but a £75,000 cap is so high that it will help only the few. The Secretary of State knows that there are 800,000 people in this country living with dementia now, and his announcement today, however welcome it is, does not deal with the community care costs that those people face day to day. This costs a billion pounds in, but there is £1.3 billion out of community costs to local authorities. How will he fill that gap?
Mr Hunt
The right hon. Lady knows well the challenge and the crisis that we face because of dementia, and she has spoken movingly on the issue. What I would say about what the Alzheimer’s Society is saying is that to look at the cap in isolation is to misunderstand these proposals. For many people with dementia, the most significant thing will be the increase from £23,000 to £123,000 in the threshold at which they get state support. That is a big step forward.
The cap is not saying that we expect people to pay £75,000 towards their care costs. We are saying that that is the maximum anyone will have to pay, which makes it possible for people to make provision in their pensions and in insurance policies. One in three of us will get dementia, and we do not know whether we will be among those one in three. This proposal will allow people to put some certainty in place—to make plans now, which means that when they are dealing with the nightmare of either themselves or someone in their family having to cope with dementia, they will not have the double whammy of having to worry about losing their house as well.
Julian Smith (Skipton and Ripon) (Con)
Many older people across North Yorkshire have been waiting decades for this kind of certainty, so I thank the Secretary of State for bringing that to them. May I urge him to use his laser vision, which he has shown on this matter, to make health budgets and social budgets work much more closely together?
Mr Hunt
My hon. Friend is absolutely right: that is perhaps the biggest remaining issue that we have to face in the NHS and social care system today. There are interesting parts of the country, such as Torbay, where it is happening very effectively, but anything he can do in North Yorkshire to make it happen more speedily and more effectively will be very welcome.
Chris Bryant (Rhondda) (Lab)
Mining constituencies have some of the highest percentages of home ownership in the country, so this issue affects them. Further to the question asked by the hon. Member for South Antrim (Dr McCrea), what discussions has the Secretary of State had with the Welsh Assembly, because I presume that there will be a Barnett consequential—money going to Wales as a result of today’s announcement? How much will that be?
Mr Christopher Chope (Christchurch) (Con)
Is it possible to have some transitional arrangements, because four years is a long time to wait for a family who are already paying care costs? Is it not possible to increase the capital allowance, for example by £20,000 a year, from now on? Is it not possible to allow care costs in excess of £75,000 to be set against future inheritance tax?
Mr Hunt
I understand where my hon. Friend is coming from. All I can say is that we had very strictly to produce a package that is affordable within the current financial constraints. For that reason, we have come up with the package we have. It is the earliest we think we can afford to do this and the lowest cap we think we can afford, but I will of course reflect on his comments.
Fiona Mactaggart (Slough) (Lab)
My question follows on from the previous one about what will happen between now and 2017. Many families are frightened about care costs and the statement has nothing for them. Their loved ones are likely to die in the next four years—2 million people will die before this is implemented. What is the Secretary of State doing additionally for local councils, which are trying to help people in that situation?
Dr Julian Lewis (New Forest East) (Con)
I warmly welcome the rise in the assets threshold, but I am not clear about one aspect. People such as my father had to sell their home to pay the costs of residential care. It is being suggested that accommodation and food will not be covered by the proposals, but, given that the residential care aspect is so important, can my right hon. Friend give us reassurance?
Mr Hunt
These proposals cover the care costs, but we will be making an allowance for accommodation and food of £1,000 a month at 2017-18 prices. The reason for doing that is that a person would face those costs whether or not they were in a residential care home, and we think it would be wrong to create a system where that person was better off financially being in a residential care home than living at home.
Ian Lucas (Wrexham) (Lab)
Beveridge committed to “the cradle to the grave” as the principle in health care. It is clear today that the Government have given up on the public sector contributing to the pre-£75,000 figure. Has he any idea or has he inquired how much the cost of provision would be for a family to obtain cover for that first £75,000?
Mr Hunt
I think the hon. Gentleman needs to study these proposals with a great deal more care. If he had listened to them, he would know that we are extending dramatically the help available to people who have to pay up to £75,000, by increasing the threshold from £23,000 to £123,000 at 2017-18 prices.
Margot James (Stourbridge) (Con)
I warmly welcome the action that my right hon. Friend has taken today. To the critics who say that the cap should be lower, would he not say that the main purpose is to provide protection for those people who face catastrophic charges, which are roughly 10% to 15%? Is that not the main point? Does he agree further that this represents a fair resolution between the people’s responsibility to save for their retirement and the responsibilities of the community to protect those to whom catastrophic charges might apply?
Mr Hunt
My hon. Friend, as so often on health matters, is absolutely right. This is about a partnership between the state and the citizen, recognising that the state is not able to bear all these costs on its own, and trying to create the incentives and the certainty whereby private citizens are able to make provision for their own social care costs in the way that they make provision for their pension and, as such, is a very important step forward.
Geraint Davies (Swansea West) (Lab/Co-op)
These proposals mean that someone with a £200,000 house pays £75,000, and someone with a £400,000 house pays £75,000. Would it not be fairer if the first £200,000 was charged at, say, 20%, and the second £200,000 at 40%, so that someone with a £200,000 house would pay £40,000 and someone with a £400,000 house would pay £120,000, so that instead of a flat-rate charge, we would have a progressive charge within the financial envelope? Will the Secretary of State consider a fairer system, rather than a flat-rate poll tax?
Mr Hunt
People whose houses have lower value benefit from the fact that we are increasing the threshold at which support is available. Because of that increase in the threshold, they will get some support towards paying for their £75,000, which people with higher value houses will not get.
Mr John Redwood (Wokingham) (Con)
Does the Secretary of State see any difficulty in this coalition Government pre-empting a future Chancellor of the Exchequer over tax policy, when I thought everybody in the House wanted a different kind of Government after 2015, who might have their own ideas?
Mr Hunt
We have funded these proposals until 2020 on plans that have been agreed by the Liberal Democrats and the Conservatives. We hope very much that we will have the support of the Opposition for these plans as well. Then we can have a national consensus around them, which is what we need because in the end, if we are to create that certainty in the markets, people need to know that whichever Government are elected, they support the basic approach that we are endorsing.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
These proposals will not apply in Scotland, where people already receive personal and nursing care as they need it, when they need it, regardless of their income. Is the Secretary of State aware that this approach has helped to reduce substantially the number of people requiring long-term hospital beds, has also helped to reduce NHS bed-blocking, and has enabled thousands of elderly, frail people in Scotland to live in their own homes, rather than face the crippling costs of moving into residential care?
Mr Hunt
There are some things that we can learn from Scotland and some things that we cannot learn. Scotland has a very good record in identifying people with dementia, and the point that the hon. Lady makes about helping people to live at home for longer is a very good one. Care costs incurred in domiciliary care for people who are living at home will count towards the £75,000 cap, so we hope to have many more flexible ways for people to provide for themselves and be able to live at home happily and healthily for longer.
Andrew Stephenson (Pendle) (Con)
I welcome today’s statement. Most welcome to my constituents will be the increase in the means-test threshold of state support from £23,000 to £123,000. Given that December’s figures from the Land Registry put the average house price in my constituency at only £114,000, will my right hon. Friend confirm that these proposals represent a very good deal for Pendle home owners, most of whom are on low incomes and of only modest wealth?
Mr Hunt
That is absolutely the point. The group of people we are targeting with these proposals are not the most vulnerable, because they already get all their care costs covered if their assets are less than £23,000, but the people one step up from that, who in many cases have worked hard, saved all their lives and paid off their mortgage, but have a house that is not of sufficient value to cover the social care costs they need. I hope that these proposals will be very welcome in Pendle.
Pat Glass (North West Durham) (Lab)
Can the Secretary of State assure me and my constituents that any gains they may make from his proposals will not be completely wiped out by the massive cuts to local authority care budgets—£120 million this year alone in my own local authority?
Mr Hunt
We have looked very carefully at the cuts that local authorities are facing in England in order to make sure that that should not compromise adult social care. They are not ring-fenced budgets. That is why we put in an extra £7.2 billion of support from the Department of Health’s budget where there are health-related needs. We are watching this very carefully throughout the country.
Mr Philip Hollobone (Kettering) (Con)
People in my constituency will want to congratulate the Secretary of State on grasping this nettle. Can he confirm that after 2017 there will be some kind of index-linking on the liability cap and the asset threshold? Is there now an implied permanent link between the yield from inheritance tax and the nation’s social care costs?
Mr Hunt
I do not think that there is an implied link in the way that my hon. Friend suggests, but I will reflect on his comment to check that I fully understood his brilliant insight. Automatic indexation is of course a matter for future Governments and future Parliaments, but it is certainly our intention that the proposals we are making will continue to take account of changes in the cost of living.
Barry Gardiner (Brent North) (Lab)
I welcome aspects of the Secretary of State’s statement. Does he agree that the security in old age that he is seeking to put in place will not be effective for as long as companies such as Phoenix Life are able to offer people like my constituent, Mr Gerard Burton, £221 a month for the rest of his life, at the age of 84, in return for half his house? Will the Secretary of State speak to his colleagues in the Treasury to ensure that there is great scrutiny of precisely what financial products are being offered in this domain?
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
This statement will be very welcome in my constituency, which has a very high proportion of retired and elderly people. May I warmly congratulate my right hon. Friend on gripping a problem that has eluded previous Governments? Can he confirm that the new higher savings threshold of £123,000 will not include the value of a couple’s home when the spouse or dependant of the person in residential care still resides in that home?
Diana Johnson (Kingston upon Hull North) (Lab)
On the financial products that will be available, will the Secretary of State produce evidence so that constituents in Hull can find out what kind of figures we are talking about as regards their protecting themselves for the future?
Mr Hunt
I am making the announcement today, so we have to give the financial services industry some time to respond to the proposal. However, the indications are encouraging, and I think that we will all see, in plenty of time for the 2017 start of this plan, what products are available. There may be separate products, but it may also be something that becomes part of people’s pension planning. In the same way that people decide what arrangements they want in their pension for an annuity and for a lump sum payment, payment towards these costs up to the level of the cap may become another part of the pension plan. We need to let the pension and insurance industries have the time to respond and to come up with these plans.
Paul Burstow (Sutton and Cheam) (LD)
Does my right hon. Friend agree that, in evaluating these proposals, the public need to understand the nasty little secret at the heart of social care in this country, which is that we have among the harshest of means tests and that that leads to people facing catastrophic costs? Will he also ensure, in making these reforms, that he provides the Joint Committee examining the draft Care and Support Bill with all the necessary details of how this will be implemented?
Mr Hunt
I would be happy to do that and I am grateful to the right hon. Gentleman’s Committee for its work to date on pre-legislative scrutiny. He will understand why I was not able to go into details when we met to discuss the Bill last week. He is absolutely right: dealing with that threshold is one of the most important things and I am sure we will benefit from good scrutiny, as we have done to date.
Julie Hilling (Bolton West) (Lab)
I want clarity about what the costs include. My mother’s journey has involved eight months in residential care and she is now back home where carers visit her four times a day. Would either of those count towards the eventual £75,000 cap?
Alun Cairns (Vale of Glamorgan) (Con)
I pay tribute to the Secretary of State for the significant progress he has made on this issue, which was ignored for so long by the Labour party. The shadow Health Secretary, the right hon. Member for Leigh (Andy Burnham), has called for a bigger and bolder response. What estimate has my right hon. Friend made of the potential costs of a bigger and bolder response, and does he not think that any such criticism should have allied to it a source of funding in order for it to have any credibility?
Mr Hunt
I thank my hon. Friend for his question. The shadow Health Secretary complained this morning that we have not adopted the precise cap that Andrew Dilnot said he would have liked. That would have cost an extra £2.4 billion a year by 2020, on top of the plans that we have announced. It is up to the Opposition to tell us how they would find that money if that is what they want to happen.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Is it not likely that the decline in domiciliary services will accelerate to the point at which people are forced to enter residential care? Has the Health Secretary factored those rising costs into his calculations?
Mr Hunt
The care costs that people have at their home will be included in the amount calculated towards the cap, so what we are hoping for is the opposite—that this proposal will lead to an expansion of domiciliary services. I think that people will welcome that. At the heart of controlling our social care costs, both financially and on a human level, is a structure that allows more people to live at home, happily and healthily, for longer than is currently the case.
Jason McCartney (Colne Valley) (Con)
Does my right hon. Friend agree that, to be credible on social care funding, any package needs to be fully funded, unlike yet more random, pie-in-the-sky, unfunded spending commitments?
Mr Hunt
Absolutely. There was a time when the Labour party would have considered a package that will be worth £1 billion a year by the end of the next Parliament to be a significant investment, but after its free spending ways of a billion here and a billion there, we are now talking real money.
Charlie Elphicke (Dover) (Con)
May I congratulate my right hon. Friend on a meaningful step forward in the social care debate, with a proper settlement? The shadow Health Secretary made a spending commitment of a £35,000 cap; for the record, how much would that spending commitment cost the country?
Mr Hunt
What the shadow Secretary of State said this morning would have cost the country an extra £2.4 billion on top of the proposals that we are outlining today. Labour Members need to say whether they would pay for that by increasing taxes or by reducing spending, but perhaps they are thinking of adding to the deficit.
Martin Vickers (Cleethorpes) (Con)
I, too, welcome my right hon. Friend’s announcement and the progress he has made. However, he will be aware that in a constituency such as Cleethorpes, which I represent and where a terraced house can cost less than £75,000, vulnerable and elderly people will still be concerned about the figures that are being tossed around. Will my right hon. Friend ensure that his Department passes the information to local authorities and local organisations that advise such people, in the hope that they can clearly understand the commitments?
Mr Hunt
We will be happy to do that. I think that my hon. Friend’s constituents will value the fact that the horrifically low threshold of £23,000, beyond which they get no help at all, will be raised significantly to the £100,000 threshold, in 2010-11 prices, that Andrew Dilnot recommended. Under the draft Care and Support Bill, all local authorities will be obliged to give a care assessment and access to financial advice to everyone in their area in order to make sure that constituents such as those of my hon. Friend are given the information they need.
Glyn Davies (Montgomeryshire) (Con)
I, too, greatly welcome the framework for social care that the Secretary of State outlined in his statement. The Barnett consequentials should mean an extra £10 million for Wales if the proposal costs about £1 billion. What discussions has he had with the Welsh Government to encourage them at least to invest the Barnett consequentials in social care, given that it is as big a problem in Wales as it is in England?
Horsemeat (Food Fraud)
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
I would like to update the House on recent developments with regard to horsemeat and food fraud.
The events that we have seen unfold over the past few days in the UK and Europe are completely unacceptable. Consumers need to be confident that food is what it says on the label. It is outrageous that consumers have been buying products labelled beef, which turn out to contain horsemeat. The Government are taking urgent action with the independent Food Standards Agency, the industry and our European partners.
Let me turn first to the facts. On 15 January, the FSA was notified by the Food Safety Authority of Ireland of the results of its survey of processed beef products on the Irish market. The Irish study identified trace amounts of horse and pig DNA in the majority of the sample, but identified one product, a Tesco burger, where there was evidence of flagrant adulteration with horsemeat. The investigations in Ireland are ongoing.
On 16 January, in order to investigate the implications for the UK market, the FSA announced a four-point plan. That included telling implicated food businesses to test their processed beef products and the launch of a full scientific study of processed beef products on the UK market.
On 31 January, the Prison Service of England and Wales notified the Food Standards Agency that traces of pork DNA had been found in a selection of meat pies labelled as halal. Although trace contamination does not necessarily indicate fraudulent activity, any contamination is clearly of concern to faith communities. The affected products were quarantined and the contracts suspended.
On 4 February, the FSA announced that it had tested a consignment of frozen meat that was being stored at Freeza Meats in Northern Ireland for horse DNA. That consignment had been detained by the local authority in October 2012 because of labelling irregularities. The consignment is under the secure control of the local authority. None of the consignment has entered the food chain and so no recall is necessary. As part of the investigation, Newry and Mourne local authority has tested current products from Freeza Meats and neither horse nor pig DNA has been found in any of those products. The FSA is undertaking a detailed investigation, which includes following the supply chain of Freeza Meats and any other producers that are implicated.
On the evening of 6 February, Findus informed the Food Standards Agency that it had confirmation of horsemeat in frozen beef lasagne products. The lasagne were produced in Luxembourg by a French company, Comigel, with the meat supplied by another French company, Spanghero. The test results were supplied to the FSA on the morning of 7 February. The FSA is investigating the case urgently in liaison with the French authorities and the police. The FSA has assured me that it currently has no evidence to suggest that the products recalled by Findus represent a food safety risk. The 7 February announcement that very significant amounts of horsemeat had been found in Findus lasagne moved the issue from one of trace contamination to one of either gross negligence or criminality.
On 8 February, Aldi withdrew two beef products after its tests found that they contained horsemeat. The products were supplied by Comigel, the same company that supplied Findus. Asda and Tesco also withdrew products from the same suppliers on a precautionary basis.
Food regulation is an area of European competence. Under the European legal framework, main responsibility for the safety and authenticity of food lies with those who produce, sell or provide it to the customer. In the UK, the Food Standards Agency was set up by the previous Government as an independent agency, and I have sought to respect its independence. It leads the operational response, and I am today updating the House on progress with its investigations and on the action I have been taking with the industry and European counterparts. I have made clear my expectation that food businesses do whatever is necessary to provide assurances to consumers that their products are what they say they are.
The Minister of State and the FSA met food retailers and suppliers on 4 February and made it clear that we expect the food industry to publish results of its own testing of meat products to provide a clearer public picture of standards in the food chain. In response to the Findus announcement of 7 February, the FSA asked in addition that all producers and retailers test all their processed beef products for the presence of horsemeat. On Saturday 9 February I called in the major food retailers, manufacturers and distributors to make clear my expectation that they verify and trace the source of all their processed beef products without delay.
At that meeting with the British Retail Consortium, the Food and Drink Federation, the British Meat Processors Association, the Federation of Wholesale Distributors, the Institute of Grocery Distribution and individual retailers, I made it clear that I expected to see from them the following: meaningful results from testing by the end of this week; more testing of products for horse along the supply chain and that the industry co-operates fully with the FSA on that; publication of industry test results every three months through the FSA; and that they let the FSA know as soon as they become aware of a potential problem in their products. I made it very clear that there must be openness and transparency in the system for the benefit of consumers, and that retailers and processors must deliver on those commitments to reassure their customers.
Let me reiterate: immediate testing of products will be done across the supply chain, including suppliers to schools, hospitals and prisons as well as retailers. The FSA issued advice to public service providers on Sunday 11 February in advance of the working week. I also reiterate that the FSA has assured me that it currently has no evidence to suggest that recalled products represent a food safety risk. The chief medical officer’s advice is that even if bute is found to be present at low levels, there is a very low risk that it would cause any harm to health. People who have bought Findus beef lasagne products are advised not to eat them and return them to the shop they bought them from as a precaution.
The ultimate source of these incidents is still being investigated, but it is already clear that we are dealing with Europe-wide supply networks. I am taking action to ensure effective liaison with the European Commission and other member states, and I have been in touch with Irish Minister Simon Coveney on several occasions since 28 January. I have spoken to him twice again today and have also spoken to European Commissioner Borg, the French Minister Stéphane Le Foll and Romanian Minister Daniel Constantin. I emphasised the need for rapid and effective action, and I am grateful for the good co-operation there has already been.
I have agreed with Minister Coveney that there will be an urgent meeting with Commissioner Borg of Ministers from the member states affected. In addition we agreed that this issue will be on the agenda of the Agriculture Council on 25 February. At the moment this appears to be an issue of fraud and mislabelling, but if anything suggests the need for changes to surveillance and enforcement in the UK we will not hesitate to make those changes. Once we have established the full facts of the current incidents and identified where enforcement action can be taken, we will want to look at the lessons to be learned from this episode. I will make a further statement about that in due course.
In conclusion, I want to reiterate that I completely understand why people are so concerned about this issue. It is unacceptable that they have been deceived in this way. There appears to have been criminal activity in an attempt to defraud the consumer. The prime responsibility for dealing with this lies with retailers and food producers who need to demonstrate that they have taken all necessary actions to ensure the integrity of the food chain in this country. I am in daily contact with the FSA. This week I will be having further contact with European counterparts and I will be meeting the food industry again, together with the FSA, tomorrow. I commend this statement to the House.
Mary Creagh (Wakefield) (Lab)
I thank the Secretary of State for an advance copy of his statement. Four weeks ago, the Irish authorities alerted the UK Government that they had discovered horsemeat in burgers stocked by UK supermarkets, including Tesco, Iceland and Lidl. Last Monday, we discovered that meat labelled as halal and served in UK prisons had tested positive for pig DNA. On Thursday, the scandal spread from frozen burgers to frozen ready meals, as we discovered that Findus beef lasagne contained up to 100% horsemeat. On Friday, this incompetent Secretary of State and his food Minister went home—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Everybody wants to make their contribution, and the only way they will is by being a little quieter. People may not like what is being said, but they should at least have the courtesy to listen.
Mary Creagh
On Friday, No. 10 told the press that the Secretary of State was working hard at his desk, getting a grip on this crisis. But in fact he had to be called back to London from his long weekend—crisis, what crisis? Until Saturday’s panic summit, he had not actually met the food industry to address this crisis. The food Minister had met with the food industry just once, exactly a week ago.
On Friday, I received information that three British companies were involved, potentially, in importing beef that actually contained horse. I wrote to the Secretary of State, offering to share the information with him. I also handed it to the Serious Organised Crime Agency. On Friday, the FSA said that the police were involved, so I was reassured. However, on Friday night the Met police said that they had had talks with the FSA, but that there was no live criminal investigation. On Saturday, after a conversation with one of the food industry representatives, I realised that the Secretary of State had not revealed the names of those firms to the food industry at the meeting. Why not? If the Government want the food industry to test on the basis of risk, why did the Secretary of State not share the names of those companies at Saturday’s meeting?
On Thursday, DEFRA announced its statutory testing regime, with 28 local councils purchasing and testing eight samples each. Does the Secretary of State seriously expect people to wait 10 weeks for the results? Can he confirm that that will be the first survey of product content that his Department has carried out since his Government removed compositional labelling from the Food Standards Agency in 2010? He talks about the FSA’s operational independence, but it is not responsible for the content of our food—he is. When will he stop hiding behind civil servants and take some responsibility? Does he think that surveying just 224 products from across the country matches the scale of this scandal, when he has asked the supermarkets to test thousands of their products by Friday? Can he confirm today to the House that not all of those thousands of tests will be completed by Friday?
Can the Secretary of State tell the House how many products the large public sector catering suppliers will test and how many lines the members of the British Meat Processors Association will test? In his letter to me last Friday, he stated that some members of the British Hospitality Association and the British Retail Consortium have withdrawn products as a precaution. Can he tell the House which members have withdrawn which products, and whether any of them supplies schools, prisons and hospitals? The supermarkets have acted with speed and a degree of transparency on this that puts him to shame. I am disappointed that the hospitality industry and caterers have not been as candid.
In his letter to me, the Secretary of State said that the FSA is taking up individual suspicious incidents with authorities and the police across Europe. He said in the media this weekend that there is an international criminal conspiracy at work. Does he think that international criminals are present everywhere in Europe apart from in the United Kingdom? The French Government estimate that the Findus fraud alone has netted criminals €300,000. This is clearly big criminal business. Why have the UK police not investigated on the basis of the intelligence supplied? Has he had the full results of the tests carried out by the Irish authorities?
At Department for Environment, Food and Rural Affairs questions nearly three weeks ago, I asked the food Minister about horses contaminated with bute slaughtered in the UK and entering the human food chain. It has now been confirmed that of the nine UK horses that tested positive for bute, one was stopped, five went to France, two to the Netherlands and one to the UK. However, when council officials approached the people who had supposedly taken the horse to eat it, they had no knowledge of what had happened to it.
There has been talk of an EU import ban, but has the Secretary of State considered the possibility that horses are going to UK and Irish abattoirs and entering the food chain in the UK? Which horse abattoirs in the UK are on the FSA’s cause for concern list? Have any horses presented for slaughter in the past month been rejected by officials because of concerns over their passports? If so, where and how many?
The Ulster Society for the Prevention of Cruelty to Animals has clear evidence of illegal trade in unfit horse from Ireland to the UK for meat, with horses being re-passported to meet demand for horsemeat in mainland Europe. It says that there are currently 70,000 horses unaccounted for in Northern Ireland. Unwanted horses are being sold for €10 and sold on for meat for €500—a lucrative trade. It is convenient to blame the Poles and Romanians, but so far neither country has found any problems with its beef abattoirs.
When will the Secretary of State get his story straight on bute? This horse medicine is banned from the food chain for a reason. On Friday, he said:
“I would have no hesitation at all in eating these products.”
Yet on Sunday he said that this food could be injurious to human health. The Health Secretary said it is just a labelling issue. Is this not symptomatic of the Government’s dangerous complacency?
I note the chief medical officer’s advice to people this morning. What levels of bute have to be present in the meat for it to be a human health risk? Will the Secretary of State tell us what the safe limits of bute consumption for human beings are, given that it is banned from the human food chain? The British public must have confidence that the food they buy is correctly labelled, legal and safe. When Ministers came to the Commons to answer my urgent question on 17 January, the food Minister said:
“It is important that neither the hon. Lady nor anyone else in this House talks down the British food industry.”—[Official Report, 17 January 2013; Vol. 556, c. 1027.]
These invisible regulatory services protect our consumers and our food industry, and allow it to export all over the world. [Interruption.] I think Government Members would do well to listen as this issue is of interest to their constituents and the lack of information from their Government has been nothing short of a disgrace.
This weekend consumer confidence in British food was sinking like a stone. Food is a £12 billion industry that supports hundreds of thousands of UK jobs and exports. In common with No. 10, it is rapidly losing faith in this Secretary of State’s ability to lead them through this crisis.
Mr Paterson
You would not think that we had inherited Labour’s system would you, Mr Deputy Speaker? You really wouldn’t. I always admire the hon. Lady—she really has a nerve.
This issue is a European competence. As agreed by her Government, the independent Food Standards Agency was set up and we have followed their policy of respecting that independence. Today, I talked to its chairman, Lord Rooker, whom she knows well, and he agreed that we had respected its independence. In the early stages of this history, this was an issue of trace DNA in an Irish abattoir. Once it came to the Findus case, where there was a significant volume of horse material, it took on a whole new dimension. He agreed that it was then appropriate that the Secretary of State should become publicly involved, as I have been in recent days. The hon. Lady is critical of the FSA’s survey—on which I wish it well. I raised it with the noble Lord this afternoon, and he agreed that April was the intended end date for these results, but that he could possibly publish some of them as he works through.
The hon. Lady completely misses the point that the retailers are responsible for the quality and content of their food. That is laid down in European law. Her Government passed a statutory instrument in 2002. [Interruption.] There is no point in the hon. Lady shouting. She must understand that under the current arrangements it is for retailers to decide. She has completely missed the point that they are responsible for testing, they are responsible for the integrity of their food and they are responsible to their customers. They have a massive self-interest in this, because obviously they want their customers to come back. She will be pleased to hear that we had a most satisfactory meeting on Saturday, and they will be bringing forward meaningful results by the end of this week.
The hon. Lady went on a bit about the police. [Interruption.] I agree with my hon. Friends that she went on and on about the police. This is a serious issue, and the FSA has raised it with the Metropolitan police, but the hon. Lady must understand that until there is a criminal action in this country, they cannot take action. However, the FSA has been in touch with Europol, because it does look as though there have been criminal cases on the continent.
The hon. Lady mentioned the Irish test. I have had a conversation this afternoon with Minister Coveney. We have agreed that there will be protocol between our two independent agencies to agree testing equivalents and to work extremely closely together, because our two food industries so often work in co-operation on either side of the Irish sea.
The hon. Lady mentioned horses. Today, Lord Rooker will announce that further to our recent announcement that all horses slaughtered in this country will be tested for bute, no carcase will be released until it has been proven positive.
Finally, the advice on food is very simple. I have been completely consistent. It must have been in an interview and I think she mis-heard the second part of a sentence when I was speaking. I have been absolutely clear. The independent agency that gives professional advice is the Food Standards Agency. I, the hon. Lady, hon. Members and the public should follow its advice. As long as products are free for sale and have not been recommended for withdrawal by the FSA, they are safe for human consumption. I recommend that she follows the advice of the independent agency that her Government set up.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Is it not absolutely right that this is a European problem that requires a European solution? This contaminated meat should never have entered the UK food chain. It now appears that the Romanian authorities did not do the product and labelling checks before the contaminated food left Romanian shores. Will my right hon. Friend please assure us that he will confirm, with both the Commission and the Romanian Minister, that these product checks are in place and that no further consignment should be admitted into this country until we know it is as marked on the label? Will he also look to the European food labelling regulations, articles 7 and 8, that permit precautionary temporary measures to be put in place to save our retailers from this expense? Will he also ask the FSA why it did not commence inspections when it was told that the Irish FSA was doing so in November last year?
Mr Paterson
I am grateful to my hon. Friend, the Chair of the Environment, Food and Rural Affairs Committee, for her question. Commissioner Borg made it clear to me today that there were no grounds for banning imports on mislabelling or fraud, and that that could happen only if human safety might be imperilled. I have also spoken to Minister Constantin in Romania, who was very emphatic on this point—we have to be fair to all countries involved. He made it quite clear to me—I am happy to share this with the House—that the two main named abattoirs, one of which only deals with horsemeat, shipped products that were correctly labelled. Horsemeat was shipped and it was labelled as horsemeat. I therefore think that this case has some distance further to travel, and we should not jump to conclusions, which is why I am pleased that my discussions with Minister Coveney have led to an agreement that the Agriculture Ministers of the half dozen countries concerned will meet. We all want to get to the bottom of this.
Mr Ben Bradshaw (Exeter) (Lab)
The Secretary of State says that there is no evidence of criminal activity in this country, but may I remind him that inaccurate labelling is illegal? Why has it taken him more than three weeks to summon the retailers and four weeks to come to the House? Given that the highly respected Chair of the Select Committee said on the “Today” programme on Friday that she would not eat processed beef products, why is he still recommending that people do?
Mr Paterson
The right hon. Gentleman is right to say that inaccurate labelling is an offence. At the moment, we have to establish exactly what is in these materials and who is responsible for the label. In the Findus case, that material has been withdrawn.
Neil Parish (Tiverton and Honiton) (Con)
We have the red tractor and other farm assurance schemes that guarantee that meat from those sources is guaranteed through to processed product. May I urge the Secretary of State to urge people to eat that type of meat, which is completely traceable? Finally, Europe has been far too lax on this type of meat processing for many years, so we need a tightening up across the whole of Europe in order to know exactly what we are eating.
Mr Paterson
I am entirely happy to recommend to all consumers in this country that they buy good British products in which they can have faith. We have extraordinarily rigorous processes for traceability and production systems, so I have total confidence in British products and strongly recommend them to the British consumer.
Barry Gardiner (Brent North) (Lab)
Will the Secretary of State explain why companies such as Tesco can consistently reject entire consignments of our farmers’ fruit and veg for being misshapen—at the cost of the farmer—yet have not focused the same attention on processed meat in their own lines, because it is not at the front of the freezer and does not affect the appearance? Will he ensure that in future the FSA has in perpetuity statutory powers to instruct retailers to carry out tests on their entire product lines consistent with the volume of product being shifted over the year?
Mr Paterson
Unlike the last Government, we have set up a groceries adjudicator, which answers the hon. Gentleman’s first question. On the second one, he will be pleased to hear that at Saturday’s meeting we agreed that retailers would carry out this testing, which will have meaningful results by the end of the week. Further to that, however, I want these results published on a regular basis—every three months.
Mr Laurence Robertson (Tewkesbury) (Con)
May I express my entire confidence in how my right hon. Friend the Secretary of State has dealt with this issue? Does it not raise a further point, however, which is that British farmers are handicapped when trying to compete with food producers from countries that not only do not carry out the appropriate checks, but have much lower animal welfare standards than we do?
Mr Paterson
My hon. Friend is right. It is a scandal that, despite our egg producers last year conforming to the enriched cages directive, and despite the fact that again this year we were 100% up because we were the first out of the traps to end tethering, some major European countries have still not conformed. I raised that point with Commissioner Borg at our last Council meeting and wrote to him about it last week.
Mrs Mary Glindon (North Tyneside) (Lab)
Will the Secretary of State guarantee that cuts to the FSA and the introduction of the self-regulatory hazard analysis and critical control points system will not compromise, and never has compromised, meat hygiene inspections and the ability to ensure that meat is legal and safe?
Mr Paterson
The hon. Lady, having read out a Whips’ handout, has unwittingly touched on an incredibly important question. The whole issue concerns a paper-based system that places too much faith in the accuracy of the paper recording what might be in the pallet or consignment, so she is absolutely right to raise the question of testing. I briefly discussed this point with Commissioner Borg today and have discussed it with the noble Lord Rooker. I would like to see more random testing of products halfway through the process, so she is on the button—it is a most important point.
Glyn Davies (Montgomeryshire) (Con)
Does my right hon. Friend agree that prime responsibility must lie with the retailers, and that retailers should use some of their vast profits to ensure product quality and guarantee that their products are exactly what they say they are?
Mr Paterson
My hon. Friend is absolutely right. Consumers must have faith in the products provided by the retailers. It is the retailers’ responsibility to present consumers with goods that are wholesome, of quality and conform to the label. It is important that the retailers get out there and sell their systems and products in a way that keeps the faith of the consumer.
Mr Tom Watson (West Bromwich East) (Lab)
I am sure that the Secretary of State would agree that Findus still has serious questions to answer. In particular, exactly when did the company have a reasonable suspicion that the supply chain was contaminated and who took the decision not to enact an immediate product recall? Ultimate responsibility lies with the man at the top—in this case, Manhattan-based private equity investor Dale Morrison. Does he agree that it is shameful that he has not flown to the UK immediately to tackle this problem or issued a word of contrition?
Mr Paterson
I talked to the UK chief executive of Findus on Saturday afternoon, but I think we have to be cautious about what we say, because I understand that Findus might launch legal proceedings against Comigel and possibly Spanghero. The important point, however, is that I made it clear at our meeting on Saturday that from now on, the minute that any food business has evidence that there might be something untoward in a product or that something might not conform, it must tell the FSA immediately, and that as soon as that evidence is corroborated by a scientifically valid laboratory test, the product should be withdrawn very publicly. I made it clear to the retailers that I would strongly support any withdrawal on those grounds.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I congratulate my right hon. Friend on his decisive action in this matter. Quite rightly, his priority should be the safety of consumers and restoring confidence in our great British food industry. He knows, however, that the national equine database was closed down last December. What assessment has he made of the impact of that closure on the Department’s ability to keep track of horses in the UK, and is he confident that the current systems available to him enable his Department to keep a track on equine movements and locations?
Mr Paterson
I am grateful to my right hon. Friend for her comments. She is right to raise the issue of equine databases. We have absolute confidence that we have access to all the information contained in the various ones around the country, and we are also very clear that the significant statement today by the noble Lord Rooker—that every single horse carcase will be held until it is proved clear—will be of great reassurance to the British consumer.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Highly processed foods of this kind are more likely to form a larger part of the diets of low-income families—of which there are far too many in Newcastle thanks to this Government’s actions. Is the Secretary of State seriously saying that when someone in Blakelaw buys a burger, they need to research the entire supply chain, rather than relying on the Government and the Secretary of State?
Mr Paterson
This is a serious misunderstanding. The hon. Lady must understand that under this system it is the retailers who are responsible. It is for the retailers to get out there and show their customers that their processed beef products are sound, that they have increased random testing and that these products are completely clear. It is for the retailers to prove that they can reassure their customers.
Roger Williams (Brecon and Radnorshire) (LD)
Illegal meat trading is one of the most profitable criminal activities, with limited penalties. Replacing dear beef with cheap horsemeat enables huge profits to be made. Does the Secretary of State agree that the active involvement of Europol is essential to break up the complex criminal food chains that have been set up to take advantage of our consumers?
Mr Paterson
My hon. Friend is absolutely right. Sadly, there is significant money to be made from this criminal activity. It is a fraud on the public. It is absolutely wrong that a British consumer should go to a retail outlet and buy a product marked “processed beef” and find later that it contains horsemeat. It is a straight fraud. It is criminal activity. We are absolutely determined to bear down on it, working with our European partners to stop it, and I am delighted that the FSA is working closely with Europol.
Dr William McCrea (South Antrim) (DUP)
Northern Ireland, like the rest of the United Kingdom, produces first-class meat products, but this meat scandal has seriously damaged public confidence in the safety of our food and is depressing an industry that is already struggling because of weather conditions. Does the Secretary of State agree that the only way to restore confidence is to find out who has engaged in this illegal activity, put them out of business and bring them before the courts?
Mr Paterson
I wholeheartedly concur with the hon. Gentleman’s sentiments. This is a fraud on the public. It is wrong for them to be presented with a product and find out later that it is not what is claimed. There is no health issue here; this is an issue of fraud and labelling. With reference to his previous question, the hon. Gentleman is absolutely right that we have to get the perpetrators—these criminals—and stop this practice.
Bill Wiggin (North Herefordshire) (Con)
The Irish Food Safety Authority has been ahead of the Food Standards Agency every step of the way. The people I am concerned about are the British beef producers. Nobody seems to care about them. They have seen their products replaced by poor fakes. What is the Secretary of State going to do about it and how are these poor, besmirched people going to get their market share back?
Mr Paterson
I would like to correct my hon. Friend a little. The reason the Irish agency picked up this issue in the Irish plant was that it had local intelligence that there was a problem. That is why it did a random check —I cleared that with Minister Coveney today. As far as I am concerned, my hon. Friend will find no stauncher supporter of British beef than the Secretary of State standing before him. We have splendid cattle, rigorous traceability systems, strictly run abattoirs and a splendid finished product.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I think we have all been shocked by these unacceptable failures in our food supply chain. Does the Secretary of State agree that one way we can be absolutely sure what is on our plates is to buy Scotch beef—quality assured and fully traceable—preferably from a local butcher, and not least that which is produced in Banff and Buchan?
Mr Paterson
The hon. Lady is absolutely right. I talked to her Minister, Richard Lochhead, only yesterday. She may be a great advocate of locally produced Scottish beef, and I may be a great advocate of British beef—or Shropshire beef—but she is absolutely right that British consumers should have faith in locally produced food.
Mr William Cash (Stone) (Con)
I am sure my right hon. Friend will be glad to know that many of us want to know whether the European Commission is being held accountable under the EU’s food and labelling regulations, which include specific notification of the species of the animal used in food. Will he assure us that all necessary actions and discussions are being pursued with Commissioner Borg to ensure that those with the legal obligations to audit these matters—including the directorate, under him, of the food and veterinary office—comply with EU standards?
Mr Paterson
My hon. Friend is absolutely spot-on to recognise the key role of the Commissioner, as this is a European competence, and that is why I spoke to him today. I am pleased to record that he was extraordinarily co-operative. We are going to fix up a meeting—at very short notice—with him and the key Agriculture Ministers some time this week. The point my hon. Friend raises is definitely one that I will make clear to the Commissioner at that meeting.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Even allowing for the Secretary of State’s rather laid-back approach, does he not think it might have been smarter to advise that guidance be issued to schools and hospitals a little earlier than 10 o’clock last night?
Mr Paterson
I am sorry the hon. Gentleman is unhappy with my demeanour. I am as active as I think he will find is necessary on this issue, having been at it for many, many days now. More importantly, the advice that the FSA has given to suppliers to schools, hospitals and prisons—it is exactly the same as that given to retailers—is clear. Unless the FSA recommends that a product be withdrawn, the public, schoolchildren, prisoners and those in hospitals should have faith in the product.
Caroline Nokes (Romsey and Southampton North) (Con)
Phenylbutazone is an incredibly common, but useful drug to all horse owners. The presence of a verifiable, accurate and up-to-date horse passport is no guarantee whatever that a horse has not been given bute. Does my right hon. Friend agree that the only way to check that a carcase is bute-free is to test it?
Mr Paterson
My hon. Friend is absolutely correct about that. That is why the FSA has today announced the new regime. Not only are all carcases being tested, but from today, not one carcase will be released until it is proven to be clear.
Nia Griffith (Llanelli) (Lab)
The Secretary of State says that retailers and food processors have prime responsibility for the content of their products. Nevertheless, the public feel that the Government have a responsibility to ensure enforcement of accurate labelling. His Government did away with responsibility for labelling of food content back in 2010. Can he now explain how it is shared between the FSA, his Department and the Department of Health, whether he thinks that is satisfactory and what improvements he thinks need to be made?
Mr Paterson
Labour Members have got a nerve! For 13 years, year after year, Conservative Members brought forward labelling Bills and were not backed by Labour Whips. We are the ones who are getting labelling sharpened up; Labour did nothing at all.
Mark Pritchard (The Wrekin) (Con)
May I offer my right hon. Friend my full support? Is this not an opportunity for patriotic purchasing, not only by buying Scottish products, but by buying British products? If consumers want to be confident in the provenance of food, they should buy local, local, local.
Mr Paterson
My hon. Friend has a good point. People are quite right to have great faith in their local suppliers—transport times are reduced, there is clear traceability and there will be clear local knowledge. I repeat: we have great local producers, rigorous traceability systems and stringent production systems, and we end up with superb quality.
Kerry McCarthy (Bristol East) (Lab)
The Secretary of State professes great concern about what is in our meat and the importance of accurate food labelling, yet according to press reports, the UK is trying to get an exemption from EU regulations that would limit to below 50% the amount of fat and connective tissue that can be used to bulk up minced meat. Does that not completely fly in the face of what he has tried to tell the House today?
Jacob Rees-Mogg (North East Somerset) (Con)
My right hon. Friend has told us that food regulation is an area of European competence. Some of us may think it an area of European incompetence. As a result of European failures, it seems that my constituents are getting disgusting food—whether or not it is a health risk, it is revolting. I wonder whether the Secretary of State will consider emergency legislation, notwithstanding the European Communities Act 1972, to allow us to stop importing disgusting food.
Mr Paterson
I look forward to sitting down with my hon. Friend and coming up with a legal definition of “disgusting food”. Let me be more positive and refer to my earlier replies: there is splendid food grown in my hon. Friend’s part of England, and I would strongly recommend his constituents to buy local.
Julie Elliott (Sunderland Central) (Lab)
Does the Secretary of State have confidence in the food chain, and is he confident that the imported food, not just meat, sold in our shops is safe to eat?
Mr Paterson
It is interesting that the hon. Lady uses the term “food chain”. What we have seen in recent days is the extraordinary complexity involved, and I am trying to get away from the expression “food chain”. It is an extraordinary network—an amazing kaleidoscopic variety of factories and suppliers all working together. It is a real network, and what is quite clear in this case is that there has to be more rigorous and more random testing. I have faith in the advice of the independent Food Standards Agency, but down the road, and picking up on the previous question, within the constraints we work under, I would like to see more random testing.
Mr Brooks Newmark (Braintree) (Con)
I congratulate the Secretary of State on the speedy, effective, thorough and robust way in which he has handled this issue. My local butcher in Braintree clearly labels its products so I know what I am buying and where it came from. I like to support our local farmers and buy local. Will my right hon. Friend join me in encouraging retailers to have better and clear labelling, so consumers know what exactly is in the products they buy and where they come from?
Mr Paterson
I totally agree with my hon. Friend, and he will be delighted to hear that the Under-Secretary of State for Health, my hon. Friend the Member for Broxtowe (Anna Soubry), who is in her place next to me on the Front Bench, is working on that very issue as we speak.
Albert Owen (Ynys Môn) (Lab)
The hon. Member for North Herefordshire (Bill Wiggin), who is just leaving the Chamber, was absolutely right that our near neighbour, Ireland, was ahead of the game in dealing with this issue. What can the Secretary of State learn from his Irish counterparts? On the issue of international criminality, is he confident that we have enough resources and surveillance at our ports of entry?
Mr Paterson
The hon. Gentleman has, I think, missed the point. The Irish had local intelligence of a local problem in Ireland, which is why random testing was done in Ireland. On his other question, I have discussed the issue with the chief executive of the Food Standards Agency, and she is clear that, with her organisation having made some sensible efficiencies, she can certainly deliver everything we ask.
Mr Mark Spencer (Sherwood) (Con)
May I draw attention to my entry in the Register of Members’ Financial Interests? Given that the problem is with international processors, can the Secretary of State reassure us that any change in legislation or regulation will not fall on the shoulders of small independent butchers and retailers?
Mr Paterson
My hon. Friend raises an important point. There has been a lot of acknowledgement around the House about the benefits of local production, but sadly in recent years we have seen the closure of a large number of small local abattoirs. Such abattoirs are of real value—there are animal welfare and food-quality benefits—so we should be judicious in any moves we make and value small country abattoirs.
Mr David Hanson (Delyn) (Lab)
If my constituents are mis-sold a range of products, they will have rights. Does the Secretary of State believe that they should have rights if they are mis-sold food products?
Mr Paterson
The right hon. Gentleman is absolutely right that of course people have a right to take their products back. What we clearly agreed with the retailers on Saturday was that if any product has been recalled, any consumer has the right to take that product back to the retailer and get a full refund.
Zac Goldsmith (Richmond Park) (Con)
Does my right hon. Friend agree that an obvious step we could take now is to ensure that the £2 billion or so we spend each year on food for schools and hospitals is used to support our own British farmers, as is done in many other countries in Europe—a policy that our party supported vociferously when it was in opposition?
Mr Paterson
My hon. Friend makes a very good point. Significant sums of public money are spent on procurement and we should ensure, if we can within the rules, that it goes in the direction of British producers.
Diana Johnson (Kingston upon Hull North) (Lab)
What was the exact date on which the Secretary of State became aware that there was a problem with horsemeat in the food chain? I want the exact date, please.
Mr Paterson
We were told about it and it became public knowledge on the day the announcement was made—on 15 January. This was an Irish issue and it was for the Irish to make the announcement.
Mr Andrew Turner (Isle of Wight) (Con)
If the moratorium on EU meat products cannot be enforced under EU rules, how does the Secretary of State plan to ensure that more contaminated products are not sold in the UK?
Mr Paterson
I would not use the word “contaminated”; these products are “adulterated”. This is a case of fraud and mis-labelling; there is no evidence at all that these products are in any way a threat to human health. I have discussed this with Commissioner Borg today, and there is absolutely no reason under the current arrangements of European law to provide a basis for a ban. Should we find a product that is injurious to human health, we would obviously act very rapidly. The Commissioner agreed that in those circumstances we would put out a notice around Europe and all take unilateral action.
Mr Russell Brown (Dumfries and Galloway) (Lab)
We would all dearly like to eat anything marked with a red tractor or a Scottish saltire, but as my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) said, what families eat depends on the household budget. The right hon. Gentleman is right to say that the retailers are responsible for what is sold, but he is responsible for the pace at which this moves forward. We are losing confidence in what people are buying, and if we do not move forward quickly, it will cause reputational damage to the agricultural industry. Will he move this on at a greater pace, and what has he done in respect of speaking to colleagues in Scotland?
Mr Paterson
The hon. Gentleman is absolutely right that this needs resolving fast. I do not think any greater unity of intent could be seen than in my conversations today. Minister Le Foll from France was emphatic: the moment I suggested the meeting, he was determined to come along. We are quite clear that we all have an alliance of interest in resolving this issue as fast as possible. The hon. Gentleman is right that this issue could damage confidence, but I stress again that this is a case of fraud and mis-labelling: it is not a problem with food safety.
Jason McCartney (Colne Valley) (Con)
I very much welcome the wider debate about where our food comes from. Will my right hon. Friend join me in welcoming the increased popularity of shop local campaigns, local food co-operatives and farmers’ markets, all of which are booming in my constituency?
Mr Paterson
I wholly agree with my hon. Friend. I think shopping local is good: it is good for animal welfare, good for food quality and good for local employment. I strongly support the initiatives my hon. Friend mentions.
Andrew Gwynne (Denton and Reddish) (Lab)
I am astounded that the Secretary of State thinks that this is a mis-labelling issue, given that some beef products have not even come into contact with a cow—except perhaps sharing a field with one at some time. I am appalled when he says that there is not even a health issue. Should he not take responsibility for, and take more seriously, the potential for contamination of the human food chain by the drug bute, which is not fit for human consumption?
Mr Paterson
I would like to reassure the hon. Gentleman that this is a case of mis-labelling and fraud; it is not a case of food safety. The noble Lord Rooker said today that, sadly, 20,000 people go to hospital because of a food-related complaint and, tragically, something like 500 die, yet he does not know of a single individual whose health has been affected by the importation of these products. I think hon. Members must get this in perspective. The hon. Gentleman mentioned bute, but I draw his attention to today’s advice from the chief medical officer, who said:
“It’s understandable that people will be concerned, but it is important to emphasise that even if bute is found to be present at low levels, there is a very low risk indeed that it would cause any harm to health”.
Angie Bray (Ealing Central and Acton) (Con)
Does my right hon. Friend agree that Opposition Front Benchers are demonstrating a degree of opportunism, given that we are operating under a system that we inherited from them? Will he confirm that no testing for horsemeat in food took place during the last seven years of the Labour Administration?
Mr Paterson
Yes, my hon. Friend is absolutely right. I think that that question threw the hon. Member for Wakefield (Mary Creagh) when she was on Andrew Neil’s programme yesterday.
The important point that my hon. Friend has made is that the Food Standards Agency is rightly targeting its efforts on problems that might be prejudicial to health. Until the case in Ireland came up, very recently, there had not been a problem with horsemeat. This is a very recent evolution, and until now the FSA has rightly been concentrating all its efforts on health problems.
Mr William Bain (Glasgow North East) (Lab)
Although the issue of food safety in Scotland has been devolved to the Scottish Parliament, this Government had responsibility during the discussions that were held with the European Commission on Scotland’s behalf. When the Secretary of State next speaks to the Scottish Agriculture Minister, will he pass on the view of the Scottish people that it is not good enough simply to test products that are manufactured in Scotland, and that goods that are retailed in Scotland must be tested as well? Do not consumers in Scotland deserve the same protection as people in the rest of the United Kingdom?
Mr Paterson
As I think I said in answer to an earlier question, I had a very constructive conversation yesterday with Richard Lochhead, the Scottish Cabinet Secretary for Rural Affairs and the Environment, and he wrote me a letter today. We will work together closely, and I will include him in discussions with the FSA. However, the hon. Gentleman, like some of his colleagues, has missed the point. The ultimate arbiters when it comes to the safety, quality and integrity of food products are the retailers. The hon. Gentleman must get his head around the fact that it is the retailers who are ultimately responsible.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Questions and answers must be very brief from now on.
Julian Smith (Skipton and Ripon) (Con)
When he cited the Irish example, my right hon. Friend spoke of the importance of intelligence. May I urge him, in his discussions with the slightly sleepy FSA, to challenge it on its whistleblowing procedures and incentives? We need as many people as possible to come forward, and he would be taking a great step if he asked the agency how it currently manages its whistleblowing.
Mr Paterson
Transparency is essential. On Saturday, we agreed that further tests would continue, and that the FSA would publish the results every three months in order to give confidence to the consumer. Ensuring that consumers go to shops and buy British goods is absolutely key.
Jonathan Ashworth (Leicester South) (Lab)
Given the concerns about horsemeat, and given the announcement at the end of January that pork DNA had been found in pies that were supposed to be halal, many of my constituents are naturally anxious about the classification of halal meat. Can the Secretary of State tell us what meetings he has had with halal certification organisations, and can he reassure my constituents that meat that is labelled halal is indeed halal?
Mr Paterson
That is an important point. Many faith groups would be shocked to find that they had bought inappropriate material. This is an operational matter, which is being taken up by the FSA.
Dr Sarah Wollaston (Totnes) (Con)
If negligent, incompetent or, indeed, criminal producers are happy to contaminate products with horsemeat, with what else would they be prepared to cut those products? Can the Secretary of State reassure my constituents that products have also been tested for non-meat adulterants?
Mr Paterson
That is a very important question. We have no evidence that any other meat product is being used to adulterate bovine, or processed bovine, products.
Grahame M. Morris (Easington) (Lab)
The Secretary of State has told us that this is an issue of fraud and mislabelling, but how can he be sure, given that the random testing seems to have involved only about 1.5% of horse carcases? How can he state so categorically that there is no health issue? If more comprehensive testing by the FSA proves that there is a health issue, will he then act unilaterally?
Mr Paterson
I think I have made clear twice that from now on all horse carcases will be tested, and that none will be released until they are proved to be clear.
Martin Vickers (Cleethorpes) (Con)
My constituents were horrified to hear of the circuitous route taken by some of the contents of everyday products before they arrive on the shop shelves. The Secretary of State rightly drew attention to the high quality of British beef and other products. Is he able to restrict the import of foreign products, or is he himself restricted by European legislation?
Mr Paterson
I am happy to make clear that the only grounds on which we could talk to the Commission about a ban on the import of any product would relate to food safety, and to content that might be injurious to human health. Commissioner Borg has made clear that if we did come across a product that could present a risk to food safety, he would react very rapidly.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
I congratulate my right hon. Friend on his handling of this crisis, which has contrasted sharply with the way in which it has been handled by the FSA. When the dust has settled, will he conduct an inquiry into why the FSA’s intelligence systems failed to identify the extensive prevalence of horsemeat in processed and ready-made meals in this country?
Mr Paterson
I think that a system can always be improved. We inherited the current system from the last Government. I have no doubt that there will be lessons to be learnt from this episode, but, as I said in answer to an earlier question, the area in which I am most interested in pursuing real progress is the introduction of random testing. Too much is taken for granted under the present system. Too often, although the paperwork is supposed to describe what is on the pallet or the truck, it goes through the system and no one actually checks. I think that we could make a massive improvement within the current constraints of European competence and all the other arrangements, but I think that random testing would make a real difference. I am pleased that Lord Rooker was so sympathetic to that idea today, as was Commissioner Borg.
Andrew Stephenson (Pendle) (Con)
My constituency contains the abattoir of Woodhead Bros Meat Bros Co., in Colne. Woodhead, which is a wholly owned subsidiary of Morrisons supermarket, benefited from a £21 million investment last year and employs more than 700 people. All Morrisons’ meat and mince is 100% British-sourced. It uses its own abattoirs and maintains very high standards, as I have seen every time I have visited Woodhead Bros. Will the Secretary of State join me in praising retailers such as Morrisons which do the right thing and go the extra mile to ensure that their products are correct?
Mr Paterson
I have to admire the way in which Morrisons managed to penetrate every possible news outlet in order to promote its products.
Andrew Percy (Brigg and Goole) (Con)
I understand the technical definition, but to many of my constituents a supposed beef product that is actually horse represents a contamination.
May I pursue the question asked by my hon. Friend the Member for Cleethorpes (Martin Vickers)? Can the Secretary of State tell me whether, if the meat had come from outside the European Union, we would now be looking at an import ban?
Mr Paterson
That is a good question. I assume that my hon. Friend means that the product was processed within the European Union. We should not forget that the products withdrawn by Findus were eventually processed in Luxembourg from meat which, we understand, went to Castelnaudary in France and possibly came from Romania, and that they therefore counted as European Union products. Under the existing system, a product from Comigel in Luxembourg would have to present a health risk to enable me to approach Commissioner Borg to request an import ban.
Mr Christopher Chope (Christchurch) (Con)
I sympathise with my right hon. Friend, who cannot act freely because his actions are circumscribed by the European Union. What else does he think the European Commissioner should be doing? It seems that the Commissioner does not have much of a sense of urgency in this regard. This is criminal fraud, and we know that a great deal of criminal fraud is endemic throughout the European Union. Why is the Commissioner not taking more action more quickly?
Mr Paterson
Perhaps my hon. Friend would like to address that question directly to the Commissioner. All I can say is that the Commissioner could not have been more co-operative when I rang him today. I look forward to meeting him soon this week—certainly before the end of the week—and I shall certainly raise with him that issue of urgency.
Mr Philip Hollobone (Kettering) (Con)
Through the extensive use of their loyalty card schemes, the big supermarkets have a very good idea about which individual consumers are buying which beef—horse—products. At the recent summit that he held, did my right hon. Friend get any indication from the big supermarkets that they would use direct promotion to contact individual consumers, first to say sorry, secondly to restore confidence, and thirdly to offer compensation to those who have brought these products in the recent past?
Mr Paterson
My hon. Friend makes a good point. As I have said in my replies to Opposition Members, it is for the retailers to get their message across and take the necessary steps to ensure the validity and integrity of their product. It is for the retailers to communicate with their consumers to ensure that they come back.
Neil Carmichael (Stroud) (Con)
I applaud the Secretary of State’s robust approach to eating British food; that is something that everyone in the House will agree with. I am also impressed that he has referred to random testing. Does he think that random testing should be applied to all steps of the food chain? That is an important issue that we need to discuss.
Mr Paterson
My hon. Friend raises an important point. That is exactly what I am thinking of. I repeat that I am concerned that the system as currently conceived is all based on trust. A product is certified at the beginning of the process with a certificate or a piece of paper to state that such and such a pallet contains such and such a product, and it then goes through the system based completely on trust. I would like to have random testing at every stage, so that everyone could be kept on their toes. That could deliver considerable benefits.
Justin Tomlinson (North Swindon) (Con)
Consumer confidence is key. Does my right hon. Friend agree that the serious questions being asked about the conduct of many of our EU neighbours illustrate the urgency of implementing the display of full product origins on food labels?
Mr Paterson
I am very keen on more accurate labelling—the more information the better—and that is what the Under-Secretary of State for Health, my hon. Friend the Member for Broxtowe (Anna Soubry) is working on.
Point of Order
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Tom Watson (West Bromwich East) (Lab)
On a point of order, Mr Deputy Speaker. In answering my question earlier, I fear that the Secretary of State might have given incorrect information. I am sure that I heard him say that he spoke to the chief executive of Findus UK on Saturday, but my understanding is that there is not currently a chief exec of the company. He left last December, hence my point about the executive chairman in New York. I would be grateful if the Secretary of State found out who was masquerading as the chief executive, if that is possible.
The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
Further to that point of order, Mr Deputy Speaker. I can confirm that I spoke to Mr Leendert den Hollander. Perhaps I have inadvertently misled the House and given him the wrong title, but that was his name.
Mr Deputy Speaker (Mr Nigel Evans)
I am sure that this is something that can be sorted out in the course of time.
European Union (Approvals) Bill
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Christopher Chope (Christchurch) (Con)
I beg to move amendment 1, page 1, line 4, leave out ‘decisions’ and insert ‘decision’.
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
With this it will be convenient to discuss the following:
Amendment 2, page 1, line 5, leave out ‘are’ and insert ‘is’.
Amendment 3, page 1, line 8, leave out paragraph (b).
Mr Chope
It is a pleasure to move amendment 1, and to consider amendments 2 and 3 with it. As hon. Members who are following the Bill closely will realise, the substance of the amendments lies in amendment 3, which proposes to leave out paragraph (b) of clause 1(2). That would have the effect of making the Bill apply only to subsections (1) and (2)(a). It would no longer include any reference to
“the draft decision to establish a Multiannual Framework for the European Union Agency for Fundamental Rights for 2013-2017 (document number 10449/12).”
On Second Reading, the Minister expressed the view that we would be able to go into the issue of the European Union Agency for Fundamental Rights in more detail in Committee, and the amendment gives us the opportunity to do just that. I want to reassert the concern that I expressed last week on Second Reading that, although this Government and this country were always against having such an agency, we are tremendously relaxed about extending its budget and its range of activities now that it has been established. There must come a time when we say to the European Union, “Enough is enough. You have gone too far already and we want to rein back the range of activities of the Agency for Fundamental Rights in the coming five-year period.” I hope that the Minister will be able to give us some words of encouragement on the action that our Government are taking to rein back the activities of the agency and, in particular, to prevent it from encroaching on the competences and activities of the Council of Europe, which covers 47 member countries, including the 27 members of the European Union.
Philip Davies (Shipley) (Con)
Will my hon. Friend tell the House exactly what this Agency for Fundamental Rights does? As I understand it, its job is to collect and give evidence on data regarding fundamental rights in all the EU countries. Given that we are all already signed up to the European convention on human rights—much against my will, but there we are—which apparently has nothing to do with the European Union, can he explain why on earth we need this body in the first place?
Mr Chope
The Government at the time had grave reservations about this being included in the provisions of the Lisbon treaty, for the very reason to which my hon. Friend refers—namely, that it represented a duplication of activity that was already taking place. It was an attempt to set up in the European Union a duplicate body to the European Court of Human Rights and the European convention on human rights.
My hon. Friend asks what the agency does. It was intended to try to create what was called a fundamental rights culture within the European Union, and to that end, the organisation does an enormous amount of research. It holds conferences, one of which I have attended. As I said on Second Reading, it was more a propaganda exercise than anything else. The agency produces large tomes of documentation relating to what it describes as fundamental rights in different countries in the European Union. However, it is clear from everything that it does that its ultimate agenda is to be not an advisory body but a legislative body. I hope that the Minister will be able to reassure us that the Government realise that that is the agenda, that they have seen through it, and that they are vigorously opposing it, given that it involves the duplication of so many activities.
Mr David Nuttall (Bury North) (Con)
I am still not clear about one point. Will my hon. Friend give the House a precise summary of the difference between a human right and a fundamental right?
Mr Chope
In essence, the Agency for Fundamental Rights tries to deal with collective rights, rather than individual rights, whereas the European Court of Human Rights deals with individual rights. That is a moot point, however. As with so many things, the European Union comes along and confuses the issue by giving a new institution a very similar name to that of an existing body. We have a Council of Europe, and, although we do not have a council of the European Union, we have a European Union Council. We also have a Commission of the European Union. The European Union has stolen the flag that was originally the flag of the Council of Europe. It has even stolen the anthem of the Council of Europe, and it is now intent on stealing the main part of the Council of Europe’s activities—namely, looking after human rights under the European convention on human rights.
Sir Roger Gale (North Thanet) (Con)
This is part of a creeping sickness, is it not? The European Union is trying to claim rights over trans-frontier broadcasting so that it can tell the whole of Europe what we may and may not broadcast. Upstairs, the House heard this afternoon that the European Union is trying to take over the European Space Agency, which of course goes much wider than the European Union; and now we have this, this evening. Where does my hon. Friend think this might stop?
Mr Chope
I know my hon. Friend has been doing very valuable work in scrutinising trans-frontier broadcasting —he is, I believe, a rapporteur on that subject for the Parliamentary Assembly of the Council of Europe.
Trans-frontier broadcasting exemplifies the problem we have. The Council of Europe set up a convention on trans-frontier broadcasting which has been signed up to not just by its 47 member countries, but by a lot of other countries as well; it is a very important convention. However, the European Union has come along and said that the convention cannot be brought up to date because it cuts across a fundamental competence of the Union. Therefore, the Council of Europe has been prevented, amazingly, from updating the convention because the European Union has said it cannot do so. Of course, because the Union has 27 of the 47 member countries of the Council, if it says, “You cant’ do that”, the Council’s member states collectively have no option but to obey the Union. This is an example, as my hon. Friend the Member for North Thanet (Sir Roger Gale) rightly says, of the European Union’s plan to encroach further upon the territory and responsibilities of the Council of Europe, to the extent that ultimately, it wishes to take over the whole organisation. That is what is so sinister about this measure.
If this were for free, we could all be relatively relaxed about it and deal with it as an academic abstraction, but it is costing us serious money: some €83 million at the moment, as we heard on Second Reading. The Agency for Fundamental Rights was set up fewer than 10 years ago with a budget of virtually nothing; now, it already has accrued that amount of expenditure, and the plans for 2013-17 are to expand it much further.
As we heard in my right hon. Friend the Prime Minister’s brilliant statement today, he and colleagues in the European Union are saying, “Enough is enough: we’ve got to rein back on the European Union’s expansionist programme”. When people put forward the challenge, “What are we going to rein back?”, my view is that this is a good starting point. We never wanted this in the first place, and I hope we are going to hear from the Government what we are doing to push back in the opposite direction.
Kelvin Hopkins (Luton North) (Lab)
I am somewhat concerned about this issue myself, but I want such rights to be strengthened, rather than weakened. However, I will come to that in my speech. Does the hon. Gentleman not agree that some fundamental rights ought to apply to workers and trade unions taking strike action—for example, that we should determine those nationally, rather than internationally?
Mr Chope
I am absolutely in favour of our having control over these issues as a sovereign country, which is why I do not really buy into the concept that there is some standard of fundamental rights across the whole of Europe. Now, the European Union is trying to identify and interpret common factors across all member countries—the Council of Europe is probably as guilty of this—and then impose them on all the countries through the agency, the Council of Europe or the European Court of Human Rights. These are very serious issues, and I look forward to hearing in due course where the hon. Gentleman thinks the agency should go.
The agency was only set up as a compromise to provide something based in Vienna. The Austrians had said that they did not have a European Union agency there, and, the agency having duly been set up, the Austrians are in the forefront of wanting to give it more powers, responsibilities and money, so that more Eurocrats can be based in Vienna and contribute to the Austrian economy. That is the cynical way these things develop. It was a compromise deal, and we have now seen that this organisation has a life of its own. I hope that Ministers will say they are going to snuff this out before the end of the 2017 multi-annual framework. That is why I have great pleasure in moving amendment 1, but if the issue comes to a vote, I will seek a vote on amendment 3, which is where the substance lies.
Kelvin Hopkins
I am very concerned about this issue because before my time in Parliament, I was involved in the trade union movement, in which I have a strong interest, and my feeling is that the agency and fundamental rights in the European Union are a bit of a paper tiger when it comes to defending workers’ rights. As I said when I intervened, I want fundamental rights to be strengthened. Whether they are strengthened by legislation in this Parliament or at the European Union level is a matter for debate, but they certainly need to be strengthened. The rights of trade unionists were weakened considerably by previous Conservative Governments and they have not been restored to anything like my satisfaction.
The “paper tiger” nature of fundamental rights in the European Union was shown in the Viking Line case. Industrial action was taken and, strangely, the fundamental right to take strike action was overridden in favour of the interests of employers. Profits and the rights of employers were seen to have primacy over the fundamental rights of trade unionists. So, I am not impressed by the fundamental rights guaranteed by the European Union. If they are fundamental, the trade unionists taking that action should have been found to be in the right, and the European Court of Justice should not have ruled against them, finding in favour of employers. There have been two such cases, major cases, and they have shaken the confidence considerably of many trade unionists who mistakenly put their faith in the European Union to defend their rights.
I was never impressed with the European Union. As the hon. Member for Christchurch (Mr Chope) knows, I am a critic from a left-wing, rather than right-wing, point of view. I was never as confident as perhaps some of my colleagues were that the European Union would defend trade union and worker rights. I will not necessarily be voting with the hon. Gentleman on this issue—if a vote is indeed called—but I do want the fundamental rights of workers and trade unionists strongly supported and defended, be that in the European Union or in the United Kingdom.
Chris Heaton-Harris (Daventry) (Con)
It is a pleasure to speak in this debate, and I want to talk about the agency in general terms. I am very concerned about the growth in the number of agencies at European level: the European “quangocracy”, as many call it. As a Member of the European Parliament, I sat on the Committee on Budgetary Control, whose purview extended to the agencies when we approved their accounts or gave them a statement of assurance each year. People always moan about the risk of fraud, mismanagement and maladministration in the European Commission, but it was fairly obvious that the further away from the Commission—from the centre—agencies were, the less the scrutiny of their accounts.
My concern is that giving the Fundamental Rights Agency a multi-annual financial framework and such a big budget increase could lead to issues with the way it runs its accounts. I am not saying it had issues in the past—actually, it did have one—but we are talking about a massive expansion in its budget. It is an arm’s length body that has very little oversight from the European Commission, the European Parliament or national Governments.
Over the years, the European Court of Auditors has sporadically looked at projects run by the agency. It is fair to say that they have been of mixed value. They have certainly improved over time, as one would expect, but I understand why concerns are being raised by my hon. Friend the Member for Christchurch (Mr Chope), among others, about including an agency whose work obviously duplicates other bits of work going on within the European Commission, the Council of Europe and possibly in other places.
Philip Davies
I do not intend to detain the House for long, but I wanted to support my hon. Friend the Member for Christchurch (Mr Chope), who, yet again, has done a great service to this House. I rather fancy that the Government hoped to sneak this Bill through without any real scrutiny; they hoped it would be nodded through without anybody looking at the detail. Of course, my eagle-eyed hon. Friend has spotted some of the nasty parts of this Bill that the Government were hoping to sneak through, and he has done us a great service by highlighting them.
Jacob Rees-Mogg (North East Somerset) (Con)
I am shocked at my hon. Friend’s suggestion that such an important Bill could have crept through this House without being carefully scrutinised. Many of us spoke on Second Reading and have considered the Bill carefully, as it is a sensible advancement of the European Union Act 2011.
Philip Davies
While my hon. Friends the Members for North East Somerset (Jacob Rees-Mogg) and for Christchurch are in the House, I can be confident that legislation will be properly scrutinised. Without their services, I cannot always be so confident, and we owe them a great debt of gratitude for the work they do.
My hon. Friend the Member for Christchurch is absolutely right about the Fundamental Rights Agency, and I hope that the Minister will make it clear where the Government stand on this issue. Bizarrely, we face enacting something and, in doing so, supporting a wholly unnecessary agency. It is unnecessary because, as my hon. Friend the Member for Christchurch said, it does the work that the Council of Europe already does. We are already signed up to the European convention on human rights, which is bad enough—if I had my way, we would not be signed up to that—but now it appears that the Government want us to have an EU version of exactly the same thing.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
I rise to speak because I am shocked by what the hon. Gentleman has just said. The European convention on human rights came about at the initiative of the British Government in the beginning; it was done to bring people together to find ways of applying common standards across the whole of Europe in order to prevent what had happened leading up to the catastrophe of the second world war. Surely he is not saying that he thinks the UK would have been better off not having taken that initiative and that Europe should remain a place of conflict where people do not agree on what human rights everyone deserves in Europe.
Philip Davies
I know that the hon. Gentleman takes a pride in living in the past, and that is fine and dandy, but of course he was talking about what the convention was set up to do in the first place, many years ago, whereas I am talking about the present. I am sure that he did not envisage our having to have ridiculous things such a votes for prisoners as a result of our membership of the European convention on human rights. I do not want to get sidetracked on to something that is not, strictly speaking, dealt with in this group of amendments, Mr Evans. The hon. Gentleman was tempting me down a path that I fear you might have intervened on had I pursued it any further. My point is that whether we are in the convention rightly or wrongly, we are in it and so it is utterly pointless to have the agency trying to mimic what is already being done there.
My second point relates to the agency’s desirability. Even if it was not pointless, it would certainly be undesirable. Let me give hon. Members an example of the types of issues the agency is trying to interfere in. It had a speaker on a panel discussing:
“Guaranteeing access to healthcare for undocumented migrants in Europe”.
We now have a new term—undocumented migrants. I think my constituents know them as illegal immigrants, but in the politically correct-speak of the EU they are undocumented migrants these days. Of course what the agency is trying to do is encourage all these illegal immigrants to access health care in countries such as the UK. My constituents are sick to the back teeth of the national health service being used by illegal immigrants and rather prefer these people to go back to the country that they should be in to access the health care in the country they come from. I hope that the Minister will address the following question: are the Government really using taxpayers’ money to fund an agency within the European Union that is actively encouraging people from within the EU illegally—this discussion was on illegal immigrants—to access this country and use the services provided for people in this country? It would be a ridiculous state of affairs if it was the official policy of Her Majesty’s Government to use taxpayers’ money to fund an agency to give out that kind of advice. If the Government’s policy is that they do not like this particular organisation and do not approve of what is it doing, what on earth are we doing with this Bill? Why are we being encouraged, in effect, to allow taxpayers’ money to be spent this agency?
Mr Chope
I am sure that my hon. Friend will not welcome this information, but this all goes wider than what he has described, because what is often being suggested is that these people seeking to access health care should be able to do so without disclosing their own identities.
Philip Davies
Absolutely, and again I am grateful to my hon. Friend. The situation makes the Government’s position on these matters unjustifiable and completely ridiculous. If the Government do not support all this, why on earth are we in this situation? If we are in this situation because the Minister is utterly powerless to do anything about it because he has no influence whatsoever, I hope he will admit that. When our referendum comes, in 2017 or thereabouts, it will be another argument for why we should leave the European Union.
Mr John Redwood (Wokingham) (Con)
Does my hon. Friend agree that the whole idea of an EU quango to lecture member states on how we should behave on human rights is nonsense? This is a group of democratic states, so surely it is the job of the Parliaments of the individual member states to decide on and uphold the human rights in their countries, rather than to be instructed by EU quangos.
Philip Davies
My right hon. Friend, as ever, is absolutely right. We certainly need no lectures from other countries in the EU about how to protect people’s freedoms; this country has a far better track record than member states of the EU will ever have. I suspect that the Minister will be trying to defend the indefensible, but it is a sad state of affairs when it appears that we in this House are powerless to do anything about these sorts of bureaucracies. We all know what happens with these types of bureaucracies: they grow and grow, and they empire build. They will grow their influence and they will try to do things that they are not supposed to do—things they were not set up to do. They will grow the number of staff and grow their budget, and it appears from what I have heard so far that we are utterly powerless to do anything about it. If the Minister can give me some comfort that we can and will do something about it, fair enough, but it seems to me that either the Government approve of all this nonsense, which would be a terrible state of affairs, or we are powerless to do anything about it, which in my view is equally unacceptable. I look forward to the Minister explaining which it is, but whichever it is, my hon. Friend the Member for Christchurch is right to draw the matter to the attention of the Committee and to pursue his amendment, which I support with gusto.
Michael Connarty
I rise because I am quite exasperated by speeches of the kind made by the hon. Member for Shipley (Philip Davies). If I really believed that the people of Shipley did not want to have human rights and participation in a convention that tries to guarantee for people across the wider Europe the same human rights that we—as he said, proudly—think we have in our own country, I would be shocked, but I believe that the people of Shipley deserve better. They deserve to hear an explanation of what this is about.
As a Member of the Parliamentary Assembly of the Council of Europe, I hear these issues debated at every quarterly session and, I hope, participate with colleagues from both sides of the House to try to point out to many countries that are not in the EU that they are not giving human rights in the right quantity to their citizens, but this is about saying that the EU will have an organisation that will also monitor those things. Some might say, “If you have it in the Council of Europe, why require it in the EU?” The reality is that unless a body has economic and legal might, such as exist in the EU, many decisions, such as those taken by the Council of Europe, do not, I am afraid, carry much weight.
There are thousands of cases against countries in the Council of Europe, which have been found in the Court of Human Rights to be in breach but which are not acted upon by the countries covered by it. There are many cases raised by Conservative Members of countries within the EU where there is a requirement for some muscle to be applied so that people cannot be locked up without trial. One case raised by the hon. Member for North Thanet (Sir Roger Gale), who sadly is not in his place, relates to Malta—our own constituents locked up in other countries.
The point of introducing the change that has been made in the EU is to allow the EU to start to participate in that activity—a role that I believe will be parallel to and supportive of what is happening in the Council of Europe and what is debated in the Parliamentary Assembly of the Council of Europe.
Philip Davies
Does the hon. Gentleman appreciate the nonsense of this country being lectured about fundamental rights and human rights by an organisation such as the EU, which has as the initiator of all its legislation an unelected European Commission? Surely one of the most basic rights is being able to elect people who make all the decisions. The EU has not even got that far.
Michael Connarty
I hope that the people of Shipley are not believing the mythical nonsense that has just been spoken. I have sat on the House’s European Scrutiny Committee since 1998, and the reality is that the European Commission can initiate proposals for legislation, but legislation cannot be agreed in the EU unless it is passed by the European Council, and we are one of 27 countries that take those decisions. A number of people do not like the fact that many of those decisions are now taken by qualified majority voting and there is no veto—I know that the right hon. Member for Wokingham (Mr Redwood) is keen on the return of the veto on everything—but that is the decision that was taken by the House through the Lisbon treaty and, before that, through many other treaties. We have participation in a Council that makes the legislation, not the Commission.
Wayne David (Caerphilly) (Lab)
Does my hon. Friend agree that one problem of the European Court of Human Rights is sheer delay? It has a backlog of 150,000 cases and a five-year delay, on average, before a case is heard. That is unacceptable.
Michael Connarty
That is entirely unacceptable. I believe that that point is regularly made in the Parliamentary Assembly by Members from both sides of the House. We have been pressing to change that, so that many cases that are queuing up at the Court of Human Rights, which clearly do not have any chance of being judged positively in that Court, can be dealt with in another manner. Perhaps some of them will not come to the Court—
Michael Connarty
No, I do not want to continue with the Council of Europe. I have spoken at length in the House in debates on the functions of the Parliamentary Assembly, which I think is an excellent organisation that brings people back to why we come to Parliament. It is about the application of human rights. We often get tied up in playing our parties off against each other, but if we look through the lens of human rights we can very quickly see where the breaches are. There were huge outcries under the previous Government when we were locking up people for long periods without trial, which I objected to. Many of these things come back to the fundamentals.
The EU is adding its weight. It has more power than the Council of Europe to deliver judgments and make those judgments stick, because penalties apply to things that the EU gets involved in. If we decided to break away from a European directive, we could, as a country, be fined. When, for example, Bulgaria refused to come up to scratch with its legal system, it had all its EU finances frozen until it brought itself up to a standard that was acceptable.
The EU might attract many criticisms, and at times I find it greatly irritating, but I am pleased that it is adding its weight to the need to look at things on a human rights basis and to report on that. That is what the proposal is about.
Mr Redwood
Does the hon. Gentleman not accept, in retrospect, that when so many powers were given away by the House under the Labour Government, it would have been much better if they had asked the British people’s permission? The British people feel cheated now.
Michael Connarty
I know that the right hon. Gentleman has a strong view about that. I do not happen to think that a referendum on an issue as complex as the EU would be debated according to the quality of the information that is required. Referendums become a mass populist vote either for or against a Government. If this Government went for a vox pop at the moment, they might be in great danger of being voted out of office. Why does he not put that to the people?
Emma Reynolds (Wolverhampton North East) (Lab)
Does my hon. Friend agree that the biggest transfers of power happened in the 1980s with the Single European Act and with the Maastricht treaty in 1992? Actually, the current Foreign Secretary voted against a referendum on Maastricht.
Michael Connarty
I recall that well, because I have been a Member of the House since ’92, and I remember the very lengthy debates that took place, but this is not about the Maastricht treaty; it is about the proposal in the Bill, which is basically to set up a
“Multiannual Framework for the Fundamental Rights Agency”.
That is the point that is of interest to me, because that is an important thing to do and we should be going forward with it. I hope that we do. If the Government really are about to do an about-face and vote against that, I wonder what their position was in the Council, when this went through. Were they voted down in the Council? Are they about to change their position?
I am interested in the Government’s position as much as anyone else, but I am speaking from my point of view, looking at this as someone who has been on the Parliamentary Assembly of the Council of Europe and the European Scrutiny Committee for a long time. It is important, I believe, for us to realise that, while we might not like the fact that the EU sometimes asks us to do things that we might not have wished to do ourselves—for me, some of those are in fishing and agriculture, neither of which has been massively amended by anything that has happened recently under this Government—human rights will not be harmed in this country but will be advanced markedly in other countries by having the EU alongside the Council of Europe and the Court of Human Rights, fighting for human rights for all in Europe. Who would wish to deny that, apart from the hon. Member for Shipley?
Chris Heaton-Harris
Is there not a concern, though, about the duplication and growth of those agencies? Even the European Commission, through Commissioner Šefcovic, said at the end of last year that we need to reform many of these agencies, which have unruly-sized governing boards, and try to prevent conflicts of interest. Just in this particular field, we have the Fundamental Rights Agency based in Vienna, the European Institute for Gender Equality based in Vilnius, and the European Asylum Support Office based in Valetta. Surely the question is, should we be growing this agency and giving it such a big budget and a multi-annual financial framework of such a size before we have undertaken some reform of those agencies?
Michael Connarty
I take the point. It is well made by the hon. Gentleman, who speaks from the dual perspective of looking in from the European Union at the effect on other countries, and looking out now from this Parliament at what the European Union is doing.
I find it remarkable that every time the European Union grows, we have a convention that the new member state gets a new Commissioner. At my first meeting in Brussels, I believe I raised the matter with UKRep—why did we need a new Commissioner every time we added a country? Why does every member state have to have an office of some kind because it does not have an office of some other kind? We did it. We were fighting over the universal patent recently, and the most important thing to the UK was where the patent court would be based. It had to be based in London. It was not about whether the patent was a good or a bad thing. There is a problem with the EU in that it sprays benefits around. I believe it has put some institution on Crete—a wonderful island where I have holidayed often, but I could not work out why a major institution of the European Union had been located on Crete, apart from the fact that the Greeks wanted to have their turn.
That has to be looked at fundamentally, but the principle is correct. If the European Union sets up the agency, it will monitor what is happening with human rights, and I hope it will then begin to ask how it can help the Council of Europe, the European Court of Human Rights and those who want, as Churchill and many others did after the last war, to base Europe on human rights. The questions will continue about the corpus juris, which the hon. Member for Stone (Mr Cash) will no doubt talk about, and the right hon. Member for Wokingham (Mr Redwood) will no doubt talk about economic interference.
After all that is discussed, I hope we will all be able to agree that if the EU supports the Council of Europe and does the business, making human rights available to all the people in the EU and then beyond, it will advance Europe in accordance with the original principles of the people who set up the convention, which should be at the heart of our politics.
Mr Nuttall
That was an interesting contribution from the hon. Member for Linlithgow and East Falkirk (Michael Connarty), but one with which I fundamentally disagree. It was obvious from the early part of his comments that they reinforced the points that have been made throughout this debate. In essence, we have jumped back from fundamental rights to human rights.
In an intervention on my hon. Friend the Member for Christchurch (Mr Chope), I asked whether we could try to agree on the difference between human rights and fundamental rights, but everyone seems to have jumped back to accepting that fundamental rights is just another phrase for human rights, and that the agency does no more than replicate what is done elsewhere in the European Union by the Council of Europe. What came out of those comments was the fact that if reform is needed, we need to reform the Court, so that it can enforce the decisions made by the Council of Europe.
Bob Stewart (Beckenham) (Con)
What is the difference between British human rights and European Union human rights? Surely British human rights should be decided here and should take precedence.
Mr Nuttall
I am grateful to my hon. Friend for that intervention. It is the second of the points that I want to make, which is about subsidiarity. We hear a lot about subsidiarity, yet in practice the European Union goes the other way, rather than saying, “Look, these are the matters which you will probably be concerned with. We’ve had a look at the UK and you’ve got plenty of organisations within the UK to deal with all these matters. There is no need for an EU body.” That applies across all 27, soon to be 28, member states.
Philip Davies
Has my hon. Friend thought about what situation we would be left in if the UK got a positive judgment from the European Court of Human Rights, but was then told that it was falling foul of the EU’s Agency for Fundamental Rights?
Mr Nuttall
My hon. Friend makes an excellent point, which gets to the heart of one of my major concerns about the organisation and why I support entirely the amendments tabled by my hon. Friend the Member for Christchurch. It highlights the confusion in the minds of our constituents.
I wonder how many of our constituents even know that that body exists. I suspect that if I conducted a poll on the streets of Bury, I would have to wait a very long time and ask a large number of people before I found anyone who had even heard of the agency, never mind understood what it was intended to do. That is not surprising, because it was introduced in 2007 by the back door. It was introduced under the provisions of section 352 of the treaty on the functioning of the European Union, the Lisbon treaty, which allows for such new bodies to be established without any proper discussion. As I say, it was introduced through the back door.
The EU goes on about the principle of subsidiarity, but then we find that it is creating an EU-wide body to do things which, as we have heard in tonight’s debate, are not only being done elsewhere in Europe, but ought to be and can be done properly here in the UK. This is not a cheap body. We know that in 2013 the agency will get a subsidy of €21.3 million from the EU budget.
Mark Reckless (Rochester and Strood) (Con)
Is it not anomalous that the agency should have a separate multi-annual financial framework for the five years from 2013 to 2017, rather than being rolled into the overall multi-annual financial framework from 2014 to 2020, which the Prime Minister has ably ensured will be significantly reduced?
Mr Nuttall
My hon. Friend makes an extremely good point. The question arises what would happen in a situation which has partly happened now and will certainly happen in the next multi-annual framework, where the agency straddles two financial periods. How can an agency properly budget when its framework straddles two budgetary periods? It does not make sense. That is just another example of muddled thinking in Europe, and of an organisation that has no intention of being transparent or open to the people whom it seeks to serve.
Mr Redwood
I am sure my hon. Friend has noticed that in the supporting documentation it is asserted that there will be no impact on public sector manpower or cost. Having to deal with yet another one of these fiddly agencies means huge legal bills, on top of the ones that we have for the European Court of Human Rights and on top of our domestic ones. Is that not an awful lot of extra money?
Mr Nuttall
Yes. My right hon. Friend again makes an excellent point. We will find that someone who is concerned about a particular right in this country is faced with a plethora of bodies, and those involved in this field in this country have an extra body to liaise with on the European front. Whereas in the past they would just have looked to the contents of the European convention on human rights and the findings of the European Court of Human Rights, they now have to think, “I wonder what the European Union Agency for Fundamental Rights will think about all this. I wonder what it has said about it.”
I will not go down that road, as we have other amendments to consider and there is a further debate afterwards. I doubt whether we need that body at all. That is why I will support my hon. Friend’s amendments tonight. The body is unnecessary and it adds confusion to what is already a very crowded playing field in the area of human rights. I simply ask the Minister how the agency will benefit my constituents in Bury, North. How would they notice if it were simply abolished? That is what I think should happen.
Mr Robert Walter (North Dorset) (Con)
My hon. Friend the Member for Christchurch (Mr Chope) and I do not always agree on matters relating to the European Union, but we generally agree on matters relating to human rights. He does sterling service in the Parliamentary Assembly of the Council of the Europe as chairman of the Committee on Legal Affairs and Human Rights.
Michael Ellis (Northampton North) (Con)
Does my hon. Friend agree that it is a simple matter of fact that for many of the issues that he is delineating we in this country have been practising a proper discourse and addressing them coherently in UK jurisdictions, in many cases before the European Union even existed?
Mr Walter
My hon. Friend is absolutely right. That is partly why we were one of the founder members of the Council of Europe and one of the original signatories to the European convention on human rights.
Article 3 of the document gives one a little hope, because it talks about
“Complementarity and cooperation with other bodies”,
but one has to read all the way through it to find that it does not even mention the Council of Europe until the final sentence, in paragraph 5, which refers to the
“Agreement between the European Community and the Council of Europe on cooperation between the European Union Agency for Fundamental Rights and the Council of Europe”.
That is all well and good. However, I hope that the Minister will deal with the question of resources. The Council of Europe has been constantly under pressure from all 27 member Governments, including our own, on how it disburses its budget. The ever-increasing work load in the European Court of Human Rights means that the majority of the budget goes towards its operation. Now we have another body, funded by exactly the same taxpayers in the 27 member states of the European Union, that apparently might not have the same financial constraints placed on it. Would it not make absolute sense if we, as the 27 members of the European Union, agreed to chuck the little packet of money that we are going to give to the Fundamental Rights Agency into the budget of the Council of Europe to make it the much more effective body in promoting human rights and respect for all the rights outlined in article 2 of the document? We could then ensure that we in the European Union can promote human rights much more effectively, particularly in the new states of Europe and the states to the east, as partners through our membership of the Council of Europe.
The Minister for Policing and Criminal Justice (Damian Green)
My hon. Friend the Member for Christchurch (Mr Chope) provoked a very wide-ranging debate covering a large number of issues, some of which are to do with the Bill and a few of which are even to do with the amendments. They include the question of whether the Fundamental Rights Agency represents value for money and concern about the potential for duplication with the work of the Council of Europe, about which my hon. Friend the Member for North Dorset (Mr Walter) spoke so eloquently.
The Bill is limited to seeking parliamentary approval for an EU decision to agree the agency’s new five-year work programme. The programme simply identifies the thematic areas under which the agency will undertake its tasks. The amendments—my main contribution to the debate, Mr Evans, will be to talk about the amendments—have as their common purpose a desire to remove clause 1(2)(b) from the Bill, the effect of which would be to withhold parliamentary approval of the draft decision that seeks to establish the next five-year work programme for the agency. Without that parliamentary approval, the UK cannot vote in favour of this measure at EU level. I do not believe that withholding such approval is the right course of action. I urge my hon. Friend to withdraw the amendment, or the Committee to vote against it, for the following reasons.
The work programme is agreed by the Council. Agreeing the work programme provides member states—including, of course, us—with the opportunity to define the focus for the agency’s work for the next five years, encouraging it to concentrate its resources on a limited number of areas and to undertake targeted, in-depth research within the boundaries defined by the framework. The UK has participated actively in the negotiations that have led to the new draft programme being drawn up and is satisfied with the results. It is important for the Committee to be clear that the agreement of a new work programme does not alter the core tasks of the agency, nor does it change the agency’s role. The work programme does not set out or define these elements. They are set out in a completely different instrument—the agency’s establishing regulation, which is not under review in the Bill or in the amendments. I hear the views of many of my hon. Friends about the merits of the agency’s work, but neither this Bill nor the draft decision that it approves can do anything to bring about changes in those areas.
Mr Redwood
I think that we have all been entirely in order and that the Minister should reconsider. We are saying that we want this thing to do a lot less and to do it much more cheaply. That is entirely in order, and it is our one opportunity to say it. We in this Government are meant to be looking for cuts. This would be an exceedingly popular one, so will the Minister cut the thing?
Damian Green
I was not suggesting for a moment that my right hon. Friend, my hon. Friends or anyone else who has contributed to this debate were out of order; I was merely making the point that I want to address the amendments. My right hon. Friend has expressed his views with characteristic force, but I have to disappoint him by saying that the amendments would not achieve what he hopes they would.
Let me be clear about the consequences of the UK not approving the draft decision. Failure to agree the work programme would deprive the Council of the opportunity to set the direction of the agency by defining the themes. However, the absence of a work programme would not mean that the agency would go away or down tools. My right hon. and hon. Friends should bear that important point in mind when considering whether or not to support the amendment. If there was no draft framework, the agency would still be able to carry out its role. However, its focus would shift to answering requests for work from other EU institutions. Not supporting the framework therefore means that member states, including the UK, would have less influence on the work that the agency does. I do not think that that would be a good result for the UK and I suspect that my hon. Friend the Member for Christchurch would agree with that.
The themes set out in the work programme continue those in the current one, and I welcome the European Scrutiny Committee’s analysis that the proposed work programme can indeed be considered to be equivalent to the former one. Although there are some adjustments between the two work programmes with regard to terminology, the changes will not alter the work that the agency has been doing.
During negotiations the UK Government were successful in ensuring that the themes set out in the work programme should continue to be limited to Community law. Other member states proposed the inclusion of themes on police co-operation and judicial co-operation in criminal matters. That would have been an extension of the agency’s work and it was successfully resisted by the UK Government. The draft decision records that we were successful. Agreeing to the draft decision will ensure that that is a binding decision of the EU institutions. That is why we are asking Parliament to approve it.
Moving on to some of the specific points that have been raised, the issue of duplication of the work of the Council of Europe has been a feature of this debate. The agency’s role is to provide the EU institutions and member states with independent evidence on how fundamental rights are respected. It does so through undertaking research and producing comparative data of the situation of rights across those member states, and through producing indicators that can be applied across the EU. Some of my hon. Friends were treating it as though it were an alternative to either the European Court of Justice or the European Court of Human Rights. It is, in essence, a data collection and dissemination agency that does not do any of the work of the ECJ or the ECHR. I agree that that would be unnecessary duplication. The same point applies to those in this country who, quite reasonably, would not want to lectured by the Fundamental Rights Agency about our performance on human rights. It does not do that sort of thing—that is not the work that it does.
There has been much discussion and concern expressed about money. This, of course, has to be set in the context of the statement made by my right hon. Friend the Prime Minister earlier today. As he made clear—I think this was widely welcomed by all parties—the Government will continue to push for a good deal for UK taxpayers through agreement on the next multi-annual financial framework. The agency’s budget for the period covered by the next MAFF will form part of our negotiations following the agreement of that framework.
Mr Nuttall
Before the Minister concludes, could he give just one example of how British citizens have benefited in any way whatsoever from the existence of this agency since it was established?
Damian Green
The dissemination of hard facts and data on human rights performance across the European Union is intrinsically useful for British citizens and, indeed, those of other countries, because it enables us to assess how one of the basic things that we all wish to preserve—not just in our country, but in neighbouring countries—namely a basic commitment to human rights, is actually happening. It is extremely desirable for the citizens of democratic countries to enjoy human rights almost as a matter of habit, and it seems to me that any body that promotes such a state of affairs, in however small a way, is doing useful things for the British people.
Damian Green
I suspect it applies in Shipley, but it might not. I defer to the knowledge of my hon. Friend the Member for Shipley (Philip Davies) on the people of Shipley. I think that human rights are a good a thing in Shipley, as they are elsewhere.
Mr Chope
I am grateful to my right hon. Friend the Minister for responding so frankly. What he has said illustrates the farce we are in. As a result of the commendable passing of the European Union Act 2011, we are being asked to approve, among other things, the work programme of the Fundamental Rights Agency for the next five years. If we do not approve the programme, we have been told, “Don’t worry—they’re going to go ahead with it anyway and choose their own programme.” Similarly, as the Prime Minister told us earlier with regard to the multi-annual financial framework—the next seven-year budget for the European Union—if a real-terms reduction had not been agreed, it would have carried on spending more than had been agreed anyway. That shows the extent to which we have been tied up in knots by the European Union and its institutions. The evidence coming out of this debate will be prayed in aid by people such as me when we get into the hard issues of debating whether or not it would be better to stay in or leave the European Union. I see this as part of that debate.
This debate has raised a number of interesting points beyond the Minister’s insight into what our powers amount to in this case. My hon. Friend the Member for North Dorset (Mr Walter) undertakes with extreme diligence his job as leader of the UK parliamentary group in the Parliamentary Assembly of the Council of Europe. He raised a number of serious issues. Such issues are being raised not just by him as leader of the UK delegation, but by a lot of other delegations. One such issue is that, at a time when the European Court of Human Rights and the Council of Europe are being starved of resources, we can see with our own eyes that the 27 member countries of the European Union feel that they can throw money at the gravy train that is the Fundamental Rights Agency. Sadly, I did not hear an assurance from my right hon. Friend the Minister about what the Government are doing to stop that. They may be powerless to do anything about it, for the reasons given in his speech.
I do not think that that is good enough. We now have a situation in which we know that a lot of that money is being wasted. My hon. Friend the Member for Shipley referred in his excellent speech to undocumented migrants in Europe having access to health care. That was the very subject on the agenda at the Warsaw conference that I attended and on which I expounded on Second Reading. What a waste of money that was.
The hon. Member for Linlithgow and East Falkirk (Michael Connarty) was concerned about the five-year delays in getting judgments. The European Court of Human Rights needs more money if it is to increase the speed with which it deals with its casework. It is not getting extra money because the 27 members of the European Union would prefer to spend their money on the Fundamental Rights Agency.
Mr Redwood
Does my hon. Friend not mean to say that the work load of the European Court of Human Rights should be severely reduced to leave more matters in the power of democratic member states? Surely he does not want more money to be spent at that level.
Mr Chope
As a lawyer—[Laughter.] As a non-practising lawyer, I believe that if somebody starts a case before the courts under the rule of law, it should reach a conclusion within a reasonable space of time. It is incumbent upon any organisation that operates a legal system to ensure that sufficient resources are available for the judges to reach decisions reasonably quickly.
Mr Redwood
Does my hon. Friend not agree with the Government’s very wise argument that we do not want so many appeals to the European Court of Human Rights and that individual litigants should be able to appeal only to our Supreme Court?
Mr Chope
I certainly agree with that in relation to our particular case. I look forward to debating that issue when we discuss the draft Voting Eligibility (Prisoners) Bill. Two months have gone by since the draft Bill was published and the Committee still has not been set up to consider it. However, that is another story.
Mark Reckless
Surely my hon. Friend is not suggesting that he objects to delay on that matter.
Mr Chope
Again, I believe in the concept of reasonable expectations. Once a draft Bill has been produced and the Government have said that it will be put before a Joint Committee, I expect the Joint Committee to be appointed within a reasonable space of time. The Committee can then meet and decide its own timetable. However, I would not want to take issue unnecessarily with the Government on a matter such as that, which is relatively small in comparison with some of the other issues on which I have differences with the Government.
I would love to recommend to my colleagues that we divide on this subject, but having heard from the Minister that even if we carried a Division, it would be of no use whatever and might even be counter-productive, I am minded to say that the best thing to do is to hope that the Minister will take back the concerns over the misallocation of resources between the Council of Europe and the Fundamental Rights Agency, and that he will see what he can do to change the system so that the next time we have a debate like this, we have the power to control the agenda and the work programme, rather than being presented with a fait accompli, the alternative to which is even more latitude for the agency concerned.
The next amendment that we will discuss is more wide-ranging and I hope that the Minister will explain in a little more detail why that amendment cannot be accepted by the Committee. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Wayne David
Clause 1 refers to the draft decisions on the Official Journal and the Fundamental Rights Agency.
I will refer to those two issues in a moment, but I would first like to say a little about clause 1(1), which sets out that when a decision is reached under article 352 of the treaty on the functioning of the European Union, or the Lisbon treaty as it is known as, under section 8 of the European Union Act 2011 that decision must come before Parliament for ratification.
As connoisseurs of these matters will be aware, article 352 is quite controversial. It is the so-called flexibility or enabling clause, which allows decisions to be taken when there is no legal base for them. Its predecessor was article 308 of the European Community treaty. When I was a member of the European Scrutiny Committee, we produced an excellent report on article 308.
I am pleased that we have this new parliamentary power under the 2011 Act. I am sure that the Minister for Europe will recall that the Opposition consistently supported more powers for national Parliaments when the Bill was going through this House. The procedure with regard to article 352 is an important new power.
I was, however, concerned that the former Lord Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), said last year in evidence to the European Scrutiny Committee that an Act of Parliament was not required to enact the decision on the Fundamental Rights Agency because it satisfied the exemption requirement under section 8(6)(a) of the 2011 Act. That was rightly questioned by the European Scrutiny Committee. In a letter to the Committee on 22 November, the Government stated that they had had second thoughts and that legislation would be brought forward after all. That is one point to the European Scrutiny Committee.
I find it strange, given the initial difference of opinion between the Government and the European Scrutiny Committee, that there is not even a passing reference in the explanatory notes to why the Government at first considered the decision to be exempt and then had a change of heart. Perhaps the Minister could tell the Committee what changed between the summer and winter of last year that prompted the Government to alter their position. Eventually, the European Scrutiny Committee cleared the document, but it stated that the Government’s uncertainty—I would say vacillation—had led to an inordinate delay.
Clause 1(2)(a) is about giving binding legal effect to the electronic version of the Official Journal, as only the printed version currently has such veracity. This may be called the libation clause. I say that because, as I mentioned on Second Reading, this paragraph is required, in part at least, because of a ruling by the European Court of Justice on a case concerning the importation of red dessert wine into the Czech Republic.
After being fined for breaking customs law, Skoma-Lux, the company that imported the dessert wine, brought an action in a Czech regional court in an attempt to cancel the fine. The company argued that the wine should not be classified as standard red wine and that the Act of accession for the new member states that joined in 2003 was not legally binding because it had not been published in Czech in the paper version of the Official Journal.
After expert examination by the customs technical laboratory in Prague, the wine was indeed reclassified because, unlike most wines, it was made from grape juice that had added sugar and corn spirit. It was said that that did not change the
“organoleptic characteristic of the beverage”
but did cause the wine to have a sweet taste that cannot be achieved by “standard wine production”. Because the regional court was not sure whether that could be discerned by customs officers, the issue was referred to the European Court of Justice. Sadly, I have been unable to find out the view of the European Court of Justice on that matter. Perhaps the Minister for Europe can help us.
Although that is unclear, what is clear is that the European Court of Justice made a number of unequivocal statements with regard to the other point that was brought before it, namely the availability of EU law in the paper form of the Official Journal. The Court ruled that “making the legislation available” on the internet
“does not equate to a valid publication in the Official Journal of the European Union in the absence of any rules in that regard in Community law”.
In the light of that ruling, the European Commission agreed to bring forward a proposal. Political agreement was achieved at the Justice and Home Affairs Council of March 2012. Undoubtedly, easy access to EU law makes for speed and is economic, and it would obviously be advantageous to have legal certainty.
Earlier I mentioned reservations in this House about the use of article 352, but it is worth noting that scrutiny reservations are not confined to this Parliament. I understand that other Parliaments, especially those in the Czech Republic and Germany, also had concerns about article 352 and the possibility of decisions being taken without a given treaty base. On the legal status of the online Official Journal, I understand that Germany entered a parliamentary scrutiny reserve and therefore the German Government were unable to confirm their agreement. Will the Minister confirm whether the situation in Germany has been clarified, and that there are no problems in other member states?
Mr Walter
The hon. Gentleman has cited examples of where the Fundamental Rights Agency is investigating areas into which the European Commissioner for Human Rights—a Council of Europe appointment—has not delved. Surely it would be more logical if we were to use those resources for the benefit of all 47 member states of the Council of Europe. It is in the 20 member states that are not members of the European Union that those rights are inevitably most at risk.
Wayne David
The hon. Gentleman makes the point: there is a mismatch between the Council of Europe and the European Union, not least in terms of the membership of those two constituent organisations. It can become awkward and cumbersome, but that obvious overlap should be recognised and efforts are being made by both parties to minimise the duplication of work. It is significant, for example, that the Council of Europe has an independent expert who sits on the board of the Fundamental Rights Agency. A physical interrelationship takes place, which is to be warmly welcomed.
One conclusion of the important report from the other place was that:
“EU legislation brings a considerable added value over the ECHR in that it can be effectively enforced…It can also cover matters not adequately covered by the ECHR and is more flexible”.
Those are important considerations. We are talking about two different beasts. The work is complementary but it is also different and it is important to recognise that.
In conclusion, it is not my intention to trespass into the debate about whether or not the UK should exercise next year its block opt-out of so-called third pillar issues. That is a debate for another time, but I say simply that these issues need careful and rational consideration. Given the interest in related issues, I hope that this House will have umpteen opportunities to consider the profound decision that will have to be made next year. This clause has the support of the Labour party and we are pleased that time has been allocated for the discussion of the Bill on the Floor of the House. We hope Members from all sides will feel able to support the clause.
Damian Green
I am grateful to the hon. Member for Caerphilly (Wayne David) for the Opposition’s support for this clause. He asked a couple of specific questions including why the Government changed their mind about the applicability of the exemption in the European Union Act 2011 to these measures. Originally, the Government thought that section 8 exemptions applied to a decision previously adopted under article 308 of the treaty. However, having reconsidered the issue of exemptions, and partly owing to the sterling work of the European Scrutiny Committee and its equivalent in another place, the Government concluded that decisions previously adopted under the legal base of article 308 do not fall within the exemptions in the 2011 Act. Therefore, along with future article 352 decisions that were previously adopted under article 308, such decisions will require parliamentary approval through primary legislation.
The hon. Gentleman also asked about the state of play in Germany, and I am happy to assure him that Germany and all other member states have completed parliamentary scrutiny of this issue. The Council is awaiting the decision of the UK Parliament before the decision can be adopted.
We have discussed exhaustively the work programme of the Fundamental Rights Agency, and the hon. Gentleman made a good point that the other part of this clause is about allowing the electronic version of the Official Journal of the European Union to be regarded as an authentic version. I am sure the Committee will agree that in the modern world in which electronic communications are now as normal as paper communications, that is a sensible measure that will not increase costs for the UK and its taxpayers. I commend the clause to the Committee.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.
Clause 2
Approval of decision relating to number of EU Commissioners
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
With this it will be convenient to discuss clause 2 stand part.
Mr Chope
The background to this, as right hon. and hon. Members will know, is that a reduction in the number of EU Commissioners was proposed, but the Irish—among others—said that that would potentially be very unfair on them. They wanted to be guaranteed the right to have a Commissioner and, as part of the compromise deal that was done to try to win the support of the Irish people in a referendum, the concession was made. They were told, “Don’t worry, every country can have an EU Commissioner.” We are now being asked to give approval to the decision relating to the number of EU Commissioners.
Mr Andrew Turner (Isle of Wight) (Con)
Can my hon. Friend explain why it is felt necessary that each country should have a Commissioner?
Mr Chope
It is difficult for me to speak for them, but perhaps some countries feel that only if they have a Commissioner of their own will they have sufficient patronage to distribute. It is within the patronage of any Government to appoint an EU Commissioner. For example, we have heard rumours that the way out for the Deputy Prime Minister will be to be appointed the next UK EU Commissioner.
Mark Reckless
Does my hon. Friend recall that I asked the Deputy Prime Minister about that directly, and he assured the House that he would not be a candidate? If Ireland insisted on keeping its Commissioner in order to ratify the Lisbon treaty and we did not want to ratify it, why did we not say, “Well, this depends on a vote of this Parliament”, and why should we approve it if the aim is to help the Lisbon treaty get through?
Mr Chope
My hon. Friend makes a telling point, and I am sure that the Minister will respond to it with the benefit of his knowledge when he winds up. So often we talk hard on these EU issues—sometimes the Government and Ministers talk hard on them—but when we have it in our power to do something about them, we pull our punches and let the matter slide away. Especially now, in the build-up to the decision that the British people will be invited to take on whether we should leave the European Union, it is vital that the Government do not duck these issues, but face up to them.
I very much welcome what the Prime Minister said in his statement to the House earlier today. It was against the background of it being pointed out in the German newspaper Die Welt that the Prime Minister was wrong to suggest that hundreds of eurocrats were paid more than him or Chancellor Merkel, because its research had shown that the actual figure is 4,365. The Prime Minister said how disappointed he was that the administrative costs will still be some 6% of the EU budget, and he said that reducing the level of those costs would be “a long-term project”. Well, this modest amendment would be a start.
Just because there will be more EU Commissioners, it does not mean that the expenditure incurred by them should increase pro rata. The amendment does not ask for any real-terms reduction in the total spent on EU Commissioners, but it suggests that the total amount spent at the moment should be redistributed among the 28 or 29 Commissioners.
Philip Davies
Obviously this is a sensible amendment that is totally in line with the Prime Minister’s announcement earlier today, and I presume that the Government cannot possibly disagree with it. Does my hon. Friend think that he has stumbled across another area in which the Government might have to admit that they do not in fact have the power to do what my hon. Friend would like them to do?
Mr Chope
I hope that that is not the case, although I do not know whether my hon. Friend has been tipped off about what the Minister will say in response to the debate. I cannot see the point of the Bill if we cannot pass an amendment that has been accepted as in order. The amendment would simply make it a condition of our acceptance of having an EU Commissioner for each member country that the total budget should not be increased if the number goes above 27, but should be shared among however many Commissioners there are. I would be amazed to be told that such a modest amendment was not within our power, especially when we know that it would be going in the direction of travel—to use that ghastly expression—of many other members of the European Union who are concerned that its administrative expenditure seems to absorb far too much money.
Philip Davies
Given the Minister’s form tonight, does my hon. Friend not expect him to say that even if the amendment were accepted, the EU would just carry on anyway and recruit the number of staff and expend the resources it wanted to, because it does not take any notice of decisions in this Parliament?
Mr Chope
That is a fair point, and it was reflected in what the Prime Minister said earlier. He said that the European Commission simply has not looked at what it can do to constrain its administrative expenditure. He has a lot of knowledge about that issue because he sees it face to face every time he goes to Brussels or any other European institution. He can see the amount of money wasted on bureaucracy in Brussels. There is obviously scope for a modest reduction, and that is why I had hoped that I would have already received notice that the Government intended to accept my amendment.
Mr Nuttall
Given that the decision by the European Council to maintain one Commissioner per country was taken only because of the result of the Irish referendums, and the decision by the Irish people to say no to the Lisbon treaty, would it not strengthen our Government’s hand in their attempt to cut the administration costs of the European Union if the Committee approved the amendment?
Mr Chope
Absolutely, and I would have thought that this amendment would be supported by Opposition Members too, as they have been in the forefront of calling for a reduction in expenditure by the European Union. Whether or not they believe that sincerely, they have been calling for that.
Philip Davies
Is not the opposite point to the one made by my hon. Friend the Member for Bury North (Mr Nuttall) more pertinent? What message would it send to the European Union about the Government’s determination to clamp down on administrative costs in the EU if they resisted such a modest amendment as this?
Mr Chope
That is a very powerful point. By their actions shall people and Parliaments be judged. This is how we are going to send out a message to our European partners. Are we really serious about these issues, or are we just going through the motions? I look forward to hearing from a Member of this House who thinks it is wrong to limit the expenditure of the European Commission to what it is at the moment so that it cannot be increased. If there are such Members, I hope that they will have the courage of their convictions and stand up. If that does not happen, then I hope the Government will accept the amendment. It gives me great pleasure to have moved this modest amendment. Looking at it, I wonder whether it is too modest. On the other hand, it would be better to get this on the record than to create too much controversy.
Emma Reynolds
With characteristic modesty, the hon. Member for Christchurch (Mr Chope) has presented his amendment. He also discussed the scope of clause 2, and I wish to speak to that before I come on to his amendment.
The hon. Gentleman highlighted the fact that there is a live debate on both the shape or membership of the European Commission and on financing it. Clause 2 provides for the current formula of one Commissioner per member state to be maintained at least for the next Commission. According to the explanatory notes, it also provides for a review of that decision either before the 2019 European Commission is formed or before the 30th member state joins the EU, whichever is sooner. We are having this debate today, we had a debate on it on Second Reading and it will continue to be debated. I want to highlight some of the points that were made on Second Reading.
There are two sides to this debate. On the one hand there is a complaint—one that I think we should listen to, and one I am sure other hon. Members will make—that the European Commission College of Commissioners has become too big and unwieldy. As the EU has grown to 27 member states—soon to be 28—there are simply too many Commissioners and that has had an effect on how it can take decisions. The other side of the argument, put powerfully and effectively by the Irish Government in recent years, is that for small member states the current formula of one Commissioner per member state guarantees an equality that would not otherwise be secured. That point has been made in the intergovernmental conference and the convention, in the constitutional treaty discussions and the Lisbon treaty negotiations by Ireland and other small member states, although not all. I mentioned last week that Denmark is of the opinion that although it does not want to give away that equality, it is worth giving it away in order to make the European Commission a more effective decision-making body.
Those are the two sides to the debate. On Second Reading, my hon. Friend the Member for Caerphilly (Wayne David) and I suggested that there is a case for considering different degrees of seniority. If we were to keep one Commissioner per member state, then, as with our system of government where there is a Secretary of State and Ministers beneath that level, we could keep one Commissioner per member state, but with degrees of seniority, which might make for more effective decision-making.
Mr Nuttall
Does the shadow Minister think there would be any merit in a system whereby only those countries that were net contributors to the EU had a Commissioner?
Emma Reynolds
All I would say to the hon. Gentleman is that that is a fluid situation, so it would be unfair to both new and existing member states. For example, the Polish economy is the only economy that I can name, certainly in Europe, that did not go into recession after the global financial crisis hit, and so its trajectory is healthy. We would do well to remember that the success of the Polish economy might mean, sooner than the hon. Gentleman might think, that it will become a net contributor rather than a net recipient.
On Amendment 4, which was tabled by the hon. Member for Christchurch, last autumn he and I were in the same Division Lobby calling on the Government to seek a cut in the EU budget, and we strengthened their hand in the negotiations. To an extent I agree with the spirit of his amendment and see some merit in it.
It would be better, however, if the hon. Member for Christchurch called on the Government to prevent an increase in the administration ceiling in the EU budget. According to the comparative table we received following last Friday’s negotiations, however, that ceiling will increase by 8% over the MFF period. I do not think that such a big victory. We heard a lot of cheers earlier during the EU Council statement, but very little attention was paid to that point, and it is a point worth considering. That would be a more powerful demand for him to make of the Government than their writing into this fairly minor Bill the conditions he has set out. For that reason, I am not in favour of the amendment, although, as I said, I agree with its spirit.
The Minister for Europe (Mr David Lidington)
The amendment aims to freeze the number of staff and resources available to Commissioners at the level provided for 27 Commissioners, no matter how many such Commissioners there are. It seeks, therefore, to make the UK’s approval of the draft decision to revert to the system by which every EU member state has its own Commissioner dependent on that condition being implemented. I have to disappoint my hon. Friend the Member for Christchurch (Mr Chope) as I cannot recommend that the Committee accept his amendment. There are three reasons for that that I hope will provide him with a measure of reassurance.
First, there are technical reasons concerning the consequences of my hon. Friend’s amendment. Secondly, there are certain safeguards within the current structure of the EU budget that mean that some of the dangers about which he is concerned ought not to arise. Thirdly, I hope to give him clear reassurances both about the Government’s robust commitment to seeking every opportunity to secure greater economies and efficiencies in EU expenditure and about some of the negotiations and instruments where those objectives that he and I share might be achieved.
I completely share my hon. Friend’s concern about the need to improve efficiency in all EU institutions, including the European Commission, but we need to be clear about what the consequences would be were this amendment to be carried. The Bill provides simply for the approval of the draft EU Council decision on the number of EU Commissioners. The draft decision provides neither the scope to change the allocation of resources within the Commission nor the power or opportunity to influence the overall EU budgetary ceilings, the individual budget headings, either on a multi-annual or annual basis, or the allocation of resources within each of those budgetary headings. Were it to be carried, therefore, the amendment would leave the UK unable to agree to the change proposed to the number of Commissioners, but would not provide the means by which to alter EU expenditure in the way that he is seeking.
Mr Chope
Surely if the Government were to accept this amendment all that would happen is that my right hon. Friend or the Prime Minister would go along and say to their counterparts in other European countries, “I’m afraid we can’t agree to this unless you agree that you won’t increase expenditure as a result of having additional commissioners.” They would accept that, would they not?
Mr Lidington
That brings me to my second point, which is that if British Ministers were to open that kind of conversation with our partners, their immediate response would be to say that such is already provided for in the European Union’s budgetary set-up. Even if the number of Commissioners increases to 28 or beyond, that cannot result in any increase in the ceiling set by the multi-annual financial framework, which my right hon. Friend the Prime Minister negotiated last week at the European Council; nor can an increase in the number of Commissioners lead to an increase in annual spending limits. To paraphrase what I think my hon. Friend said in moving his amendment, if there has to be additional expenditure to provide for a new Commissioner and his or her team, it would need to be found from elsewhere in the European Union budget, subject to the ceilings set unanimously by the European Council in respect of the multi-annual framework and, subsequently, each annual budget negotiated and agreed by qualified majority vote on a 12-monthly basis, so there is a measure of safeguards already.
Let me also make this point to my hon. Friend. I am the first to agree that when we look for efficiencies and economies, we should not be shy about looking for savings in small matters as well as large. However, we also need to be clear about what an extra Commissioner would entail. It is true that it would mean providing somewhere in the budget for a salary for that Commissioner and their immediate cabinet. That money would have to be found, within the ceilings, by sacrificing spending opportunities elsewhere, but the process would not mean the creation of entirely new directorates-general. Indeed, I can tell the House that the discussions already under way about provision for a probable new Croatian Commissioner involve the splitting up of existing directorates-general and parcelling them in a slightly different way, not adding to the overall number of new people working for the Commission. We are talking about a redistribution of responsibilities among a larger number of Commissioners.
Philip Davies
I am enjoying my right hon. Friend’s gymnastics in trying to resist the amendment moved by my hon. Friend the Member for Christchurch (Mr Chope). Am I right in thinking that my right hon. Friend is saying that we should not worry because the overall EU budget is capped and, therefore, that if the EU wastes more money on a European Commissioner, that will just mean it has less to waste on something else? Is that really the thrust of his argument?
Mr Lidington
What I am saying to my hon. Friend the Member for Christchurch is that the objective that is explicitly sought in the amendment—to ensure that the budget does not increase as a consequence of the appointment of additional Commissioners—is a principle that is already embodied in the European Union’s budgetary arrangements, both multi-annual and annual.
My third point is about what is perhaps the most important area. It should remain a key priority for the Government of the United Kingdom—and, I should add, for a fair number of other national Governments around the European Union—to look for ways to make the European Union more efficient in everything it does and to look for every opportunity to eliminate wasteful or unnecessary expenditure. There are a number of ways that that could be done.
The hon. Member for Wolverhampton North East (Emma Reynolds) talked about a possible reconfiguration of the Commission along a senior Minister/junior Minister model. That is not something to which the UK Government are committed at the moment, but it is certainly one idea that is being discussed in think-tanks and elsewhere as a means of trying to impose not just greater efficiency, but greater coherence on the operations of the Commission. If we look at the Commission today, to provide one illustration, we have a Commissioner for External Relations, who is the High Representative on foreign policy, and we have separate Commissioners for international development, for disaster relief and for European Union enlargement. One conceivable model would be to see those four portfolios given to a Commissioner who was head of department and to subordinate Commissioners reporting to that more senior post holder. That is one way of seeking greater efficiency, but there are many others, too.
Mr Nuttall
My right hon. Friend is making a very good case for the Government about why this modest amendment is being resisted, but let me ask him a simple question. If my right hon. Friend does not feel that he would be able to persuade our partners in the European Union to accept such a modest amendment as this one, what hope is there of us ever being able to negotiate anything like the sorts of return of competences that would be necessary to satisfy the desires of the British people?
Mr Lidington
If my hon. Friend looks at what the Prime Minister achieved last week—against expectations in some parts of this House and outside it—and if he looks at the significant moves taken towards fisheries reform in recent weeks, I think he would see evidence to show that it is possible for a determined and energetic UK Government working closely with like-minded allies to secure the kind of reforms to the European Union that both he and I would wish to see enacted.
Mr Lidington
I will give way to my hon. Friend, but I want to return to his point about efficiencies and expenditure.
Mr Chope
Perhaps this intervention will facilitate that. I ask my right hon. Friend whether the hon. Member for Wolverhampton North East (Emma Reynolds) was correct in saying that the administrative ceiling is going to increase by 8%. If so, how is that consistent with everything that my right hon. Friend is saying? Why would they need to spend more money on administration?
Mr Lidington
I would wish heading 5 on administration to be a lot lower than was provided for in the package negotiated last week. It is up compared with 2006 to 2013, but it is down by €1 billion from the proposals brought forward by the European Commission and President Van Rompuy at the November European Council meeting. I was being told by the Commission as late as December last year that that reduction was completely impossible as it would lead to the inability to recruit staff or to deliver key services, yet there has been that significant reduction. I am the first to acknowledge to my hon. Friend that I wish we could have got unanimous agreement to go a lot further and that we need to return to the charge.
Emma Reynolds
Will the Minister confirm, however, that this is still an 8% increase from the previous period? I will give him my table if he would like to see it.
Mr Lidington
I may be able to put on record the exact figure later on, but I do not have it in the notes in front of me at the moment.
The other opportunities lie in measures such as the staffing regulations for EU institutions, which are the subject of negotiations at the moment. It is those regulations that govern the salaries, the pensions, the tax status—or perhaps the non-tax status—of EU staff. Those regulations govern such matters as allowances, on which I think my hon. Friend the Member for Christchurch and I would be in agreement. It is impossible to justify objectively the payment of an expatriate allowance to staff who are working in Brussels rather than London or Paris and who have in some cases been working there for well over a decade yet still receive this expatriate allowance to recognise the apparent hardship of having to work in the Berlaymont.
There are many opportunities that we can and should seek for reform. The Government are determined to do that, and I believe that they have strong support in the House for so doing. However, it remains in the interests of the United Kingdom for this decision to be ratified. I hope that, having heard what I have said, my hon. Friend the Member for Christchurch will feel able to withdraw his amendment, and to be confident in the Government’s resolve to continue to work for the greatest possible economy and efficiency in every part of the European Union’s work.
Mr Chope
I am grateful to my right hon. Friend the Minister for his full response to the concerns that have been expressed this evening and the concerns that gave rise to my modest amendment, and I am grateful to the hon. Member for Wolverhampton North East (Emma Reynolds) for agreeing with me in spirit, which is something that I certainly value.
I am also grateful to the hon. Lady for drawing the Committee’s attention to the prediction that the administrative ceiling will rise by some 8%, a figure that seems to be pretty much undisputed. That demonstrates the truth of an observation made by my hon. Friend the Member for Bury North (Mr Nuttall). If it is as difficult as it seems to have been to bring about a zero increase in the EU’s administrative budget, how difficult will it be to win back those powers and responsibilities for our own Parliament during the negotiations leading up to the referendum? That just shows how tough a job it is to make any progress in the European Union.
I accept my right hon. Friend’s view that there are difficulties with my amendment, and that it would have, as he put it, technical consequences. However, one does despair when, following all the excitement associated with the power effectively to veto these proposals under the European Union Act 2011, as soon as we start threatening to use the veto—or even arguing for a modest amendment, or for the attachment of a condition to something that the European Union wants to change —we are told “Oh, we cannot do that, it would be ever so difficult”.
I am sure that you share my frustration, Mr Hoyle. We discuss all this stuff, and then, when we reach the end of the debate, it seems that we have travelled no further in terms of substance. We appear to have thrown in the towel in allowing an increase in the number of Commissioners, and it will be very easy for the Commission to increase its expenditure if there is an 8% increase in its ceiling for administration.
However, the debate has provided an opportunity for everyone to see exactly what battle we must fight with the European Union if we are to win back any substantive powers. Furthermore, because I am as concerned as many of my hon. Friends about the hard deal that people in rural areas have had as a result of the local government settlement, I do not want to eat into the time that is available for the debate on that subject by pressing for a Division. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clause 3 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Third Reading
Mr Lidington
I beg to move, That the Bill be now read the Third time.
I want to thank all right hon. and hon. Members who have participated in our debates on the Bill. I thank the hon. Members for Wolverhampton North East (Emma Reynolds) and for Caerphilly (Wayne David) for the support that the official Opposition have given to the Bill. It has been a significant piece of legislation on two counts. First, it has been a useful test of the procedures included in the European Union Act 2011. In the Act, we committed ourselves to providing Parliament with more opportunities to scrutinise European Union business, and the Bill is evidence that we are delivering on that commitment. The requirement for debate and primary legislation to govern these decisions has added to Parliament’s hold over EU business.
Secondly, the proceedings on the Bill have shown that the Government have been prepared to listen carefully to the views of parliamentary Committees. As was said earlier, the Government originally thought that the decision about the work programme of the Fundamental Rights Agency was exempt from the requirement for primary legislation under the 2011 Act. However, we took careful note of the serious argument put forward by the European Scrutiny Committee of this House and the European Union Select Committee of the House of Lords that that was not the case. Our legal advisers looked again at the matter, and we accepted that, on this occasion, Parliament was right. We accordingly brought forward the necessary legislation.
I should like to put on record my gratitude for the outstanding work done by officials in the Foreign and Commonwealth Office and the Ministry of Justice on this legislation, and my thanks to my right hon. Friend the Minister for Policing and Criminal Justice and the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Boston and Skegness (Mark Simmonds) for their work on the earlier stages of the Bill.
The Government believe that all three measures contained in the Bill are in the best interests of the United Kingdom, and that they are sensible and reasonable proposals. None of them will have a significant domestic impact, and none will result in any additional financial burdens being imposed on this country. I commend the Bill and its Third Reading to the House.
Emma Reynolds
As the Minister for Europe has said, this is the first Bill that the Government have introduced under the European Union Act 2011. It has constitutional significance for that reason, even though it is small. When we are debating European matters in the House, I often look to the other place for wisdom and learning, but on this occasion, I looked at Hansard and found that there had been no debate on the Bill in the other place. That was quite a disappointment. I am pleased to say that we in this House have spent many more hours deliberating on the Bill, and enunciated many more words than their lordships on it. That is to be welcomed.
We have had good debates on Second Reading and in Committee. The Bill deals with three draft decisions, which have been well discussed. The first will give legal effect to the online version of the Official Journal of the European Union. The second will establish a multi-annual framework for the Fundamental Rights Agency. The third, which is much more controversial, deals with the maintaining of the status quo regarding the formula for the number of commissioners—that is, one commissioner per member state. As I said on Second Reading and in Committee, the debate on that matter is still live and ongoing, and we will return to it when the Commission of 2019 is created. The three decisions that are dealt with in the European Union (Approvals) Bill have the support of the Opposition. They are sensible ways forward and we support the Bill.
Martin Horwood (Cheltenham) (LD)
I just want to put on the record the Liberal Democrats’ support for the Bill. The various measures it introduces, which we have rehearsed at length on Second Reading—the multi-annual framework for the Agency for Fundamental Rights, the deal on the number of commissioners, and the e-publication of the European Parliament journal, on which we had an important debate—demonstrate the belt-and-braces approach the coalition has now brought to European scrutiny in this place.
As should be noted, this is an historic first use of the European Union Act 2011. I congratulate the Minister and his whole team on steering the Bill through the House of Commons. Although its course was not exactly perilous, one or two rocks and stones had to be overcome.
Mark Reckless
It is a pleasure to follow my hon. Friend the Member for Cheltenham (Martin Horwood). I congratulate the Minister on pursuing this Bill. Despite some of the things I have been told about the lack of scrutiny in Parliament of EU matters, tonight’s debate, unlike that in the other place, has demonstrated an appropriate degree of scrutiny of matters that require unanimity at the Council and a change in our domestic law.
I am persuaded that it is perfectly sensible to allow the electronic version of the official register to be binding. The multi-annual framework for the agency is not a financial framework, and therefore is perhaps not quite as important as the own-resources cap and the need to consider an EU finance Bill in this Chamber. However, under article 312(4) of the treaty on the functioning of the European Union, it is far from certain that, even if the framework were a financial framework, it would enable the inter-institutional agreement to come into effect and allow inflation increases in that budget without the proper sanction of this House.
The debate on the number of commissioners is really significant. The previous Labour Government entered into a deal at the European Council, whereby they would agree to a commissioner for every member state and implementing the necessary legislation at a later point, in order to try to drive the Lisbon treaty through a second Irish referendum. Had we known then that we would have this level of scrutiny here and that the decision would be dependent on a vote in this Chamber, where a Conservative-led Government have a majority, we could have made it clear that we did not agree with the Lisbon treaty. In such a situation, why should a Conservative-led Government regard themselves as signed up to a deal, negotiated by Labour, to force the Lisbon treaty through Ireland, without our having the same opportunity for a referendum in this country?
That is a key thing we have learned, and I hope Ministers will reflect on that when they seek to renegotiate our relationship with the EU, and that they are certain that anything they may agree on at a political level will have to be delivered by the legislatures of the member states.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Backbench Business
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Local Government Finance (Rural Authorities)
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Neil Parish (Tiverton and Honiton) (Con)
I beg to move,
That this House has considered the matter of the local government finance settlement for rural local authorities.
We have only a short time for this debate—just over an hour. We were expecting a three-hour debate, but unfortunately we have been squeezed by various statements during the day and a substantial debate on Europe. However, I am happy to take interventions and will try not to speak for too long.
One can tell by the number of Members in the Chamber that this is a very important debate—on the share of grant that rural authorities are receiving from Government —that we take extremely seriously. I very much welcome the meetings I have had with the Minister and the sympathy he has shown. What we want to do this evening is take away not just sympathy but a little money, which is a little easier to put in our pockets.
The Department for Communities and Local Government announced the local government financial settlement for 2013-14. It will reduce central Government support to councils while doing nothing to address the long-standing inequality in funding between rural and urban councils. We are not asking for a change in the Government deficit reduction strategy, as we support the Government in taking tough decisions to tackle the budget deficit inherited from the previous Administration; a quarter of all public expenditure is accounted for by councils and that must be addressed. Instead, we are here this evening, even at this late stage, to press the Secretary of State to revise the proposed settlement and make good on the long-standing promise to correct this historical imbalance and give rural local authorities their fair share of central Government funding, in line with the summer consultation.
Mr Graham Stuart (Beverley and Holderness) (Con)
Does my hon. Friend agree that the rural penalty, which sees 50% more per head going to urban councils than to rural councils, cannot be justified, even by increased levels of deprivation in the urban areas? The additional cost of delivery in rural areas and of need in rural areas means that there is a demand across the country for a fairer settlement.
Neil Parish
I thank my hon. Friend for his intervention, because I was going to say how much I thank him for his support. He chairs the Rural Fair Share campaign, and I thank him for pursuing this issue with Ministers with such tenacity and for helping to secure this debate. I agree with him entirely that the current situation just is not fair. We are not here to rob urban authorities of their money, but we are saying clearly to the Government that there are inequalities and they must be put right.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Does the damping system not make the matter worse? It says to rural authorities, “You deserve more but we are not going to give it to you until at least 2020. We are going to give it to authorities that will kick up a fuss if we don’t give it to them.”
Neil Parish
I shall go on to mention the damping, but it seems to have achieved the worst of all worlds. The funding issue was looked into, and the Government listened to rural authorities and said that they would move money across, but the so-called damping process has been added to the system and it seems to have made the settlement even worse than it would have been without it. That is where the Government must look again.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I just say to hon. Members that one or two of you wish to speak very high up on the list and I am bothered that people keep intervening? If you go down the list as a result, you will understand, because it is going to be four minutes each at this rate. Were you giving way, Mr Parish?
Sir Tony Cunningham
The hon. Member for Beverley and Holderness (Mr Stuart) mentioned the contrast between urban and rural areas, and the deprivation in urban areas. Does the hon. Gentleman agree that there is deprivation in rural areas, too?
Neil Parish
I thank the hon. Gentleman for his intervention because that is precisely the point. Rural areas are often leafy and green, and it does not appear, on the face of it, that there is any deprivation there, but there is. In rural areas people often have lower wages and so even those who are working find it very difficult to pay high levels of council tax. He makes a good point.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
My hon. Friend will be depressed to learn that I am confused already, because we are talking about rural areas and urban areas, yet I am not aware of any line on the map that distinguishes between the two. Could he, or could the Minister, explain precisely how the difference is defined?
Neil Parish
My hon. Friend makes an interesting point, because one of the arguments is about how we define what a rural authority is. Under the Department for Environment, Food and Rural Affairs definition some rural authorities are 80% rural and some are 50% rural, whereas the DCLG has one overall view: it has added everybody together and called them rural authorities. That is one of the problems we are facing.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate my hon. Friend on the timing of this debate, as most councils are setting their council tax at the moment. Does he agree that it costs more to deliver public services in rural areas, because of the increasing cost of fuel in those areas?
Neil Parish
My hon. Friend is absolutely right, and there should be rural weighting. We are talking not only about the distances between villages and hamlets, but the distances between schools and the number of small schools in rural areas that are the heart of the village. If the local schools were to be destroyed, the village itself could be destroyed, so there is an awful lot to play for here.
Roger Williams (Brecon and Radnorshire) (LD)
Does my hon. Friend agree that in rural areas there are often a lot of self-employed people who are reluctant to apply for benefits such as free school meals, which are sometimes a measure of deprivation? Rural areas therefore lose out in that way as well.
Neil Parish
My hon. Friend raises an interesting point about how we define the rural population and how we define depravity— [Interruption.] Perhaps I should refer to those who are deprived, rather than to depravity. I still want to make a serious point, because there is a problem with how the statistics are compiled and how judgment is made on rural areas. We in rural areas are all supposed to be wealthy and are asked to pay a great deal more of overall local government spending in our council tax.
Anne Marie Morris (Newton Abbot) (Con)
Does my hon. Friend agree that sometimes the rural authorities that have been the most careful—doing the right thing—are the most penalised? For example, Devon has saved £100 million in the past three years, yet its gross value added has declined over seven years and is now 78% of the UK average.
Neil Parish
Again, one of my hon. Friends raises a good point, because this has been going on for a long time. It went on under the previous Government and, dare I say, probably went on slightly under the previous Conservative Government. In those days, I was in local government. Savings were made and we cut our cloth accordingly, but along came the Government saying, “You have been so careful with your spending that you can now cut it some more.” I wonder whether central Government recognise those authorities, such as Devon and others, that have spent money wisely and made savings, yet are asked to make further reductions. The Minister is extremely concerned to make this fair, but we need not only to talk about it, but to sort it out.
Let us consider, for instance, the amount raised in council tax. Rural authorities such as Mid Devon and East Devon, which I represent, will raise in council tax nearly twice as much as, say, a local authority such as Greenwich. Therefore, rural populations are not only not getting a fair share of grant, but have to fund much more of local government spending from council tax.
The Government spend a lot of time talking about the overall spending power of a council, but I would argue that it is how we get to that spending power that matters. If we are asking our local residents and council tax payers to provide much more of that spend via their council tax than those in urban authorities do, we in the countryside are being over-taxed and, dare I say, urban authorities are being slightly under-taxed. We were told last year that that would be put right.
Annette Brooke (Mid Dorset and North Poole) (LD)
Will my hon. Friend consider the fact that the higher council tax paid by many rural authorities is a reflection of the increased cost of service delivery? It is hardly likely to be due to inefficiencies.
Neil Parish
Yes. My hon. Friend makes a good point, because there is an extra cost in delivering services in rural areas and rural authorities. However, whatever the cost of delivering a service, we cannot get away from the inequality in how much is given in Government grant to rural authorities compared to urban. I expected and still expect—I have great expectations of the Minister and of the coalition Government—the promise of equal shares for rural authorities to be delivered on.
Mr Jonathan Djanogly (Huntingdon) (Con)
The point is that we want fairness. We know that the pot had to be reduced, but we were promised that whatever the pot was, it would be more fairly handed out. Not only is that not happening, but it has now been put off until after the next general election.
Neil Parish
My hon. Friend makes a good point. Back in 2004 we saw funding drift away from rural authorities towards urban authorities and we thought that now there would be a rebalancing, but that is not happening and, as he says, we will have to wait until almost 2020 before that is put right.
If we do not get this year’s settlement right, lower funding for rural authorities will follow in subsequent years. We will see many changes, especially in district councils, where business rates will be retained, but the amount that they are able to spend will still be controlled by central Government. That is why this year’s settlement is particularly important.
Mr David Ruffley (Bury St Edmunds) (Con)
On that point, in my 15 years as a Member of Parliament I do not think I have seen such anger on the part of rural council leaders in Mid Suffolk district council. One of the most numerate of councillors I have ever met, Councillor Derrick Haley, who has cut services to the bone and been incredibly efficient and innovative, is incredibly angry. Has my hon. Friend picked up that sense of anger from very competent, diligent and loyal Conservative council leaders?
Neil Parish
My hon. Friend is right. The position is the same in Devon, where the Devon county council leader made enough savings to get through the current budget and was going forward well, but his budget was cut yet again. That is the problem. Devon is reputed to have more roads than Belgium, for instance, which is why the cost of repair, particularly after the floods, is so large. [Interruption.] It is absolutely true. There are more roads in Devon than there are in Belgium.
Rural authorities have to deal with high fuel prices, and the cost of education in schools is much higher. Devon is the 244th lowest in the table for school funding. All these factors need to be taken into consideration by the Government so that we get a fair share. I have much more to say, but in order to give colleagues time to speak—
Sir James Paice (South East Cambridgeshire) (Con)
If my hon. Friend is drawing his remarks to a close, which would be a shame, may I urge him to address the issue that he promised to come on to, which was raised by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), about damping? It will mean that rural authorities will not see the gains to which they are entitled before 2020 and probably not at all.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We have already used 14 minutes, and every time we carry on, we are going to lose some speakers. It is that serious.
Neil Parish
I accept what you say, Mr Deputy Speaker, so I will bring my remarks to a close. I agree with my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice). We looked at moving funds in a more equal way towards rural authorities. I do not know who it frightened in the system, but it obviously frightened somebody. They came up with a damping process which, in my view, made matters worse. I know from speaking to the Minister that he is very keen to put things right. I shall be interested to hear what he says this evening about bringing back some of the funding that has been taken away by damping. That is what we are after tonight. We do not expect vast pots of new money, but we want to see our situation get better; instead, it just seems to get worse.
We look forward to hearing what the Minister has to say about directing a fair share of funding towards rural authorities and making sure that this settlement does not prolong the agony of poor settlements for rural authorities for many more years.
Helen Goodman (Bishop Auckland) (Lab)
I congratulate the hon. Member for Tiverton and Honiton (Neil Parish) on introducing this debate and the hon. Member for Beverley and Holderness (Mr Stuart) on the good work that he has been doing in running the all-party group on rural services.
I want to make it absolutely clear that this is not just an issue for Government Members; Labour Members are also concerned about it.
Sir Tony Cunningham
I am sure that my hon. Friend agrees that this is not a party political issue. Cumbria county council is controlled by Labour and Conservative councillors, and they think that the situation is unfair.
Helen Goodman
Precisely—it is unfair. There is a lot of deprivation in rural areas, many of which in my constituency are former mining areas and old mining villages where the levels of deprivation are among the highest in the country. That is also true of Cumbria and in Derbyshire.
It is important to consider why service delivery is more expensive in the countryside. Distance issues that do not apply in urban areas mean that the costs of delivering village schools, school transport, health services, social care, transport to hospitals and ambulance services all shoot up.
Andrew Bingham (High Peak) (Con)
In a two-tier authority, all the things the hon. Lady mentioned that cost more because of rurality would relate to a county council. Does she agree that there are also extra costs to rurality at the district level?
Helen Goodman
The hon. Gentleman is right. On roads, for example, in my constituency there is not only the cost of their upkeep but of dealing with the snow, and the bus network covers 900 sq km. He will immediately see that huge costs are falling on Durham county council.
We need to have more community centres and village halls—extra facilities to deal with the fact that people cannot be expected to travel all the time to reach their public services. Last month I had a particularly poignant example involving a training centre in a village that is needed because the bus fares are so high to get to the further education college in the main town. Unfortunately, because of the cuts in the local government settlement, Coundon and Leeholme community partnership found that the training centre was going to have to close. That is a terrible problem for the people in the village, who will not be able to afford the training that they need.
School transport is also a significant problem. It is absurd for children to be walking 3 miles to and from school every day, as is possible under the law at the moment. Such laws were instituted in the days when there was not a lot of traffic on the roads as there is now. We really need to pay attention to these special rural issues.
I want to say a couple of things about the system. The summer consultation showed that rural areas were gaining more than £30 million, but those gains were lost because of damping, as the hon. Member for Tiverton and Honiton said. A one-off grant of £8.5 million has been provided to some authorities for 2013-14, but there is apparently no plan to continue with the grant beyond that period. It would be helpful if the Minister could tell us his plans for future years, because rural areas have lost proportionately more than urban areas. I want to raise with him a specific point about Durham.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
Will the hon. Lady provide the House with the information that she suggests exists? The truth, as I am sure she will agree, is that as a result of the adjustment the reduction in spending for predominantly rural areas is less than the reduction in spending for other forms of authority.
Helen Goodman
Given that Durham county council faces a 40% cut over the spending period, I could not possibly agree with the right hon. Gentleman’s contention.
At the start of last week, the Government announced an extra £8.5 million for rural areas. A list was published on Monday by the Department for Communities and Local Government indicating that County Durham would benefit by £224,000. Later in the week a further, revised list was published in which Durham’s £224,000 had disappeared. The allocations for other areas had also been taken from the list. What is happening to Durham? Why were we on the list in the first place? Why are we not on the list now? What has the Minister done, not just with our county, but with others that have been moved off the list?
It is clear that rural fire authorities have suffered a larger fall in their grant than urban ones, even when their share of the £8.5 million is included. Rural council taxes are an average of £75 a head more than urban council taxes. That is because of the extra costs of delivering services in rural areas, not because rural authorities are less efficient. The result is that rural authorities will be at least £60 million worse off than they might reasonably have expected to be next year.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
May I say, Mr Deputy Speaker, that the telling off you gave me was the nicest one I have ever had?
I want to give a practical view of where we are. West Somerset district council—my hon. Friend the Member for Tiverton and Honiton (Neil Parish) knows it well, but it will be better known to most colleagues as Exmoor—has 30,000 people in 260 square miles. It has a budget of just £5 million and is in severe financial difficulties. One of its problems, not just now, but over many years—this goes back a long time—is that it has battled against various Government cuts. It has now got to the stage where, unless severe decisions are made, it will no longer exist. It has had to sign a protocol with Taunton Deane council—the next-door borough council, which, I am glad to say, is Conservative—enabling it to be helped with both the budget and the taking over of resources.
The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) has been to West Somerset to help, so he is well aware that the grant has been cut over many years. Although he has managed to find the council a bit more money this time around, it is only worth 1%, or £45,000. A 3.7% increase in rates is only about £40,000, given the low base.
My hon. Friend the Member for Thirsk and Malton (Miss McIntosh) made the point about the cost of living in rural areas. It shows in West Somerset. Unfortunately, if this situation continues, West Somerset will not be the only one. I can assure all colleagues that other district councils will be in the same position in a few years.
Caroline Nokes (Romsey and Southampton North) (Con)
Does my hon. Friend agree that one of the significant problems is that the cost of delivering services in rural areas has simply not been reassessed for many years and that it is high time that that reassessment took place?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Lady was at the very top of the list, but she has now dropped down. I did warn people what would happen.
Mr Liddell-Grainger
My hon. Friend is absolutely right. She knows from her own constituency how difficult it is to live in rural areas where the cost of care, of the school run and of everything else is high. I know that she does a marvellous job for her constituency and that she will continue to do so.
Sedgemoor district council is at the other end of my constituency. It has a much more successful base, but it is still under enormous pressure because of the differential. It builds huge warehouses and does so much to bring in industry. It has been very successful, but it is still 20% behind. If we do not address this situation now, not only will a lot of councils opt out, but how will we get councillors? Why would somebody become a councillor in an organisation that may well disappear on their watch? It is just not going to happen. It is becoming more obvious that, unless a decision is made quickly, local government may not last until 2020. The decision has to be made in this financial year, or the next at the outside.
The two options are either to cut urban or put up rural. That is it—there is not a lot else we can do. The Minister has to decide which way we go. It will not be easy, because we do not have the money, but quite simply something must be done if we do not want all our district councils to disappear and turn into great unitary councils and if we are to keep the local democracy that so many people across Torridge and West Devon and so much of this House hold dear.
I plead for West Somerset council, because I think that it needs to survive. The Minister and everyone else have done their best, but the odds are still skewed against it. On that note, I will not detain the House any longer.
Mr Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in this debate.
I chair the Rural Fair Share campaign with my hon. Friend the Member for North Cornwall (Dan Rogerson) and the hon. Member for Workington (Sir Tony Cunningham). The campaign has support across the House, as the hon. Member for Bishop Auckland (Helen Goodman) suggested in her powerful speech, which I hope Ministers listened to closely.
The hon. Member for Bishop Auckland highlighted the cost of delivering services. One does not need to be a public service economist to understand that point; one just needs to look at a map. If one adds to that the fact that rural areas have older populations than urban areas—populations that are ageing quickly—and the costs of domiciliary care, one can feel the immense pressure that there is on the system in rural areas.
As has been said, rural areas have been poorly funded for a long time compared with urban areas, despite the fact that the costs of delivery are often higher. Overall, rural residents earn less than people in urban areas, but pay council tax that is £75 per head higher. Therefore, rural people, having paid more out of a lower income base, have a level of spending power for services that is lower than that in urban areas. There is no evidential base for that fundamentally unfair situation. That is the point that I hope Ministers will take on board.
There is a rural penalty that sees urban areas get 50% more per head in central Government funding than rural areas. That position is indefensible. If it is not indefensible, we would like the Government, who must have done the analysis, to explain to us why it is just and reasonable for people in rural areas, many of whom are elderly and on low incomes, to be so unfairly treated.
Sir James Paice
I am grateful to my hon. Friend for giving way. I know that I am not on your list, Mr Deputy Speaker, but I want to challenge my hon. Friend because he has rightly referred to the Department’s statistics and comparisons. Over the past few weeks since this has become a topic of such serious concern, there has been a lot of dispute between Ministers and sparse rural local authorities. Will my hon. Friend spare a minute or even half a minute of his speech to explain what that difference of opinion is and why those of us who represent rural local authorities differ seriously from the Department?
Mr Stuart
I thank my right hon. Friend. I will explain the position. A year ago, a delegation went to see the Prime Minister to deal with this issue. In the summer, the Department consulted on a new way of looking at things that recognised the increased cost of sparsity in the formula. It came out with a figure that looked very promising in respect of reducing the 50% rural penalty. It then damped 75% of the gain away so that there was a 2 percentage point closing of the gap from a 50% rural penalty to one of merely 48%.
When the December settlement came out, our first analysis showed that that 2 percentage point gain had been wiped out. In fact, it had been entirely reversed and we were looking at a 2 percentage point increase in the rural penalty. We met the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), who is responding to this debate—he has been most helpful in having meetings—but we struggled to get the position of the officials on the numbers that the Rural Services Network had come up with. It turned out that 500,000 people had been added to the population of London. When that information is put in, the 2 percentage point increase per head turns into a 0.2 percentage point narrowing.
The good news, which I can share with the House, is that the Government’s settlement takes a 50% rural penalty and reduces it by 0.2 percentage points to 49.8%. As I understand it, that is why technically the Government can claim that there has been a narrowing of the gap. It is pretty minuscule and nothing like the closing of the gap that we were talking about in the summer, which even then was derisory. Ministers are right, if they are doing so, to hold their heads in shame at that situation. [Interruption.] Was that too harsh?
I say to those on the Front Benches that Members participating in this debate come from across the House. We are looking for a fairer settlement and we hoped and expected that the Government would look at the issue on an evidential basis. We are not seeing that and it is not good enough. There will be a vote on Wednesday, and I hope that those on the Front Benches will consider carefully the speeches made this evening. All Government Members support the need for austerity and strict control of the spending envelope, and we do not argue for greater Government spending. We are saying, however, that at a time of limited resources, the allocation of those resources is more, not less, important. It may be politically more difficult and challenging and take some courage, but if less resource is around, we cannot afford to punish further those who have already put up with too much. That is our message to those on the Front Benches, and I sincerely hope they will listen.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
My hon. Friends who preceded me have expressed with elegance and precision the real points, and I hope that Ministers on the Front Bench—it is good to see the Secretary of State in his place today—will discover deep down a will to remedy this issue. My hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) set out the problem for West Somerset, and said that other districts in similar positions will face precisely the same predicaments just a year or two down the line.
I represent one or two such districts—Torridge district council and West Devon borough council are small, highly rural councils both facing an existential threat from the proposals in this settlement. Although West Devon council’s needs assessment was raised by 60%, the effect of damping is to reduce the overall funding settlement by 2.5%. Over the next three years it must take out £1.4 million from a budget of £7.5 million. It has already saved £1.5 million over the past three years, and the five years before that it saved £2.5 million by sharing back-office services with South Hams district council. My question to my right hon. Friend the Secretary of State is: where is the council to find the money?
West Devon council scrutinised with anxious care the “50 ways to save” document published by the Department which is, if I may say so, a practical manual full of common sense. There is one problem, however, because it has already implemented 47 of the 50 measures. Only three are left and they might have a marginal and peripheral effect. That is why West Devon council—which I use as a case study only— is facing over the next three years the need to take £1.4 million from a budget of £7.5 million. It has no serious revenue asset base; its council tax is already at a high level and it has been obliged to disobey the strictures of the Secretary of State by failing to freeze council tax.
Since the Secretary of State is present, let me say that I appreciate his robust style. Government Members love him; we think he is an asset to the Conservative party and to the Government. However, I plead with him: could he temper his language just a little? There are hundreds of good Conservative councillors up and down the length and breadth of the country who from time to time listen to his words and misunderstand. We know he does not mean it; we know it is just a joke. We know he is only teasing and that he is doing it in a loving way. The truth is, however, that those Conservative councillors—and other councillors—need to be loved and not always criticised. They are facing precisely the problem that my hon. Friend the Member for Bridgwater and West Somerset so eloquently set out, and a situation that is simply untenable over the next three or four years.
It is no good producing £8.5 million from the back of the sofa for this year only; they will have to produce it over the next few years as well. I say to Ministers on the Front Bench that we cannot go on fudging and dodging the issue. These small district and borough councils are facing a serious threat, and I urge Ministers to take it as seriously as it deserves.
Annette Brooke (Mid Dorset and North Poole) (LD)
I shall be brief. My constituency has four principal authorities, with a mix of urban and rural that makes life quite difficult. In any event, I see clearly the concerns of Purbeck district council, part of which lies in my constituency. It is obvious that rural councils will be subject to extra costs when delivering services, but the question is, “How much extra cost?”
I would like to make a plea for some work to be done on this question. Presumably, there was some work done on it, because originally the local government settlement was looking most promising, with some consideration given to increasing funding in relation to sparsity, which was excellent. But then along came damping, followed by the £8.5 million grant, which is positive, but for one year only. I want some transparency. What is the deficit? If we knew that, and we could all see what the position was, people would feel happier. Hearing about 1% and 2%, or that rural councils are really better off, is confusing. Why cannot we have a clear, pat answer —the position is this, because of that. I do not see that that should be beyond the bounds of possibility.
While the average awarded in Government grant per head of population last year was £487, or £324 for rural areas, Purbeck received only £215 per head. Average council tax in England is £398, but in Purbeck it is £594. Everything is exaggerated as we go through the figures. The pre-damping figure for Purbeck was £295,000, but post-damping it is £121,000. Surprise, surprise, when we get the share of the £8.5 million grant, it is a mere £6,879 for Purbeck, which will not give a great deal of scope for finding more efficiencies, if indeed there is any more to do.
We have a problem. We have reduced local government expenditure and they have implemented so many cuts. We have the battle between the councils, but we can only be sure that we are getting the best deal for our residents if we have total transparency and figures provided to us that actually explain the situation rather than blurring it.
Caroline Nokes (Romsey and Southampton North) (Con)
The stark contrast between rural and urban areas is clearly demonstrated in my constituency, part of which is drawn from the urban unitary area of Southampton and the rest from the rural area served by Test Valley borough council and Hampshire county council. They are good councils working hard to deliver top-quality services at the most economic cost. They are rightly proud of their combined record in that regard, but they face difficult challenges because of the very nature of the geography they must cover.
Hampshire is a county where town and country often meet, and where it is not unusual even within boroughs for there to be massive contrasts between the relatively highly populated urban centres and the vast rural areas where populations are much more spread out; where schools serve vast areas but comparatively fewer children; where refuse collection is much more challenging just because of the sheer miles to be covered; and where there are real problems in delivering adult social care because the distances for carers to travel between elderly residents in need of assistance are significant.
Those of us representing rural areas can point to examples, and what we see as the challenges, but the difficulty is that there is little hard evidence. Instinctively, we may feel and see differences between rural and urban, but research by the Department is desperately needed to assess the extent of the disparity. Rural councils cannot demand comparative evidence from their urban neighbours in order to make a proper comparison, but such a comparison is desperately needed.
In Hampshire, a population of 1.3 million is spread over 1,400 square miles—it is the largest county in the south-east of England. But its size brings about very real challenges. The 5,000 miles of road not only need to be maintained properly, at a cost of £60 million a year, including Operation Resilience, which completely resurfaces Hampshire’s roads, but—as we can see today—those same roads need to be gritted and snow-ploughed.
Of course, we cannot guarantee that residents will live in the most accessible parts of the county. We cannot be assured that schools will be easy to access. In Hampshire, there are 500 schools varying in size from just 50 pupils up to 1,800. In small villages in particular, delivering education presents a challenge and prevents councils from achieving economies of scale. In the Southampton part of my constituency, primary schools have an average number on roll of nearly 250, whereas in some of my village schools the figure is only 50. That is not to say that provision is any harder or easier; it is just different.
Councils that have to provide services such as education and transport have become expert at doing so. However, in many instances it is more and more of a struggle to cut their cloth sufficiently sparingly to go around. As I said earlier, it is important to have comparators and that a reassessment be done, so that when we stand in this Chamber and make the case for rural areas we can do so from a base of knowledge and evidence.
Dr Sarah Wollaston (Totnes) (Con)
Today we have seen a welcome announcement in the House: a rise in the threshold for eligibility to social care to £123,000 and the improvement of having a total cap on care costs. However, this will have huge implications for local authorities, because it will bring many more people into statutory eligibility for care. This will not come into force for several years, but the settlements in place now will have long-term implications for the future, and great implications for rural areas and rural authorities such as Devon, the fifth-oldest of all the local authority areas in England. The implications will combine with the similar kind of arrangements that occur, for example, in health.
Increasingly, there is a trend towards prioritising funding to address health inequality, rather than focusing on health need. The older one is, the greater one’s care needs.
Dr Wollaston
It is ageist. We need to consider what elderly people require. How can we justify the fact that older patients in inner-city authorities have three times the amount spent on their cancer care than those living in a rural authority? For any condition that we might want to consider—be it diabetes, arthritis or dementia— rural local authorities’ needs will be higher. How do we justify to our elderly constituents, or to a carer for someone with dementia, that they are entitled to less? Why do we rate the value of an elderly person with dementia so much less in a rural area such as Devon than we do in an inner-city area?
We have to consider health inequalities, but other parts of the budget are more appropriately considered as modifiable areas for change. However, many conditions are not modifiable as health inequality issues. Will the Minister say what can be done to address health and social care needs? It is not just about addressing need, but the cost of delivering care. It might take a care worker in Devon 40 minutes to travel between appointments, whereas distances and costs will be far less in inner-city areas. There is also the consideration of whether a care worker can be found at all in many rural areas. Will those on the Front Bench consider the challenge of rurality? To be deprived in a rural area is to be additionally deprived. I hope that Ministers will address that by distributing funding more equitably to rural areas.
Rory Stewart (Penrith and The Border) (Con)
There is the possibility that those on the Front Bench will have a weary cynicism about this debate—a feeling that statistics are being thrown around, that special pleading is going on, names of councils being showered down on them, and figures of 50% or 2% and different definitions and so on being mentioned, but the point, of course, that hon. Members are making on both sides of the House is not about councils, but about rural communities and the very particular situation in which rural communities in Britain find themselves after 50 years of intense fragility.
We are talking not about individuals, wealthy second-home owners or people who retire to the countryside, but about organic, living communities of the sort that we prize in this country and that everyone in the Chamber prizes—communities containing young families, living small farms and a living school. Those things desperately depend on how rural councils are funded, however, and they face a perfect storm. Ministers are not the only people putting pressures on them. It is important to understand the overall context in which agri-environmental schemes, the huge movement towards supermarkets and capitalism itself have eroded rural communities. This is simply the last straw on the camel’s back. For all the reasons we have heard in the House—sparse population, fuel poverty, cost of living—these communities now face a serious crisis. Whatever we do with the 50% or the 2%, rural councils have inherited a situation in which they are significantly less well funded per head than urban councils.
Andrew Bingham
As my hon. Friend points out, this situation has been going on for a long time, so does he share my disappointment that, although we thought that this would finally be dealt with and that rural communities would get their fair share, that does not appear to be happening?
Rory Stewart
That is an excellent point. Perhaps Ministers will address the fact that this is an inherited situation, stretching back to the ’60s and the ’70s, and relating to the debts of urban councils and the types of assets that urban councils possess. The financial settlement was not designed to address real instances of deprivation or to take into account the indexes of deprivation that we all experience day to day—the cost of heating rural homes, the cost of living and so on.
The nub of the argument, however, has to be about the communities themselves—about why we care about them and wish to keep vibrant, living, organic communities alive. There are three reasons: first, there will come a time when we treasure the food security offered by those small farms, which do not exist independent of the funding that the council is prepared to provide for schools, transport or housing; secondly, tourism, which is one of the most rapidly growing sectors in the rural economy, is dependent not on our weather or food, but on a living landscape of humans; and finally, the fact that this is something deeply precious to Britain. In this the 21st century, our country has the privilege of being one of the most advanced developed countries in the world. We can set an example to other countries of how an advanced industrial economy should behave, what kind of civilisation and future we want and what kind of landscape we imagine for our grandchildren. The decision that Ministers make today will determine that: it will determine whether instead of a network of small farms, organic communities and vibrant villages, we end up with nothing but a wilderness for millionaires.
Chris Williamson (Derby North) (Lab)
This has been a very interesting and important debate, and I start by congratulating the hon. Member for Tiverton and Honiton (Neil Parish) on leading it.
The Opposition would not support a drift of funding from deprived urban authorities in order to make up the shortfall in rural authorities, but that is not to say that the rural authorities do not have a important case —a case that has been eloquently put by hon. Members this evening.
Dan Rogerson (North Cornwall) (LD)
The hon. Gentleman will know that that has been the situation over decades, as we have heard from other Members, but we are not talking about just an urban-rural split. Larger county councils in other parts of the country, such as the south-east, are demonstrably overfunded, whereas councils and authorities such as Cornwall are underfunded. This is not an urban-rural thing; it is about looking at where the need is and ensuring the money gets there.
Chris Williamson
The complexity of local government funding is certainly an issue, but when the hon. Gentleman refers to an historic problem, I remind him that in every year of the Labour Government, local government saw growth in its budgets. Only since the election of the Conservative-Liberal coalition have we seen a huge reduction in funding for local government. Of course we must argue for a fair share for rural authorities, but that should not be achieved at the expense of urban authorities.
Helen Goodman
Does my hon. Friend agree with the contention that the freeze only really helps authorities in the south-east with high house prices? Is he aware that of the 17 authorities with projected increases in spending power for 2014-15—the year after the £8.5 million one-off grant—no fewer than 14 are in the London commuter belt, while rural areas feature heavily among those facing the biggest reductions?
Chris Williamson
My hon. Friend draws attention to a real problem with the council tax freeze grant, as have Government Members this evening. Local authorities of every political persuasion have seen through the Secretary of State’s wheeze. For many local authorities, taking the grant would clearly create significant problems down the road. That is why we are seeing Conservative, Liberal Democrat and Labour authorities refusing to take the grant, for very good reasons.
We have heard contributions this evening from my hon. Friend the Member for Bishop Auckland (Helen Goodman), who we have just heard from again, and the hon. Member for Beverley and Holderness (Mr Stuart), who spoke passionately about the need for a fairer settlement—although, rather paradoxically, he also said he supported the Government’s austerity programme. It seems to me that he cannot have it both ways.
Mr Graham Stuart
This is about the allocation and getting a fair share—hence the name of the Rural Fair Share campaign. We were going to have to control public expenditure whoever was in office; this is about recognising the need to look even more carefully to ensure a fair division based on need.
Chris Williamson
I hope the hon. Gentleman would agree, however, that it would be completely unfair to impose even deeper cuts on some of the most deprived local authorities in urban areas. The real issue is that the Secretary of State volunteered to accept unprecedented funding cuts—far higher than those for any other Department—in local government. The blame rests fairly and squarely on his shoulders; he has let down local government in rural and urban areas alike.
We also heard from the hon. Member for Mid Dorset and North Poole (Annette Brooke), who made a significant contribution in calling for greater clarity about funding for local government. She made the point that there is no scope in her local authority for more efficiencies. She and others have seen through yet another scam from the Secretary of State: his “50 ways to save” document. Let me tell him that all local authorities have been doing that for years. I do not understand what he is talking about when he issues such a document. It might make a good soundbite in a press release, but he is not living in the real world.
We also heard from the hon. Member for Totnes (Dr Wollaston), who talked about the cost of delivering health and social care needs in rural areas and referred to the cost of rurality. It was interesting that the Secretary of State, sotto voce, did not seem to understand the term “rurality”. Perhaps that is an indication of the sort of problems that local government in rural areas is suffering from.
Finally, the hon. Member for Penrith and The Border (Rory Stewart) talked about the importance of communities, but when the Secretary of State agreed the unprecedented cuts in local government funding, he drove a metaphorical knife into the heart of local communities up and down our country.
Richard Drax (South Dorset) (Con)
I regret the tone and the personalisation. As far as Government Members are concerned, this debate is about the share for rural communities from an inherited budget that, as the hon. Gentleman will know, left this country in a terrible state. It is about the share for rural communities; that is what we are trying to fight for.
Chris Williamson
I remind the hon. Gentleman that there was a worldwide banking crisis and that it was Margaret Thatcher who deregulated the financial markets. The problems can be traced back to the big bang and the deregulation of those financial markets.
Chris Williamson
I will give way to the hon. Gentleman in a moment.
What I regret is the Secretary of State letting down or betraying local government. Again, it is important to understand that it was this Secretary of State who volunteered for the biggest single reduction in Government funding of every Government Department. Government Members might not like to hear that, but that is the truth of the matter. If the Secretary of State had stood up for local government, local councils would not be in the parlous situation in which they find themselves.
Chris Williamson
It is clear that the rural authorities are by no means the only authorities to have been dealt an almighty body blow by this Government—far from it. Councils in the north, councils in the south, councils in the east, councils in the west, county councils, district councils, borough councils, metropolitan councils, unitary councils, councils that serve urban areas and councils that serve rural areas: all have suffered at the hands of this Secretary of State. As I have already said, if he had done his job properly, today’s debate would not have been necessary.
Duncan Hames
I thank the hon. Gentleman for eventually giving way. Of course, his Government reduced the number of councils in Wiltshire and Cornwall that were underfunded in rural areas by abolishing them. Given that he has not found any alternative source for making the distribution of funds fairer, is the best he can offer to councils in Somerset and Devon the same prescription as his Government dealt those rural councils in Wiltshire and Cornwall?
Chris Williamson
Not at all. We are not making that point in any way, shape or form. Indeed, my right hon. Friend the shadow Secretary of State for Communities and Local Government has made it clear that Labour’s policy is to give a fair deal, a new deal, for local government and to allow local government on the ground to determine the shape of local government, rather than it being imposed from the top. The local authorities to which the hon. Gentleman refers wanted the local changes brought about by the Secretary of State at that time.
Chris Williamson
In the interests of brevity, I will sit down and allow the—
Mr Speaker
The hon. Gentleman does not need to make a speech about it, but we are grateful to him.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
I congratulate my hon. Friend the Member for Tiverton and Honiton (Neil Parish) on securing today’s important debate. It seems ironic that the first time I am at the Dispatch Box at this time of night since the last time I was here at this time of night, we are debating rural areas looking for fair funding. Last time, it was about urban areas, and Newcastle Members and others made the same sort of case for those areas.
I shall have to keep my remarks relatively short, as the hon. Member for Derby North (Chris Williamson) talked for some time, and I want to ensure that my hon. Friend the Member for Tiverton and Honiton gets the chance to sum up. If I do not cover everything Members have brought up this evening, I would be happy for them to come and see me—now or over the next few months—as we continue to argue passionately and with great determination over the issues raised tonight. However, as one of my hon. Friends commented a few moments ago, the tone of the debate changed dramatically when the hon. Member for Derby North decided to avoid the fact that it was the last Government who had pledged £52 billion in local government cuts. Labour Members have seemed not to want to discuss that in any way, while opposing every change and every reduction that we have introduced to deal with the deficit that we inherited from their Government. That cannot give any credibility to what they say about the money that is needed for local authorities.
The hon. Gentleman spoke of standing up for local government. What he should have observed tonight, and over the past few weeks, is the Secretary of State and other Government Members standing up for their local residents, for their communities, and for the hard-working taxpayers for whom we have introduced the council tax freeze option.
Chris Williamson
In that spirit—the spirit of Government Members standing up for their communities —will the Minister invite the Secretary of State to stand up for local government throughout the country, and argue with the Treasury the case for giving it a fairer share of the cake? Does he accept that its funding has been cut by 28%, which is a far larger reduction than any imposed by other Departments?
Brandon Lewis
I thought that the hon. Gentleman had something to say that was different from what he had already said. Again, he avoided mentioning the £52 billion of cuts that his party had pledged to make. My point is that Government Members, including the Secretary of State, are standing up for the people whom we are elected to stand up for—the hard-working residents who will benefit from the council tax freeze that this Government are providing.
Let me say in the few moments that I have left that the thinking behind this local government financial settlement took into account ways in which councils can make progress in the years ahead, and that we believe it to be fair to both north and south and to both rural and urban communities. As others have pointed out, we have managed—although, I recognise, not to the extent that some would have liked—to reduce the gap between rural and urban. We have made adjustments to relative needs formulas to reflect the greater cost of providing services in rural areas. That is one of only three formula changes in the settlement. We have increased the weight of super-sparse areas in the formula, doubled the sparsity weight for older people’s social care, reinstated the sparsity adjustment for county-level environmental protective and cultural services, and introduced a sparsity adjustment for fire and rescue. As a result, funding per head is falling by less in predominantly rural authorities than in predominantly urban authorities, in all classes.
Mr Graham Stuart
Members on both sides of the House are concerned about the 2014-15 settlement and the position up to 2020. Can my hon. Friend assure us that Ministers will be willing to discuss next year’s settlement, and to ensure that we get the settlements right from then onwards?
Brandon Lewis
I can confirm that. I have had a few meetings with my hon. Friend, and he has—rightly—made a powerful case for people in rural areas. I can tell him that I shall be happy to continue to talk to Members from all parts of the country about next year’s settlement.
My hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger) raised the position of West Somerset. I have visited West Somerset and met the council leader a number of times. I know my hon. Friend will agree that, given its critical mass—the area has just 35,000 residents—it must consider sharing management and services with other authorities.
There is much more to be said about this subject. I shall be happy to meet Members individually to discuss it with them, but I want to ensure that my hon. Friend the Member for Tiverton and Honiton has a couple of minutes in which to sum up the debate.
Neil Parish
I welcome the powerful speeches that have been made by my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), the hon. Member for Mid Dorset and North Poole (Annette Brooke), my hon. Friend the Member for Beverley and Holderness (Mr Stuart), the hon. Member for Bishop Auckland (Helen Goodman), and my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes), for Totnes (Dr Wollaston) and for Penrith and The Border (Rory Stewart). My hon. Friend the Member for Congleton (Fiona Bruce) would have liked to contribute, but, like many other Members, was not able to do so.
The extent of the support for this evening’s debate is clear from the number of Members who are present. I am sorry that more time was not available. I think that we should seek either a Westminster Hall debate or another debate in the Chamber, because it is clear that Members have more to say.
I welcome what was said by the Minister, who dealt with us very fairly. However, I ask him to listen, and to ensure not only that the words with which he is provided by his civil servants show that money has been given to rural authorities, but that those words result in cash and not just statistics. This is not about spending power; it is about what the councils are given in grant. We are seeking a fair share, and Members across the House have made a powerful case for that tonight. I welcome the fact that the Minister will look at the funding for 2014-15, because that is important. I thank everyone for supporting the debate tonight.
Question put and agreed to.
Resolved,
That this House has considered the matter of the local government finance settlement for rural local authorities.
Business without Debate
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hon. Members
Object.
HUMAN RIGHTS (JOINT COMMITTEE)
Ordered,
That Mr Dominic Raab be discharged from the Joint Committee on Human Rights and Mr Robert Buckland be added. —(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)
JUSTICE
Ordered,
That Mr Robert Buckland and Robert Neill be discharged from the Justice Committee and Gareth Johnson and Mike Weatherley be added. —(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)
West Lancashire Developments
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Rosie Cooper (West Lancashire) (Lab)
I wish to acknowledge the work done by the members of Burscough Action Group to collect 4,016 signatures alongside securing a 96% opposition vote in a parish poll on proposals in the West Lancashire Local Plan to develop Yew Tree Farm in Burscough. In particular, I would like to thank Gill Bjork, Michelle Blair and Gavin Rattray for their commitment to keep fighting the corner of Burscough residents. I am presenting this petition to the House this evening to give the residents of Burscough who have signed it the voice that they feel they have been denied by West Lancashire borough council. I would therefore like to present a petition of residents of West Lancashire.
The petition states:
The Petition of residents of West Lancashire,
Declares that the Petitioners reject the proposed developments by West Lancashire Borough Council in their West Lancashire Local Plan because of the following detrimental effects; the loss of Green Belt and agricultural land, the loss of a safety buffer between residential and industrial areas, the further strain on inadequate infrastructure; roads, sewers, health services and schools, the damage to the environment through pollution and loss of habitat, the devaluation of property, the loss of identity as a village and finally because there is no guaranteed benefits to local residents.
The Petitioners therefore request that the House of Commons urge the Government to stop the proposed developments in the West Lancashire Local Plan by West Lancashire Borough Council.
And the Petitioners remain, etc.
[P001155]
Policing of Violence at Hunts
(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Williamson (Derby North) (Lab)
I secured this debate to highlight the antisocial and criminal behaviour of a tiny minority of individuals who cause havoc in the countryside. These rural ruffians are blood sports enthusiasts who have been getting away with this lawless behaviour for far too long. To my mind, they are no different from the mindless yobs that blight some of our urban housing estates, but the police, regrettably, are turning a blind eye to their lawless behaviour.
I have been a trustee of the League Against Cruel Sports since 1979, and I was the press officer and then the chair of the Hunt Saboteurs Association 35 years ago, so I know from first-hand experience what these characters are capable of. I was regularly assaulted and threatened by hunt supporters, and I would like to give the House just one example of an incident that happened to me. Following a lengthy car chase, my vehicle was rammed by a supporter of the Quorn Hunt who was driving a Land Rover. Just a few minutes later, several other Quorn Hunt supporters used powerful catapults to fire steel ball-bearings at me. I was therefore delighted when Parliament struck a blow for decency by passing the Hunting Act 2004.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
The hon. Gentleman will have to forgive me—I am trying not to be facetious in asking the question, but would he at least declare to the House any criminal record or record of a similar nature that he obtained while being a hunt saboteur, because I think that is relevant to the debate?
Chris Williamson
I am pleased to confirm to the House that I had no criminal convictions when I was a hunt saboteur.
Simon Hart
Would it be fair to say that the hon. Gentleman was bound over to keep the peace for an incident involving inciting people, in the eyes of the law, to break the law when he was secretary of Derbyshire hunt saboteurs back in the 1970s, as reported in the Derby Telegraph?
Chris Williamson
For the record, I was bound over to keep the peace after taking part in a Radio Derby broadcast to outline a protest against grouse shooting. That is very different from what the hon. Gentleman is seeking to imply.
The Bill that became the Hunting Act was long overdue. Public opinion overwhelmingly supported the ban and still does. Labour, Tory and Liberal Democrat voters support the ban; young and old citizens support the ban; male and female citizens support the ban; urban, suburban and rural dwellers all support the ban.
Angela Smith (Penistone and Stocksbridge) (Lab)
Has not support for the ban increased since the Hunting Act was passed during the 2001 to 2005 Parliament?
Chris Williamson
My hon. Friend is absolutely correct. People cannot understand why some Government Members want to bring back this barbaric activity. The overwhelming majority of the British people want blood sports to remain consigned to the dustbin of history. As my hon. Friend points out, the vast majority of the British public want the Hunting Act to be retained.
The Act should have consigned hunting to the dustbin of history, yet such is the arrogance of some members of the hunting fraternity that they think they are above the law. However, they need to understand that nobody in this country is above the law—not even them. Organisations including the League Against Cruel Sports, Hunt Watch, Protect Our Wild Animals, the Hunt Saboteurs Association and the International Fund for Animal Welfare, along with many other conscientious individuals, have continued to monitor hunt activity. They all tell a consistent story: hunt violence and hunt havoc continue to blight the lives of ordinary people living in and visiting our beautiful countryside.
I have been genuinely shocked by the evidence that has been passed to me about the behaviour of these common criminals. Antisocial behaviour, intimidation, harassment and even violence directed towards those monitoring their activities are all too commonplace. I could not believe that the violence and intimidation, which I witnessed in the 1970s, is even worse today. The disregard for the wider rural community is another feature of their selfish, arrogant behaviour, which includes road blocking; invading and damaging private property; rampaging hunting dogs killing livestock and beloved pets; causing road traffic accidents; and recklessly trespassing on railway lines.
I am not suggesting that everyone who participates in hunting is an arrogant, violent thug. Indeed, I am sure that most hunt followers obey the law. However, worryingly, a significant minority are arrogant, violent thugs, which is why urgent action is needed to tackle this flagrant disregard for the law. Of course I understand that the police numbers have been reduced, but where the law is being routinely abused, the public must have confidence that the authorities will take action. That is why the Government must act to give the police the tools they need to do the job.
Since I secured this debate, I have been inundated with examples of the lawless behaviour of sections of the hunting fraternity. The incidents are too numerous to list them all tonight, but I wish to give just a few examples to illustrate the kind of people and the sort of incidents I am talking about. In December, a hunt monitor reported to Okehampton police an assault that was captured on film. She was told to attend the police station with evidence of the assault, but, after reviewing the DVD, police officers told her that no offences had been committed. They said that there were just some driving issues that the offenders would be advised about, that any assault was part of a hunting issue and that she should not have been on the public footpath in the first place.
Last summer, a south Pembrokeshire hunt supporter was jailed for three and a half years for firearms offences while at a hunt, after a hunt monitor was shot in the head by what transpired to be a modified single-shot handgun. The man also had a sawn-off shotgun and ammunition inside his van, and a further 16 guns were found in his home. In Devon, two separate home owners sold their houses and moved away from the area after being victimised by the local hunt. The hunt master of the Crawley and Horsham hunt, Kim Richardson, was recently filmed telling hunt monitors,
“You’re all fair game now”.
On 4 January 2012, a female hunt monitor was violently assaulted by a supporter from the Cottesmore fox hunt. The woman was on her own when she saw the hunt’s hounds illegally chasing a fox. When she intervened, she was thrown to the ground by a man who smashed her over the head with an aluminium bottle before pinning her down and pouring the bottle’s contents over her face.
On 18 March 2012, supporters of the Ross Harriers hunt broke the window of a vehicle belonging to a monitor and attacked the monitors with an iron bar. One of the victims of the attack suffered injuries to the leg and head.
Chris Williamson
On 25 March 2012, three hunt monitors were set upon by a group of 15 Coniston fox hunt supporters armed with sticks.
Chris Williamson
I have a lot to say and I want to make some more progress. If I have time, I will let the hon. Gentleman in towards the end.
One of the monitors was left with welts on his back and a serious eye injury after the attackers tried to throw him down a ravine. An ambulance was called to treat him, but could not reach him after it was deliberately held up by vehicles belonging to hunt supporters, who hurled abuse at the paramedics.
On 3 November, the Crawley and Horsham huntsman Nick Bycroft was filmed breaking the wing mirror of a moving vehicle and then trying to smash the window with his whip. However, the West Sussex police, who were on the scene, refused to take action. On Boxing day, five armed men from the Southdown and Eridge fox hunt attacked a solitary hunt monitor, beating him around the head and injuring his hands. Keys and equipment were stolen from the vehicle, yet the East Sussex police refused to visit the hunt meet to identify the culprits.
Earlier this afternoon, I watched a short DVD produced by the International Fund for Animal Welfare, which illustrates the intimidation, theft and assault to which its monitors have been subjected. I have to say that I found the footage shocking.
I also have evidence—a letter from Thames Valley police—of one particular hunt incident dating back to January 2011. It involved a Thames Valley police detective inspector who told a complainant that the case was
“fundamentally flawed (principally due to the delay in time since the offences)”.
Is an offence not an offence whenever it takes place? Is the passage of time a valid reason not to pursue?
It is not just hunt monitors who are the victims of these militant blood sports fanatics. I also have recent examples of other types of antisocial behaviour where these rural ruffians have run amok. In Kent, a farm manager’s wife was pushed off a public footpath by horse riders who were galloping across a narrow area. She was pushed into a hedge after grabbing her pet dog to save him from being attacked. The Goathland and Staintondale hunts killed a pet cat. In Devon, a Staffordshire terrier was attacked by hunt hounds. In Yorkshire, recovering horses at a sanctuary were distressed by rioting hounds. The owner of the sanctuary subsequently received threats—incredibly—from a member of the hunt. A Surrey cattle farmer had his herd disturbed on a number of occasions, causing severe distress to many of the cattle. In Somerset, a sheep farmer complained of sheep being distressed by hunting hounds. In Gloucester, horses were distressed by trespassing hounds that killed a fox on private property. In north Cornwall, animals from a small holding were disturbed by rioting hounds.
Those examples are just the tip of the iceberg. In what other part of society would that be acceptable? The simple answer is that it would not be. The irony is, of course, that none of this is necessary. If those recalcitrant hunt supporters and their unacceptable practices were not tolerated by the hunting fraternity’s hierarchy, those incidents would stop. By complying with the terms of the Hunting Act, all the transgressions I have outlined could be avoided.
Kerry McCarthy (Bristol East) (Lab)
Does my hon. Friend agree that the Government rhetoric about the Hunting Act being flawed and not enforceable and the signals that they would like the hunting ban to be repealed sends the message to the police not to take such offences seriously when they ought to be doing exactly that?
Chris Williamson
I could not agree more with my hon. Friend. Indeed, I shall come to that point towards the end of my speech.
Simon Hart
I respect the fact that the hon. Gentleman has given way. We could both stand here all evening making such comments. I have spent 20 years compiling a list of incidents of violence against legitimate country people and hunt supporters, particularly by members of the hunt saboteurs in balaclavas and all that. Will he accept two things? First, could he not at least seize this opportunity to apologise to all those people—women and children included—who have been on the receiving end of violence from the hunt saboteurs? Secondly, could he not recognise that in every instance that he has mentioned there is existing law to deal with the matters that he has brought to the attention of the House?
Chris Williamson
If anybody is owed an apology, it is the victims of the hunt violence that I have referred to. I regret the fact that the hon. Gentleman has not taken the opportunity, as a former chief executive of the Countryside Alliance, to offer that apology tonight.
If the hunting fraternity complied with the terms of the Hunting Act, the hunt monitors, whom they seem so frightened of, would be welcomed because the hunts would not be doing anything unlawful. However, the Masters of Foxhounds Association and the Countryside Alliance have singularly failed to deal with the lawless behaviour in their midst.
Will the Minister reassure me that he will issue an instruction to chief constables stating that the Hunting Act must be upheld? Will he also ensure that chief constables take steps to prevent hunt supporters from intimidating anyone who is lawfully monitoring hunting activities? Will he state for the record that, as far as this Government are concerned, no one is above the law? Does he agree that the mixed messages from senior Ministers could be misinterpreted by some people as tacit approval for breaking the law? Will he urge his senior colleagues, including the Prime Minister, to stop criticising the Hunting Act?
The Minister for Policing and Criminal Justice (Damian Green)
I congratulate the hon. Member for Derby North (Chris Williamson) on securing this evening’s debate. It is not often in an Adjournment debate that the full emotions behind it are apparent, but they already have been this evening. The House will be aware of the strong emotions and feelings held on both sides of the debate.
In the last few minutes of his speech the hon. Gentleman set me some challenges, so let me address them directly. Violence at hunts is unacceptable, whether that is violence towards those who are hunting or towards those who are protesting against hunts. As with any violent crime, I would expect the police to take appropriate action should violence occur at a hunt.
The hon. Gentleman also said that he wanted me to direct chief constables to do certain things. I should point out to him as gently as I can that it is not for Ministers to tell chief constables how to do their job. One of the things that we most cherish about British policing is that the police are operationally independent, and when politicians try to direct police in detail as to how they should do their job, they enter very murky—
Chris Williamson
Does the Minister not feel it is appropriate, however, to issue guidance to the chief constables to make it clear that the Hunting Act 2004 is the law of the land and that police have an obligation to uphold the law—all laws?
Damian Green
I am not aware of a single police officer in this country who does not know that the Hunting Act is the law of the land. The hon. Gentleman is asking me to interfere in the operational decisions of the police. That I refuse to do, and any sensible Policing Minister—indeed, any Minister—would refuse to do that because that is not the way we do policing—
Chris Williamson
I am grateful to the Minister for giving way. I do not want to keep interrupting his flow, but surely he is not satisfied at the fact that hunts are regularly and flagrantly breaking the terms of the Hunting Act. That cannot be right, can it? It is the law of the land and surely the Government have an obligation to make sure that the law of the land is upheld.
Damian Green
Let me get to the facts. As my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) said, on both sides of the hunting debate it is possible for people to compile a list of grievances. That is what has happened.
Let me turn to the question of policing at hunts very directly. There are over 325 registered hunts in England and Wales. Together they have carried out over 70,000 days’ hunting since the Hunting Act came into force in 2005. From 2005 to 2011, the latest year for which official figures are available, a total of 332 individuals were prosecuted under the Hunting Act. Of these, 239 were found guilty.
The Association of Chief Police Officers has issued guidance to forces on the enforcement of the Hunting Act. This guidance reinforces the general position that the deployment of police officers, including for enforcement of the Hunting Act, is an operational matter for the police force concerned. The police, of course, have an important duty to enforce the law, but this general duty to enforce the law is subject to the normal discretion of chief constables, who are required to balance resources and priorities. The Hunting Act is no exception to this principle. It is up to the police to decide what resources they use to enforce and prioritise the Act.
The hon. Gentleman indicated that he thought the police were perhaps neglecting this because of the absence of sufficient resources. The Government have no choice but to deal with the deficit and that means that all public services must constrain their spending. Her Majesty’s inspectorate of constabulary has made it clear that there is no simple link between officer numbers and crime levels, between numbers and the visibility of the police in the community, or between numbers and the quality of service provided.
I hope that hon. Members in all parts of the House and on both sides of this passionate debate would welcome the fact that in the first two years of this Government, crime fell by 10%. On both measures of crime it is clearly falling and it is perfectly clear that the police, even with the constraints on resources, are able to do their job better than ever before. There is no argument to be made at all that resources are restricting the police from doing their basic job of cutting crime. That applies across the board.
Let me turn to the right of protest, which the hon. Gentleman rightly mentioned. I agree with him that peaceful protest is a vital part of a democratic society.
Chris Williamson
The right to protest is not what I was talking about in relation to hunt monitors, who are engaged in a perfectly legal and lawful activity in monitoring the activities of the hunting fraternity, partly to make sure that they do not transgress the law. Indeed, evidence garnered by hunt monitors has led to numerous successful prosecutions. It is not about protest: it is about monitors being allowed to go about their lawful business.
Damian Green
Indeed. I have already, I hope, enlightened the House with the number of prosecutions. If the hon. Gentleman is arguing that hunts are not being properly policed, I simply point out that there have been 332 prosecutions and in 239 of those people were found guilty. Whether he regards monitors as protestors or as something else, it is clear that the police are doing their job, as is the rest of the criminal justice system, and people are being prosecuted successfully.
The rights of monitors, protestors, or whatever we wish to call them need to be balanced with the rights of others to go about their business without fear of intimidation or of serious disruption to the community. The police have a responsibility to assess and manage this balance to ensure public protection and safety, and to engage with protestors, monitors and event organisers to enable peaceful activities to take place. It is clear that on either side of this debate none of these rights extends to violent or threatening behaviour. It is not acceptable for peaceful and law-abiding people to be attacked by others for expressing their views, and the police will and do act if that happens.
The police have a range of powers available to deal with violent crime, whether at a hunt or elsewhere. Where a violent crime has been committed or alleged, or a complaint has been made to the police, it is the responsibility of the police to investigate and determine whether there are sufficient grounds to launch a criminal investigation. The hon. Gentleman gave a number of examples, in some of which the police had clearly looked at evidence and decided that a prosecution would not be successful. That is normal police activity; it is what the police do every day. They detect more crimes than end up in court because they may well, on looking at the evidence in any type of crime, decide that perhaps a crime has not been committed or that there is not enough evidence to—
Simon Hart
The Minister sensibly mentioned the issue of intimidation. Would he like to express a view about whether it is necessary for people involved in hunt monitoring or hunt protesting to wear paramilitary gear and balaclavas? Is not that in itself intimidatory? Could the police exercise the powers they already have to make sure that people who want to protest do so in a legitimate and non-confrontational way?
Damian Green
Violent or intimidatory behaviour will draw the attention of the police, from wherever it comes. As I have said several times, this is a passionate debate with very strongly held views on both sides. I am anxious that those views can continue to be expressed but that people stay within the law, and that intimidation and violence is kept out of this debate, as it should be kept out of all debates in a democracy.
Chris Williamson
For the sake of clarity and setting the record straight, I have seen evidence—I have it here on this DVD and I have seen other footage—of hunt supporters wearing the paramilitary uniforms and balaclavas that the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) mentioned, being extremely intimidatory and, indeed, physically assaulting hunt monitors. I hope that the Minister and the hon. Gentleman would admonish those individuals as well.
Damian Green
I say to the hon. Gentleman what I have just said to my hon. Friend the Member for Carmarthen West and South Pembrokeshire: I will condemn violence and intimidation wherever it comes from. We are all aware of how strongly felt the views are on this matter, but they should not lead to violence or intimidation.
If the police have evidence of violence, intimidation or any other criminal activity, they will consult the Crown Prosecution Service, which will decide whether an offence reaches the threshold required for prosecution under the relevant legislation. The code for Crown prosecutors prohibits a prosecution from continuing if there is not a realistic prospect of conviction.
Once criminal proceedings are brought in an individual case, it is for the courts alone to determine whether the police have acted correctly in enforcing the law and whether there is sufficient evidence to convict the defendant of the charges brought. Where a defendant is convicted, it is for the court to decide, within limits laid down in legislation, what sentence should be imposed, taking into account any aggravating or mitigating features of the case. That is a fundamental principle of our criminal justice system and no Government Minister has the power to influence the courts in the exercise of their judicial discretion—and a very good thing, too.
On hunting more generally, this has been a highly contentious issue for many years, both in this House and among the general public. It has been brought home to me this evening, as it has on other occasions, that that remains the case. I know that the hon. Gentleman in particular is passionate about the issue, as is my hon. Friend. It is right and proper that Government and Parliament should reflect on this matter from time to time.
I should make it clear that, while I appreciate that this is a sensitive issue that needs to be discussed from time to time, the Government are not proposing any immediate reform at this stage. We recognise the strong views held on both sides of the debate and—this point is important to the House—that it is an issue of personal conscience. Members of all parties in the House hold different views on the subject of hunting and it has traditionally, and rightly, been subject to a free vote in Parliament. I was a Member at the time of the Hunting Act and voted against it. My personal views are on the record. I should say as a declaration of non-interest that I have never been hunting in my life. Nevertheless, I voted against the Bill.
The Conservative election manifesto promised that Parliament would be given the opportunity to repeal the Hunting Act on a free vote. There are many greater priorities facing the Government at the moment, but we plan to honour that commitment by tabling a motion on hunting at an appropriate time.
Chris Williamson
I thank the Minister for giving way again. Does he agree that that commitment and the rhetoric of senior Ministers are, as I said in my speech, tantamount to tacit approval for those who are transgressing the Hunting Act to continue to do so? They may be misinterpreting them—I am sure that Ministers would not encourage people to break the law—but does the Minister not understand how the hunting fraternity might take that as tacit approval to break the Hunting Act?
Damian Green
No, absolutely not. Every party at every election makes promises to change the law. Nobody takes that as tacit approval to break the law. If they did, no party would, responsibly, ever promise to change the law at any election and, therefore, there would be no point in having elections or election manifestos. As I hope the House will have observed, I am trying to steer a course, but I have to say to the hon. Gentleman that I absolutely reject his interpretation of my party’s policy at the election.
As I have said, the time is not appropriate and we are not prioritising reform of the Hunting Act at the moment, but the right to protest peacefully and within the law is one that this Government hold dearly. Violence against those who do or do not support hunting is unacceptable. I know that the police will take appropriate action to identify and prosecute the perpetrators of violent crime, using the range of powers at their disposal to deal with any violence or unlawful activity. That is what the police should be doing, that is what the police are doing and that is what they will continue to do.
Question put and agreed to.
Written Ministerial Statements
(11 years, 10 months ago)
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Regional Growth Fund (Update)
(11 years, 10 months ago)
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The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
In my written ministerial statement of 17 January 2013, Official Report, column 41WS, I announced that Ministers reserve the option to award Regional Growth Fund (RGF) support flexibly. This allows us to respond quickly to specific economic opportunities or shocks in order to ensure that we do everything that we can to maximise growth in the most vulnerable parts of the country. This will be in exceptional circumstances only and will take place outside the normal bidding process, although detailed due diligence requirements will still need to be met.
Part of the Government role in their commitment to growth is to discuss investment opportunities with private sector organisations and local bodies. Where a proposal for securing investment, and associated employment opportunities aligns with the principles of the RGF and there is no routine chance to bid—either because no bidding round is open or because an investment decision is needed imminently—RGF support can and should be possible, to realise those growth opportunities.
Exceptional RGF (eRGF) will therefore be considered by Ministers as a way to support credible proposals for growth by allowing RGF money to be awarded at any appropriate time. In this way, we continue in our aim to rebalance the economy and support business growth.
One of the strengths of the RGF to date has been its competitive nature. In the absence of an open competition, eRGF cases will be benchmarked against similar bids from previous rounds to assess their relative value for money. In each case Ministers will also seek independent advice before approving eRGF support.
Exceptional RGF funds will be met from existing budgets by recycling money from previous RGF rounds where bidders have withdrawn or reduced their grant amount. In this way, we ensure that RGF funds continue to be spent on RGF objectives, to enable investment, support growth and create jobs.
As with RGF, those organisations that are awarded eRGF support will be published on the Government website (https://www.gov.uk/understanding-the-regional-growth-fund) where further information on eRGF is also now available.
Withdrawn projects
A number of bidders have withdrawn since I last published the list in September. The withdrawal of a small proportion of bids is to be expected given the robustness of the contracting process.
Bidders may withdraw a project or programme for any reason. Commonly these include global market conditions; realisation through the due diligence process that the project could not be supported (including on state aid grounds); and changes in senior management or parent company strategy.
The up to date list of withdrawn bids is below.
No. | Name of Beneficiary | No. | Name of Beneficiary |
|---|---|---|---|
1 | A&P Tyne Ltd 247C | 24 | Messier-Dowty Ltd |
2 | Ames Goldsmith UK Ltd | 25 | Nissan UK P3 |
3 | BRM Packaging Ltd | 26 | Northern Tissue Group Ltd |
4 | C&C Baseline Ltd | 27 | PD Teesport |
5 | Caparo Precision Strip | 28 | Pilkington United Kingdom Ltd |
6 | Carlton & Co | 29 | PMT Industries Ltd |
7 | 1CE3 - Conitech | 30 | Rapsican Systems |
8 | CE4 - Verta Energy | 31 | SCM Pharma Ltd |
9 | Cleveland Potash Ltd | 32 | Shepherd Offshore Ltd |
10 | 2CTS - Exhausto Ltd | 33 | Sirius Minerals |
11 | CT7 - Aggregate Industries Ltd | 34 | St Modwen Properties |
12 | CT8-W.D. Irwin & Sons | 35 | Stainless Plating Ltd |
13 | CT9 - Aria | 36 | Sunsolar Ltd |
14 | Cumbrian Holdings | 37 | T&N Plastics |
15 | Diodes Zetex Semiconductors Ltd | 38 | Tameside/Monopumps |
16 | Disley Tissues Ltd | 39 | Thales Properties Ltd (Leicester) |
17 | Federal-Mogul Friction Product | 40 | The Listen Media Company Ltd |
18 | Heerema Hartlepool Ltd | 41 | Treves UK Ltd. |
19 | Huntsman Polyurethanes (UK) Ltd | 42 | Turner Powertrain Systems Ltd |
20 | ING Lease UK Ltd | 43 | Universal Engineering |
21 | I-Plas Products Ltd | 44 | Vestas Technology UK Ltd |
22 | J & B Recycling Ltd | 45 | Zegen (Wilton) Ltd |
23 | Marlow Foods Ltd | ||
1 CE is the Chirton Engineering package of projects. 2 CT is the Carbon Trust package of projects. |
Horsemeat and Contaminated Food
(11 years, 10 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
Investigations are currently going on into a number of incidents of processed beef products containing undeclared horsemeat. These investigations are being led by the independent Food Standards Agency in liaison with authorities in other European countries and the police. The Food Standards Agency has assured me that it currently has no evidence to suggest that the products in question represent a food safety risk.
Food fraud is completely unacceptable. Consumers need to be confident that food is what it says on the label. It is outrageous that consumers have been buying products labelled beef, but which turn out to be horse. I am determined that we get to the bottom of this and that any wrongdoing is prosecuted.
I met major retailers, manufacturers and distributors on 9 February to agree a clear plan of action to deal with this problem. Producers and retailers are testing their processed beef products for the presence of horsemeat and I made it clear I expected to see meaningful results from this testing by the end of this week. We also agreed that more testing of products for horse needs to be done along the supply chain.
Consumers can be confident that we will establish how this has happened and will take whatever action is necessary to ensure the integrity of the food chain in this country.
I will be making an oral statement to the House on these issues later today.
Scotland in the UK
(11 years, 10 months ago)
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The Secretary of State for Scotland (Michael Moore)
The Government have published the first paper in the Scotland analysis programme series to inform the debate on Scotland’s future within the United Kingdom.
“Devolution and the Implications of Scottish Independence” covers the benefits of devolution and the legal consequences of establishing an independent Scottish state.
Alongside this paper the Government have published an independent expert legal opinion from leading experts on international law. The opinion concludes that, in the event of a vote for independence, Scotland would become a “successor state”. It would therefore be required to create a new set of domestic and international arrangements. The remainder of the United Kingdom would be the “continuator state” and would not have to negotiate new treaties or memberships of international organisations because, as the continuing state, the remainder of the UK would be largely unaffected under international law.
Negotiations would need to take place with the UK Government on any requests to retain UK-wide arrangements on matters such as a currency union, financial regulation and national security. An independent Scottish state would also need to negotiate with the European Union and other international organisations to agree new terms and conditions of membership.
Future papers from the Scotland analysis programme will be published over the course of 2013 and 2014 to ensure that people in Scotland have access to the facts that will help inform them ahead of the referendum.
Road Network (Economic Growth)
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
This statement is to inform the House that I am today publishing a consultation on revised policy setting out the role of the strategic road network in enabling economic growth.
The new policy will replace circular 02/2007 planning and the strategic road network, and DFT circular 01/2008 policy on service areas and other roadside facilities on motorways and all-purpose trunk roads in England.
We are consulting on changes that will mean in some cases constraints are removed from local authorities and other local decision makers, when considering proposals for new developments.
In reducing regulation, the updated policy will encourage growth by making it easier for businesses and communities to develop, while at the same time ensuring that the road network continues to operate efficiently.
Social Fund Schemes
(11 years, 10 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I am pleased to announce that later today we intend to lay regulations to include universal credit in the list of qualifying benefits that currently act as an initial gateway to the three regulated social fund schemes (i.e. the Sure Start maternity grants, funeral payments and cold weather payments). The other qualifying criteria that also apply to these schemes will continue as now with some modifications being made to the cold weather payment scheme.
As universal credit is both an in and out of work benefit and does not exactly mirror the existing income-related benefits, the cold weather payment scheme has had to be modified. In addition, to ensure that the underlying principles behind the scheme continue to apply—that additional support is given to help the most vulnerable with the extra costs associated with heating the home during severe weather periods—a further qualifying criterion has been introduced for recipients of universal credit, which restricts access to those not in employment. An exception to this criterion has been made for families with a disabled child or children.
Two further changes have been made to the funeral payment scheme. The first relates to the introduction of universal credit. Because elements for housing benefit will be included in the universal credit assessment and payments will be made monthly, changes must be made to prevent any final benefit arrears owing to the deceased from extinguishing an award being made to the person taking responsibility for the funeral. The second change removes council tax benefit from the list of qualifying benefits that currently act as an initial gateway to the scheme following the decision to abolish council tax benefit from 1 April 2013 in favour of localised provision.
With the exception of the cold weather payment scheme, all the changes are due to come into effect from 1 April 2013 to ensure the changes are in place for the commencement of the universal credit pathfinder. The changes relating to cold weather payments will come into effect from the start of the winter season 1 November 2013.
House of Lords
(11 years, 10 months ago)
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NHS: Private Companies
(11 years, 10 months ago)
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Lord Winston
To ask Her Majesty’s Government whether they have plans to exempt private companies providing services to the NHS from corporation tax.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the Government will not be exempting private sector providers of NHS services from corporation tax. The purpose of Monitor’s fair playing-field review is to ensure that any providers, be they NHS, for-profit, community or voluntary sector organisations, that are able to improve the services offered to patients are given a fair opportunity to do so.
Lord Winston
I am grateful to the noble Earl for that reply and deeply reassured that corporation tax will not be in the equation. Given that the NHS is not good at costing out its treatments, how can he be sure that the private sector will not charge what it thinks the market will bear rather than the actual cost of the treatment it is delivering?
Earl Howe
My Lords, the Government’s policy is that competition should never be deployed for competition’s sake but only in the interests of patients. Furthermore, competition should be on the basis of quality and not price. The answer to the noble Lord’s question is that we need to arrive progressively at a system of tariffs that fairly reflect the value and cost of the work that providers do, and that all providers should compete equally on that basis.
Baroness Jolly
My Lords, Parts 3 and 4 of the Health and Social Care Act were rigorously debated. Will my noble friend confirm that the regulations covering this will be laid down soon, as 1 April is less than two months away?
Lord Harris of Haringey
My Lords, it is gratifying that the private sector will be expected to pay corporation tax. However, can the Minister tell us how the private sector will make an appropriate and proper contribution to meet the needs of a full and broad range of training within the NHS, given that in some instances it will not be providing a full range of services?
Earl Howe
The noble Lord raises an important point. A great deal of work is currently being done on the way in which the education and training of NHS clinical staff is funded. Changes are being made this year in order to make funding fairer and more transparent generally, and the Government will consider any further recommendations that Monitor may choose to make in this area if they would bring about further benefits to patients.
Earl Howe
My Lords, the system will operate in a way that ensures that non-NHS providers who provide services to the National Health Service pass a quality test with the Care Quality Commission. They will be obliged after that, should they receive the benefit of contracts from the NHS, to demonstrate that they have abided by the terms of the contract.
Lord Brooke of Alverthorpe
My Lords, as the Government are contemplating introducing a new factor into contracts in which government work is let out to international companies to ensure that they are paying their tax properly, what will they do about the NHS? Have they any plans to apply that kind of system to letting contracts for NHS services?
Earl Howe
My Lords, the answer to that question will need to wait until Monitor has reported to the Secretary of State, which it has not yet done. I know that it is considering a number of aspects of the fair playing field generally, and that may well be one of them. When I am in a position to answer that question, I will be happy to do so.
Lord Flight
My Lords, what will the Government’s policy be towards the term of contracts? One of the big problems with PFI has been that the contracts were too long, but it is quite difficult to combine getting both commitment to service and investment and prices updated.
Earl Howe
My noble friend is absolutely right. Various contracts have been criticised for being too long: PFI is perhaps a good example. Other types of contract have been criticised for being too short because they do not enable providers to invest on a sufficient timescale in order to be able confidently to bid for work. I have little doubt, once again, that this is an area that Monitor will look at and make recommendations upon.
Lord Foulkes of Cumnock
My Lords, will the Government consider requiring companies providing services in the NHS to pay their employees at the very least the national minimum wage and preferably a living wage?
Lord Naseby
My noble friend mentioned tariffs. Will it be a tariff across the whole of England or will it reflect the differing costs, particularly in overheads, of, say, an operation in London and an operation further north?
Earl Howe
My Lords, there are tariffs that are nationally set and others that may be locally set, but there is scope to vary even the national tariffs if there is a good reason to do so on the grounds of local variation in costs. There is some flexibility in the system, but the main basis of the policy, as I stressed earlier, is that, where competition occurs, it should be on the basis of quality and not price.
Baroness Meacher
The CQC has an incredibly important job to do, but we know that it is very overstretched. What systems do the Government have in place to ensure that the CQC’s scope is adequate to monitor all private and NHS facilities and ensure that they are providing a sufficiently good service?
Earl Howe
I am aware that the board of the CQC is looking at that very question at the moment in the light of the Mid Staffordshire review. The noble Baroness is absolutely right. I think the essence of the answer to her question is that a risk-based approach must be adopted so that areas that are deserving of more attention from the CQC receive it and areas that are of lesser concern are allowed to act accordingly without interference.
Baroness Royall of Blaisdon
My Lords, the Minister spoke of the possibility of local tariffs. How does that translate into regional pay? Is the Minister in favour of regional pay for people working in health service?
Earl Howe
I am not sure what the noble Lord’s question about the living wage implies. I answered a question about the minimum wage, which is what the law entails. It is of course up to employers to ensure that they pay their employees in a way that is not derisory and that reflects the value of the work that they do.
EU: Membership
(11 years, 10 months ago)
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Baroness Morgan of Ely
To ask Her Majesty’s Government which European Union member states have indicated that they are willing to consider a request from the United Kingdom to develop a different relationship with the European Union, either within or outside the existing European Union treaty.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, the Government frequently discuss a range of issues with other European Union member states, including the key challenges that all EU countries face. Those include dealing with the eurozone crisis, increasing competitiveness and taking steps to improve democratic accountability. Many EU member states agree about the need for reform to address those challenges.
Baroness Morgan of Ely
I thank the Minister for that reply. I am sure that most member states would agree on the need to reform some aspects of the EU, but for the UK to develop a different relationship with the EU, every member state would have to agree. Any country could say no, and that would be the end of the story. That would leave this country in a very precarious position, particularly given that the Prime Minister has promised a referendum. Does the Minister therefore agree that the fate of the future relationship with the UK with its main trading partner is too serious a matter to gamble on the whim of any single country, particularly in the light of the fact that the Governments may change in the next few years?
Baroness Warsi
The Government certainly feel that the challenges in Europe at the moment are too serious to ignore. As the noble Baroness herself says, there is a need for reform. There are some serious challenges in relation to competitiveness, the changes that have come about because of the eurozone and the most serious issue of improving democratic legitimacy. There is a real disconnect between the citizens of the European Union and what they feel that the European Union is doing for them. It is right, therefore, that Britain is leading that debate.
Baroness Falkner of Margravine
My Lords, does my noble friend agree that, with banking union on the table, the financial transaction tax, fiscal union and eventually political union within the 17 euro-ins, now is probably not the time to be defining parameters and deciding where we want to go; and that we need to see how those things evolve before we decide what representations we are to make about the EU?
Baroness Warsi
My noble friend always comes at these matters with real experience, but on this occasion I have to disagree with her. It is precisely because of the real challenges to which she refers that this is the time to ensure that we are at the forefront of forming the debate and reforming the EU to being in the best interests of this country, but also of the wider European Union.
Lord Liddle
My Lords, taking the noble Baroness back to the original Question, although there is sympathy among several member states with some of the themes of the Prime Minister’s speech, and although there is widespread agreement on the need for reform, surely that is seen to be reform that affects the whole of the EU. What is the position if there is no treaty that reforms the whole EU by 2017? Will the British Government then be pressing for a special renegotiation purely for Britain? Since the Prime Minister’s speech, how many member states have indicated that they might support such a special renegotiation for Britain alone?
Baroness Warsi
I can assure the noble Lord that we have set out on the right path. It is right for us to acknowledge, as he does, the need for reform. It is right for us to move forward with ensuring that we work out our relationship with the European Union. The balance of competences review that the Government are undertaking will lay out where we feel that the European Union helps and where it hinders.
The noble Lord asked from where support has come. Only last weekend, we saw the Prime Minister take a very front-footed, brave and national-interest position on the European budget. I could read to the noble Lord many quotes of support from around the European Union—from the Danish PM, the Swedish PM and the Finnish PM. I assure him that there is a real appetite for reform across the European Union. Those of us on this side of the House are leading that debate, but I am sure that, in due course, noble Lords opposite and, indeed, the Labour Party will also commit to that reform.
Lord Mackay of Clashfern
My Lords, it seems likely at the moment that some reform will be required to meet the needs of the eurozone. As the noble Lord, Lord Owen, powerfully reminded us in the debate on the Queen’s Speech at the opening of this Session, that requires the United Kingdom to have a position about what the situation should be because it is not in the eurozone. It is bound to affect the whole European Union. Surely it is better to think about it now than to wait until a decision that we have not had time to think about is suddenly required.
Baroness Warsi
I assure my noble and learned friend that we think about these matters all the time. A new treaty has not been ruled out; it is being actively discussed in the corridors of Brussels and many capitals across the EU. The Prime Minister agrees with those who believe that, in the next few years, the EU will need to agree on treaty change to resolve the crisis in the eurozone, to which my noble and learned friend referred, while protecting the interests of those outside the eurozone and driving forward reform for all.
Lord Tomlinson
Would the Minister agree if I suggested to her that in all these requests that we are making for renegotiating the relationship with the European Union, some of them must be abundantly clear without waiting for the balance of competences review? Can she give us a list of some of the imperative items on that shopping list?
Baroness Warsi
This Government do not believe in pre-empting decisions without consulting experts and the public.
Baroness Warsi
Noble Lords opposite may see this as a matter of fun, or indeed as a matter that they take quite lightly. We take consulting with the public, and indeed with experts, extremely seriously. We believe it is important that those with the expertise in various areas take part in the balance of competences review, which will conclude in 2014. On the basis of that, matters will be put into the manifestos of individual political parties. I can assure noble Lords that in the Conservative manifesto, there will be a referendum. I am not sure whether noble Lords opposite can confirm whether their manifesto will have a referendum in it.
Libraries: Closures
(11 years, 10 months ago)
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Baroness Bakewell
To ask Her Majesty’s Government what plans they have to limit the ongoing closure of public libraries across the country.
Lord Gardiner of Kimble
My Lords, every authority in England is required by statute to provide a comprehensive and efficient library service. In 2011-12, authorities invested £820 million in their libraries. The closure of a library does not necessarily signify a breach of an authority’s duty to provide a comprehensive and efficient service. Library services are adapting to changing needs. The Government have appointed a specialist libraries adviser to work with local authorities and Arts Council England.
Baroness Bakewell
I thank the Minister for that Answer. Good news is always welcome, however meagre, but the bad news is coming in torrents. Three hundred and twenty-six libraries are under threat, have closed or have left council control since April last year. Newcastle is planning to close 10 out of 18 libraries and Liverpool 10 out of 19. Given the disproportionately heavy cuts to local authority funding in the north of England, when will the Secretary of State use her considerable reserve powers to stop this cultural catastrophe?
Lord Gardiner of Kimble
My Lords, I am very well aware that the noble Baroness is a formidable supporter of public library provision. Indeed, on Saturday I visited two libraries for National Libraries Day, in Eye in Suffolk and Diss in Norfolk, and I am very much aware of the points of view and their importance to communities. To come to the Question, clearly it is important that the local authorities reflect on the local need. That is precisely why there is a specialist libraries adviser, as I particularly mentioned, whose job it is to work with the local authorities where there is a question of libraries being at risk. Clearly, a number of rationalisations have gone on but I take the points that the noble Baroness has made very seriously indeed.
Baroness Miller of Chilthorne Domer
My Lords, what advice would my noble friend give to a community group such as that in Friern Barnet, who wanted to keep their library open and were willing to staff and fund it but found that their local council, Barnet, took them to court to get them out? Happily, the situation is now resolved and the library has stayed open but is that not against the spirit of the statute, where the community is willing and able to take the library on?
Lord Gardiner of Kimble
My Lords, there are some very strong examples of community-managed libraries, and I very much support the work that they are undertaking. Indeed, guidance for local authorities on community-managed libraries has only just been published by the Arts Council and the Local Government Association. Professionally qualified librarians are also key to the public library service, and the librarians I met in Diss and Eye were an example of dedicated commitment.
Lord Elystan-Morgan
My Lords, the Minister said, I am sure quite accurately, that the closure of a public library does not of necessity mean a breach of the statutory obligations on that particular local authority. Bearing in mind the scale shown by the noble Baroness, Lady Bakewell, of the closure of public libraries, however, at what point is there a clear breach of everything that statute intended in that connection?
Lord Gardiner of Kimble
As the noble Lord has referred to, this is about a comprehensive and efficient system. I shall expand quickly and briefly on the fact that we have heard about closures but there are in fact some incredibly good success stories of openings and relocations. One of the key challenges for public library provision is where we locate them so that they can be an even greater part of the modernised situations—for instance, new libraries alongside cafes and adult learning classes. These are areas where we can have new openings in urban and rural areas and expansions in certain areas. There will be cases where they will be rationalisation but there is a responsibility to ensure that it is a comprehensive network.
The Lord Bishop of Worcester
My Lords, the Minister has just mentioned success stories. I wonder if he is aware of an exciting development in Worcester of a joint university/city library, which Her Majesty the Queen opened last year. Does he agree that this unprecedented partnership provides a model—a win-win approach if ever there was one—for other places to follow? I wonder, if he has not done so, whether he would like to visit it.
Lord Gardiner of Kimble
I am very keen on rural rides. The Hive in Worcester, as the right reverend Prelate has mentioned, is a new library and history centre, and the first ever joint public and academic library in the country. I could go through the very long list of success stories. I know that there are communities worried about their public library provision but there are good stories to be told in Hackney, Lewisham, Newton Abbot, Clapham, Oldham, Northumberland—I could go on.
Lord Collins of Highbury
My Lords, a comprehensive library service is about more than simply the supply of books. It is about encouraging the joy of reading; it is about education. I fear that some of the noises that we have heard from local government simply about alternative provision do not meet the standard, let alone the number, of libraries that my noble friend Lady Bakewell has referred to. What is the Minister’s view about the standards for a library service that meets that need for encouraging reading?
Lord Gardiner of Kimble
My Lords, the Government and the department have continued to fund the Reading Agency and the Book Trust, two very important charities in that sector; indeed, the Book Trust is involved with book-giving for children. One of the key points that I identified on my visit to these libraries is that we are going through a technological revolution in terms of libraries. The number of e-books that are loaned has risen in two years from 100,000 to nearly 600,000. We are going to have to deal with those new technologies and how we encourage young people and the community to be involved. Among the key pilot schemes are the 22 schemes for automatically joining primary schoolchildren—I am told that in Norfolk they will be joined at birth—and the children will encourage their parents to come to the libraries as well.
EU: UK Membership
(11 years, 10 months ago)
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Lord Davies of Stamford
To ask Her Majesty’s Government how many jobs they think would be created by the United Kingdom leaving the European Union.
Viscount Younger of Leckie
My Lords, the Question is based on multiple hypotheticals and intangible variables. I will do my best to deliver my response with a touch of realism. The Government’s policy on the EU is clear. It was set out most recently in the mid-term review and was confirmed in the Prime Minister’s speech, so no analysis has been made at this time of the number of jobs that might be created or, indeed, lost as a result of a UK exit.
Lord Davies of Stamford
My Lords, I am afraid that the Minister’s bureaucratic evasion cannot avoid the bare fact that no one has ever suggested that leaving the European Union would create a single job, but everybody knows that doing so would put at risk many jobs, both present and future, depending on future decisions about the location of investment. Against that background, why are the Government gratuitously creating this uncertainty for investors and employers? Can we have an explanation for why over the past few weeks several Cabinet Ministers have openly been talking about their willingness to leave the European Union?
Viscount Younger of Leckie
The noble Lord is right in saying that we were right to stay within the European Union. The reason that decisions have been made to get rid of the uncertainty is because questions are being asked, not only within the UK but within Europe, about our future, and it is right to settle that now. I stress that the noble Lord is right in saying that it is very important that we stay in the EU. The single market provides UK businesses with access to a market of 500 million customers worth around £11 trillion in 2011. Between 1992 and 2008, the single market is estimated to have raised EU GDP by 2.13% and to have created 2.77 million new jobs. It is estimated that those benefits could be doubled with the removal of the remaining trade barriers.
Lord Pearson of Rannoch
My Lords, given that only 9% of our GDP exports to the European Union, declining and in deficit, that 11% of our GDP exports to the markets of the future, rising and in surplus, and that 80% stays in our domestic economy, is it not obvious that that 91% of our GDP, which is made up of our non-EU exports and our domestic economy, would generate several million new jobs if they were freed from the stifling overregulation from Brussels?
Viscount Younger of Leckie
It may not surprise the noble Lord that I do not agree with his approach. It is estimated that around 3.5 million jobs in the UK are dependent on trade with the EU. The UK exports a wide range of goods and services to other European member states, everything from cars, worth more than £13 billion in 2011, through music, which represents £1 billion and even more once related services, royalties and licences are included, to a wide variety of food and drink products, worth close to £10.5 billion. There is much to be lost if we leave the EU.
Lord Razzall
My Lords, if we take the follow-up question by the noble Lord, Lord Davies, and indeed, the Minister’s answer to the last question, does he not fear, realistically, that the uncertainty created by the Prime Minister’s commitment to a referendum in 2017 will risk reduced investment and employment in British manufacturing industry, particularly in the motor car industry, to which he referred?
Viscount Younger of Leckie
I do not agree with my noble friend, but I stress again that it is right to end the uncertainty of the questions that are persistently asked. My noble friend mentioned UK car manufacturers. They effectively saved £0.9 billion in 2009 by not having to pay the common external tariff to export to the EU. This equates to a saving of £1,100 per vehicle exported in 2009 to the EU. I stress that there are large figures involved in needing to settle the uncertainty.
Lord Soley
I put it to the Minister that he is not answering the question about the judgment of investors as a result of the uncertainty created by a referendum. Can we have his assessment of the impact of the uncertainty of a referendum on inward investment?
Viscount Younger of Leckie
I cannot give any specific figures on that, but I stress again that it is important to end the uncertainty. That is why my right honourable friend the Prime Minister has set out in the other place his stall in terms of how we go forward, including with a referendum.
Lord Dobbs
My Lords, can my noble friend assist a simple soul? Am I right in believing that we run a substantial balance of payments deficit in our trade with the European Union? Does that not therefore mean that there are more jobs dependent on that trade in Europe than there are in this country?
Viscount Younger of Leckie
I do not agree with that particular approach. European markets count for under half of UK exports of goods and services. Seven of the UK’s top trading partners are EU member states.
Lord Reid of Cardowan
My Lords, multiple hypotheticals and transient variables seem the very essence of the Government’s policy on Europe. Avoiding those, will the Minister answer a factual question? When last year, in the middle of the eurozone crisis, I asked the Government whether there was not an approaching fork in the road, and whether they would envisage the possibility of a two-speed, or multi-speed, Europe, I was told that the Government did not envisage that under any circumstances. What happened to change their mind?
Viscount Younger of Leckie
The answer to the noble Lord’s question is that we are fully focused on staying within the EU. We do not see a two-tier Europe coming forward.
Lord Hannay of Chiswick
Can the Minister clarify another simple point? How does the announcement of a referendum in four years’ time, the result of which cannot possibly be predicted, remove uncertainty?
Viscount Younger of Leckie
The Prime Minister emphasised in another place that now was not the right time to hold a referendum, and that it would be right to hold a referendum after the next election—and after, we hope, the current EU crisis has abated.
Mental Health (Discrimination) (No. 2) Bill
(11 years, 10 months ago)
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National Health Service (Clinical Commissioning Groups—Disapplication of Responsibility) Regulations 2012
(11 years, 10 months ago)
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Companies Act 2006 (Amendment of Part 25) Regulations 2013
(11 years, 10 months ago)
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Lord Popat
That the draft regulations and order laid before the House on 18 and 19 December 2012 and 10 January be approved.
Relevant documents 15th and 16th reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 6 February.
Enterprise and Regulatory Reform Bill
(11 years, 10 months ago)
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Viscount Younger of Leckie
That the amendments for the Report stage be marshalled and considered in the following order:
Clauses 1 to 7, Schedule 1, Clause 8, Schedule 2, Clauses 9 to 14, Schedule 3, Clauses 15 to 20, Schedule 4, Clause 21, Schedules 5 and 6, Clauses 22 to 24, Schedule 7, Clauses 25 and 26, Schedule 8, Clauses 27 and 28, Schedule 9, Clause 29, Schedule 10, Clause 30, Schedule 11, Clauses 31 and 32, Schedule 12, Clauses 33 to 35, Schedule 13, Clauses 36 to 45, Schedule 14, Clauses 46 to 50, Schedule 15, Clauses 51 to 53, Schedule 16, Clauses 54 to 56, Schedule 17, Clauses 57 to 64, Schedules 18 and 19, Clause 65, Schedule 20, Clauses 66 to 69, Schedule 21, Clauses 70 to 84.
Welfare Benefits Up-rating Bill
(11 years, 10 months ago)
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Baroness Stowell of Beeston
My Lords, the Bill before us is about securing a stronger economy for the future. Noble Lords are well aware of the challenge we currently face. We are dealing with a deficit which is unprecedented in peacetime. Back in 2010, we were borrowing £1 in every £4 that we spent, and interest payments were costing us £85 million a day.
Baroness Anelay of St Johns
My Lords, a considerable number of Members of this House are leaving, but there are still some staying behind to take part who would like to listen to the Minister, who is trying to present the opening of this debate. I should be grateful if Peers leaving could do so quietly.
Baroness Stowell of Beeston
I am grateful to my noble friend. Back in 2010, we were borrowing £1 in every £4 that we spent, and interest payments were costing us £85 million a day. We have begun to make progress on that deficit—it has since reduced by a quarter. But there are still difficult decisions to be taken if we want a stronger economy that delivers a better future for everyone. Let me be clear about that: everyone, all of us, whoever we are, deserves the chance to do the best for ourselves and our families.
Several commentators have said that we should look first to make savings from those with the broadest shoulders—the richest in society—and I am proud to say that we are. This Government’s plans increase the total tax contribution from the most well off. As a result of our actions, the richest pay more tax on capital gains, more stamp duty on their homes, more tax on their pensions and are less able to avoid or evade tax. The top 20% of households continue to make the greatest contribution towards reducing the deficit. The Autumn Statement raises more than £1 billion pounds a year from the richest and more than £8.5 billion over the forecast period. Overall, the richest will pay more in tax during this Parliament than under the previous Government’s tax plans.
However, as we seek to reduce the deficit and retain credibility with financial markets, we cannot ignore the welfare budget. From 1997 to 2010 spending on working age welfare increased by some 60% in real terms. Today, it accounts for £1 in every £8 that the Government spend. The Institute for Fiscal Studies has said:
“When cutting public spending dramatically to help reduce an unsustainable budget deficit it is almost inevitable that spending on benefits and tax credits—which account for 30% of the government’s total budget—will be targeted”.
But in seeking savings from welfare, we have always sought to strike a balance, and that is true of this Bill.
The Bill provides for most working-age benefits, tax credits and statutory payments to be subject to a 1% increase in 2014-15 and 2015-16. I will not go through the full list but it is set out in the Schedule to the Bill and the Explanatory Notes. As a result of this, the Bill will save £1.9 billion in 2015-16. We have also retained safeguards for a number of key benefits, which will not be subject to the provisions in the Bill.
For pensioners, we are maintaining our commitment to the triple lock, a commitment which will see the basic state pension rise by earnings, prices, or 2.5%, whichever is highest. In 2013-14, when both prices and earnings growth are below 2.5%, we will ensure that the poorest pensioners will see the same cash increase by over-indexing the guarantee element in pension credit, which would normally rise with earnings. In addition, for disabled people and carers, we have committed to uprating benefits covering additional needs to the costs that they incur because of their disabilities in line with inflation. The protection applies to disability living allowance, attendance allowance, carers allowance, the disability premiums in working age benefits, the disability elements in tax credits, the carer premium and the support component of the employment and support allowance. Those are not included in this Bill: they are protected. We have sought to find a balance between making necessary savings and protecting those who are least able to increase their spending power.
We have also sought to strike a balance between supporting those on benefits while containing the costs of the welfare system. Let us not forget that most people have faced significant pay restraint in recent years. Looking at average incomes over the past five years, including those in low-paid jobs, those in work saw their incomes rise half as quickly as those on out-of-work benefits, at a rate of 10% compared to 20%. Let us not forget that public sector workers have had their pay frozen and then increased by just 1%. Indeed, even with the 1% increase on these benefits, on current projections out-of-work benefits will still be at a higher level in 2015-16 than if they had been uprated by average earnings growth since the financial crisis began. While people want to know that the welfare system is there for them in hard times, when they need to draw on it, they also want to be confident that it reflects the budgeting decisions that people have to take in work and that it incentivises people to find and take work.
By setting out clear savings commitments in legislation, the Bill also seeks to give certainty, both to taxpayers and to the markets, that this Government are committed to securing fiscal credibility in the years ahead, and it is “the years ahead” that I am particularly concerned with. Investing in credibility and stability is an investment for the long term, and it is, of course, a means to an end. Yes, we have to rebalance the public finances, but not simply so that we can point to a nicely balanced budget in the ledger.
In my eyes, the real end is ensuring that the next generation can benefit from a stable and growing economy, one where they are able to secure a job, become productive members of society and get on in life. I do not believe we can achieve that end without taking these difficult decisions.
Noble Lords need not look far for reassurance that this Government’s approach is the right one. In Spain and Greece, one in every two young people in the labour force is unemployed. Italy and Portugal are not far behind. I do not pretend that unemployment is not a problem in this country, but the decisions that we have taken to restore the public finances and the credibility and stability we have secured with the financial markets have been key to securing the stability of our own labour market. Over the past year, the UK employment rate has grown faster than any other G7 country. Employment in the private sector is up by more than 1 million since the election, while the last quarter saw further improvement in youth unemployment, a fall in long-term unemployment and a fall in unemployment overall. For me, this underlines the critical importance of the Government’s fiscal plans. We are trying to repair a damaged economy so that we can secure something that makes a real difference to people’s lives—a sound economy backed by an expanding labour market for them and for future generations.
But a sound economy has to go hand in hand with a strong social settlement. We can get the economy going again, but we will have failed if we still have a welfare system which does not make work worth while. So at the same time as we are restoring the public finances, I would ask your Lordships to remember that we are working to restore the welfare system as well. This year will see the introduction of universal credit, an historic change that will create a welfare system that is simpler, more effective, and designed to ensure that work pays. We expect some 3.1 million households to gain from the move to universal credit, on average by £168 per month. This is a progressive reform. Around 75% of the households that gain are in the bottom 40% of the income distribution. Overall, we believe that universal credit could lead to the equivalent of up to 300,000 additional people in work through improved financial incentives alone.
It is important that we see this Bill in its broader context. It enables the Government to make savings that are crucial to reducing the deficit and to maintaining our credibility with the financial markets while protecting those on fixed incomes or with additional needs. But at its heart it is a Bill for the long term, one that plays a crucial role in repairing the public finances, and so one that is an investment in a sound and stable economy in the future, and a future that is better for everyone. It is on that basis that I commend this Bill to your Lordships’ House.
Lord McKenzie of Luton
My Lords, I start by thanking the noble Baroness, Lady Stowell, for her explanation of this Bill, but let me say at the outset that we consider this to be a bad Bill that should not reach the statute book, and we have much to do in Committee.
The Chancellor of the Exchequer has said that it is, in his terms, shirkers who will be affected by these cuts to tax credits and benefits, and of course uprating by less than the rate of inflation is a real-terms cut. However, analysis now shows that two-thirds of those affected by this Bill are actually in work, striving to rise above poverty levels and support their families. The Children’s Society shows that up to 40,000 soldiers, 300,000 nurses and 150,000 teachers will lose out as a result of this Bill. Despite what we are told, disabled people are not properly protected. The Bill penalises working mothers and punishes children, trapping them in poverty. Two-thirds of those hit by cuts to tax credits and benefits are women.
There could be no starker example of this Government’s values than the fact that at the same time as they are introducing this Bill, they are seeking to give 8,000 millionaires an average tax cut of £2,000 a week. Compare this with the 71p increase per week for somebody on JSA. We will seek to ensure that the Bill does not proceed while these tax cuts are being implemented. It is anyway entirely unnecessary. If the Government are so determined to uprate most benefits and tax credits by just 1%, they can do it by way of the annual uprating process, precisely as they are doing for 2013-14.
Those affected by the Bill are having to shoulder the burden of the Government’s continuing economic failure in jobs and growth. The 2012 Autumn Statement made abundantly clear that with a shrinking economy last year and growth forecasts downgraded again for this year, next year and every year up to 2016, the Government are also failing to tackle the deficit and debt.
The Chancellor has been forced to announce that he will not meet his fiscal rule to get the debt down by 2015, with the result that the Government are borrowing a staggering £212 billion more than they planned. Nearly 1 million young people are out of work and the claimant count is forecast to be 275,000 a year higher in 2015. The OBR expects the economy to be 3.6% smaller in 2016-17 than it thought it would be just a year ago.
However, the Government still will not change course. Nothing in this Bill will help growth and jobs. Nothing in this Bill will help build a stronger economy. Everything in this Bill will contribute to depressing demand and putting more pressure on hard-pressed public services. There is no recognition that low-income families have high marginal consumption rates, so restricting their income will impact very directly on demand in our economy. Therefore, the poorest are being asked again to bear more of the burden. The IFS says that this will include 7 million working households, who it calculates will lose on average £165 a year.
Taken together with other changes in the Autumn Statement, the real income of a one-earner family will reduce in real terms by more than £500 by 2015-16. The Government’s own impact assessment shows that the average loss in income is higher for families in the lower deciles than for those in the higher deciles. Those at the bottom lose £4 to £5 a week; those at the top lose £1 to £2 a week.
As USDAW put it in its briefing, this Bill is another blow to working families. Compared with a CPI uprating, the Bill will cost a working family on a modest income nearly £800 a year. We know from the Minister herself —Esther McVey—that it will result in an extra 200,000 children being pushed into poverty on top of the 800,000 the IFS already estimates have entered that state due to the coalition’s policies. This is why we will demand that the Government produce a comprehensive assessment of the Bill’s effects on child poverty.
Any claim that increases in the personal tax allowances will compensate low-income working families for such losses does not bear examination. Many will not reach the tax threshold, being in part-time jobs at the minimum wage. For those who do, a tapering away in housing benefit and council tax support will negate much of the suggested advantage.
Of course, we still do not have from this Government a cumulative impact assessment of all the changes made to tax credits and benefits since May 2010—an issue so brilliantly pressed by my noble friends Lady Hollis and Lady Sherlock in a recent debate. When introducing the Bill, there was not a scintilla of recognition by the Minister of how much the living standards of the poor have already suffered under this Government. There was no recognition either of the tsunami of cuts that are about to engulf hundreds of thousands of our fellow citizens in the form of the bedroom tax and local council tax support schemes.
I accept, as the Minister said, that the Government have not ignored the welfare budget. Under it, they have already taken £20 billion from the poor. We are told that it is necessary to legislate for the 1% restriction to provide certainty for the taxpayer, the markets and claimants. These are entirely specious assertions. Taxpayers will not have certainty about the costs of social security without knowing claimant numbers, which of course are heavily dependent on the growth that this Government have failed to deliver.
It is frankly ludicrous to argue that the markets will take fright in respect of the amounts involved if you have just declared your intentions to uprate by 1% rather than enshrine it in legislation for two years in circumstances where your public sector net debt is heading north of £1.4 trillion. In any event, the market knows full well how determinedly brutal you can be when it comes to cuts.
When it comes to claimants, I am sure that most would forgo the certainty of a 1% increase—a maximum of 1%—for the prospect of a fair review on an annual basis, because what this Bill is doing is placing inflation risks with the most vulnerable members of society. Inflation just three years out is difficult to predict, and should it, contrary to current expectations, dip below 1%, the Government can pocket the benefit. Are the Government really saying that whatever the level of inflation, say in year three, they will allow any level of cut to be visited on the nation’s strivers? The justification for the 1% is that benefits have been rising at a faster rate than earnings over the past few years—we heard that from the Minister—but this means that the families receiving in-work benefit are getting a double blow from the Bill. If you look at the longer trend—the DWP gave us the figures just this morning—average earnings have increased at a much faster rate than benefits over the medium and long term.
However, the reality is that this Bill is not about shoring up the markets. It is about trying to shore up the dwindling political standing of the Government. It is about trying to foster a political climate—a party-political dividing line—that says that recipients of tax credits and social security benefits are feckless and workshy, and stay in bed while others go out to work for a living. The Government, of course, are only for the latter.
I was struck by a contribution when the Bill was debated in the Commons, from which I shall briefly quote. It was stated:
“But the insidious aspect of the Bill is that, in seeking to open up a philosophical divide of that type, it becomes not an issue of political leadership, but of political pandering to some of the fears, insecurities and downright prejudices that can be stoked up in society—the ‘us and them’ mentality and the sense of resentment and envy. When people start playing fast and loose with those factors—and we have seen early examples against the backdrop of this legislation in the last week to 10 days—they are following a very risky strategy indeed”.—[Official Report, Commons 21/1/13; col. 86.]
That was Charles Kennedy. That any Government should seek to prey on the lives of poor people in this way for party advantage is disgraceful. The ploy is anyway unravelling. Of some 14 million working-age households with someone in work—strivers in anyone’s language—around half are disadvantaged by this Bill.
However, it is not only people in work who are strivers. What about a lone parent struggling on income support to nurture a young child to be part of a responsible future generation; or someone on income support because they devote every waking hour to care for someone, saving the state hundreds of thousands of pounds over the years; or someone on JSA who has been made redundant through no fault of their own, desperate to get back into work? These are strivers too.
Any claim that disabled people are being fully shielded from the cuts in this Bill are of course false. Disabled people in the work-related activity group—by definition those found not fit for work—will have their ESA uprating capped at 1%, thereby losing, according to the Disability Benefits Consortium, £87 a year. Those in the support group fare little better, with the support component being out of scope but the core component being subject to the cap. This, at least, we will seek to address in Committee. Of course, disabled people will miss out not only on this basis. Other benefits on which disabled people are disproportionately likely to rely, such as housing benefit, will also be restricted. We will seek, in Committee, to reverse the real-terms cut in statutory maternity pay. That would reverse just part of the losses that working women are suffering from cuts to maternity pay, pregnancy support and tax credits. The House of Commons Library research shows that low-paid new mothers are losing out to the tune of some £1,300 because of this.
This is a wretched Bill with the wrong priorities. It does nothing for jobs, which is why we will press that it not enter into force until a compulsory jobs guarantee can be introduced, focused on the long-term unemployed and paid for by restricting pension tax relief on high earners. The injustice at the heart of the Bill is another attack on the poor, including the individuals and families who subsidise all of us because they work for low wages, meaning that we all benefit from cheaper goods and services. They should not be treated in this way.
If the Government have their way on this Bill, it will mean another spur to poverty, more food banks, more payday loans, more households having to choose between heating and eating, and more despair for those striving to do the right thing. We have a duty to stop it.
Lord German
My Lords, it will not surprise the House that I start from a different place from the noble Lord, Lord McKenzie. I will refer later to the use of the word “language”. I hope that your Lordships’ House will join us in saying that we should not use language that tries to segregate different groups of people. I shall illustrate that later. My starting point in examining this Bill is to ask whether it meets the policy objectives that it sets for itself and whether it is a proportionate response to the problem that it attempts to solve. As the principal policy objective that it seeks to fulfil is to make an impact on the underlying structural deficit that this country faces, it is an impossible analysis if we do not start with an examination of that factor.
In 2010, the Government set themselves the objective of eliminating the inherited structural budget deficit by the end of this Parliament—that is, by 2015. However, external circumstances, such as the problems within the eurozone, intervened which made that a much more difficult task to accomplish. So the Government took the decision to slow down the elimination of the structural deficit from five years to seven years, to 2017-18. Of course, they could have chosen to meet their original target date by imposing even more challenges to government expenditure—by increasing the tax take and by digging deep into the health and education budgets, and presumably further into the welfare budget as well. They chose not to do so. The consequence of that is a need to take further steps in budget reduction and this measure does that. It is aimed at 2015-16, the last of the financial years that will be determined before the next general election.
My first point is that sticking to the original timescale for deficit reduction would have meant a much more challenging debate than the one we are having today. Clearly, many noble Lords are concerned about the welfare budget reductions contained in the Bill. I can understand that concern. It is never easy reducing welfare payments; it is very uncomfortable and something which gives me concern as well. However, it would have been a lot worse if the Government had not slowed down the deficit reduction programme.
There are, and will continue to be, very difficult decisions to be made, and this Bill is one of them. However, those who object to the budget reductions in the Bill must say whether they are in favour of either a further extension of the already extended deficit reduction programme—slowing it down even further, going beyond the planned seven years and increasing the level of borrowing substantially—or taking money from some other source. It would be helpful to know where noble Lords stand on this matter. I listened very carefully, but I was unable to detect where that money might come from. The Bill cannot stand alone in some sort of splendid financial isolation. When there are hard choices to be made, it is important to know whether others are prepared to face up to them. There are also further tax measures to come if the Government are to meet the new seven-year timetable. We can take some comfort from the IFS Green Budget scrutiny, which, taking this Bill into account, determined:
“The whole set of tax and benefit changes introduced between the start of 2010 and 2015-16 will hit the richest households hardest”.
My second point is about proportionality. Many noble Lords will recall debates in this House where the figure of an additional £10 billion reduction was bandied about. The Chancellor of the Exchequer said last year that,
“we will have to find greater savings in the welfare Bill. £10 billion of welfare savings by the first full year of the next Parliament. Iain Duncan Smith and I are committed to finding these savings”.
However, the cumulative figure that this measure provides is not £10 billion but £3.6 billion—and that includes this year’s uprating order. That accords with the approximately £1 in every £3 of public expenditure that goes on welfare. Therefore, it could have been far worse for the welfare budget.
I am pleased that arguments made by those on the Liberal Democrat Benches have been taken on board by the Government. There will be no capping of child benefit at two children; there will be no cessation of housing benefit for the under 25s; and there will be no absolute freeze on working-age benefits. Thankfully, that is not the trajectory of this measure.
Spreading the burden across the years and taking relatively small amounts of money from a large number of people is a sensible approach. A lot of people paying a little is better than the alternative of a small number of people losing a lot of money in a single year. Here, I am talking about the welfare budget. Some have suggested taking out child benefit and tax credits from the Bill, but this would wipe out £1.5 billion of the £3.6 billion of savings, which would once again have to be found elsewhere.
Given the budget restraint, the Bill takes a sensible approach. It is sensible because, since the financial crisis, out-of-work benefits have risen twice as fast as average earnings—by 20% compared to 10%. For many, the effects will be short-term, as most people out of work find work again within three to six months. Also, the Government have capped public sector increases at 1%, so there is also an element of fairness to the measure. Besides, the shadow Secretary of State for Work and Pensions recently said that he wished to see incomes rise faster than benefits.
This measure is temporary. It is time-limited to end in the financial year 2015-16. Unless changed again by an incoming Government, the present arrangements for annual uprating will apply once more. However, there are some rough edges to the Bill. I hope that the Government will explain and debate these in detail in Committee. It is right to have sweeping exemptions for pensioners, the sick and the disabled—but some anomalies will need explanation, justification and perhaps amendment.
I said that I would say a little more about the language used in discussions and debates on these matters. The word “shirkers” has been used already in the debate. I do not find it helpful. It is not just one side who are saying this. According to the Labour Benches, it was the Chancellor who used the word “shirkers”. However, the word was also used by the shadow Secretary of State for Work and Pensions in a speech last year at the London School of Economics. I hope that noble Lords from all parts of the House will support the notion that we have to be extremely careful not to negatively categorise people. It does no good at all to use inflammatory language to distinguish between those in work and those out of work. The benefits trap itself is to be deplored. That is why there is so much to be gained by the new universal credit. The principal message I take from this is that as a country we must offer a helping hand, rather than deprecate the people who are trapped by the current benefits regime, which soon will be radically altered.
I want to say a word about child poverty, because I read so often of the figures produced by pressure groups that have written to many noble Lords in relation to this Bill. The child poverty measure, as I discovered when there was a committee inquiry in the National Assembly for Wales, is very difficult to sustain both internationally and in this country. In the first year of this Government, the numbers in child poverty—according to the international measure—fell substantially in the United Kingdom. That is because the median is used as the measure in this country. It is time that we had a new measure if we want to see what is happening in respect of children in poverty in this country and in other countries. I hope that noble Lords from all sides of the House would agree that continuing to use the current measure is no way to examine this issue, despite the fact that it substantially benefits the Government’s argument.
Finally, I hope that the Bill puts to an end any further reductions in the welfare budget before the next general election. Of course, there may be minor, necessary adjustments, but these past few years have really been a difficult time, with very hard decisions having to be taken about the size of the welfare budget. I hope that, in his response, the Minister will offer your Lordships some reassurance that this area of spending reduction has now reached its conclusion for the continuing length of this Parliament.
Lord Adebowale
My Lords, I declare my interest as chief executive of Turning Point, an organisation that works with many of the people who will be affected by this Bill, should it become an Act. I felt compelled to join in this debate because many of the people who stand to be affected are people with whom I and my organisation work; they are some of the most vulnerable in society. It is important that we remind ourselves of this during the course of the debate.
In his opening remarks, the Minister made the point that the rich were going to pay more and carry a greater burden than the poor. However, it is the poor who feel the impact more than the rich. I refer to an article I once read by the sister of the Mayor of London. She pointed out that during times of austerity, the rich of course feel the burden of cuts, but generally the burden is restricted to deciding whether they should take one or two cooks on holiday with them this year. We should think about this Bill in that context.
I would like to raise a few points about the Bill’s potential impact on certain groups and make a few further points about fairness and public attitudes. Those who stand to be impacted include many working-age adults; many people accept that now as a given. Many of those with complex needs and challenges are the people supported by Turning Point. We work with people who are experiencing challenges such as substance abuse, mental ill health, learning disabilities, employment difficulties or a combination of some or all of these. I have said in earlier debates that I have yet to meet any one of our clients who does not want to work.
Around half of those who used Turning Point’s integrated, complex-needs services last year have already had benefit and housing difficulties. They have had problems accessing disability benefits despite physical and mental health problems and have been left with debts due to lengthy appeals processes. The point is that people are already struggling due to changes that have begun to affect them and there are still other changes that will start to hit from April.
I got some advice from Crisis, an organisation that is well respected across the House. It gave me an example of a young man called Russell, who had been urgently looking for a shared property in London since September, but did not have the deposit that nearly all landlords require. His rent for a small studio flat was, until September, paid by housing benefit. However, when the changes to the shared accommodation rate kicked in, his housing benefit was slashed from the £180 a week he required to £86 a week. As a result, he had to drop out of his computer course to look for somewhere to live and has accumulated nearly £3,000 in arrears and been served an eviction notice. Homelessness was a real threat for Russell. I am really pleased to report that this morning, I was told that he has just managed to find a new place to live, but has no idea how he is going to pay back the debt accumulated over that period.
The Bill has been described as a real-terms cut with the IFS estimating that, given the current forecasts for inflation, it could amount to a cumulative 4% real cut in the benefits affected. In reality, we do not know what its impact will be as it depends on future inflation rates. The IRS states that this will expose some of the most vulnerable to inflation risk.
I recognise and welcome the fact that disability benefits and carer’s allowance are exempt from the legislation, but the problem remains that the Bill will apply to the main rate and the work-related activity group component of employment and support allowance. According to Disability Rights UK, all of the 991,000 disabled people receiving ESA in the support group and work-related activity group will experience the impact of a 1% cap, and it estimates that that will amount to a loss equivalent to a loaf of bread and a pint of milk per week, or £87.65 a year. That does not sound like a lot, but I come across people whose lives are hugely affected by the ability to afford that loaf of bread and that pint of milk each week.
The Government talk about fairness, which is a big part of their motivation for reform. The debate about skivers versus strivers has been played out a lot recently, and whether it is helpful or it contributes towards polarising opinion and increasing stigma is perhaps a matter for another discussion. Still, the employed and the unemployed cannot be compared with one another so simply. For a start, many working people are in receipt of benefits. We know from recent data that households with at least one employed adult have accounted for 93% of the increase in the number of housing benefit claims in the past two years and that there are around 3.6 million working households already living on an economic “cliff edge” who could be squeezed further by this Bill. The Children’s Society has calculated that the Bill will mean that by 2015, a lone parent with two children on a weekly income of £530 would lose £424 a year, and a couple with two children on a weekly income of £635 would lose £351 a year.
Public attitudes to welfare spending are often impacted. I think that the prejudices which have been mentioned by contributors to this debate are based on the fact that the public do not often understand what the actual impact of this Bill will be on individuals. An argument used in favour of reform is that the welfare bill accounts for a quarter of total government spending. Last year’s data show that the DWP does indeed account for 23% of all public spending, or £166.98 billion. However, of the £159 billion of that sum which went on benefits, 47%, or around £74 billion, went on state pensions compared with JSA and incapacity benefit, which saw spending of approximately £4.9 billion each. Despite this, a YouGov poll recently commissioned by the TUC has found that on average, people think that 41% of the entire welfare budget goes on benefits to unemployed people. The same poll also suggests that support for this Bill actually depends on the level of understanding of it, as I have already mentioned. The Government have a duty to educate the public on the realities of welfare benefits and the impact on the poorest in society as opposed to being tempted to take advantage of ignorance of this matter.
The Government want to improve fairness and incentivise work, but welfare reform cannot be tackled in isolation from other factors such as the labour market and current inequalities. Despite it being a commonly held view, it is difficult confidently to identify evidence of widespread welfare dependency and intergenerational worklessness. The Joseph Rowntree Foundation and the University of Bristol recently found that only a very small minority of households, some 15,350, have had two or more generations who have “never worked” and of those, many of the second generation have been out of work for less than one year.
Policies that change behaviour are a risk when the roots of the problem go beyond behaviour. Just one worrying trend is the 109% rise in the number of people being helped by food banks, as reported recently by the Trussell Trust. While some people think that food banks are a good idea, research in Canada seems to indicate that the level of nutrition provided by such food is very low compared with the ability to choose your own produce. I am worried that the impact of welfare changes, spending cuts to services and rising living costs could contribute to a further increase in the use of food banks. It would be interesting to know whether Ministers think that an increase in the use of food banks would be a credible and useful outcome of this Bill.
I worry that the Bill risks pushing vulnerable people, including disabled ESA recipients, the working poor and people such as Russell, further away. I would like the Minister’s response to perhaps provide some advice for the Russells of this world—he is not alone and represents maybe a few hundred thousand people—as to what they should do when faced with the impact of the proposed Bill.
The Lord Bishop of Leicester
My Lords, it is a privilege to follow the noble Lord, Lord Adebowale, who speaks with real authority and experience in this matter and who came to speak in Leicester this time last year to a group exploring the public responsibility for the poor.
It seems to me that, from time to time, it falls to these Benches to raise questions about the moral responsibility of this House and perhaps today is one such occasion. I want to ask what is the fundamental purpose of the Bill before us. The Minister has asserted that it is to achieve a stronger economy for the future. If that is the case, presumably it is designed to achieve short-term savings in response to a present budget deficit. However, because of its long-term effects, it looks like part of an ideologically motivated attempt to alter the very nature of the welfare state. If that is the case, we must ask ourselves what is the limit of our collective responsibility for the poorest in our society. I believe that there is confusion in this Bill about that limit in at least three key areas.
First, there is impact of the Bill on working families. One of the main arguments used to justify the Bill is that it is unfair that out-of-work families should see their benefits rise at a faster rate than hard-working families who are facing a squeeze in their wages. Others have made this point already. However, this claim is both inaccurate and unhelpful. It is inaccurate because the fact is that working families, and low earners in particular, are among those worst affected by this Bill, as we know. Working tax credit, one of the benefits included within the cap, is only available to working households. Other benefits that are also included, such as child benefit and child tax credit, are available to both working and non-working families. The House of Commons Library has estimated that if only out-of-work benefits were subjected to the 1% cap, 80% of the proposed savings would disappear. According to the Resolution Foundation, 60% of the impact of the Bill will fall on working households. In 2015-16, the 1% uprating policy will take a total of £2.8 billion out of the pockets of the very people who the Government should be seeking to support. More than at any other time, these families are relying on tax credits and other benefits to help compensate for the squeeze in their earnings and the rising prices of essentials.
As other noble Lords have mentioned, it is also unhelpful to set up a false distinction between in-work “strivers” and out-of-work “shirkers”. All of us who are actually in touch with the effects of this Bill in local communities know that many are losing their jobs through no fault of their own. Contrary to ministerial rhetoric, the vast majority of unemployed people want to work: 70% of unemployed people find work again within a year and only a tiny minority of workless households contain two generations who have never worked. As if it is not enough to lose your job, some of these people are now being vilified and impoverished.
Secondly, the Bill will have an adverse impact on the population at large. In total, it is estimated that 6.4 million families with children will be affected. That is 87% of all families with children and 95% of lone-parent families with children. While nearly all families will be affected by this policy, it is the poorest families who will bear the disproportionate share of the burden. The Government’s own impact analysis reveals that two-thirds of the cost of this measure is from the bottom third of the income distribution; only 3% is from the top third. Surely this is completely inconsistent with the Prime Minister’s statement that,
“those with broader shoulders should bear a greater load”.
I am not afraid to say that I think this is wrong.
Of course, this Bill comes on top of all the other welfare cuts that are disproportionately affecting low-income families, such as cuts in disability benefits and in the local housing allowance. I see at first hand the effects of these in my own city of Leicester, where the bedroom tax will affect 13% of tenanted households; the benefit cap will affect 585 households; and cuts in council tax support will affect 16,000 households, which will have to pay some element of council tax for the first time.
The Institute for Fiscal Studies estimates that the combined effect of all the tax and benefit changes introduced between 2010 and April 2015 is to reduce the incomes of the poorest fifth of families with children by about 7%. As others have said, the inevitable impact of this policy will be a further increase in child poverty. The Government’s own estimates are that this Bill will push 200,000 more children into poverty. Even before this measure was announced, the Institute for Fiscal Studies was already estimating that relative child poverty was set to increase by about 400,000 between 2010 and 2015. In Leicester, 32% of children are already in poverty, well above the 21% national average. This policy will substantially increase that number. I ask the Minister: what are the Government doing to reduce the impact on these 200,000 children?
Finally, I fear for the long-term implications of this policy. This Bill breaks the historic link between benefits and price inflation, which will have implications not just over the next three years but in 10 and 20 years’ time. We have not had enough public and political debate about this. The cumulative impact of this policy is a substantial erosion in the real value of benefits for the poorest working-age households, which is already considerably below what most people agree is necessary to achieve an adequate standard of living. Families that are already in a financially precarious position due to debt problems, lack of family support and so on will be particularly vulnerable, pushing many into unmanageable debt and triggering mental health problems, homelessness and family breakdown.
The changes to uprating policies announced by this Government already mean that the level of means-tested support will be 7% lower by 2016-17. If inflation turns out to be higher than currently forecast, the impact on living standards will be even greater—a serious risk that does not appear to have been adequately considered by the Government. Every unexpected increase in food prices or fuel costs will hit the pockets of those least able to bear the cost. What flexibility will there be to support vulnerable families if inflation rises much higher than the 2.2% measured by the consumer prices index?
If we wind the clock forward, what kind of safety net will be left in 10 or 20 years’ time? I fear that we are heading in the direction of a United States-style welfare system, where healthcare provision and pensions are large and protected but working-age provision is less generous and more stigmatised, barely providing enough for people to live on without relying on charitable handouts, where visits to the food bank are not an emergency response to an economic crisis but an integral part of the welfare state. Is this really the kind of society that we want to live in?
This Bill will not help the well-being of the most vulnerable in our society. It will depress hard-working families even further, remove much needed support for the vulnerable and unable to work, and potentially take us in the wrong direction for a generation, condemning countless children to poverty. It is a proposal that I cannot support.
Lord Bates
My Lords, as I listened to the right reverend Prelate, I struggled to think of one point in this Bill on which this House might be unanimous, but I venture that it is this: that the provisions of the Bill are unwelcome. However, the question was never whether they were welcome; it was always whether they were necessary.
The roots of this Bill in this Parliament lie in the bill for the previous Parliament: the doubling of the national debt and the biggest budget deficit in the developed world and in our own peace-time history. From 2003 to 2010, the previous Government spent £171 billion on tax credits, contributing to a 60% rise in the welfare bill, which was unsustainable. I have never quite been able to get to grips with the idea that profligacy is compassionate and that sound management of your finances is somehow hard-hearted and uncaring.
Other myths that have been put forward surround language. “Shirkers”, for example, is an expression that I would never use, having grown up on Tyneside with many people who found it degrading to be in receipt of government aid through welfare rather than having the dignity of earning a salary. I never use that phrase, but, of course, it was never this Government who started its use; it was Mr Liam Byrne—to whom I shall refer a couple of times in this speech. He said at the Labour Party conference in September 2011:
“Let’s face the tough truth—that many people on the doorstep at the last general election felt that too often we were for shirkers not workers”.
That was not a Conservative statement. In a speech given by Mr Byrne at the London School of Economics in January last year, he said:
“Labour is the party of hard workers not free-riders. The clue is in the name. We are the Labour Party. The party that said that idleness is an evil. The party of workers, not shirkers”.
It is important when we have a debate of this nature, which is clearly highly charged and emotive, that we correctly ascribe the language being used.
Let us place the proposed savings that this measure will bring about in some sort of context. We are talking here about proposed savings in 2014-15 of £1.1 billion, rising to £1.9 billion in 2015-16. That is 1% of the £117 billion bill for social welfare, excluding pensions and sickness. Another argument used is that this is somehow a pernicious measure which seeks to attack the poor while helping the rich, yet the argument used about higher-rate tax cuts is worth further examination. Higher-rate taxpayers will pay more tax to the Government in every single year of this Parliament than they paid in any single year of the previous Parliament. The increase of the higher rate of tax to 50p in the pound came into effect on 6 April 2010. If ever there was deathbed conversion on the part of the previous Government, that was it. In 13 years, they did not put up the higher rate of tax; it came into effect two days before the Dissolution of the previous Parliament. We are moving forward and saying that you will pay more through capital gains tax, more through the reduction in the pension tax relief threshold, more through the freezing of inheritance tax, which will come later, and in a number of other ways.
Therefore, the point that the Government are focusing on fairness in restoring the public finances is an important one. For example, changes in child benefit will mean that those who earn salaries over £50,000 will progressively lose their child benefit, which has widespread support as being fair. The raising of the personal allowance has halved the tax bill of someone who is on the minimum wage and taken 2.2 million of the poorest working families out of tax altogether. The state pension has risen from £97.65 in 2010 to £110 per week in the current year, including one of the largest rises in the level of the state pension ever in 2011.
There is another crucial element, which is reducing the welfare dependency culture in the UK, which has trapped millions on welfare and is a huge waste of human potential. Between 1997-98 and 2010, while average earnings increased by 30%, tax credit spending increased by 340%. The result was that by 2010, 90% of all workers were eligible for some form of welfare.
That leads me to another point on which I should like to press my noble friends on the Front Bench a little further. Given the opportunity, I will return to it in Committee. With the introduction of universal credit, we will have a system where, no matter what the salary of the job, you will always be better off in work by a straight line table of 65p in the £1. It is very important that people should always be better off in work. That is one of the principles at the heart of this reform. However, in the debate on 17 January led by the noble Baroness, Lady Hollis, which I guess was a bit of a forerunner of this debate, one of the issues that I raised was the living wage. I should like to explore it further.
I followed it up in a Question for Written Answer, in which I asked what would be the effect on the bill for social security benefits of raising the minimum wage to the living wage. If the argument, which I fully support, is that we want to reduce welfare dependency, then whether that welfare dependency comes through levels of benefits or inadequate levels of income, it needs to be treated exactly the same. The Answer was:
“The Government support the idea of a living wage and they encourage businesses to participate. However, requiring employers to pay a living wage higher than the national minimum wage could be burdensome to business and damage the employment prospects of low-paid workers … In the absence of evidence on the living wage’s adoption by employers and the resulting effect on employment levels and patterns, it is not possible to estimate the net effect on income tax and national insurance receipts, or on social security benefits”.—[Official Report, 29/1/13; col. WA 315.]
On the first part of the Answer, I would say that if it was the case that the minimum wage destroyed jobs, why have we continued to increase it from £5.93 in 2010 to £6.08 in 2011 and then to £6.19 per hour in 2012? Presumably, we accept that it does not destroy jobs.
When it comes to calculating the cost, Her Majesty’s Treasury seems unable to estimate it, but the Resolution Foundation has estimated that the living wage would introduce gross savings of £3.6 billion in increased tax revenues and a reduction of £1.1 billion in tax credits and means-tested benefits—a not insignificant sum, as it is the same as would be yielded by the 1% cap on welfare increases over the next three years.
I therefore encourage my noble friend to reconsider the issue of the living wage. As a Conservative, I think that we should help companies to create wealth and jobs through lower taxes, not by subsidising low pay. That is worth looking at. It would be entirely in keeping with the principles of the Secretary of State for Social Security and, I am sure, the Chancellor of the Exchequer, and I would support it. That would show that we are on the side of low-paid employees who are struggling to get on in life and whose contribution and effort we respect and admire.
Baroness Hollis of Heigham
My Lords, normally one can say something halfway decent about some aspect of any social security Bill. I think that for the first time in 20 years in your Lordships’ House, I can find nothing good to say about this Bill at all—nothing. It is simply a lock-in cuts Bill which, to save £3 billion, will send 1 million poor children into deeper poverty by 2020 so that the better off among us, including myself, are spared a tax rise while millionaire earners have a hefty tax cut that is, curiously, also worth £3 billion.
Why do we oppose this Bill? It is simple, really. First, as my noble friend Lord McKenzie said, it is entirely unnecessary. We have always had annual up-ratings to respond to inflation; we now have a 1% rise for the forthcoming year and a Bill, costing many hours of parliamentary time, continuing it for a further two years. Why? The only defence offered by the rather fragile impact analysis is “certainty” for the financial markets, the public, and recipients themselves. Certainty, my Lords? Even if the Government cruelly ignore inflation, which the OBR believes will hit nearly 4% by 2015-16, benefit spend will still depend on the future number of claimants as well as on the level of their benefit. Exactly how can the Government give certainty to the markets and, that nice touch, certainty for the recipients, who will no doubt be grateful to learn that their benefit cuts are guaranteed for the next three years? No, the Bill is to lock in these benefit cuts for the poorest—to take it off the agenda, so to speak—in preparation, I do not doubt, for further cuts still to follow.
After all, if our solicitous concern for the markets and the public was driving this Bill, we would offer the same certainty to taxpayers for the next three years. There would be frozen tax allowances, so no more Lib Dem raising of the thresholds with the very real uncertainty that causes for NEST, auto-enrolment and, no doubt, the markets. There would be frozen tax rates, so no pre-election handouts. No, the Chancellor wants to lock the poor into their cuts, while being free in an election year to adjust the taxes that fall on the rest of us.
Secondly, the spin surrounding this Bill is deliberately and unpleasantly misleading, suggesting that these cuts fall on the undeserving poor, so that is all right then—the ones with closed curtains. It is not all right but, in any case, it is completely untrue. We had the distinctly ugly spectacle of the Iain Duncan Smith press releases while this Bill progressed through the other place, implying that these cuts were morally as well as financially desirable because they would help to wean the poor off benefit dependency, which the noble Lord, Lord Bates, cited today, as though the recipients were addicts waiting for their next benefit fix rather than loving and responsible parents trying desperately to feed their children. That was while IDS knew, as we all know, that two-thirds of these capped benefits are going to people in work on low pay with children to support. IDS smeared every poor family in this land, and I had thought better of him.
Why do we need these top-up benefits, such as housing benefit and tax credits for people in work? We all know why, don’t we? It was because while a wage may be acceptable for a single man in a full-time job on minimum wage, that wage will be hopelessly inadequate for a family man with two or three children to support unless it is topped up by tax credits. So unless employers raise wages substantially not to a living wage but to double the current pay to make good—to something like £10 or £12 an hour, which is not going to happen—their children will now become poorer still. That of course is why the argument that because pay is being capped to 1% so benefits must be is utterly fake, because Iain Duncan Smith—Mr Smith—knows perfectly well that they are largely the same group of people, their low but capped pay being topped up by low and, in future, artificially capped and lowered benefits.
It is precisely because earnings have fallen below inflation over the past few years during the recession that the tax credit bill has risen to compensate for that shortfall. Firms have also cut hours rather than sack staff; 3.5 million people are now involuntarily underemployed. As one family man in Norwich said to me not long ago, at least tax credits help to make up the difference.
So instead of the Government explaining and accepting, as they should, that the increase in tax credits is due to falling wages and that it helps to protect families, we are instead told that as wages have fallen, so must benefits, thus ensuring that the working poor face a double lock on pay and tax credits—and of course the universal credit, when it comes in, will no longer take the strain.
Nevertheless, the Government claim that we cannot afford not to cut benefits, an argument that has been run today. Benefit expenditure overall has grown, partly because tax credits help to offset low pay and lowered hours of work but mainly because pensioners are protected from any cuts, their pensions are rising and more of them are living longer. That is good news. However, the dirty news is that the unemployed and the low-paid, and their children, are now being blamed by IDS for what his colleague, Steve Webb, is rightly doing for pensioners. How cynical can you get? Pensioners get a triple lock into greater comfort, which I welcome, while the poor of working age get a double lock into increased poverty.
Let us be clear, and I make this point again: this is about policy choices. As my noble friend Lord McKenzie has said, the Government have shown that they are on the side of millionaires, who are receiving a tax cut worth £3 billion, rather than 1 million poor children who will see their parents made poorer still by around £3 billion.
Above all, the Bill and its impact analysis cheat. They both treat these cuts as though they were freestanding—one-off, so to speak—and apparently not so very large. Around 30% of households will see an average cut of £3 through this policy, according to the impact analysis documents, when actually those cuts are a further slice off income on top of the myriad other cuts since 2010 that are already damaging poor families. We have heard nothing about those today, even from those who sit on the coalition Benches. In that regard, I say, “Shame on you”, because they are deleting what is clearly absolutely central to this debate. We have been offered no assessment of the cumulative impact of these cuts—£18 billion of cuts and no public analysis of how they build up or of whom they hit.
We had a debate on this a couple of weeks ago. I hope that noble Lords will forgive me if I repeat the broadest of statistics; as the Government will not, I will try. With the invaluable help of CAB and Landesman economics, we tracked the cumulative effects of all the cuts since 2010 on one family: a couple with two young children, he a security guard in full-time work on minimum wage, living in a £100 per week council house and, obviously, entitled to pay council tax. He gained £1.71 per week from the raising of the tax threshold and then went on to lose £30 to £35 per week in benefit cuts. If one of his children is disabled, say, he will lose over £40 per week. Under the universal credit, the cuts increase to £50 per week if he is in work or £65 per week if he is unemployed. It gives a new meaning to the slogan that the universal credit will make work pay—yes, by reducing the benefit floor underneath it.
Those statistics were the result of a weekend’s work. With more time, I would have tracked the cumulative effect not only on the security guard’s family but on a lone-parent family, on a childless couple and on a single person, because they all share the cuts. It is not rocket science; it is standard policy analysis on standard family types, as they are called, and yet we are told that the DWP and HMRC with, what, 60 professional analysts, powerful computer modelling and a couple of months in hand to do the work are unable tell us what the total effect of these cuts will be, which some of us were able to work out in a weekend? I really cannot believe that they do not know what the impact of their policy initiatives is and who bears the bill. They still will not or cannot tell us. If they do not know, it is an utter dereliction of social duty, it really is—you cannot develop policy and be indifferent to its effects—but if, however, they do know and are not telling us, it is a deceit that I cannot believe my former department would stoop to.
Finally, what makes me angriest of all—the right reverend Prelate the Bishop of Leicester powerfully focused on this—it that this Bill is grotesquely unfair on whom it falls, on poor children above all. Since when, as we talk about us all being in this together, do we include poor children in the we, but exclude comfortably off pensioners like me, who have experienced not a penny of cuts? What sort of we is that? The noble Lord, Lord Bates, said nobody was telling him where to find the money. I urge him and the noble Lord, Lord German, to accept that we are today making policy choices, not following financial imperatives. It really is about choices about who pays and, ultimately, who gains. It really is. With £32 billion spent on pension tax relief still untouched, although two-thirds goes on the better off, and what is happening on tax reductions for millionaires, these are political policy choices.
We could all have done different and in the process saved the situation that poor children will fall into, stumble into, as a result of what we are doing today. These cuts will fall on those in rented housing who rightly fear losing their home, rather than on those who have two, three or, as the papers have recently told us, even eight homes. They fall on those who go to food banks, not to foodie restaurants. They fall on separated loving dads who have their children stay over at week-ends, rather than on fathers who lose contact and refuse them. They fall on families with a wheelchair user rather than a Ferrari driver. These cuts fall on the vulnerable but voiceless, rather than on those of us with resilience and resources, but who, of course, are more likely to vote. It is a shameful little Bill. As Hobbes might have said, it is nasty, brutish and short.
Lord Low of Dalston
My Lords, it feels presumptuous to rise after a powerful speech such as that, but I shall try to do my best.
This miserable little Bill is not only mean-spirited and out of touch; it, or rather the spin surrounding it, is misleading, not to say dishonest. Moreover, the whole enterprise is misconceived. It is out of touch in the way it perpetuates the relentless attack on welfare, which is depicted as an aberration in social policy, to put it no higher, that needs to be reversed instead of as a mark of a civilised society acknowledging its obligation with increasing prosperity to look after its less fortunate members. Recipients of welfare are demonised as battening on society, and crude cutting is mystified in the rhetoric of helping people off benefits and into work.
The Bill’s justifications are misleading in their use, not to say their creation, of five myths. First is the myth that there is a radical separation between those on welfare and those in work, but many of the benefits that will be pegged by this Bill go equally to those on welfare and those in work: tax credits, for example. The second is that benefits have risen twice as fast as pay. They may have if you pick your dates correctly, but everyone knows that historically wages have risen considerably faster than benefits, which are pegged to the rate of inflation.
The third myth is that percentage, as opposed to cash, increases are a fair reflection of these things. I think that a caller to “Any Answers?” on the radio got this right when he pointed out that a 1% increase on the national average wage of £500 a week amounts to £5: a worthwhile sum. However, 1% on jobseeker’s allowance of £71 amounts to only 71p. That is as much of an insult as Gordon Brown’s 75p increase in the old age pension.
Fourthly, there is the myth that any shortfall in benefits is made up for by the increase in personal tax allowance. This applies only to those in work, of course. Anyway, as Citizens Advice has shown, capping the uprating of benefits will swamp any gain from the increase in the personal tax allowance, certainly for low-income households.
The fifth myth is that the most vulnerable are protected, but you do not protect the poor by cutting welfare since it is the poor who rely on welfare. You only have to look at the treatment of disabled people, whom the Government maintain they are protecting under the Bill, to see the essential dishonesty of the Government’s propaganda. Here, I declare my interest as having a connection with a number of disabled people’s organisations, which are mentioned in the register.
Disabled people are certainly vulnerable. They have experienced a drop in income of £500 million since the emergency Budget of 2010. The Government have already reduced the measure by which benefits are uprated from the higher RPI to the lower consumer prices index. Some benefits for disabled people and carers, such as disability living allowance, the support group component of employment and support allowance and disability-related tax credits are exempted from the reduced uprating. This acknowledgment that disabled people need additional protection is welcome. However, notwithstanding the Government’s claims, the Bill will still mean a real-terms cut in vital support for many disabled people. DLA will continue to rise by inflation, but this is not the case with employment and support allowance.
Following a work capability assessment, people who are unable to work can be placed in either the support group or the work-related activity group. Many disabled people are being placed in the work-related activity group. For them, the Bill will cap the uprating of this benefit to 1%. This will mean in effect that households in the work-related activity group receiving ESA will be £87.65 a year worse off. Furthermore, disabled people who are placed in the support group, meaning that their impairment or condition is such that they are not expected to look for work, have been given only limited protection from the reduced rate of uprating. The ESA that disabled people in the support group receive is made up of a core payment with an additional support group component. Only this additional component will continue to rise by inflation, with the core element rising by only 1%. This means that, overall, disabled people in the support group will see their ESA payments rise by just 1.4% rather than inflation. This will mean that a disabled person in the support group of ESA will be £62.76 a year worse off.
The real-terms loss of financial support that disabled people receiving ESA will face compounds a situation where disabled people are disproportionately more likely to live in poverty than non-disabled people. The problems of living on a low income are then compounded by the extra disability-related costs. When these are included in the measurement of poverty, the proportion of households with a disabled member living in poverty doubles to almost 50%. The Government’s impact assessment recognises that the Bill will impact on disabled people. It states that households where someone describes themselves as disabled are more likely to be affected than those where no person describes themselves as disabled—34% of households as against 27%.
For disabled people who also rely on other benefits, such as housing benefit, the reduced rate of increase will impact on the financial support they need to live. Despite assurances that disability benefits will be protected and continue to increase by inflation, disabled people claiming ESA, housing benefit or any other benefit not specifically for disabled people will see a real-terms cut to the amount of financial support that they receive.
The Bill will also reduce the rate at which the lower tier of the disabled child addition of universal credit increases. Disabled children in the UK are already disproportionately likely to live in poverty. Approximately 40% of all disabled children—about 320,000—live in poverty, compared with a poverty rate of 30% across all children. Nearly one-third live in severe poverty, where a family’s income is less than 40% of the national average. Under universal credit, which will begin to come into effect later this year, parents of disabled children can receive a benefit called the disabled child addition. This will replace the current disabled child tax credit.
Under universal credit, the support available for disabled children who do not receive the high rate of the DLA care component will be cut by one-half, from around £57 a week under the disabled child tax credit to £28.52. Furthermore, the Bill will mean that the value of this benefit will increase at a significantly slower rate—by just 1%—as opposed to in line with the consumer prices index, which is currently 2.7%. As a result of the Bill, parents of disabled children receiving the lower disabled child addition of the universal credit will lose £25.21 a year or £75.63 over the next three years.
Finally, the Bill is misconceived because, with the economy flatlining, it does not make sense to take purchasing power out of the hands of a section of the population that is most likely to spend what it has. The fiscal squeeze is set to tighten in 2013-14 compared with 2012-13, and the IMF is warning that planned cuts may need to be scaled back if growth does not build momentum by early 2013. Talk of growth, such as we heard in this House a fortnight ago, is largely beside the point while the level of demand in the economy is still so low. In these circumstances, the last thing we need is a further reduction in the level of demand. It even undermines the automatic stabilisers.
If the Government are to be as good as their word on the protection of disabled people, at a minimum the whole amount of ESA needs to be uprated in line with inflation for those in the work-related activity group, as well as the support group, and not just the additional support group component. Disabled people should be exempt from the reduced uprating of other benefits, such as housing benefit. I invite the Minister to respond positively to this proposal in the winding-up speech, before I start drafting amendments for Committee.
European Council
(11 years, 10 months ago)
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Lord Tomlinson
May I ask the noble Lord, Lord Hill, one simple question? We have the Statement on the European Council in the Printed Paper Office, but in the very last sentence it refers to the multiannual financial framework, as set out in document 37/13. I have been now two or three times to the Printed Paper Office, and that document is not available. It makes it very difficult for Members to comprehend the Statement when the principal part of the European Council in discussions on the multiannual financial framework is not available to Members of the House. I apologise to the noble Lord for interrupting him before he starts.
Lord Hill of Oareford
I am happy to be interrupted at all times. I apologise for that and will see what we can do to put that right as soon as possible.
With the leave of the House, I will now repeat a Statement made earlier in another place by my right honourable friend the Prime Minister. The Statement is as follows:
“Mr Speaker, I am sure that the whole House will join me in sending our best wishes to Pope Benedict following his announcement today. He has worked tirelessly to strengthen Britain’s relations with the Holy See, and his visit to Britain in 2010 is remembered with great respect and affection. Pope Benedict’s message on that visit of working for the common good is something that spoke to our whole country, and I am sure his successor will continue to provide a voice of inspiration for millions around the world.
Last week’s European Council agreed the overall limit on EU spending for the next seven years, starting in 2014. When these multiyear deals have been agreed in the past, spending has gone up, but last week we agreed that spending should go down. By working with like-minded allies, we delivered a real-terms cut in what Brussels can spend for the first time in history.
As the House knows, the EU budget is negotiated annually, so what we were negotiating, initially at the Council last November and again last week, was not the individual annual budgets but rather the overall framework for the next seven years. This includes the overall ceilings on what can be spent—effectively, the limit on the European Union’s credit card for the next seven years.
During the previous negotiation, which covered the period 2007-13, the previous Government agreed to an increase in the payments ceiling of 8% to €943 billion. Put simply, this gave the EU a credit card with a higher limit, and we are still living with the results of allowing the EU’s big spenders to push for more and more spending each year. In fact, only last year, while member states had to make tough decisions to tighten their belts at home, the big spenders succeeded in increasing the 2012 European budget by another 5% compared with the previous year. If no deal had been reached, the existing ceilings would have been rolled over and annual budgets could have continued to soar for the next seven years. Because annual budgets are negotiated by qualified majority voting, it can be difficult to constrain spending in these annual negotiations. By contrast, the seven-year limits are agreed by unanimity. So this was our chance to get the ceilings down in line with what could be afforded.
The European Commission produced an initial proposal for increasing the payments ceiling still further to €988 billion. This was strongly supported by a number of member states. The first negotiation took place at the Council in November and, although the President did then reduce this during the Council itself, it was still some way short of the real-terms cut we were looking for. Together with like-minded allies from a number of countries, including Germany, Sweden, the Netherlands and Denmark, we rejected the deal on the table and told them to think again.
At this Council, we made further progress. Together with like-minded allies—many of whom, like Britain, actually write the cheques—we achieved a proper look across all the areas where spending in the Commission proposal could be cut. While there are areas where we could and should go further, not least on reforming the common agricultural policy and reducing the bureaucratic costs of the European Commission, we agreed a real-terms cut in the payment limit to €908 billion. That is €80 billion lower than the original proposal. It is €35 billion lower than the deal agreed by the previous Government, which is still in operation today, and it is €60 billion lower than the emergency arrangements which would have come into place if there were no seven-year deal.
But my aim was not simply to cut the credit card limit. I wanted to set the limit at a level that would deliver at worst a freeze and at best a cut in the actual spending over the next seven years, and this is indeed what this deal delivers: a real-terms cut. If you take the latest complete budget—the one for 2012—and freeze spending at that level for the next seven years, you would have spending of €932 billion. Our new payments limit means spending cannot rise above €908 billion, so we have slashed €24 billion off a real freeze on the last completed budget. Of course, the budget set in 2012, which Britain voted against, was unacceptably large, but even against the average of the past two completed years—2011 and 2012—this deal still delivers a real-terms cut.
Of course, this deal must now be voted on by the European Parliament. The European Council has said that it is prepared to accept some flexibilities about how spending is divided between different budget years and different areas of spending, but we are absolutely clear that this must be within the framework that the member states have now agreed. The EU’s seven-year budget will now cost less than 1% of Europe’s gross national income for the first time in its history.
Let me say a word about how this deal is likely to affect the UK’s contribution; a word about how it is likely to affect what the UK receives from the EU for research, for our regions, and for our farmers; and a word about what this means for growth and competitiveness across the European Union as a whole. On the UK’s contribution, the House will remember how the previous Government gave away almost half of our rebate. This has had a long-term and continuing effect on the UK’s net contributions. It is worth remembering why. When the European Union spends money on, for example, structural funds and cohesion payments in eastern European countries, the UK no longer gets a rebate on this money. As a result, almost whatever budget deal was done, our net contributions were always likely to go up, but as a result of this deal, they will be going up by less.
The only two sensible things we could do to protect the British taxpayer in these negotiations were to get the overall budget down and to protect what is left of our rebate, and that is exactly what we have done. While the actual amount that the UK contributes will depend on technical factors such as the size of the annual budgets, economic performance and exchange rates, as a result of this deal we now expect the UK’s contribution to the EU to fall as a share of our gross national income. As for the rebate this Government inherited, it is completely untouched. As ever, throughout these negotiations, the rebate was attacked repeatedly, but I successfully rejected all the calls for change. Under this Government, the British rebate is safe.
In terms of what the UK receives, I wanted to make sure that our universities are well placed to receive research work, our less well-off regions are treated fairly compared with others and our farmers continue to receive support for the environment schemes they put in place. On these points, the section of the budget that includes spending on research, innovation and university funding is up by a third, and this money is handed out on the basis of quality, so Britain’s universities are particularly well placed to benefit. We have ensured that structural funds will continue to flow to our less well-off regions. Britain’s share will remain broadly the same, at around €11 billion. And while we have cut spending on the common agricultural policy overall, we have protected the flexibility which will allow us to direct funds to support both the environment and the livelihoods of our farming communities.
Overall, this is a better framed budget in terms of growth, jobs and competitiveness. It is disappointing that administrative costs are still around 6% of the total, but overall spending on the common agricultural policy will fall by 13% compared with the previous seven-year budget. Research and development and other pro-growth investment will now account for 13% rather than 9% of the total budget. Reform of EU spending is a long-term project, but this deal does deliver important progress. Working with allies, we took real steps towards reform in the European Union. It is a good deal for Britain, a good deal for Europe and, above all, a good deal for all our taxpayers. That is what we have delivered, and I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Royall of Blaisdon
My Lords, I thank the Leader of the House for repeating the Statement by the Prime Minister on the outcome of the European Council meeting. Like the Prime Minister and the Leader of the House, I pay tribute to Pope Benedict XVI. He is a spiritual leader for 2 billion people and a theologian of great distinction. His visit to the UK in 2010 will be long remembered as a proud moment for millions of Catholics, other people of faith in this country and, indeed, many Members of this House. His decision to stand down is not one that he will have reached lightly. It is right that all sides of your Lordships’ House acknowledge his service, and from these Benches, I do so now.
On the European Council, I join the Prime Minister and the Leader of the House in welcoming the fact that an agreement has been reached on a cut in the seven-year payment ceilings for the European Union budget. At a time when so many budgets are being cut at home, last October the other place voted for a real-terms cut in the EU budget, and it was right to do so. That is what my party argued for in the debate. In the resulting vote, the Prime Minister was given a strong negotiating mandate for a real-terms cut in the budget. We are therefore glad to see the agreement reached at the European Council. However, as well as restraint in the budget, we needed reform—prioritising growth within a smaller budget by cutting back even further on wasteful spending.
First, on agriculture, the CAP fell as a proportion of spending from 46% in 1997 to 33% in 2010. We welcome the modest decline in agriculture spending as a share of the European budget, from 31% in 2013 to 27% by 2020. The Leader was right to say that there is further to go in this area, with agriculture making up just 1.5% of the total output of the European Union but still accounting for nearly 30% of the budget.
Secondly, we welcome the increase in funds targeted towards growth infrastructure, R&D and innovation. However, can the Government confirm that the achievement of a declining budget compared to November’s proposal came not at the expense of agricultural spending but in part at the expense of this funding for growth? Can the noble Lord also tell the House that proper investment will continue to be made by the EU in science, as urged by many UK university vice-chancellors last week?
Thirdly, the Opposition and the Government agree on the need for the EU to play its part in effective development, diplomatic and governance support in north Africa. Can the Leader of the House therefore say what discussions took place about how the EU could play this enhanced role in the context of the decision in this budget round to freeze the European Development Fund, which provides assistance to that region? Given the new emerging challenges across the Sahel, what information can the Leader of your Lordships’ House provide on how funding to that region will be affected? Will he also take this opportunity to update the House on the transition road map for Mali, which forms part of the Council conclusions?
Fourthly, given the very significant and unprecedented difference between the ceiling on payments and the ceiling on commitments agreed on Friday, can the Leader tell the House what discussions took place on how this would be dealt with in the years ahead?
This budget agreement shows that contrary to the views of some Members opposite, the European Union is capable of change, and that it is capable of change when we work with our allies. However, while this budget agreement brings restraint, Europe still needs a plan for recovery and growth. The Council conclusions talk about the importance of trade agreements. Can the Leader update the House on developments on the possible EU-US trade agreement and on how the Government see it being developed this year, including at the G8 summit? However, do the Government also recognise that the long-term changes to the budget and the possible EU-US trade agreement are not a substitute for a growth strategy now for Europe?
There are 26 million people unemployed in the European Union, more than 6 million unemployed young people looking for work and, shamefully, 1 million of them are here in the UK. I should be grateful if the Leader can say what specific budgetary measures were agreed in relation to young people and employment—for example, on the European youth guarantee.
The European economy is struggling and the British economy is flatlining. What Europe now needs—what Britain now needs—is a plan for jobs and growth. That is the way in which Europe must change, and that must be the priority for the months and years ahead, in both Britain and the European Union.
Lord Hill of Oareford
My Lords, I am grateful for the broad welcome given to the Statement by the noble Baroness, Lady Royall. She made the point that this negotiation demonstrated, as I believe it did, that the EU is capable of change. It was not that long ago that some in the party opposite were saying that my right honourable friend the Prime Minister was isolated in Europe. The deal that he managed to strike demonstrated that, by working closely with our allies, particularly with the Nordics, he has been able to secure a good deal and a deal which, overall, will lead to savings, so we are far from being isolated. That is absolutely right in the current climate.
On agriculture, I agree with the noble Baroness that there is more to do on CAP. Generally, in these negotiations one does not always achieve everything that one wants. Britain’s overriding priority was to go for a freeze, or, if possible, a real-terms cut in the overall credit card limit or ceiling, which we have achieved. Some steps were taken and the CAP budget was reduced for the next seven years from a proposed €320 billion to €277 billion, so that is some progress, but I accept that there is more to do.
As regards growth, as the noble Baroness said, the budget for R&D has increased. The Connecting Europe Facility has also been increased. In terms of making savings on where some of those moneys have come from, my right honourable friend was keen to make bigger savings in the administration costs and he was disappointed not to have got those because there is a widespread feeling that we could have done better. We managed to take €1 billion out, but I am sure that more could have been done.
On the noble Baroness’s important points about governance in Africa, the Sahel and the road map for Mali, it is true to say that the overwhelming priority of this Council was sorting out the multi-annual financial framework, so the amount of time spent on some of these other important issues was proportionately less. As regards Mali, at the European Council the contribution made by the French was praised and the United Kingdom gave them strong support. We will contribute by training troops from the west African nations, as the noble Baroness will know. Generally, our approach is to try to develop a more sophisticated, political, diplomatic strategy alongside a military strategy.
The European Development Fund went up by a modest amount, so I am not sure that it was frozen. If I am wrong on that, I shall correct what I have said.
On the gap between the ceiling on payments and the ceiling commitments, raised by the noble Baroness, I understand that that size of gap is not untypical in terms of these negotiations. It is broadly in line with what had been the case in the previous seven-year negotiations. The European Commission also said that it thought that scale of gap was deliverable.
On growth generally, the noble Baroness is right to point to the importance of the trade negotiations and to see whether we can make more progress on the EU-US talks. I know that my right honourable friend the Prime Minister spoke to President Obama not long ago to try to make further progress on that. I also know that good progress has been made on those talks with Canada and negotiations are being taken forward with Japan. Opening up the European Union and encouraging trade is one of the most powerful ways in which to help growth and to get jobs, especially for the young, about which the noble Baroness is concerned.
Lord Dholakia
My Lords, I thank my noble friend for repeating the Statement in your Lordships’ House. Perhaps I may say how much we welcome the Statement, and in particular the fact that research and university budgets have not been affected. At a time of economic recession, when national and household budgets are shrinking, it is right that the European budget should reflect the gravity of the situation. However, two elements have been preserved: growth and jobs. Is my noble friend able to quantify the overall impact on growth and jobs resulting from the reduced European Union budget?
Lord Hill of Oareford
I am grateful to my noble friend for his overall welcome, and for the support he has given over a considerable period to my noble friends who took part in these important negotiations. I am not able to give a specific calculation of what the contribution of a smaller budget is likely to be to jobs and growth, because so many variables are in play: what happens in the eurozone, what happens to trade, how far we get with these talks and so on. What I am able to say is that the increased line on research and development should be of particular benefit to British universities, given that the money is distributed on the basis of quality—and, as we all know, British universities are renowned for their quality.
Lord Wigley
My Lords, will the Leader confirm my understanding that structural funds will continue to flow to regions of economic need. I believe those were the words he used? If so, will he confirm that the funds will remain at the levels that were previously anticipated for qualifying areas such as west Wales and the valleys, and that the source of funding will not be repatriated under last week’s agreement?
Lord Hill of Oareford
My Lords, on the question of these important funds, the noble Lord will be aware that the direction of travel, which the British Government support, is to try to make sure that they go to the least well-off regions in the European Union. With the accession of new countries to the east, it is important that they should have those funds. On the noble Lord’s specific question, we currently expect that the overall receipts will be broadly comparable to 2007 to 2013 levels. There will be a domestic application process that the Government will have to go through in due course, as a result of which we will know what the figures are.
Lord Howell of Guildford
My Lords, I apologise for not being in my place for the first two minutes of my noble friend’s speech. Is not by far the best outcome of this very satisfactory budget negotiation, on which my right honourable friend the Prime Minister should certainly be congratulated, the fact that it demonstrates that when we go for constructive reform in the European Union, we are not without friends—and indeed, that we are gathering an increasing number of allies? Will my noble friend point out to those who keep talking about Britain being isolated and marginalised that the opposite is the case, and that when we develop our ideas further for European reform, clearly we will have more friends?
Perhaps I might add a second question. I read in the papers this morning that up to 20% of the entire EU budget will now be spent on climate-related and green issues, including energy. Can my noble friend confirm whether that is true? If it is, what can we do to make that expenditure far more efficient in achieving good environmental and energy results?
Lord Hill of Oareford
On my noble friend’s second question, I will need to see whether I can provide better particulars on how the figures break down, and what the basis is for the speculation that my noble friend saw—whether it is to do with the energy elements of environment funds through the CAP, for example. I am not sure about that, so I will see what I can do. On his general point, I could not agree more. This outcome shows that Britain was far from marginalised and isolated in the negotiations. It also shows that the pessimistic view held by some that Britain is doomed to fail, and therefore should not go into negotiations with a strong position trying to win others round to our point of view, is entirely wrong.
I remember that many years ago when I was working for the then Prime Minister, John Major, there were similar views to the effect that Britain would never be able to win an opt-out of the single currency or an opt-out of the Social Chapter, but in fact those were both successfully achieved. Similarly on this occasion, there were people looking forward with eager anticipation in the expectation that my right honourable friend the Prime Minister would not be able to secure Britain’s interests. In fact, he has; I agree with my noble friend that by being clear in one’s objectives and by assembling alliances—in this case, with the Germans, the Swedes, the Dutch and the Danish—it is perfectly possible for Britain to secure its objectives, and it will continue to be so.
Lord Pearson of Rannoch
My Lords, I hope it will not ruin the Prime Minister’s day if I offer congratulations on a small step in the right direction. However, I think he is going a bit far when he describes the present situation as “a good deal for taxpayers”. Could the noble Lord tell us what this country’s gross and net contributions now become? In 2012, our gross contribution was some £22 billion, of which we got back around £11 billion, so our net contribution was £11 billion a year. That represents the salaries of 1,000 nurses at £30,000 a year every day, which we never see again. Therefore, I still have to query whether this whole arrangement is anything but a disastrous deal for British taxpayers.
More importantly, perhaps, is it true that the European so-called Parliament is going to vote on this new proposal in secret? If so, does that not nicely confirm the nature of this animal? What happens if the EU Parliament votes this down? Do we go back to some 2% inflation per annum for the next seven years? Could he enlighten us on that before we get too overwhelmed by the Prime Minister’s success?
Lord Hill of Oareford
I shall do my best to calm the House down, my Lords. I noticed that in the space of the comments of the noble Lord, Lord Pearson, he went from expressing concern about causing my right honourable friend the Prime Minister an anxiety attack by praising him, to rescinding that praise by the end.
On the cost to the British taxpayer, clearly, so far as the negotiation was concerned, the fact that the Prime Minister managed to end up with a credit card limit that was so many billions of euros lower than had been initially proposed is a cause of some modest satisfaction to the British taxpayer. That cost would have been lower if a chunk of our rebate had not unfortunately been surrendered in those negotiations in 2005 in the hope, as I understand it, that there would then be a deal on the CAP: a deal that has not been forthcoming. That explains why, although the overall figures are considerably lower—and they do represent a real-terms cut, which is what everyone wanted—the cost to the taxpayer is nevertheless higher than one would like.
On the European Parliament, like the noble Lord I have read some of the speculation there has been about that. The European Parliament has a role to play in approving the budget, but our position is that that agreement was struck by the 27 member states that are responsible for finding the money. We believe that some of the situations that the noble Lord has invited me to speculate about will not come to pass, but we need to see what happens. I will not be drawn into his alluring hypothetical situations.
The Lord Bishop of Worcester
My Lords, we on these Benches wish to join in paying tribute to His Holiness the Pope following his announcement. We give thanks for the outstanding contribution that he has made to the common good as well as to the welfare of the church during a long and distinguished ministry. He is in our prayers, as are those responsible for electing his successor, and as are the many Roman Catholics who will have been distressed and disorientated by his announcement.
Mention of the common good brings me to the EU budget and the welcome announcement that has been made. Can the Leader of the House assure us that the Government will focus their attention on what the budget seeks to achieve as well as on its size? There is a broader question here of what constitutes good stewardship of the resources that Europe has at its disposal. Stewardship requires a way of living that recognises that everything belongs to God and that all resources must be used for his glory and the common good. It requires us to find ways of collaborating with others to make the resources in our possession work for the good of all, as intended by God.
The Leader of the House will know that in 2004 the Sapir report was commissioned by the European Commission to look at ways in which the EU might deliver on the promise made in 2000 of becoming the most competitive knowledge-based economy in the world by 2010. The report argued that:
“As it stands today … the EU budget is a historical relic. Expenditures, revenues and procedures are all inconsistent with the present and future state of EU integration”.
Can we have an assurance that the Government will press for a more radical restructuring of the European Union budget in the time to come?
Lord Hill of Oareford
My Lords, I recognise the important points made by the right reverend Prelate on behalf of the Bishops’ Bench in respect of His Holiness the Pope.
On the overall administration of the EU budget, I think my right honourable friend the Prime Minister has made it clear that he shares the sentiment that the way in which it appears to have been going up and up does not suggest very good stewardship—to use the right reverend Prelate’s word. In the years ahead we will carry on trying to bring pressure to bear, as we will in trying to make sure that all the funds that are allocated are spent responsibly and wisely on the ends for which they were intended.
Lord Tugendhat
My Lords, I think it is the turn of this side of the House. As a former budget Commissioner, perhaps I may add my congratulations to those of others to the Prime Minister on his achievement. I also emphasise the points made by my noble friend Lord Howell about the importance of alliances. This shows that when alliances are built up, results can be achieved, something that many people would not have believed possible. The way in which the Labour Party voted before the last round of budget negotiations, when it thought that it was setting the Prime Minister an impossible target, is an indication of how effective British diplomacy has been on this occasion.
Finally, does my noble friend agree that there is no stronger supporter of the European Union than Chancellor Merkel? The fact that she is on the same side as us gives the lie to those who argue that you measure support for the European Union by the size of the budget. No one would suggest that British patriotism can be measured by the level of public sector expenditure, and it is a complete fallacy to suppose that one should measure support for the European Union, as so many in the European Parliament do, by the size of the budget.
Lord Hill of Oareford
I think I agree with every single point that my noble friend Lord Tugendhat has made. He has underlined the importance of alliances, which is clearly right, and he has drawn particular attention to the strength of the relationship that my right honourable friend the Prime Minister has worked hard to develop with a number of allies, including Chancellor Merkel. It is also true that in domestic politics the level of commitment is not related solely to the size of a budget. Given his experience, I have listened with particular care to my noble friend and I endorse his conclusions.
Lord Hannay of Chiswick
My Lords, I hope the Minister will get some pleasure from somebody who is normally a critic of the Government’s European policy saying that I thought an extremely good deal was sealed last week. I am also delighted that the Prime Minister, in his Statement, drew the right conclusion from it, which was that you can get a good deal if you work carefully with your partners.
Was the noble Lord the Leader of the House not slightly surprised that one thing that no one has commented on so far is that the Prime Minister has committed himself to a budget that goes three years beyond the date of the referendum which he has said he is going to call? On this vexed question of the rebate, will the noble Lord the Leader of the House perhaps confirm that the change in the British rebate that took place in 2005 was simply Britain agreeing to pay its fair share of the structural fund spending in the new member states? Does he think that we should not have paid that fair share? We were the primary protagonists of those member states joining.
Lord Hill of Oareford
First, I very much welcome the noble Lord’s welcome for my right honourable friend the Prime Minister’s achievement, from a different perspective from that of the noble Lord, Lord Pearson of Rannoch. I am obviously very aware of his background and experience in these matters, so am glad to receive it.
On the noble Lord’s point about the rebate in 2005, my understanding is that the other side of that deal, as it were, was supposed to be reform of the CAP, which, sadly, has not been forthcoming. That will cost the taxpayer in the region of, I think, €8.5 billion. From the point of view of wanting to defend the interests of the British taxpayer, I am extremely glad that my right honourable friend the Prime Minister has taken a robust line on Britain’s abatement. He was pushed to surrender more of it but felt that to do so would be wrong. I am glad that he resisted that pressure.
Lord Ryder of Wensum
My Lords, in the event that Scotland votes next year to become an independent nation, and therefore ceases to be a member of the European Union, can my noble friend confirm that the resources normally allocated to Scotland will be reallocated to the other three partners within the United Kingdom: namely, Northern Ireland, Wales and England?
Lord Hill of Oareford
My Lords, one thing that is clear in the document that I believe has been published today by constitutional experts looking into some of the implications, were there to be a vote in favour of independence in Scotland, for membership of organisations such as NATO or the European Union is that it is, to say the very least, unclear how things would pan out. However, the assumption that everything would just roll on is certainly questioned. My noble friend is right to highlight those concerns. Difficult and complicated negotiations would need to take place.
Lord Lea of Crondall
My Lords, will the noble Lord the Leader of the House agree that, given the complexities of these negotiations and the widely recognised need to explain to the British people how these things work, this is not the right time for the Secretary of State for Education to say that the question of understanding the European Union and its history and geography will be removed from the national curriculum?
Lord Hill of Oareford
I always admire the ingenuity with which certain Members of this House manage to broaden the scope of the matter at hand. There are many ways in which we can try to increase public understanding of membership of the European Union, which lies at the heart of why so many people question the nature of our relationship with it. People’s trust in the institutions of the EU does seem to be wearing thin. Whether or not better geography and history teaching will help with that, I leave to others to decide.
Social Care Funding
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, with the leave of the House I shall now repeat a Statement made earlier today in another place by my right honourable friend the Secretary of State for Health, on the funding of care and support in England. The Statement is as follows:
“With permission, Mr Speaker, I would like to make a Statement on the funding of care and support in England. As we get older, none of us can have any way of knowing what care needs we will eventually face. Some will be blessed with a long and healthy life, but many others will be less fortunate.
Today many older people and people with disabilities face paying the limitless—often ruinous—costs of their care, with little or no assistance from the state. While those with assets of less than £23,250 do receive support, those with assets above this level receive none. This is desperately unfair, particularly for those who have worked hard all their lives to pay off their mortgage, to save for their future or to have something to pass on to their loved ones, only to see their property sold and their savings wiped out—something that happens to more than 30,000 people every year or 100 people every day. The system we have also sends out the wrong message: that you are better off not saving for your future because any savings will only disappear in a puff of smoke.
Today I can announce this Government’s radical plans to transform the funding of care and support in England, bringing a new degree of certainty, fairness and peace of mind to the costs of old age, disability and living with long-term conditions, while ensuring that the greatest level of financial support goes to those with the greatest need. We propose to introduce a cap on an individual’s financial contributions towards the cost of care, and a significant increase in the level of assets a person may hold and still receive some degree of support from the state.
In 2010 this Government asked the economist Andrew Dilnot to look at the whole issue of funding for care and support. The independent Dilnot commission published its recommendations in July 2011. In response to those recommendations, and following extensive engagement with the care and support sector, we published the Care and Support White Paper and the progress report on funding reform in July 2012.
In the progress report, we accepted some of Andrew Dilnot’s main recommendations, including those around a consistent, nationally set eligibility threshold for care and support, and universal deferred payments—whereby no one will have to sell their home in their lifetime to pay for care costs. I would like to take this opportunity to thank Mr Dilnot and his team for their excellent work.
A core principle set out by the Dilnot commission was that people should contribute to the costs of their own care but that those costs should be limited and people should be protected against the potentially catastrophic costs of care. This should come through a cap on those costs, and an extended means test. One person in 10 will be faced with care costs in excess of £100,000, with a small number facing costs significantly higher still.
To give everyone peace of mind, from April 2017 we will introduce a cap on the amount that someone over state pension age will be liable to pay. The Dilnot commission’s original suggestion was for a cap of between £25,000 and £50,000 in 2010-11 prices, which is the equivalent of between £30,700 and £61,500 in April 2017 prices. Despite the extremely challenging economic situation we find ourselves in, we have come as close to this range as possible.
The cap will be set at £61,000 in 2010-11 prices, or £75,000 once it is introduced in April 2017. The intention is not that people should have to pay up to £75,000 for their care costs. But by creating certainty that this is the maximum they will have to pay, they can then make provision through insurance or pension products so that they are covered up to the value of the cap, thereby reducing the risk of selling their home or losing an inheritance they have worked hard to pass on to their family.
Young people who already have care needs when they turn 18 will now receive free adult care and support when they reach 18. People who develop a care need after 18 but before state pension age will be protected by a cap that is below the £75,000 threshold.
The other measure that we propose is significantly to increase the amount of assets that a person can hold and still receive financial support for their residential care- home costs. Currently, this is set at £23,250. If a person has assets valued above this level, including, in some circumstances, the value of their home, they receive no support. The Dilnot commission recommended that this threshold be raised dramatically to £100,000 in 2010-11 prices. We accept this recommendation.
From April 2017, the threshold will be increased so that those with assets worth £123,000 or less, equivalent to Dilnot’s recommended level, will all receive some degree of financial support for their care costs. People with the fewest assets will receive the most support. This will, for the first time, provide financial protection for those with modest wealth, while ensuring that the poorest continue to have all or the majority of their costs paid.
Everyone will benefit from the peace of mind that a cap brings. The introduction of a cap and the extended means-tested support will help many people in the most challenging circumstances—we expect up to 16% of older people who need care to face costs of £75,000 or more. But, of course, none of us knows whether we will be one of that 16%. Everyone will benefit from the peace of mind that these changes bring and, by 2025, up to 100,000 more older people will receive financial support for their care costs as a result.
My right honourable friend the Chancellor and the Treasury have rightly insisted that we identify how we pay for the additional costs of these proposals. In this day and age, making promises that you cannot pay for makes those promises meaningless. We have therefore identified exactly how to pay for them. These reforms will cost the Exchequer £1 billion a year by the end of the next Parliament. With the agreement of the Chancellor, they will be met in part by freezing the inheritance tax threshold at £325,000 for a further three years from 2015-16. The Chancellor and the Chief Secretary to the Treasury have agreed that the remaining costs over the course of the next Parliament will be met from public and private sector employer national insurance contributions revenue associated with the end of contracting-out as part of the introduction of the single-tier pension.
These two new proposals join with others previously announced when we published the draft care and support White Paper last summer. They include, from 2015, the ability of people to defer the payment of residential care costs so that no one needs sell their own home to pay for them during their lifetime. Also from 2015, a national minimum eligibility threshold will be introduced to end the lottery of local access that can see support provided to someone in one area but not in another. Taken together, today’s proposals and those already set out in the draft care and support Bill represent a new era of support for the elderly and disabled in England.
Thanks to the certainty that these proposals will introduce, people should no longer feel that they have to hoard every penny in case the very worst happens or feel that they are powerless and that there is no point in saving at all. Rather, they will be able to plan and prepare sensibly for their future. This will be supported by a wider range of financial products becoming available in the market designed to help people to plan and prepare for their later years and to reassure them about how much they will pay. We will work with the care and support sector—with local authorities, charities, care providers and individuals, and with the financial services industry—to develop these plans and to introduce them practically.
Our society is ageing. By 2030, the number of people aged over 85 will double, and the number of people with dementia will exceed 1 million. As the number of older people with such long-term conditions increases, we need to become a society where people prepare and plan for their social care costs as much as they prepare and plan for their pension. Sadly, this is an issue that Governments of all colours have long failed to tackle. While there are many other things that need to be done to prepare for an ageing population, these reforms herald a historic change in the way that care and support is funded in this country.
The economic circumstances are challenging, but these commitments demonstrate our determination to help people who have worked hard, saved and done the right thing to prepare for the uncertain hand that fate deals to all of us in old age. By introducing these reforms within the timescale and at the thresholds set out, they will also be sustainable and consistent with our overriding priority to reduce the deficit inherited from the previous Government. We want our country to be one of the best places in the world to grow old. These plans will give certainty and peace of mind about the cost of care, making sure that we can all get the support we need without facing unlimited costs, while also ensuring that the most support goes to those in greatest need. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Hunt of Kings Heath
My Lords, we are grateful to the noble Earl for repeating the Statement.
It is accepted on all sides of the House that our current social care system is living through the worst of all possible worlds: a cruel lottery in which people who go into later life with everything for which they have worked so hard on a roulette table and the most vulnerable are always the biggest losers. So it needs to change. The Secretary of State has today published a modest plan that will make the system fairer than it is today, and he is to be congratulated on that. We welcome elements of what he has announced. A cap of £75,000 is certainly better than no cap at all. Raising the means-test threshold will help more people on lower incomes to get some help with their charges. It is a step forward, but it is a faltering one, and only one of a series of measures that are required if older people and people with long-term conditions are to be given sufficient care and support. We need a holistic, cross-party approach.
Last week, the Francis inquiry exposed some very serious issues within the National Health Service which impact on the quality of care for a growing number of older people in our hospitals, often with several different illnesses. The NHS is overwhelmed with the demands being made on it, the tightening of its finances and the rightful emphasis on safety and quality. The changes being made by the Health and Social Care Act focus on the commissioning responsibility of general practitioners but, overwhelmingly, the real need for GPs is to focus on improvements in primary care, including accessibility and support for older people in their homes. Just when local authorities are needed to do so much more to help prevent admissions to hospital and to have much faster and more sensitive support for people discharged from hospital, they are having to cope with huge reductions in expenditure.
It is hard not to feel a sense of disappointment when listening to the noble Earl—first, because a Statement on a subject of such importance was briefed to the media before Parliament; because the Government have abandoned any efforts to build a cross-party consensus before rushing to announce their proposals; and because they have chosen to rewrite the Dilnot report with figures of their own, breaking the careful logic so apparent in Dilnot’s report.
There are four problems with what has been announced today, which I will address in turn. First, it fails the fairness test. We will have a durable solution to the problem only if we can answer this question: will it help every person and every couple to protect what they have worked for, whatever their wealth and savings? This package falls way short. According to Demos, the £35,000 cap, as recommended by Dilnot, would benefit about 3.2 million pensioners. A per person cap of £75,000 will benefit only 1.4 million. For the average couple, the cap is £150,000. That might be enough to protect detached houses, but it will not protect the average semi-detached home in large parts of England.
The Secretary of State selectively quoted Andrew Dilnot and, specifically, what he said about the £75,000 cap. I remind the House that Dilnot said that the cap was,
“higher than we would have wanted—£11,000 higher than the top end of our range —and I regret that”.
Will the noble Earl confirm that people with modest to average homes and savings are not protected under this plan? The Secretary of State claimed that insurance companies will step in with new products so that more people can protect their assets but, in oral evidence to the Health Committee, the Association of British Insurers said that it did not believe that the capped-cost model would result in a market for pre-funded care assurance. I would be grateful if the noble Earl could say what confidence he can give the House that a market will emerge. What discussions have been held recently with the insurance market?
The second issue that I am concerned about is that this addresses only a small part of the overall social care funding problem. With this decision, the Government have prioritised the funding of a cap on care costs with new money, over and above addressing the crisis in council social care budgets. Will the noble Earl confirm that this was against the advice of Andrew Dilnot to the cross-party talks? What it means in practice is that vulnerable people will continue to face rising charges as councils put up fees to cope with the growing shortfall in their budgets. This is the effect of the Government’s care policy in practice: they are asking people to make up the councils’ shortfall, making it more likely that they will have to pay right up to the new £75,000 cap. To many people, that will not feel like progress.
More than £1.3 billion has been cut from local authority budgets for older people’s social care since the coalition came to power. Care charges are rising well above inflation and councils are warning that by 2024, they will be overwhelmed by the cost of care. Does the noble Earl accept that forecast and, if he does, how will the plans announced today help to address it? It is true that the Government have raised the capital threshold to £123,000, and we welcome that, but can the noble Earl give the House any confidence that the extra support people will receive through a more generous means test will not be more than offset by increasing care charges, caused by collapsing council budgets? Many people may not know that the cap does not reflect what people actually pay for care but a local authority average, and does not include accommodation costs. As the noble Earl will know, accommodation costs can be considerable. Do the Government have any proposals at all to cap those costs, given the risk that they might rise as care home owners take advantage of additional state support?
The third element relates to inheritance tax. In 2007, a flagship pledge was made to increase the inheritance tax threshold to £1 million by the party to which the noble Earl has the honour to belong. Just eight weeks ago, the Chancellor said that he would increase the threshold in two years’ time, so what has happened in the past two months to make the Chancellor change his mind? The irony will not be lost that they are now increasing death taxes to pay for their plan. The noble Earl has said that the rest will be made up from national insurance. Does he think it is fair to ask the working-age population to pay for something else, rather than older people? Also, what safeguards will be available for people who have paid for their own care costs up to the cap and then have responsibility taken over by the local authority? What happens when the fees paid by that person are more than the local authority is willing to pay? Would that mean the person having to move from the home they are in to another and, if so, is the noble Earl aware of the risks involved in moving frail, elderly people from the environment that they have become used to?
What is the impact of this announcement on the considerations of the joint Select Committee that is now considering the draft Bill? I understand that it is shortly to report. Will it be asked to reopen its discussions and, if the noble Earl intends to publish further draft clauses, can he say what parliamentary process will be arranged for their scrutiny? I should also like to ask the noble Earl whether, through the usual channels, we might have an early opportunity to debate this announcement. The noble Lord the Leader of the House was very kind last week, when the Francis inquiry Statement was made. He said that he would see whether a debate on the Francis report could be arranged and, to his great credit, my understanding is that a Question for Short Debate tabled by the noble Lord, Lord Patel, has been prioritised for debate. I think it will be on 11 March. Could the good offices of the noble Earl be put to the same effect, so that we could indeed have a very early debate?
In conclusion, up to a point we of course welcome what has been announced today. It is a start but it will not lead to more integration of care. Indeed, it may well entrench the separation between two systems: of free at the point of use NHS and of charged-for social care. It is interesting that Demos described it this morning as being “unambitious” and “miserly”, and that it,
“will do little to solve one of the most vital social problems facing our generation”.
Would it not have made more sense, rather than developing these piecemeal plans in isolation, to have set them out as part of a single vision for a sustainable health and social care system in the 21st century?
Earl Howe
My Lords, first, I thank the noble Lord, Lord Hunt of Kings Heath, for his positive welcome for at least some elements of the Statement, which I know reflect the view of his own party on some of the principles enunciated by Dilnot and which have not been a matter of disagreement between us. I am very pleased that those principles are reflected in the structure that the Government have announced.
The noble Lord began by saying that we needed a holistic approach to the funding and delivery of social care. I could not agree with him more but it is important to remember that the remit given to the Dilnot commission focused on one particular aspect of social care funding. It never pretended to give it an instruction to solve every problem that faces us over the next 10 to 20 years in funding social care, or indeed to tell us how we raise the quality of social care or give life to the prevention agenda, which I know is as close to the noble Lord’s heart as it is to mine. He rightly said that the NHS has an important part to play in that.
The financing of local authorities is a major issue, which we still have to grapple with. I do not duck that and I would of course welcome cross-party consensus on that issue, if it can be reached. However, reading some of the public’s comments today on the Government’s announcement, they have been on the whole very measured. While some regret that we were not able to conform precisely to the parameters that Dilnot recommended in terms of the cap, nevertheless we have got reasonably close to them given the current economic circumstances that we face.
The noble Lord asked me whether the announcement we have made passed a key test, which is: will these arrangements help every person in the country? My answer is: yes indeed they will, because everybody in the country will now get the reassurance that, whatever their circumstances, they will get the long-term care and support that they need without facing financial ruin. People will benefit wherever they receive care, be that in a care home or in their own home, and they will be more in control—they will be more easily able to plan and prepare for the care and support that they might need at some time in future.
On that score, the noble Lord asked me about products that may be developed by the financial services sector. We have engaged very fully with the sector, and we are under no misapprehension that it has been as keen as anyone to see this announcement. The certainty that it gives firms in that sector will enable them to develop products that they can market to those who would like to provide for their old age and their care costs in an affordable way, and we are now giving them the freedom and scope to do that.
The noble Lord asked how the cap will actually work. It will cover eligible social care costs that the local authority assesses that it would meet at a price that the local authority would pay. Individuals would be responsible for meeting their eligibility care costs up to the cap. Where they cannot afford to do so, the local authority will provide financial support, as I have said, to those with less than £100,000 of assets in 2010-11 prices who are in residential care. This will rise to around £123,000 at implementation. The cap would cover the cost of social care. Someone in residential care will always be responsible for a contribution to their general living costs—that is, their heat, food and light—as they would when living at home. That amount would be set nationally at around £10,000 in 2010-11 prices, as recommended by Dilnot, but anyone who is unable to afford that will be helped by the local authority. We view that flat contribution to hotel costs, if I can describe them that way, as a fair way of implementing a rule around the country that is easy for everyone to understand and does not involve massive bureaucracy. Altogether, the design of the cap sets out what we believe is a fair partnership between the state and the individual that protects individuals from the prospect of catastrophic costs.
The noble Lord indicated that the Association of British Insurers was disquieted by this announcement, but in fact today the ABI said that the reforms were a potential step forward. Stephen Gay, their director of life savings and protection, said:
“This is potentially another positive step forward in tackling the challenges of an ageing society. The cap and the higher means test give people greater certainty and will enable them to plan ahead for later life. What is important now is to work through the implementation of what is a complex system, and we are looking forward to working with government and the care sector”.
I read that as a reasonably positive endorsement of this package.
The noble Lord asked me about draft clauses for the Care and Support Bill. It is not our intention to publish draft clauses designed to implement Dilnot. Instead, as and when the Bill is introduced to Parliament—and I cannot give any commitment as to when that will be—we will have inserted the relevant clauses for consideration by both Houses, and we believe that that is the right way to set about things. With regard to a debate in your Lordships’ House, I will willingly pass the noble Lord’s suggestion to our colleagues in the usual channels.
Baroness Oppenheim-Barnes
My Lords, my noble friend may recall that when we previously discussed this problem on the Floor of your Lordships’ House, I voiced the very strong concerns that I have held for a long time. That is because when I was in another place, I faced a number of constituents in my surgery saying, “We’ve worked hard all our lives, we’ve done everything that we can do and we’ve paid for everything, and now they’re going to sell my house, whereas someone who has done nothing and saved nothing is going to get their treatment for free”. In his opening remarks, my noble friend has answered all those points, so they are extremely welcome.
On the other hand, when I raised these points with previous Governments, their reply was, “Well, the British taxpayer should not be asked to subsidise the inheritance of their future children”. I felt that that was a very harsh view to be taken, and my noble friend has put that right. This is an important step in the right direction. It may not be possible for the Minister to answer this, but if a person who has entered a care home, and made whatever provision they had to with regard to resources, unfortunately dies within a very short period, will any sort of rebate be given?
Baroness Northover
My Lords, I interrupt briefly to say that if noble Lords make brief contributions more of their colleagues will be able to get in this critical debate.
Earl Howe
My Lords, I am grateful to my noble friend for her remarks. She is of course quite right; many of us have heard for years the concerns of members of the public, friends and family about what might be the catastrophic burden of care costs in old age. If there is one thing that everyone should welcome, it is that aspect of this announcement. With regard to a rebate, no, that is not in our sights at the moment. If someone were to die in the circumstances posited by my noble friend, the arrangement would have to remain as set out to that person at the outset. We would not expect to move the goalposts after that person had died.
Lord Warner
My Lords, I should declare my interest as a member of the Dilnot commission. It would be churlish not to welcome the Government’s acceptance in large part of the Dilnot architecture for reforming the funding of social care for the medium and longer term.
I have a couple of questions for the Minister. As I understood what he was saying, the new capping system is likely to start in 2017-18. I understood him to be saying that a new national threshold for eligibility criteria would start at the same time. That would therefore mean that the present eligibility criteria, interpreted by local authorities, would stay in existence for another four years, so we would have four more years of the tightening of those eligibility criteria.
I remind the Minister of a paragraph in our report that drew attention to the fact that there was strong evidence of a major shortfall in the existing funding of social care that could not be put right by our recommendations, and that if those problems were not resolved on a cross-party basis, they would simply undermine the functioning of our recommendations in the medium to longer term.
Earl Howe
My Lords, I hope that I can put the noble Lord’s mind at rest. In doing so, I thank him once again for the work he did on the Dilnot commission. It is our intention that the eligibility criteria will be introduced from April 2015—so, in advance of the Dilnot arrangements. As he well knows, that national minimum eligibility will be set to make access to care more consistent around the country. In addition, carers will have a legal right to an assessment to care for the first time. I take his point about trying to achieve cross-party consensus on social care funding.
As for funding in the existing system, in the last spending review we made, as he knows, an additional £7.2 billion over four years available for care and support. Since then, we have provided local authorities with an additional half a billion pounds. We believe the challenge creates an opportunity for local authorities to innovate and to explore new ways of working better to meet the needs of their local populations and to optimise the use of the resources that they have. Many local authorities are already innovating, and we are committed to supporting them to deliver further service improvements.
Lord Sutherland of Houndwood
My Lords, I am pleased to welcome the Government’s Statement today. This has been a long time in the waiting, not simply from this coalition Government, who have done well to get this far, but from previous Governments. There has been prevarication for more than 10 years, and it is about time we got started. We have now started. As has been said, this is a first step on the way. There are many steps to be taken thereafter, and a great deal of discussion and, if possible, cross-party consensus would be useful.
Will the Minister confirm that an adequate length of time will be made available for that, not simply a Question for Short Debate, in the near future? Secondly, will he confirm that it would be open to any Government, perhaps his own Government, to look again at the financial thresholds that they are setting in this Statement as and when, as we all hope, the economy improves?
Earl Howe
I am grateful to the noble Lord, Lord Sutherland, and pay tribute to his work over many years in this field and in the royal commission some years ago. I will convey his wishes to my noble friend and other members of the usual channels. I agree that it would be unsatisfactory to have an unduly short debate on a complex and important subject.
As regards the thresholds, I hope I can reassure him. It is our intention, as I mentioned, to introduce clauses into the care and support Bill when it reaches Parliament that would embody the essence of the Dilnot proposals but to leave it to regulations to set the relevant numbers for the cap and the means test, for example, so that it would be a relatively easy matter for a future Government, if they so wished in brighter economic circumstances, to change those figures if they felt that that was the right thing to do.
Lord Lipsey
My Lords, better half a loaf than no loaf at all and, to that extent, I welcome the Government’s Statement. Does the Minister agree with all noble Lords who have spoken who have emphasised the importance of all-party agreement, if it can be obtained on this subject, so that old people know the background they have to plan against when looking to their futures? With that in mind, will he meet one of the points made by my noble friend Lord Hunt by trying to make this package slightly more favourable to the less well off and not, as it is, somewhat, at the moment tilted towards the better off, so that it is easier to achieve that all-party agreement and to go forward united to something that all old people will so greatly welcome?
Earl Howe
My Lords, I thank the noble Lord. I am with him in spirit. I say that because not only do I believe in cross-party consensus on a matter as important as this, but I hope he will accept from me that the way we have tried to structure this package, taking the cap and the means test in combination, has precisely been to target those of more modest means. Currently only those with assets of less than £23,250 and a low income receive help from the state with their care costs. Our changes will mean that those with property value and savings of £100,000 or less in 2010 prices will start to receive financial support. That means that the most support will go to those in greatest need. I am advised that had we, for example, opted for a higher means-test threshold, it would not in practice have brought into the net that many more people. We felt that the fairest way of cutting the cake was to try to concentrate the benefit on those of lowest means while also removing the fear of catastrophic care costs from everybody in the system.
Baroness Jolly
My Lords, we on these Benches are delighted that the Government decided to implement the principles of the Dilnot report. The care and support Bill places a duty on local authorities to provide information and advice. In addition, there will be a need to set up some sort of taxi-metering system in order to achieve that outcome. Has the Minister any idea about how that might be achieved?
Earl Howe
My noble friend is absolutely right. One of the tasks that faces us over the next two or three years is to ensure that every member of the public has easy access to information which enables them to make plans and take decisions about their own or their family’s future. We will therefore be working very closely with local authorities on that front. It is important that there are websites. My department is already devoting a section of its website to appropriate information on this front. More generally, we need to ensure that the system is not only fair to people, but clear to people.
Baroness Pitkeathley
Following the question from the noble Baroness, Lady Jolly, I believe it is the Chinese who say that a journey of a thousand miles starts with a single step. We have certainly made more than a single step today, on which I congratulate the Government. Two major problems remain, as other noble Lords have said. First, there is not enough money in the system, and secondly, people do not know about it. They do not know that they have to pay for social care, never mind up to £75,000. Is the Minister confident that what he said about information and advice—and this is yet another responsibility for local authorities, which are already strapped for cash—will enable people to plan in the way to which he is so clearly committed?
Earl Howe
I quizzed my officials very closely on that very point only this morning and received very firm reassurances on that front. I completely agree with the noble Baroness about how important this is. She is right; there is a widespread lack of knowledge among the general public about what they are entitled to and what they may not be entitled to. Collectively, we need to put that right. I take her point about additional burdens on local authorities, but ultimately I hope that they will see it as in their own interests to inform the public before they are inundated with questions that will take them a lot of time and effort to answer. I can assure her that work on these lines will be very vigorous, and I will be happy to keep her up to date on the work we are doing over the months ahead.
Lord Cormack
Does my noble friend agree that it is a pity that so many details were given to the media this morning before we had them in Parliament? Will he clarify one point that he made in his answer to the noble Lord, Lord Warner? He said that the eligibility criteria would change as from 2015. The new system will not be operative until 2017. What precisely does that mean?
Earl Howe
First, I completely agree with my noble friend that the leak to the media over the weekend was highly regrettable. I do not know how it occurred. It certainly was not of my making or that of my ministerial colleagues in the Department of Health. We wished to make this announcement to Parliament first of all, and I am sorry that that did not happen.
My noble friend’s second question relates to the national minimum eligibility threshold. We believe that that can be introduced in advance of the Dilnot package because what it is designed to do, as I explained earlier, is to give people greater certainty about their access to care wherever they live around the country, particularly for those who move from one place to another. That is a separate issue from those covered by Dilnot, although it was one of those which the commission considered. It is separate from the issue of the cap or the means test, which we believe can logically come in at a later date.
Baroness McIntosh of Hudnall
My Lords, as one of those in the Chamber today who is not an expert on social care matters, I ask the noble Earl whether he can reassure the great many people who are hearing about this for the first time as to what it means in practice for them when they have to start paying for social care—or, more particularly, when they become in need of social care. When we have a Budget, newspapers often produce ready reckoners, showing the impact of tax rises, reductions or whatever is being introduced on people in particular circumstances. Will the Minister encourage his department, and encourage his department to encourage local authorities, to produce the kind of information that ordinary people can understand, which will show them in easily understood, ready-reckoner terms what they will be in for if they need long-term care?
Earl Howe
My Lords, I absolutely agree with the noble Baroness on how important this is. It is quite complex to explain the whole system in words. The system will depend on the operation of a sliding scale which, by its nature, is difficult to describe other than pictorially. Nevertheless, the basics of the rules of these funding arrangements are straightforward and can be described. They are, as the Statement described, two essential elements, being the maximum level that people have to pay for their care—which we are setting at £61,000 in 2010 prices; £75,000 in 2017—and the means test, which is £100,000.
Of course, there are nuances around that, such as around couples and how the system will work for them. That is a question that the noble Lord, Lord Hunt, asked me which I did not answer. At present, a couple could potentially face two sets of unlimited care costs. By protecting them from these costs, the reforms offer them significant benefits which need to be spelt out. In most circumstances, even if a couple both had care costs at £75,000, the level of the cap, they would contribute less than this because housing assets do not count towards the means test if one of the partners remains resident in the home. All those sorts of things need to be made clear. We will do our very best to work with others to ensure that these messages have not only the greatest clarity but the greatest coverage.
Lord Pearson of Rannoch
My Lords, I do not want to make a European point so much as to ask the Government whether they have not got their spending priorities tragically wrong. In our previous debate, I asked the noble Lord the Leader of the House how he could justify sending £11 billion in net cash annually to Brussels to be filtered away. Here we are, with this debate on the Dilnot commission, and, from the remarks of the noble Lord, Lord Hunt, we have made a step forward. However, clearly this is not adequate to look after the needs of our old and infirm for many years.
How can the Government throw away £11 billion with one hand and then say that we cannot afford more than £1 billion by the end of the next Parliament to look after our old and infirm? Are we a civilised society?
Earl Howe
My Lords, I hope that we are a civilised society. While I understand the noble Lord’s point of view on the European Union, the fact is that if we are fully paid-up members of the European Union we have legal obligations to contribute to the Community budget. That is a given.
However, like any Government, we need to look at the totality of government commitments in the round. We have decided that, against competing priorities, this is a very high priority. That is why we have brought forward these proposals.
Horsemeat and Food Fraud
(11 years, 10 months ago)
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The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley)
My Lords, with your Lordships’ permission, I will repeat a Statement made today by my right honourable friend the Secretary of State for Environment, Food and Rural Affairs in another place. The Statement is as follows:
“Mr Speaker, I would like to update the House on recent developments on horsemeat and food fraud.
The events we have seen unfold over the past few days in the UK and Europe are completely unacceptable. Consumers need to be confident that food is what it says on the label. It is outrageous that consumers have been buying products labelled beef but which turn out to contain horsemeat. The Government are taking urgent action with the independent Food Standards Agency, industry and European partners.
Let me turn first to the facts. On 15 January, the FSA was notified by the Food Safety Authority of Ireland of the results of its survey of processed beef products on the Irish market. The Irish study identified trace amounts of horse and pig DNA in the majority of the sample, but identified one product, a Tesco burger, where there was evidence of flagrant adulteration with horsemeat. Investigations in Ireland are ongoing.
On 16 January, in order to investigate implications for the UK market, the FSA announced a four-point plan. This included telling implicated food businesses to test their processed beef products. It also included launching a full scientific study of processed beef products on the UK market.
On 31 January, the Prison Service of England and Wales notified the Food Standards Agency that traces of pork DNA had been found in a selection of meat pies labelled as halal. While trace contamination does not necessarily indicate fraudulent activity, any contamination is clearly of concern to faith communities, and the affected products were quarantined and contracts suspended.
On 4 February, the FSA announced that it had tested a consignment of frozen meat that was being stored at Freeza Meats in Northern Ireland for horse DNA. This consignment had been detained by the local authority in October 2012 because of labelling irregularities. The consignment is under the secure control of the local authority. None of this consignment has entered the food chain and so no recall is necessary. As part of the investigation, Newry and Mourne local authority has tested current products from Freeza Meats, and neither horse nor pig DNA has been found in any of these products. The FSA is undertaking a detailed investigation, which includes following the supply chain of Freeza Meats and any other producers that are implicated.
On the evening of 6 February, Findus Foods informed the Food Standards Agency that it had confirmation of horsemeat in frozen beef lasagne products. The lasagne was produced in Luxembourg by a French company, Comigel, with the meat supplied by another French company, Spanghero. The test results were supplied to the FSA on the morning of 7 February. The Food Standards Agency is urgently investigating this in liaison with the French authorities and the police. The FSA has assured me that it currently has no evidence to suggest that the products recalled by Findus represent a food safety risk.
The 7 February announcement that very significant amounts of horsemeat had been found in Findus lasagnes moved this issue from one of trace contamination to one of either gross negligence or criminality.
On 8 February, Aldi withdrew two beef products after its tests found that they contained horsemeat. The products were supplied by the same company, Comigel, that supplied Findus. Asda and Tesco also withdrew products from the same suppliers on a precautionary basis.
Food regulation is an area of European competence. Under the European legal framework, the main responsibility for the safety and authenticity of food lies with those who produce, sell or provide it to the consumer. In the UK, the FSA was set up by the previous Government as an independent agency. I have sought to respect its independence. It leads the operational response. I am here today to update the House on progress with its investigations and on the action that I have been taking with the industry and with European counterparts. I have made clear my expectation that food businesses need to do whatever is necessary to provide assurance to consumers that their products are what they say they are.
The Minister of State and the FSA met food retailers and suppliers on 4 February, and made clear that we expected the food industry to publish the results of its own testing of meat products to provide a clearer public picture of standards in the food chain. In response to the Findus announcement on 7 February, the FSA in addition asked that all producers and retailers test all their processed beef products for the presence of horsemeat.
On Saturday 9 February, I called in the major food retailers, manufacturers and distributors to make clear my expectation that they needed to verify and trace the source of all their processed beef products without delay. At this meeting with the British Retail Consortium, the Food and Drink Federation, the British Meat Processors Association, the Federation of Wholesale Distributors, the Institute of Grocery Distribution and individual retailers, I made clear that I expect to see the following from them: meaningful results from this testing by the end of this week; more testing of products for horse along the supply chain and industry co-operating fully with the FSA on this; publication of industry test results every three months through the FSA; and them letting the FSA know as soon as they become aware of a potential problem in their products. I made it very clear that there needs to be openness and transparency in the system for the benefit of consumers. Retailers and processors need to deliver on these commitments to reassure their customers.
Let me reiterate: the immediate testing of products will be done across the supply chain. This includes suppliers to schools, hospitals and prisons as well as to retailers. The FSA issued advice to public service providers on Sunday 10 February in advance of the working week. I would also like to reiterate that the FSA has assured me that it currently has no evidence to suggest that recalled products represent a food safety risk. The Chief Medical Officer’s advice is that even if bute is found to be present at low levels, there is a very low risk that it would cause any harm to health. People who have bought any Findus beef lasagne products are advised not to eat them and to return them to the shop they bought them from as a precaution.
The ultimate source of these incidents is still being investigated, but it is already clear that we are dealing with Europe-wide supply networks. I am taking action to ensure that there is effective liaison with the European Commission and other member states. I have been in touch with the Irish Minister, Simon Coveney, on several occasions since 28 January. I have spoken to him again twice today and have also spoken to European Commissioner Borg, the French Minister, Stéphane Le Foll, and the Romanian Minister, Daniel Constantin. I emphasised the need for rapid and effective action. I am grateful for the good co-operation that there has already been. I have agreed with Minister Coveney that there will be an urgent meeting of Ministers from the member states affected, with Commissioner Borg. In addition, we agreed that this issue will be on the agenda of the Agriculture Council on 25 February.
At the moment, this appears to be an issue of fraud and mislabelling, but if anything suggests the need for changes to surveillance and enforcement in the UK, we will not hesitate to make those changes. Once we have established the full facts of the current incidents and identified where enforcement action can be taken, we will want to look at the lessons to be learnt from this episode. I will make a further Statement about this in due course.
In conclusion, I want to reiterate that I completely understand why people are so concerned about this issue. It is unacceptable that people have been deceived in this way. There appears to have been criminal activity in an attempt to defraud the consumer. The prime responsibility for dealing with this lies with retailers and food producers, who need to demonstrate that they have taken all necessary actions to ensure the integrity of the food chain in this country. I am in daily contact with the FSA. This week, I will be having further contact with European counterparts and will meet the food industry again, together with the FSA, tomorrow”.
That concludes the Statement.
Lord Knight of Weymouth
My Lords, this is a very serious issue of public confidence in the food that we buy. I share the Minister’s outrage that horsemeat is being passed off as beef. Food prices are rising sharply and those having to buy cheaper food are therefore more likely to buy processed and cheaper sources of meat. We must particularly ensure that these people are confident that food standards and labelling are accurate.
Equally, food processing and manufacturing is one of the most important employers in this country. British food is an area of great potential growth for us and we must do all that we can to maintain and sustain confidence in our industry. In that vein, I am grateful to the Foods Standards Agency for its briefing and its work in providing reassurance that there is no risk to health.
However, I am concerned at the Secretary of State’s media performances over the weekend, which will have raised doubts in some people’s minds over health. For example, he said:
“We may find out, as the week progresses as the tests begin to come in, that there is a substance which is injurious to human health … We have no evidence of that at all at the moment. At the moment this is a labelling issue”.
He is sowing the seeds of doubt. For the sake of clarity, will the Minister be clear now as to whether he believes there to be any risk to human health from food sold as processed beef in this country?
Health worries focus on the traceability of horsemeat, and in particular any bute or other medicines consumed by horses entering the food chain. In 2012, the Food Standards Agency found eight instances where UK horsemeat was contaminated with bute, which is banned from entering the human food chain. In five instances the horsemeat was exported to France, in two it was exported to the Netherlands, and in one it was consumed in the UK.
There are 75 horse passport-issuing organisations in the UK, making it difficult to check their status. Each has a different design of passports, making it easier to produce forgeries. Last May, a truck was seized in this country and false horse passports were seized. I gather that abattoirs do not have to keep records of passports but should return them to owners or to Defra. Is it not time to rationalise this system so that we can trace horsemeat properly?
I also understand that the FSA carries out rigorous inspections in abattoirs. Does it inspect further upstream in manufacturing and processing plants? If not, should that now be introduced as random inspections to increase public assurance up the supply chain? Will the Minister guarantee that cuts to the Food Standards Agency have not, and will not—the Secretary of State again was very uncertain about this in a Channel 4 news report that I saw over the weekend—compromise meat hygiene inspections and its ability to ensure that meat is legal and safe?
The Minister will know that his Government removed responsibility for the labelling of product content from the FSA in 2010. Three government bodies are now responsible for ensuring that our food is correctly labelled, legal and safe: namely, Defra, the Department of Health, and the Food Standards Agency. Is that not incoherent and open to the sort of confusion that we all know can occur between different government departments? Would it not be sensible for the Government to centralise that function once more?
I understand that two types of tests are taking place—those carried out by retailers and those carried out by local authorities under the supervision of the Food Standards Agency. The local authority tests are of retail, wholesale and catering premises. Are the councils concerned being reimbursed for the cost of this work? The tests being carried out by retailers, which are due to the Secretary of State by Friday, will cover only the major retailers. Should he not ask large wholesalers and large caterers to carry out similar tests under a similar stringent timeline?
The timeline for the local authority tests is four weeks to collect and screen samples to ascertain the presence of horse DNA and another four weeks for confirmatory tests to give the proportion of other meats. As I understand it, the plan is for all those results to be published at once in mid-April. This seems an excessive timeline. I understand that we have to get the results right, but will the Minister consider releasing the results on a weekly basis as they come in, as part of his commitment to transparency? Can we also get a cast iron guarantee that schools and hospitals will be tested across the country? The Secretary of State is clear that the retailers are responsible for the food that they sell. Will the Minister tell us who he considers to be responsible for food served in schools, hospitals and prisons? Is it the head teacher or the chair of governors, the hospital manager or the prison governor? If it is the retailer who is responsible, we need to know who to hold account for food, should there be a problem in those circumstances.
The Secretary of State has also speculated in the media that there is a criminal conspiracy. Has the Minister involved the police, having acknowledged evidence of widespread criminal behaviour? Is he passing information on to the police if he has those suspicions? Can he reassure us that no UK companies are currently being investigated by Defra, the FSA or other UK authorities in respect of passing off horsemeat as beef?
Can the Minister tell us, given the Government’s growing influence as committed Europeans, how he is working with the Commission? The Irish appear to have blamed the Poles for the first case back in January, the French appear to blame the Romanians for the Findus case, and the Poles and Romanians are denying responsibility robustly. Is the Commission going to get a grip and answer questions on where the horsemeat comes from so that we can begin the important work of traceability?
However, it is not just the Commission that needs to get a grip. We need the Government to give clear advice to people and public sector caterers on what they should do with their frozen beef products. Ministers need to stop sending mixed messages about whether they would eat beef lasagne or not. A full police investigation into the alleged criminal adulteration of meat products is needed. The European police are being involved. We have heard about an international criminal conspiracy. What is happening with the UK police? The Irish Government called in the police and special fraud investigators at the beginning of this month. Perhaps our Government must do the same.
A quicker testing regime is needed to reassure the public about what is happening. Supermarkets and food industry tests must be reported by Friday, but the Government need to speed up the official tests that they are conducting across 28 local authorities. We need some positive release around the horse slaughter tests that are going on at the moment. Those in the UK are testing for bute, which is banned from the human food chain. Given the concerns about the horse passport system and horse traceability, we believe that meat should be held in storage until proven clean.
With these sorts of measures and robust action from Ministers on the front foot, I think that we can get some reassurance back into our food supply. At the moment, I do not see that from Ministers. I see uncertainty in their media performances and their performances generally on this issue. Our British food industry needs them to step up to the plate and raise their game.
Lord De Mauley
My Lords, the Secretary of State held an urgent meeting with food businesses on Saturday to get to the bottom of this unacceptable situation. The Government and the FSA insisted that more and tougher testing will take place. The food industry has accepted this, and we expect to see initial results from industry testing by the end of the week. Retailers and industry bodies will now work with the FSA on making checks further down the food chain. They have also agreed to let the FSA know as soon as they become aware of a potential problem in their products. At the moment, there is no evidence to suggest that there is a food safety risk.
The noble Lord asked about the split of responsibilities. By law, retailers are ultimately responsible for ensuring their products’ safety and accurate labelling. However, we join up across government to back this up with nearly 100,000 risk-based checks each year. The front-line testing regime checks that what is in the packet is what it says on the packet and was the same before 2010 as it has been since. There continues to be a rigorous risk-based system of checks by local authorities’ trading standards teams, overseen by the FSA. That is how the testing works.
The noble Lord asked about public sector purchasing, and he is right to do so. Public institutions are within the scope of the UK-specific authenticity sampling programme and, therefore, suppliers of meat products to schools, hospitals and prisons are included in the local authority surveillance programme. In addition, suppliers including caterers to public institutions are part of the extensive testing regime that the Food Standards Agency has established with the food industry, including food service businesses, to reinforce the integrity and confidence of processed beef supplies in Britain. This approach means that we will have an established industry testing approach, with the FSA undertaking additional verification and validation of authenticity, which ensures that industry takes responsibility for providing assurance to consumers, with the FSA providing appropriate oversight.
The noble Lord asked about local authorities and mentioned that results of testing were to come mid-April. My right honourable friend spoke to the chairman of the FSA today, and test results will be announced as soon as they are available, which is what the noble Lord asked for. He asked, too, about police involvement. The FSA is in touch with the police and Europol. We are investigating the food chain at the moment. The police have been informed and will take action if they find that people in this country have been deliberately defrauding consumers. If criminal activity has taken place abroad, the relevant authorities will be notified.
The noble Lord asked about collaboration with our European colleagues. The Statement mentions a certain amount about that. The Secretary of State spoke to EU Commissioner Borg today, and to Ministers in countries including Ireland, France and Romania. There will be meetings at official and ministerial level over the next few days and we will do all we can to assist in tracing sources of the meat in question.
The noble Lord asked about testing of horses killed in abattoirs for bute. Hitherto, under the regime that we inherited from the previous Government, we conducted risk-based testing, backed up by the passporting system. From now on, all horses going to abattoirs are being tested for bute and no horse carcasses can leave an abattoir until they are declared clear.
Lord Clark of Windermere
My Lords, there are clearly various aspects to this problem—the criminality, misleading of the general public and the issue of food safety. The Minister has given us an assurance today that there is no risk to food safety. May I press him on this issue and ask him a question? I understand that the science of veterinary medicine as it might pass on to food consumption for humans is based on minimum residue levels, but there are a number of veterinary medicines that do not subject themselves to that classification, such as phenylbutazone, which he mentioned, and many others. These medicines pose a risk to human health. We have a very elaborate and rigorous system of testing for those medicines, but this problem has emanated, as I understand it, not primarily from the United Kingdom but from other parts of Europe. Do other European countries test horsemeat with the same rigour for veterinary medicines—because that is where the danger is—as we do?
Baroness Trumpington
My Lords, may I ask the Minister whether he remembers or is aware of a debate on 1 May 1991? It concerned a Question from Lord Campbell of Croy, and I as the relevant Minister replied, using a few words written by the then Member for Penrith and The Border. What was his name?
Baroness Trumpington
Absolutely. He said:
“A Scotsman’s belief
Is that mince must be beef.
Imitations bring instant dismissal.
But some people abroad
Will contentedly plod
Through a plate full of horsemeat and gristle”.
Lord De Mauley
I thank my noble friend and point out to her that the occasion of which she speaks occurred no less than 14 years before I arrived in your Lordships’ House.
Lord Elystan-Morgan
My Lords, following the point made by the noble Lord, Lord Clark, does the Minister agree that phenylbutazone is an active carcinogenic agent? If within the next two weeks the FSA is satisfied that there is evidence of such contaminated horsemeat having come into the United Kingdom or, indeed, any other meat that is contaminated by veterinary processes in the way described by the noble Lord, will the Secretary of State ban forthwith all horsemeat products coming to our shores?
Lord De Mauley
My Lords, I share the seriousness with which the noble Lord takes the issue of bute. I have spoken about it at some length. He will know that imposing a ban is no small matter. Indeed, the onus is on the exporting member state to ensure that meat produced on its territory meets animal and public health requirements laid down in EU legislation. We have legislation in place to provide for a ban on imports where there are grounds for suspecting a serious threat to public or animal health. I hope that satisfies the noble Lord.
Baroness Crawley
My Lords, I am certain the Minister would agree that consumers have a right to expect that the food they eat is what it says on the label and that it is legal and safe. As president of Trading Standards, I know that trading standards officers across local authorities are doing all in their power to locate and remove any affected food in the current crisis. However, how does the Minister think it is possible for Trading Standards, working with the FSA and their partners in environmental health, to maintain proper targeted surveillance of the UK-wide food sector when food sampling budgets have been cut by approximately 50% over the past five years—most of it in the past two years—and when Trading Standards has lost 700 officers over the same period in local authority cutbacks? Something has to give.
Lord De Mauley
My Lords, it is right that industry should be responsible for the safety and authenticity of the food it produces and sells, which is why the Government work with it to maintain confidence in the food chain. All systems of standards and quality control depend to a certain extent on self-regulation and due diligence. While the Government have a role in checking and monitoring industry, particularly where there are public health issues, non-regulatory approaches and agreements can be just as effective and can be achieved faster than legislation. This can be seen in our approach over recent days, where government and industry have come together with a joint aim of maintaining consumer confidence in the food chain.
The Lord Bishop of Ripon and Leeds
My Lords, I return to the question of the contamination of halal meat, which got a brief reference in the Statement and has real implications for faith communities and faith relationships. This may not have been a matter of deliberate fraud but it must have been dangerously careless. Can the Minister give us more reassurance on the action taken by the food industry as regards finding non-halal traces in allegedly halal food, including in food supplied by government contracts such as prison suppliers?
Lord De Mauley
My Lords, I agree wholeheartedly with the right reverend Prelate that it is essential that people can have confidence that what they are eating is what it is made out to be. There is responsibility throughout the food chain. Suppliers are responsible for what they supply onwards to other organisations and businesses. We are reminding public bodies of their responsibility for their own food contracts. We expect them to have rigorous procurement procedures in place with reputable suppliers. We expect caterers and suppliers to public institutions to have appropriate controls, including testing and sampling regimes, in place to ensure the authenticity of their products. If caterers have any doubts about the provenance of their product, they should seek assurance from their suppliers.
Lord Forsyth of Drumlean
When I was Secretary of State for Scotland, I had to deal with an E.coli crisis, the BSE crisis and a problem with some radioactive gas being delivered to the Barr’s Irn Bru factory. Therefore, I have considerable sympathy with my right honourable friend in dealing with a food crisis of this kind. Will my noble friend accept our congratulations on the way in which the Secretary of State has handled it and reject the criticisms of the noble Lord, Lord Knight, who I am not sure realises that the chairman of the FSA is one of his colleagues—the noble Lord, Lord Rooker? Between them, the noble Lord, Lord Rooker, the Secretary of State and his colleagues have done an excellent job in balancing the need to give the public information with the need not to destroy businesses. Going back to the BSE crisis, the French unilaterally imposed a ban on Scottish grass-fed beef, which lasted for several years and did enormous damage. My right honourable friend is to be congratulated on not operating in a way that is damaging to the interests of businesses throughout the United Kingdom and, indeed, throughout Europe, while at the same time taking sensible measures which are required to protect the public interest.
Lord De Mauley
My Lords, I will pass on my noble friend’s comments to my right honourable friend.
Lord Harris of Haringey
My Lords, the Minister has repeatedly said that there is no evidence of a threat to food safety, which is obviously welcome news. However, he glossed over an answer to the question asked by my noble friend Lady Crawley. There have been massive reductions in the resources available to local Trading Standards to pursue proper food safety tests. Further, the number of food inspectors has been reduced. This clearly poses a risk. If there is potentially criminal fraudulent activity involving the substitution of one form of meat for another, could there not also be criminal activity involving cavalierly ignoring hygiene regulations or the rules on additives? What assurances can the Minister give us that those matters will be addressed properly in the future?
Lord De Mauley
My Lords, I can assure the noble Lord that the Government take these issues extremely seriously. The FSA has certainly not dropped its guard. As my noble friend Lord Forsyth, said, it has been doing an extremely good job in very difficult circumstances and the Government are supporting it in that. As I explained earlier, the nature of sampling is risk based and focused on protecting consumers. Staff reductions have not affected the level of testing carried out on meat. Meat produced in UK approved slaughterhouses is inspected by official veterinarians and meat inspectors working under their direction. They also ensure that meat hygiene regulations are complied with in abattoirs and meat establishments.
Baroness Miller of Chilthorne Domer
My Lords, does the Minister agree with me that the length of the food chain is part of the problem? For example, in one lasagne you can get four or five sorts of meat from different sources, even if they all comprise beef. There are all sorts of things that people could mistrust, such as salami made from donkey. Labelling is absolutely crucial. If I may say so, checking as much as we can is only ever going to be a case of shutting the door after the horse has bolted.
Lord De Mauley
My Lords, I have a lot of sympathy with much of what my noble friend said. She is right: our supply chains are complicated nowadays but that is how the market has developed and we have to work with that. She is also right that labelling is absolutely key. We must ensure that it is accurate.
Lord Palmer
My Lords, I have been involved in the food chain literally since I could walk, and an awful lot of people outside this Chamber or the other place would not know what bute was. Is it perhaps worth having a tiny statement by the Government telling people what bute is and the fact that it poses a very low risk to human health?
Lord De Mauley
Yes, my Lords. I have spoken at some length on bute, which, as I am sure noble Lords are aware, is a substance administered to horses with evidence of lameness or whatever to enable them to go about their business. The whole purpose of the passporting system is to ensure that a substance such as bute does not get into the food chain.
Baroness Browning
I very much welcome the Government’s recent announcement that proper cookery lessons are to be reintroduced into our schools, and I hope that there will be more home-made lasagnes rather than those that are pre-bought. However, given the fact that a lot of people rely on convenience foods and trust in brands, and if it is established that there is a problem with equine medicines in the food chain, is there an intention to look at foods such as stock, which is a concentrated product that is widely used domestically and commercially? Is any testing being carried out because of the obvious implications beyond those for beef?
Lord De Mauley
My noble friend makes an important point and I agree with her. I can add to my answer to the noble Lord, Lord Palmer. Phenylbutazone, known as bute, is a commonly used veterinary product and is a non-steroidal anti-inflammatory drug. Bute is not approved for use in food-producing animals because it is not known to be safe for human consumption. An animal that has been treated with bute is not permitted to enter the food chain.
Lord Judd
My Lords, is this whole sad saga not an exemplary indication that if we are to look to the well-being of the British people, we must put all our efforts into effectively working together with the people and Governments of Europe to resolve issues that can be resolved only on a basis wider than our own national frontiers?
Lord De Mauley
My Lords, I could not have put it better myself and, as I explained, my right honourable friend has been in touch not only with the European Commissioner today but with Ministers from the various other European member states involved. It is extremely important that we collaborate very closely with them.
Lord Martin of Springburn
My Lords, given that it was our Irish neighbours who notified us of this problem, do they have a better safeguarding system than ours?
Lord De Mauley
My Lords, the Irish were acting on intelligence. They conducted their test and, lo and behold, they found horsemeat. We had not received similar intelligence but I have no doubt that our testing regime is absolutely rigorous.
Viscount Ullswater
My Lords, under European Commission Regulation 504/2008, a vet must record in a horse passport all treatments with veterinary medicinal products, which determines whether a horse can enter the food chain. Are Her Majesty’s Government satisfied that this part of the regulation is being adhered to? The occupier of a slaughterhouse must hand the passport of a slaughtered horse to the vets at the slaughterhouse, who must record the microchip number of the animal, mark the passport accordingly and send it to the issuing authority. Are the Minister and the Government satisfied that that is happening in every case?
Lord De Mauley
My Lords, the appearance is certainly that that is the case, but that matter will be part of the ongoing investigations. Perhaps I may add to my answer to my noble friend Lady Browning on whether we test stock, as in stock cubes. It would be very difficult to test stock cubes because there will be little or no DNA present in them.
Baroness Donaghy
My Lords, can the Minister assure the House that food taken off the supermarket shelves in response to these revelations will not appear in food banks?
The Countess of Mar
My Lords, in many ways, this is a sign of the times. Cheap food means that manufacturers are constantly chasing their bottom line. There is also a surplus of horsemeat on the market because people cannot afford to keep horses. Can we not somehow resolve this problem by putting horsemeat into pet, as opposed to human, food? Can he corroborate or deny a statement made today in the Daily Telegraph that we imported 9,000 tonnes of Mexican horsemeat into this country, and what are its safety implications?
Lord De Mauley
My Lords, what is important is that consumers know what they are buying and that labelling is done properly and honestly. Retailers are responsible for both the safety and the correct labelling of the products that they are selling, which is why government work with industry to maintain confidence in the food chain. All systems of standards and quality control depend to some extent on a certain amount of self-regulation and due diligence. While the Government have a role in checking and monitoring industry, particularly where there are public health issues, non-regulatory approaches and agreements can be just as effective and achieved faster than legislation. This can be seen in our approach over recent days, where the Government and industry have come together with the joint aim of maintaining consumer confidence in the food chain.
Lord Lucas
My Lords, in a city where you can get an extraordinary variety of meats such as crocodile, kangaroo and ostrich—not to mention snails, fish lips and other exotics—does my noble friend not feel that all this fuss about eating a bit of horse is seriously contaminated with bull?
Lord De Mauley
My Lords, I am not sure how to answer that, save to say that I, like my noble friend, enjoy a good variety in my diet.
Welfare Benefits Up-rating Bill
(11 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Brooke of Sutton Mandeville
My Lords, I was never a good enough cricketer to have played all-day cricket before I was 20 but, thereafter, I played it for another 40 years, and I can still recall vividly how being the first batsman to face the bowling after the lunch interval was always a tribulation. On this occasion, I am conscious that it was the close of the innings of the noble Lord, Lord Low of Dalston, that occasioned the interval, but it remains very much a privilege to share membership of your Lordships’ House with him. On any matter, I should, in cricketing terms, always give him the benefit of the doubt. In the mean time, the lunch interval has been surprisingly long, but I assume that there is a possibility, as sometimes happens in English cricket, that snow has affected the wicket.
The precise subject of the Bill is a new wicket for me to play on. I do not think that it is mandatory for me to declare an interest but, once upon a time, I was a Treasury Minister for nearly four years. Among the seven Treasury colleagues with whom I shared the ministerial responsibilities in those years, I was the only one who had never worked in the City, although I was, for 24 years, its MP. My noble friend Lord Lawson of Blaby was generous in involving us all in the gestation of Budgets but, in practical terms, my direct responsibilities might have been described as Treasury housekeeping, with all three main subjects being housekeeping oriented, and I had up to a dozen minor ones, including—perhaps unexpectedly—the Central Office of Information. It is quite possible that no one else in your Lordships’ House knows the origin of the ministerial concept of “the line to take”, except the noble Lord, Lord Hennessy of Nympsfield—and he knows only because I told him. However, it was the Treasury that thought of the policy first.
The only relevance to today’s business that I can detect from those years is that the EU budget Council, on which I sat for all my Treasury days, had methods of computation every bit as complicated as those in the Bill. It is a nice complement to the Bill, and to my noble friends in charge of it, to have had today’s Statement, which has enabled us to get our eye in. However, my remarks will be brief.
The great excitement on the Bill relates to whether the noble Lord, Lord McKenzie of Luton, can be seduced during its passage through your Lordships’ House into sharing with us how the official Opposition propose to handle the problem that the Bill addresses, for which they were in no small degree responsible for creating. I lived through the 1969 to 1971 recession running a business in New York City, of which my chief memory is the “news in brief” item in the Wall Street Journal to the effect that the best index of the recession’s severity was that the Mafia had had to lay off two judges in New Jersey. However, I acknowledge that running anything during a recession is not in itself amusing.
I do not know how many others in the Chamber of your Lordships’ House today have had the stamina to watch the video which is currently available on one’s PC within the Palace through the kindness of MoneyWeek. It raises all sorts of financial nightmares that lie ahead of us. I stayed with it till it reached its conclusion only because I wanted to see how it would end and I was unsurprised when it concluded with a hard sell to buy MoneyWeek and its attendant publications. To conjure up a quasi-Richter scale of nightmare, it had to be painfully repetitious but from Lloyd George’s 1909 legislation onwards, no Administration avoided some of MoneyWeek’s blame.
A more elegant prospectus was advanced by the article in the Times below the day’s cartoon on 17 January this year by its accomplished columnist Camilla Cavendish. Those who have approached Horse Guards on Whitehall from the Embankment will know that, pausing at the traffic lights when red at the Whitehall junction, enables one to read the Cavendish family motto on the back of a statue to the Duke of Devonshire, who served in Gladstone’s Cabinet: “Cavendo tutus”, a play on words meaning secure by being cautious. It promises well. I shall quote a single opening sentence and three paragraphs from her article, which was on current welfare expenditure. They will be marginally edited for clarity. The opening sentence reads:
“As the debate about welfare rolls on, … it is … revealing that far more working people get their income topped up by benefits than most of us ever imagined”.
The first paragraph I want to quote states:
“There is no official figure for exactly how many [working people] are on benefits. But what is clear is that their numbers increased dramatically under the previous Government: from 700,000 when Labour took office in 1997 to 4.7 million on the equivalent entitlements in 2010, rising to between 6 and 7 million people, once housing benefit and council tax benefit are included … in a period that was, for much of it, one of unprecedented prosperity”.
The second paragraph I wish to quote states:
“In the good times, it was possible to fudge the decision about which aim—rewarding work or rewarding children—should take priority. Now the decision is unavoidable. The coalition has broadly decided to prioritise work through the Universal Credit system, which aims to make paid work more worthwhile. But it is also sensitive to the risk that the rising cost of living is entrenching poverty. Until it imposed the 1 per cent cap last week”—
that was the week of 7 January—
“the coalition had continued its predecessor’s policy of uprating benefits in line with inflation”.
The third and final paragraph I want to quote—the last paragraph of her article—states:
“Poverty campaigners know that the public is unsympathetic to adults who don't want to work, so they have shifted the argument to defending welfare benefits for the low-paid. But the explosion in numbers in the past 15 years makes it difficult to defend the status quo”.
That concludes my quotations from that article.
When the noble Baroness, Lady Hollis, whom I am delighted to see in her place, chose and opened a debate on housing in the autumn of 2010, I said that I thought that subject, and those that we are debating today, were potentially the key endeavours of this Government. I reiterated that at the time of the Pensions Bill and the Welfare Reform Bill. I am without expertise in these matters but I regard them as so important that I sought to learn by attendance at the majority of Grand Committee proceedings on the Welfare Reform Bill where matters were, in my view, most admirably conducted throughout, although without, in cricketing parlance, my much troubling the scorer myself. However, I shall do the same on this Bill—this time, I gather, in this Chamber.
The great Claud Cockburn in his engaging memoirs said that the world was divided between those who preferred surprises and those who liked things to turn out as they expected. By illustration, he said that, if he were ever caught in an Alpine snowstorm, the mere sight of a St Bernard would restore his morale, even if the cask around its neck was empty of cognac.
I shall go into Committee with an open mind and recognition that the Bill can perhaps be technically improved but in the hope that we shall learn more than a little of the Official Opposition’s intentions, which the noble Baroness, Lady Hollis, implied would be more thoughtful than political. She must forgive me if I have misremembered her precise adjectives, but I have tried. If, however, the noble Baroness thinks that her speech was other than political, I think she may deceive herself. Certainly one would need to know more of the thoughtful detail to appreciate what its economic consequences would be. It is almost 60 years since I was a soldier but, if, unlike Grand Committee on the Welfare Reform Bill, we are to listen to unremitted hostility, it will seem, at least for me, in military terms as simply being smoke. These matters are too important for that.
Finally I shall speculate in Committee on what the late Lord Russell—Conrad to most of us—would have made of all this. In your Lordships’ House both he and the late Lord Newton—Tony to many of us—were kind enough to remind me that I had given them respectively their first maiden speeches on the order paper in the Oxford Union. Indeed in the interests of balance, I shall speculate on what Tony Newton would have made of it all too. In the mean time, that is not a bad double barrel. I hope your Lordships’ House will forgive me hereafter, although I shall obviously observe the rubric, if I am briefly absent at the 90th birthday party of the noble Baroness, Lady Sharples.
Lord Touhig
My Lords, I am very pleased to follow the noble Lord, Lord Brooke of Sutton Mandeville. Some years ago he contested the parliamentary constituency of Bedwellty in the Conservative cause. It later became the constituency of Islwyn, which I had the privilege of representing for 15 years. I am sure that from his experiences in the Welsh valleys and the fact that his mother was Welsh, he will certainly know where I am coming from in this debate.
Although we all recognise the difficult economic climate in which decisions around benefits are being made, we must ensure that families are never left unable to afford the essential costs of daily living. Our priority must always be to ensure that those who face financial difficulty due to illness, disability, low pay or unemployment are still able to pay their rent, heat their homes, and feed their children; basic necessities which everyone in this Chamber takes for granted.
The Westminster Catholic Children's Society works with some of the poorest families in London. Its chief executive, Rosemary Keenan, recently said:
“It is hard for many of us to imagine what it is like for a mother to only have £1 left and know she still has to feed her children”.
Yet this is the case for an ever-growing number of parents. They are being forced to choose between turning on the heating or putting food on the table. Over the past year, we have witnessed a 44% rise in the number of families relying on emergency bed-and-breakfast accommodation after losing their homes, and a staggering 79% increase in the number of people visiting food banks.
By capping the up-rating of key benefits at less than half the rate of inflation, this mean-spirited Bill stands to further exacerbate the problems faced by some of the poorest people in our country. In short, it will widen the gap between family income and the price increases of basic commodities such food and fuel, further undermining people's ability to achieve decent living standards.
Kevin Flanagan, the director of St. Antony's Centre in Manchester, warns,
“We are already seeing increasing levels of family poverty and homelessness; any further real-term reduction of benefits will only worsen this situation”.
One particular concern widely held among the organisations working to support struggling families is the breakneck speed at which changes are being made. This Bill cannot and should not be considered in isolation; it comes as yet another blow to the poorest people, in a long line of already devastating cuts. Perhaps most worryingly, it comes at a stage when many key provisions of the Welfare Reform Act have yet to be implemented, including the capping of household benefits; cuts to council tax benefit; and new penalties for those deemed to be under-occupying social housing. The cumulative effect of these measures, which are being simultaneously thrust upon families this year, will create significant reductions to household incomes that are already under immense strain for many families. With such a widespread change under way, it is important that time is allowed for proper assessment and appropriate adjustments to be made.
However, the Government are already committed to further real-terms benefit cuts both for the immediate future and the next three years. It is irresponsible to legislate for a fixed annual increase of 1% when there can be no guarantee of how the rate of inflation will change between now and 2015. It is very possible that we will see families eventually facing an even bigger gap between incomes and prices in the years to come.
This rush to make short-term savings is not only unjust but economically unwise. It will inevitably increase homelessness, cause mental health problems for many and create higher personal debt. As a consequence, the cost of more family poverty will ultimately fall back on the taxpayer. This is not some Dickensian tale. In Britain in the 21st century, some 200,000 children will be pushed into poverty, growing up in unheated households or going to school hungry. They will face real risks to their education and health, which apart from the devastating human cost will almost certainly require expensive interventions by the state further down the line.
One particularly unpalatable aspect of the debate surrounding this legislation has been the rhetoric contributing to the isolation and stigmatisation of the vulnerable in our society. A number of noble Lords have spoken about this. Seeking to differentiate those in poverty as “deserving” or “undeserving” serves only to scapegoat those who are the victims of Britain’s stagnant economy. They are blamed. The implication is that if we did not have the people labelled “benefit scroungers”, everybody would be in work and the economy would be all right. This sort of rhetoric harms the vulnerable and clouds the fact that the majority of people who stand to be affected by the Bill are in fact hard-working men and women in low-paid jobs.
There are currently 6 million British workers in poverty. They rely on benefits to bridge the gap between a lower-than-living wage and rapidly rising living costs. These people will bear the brunt of the Bill when they are hit by real-terms cuts to their essential working tax credits and child tax credits. Furthermore, a below-inflation rise in benefits risks creating work disincentives, especially when working people face above-inflation rises in food and transport costs. For a worker receiving the minimum wage and facing a 4.2% rise in the cost of their commute, the Bill simply means that work will pay less than ever before. There are also more than 1 million disabled people who will be directly affected, adding to the pressures they already face from changes including the overhaul of the disability living allowance and the time-limiting of employment and support allowance.
The Government have consistently said that disability benefits are exempt from the 1% cap on benefit rises, yet the cap applies to employment and support allowance, which helps people who have barriers to work because of their disability. People with conditions like autism who are struggling to find work but who want to contribute will miss out under this legislation. Just 15% of adults with autism are in full-time work, yet research by the National Autistic Society shows that the vast majority want to work. Benefits for them are a necessity, not a luxury. The Government need to change their rhetoric to acknowledge the fundamental necessity of benefits to thousands of disabled people and their families up and down the country.
John Coleby, the director of St Joseph’s Pastoral Centre, which serves the Catholic Archdiocese of Westminster and provides specialist support to adults with learning difficulties, echoed the warning of many disability charities when he said that,
“the Bill should not be seen in isolation”,
from other cuts that were,
“creating a climate of uncertainty and fear”,
among disabled people for their future living standards and their independence, both of which are coming under increasing threat.
This debate has frequently and mistakenly been framed around the fairness of benefits rising faster than wages. It fails to acknowledge the fundamental issue at stake: namely, whether individuals and families are able to maintain their basic well-being. A comparison with wage increases is ultimately a false one to draw because in pounds and pence terms, families are struggling to make ends meet on a daily basis. The average weekly take-home pay in Britain is £395. That is five and a half times the jobseeker’s allowance of £71 and seven times the under-25s jobseeker’s allowance of £56.25. Faced with those differences, is anyone seriously suggesting that people labelled “benefit scroungers” would rather stay at home than be in work?
The average weekly shopping bill has risen by £5.66 in the past year alone, and is set to continue rising annually by at least 4%. Energy bills, too, have risen well above the rate of inflation, with the largest companies putting up prices by 7.6%. It is unthinkable that a mere 71 pence a week in jobseeker’s allowance, or a 99 pence a week rise in employment and support allowance, will come anywhere near bridging that gap. This is what a 1% rise means—71 pence and 99 pence—for people in these difficult circumstances.
Rather than focusing on misleading comparisons between benefits and wages, we should ensure that those who need support will still be able to afford the soaring costs of food, heating and accommodation. Overall, the impact of the Bill on vulnerable people and their families will be overwhelming. The decision to cap benefit increases so far below rising prices comes rapidly on the heels of a programme of widespread welfare cuts, the combined effect of which will further erode the ability of the lowest-income families to meet their daily living costs.
It is unjustifiable that parents and children will go hungry and that their homes will be put under threat through the misfortune of being ill, unemployed, disabled or simply working in low-paid jobs. The rush to make short-term savings will cause irreparable damage to those who are most in need of protection, and risks transforming our current economic challenges in this country into a very real poverty crisis.
Lord Kirkwood of Kirkhope
My Lords, it is a pleasure to follow the noble Lord, Lord Touhig, who is an expert in his field and brings an interesting Welsh dimension, as does my noble friend Lord German, to this important debate. It has been an excellent debate so far, reflecting the rising level of apprehension that exists in the country about what the future holds, particularly for the low-income, working-age households that the Bill particularly affects.
I am in some difficulty with the Bill because, at the risk of sounding pedantic, I do not even agree with the title. The Bill’s Short Title is “Welfare Benefits Up-rating Bill”. The Long Title is “To make provision relating to the up-rating of certain social security benefits”. I have argued this etymological, perhaps pedantic, point before. There is a world of difference between statutory social security entitlements and welfare benefits. Welfare benefits were things that we inherited from our American cousins. They have nothing whatever to do with the statutory provision that we in the United Kingdom have enjoyed for the past 20 years.
I agree with noble Lords who made powerful speeches about the kind of language that we use to frame the debate. It is not just “drivers” and “skivers”, but goes more fundamentally to the point that since Section 150 of the Social Security Administration Act 1992, which the Bill seeks to amend, we have always had uprating. I was there when that Act was cast. It put the uprating debate beyond short-term party-political arguments. It stated that there were entitlements that gave people on various benefits a stake in creating the wealth of our country. That is a very important element in the social cohesion that we have enjoyed in this country to date. We are at risk of setting a very bad precedent with the Bill by disrupting this for a three-year period.
My noble friend Lady Stowell made a powerful but, I think, Treasury-influenced speech with important points that cannot be ignored.
We need to try to have a more measured, long-term public discussion about what is going on. The public are ignorant about the facts of social security, and I mean that in the polite sense of the word. They are just untutored about what is going on. They are frightened to death by some of the gross figures because we always talk about cash as snapshot cash figures—and the quantities are truly frightening for anybody who does not know anything about it—instead of talking about percentage shares of the wealth of the country and the long-term longitudinal dimension to some of this debate, which tracks what families do in the course of a life, and looks at people going in and out of work and the contributions they have made through the national insurance contribution system, or what is left of it.
We should and could have a much more informed debate about what we think we can afford. If Britain is a poorer country, as I believe it is—I do not know for how long it is going to be poorer, but it is certainly not going to go back to sustainable levels of growth in the near future—we have to ensure that the country knows what that means for the future. It is an ageing society. We are all living longer and that is a success story, but we have to pay for that, too. We are talking not just about health costs but about costs across the whole public policy area. That debate is not happening to the qualitative level and the political extent that it should. That is the first point I wanted to make.
My second point concerns something that one or two colleagues have mentioned. On top of everything else, this Bill worries me. I could be persuaded that for the next 12-month period there is a case for looking at the uprating of benefits, and I would certainly want to engage in that. However, I am deeply worried that this is on top of everything else. I would like to think that I have been studying this as long as anybody, but I have no idea what the next five years are going to hold, particularly for low-income working-age families. The point that was powerfully made by the noble Baroness, Lady Hollis, was that the cumulative effect of all this has not been analysed by anybody. I would argue—and I think that the people sitting behind the Minister would probably say this—that the situation has been changing so fast that it has been impossible to pin down a cumulative analysis of what has been going on. I agree with her that this has to be done.
I want to make a connection between what the noble Baroness was saying and what my noble friend Lord German was saying, because he said something important with which I fundamentally agree: these cuts now have to stop. Between now and 2015, I will stand shoulder to shoulder with my noble friend Lord German, particularly in relation to low-income working-age households, in arguing that there should be no more cuts after this. Anything else would be to risk poverty and deprivation on a scale that we underestimate at our peril. If my noble friend Lord German and I get our way and stop any future change beyond this Bill, we could get on and do the arithmetic that the noble Baroness, Lady Hollis, is suggesting. Perhaps it is calculus, not arithmetic. If we do not do that, we will all be arguing blind. I certainly do not know what the full consequences will be of everything that has happened to date, and I do not think that that is safe. I want to come back to that in my final point.
I want to make one other point about fairness. I think the noble Lord, Lord Adebowale, made it earlier. There is a qualitative impact to these cuts as well as a quantitative one, particularly for low-income working-age households. The noble Lord said this powerfully; he has more experience in the front line than I have. The impact of a 1% cut for somebody in the lower two deciles of income is much more profound than for others. It does not matter what the cash effect is; it is the impact.
Another matter that deeply concerns me but that has not been drawn out enough is the residual level of unsecured debt that these households are carrying—estimates just shy of £6,000 on average. It worries me that this is what we are putting into households across the United Kingdom with an average unsecured debt of £6,000. The impact question has a qualitative as well as a quantitative effect.
In closing, I want to try to promote an amendment to this Bill because, as we have been saying, an inflation risk has been introduced in a way that we have never seen before. This Bill imposes a 1% uprating in 2014-15, regardless of inflation. I am sure that we all trust the Office for Budget Responsibility; I am not an economist, but it seems to me that their forecasts have been pretty dodgy in terms of some of the metrics in the economy in the past. If they are not right about a 2.6% increase in CPI, and a 2.2% increase the year after, in 2014, anything in excess of that will increase these cuts.
Nobody in this room can tell me what that increase will be. I have done these metrics but will get them checked before Committee, because my arithmetic is not great, but if inflation were to be 2% more than the OBR’s current forecast over the next two years, the savings in 2015-16 increase from £1.9 billion to £4.7 billion. Who can put their hand on their heart and say that they know that we are not going to face this kind of inflationary increase? With food costs, fuel costs and rent costs, some families will certainly experience a 2% increase over the OBR estimate. I do not know how widespread that will be, but some of them will face that, so it is just not safe for us as legislators. I know there might be some issues of financial privilege in some of this, but I think it is possible to amend this Bill in a way that says that in Clauses 1 and 2, subsection (1) shall be disapplied if inflation goes higher than 3% or 4%. I do not know. That is a political decision, and we will have to think about that.
Let me make it clear that I am not trying to take away the power of the Government eventually—as long as they stay within the envelope of the OBR’s estimates—to seek the automaticity of the 1% increase that is suggested in this Bill. However, if it goes anywhere above that, they have to default back and argue the case year by year using the 1992 Section 150 provisions. I think that would be a modest amendment. It would give people like me some comfort to know that there was some protection for these low-income households in future.
I say to colleagues, having been thinking about this carefully over the weekend, that if we do not do that there are next to no other circumstances in which it would be safe to introduce this Bill the way it stands at the moment. It will impose an inflation risk that is a one-way bet for the Chancellor, because if it goes up he gets more savings, and if it does not he gets the savings in any case. Therefore, we have to think carefully about this in Committee. I will happily participate in any discussions around an amendment of that nature in order to ensure that we give some protection to some of these families in future.
Baroness Grey-Thompson
My Lords, I have listened with great interest to the debate so far, and I, like many others, have a number of concerns with this Bill. Capping the uprating of most benefits to no more than 1% for the next three years will mean an exponential increase in the net losses each year. The Government have already reduced the welfare budget for working-age people, so this Bill will be yet another blow for low earners and unemployed, sick, or disabled people.
My first concern is that the impact of benefit uprating changes will swamp any gains from raising tax thresholds for low-income households. Uprating changes are less noticeable than other cuts but over the years can have a large impact on someone’s income. Between 2011 and 2015, the uprating changes to child benefit alone will result in a real-terms cut of almost £6 a week for a family with two children. Child benefit, in addition, plays a role in determining the level of housing and council tax benefit paid to those on low incomes in work. The real-terms cut due to child benefit uprating alone during that period is almost £11 a week.
Households with someone working full time on the minimum wage, if there are children, not only will suffer a real-terms loss of £11 a week between 2011 and 2015 but will gain less than £2 a week from the rise in the tax threshold, because a rise in net income means a drop in housing and council tax benefits. Also, the effects of this Bill will not be greatly eased by the change in the personal tax allowance. Low-income households will lose most of the increase in income through a reduction in benefits such as housing benefit and tax credit. Paradoxically, it is the middle and high earners who will receive the full benefit of this measure.
Secondly, uprating changes are not occurring in isolation from other benefit cuts. In considering this Bill, it is important to have in mind the full impact of all the changes. Very few people who rely on benefits or tax credits as part of their income, whether in or out of work, will experience a cut in uprating alone. There have been numerous other cuts to tax credits, housing benefit, council tax support and disability benefits as well as capping. Citizens Advice has analysed the overall impact for a household through a series of changes in circumstances on what we currently know. The analysis demonstrates in a small way the combined impact of the changes on some groups, assuming that this Bill is passed. The example I want to present is not at the extreme end as there will be many people who will be even more severely hit by the cuts and will lose much more.
A couple, Mike and Anne, have two girls aged 12 and seven. They live in a three-bedroom property belonging to a local housing association and are both working full time with a combined income of about £46,000 a year. With this joint income they will be about £17 a week better off from tax and benefit changes in 2015 than they were in 2011. They will lose about £6 a week in real terms from the uprating of child benefit, but they will gain around £23 from the change in the tax threshold, giving an overall gain of £17 a week. However, this position rapidly deteriorates if the family circumstances change for the worse. If, say, Anne becomes ill and is diagnosed with MS, she may have to cut her hours because she quickly becomes exhausted.
The couple split up and Anne becomes a lone parent. She now has earnings of £10,000 a year, but is entitled to some help through benefits, including disability benefits and premiums in recognition of the extra costs she now faces as a result of her illness. Between 2011 and 2015, someone in her position will suffer a large loss in benefits, around £58 a week, while gaining only about £2 a week from the rise in the tax threshold as the gain in net earnings leads to a reduction in benefits. That is an overall loss of £56 a week. This is made up of an underoccupancy charge, loss of lower rate DLA, a £5 council tax payment and about £18 due to all the uprating changes.
That is the loss under the current system. The loss under universal credit will be even greater for someone in Anne’s position. If she moved over to universal credit at the point when her health deteriorated, she would not get transitional protection, and in 2015 would have a real-terms income of £95 a week less than in 2011. This is because under universal credit she will get no more financial support than someone who is not ill or disabled. If Anne’s condition further deteriorates and she has to leave work, she is awarded the middle-rate care component of DLA and is placed in the ESA support group. She now has a great many extra costs.
The overall real-terms loss between 2011 and 2015 for a household in this position is about £34 a week, and that assumes that Anne keeps DLA or the same value in PIP. This loss includes a real-terms loss of about £15 due to uprating changes, despite the protection for disabled people. Again, this is all under the current system. Under universal credit, if Anne does not get transitional protection, she will be £61 worse off in real terms in 2015 than someone in her position would have been in 2011. The extra loss is due to the loss of the severe disability premium offset by the rise in the support element of universal credit.
In summary, between 2011 and 2015, this couple with a joint income of £46,000 a year have a real-terms gain from tax and benefit changes of £17 a week; they would have a £23 gain if they did not have children. A disabled lone parent in Anne’s position who is working will have a real-terms drop of £56 a week overall, despite the gain from the raising of the tax threshold. The drop will be a real-terms drop of £95 a week between the current system in 2011 and universal credit in 2015. For someone in Anne’s position and in the support group, the real-terms loss is £34 a week, or £61 a week if on universal credit.
People are already struggling to manage, as has already been mentioned by my noble friend Lord Adebowale. The numbers going to food banks are rising steeply. These proposed changes impact disproportionately on those with a low income because more of their income goes on buying essentials, and it is these essentials such as fuel and food that are subject to high inflation. For many, this can mean making choices such as whether to keep the house warm or to eat properly. Disabled people who cannot work, those who are unemployed and cannot find work, and those on low earnings who are working are all being affected by other benefit cuts. Decisions on uprating should not be taken without recognising the cumulative impact. Many in your Lordships’ Chamber have asked about the cumulative impact of these changes, and I would urge the Government to look at this again.
I will not repeat the words of the right reverend Prelate the Bishop of Leicester, but I wholeheartedly support his views. We have to understand where we are going as a society and how we want it to be viewed. In the Welfare Reform Bill, the Minister, the noble Lord, Lord Freud, said consistently that the most vulnerable should get the most support, but I fear that as this Bill progresses, that may not be the case.
The Lord Bishop of Ripon and Leeds
My Lords, my colleague the right reverend Prelate the Bishop of Leicester argued that in this Bill we are again putting pressure on those who are already the poorest in our society. We want to urge the Government to look again at the effect of the Bill on child poverty, not just over the next three years, but on into the future. I will not repeat my colleague’s arguments, but in that context, I want to ask three questions of the Minister.
First, will the Government make some commitment about benefits for asylum seekers, especially child asylum seekers? I ask this as a member, alongside the noble Baroness, Lady Lister, of the parliamentary inquiry into asylum support for children and young people, which has recently reported. I am told that benefits for asylum seekers are not welfare benefits, and that although they are benefits designed for the welfare of those in destitution, they are beyond the scope of this Bill. In that Alice-in-Wonderland world, I would nevertheless plead with the Government to give some comfort to asylum-seeking children and those who work with them.
Until 2008, these benefits were pegged at 70% of income support, but now they are not related to anything at all and have fallen to between 50% and 60% of income support. No increases were made in 2012 and we are told that there are no plans for any increases in the near future. I am thinking of a teenage girl in Leeds who has to look after her disabled mother as they seek asylum after fleeing from terror. She goes without meals herself in order to ensure that her mother is kept out of destitution. Will the Minister press her colleagues to ensure that the 10,000 asylum-seeking children who are at the most deprived end of our society are given a fair chance in life?
It is always a privilege to follow the noble Baroness, Lady Grey-Thompson, in these debates. Will the Government look again at the effect of the provisions of this Bill on disabled children? While some disability benefits are to be protected, the lower child disability addition of universal credit is included in the Bill among the benefits to be capped at 1% per annum. I follow the noble Lord, Lord Low, in asking that this should be looked at again. This benefit will be halved under universal credit; families with disabled children will have that element of their benefit reduced from £57 a week to £28, and now that savage reduction will be compounded by an increase of only 1% rather than by inflation. Will the Government consider the cumulative effect of the various measures on disabled children?
Alongside that, again with the noble Baroness, Lady Grey-Thompson, I am concerned about the effect on families of the continuing erosion of child benefit. This benefit has long been the mark of our support for children in our society, but already we have seen a significant number of families being deprived of this universal benefit altogether. The social value of paying this benefit to the mother has, I believe, not been properly or adequately counted. It is a benefit that is widely used to support the next generation, but it is now being refused to many. The 1% increase in 2014-15 follows three years of freezing the uprate so that, over the five years from 2010 to 2015, the level of child benefit for a family with three children will have reduced by £380 a year—in addition to the other reductions for children in deprived circumstances. Child benefit is key to the welfare of our society and it needs to be protected.
Finally, other noble Lords, particularly the noble Lord, Lord German, have asked the Minister whether she will encourage her colleagues, and indeed everybody else, not to use derogatory or dismissive language when they refer to those who receive welfare benefits. I will go a bit further than that and ask whether she will make it clear that the vast majority of those on benefits are not shirkers, fraudsters or spendthrifts. The majority of those who receive benefits are in work and the majority of those out of work would love to work if they could find jobs. The stigmatisation of those who receive benefits is both serious and dangerous. In 2011, there was an increase of 30% in attacks on disabled people, fuelled by stories of how people were falsely claiming disability allowances. Politicians and journalists are accused of spreading a mythology that causes stigma. Will the Minister today begin the process of slaying that myth by declaring that responsibility for poverty does not lie with the poor, so that we can, together, seek to support one another in helping those in most poverty, especially those in child poverty, within our society?
Lord Sheikh
My Lords, I welcome the Bill as it will restore fairness and simplicity to the process of social security payments. It will also deal with the question of affordability. It is important for a Government of any persuasion to show that they empathise with taxpayers who are essentially paying for welfare handouts. The concept of fairness is one of the reasons for proposing this Bill. It is worth remembering that the coalition Government inherited the biggest budget deficit of any country in the developed world. It is estimated that capping social security benefits in this manner will save the Treasury £3.7 billion in 2015-16 and that, thereafter, there will be permanent savings each and every year in our welfare spending.
Welfare spending increased by 60% under the previous Government but this did not produce the intended result of helping individuals to return to work. If we can get more people in work, some of them will receive salary progressions and improve their standards of living. In the years 1997 to 2010, when average earnings increased by 30%, tax credit spending increased by 340%. One of the aims of this Bill is to tackle the lack of aspiration and ambition among a number of those who have been trapped in poverty. I believe that the 1% uprating stipulated in Clauses 1 and 2 will improve incentives to work.
It is true that the welfare debate has been described in overly simplistic terms in certain quarters. However, it is a fact that a culture of dependency exists in some areas. Previous Governments have tried to tackle this issue with the best of intentions but the complexity and scope of the problem has often meant that past strategies have not been successful in addressing the matter. Children and young people who live in households where adults do not engage in any form of employment are not only the most deprived in our society but are most likely to follow this path once they leave full-time compulsory education. This generational cycle of worklessness is a key factor in the rising levels of welfare dependency and poverty in our communities.
I am sure that all noble Lords will agree that work gives people pride and confidence. Unemployment sometimes creates depression and has an adverse affect on people. Work is good for people’s mental health, their physical health and their general well-being. These benefits have been demonstrated repeatedly. Dependency is not liberating; it constrains people and prevents them achieving their ambitions.
Baroness Hollis of Heigham
I am grateful to the noble Lord for giving way for a moment. Would he not agree that, on the contrary, what welfare benefits such as tax credits have done, and what universal credit proposes to do, is to make work pay and thus get people back into the labour market, exactly as he wishes?
Lord Sheikh
I still feel there is a culture of dependency. Obviously, we would like to get more people into work and incentives must be given to people to go to work. People have become trapped in our welfare system and they need to be freed. This Bill will make a great contribution to their liberation.
The Government deserve recognition for trying to ensure that we have a fair welfare system to support those in genuine need. Social security should be for people who find themselves out of work and are trying to get back into employment. This House recently debated the success of the Asian community who were expelled from Uganda and came to settle in this country in 1972. My family was among those people who were expelled by General Amin and who came here. A number of these Asians came here penniless and were initially housed in Army camps. At the outset they received state benefits but they came off those benefits, and started to work and established small businesses. They have been successful and now offer employment to others, pay taxes and create wealth for the country. It is unfortunate that some people have chosen not to make a contribution to society and have opted to receive benefits as a way of life. The welfare system was created to ensure that people were not left destitute if they lost their jobs. It was viewed as a matter of support for those who were down on their luck. It is unfortunate that the original purpose of this safety net has been distorted.
I wholeheartedly support the Government’s decision to retain the uprating of long-term disability benefits at the rate of inflation. I also support the triple-lock guarantee for basic state pensions, which means that pensioners will receive an increase of at least 2.5%. A compassionate society is one that shows respect and understanding to the most vulnerable. I am proud that the Government have taken these steps as they are both a moral and civil duty. Further to erroneous reports about these measures, I would be grateful if the Minister could inform your Lordships’ House of the steps Her Majesty’s Government are taking to ensure that people are well informed and reassured about policy regarding disability and pension provision.
It is neither prudent nor fair to distribute welfare payments or benefits without question or regard for our economic situation. The uprating measures in this Bill will show considerable savings by 2015-16 and for years after that. This is essentially about taxpayers’ money. We have a financial deficit that we need to rectify and we need to put the country on a sound financial footing. We can achieve this by reducing our spending, applying appropriate taxes and undertaking more business at home and overseas. I have spoken on the latter point in your Lordships’ House previously. We cannot afford to continue paying welfare benefits as in the past.
The Government have reduced the deficit by a quarter since they came to power in 2010. Obviously, this is to be commended. More than 1 million jobs were created in the private sector in the same period. The FTSE 100 index has risen above 6,300 points for the first time since May 2008. If we can achieve more growth we will create more jobs, and if we can encourage people to work rather than be dependent on the state, more people will be gainfully employed. I support the Government on getting the economy right and we must be firm and keep on the right track. It will indeed cause pain to some people but, of course, if a person is ill it is necessary to take strong medicine. We should not borrow our way out of the current financial crisis. Borrowing is the easy way but it is the wrong way.
There are wider social implications at the heart of this debate. We cannot ignore the resentment and anger felt by hard-working families who see others making a conscious effort not to work being rewarded handsomely by the state. Failure to address this issue may cause tensions within communities. I am sure that some of us have heard the expression, “I cannot afford to go to work”. This is an absurd situation and we are perhaps the only country where people are better off not working.
The measures in the Bill are necessary to remedy the culture of dependency that is blighting some members of our population. The Bill is a sign of the Government’s commitment to ensuring that we live in a fair society. The fact remains that since the economic downturn salaries have risen on average by 10%, whereas payments for some individuals in receipt of benefits have risen by 20%. We need to look at all areas of expenditure for our well-being, which will of course include the welfare benefits. The present state of affairs is simply not sustainable. I am supporting this Bill as it is a step forward in dealing with issues relating to affordability and fairness.
Baroness Donaghy
My Lords, I pay tribute to the noble Lord, Lord Sheikh, for being a hard-working and successful entrepreneur. I know several people who have two or three part-time jobs who work extremely hard and who remain low paid. I never cease to be surprised that the low paid are always blamed for being low paid and being eligible for tax credits, but low-paying employers are never blamed for their part.
This Bill is political and deserves a political response. The challenge has been issued by the noble Lords, Lord German, Lord Bates and Lord Brooke of Sutton Mandeville: “What would I do instead of this Bill?”. In the words of Yosser Hughes, “Gissa job” and I will tell you. This Bill is completely unnecessary, it is based on a misrepresentation and it is playing politics with people’s lives. All this will become apparent when the impact is actually felt by real people, when the jobless numbers rise and child poverty increases.
First, there was absolutely no need for the Bill, as has already been said by several speakers. The Government already have the power to uprate by 1% this year, next year and the year after at the appropriate time without new primary legislation. So why do it? The Work and Pensions Secretary, Iain Duncan Smith, said that it would,
“provide certainty for taxpayers, the markets and claimants”.—[Official Report, Commons, 8/1/13; col. 189.]
I ask the Minister: what certainty can there possibly be when the level of inflation in the next three years—a key ingredient, she must accept—is unknown? What certainty can there be when the markets are up and down like a yo-yo? I suppose it could be said that higher rate taxpayers have been provided with certainty, and claimants are certain that they will be a lot poorer. The real reason for this unnecessary Bill is to provide a symbolic dividing line between the coalition Government and the Labour Opposition—short-term political gain on the back of those at the bottom of the labour market—and this sleight of hand will be found out.
Secondly, the Bill is based on the false premise that this is about fairness between taxpayers and those out of work. The Chancellor himself stated that,
“over the last five years, those on out-of-work benefits have seen their incomes rise twice as fast as those in work”.—[Official Report, Commons, 5/12/12; col. 879.]
Everything has been pitched to present this Bill as an act of fairness to working people whose earnings have risen by about 10% since 2007 while out-of-work benefits have gone up by about 20%, but we all know how misleading this comparison is. I negotiated wage increases for the poorest paid in universities for 16 years, 90% of them women, mainly part-time. Using percentages to present a case is designed to mislead. We used to say that 10% of nothing is still nothing.
The whole presentation by the Government is about employed versus unemployed, when the reality is nothing of the kind. It is actually about divide and rule. Thirty per cent of households will be affected. Those most likely to be affected are families with children, particularly lone parents, 90% of whom are women. The Government claim that many of those affected by the Bill could cope with the below-inflation benefits by moving into work, but 60% of those households affected are in work. The Government claim that the disabled will be protected, but disabled people in the ESA support group will see their basic allowance of £71 uprated by 1%. This represents almost 70% of their out-of-work support and 991,000 disabled people receiving ESA in 2012 will experience a 1% uprating, representing a loss of £87.65 a year, as has already been said.
The real weasel words come when we are told about child poverty. The Parliament Under-Secretary, Esther McVey, said that there would be,
“an extra 200,000 children being deemed by this measure to be in relative income poverty compared to uprating benefits by CPI … It is misleading to look at the impacts of uprating in isolation”.—[Official Report, Commons, 15/1/13; col. 715-16W.]
Note the words “deemed” and “relative income poverty” in an attempt to minimise the impact. Mr Duncan Smith went on to say:
“If we take the figures on that relative income point across the period covered by the spending review, we can see that some 350,000 children net will be lifted out of poverty, even if we take into account the effect of this Bill”.—[Official Report, Commons, 21/1/13; col. 131.]
So either we have 200,000 extra children in poverty or we have 350,000 fewer in poverty. In a recession we are all poorer so the poorest are comparatively better off—what unbelievable nonsense.
Thirdly, the Government are playing politics with people’s lives. They claim it is about rebalancing the economy and making work pay. Let us say for the sake of argument that the 60% on diminishing tax credits who are in work get better jobs, leaving room for the 40% who are not in work to do the lowest paid jobs. Where are these jobs coming from? Last year 300,000 jobs were lost from the public sector. The OBR predicts the loss of a further 900,000 jobs by 2017-18, while the Institute for Fiscal Studies predicts 1.2 million lost jobs in the public sector over the same period.
The Government think they are all going to come from the private sector, and so far they have, but there is no growth in the economy. People are spending what they have on energy, food and rent, and large retail chains are going out of business. Maybe they will all become self-employed. Between June 2008 and April-June 2012 the number of self-employed rose to 4.2 million, a rise of 367,000. During the same period, the number of employees declined by 434,000. Maybe this is how we are going to work our way out of poverty.
However, if you look at the figures, 80% of that increase in the number of self-employed were aged over 50 and more than likely to be male, according to the Office for National Statistics. So we are turning into a nation of 50 year-old entrepreneurs. When you delve even further, they turn out to be construction workers, carpenters, taxi drivers, et cetera. This suggests people who have little choice about their employment status, whose job prospects have diminished because of age barriers and who are probably bumping along on the bottom of the labour market, getting what they can but not continuous employment. It could also explain why output is flat while employment is growing. It is not the brave new world but more like a twilight zone.
The Government are not looking after the economy; they are looking after their own. The gap between rich and poor, already unacceptable, will widen. The Times Magazine last week said that a child born in Lambeth is likely to die eight years before their counterpart in Kensington and Chelsea. I presume that the latter need the extra eight years in order to spend their tax breaks. It is bad enough that we live in a society that tolerates these differences in mortality rates. This Bill is intended to be a propaganda coup for the Government. It will soon be seen for what it is: a gratuitous attack on the poorest and weakest in an unequal society.
Lord Wigley
My Lords, I am delighted to follow a number of long-standing colleagues with whom I have campaigned on these issues over many years. I, too, voice my concern about this Bill, which will result in real-terms cuts in support for thousands of low-income people, including, despite government claims to the contrary, up to 1 million disabled people, particularly those endeavouring to work.
If the Bill goes through unchecked, the increase in welfare benefits will be 1% while CPI inflation stands at 2.7% and RPI inflation at 3%. As the noble Lord, Lord Kirkwood, mentioned, inflation may well increase substantially. This will lead to real-terms cuts during the next three years in payments to support those who are working and contributing to the economy. They are the very “hard-working families” so beloved of the spin doctors of those who want to underpin the concept of the deserving poor—deserving, apparently, of just 1% uprating. I cannot see how this will contribute to promoting a work ethic or allow working people to participate in a savings culture.
I shall refer to figures relating mainly to Wales, although I realise that the arguments will apply to many other areas, too. The effect of the measures in Wales will be disproportionally greater, since incomes per head in Wales are substantially lower than average incomes in England. Figures released before Christmas show that GVA per head in Wales stands at 75.2% of the UK average, so cuts to in-work benefits for the low-paid will hit Wales proportionately harder.
According to the most recent DWP data, as at 1 December last year, more than 125,000 families in Wales were receiving working tax credits. This comprises some 93,000 families receiving both working tax credits and child tax credits, and 32,000 families receiving just working tax credits. The 2011 census records that in my home area, the Gwynedd local authority area, 9,200 families were receiving one or more elements of tax credits out of the total 52,000 households. This means that 17.5% of all households were in receipt of tax credits. These people generally spend their money within their own local areas. The Welsh economy is made up overwhelmingly of small businesses. These working tax credit reductions will mean that demand is further sucked out of local economies as people have, in real terms, less money to spend.
The uprating will also hit those seeking work. The Government may intend this real cut as furthering workforce discipline, surmising that, as benefits will be even lower, so people will be prepared to take any job. In this, they are fundamentally mistaken. Many unemployed people, particularly in Wales, are seeking work in vain because the economic policies of the Government are failing. There are some parts of the west Wales and the valleys area whose GVA per head is only 65% of the UK average, with 21 unemployed people chasing every vacant job. Putting the morality of this on one side for a moment, starving people back into work has no prospects of success if the jobs are just not there.
If we are to combat this, boosting skills alone will not cut it; we must also tackle the demand side of the economy. We have to make sure that there is real work out there for people to do. The Government's Work Programme, allegedly designed to take people off benefits and into work, was utterly ineffective throughout the UK, but Wales recorded the worst figures, with the Department for Work and Pensions saying that only 1,380 of the 42,380 people on the programme entered long-term employment—a success rate of only 3%. In Wales, 77,377 people are looking for work and claiming jobseeker’s allowance, while just 20,310 vacancies are posted in jobcentres. This means that, across Wales, there are on average four people chasing every empty job
We are facing a vast increase in the number of the working poor—people who are now resorting to the food banks to feed their families. If this Government were serious about ensuring that work pays, they should legislate to ensure that work really does pay more in wages so that people do not have to resort to benefits to make ends meet. Legislating to uprate the minimum wage to the recommended living wage would be a good start, and I commend the points made by the noble Lord, Lord Bates, earlier in this debate.
It has been estimated that the private sector in the UK is sitting on a cash stockpile of as much as £700 billion, because it does not have the confidence to invest. Getting this prospective investment to create economically productive jobs is the challenge which the Government have so far failed to address successfully.
In Wales, although most economic powers are not devolved, we can take some steps to improve the situation. My own party, Plaid Cymru, recently successfully negotiated with the Welsh Government to secure £40 million of funding towards 10,000 new apprenticeship training places in Wales as part of a budget deal. We are also pressing for a new procurement policy that could create several thousand jobs through sourcing public sector contracts domestically. Such an approach might be beneficial also for the deprived parts of northern England which, like Wales, are suffering from ineffective economic policies.
Wales needs job-creating levers to improve our economy, not handouts and workfare. That is why it is essential that the powers recommended by part 1 of the Silk commission are implemented as soon as possible. Real work and training is what is needed, not temporary workfare schemes to take people off unemployment figures for six months. At the very least, the Government must make sure that increases in benefit rates reflect rises in the cost of living. Otherwise, this proposed cut will deepen inequality, increase poverty and further dampen the economic prospects of poorer areas.
Lord Whitty
My Lords, the noble Lord, Lord Sheikh, said it and, to a large extent, the noble Lord, Lord Wigley, demonstrated it as regards Wales; namely, that this Bill has wider social implications, but they are not welcome implications. They are to put a big burden of the sorting-out of our economic situation on low- paid working people. I follow the noble Lord, Lord Kirkwood, in saying that it is quite a dangerous move, after 20 years of virtual cross-party consensus, that we should virtually automatically uprate our benefits system, to break that system in this way in a Bill which is legislatively unnecessary. The noble Lord also said that we needed some clearer long-term thinking. My main points will be about that because, as many others have said, this Bill is surrounded by hugely misleading propaganda.
It is supposed to be part of a strategy on the part of the Government to reduce benefit costs, simplify the benefits system and increase employment, but any such strategy is put in jeopardy by a government believing their own propaganda and that of their press allies. That propaganda seems to be all about the distinction between the deserving and the undeserving poor—those who work and those who do not—but the burden of the Bill falls on those who do work, who are already squeezed by a cut in real wages, particularly at the lower ends of income, and who will therefore be twice hit by a cut in the real value of their benefits.
The propaganda also suggests that benefit recipients’ real living standards have risen dramatically faster than those who are in work. As the figures that have been provided to us by the CPAG show, the real value of unemployment pay and other social benefits has steadily fallen over several decades. The reason why there has been a slight reversal in the past couple of years is the dramatic fall in real wages at the bottom end. That is not a reason to aggravate that unfairness and retrogression by the means proposed under the Bill.
If the Government were really telling the public that we need to differentiate between those who work and those who do not, they would have provided for a benefit system that differentiated between levels paid to those in work and those out of work. The Bill does not do that. The Government have, rightly, stuck with focusing on need rather than on whether you are in or out of work. Of course, the downside of that is that they have hit both equally. For those who are in work, the Government claim that they have offset that by raising the tax threshold at the same time, but the tax threshold hike has been offset by the cut in housing benefit, the abolition for many and the cut for others in council tax benefit and other benefits. The net effect on the working poor of the Government’s measures has not been positive compared to those who are on benefit and who are out of work. The supposed strategy is as much at odds with the propaganda as the propaganda is at odds with reality.
I hope that the Government will find my second point slightly more constructive, but it is equally critical, not only of this Government but of previous Governments. Elements of the Daily Mail propaganda, as I would call it—to save Ministers’ blushes—are correct. That relates to the soaring cost of housing benefit and, within that context, to occasional, admittedly much exaggerated, stories of ludicrously high levels of housing benefit for particular families in particular situations, especially in London. Those families are obviously chosen to highlight a point. For obvious reasons, they tend to be families who fit the Daily Mail image of benefit recipients by being large in the number of children, probably out of work and almost certainly foreign.
There are thousands of other less dramatic cases in which, inevitably, housing benefit has risen above the rate of inflation. The Government, and all of us, have to ask ourselves why. It is because of the failure of the housing market, compounded, in some cases by the failure of local authority placement policies. It is not, by and large, due to the failure of the benefit system.
I have been banging on about the failures of the housing market for at least 10 years, for the past two years as chair of Housing Voice—as I should have declared—but so have many other people for far longer. The reality is that all parts of the housing market—out-of-reach mortgages, soaring private rents, unaffordable leasehold charges, the inadequate quantity of new social housing, and increasingly expensive social housing at that—reflect a failure to build, a failure to refurbish and a failure to provide housing choice fit for our society at various levels.
Hence, in all forms of tenure, housing costs are rising. Inevitably, that leads to a rise in housing benefit payments. I repeat that that is a failure of housing policy; it is not a failure of social security policy. I predict that the pressure on housing benefit, or what is intended will become the housing component of universal credit, will seriously sabotage and possibly completely undermine what I think is universally regarded as the commendable aim of introducing universal credit, unless housing benefit and the pressures on it are dealt with first in the wider context of housing policy.
Looking back, the roots of this problem go to a serious mistake, made, probably unconsciously, decades ago. Until the 1960s, the vast bulk of government intervention in the housing market was on the capital side: help to local authorities to build social housing; and help to homeowners and landlords to improve their stock. A much lesser proportion was on the revenue side in subsidies to people, and much of that was through tax relief on mortgage payments. We now have a completely switched system, so that more than 90% of state support in the housing market is revenue based and very little is capital based. In the next five years, £90 billion will be spent on housing benefit; £5 billion, at best, on new and improved housing. Within government, the two aspects are dealt with by entirely separate policies and entirely different departments. CLG designs housing policy; DWP decides housing benefit. If the two sides were brought together in one pot with one policy in one department, we could perhaps, over a period of years, develop a sensible housing strategy: building more houses, improving those we have, and providing selective support to tenants and householders who are faced with unaffordable costs.
Unless we do that, unless we take housing benefit out of the plans for universal credit strategy and put it back into housing policy, we will not solve the housing crisis, the pressure on housing benefit and therefore the pressure on the social security budget in total. Unlike other benefits, housing benefit—and, I guess, council tax benefit—depends not on your income or your family circumstances but on the home and the area in which it is situated and on the state of all the housing markets in that area. As long as the housing crisis persists, the total benefit bill will inexorably rise faster than inflation. Then the Treasury will again insist on real-terms cuts to the income of many of the poorest in our society, such as the proposals before us tonight.
I appreciate that in calling for a single approach to housing policy, I am parting company with some of my usual colleagues who are housing and policy campaigners, but I say to the Government and the Opposition that unless they start looking at this in a more strategic way and put both sides of the housing issue together, they will solve neither the housing crisis nor the pressures on the social security budget. Unless we do that, we will be back here in a few years’ time with a Government of one complexion or another unfortunately forced to put the cost of our failure on those who are least able to afford it.
Baroness Gardner of Parkes
My Lords, it has been a very wide-ranging debate, and many different aspects have been developed by different speakers. I start by taking issue with the noble Lord, Lord Whitty, for saying that we on this side have tried to make this a battle between the deserving and the undeserving. I do not think that there should be moral judgments like that, and I do not believe that our party is making them. I will start with the noble Lord’s speech because it was the previous one and therefore it is fresh in my mind. It is important to realise that housing benefit has been a great problem. He says that we need to address it. Of course we do. One way to address it is to restrict it, and that is what has had to be done.
I have seen people living in properties who have been getting housing benefit of about £80,000 a year. That is just the benefit. It is not their living costs or anything else. People in employment might be earning £20,000 a year in the same area. It is pretty hard to watch that happen. When I was chairman of social services on Westminster Council, many years ago, we discovered that housing in London was terribly expensive even then, and that there was plenty of space and lots of unoccupied properties in, I think, Liverpool. It was somewhere quite remote.
We gave all those people who had no housing rights at all the right to go there. We provided transport and everything else, and Liverpool was willing to provide the accommodation. One-third of those people arrived there. The other two-thirds vanished into the blue. They went off our housing list, but they never appeared anywhere else. Evidently they would rather do anything than leave London. When we now see these people living in a little shed in a back garden in Acton or somewhere, it is terrible that people so desperately want to stay in London, where housing is, I would say, at the top of the range in price, and the least available. We had terrible trouble then because all the bed and breakfast hotel accommodation, which is so widely used now, was taken up by tourists or new arrivals to the country. Even to get a bed and breakfast space we at Westminster Council had gradually to move out wider and wider. It got to the point where no one in London had any bed and breakfast space available.
I feel for councils now that have nothing to offer people. This problem has not arisen in five minutes. It goes back a long, long way. When I was on the Greater London Council, I remember that we had a Conservative housing chairman and a Labour Government at that time. The chairman said, “This is the time when we could solve the housing problem, because I know what we need in London and the Labour Government have good ideas on what they could do”. However, it never happened because each of those authorities changed. The Government and the council changed, so the whole scenario changed.
Housing is a major problem. What is very bad is the continuing increase in utility bills and fuel rises. People in council blocks have recently told me that they can manage to pay the rent—they were renting from people who had bought their leasehold because that was all that was available—but they could not afford to warm the flat because the fuel bill is so high. That is worrying, because we were told that every effort would be made to see that fuel bills came down to a level where a card payment at a prepayment meter, which most of those people have to use because it is the only practical way for them to budget, would not be more expensive than having a quarterly bill. Yet only last week someone told me that it is still 10% more. Of course, it is going up all the time. That would be something—there are many things—that could be done to help people. The housing issue is not such a battle now. It has been addressed by putting a ceiling on housing benefit.
I heard the noble Lord, Lord Wigley, talk about Wales and the shortage of work there. Surely a lot of those people who cannot get anywhere else to live in the country could go to Wales. If you are living on a benefit, it does not matter where you are living if it is fully paid for by someone else. I do not understand that position.
Lord Wigley
I am listening carefully to what the noble Baroness says. Surely she would not uproot families—families with children in schools and with support mechanisms around them in south-east England—and move them to Merthyr Tydfil or Middlesbrough, where they have no links at all.
Baroness Gardner of Parkes
I do not know that I agree. I arrived in this country and knew nothing about it. I had no job or anything else. Particularly if you have come from another country, it really does not much matter where you settle provided that you have the school that you want. Wales has always had a marvellous reputation for literacy, and I am quite sure that the schools would be good there. You want to be able to live in a safe, clean environment. Again, Wales is a beautiful country. I am a New South Welshman myself.
I do not want to be frivolous in this very serious debate. The one thing that we all have in common in this Chamber tonight is that none of us wants to see restrictions on anything. However, we just have to be realistic and look at the common sense of it. If we do not have the money to afford things, we cannot attempt to do it. It is all very well to think that you can do everything for everyone. I read in the statistics, which I think someone else quoted, that there was a 60% welfare increase under the previous Government between 2003 and 2010. Every household had to pay more than £3,000 a year to meet that extra increase of 60%, and the fact that we went too far and spent too much then is of course catching up with us now. It would be lovely if these things did not happen. However, this has happened and we have to try to put a stop on it, at least to be sure that we do not go on for ever.
The noble Lord, Lord McKenzie, spoke early on about how we denigrate people as being workshy. Again, when I was in dental practice we had only a very poor catchment area near us because the only way people could get to work was by bus. There was absolute overemployment in the country, but we would go to the jobcentre and get nice young people to come and start work. We made the mistake originally of giving them keys to the surgery. That was a big mistake because most of them did not last a week. Then you would phone and say, “Where is Joanie? We were expecting her at work”, and someone would say, “Oh no, she never gets out of bed before midday. We can’t do anything with her”. So this is not a new problem. There have always been people who did not want to work, but there are others who do. That is the tragedy today; plenty of people desperately want to work but cannot find the work, as the noble Lord, Lord Wigley, suggested about Wales. It really is a major problem.
However, the more difficult the world and the more difficult these situations, the more we have to address them. We cannot go on believing that it will all work out all right in the end, just keep your fingers crossed. I was very impressed with the speech by the noble Lord, Lord German. I have never heard him speak before, but he clearly understands all the technical terminology, which I cannot claim to understand at all. The noble Lord said that at the moment all these taxes hit the richest hardest. That is true, because they are paying the biggest bit. Someone else, who I think was on the other side—no, it was that marvellous noble Lord in the back row here. I cannot pronounce his name; it is a bit too difficult for me—
Baroness Gardner of Parkes
Thank you very much. The noble Lord said that some are hit harder than others and that to be hit hard if you are rich is not nearly as difficult as if you are poor. Every one of us would agree with that statement, so these things are not simple.
There was talk about food banks. The other day we had a question about food banks, which are a good idea. It is a disappointment that you might have to use a food bank but at least there is something there. When people talk about the difficulty of having to choose whether to warm the house or feed their children, surely food banks are better than leaving your child hungry. I can see someone disagreeing with me, but whatever I say, someone will disagree with me because there are two definite views on this. However, we have to be realistic.
I noticed that the right Reverend Prelate—was it the same Lord Bishop who is in his place? No, I think it was the previous one—the Bishop of Leicester said that it was just a short-term saving and that people were having to pay some element of council tax for the first time. Again, I think that council tax is perhaps one of the better forms of tax and that councils take into account where people really need help. I notice that even in business rates there is a provision whereby you can apply to have your business rates reduced, and that might enable you to stay in business and go on employing people who are working for you. Things are not that easy. The internet is destroying lots of shopping centres. There are issues there.
The noble Lord, Lord Touhig, made points that I agreed with strongly. He talked about the deserving and the undeserving. That seems to be the tag that they are giving us today. I remember Keith Joseph, in the days when he was very involved, talking about the cycle of deprivation. I have always thought that that still exists. If you do not know how to live frugally and do things for yourself, you cannot teach your children the same things because you do not know them to pass them on. This is very important. When times are hard for some people, they tend to buy food that is expensive and not necessarily nutritious. We get all the talk about obesity even in the very poor, and that is because the food that they can buy that is cheap is the worst for health. All these things are difficult.
The noble Lord referred to the climate of uncertainty and fear that we are trying to create—I do not know whether he said that we were trying to create it or whether we had done so—but that is certainly not the intention. There are things that we could do. I am strongly supportive of old people having bus travel passes or of transportability for people. Again, we did a great survey when I was chairman of social services and we discovered that the best thing possible was for people to continue to be mobile and to get around. If they could not afford the fares, they could not do that, and that added to the national health bill. If we are looking for a good economic thing, one of the good things is to keep people mobile and moving around as much as possible. The other things that are much more difficult are how to occupy them.
We have created a culture of dependency. As I said, those benefits went up 60%. This is the realistic situation that we have to bring back into line. The Bill has been demonised today in a way that is not fair. This side cares very much about people. It is simply that the answers are not easy. We would all like to do everything to help everyone, but you just cannot have it all ways. For that reason, I support the Bill.
Baroness Lister of Burtersett
My Lords, this Bill should really be titled the “Welfare Benefits Downrating Bill” because it will downrate the real value of the benefits and tax credits upon which the poorest members of our society rely. The Bill’s length, together with its effects and some of the divisive arguments that have been used to justify it elsewhere, make it—unfortunately my noble friend Lady Hollis got in first with my best line—nasty, brutish and short.
Among those who face greater hardship as a consequence are the 200,000 children who will fall into poverty as families with children and poor mothers are particularly hard hit. In the words of the Children’s Commissioner for England, it is unacceptable that children should have to pay the price for the economic malaise of our country. Could the Minister please explain how this projected increase in child poverty is compatible with the Government’s obligations under the Child Poverty Act 2010? Moreover, as a number of noble Lords have said, about one-third of households containing a disabled person stand to be affected, despite the claims to be protecting disabled people.
I wish to examine the two main arguments used by the Government to justify this nasty Bill. The Secretary of State told the other place that the arguments are,
“first and foremost about affordability”,—[Official Report, 21/1/13; col. 128.]
and that deficit reduction is at the heart of the measure. Oddly, he countered the charge that social security spending had risen faster than anticipated under his watch by rightly pointing out that,
“a huge part of that is spending on pensions”.—[Official Report, 8/1/13; col. 188.]
Yet pensions are not included in his Bill, which is supposedly “all about affordability”, as my noble friend Lady Hollis has underlined.
Ministers enjoy using the affordability argument to ask the Opposition what they would cut instead, as have the noble Lords, Lord German and Lord Bates today. I cannot talk for the Front Bench but similar sums could have been saved in a much less regressive way by forgoing tax cuts that benefit the better off the most. I am talking about not just the regressive cut in the additional rate of tax but also the increase in personal tax allowances, which are of no help to the one-fifth of workers too poor to pay tax, two-thirds of whom are women; of only limited help to those in receipt of certain means-tested support, which tapers away with higher post-tax income, and this will be even more the case under the universal credit; and of most advantage to higher-rate taxpayers. As a Gingerbread report put it:
“It would be hard to design a policy that was less well targeted on low income families”,
than raising personal tax allowances—the more so, given that the better-targeted child benefit has been frozen, as the right reverend Prelate the Bishop of Ripon and Leeds has pointed out.
In any case, if the policy is really about deficit reduction, cutting incomes at the bottom is counterproductive because, as the IMF has pointed out, this reduces demand. People on low incomes are more likely to spend their money, and in the local economy. According to the Office for Budget Responsibility, the multiplier effect of changing benefit levels, for good or ill, is twice that of personal tax allowances. So what is the sense of taking money out of poor people’s pockets in order to put some back into better-off people’s pockets in a way that is less likely to keep the economic wheels turning? Again, a number of noble Lords have made that point.
The second argument concerns fairness. There are two aspects to this. The first is that over the past five years out-of-work benefits have gone up by about double average earnings. In the debate in the other place, a Conservative Back-Bencher said that it,
“cannot be right ... for benefits to rise, year after year, faster than the wages of the low-paid”,—[Official Report, Commons, 21/1/13; col. 101.]
but the past five years have been an aberration. With the exception of a much needed boost to the real value of support for children achieved under the previous Government, benefits have year after year gone up by less than wages because they have been linked only to prices. The consequence is that, according to Professor Jonathan Bradshaw, the value of the basic safety net benefit received by a single person is now only 11% of average earnings compared with 18% in 1948 and 20% in the late 1960s. Moreover, the replacement rate of unemployment benefits is low comparatively, meeting only 53% of former net earnings for a couple with two children on average earnings compared with an OECD average of 76%.
A Joseph Rowntree Foundation study of existing uprating policies concluded that they,
“imply substantial long-term reductions in personal disposable income relative to earnings”.
Indeed, the Minister, Steve Webb, told the other place that,
“we think that average earnings in a couple of years’ time will be more than CPI, as is the case in many normal years”.—[Official Report, Commons, 21/1/13; col. 114.]
So even the Government do not believe that benefits were going to run away ahead of earnings, if they continued to be uprated in line with the CPI.
As has already been pointed out, the differential impact of inflation on different income groups due to big increases in food and utility prices means that people on benefits typically will have been hit harder by rising prices than the people on average earnings with whom Ministers like to compare them. They are also being hurt by cuts in housing benefit and are about to face cutbacks in council tax support. We can already see the consequences in the growing hardship documented by charities and the inexorable rise of the new alternative safety net of food banks.
I wish to refer briefly here to the findings of the independent parliamentary inquiry mentioned by the right reverend Prelate the Bishop of Ripon and Leeds. The inquiry,
“was shocked to hear of instances where children were left destitute and homeless, entirely without institutional support and forced to rely on food parcels or charitable donations”.
The asylum support system, which has failed these children, has not been increased at all this year, not even by the miserable 1% in this Bill.
Percentage increases, or what the noble Lord, Lord German, called a small amount, have to be understood in the context of the value of the benefits themselves. Analysis by my colleague Donald Hirsch at Loughborough University shows how working-age benefit levels are well below the minimum income standards that members of the public believe are necessary to live a decent life. It is sobering to reflect that if I were a single, unemployed person the £71 I would get a week in jobseeker’s allowance is less than a quarter of the allowance I can claim a day for attending your Lordships’ House.
The other fairness argument that has been put was articulated by the Chancellor in his Autumn Statement when he maintained that,
“fairness is also about being fair to the person who leaves home every morning to go out to work and sees that their neighbour is still asleep, living a life on benefits”.—[Official Report, Commons, 5/12/12; col. 669.]
As has already been said, this has encouraged the framing of the debate in the loathsome terms of strivers versus skivers in which striving is misleadingly treated as synonymous with paid work and skiving with out-of-work benefit receipt. With reference to this the Joint Committee on Human Rights, of which I am a member, has reminded the Secretary of State,
“of the importance of fostering respect for the dignity of the vulnerable, including benefits claimants”.
I am very glad that so many noble Lords have made the point about the importance of the language that we use.
I hope in this context that noble Lords will also have regard to a new Joseph Rowntree Foundation study, which debunked the conventional wisdom of an intergenerational culture of worklessness despite a search in the kind of areas most likely to produce it. The researchers found that typically young people,
“aspired to a life that included work”,
The study said:
“Without exception, parents also hoped for better for their children and, where possible, made practical efforts to help them towards employment”.
The noble Lord, Lord Bates and Lord Sheikh, are not in their places, but they might like to read that study because they seem to believe that a dependency culture exists widely in this country. Study after study demonstrates the work commitment of people in receipt of benefits, and I am sure noble Lords would not want to follow the example of the Conservative Back-Bencher in the other place who insisted during the Second Reading debate that,
“there is evidence of a culture of worklessness, whatever the Joseph Rowntree Foundation says”.—[Official Report, Commons, 8/1/13; col. 238.]
And what was the evidence? It was a caller to LBC radio.
A number of pieces of JRF research have also illuminated how the demonising division of the world into strivers and skivers belies the constant movement in and out of work at the bottom of today’s insecure labour market. The assumption that people out of work are skivers ignores the ways in which they strive to get on and to help their children to get on, strive to care for their families and often to improve their local communities, too. I suggest that it is an unfair slight on the good name of many of our fellow citizens to write them off as “shirkers”, “welfare dependents” and undeserving of decent benefits.
It is also unfair to suggest, as did the Secretary of State recently, that many of those in receipt of tax credits are somehow getting what they are not entitled to. This smacked of an attempt to deflect the evidence that around half of those affected by the Bill are in working households. This discrediting of tax credits ignores the ways in which, as has already been noted, they have supported low-income working families whose earnings have been squeezed during the recession, and have probably contributed to the lower than expected level of unemployment. To then compare the increase in benefit levels with these same squeezed wages as justification for this Bill, which also cuts tax credits, is to add insult to injury.
I suggest that the Government’s arguments do not withstand scrutiny. Instead, this is an unnecessary, political bill designed to divide one group of low-income people from another and to court public opinion. The one silver lining is that opinion polls suggest that the public are less enthusiastic than the Chancellor of the Exchequer had perhaps anticipated. By fixing benefit upratings at an arbitrary 1%, regardless of what happens to inflation over the next three years, rather than assessing the situation in the normal way, year by year, the Government are, in the words of the Institute for Fiscal Studies, exposing,
“the poorest in society to inflation risk”,
a point made powerfully by the noble Lord, Lord Kirkwood.
As even the right honourable John Redwood warned in the other place:
“If inflation suddenly took off”—
I am not sure about “suddenly”, because I have been reading reports about the new Governor of the Bank of England talking about economic policy which may well increase inflation—
“this would become a much tougher and crueller policy”.—[Official Report, Commons, 21/1/13; col. 66.]
It is already a tough and cruel policy. It does not deserve your Lordships’ support.
Lord Macdonald of Tradeston
My Lords, as previous speakers have emphasised, the impact of the Bill must be seen in the context of the radical reforms taking place across the welfare system—reforms which my noble friend Lady Hollis denounced so comprehensively in her coruscating and, indeed, moving speech following the equally persuasive critique of the right reverend Prelate the Bishop of Leicester.
At this late stage with so many criticisms so well expressed, I say simply that disabled people have suffered particular uncertainty and distress. Unfortunately, the changes proposed to their benefits in the Bill add more uncertainty. Yet, when announcing the Bill last year, the Chancellor said that he would exempt some benefits for disabled people and carers from the 1% cap on uprating. Indeed, the exceptions of disability living allowance and the support component of employment and support allowance are to be welcomed as an acknowledgement that disabled people need additional protection in these difficult economic times.
Regrettably, however, these protections do not go far enough to protect disabled people who have collectively experienced an estimated drop in income of £500 million since the emergency Budget of 2010. The reality is that measures in the Bill mean that many disabled people and their carers will experience cuts in the support that is essential if they are to cope with and overcome the barriers and extra costs that they face as a result of their disabilities. A serious concern relates to the changes around the employment and support allowance. The noble Lord, Lord Low of Dalston, has already explained in detail how the disabled will be left worse off. I will not repeat his excellent analysis, except to remind your Lordships that these cuts could cost disabled claimants between £63 and £88 per year.
On previous occasions, I have spoken in the House about the difficulties faced by those who suffer from dystonia. I declare an interest as patron of the Dystonia Society. Dystonia is a neurological condition which affects 70,000 adults and children in the UK. It causes involuntary and sometimes very painful muscle spasms, and is experienced by approximately 20% of disabled people with cerebral palsy. Many sufferers receive employment and support allowance, and for some that is essential support. Dystonia can be unpredictable, with symptoms varying from day to day, which makes regular employment a challenge. However, with adequate support, many will endure their dystonic spasms to prove that they are ready to work at least as well as they can. It seems unfair for the support that they should receive to be further threatened by this Bill. I therefore ask the Minister to consider amending the Bill to ensure that all aspects of the employment and support allowance are uprated to keep pace with inflation. I look forward to his response.
Lord Best
My Lords, my contribution to this debate considers the implications of the Bill for the nation’s housing. However, in the wider debate I align myself firmly with those who believe that there are better ways to reduce the national deficit than by cutting living standards for the poorest. For example, I note the announcement today of the Government’s intention to raise more funds—that is, more than were previously planned—through inheritance tax. I have made my own proposals in this House for other measures that would spare those on the lowest incomes; for example, by reducing the non-means-tested single person’s council tax discount, rather than reducing council tax benefit for current recipients. I do not enter this debate with the belief that cuts to the incomes of the very worst-off are an essential part of deficit reduction.
Turning to housing matters, I shall highlight three ways in which housing will be affected by the 1% limit on benefit increases. First, the new 1% cap on increases to local housing allowances—the housing benefit for private sector tenants—will accentuate the reluctance of landlords in the private rented sector to offer new tenancies or renew existing tenancies to those who rely on benefits. The new cap on rent increases on its own might not look significant but we have seen a succession of limitations on local housing allowances and another one is bound to affect landlord attitudes.
If the landlord puts up the rent by more than the 1% limit for the local housing allowance, the shortfall for the tenant to make up—the gap between the actual rent to be paid and the amount received by way of the allowance—will widen, taking more out of the tenant’s meagre income that is needed for other costs. Of course, as landlords will note, these extra pressures on tenants’ incomes make rent arrears more likely. The last thing that these landlords want is the hassle and expense of evictions. I was glad to note the special help through exemption from the 1% LHA cap for areas with the highest rents. But, because of the reductions to other benefits, a household in London is still likely to lose more than £500. This obviously increases vulnerability to getting into trouble with rental payments.
The Government had hoped that the caps and ceilings they have already applied to their support for housing costs would lead to private landlords lowering rents accordingly. But in most areas—very prominently in London and the south of England—rents have gone up instead. Last year, they increased by 7% in London and 3.4% across England and Wales. Landlords have been able to charge these rents because they can let to tenants who are not in receipt of benefits. Because so many new households in reasonably paid jobs are now unable to buy, landlords in much of the country can choose to take in these better-off homeseekers in place of those who need benefits.
As rents rise and the incomes of those in work do not keep up, more working households are requiring help with housing costs. New figures from the Building and Social Housing Foundation show that the proportion of housing benefits going to people in work is rising significantly, and working households now account for 90% of all new claimants. Caps on local housing allowances, therefore, affect the hard-working families whom the Government want to protect. Discouraging private landlords from letting to those in receipt of benefits means more working households, as well as those without a job, being left with nowhere to go.
This brings me to the second likely effect of the Bill: the adverse impact on social housing. The decline in home ownership, and the resultant ability of private landlords to choose to house those on rather higher incomes, magnifies the importance of the social housing providers. However, I fear that the Bill—not on its own but, as in the private sector, in combination with other reductions in support for tenants—will make things more difficult. A large proportion of housing association and council tenants derive income from benefits due to fall in real value for three years. If the gap between 1% and inflation, particularly inflation of food and fuel prices, is modest, this extra burden may not be too disastrous; if the gap is wide, as the noble Lord, Lord Kirkwood, has set out, those affected will really be struggling by year three. Even so, the 1% uplift is unlikely to be catastrophic; rather, it is the cumulative impact of this latest cut, on top of earlier reductions in help, which is likely to be pretty devastating for several hundred thousand social housing tenants, and therefore for their landlords, too.
I detect a gradual awakening to the magnitude of the problem that one of these changes will bring. This is the “underoccupation penalty” for those deemed to have a spare room. I named this the “bedroom tax” some 18 months ago and, although these words have been strongly criticised, I stand by them. I will spare your Lordships at this late hour another analysis of the truly awful consequences for 660,000 social housing tenants of this penalty, levy or tax. However, already I note that this measure is, understandably but unfairly, turning tenants against their social landlords, who will be required to collect the bedroom tax next April at an average of £14 per week per household. The anxieties of these housing providers about their ability to extract the money from hundreds of thousands of tenants, some of whom may already be in debt, is compounded by the knowledge that the Bill will mean that the real income of many of their tenants is now destined to fall. Combine this with the impending imposition of council tax at 20% to 30% for the same people, and the financial position of social housing tenants, and therefore of social housing, looks increasingly fragile. Throw in the new regime for paying housing benefit in big monthly sums directly to tenants, who face horrendous choices in juggling debts and spending on very low incomes, instead of the benefit going straight to the landlord, and the risk multiplies that rents do not get paid.
To those social housing tenants struggling with these new burdens, including bedroom tax, council tax, and caps on other benefits, the Bill before us may be the final straw. If landlords take the strain because arrears mount, and evictions and emergency housing cost a fortune, the housing associations and local authorities will have less money to support their local communities; to do all the preventive work that helps families to get on; to regenerate the neighbourhoods where they work; and, which brings me to my final point, to fund their production of additional homes.
The final way in which housing is likely to be affected by the Bill relates directly to the commitment of the Department for Communities and Local Government to addressing the very reason why welfare expenditure on housing costs is so high and is continuing to rise, not fall. This underlying cause of the UK’s appalling housing situation, now affecting almost every household in their 20s and 30s, is the acute shortage of homes that they can afford. This pushes up prices and rents, absorbing disproportionate percentages of income in return for questionable quality.
Housing shortages push up the welfare bill and mean taxpayers having to subsidise more people and to higher levels than in our competitor countries. Each year, the UK’s national housing deficit—the accumulating gap between extra homes required and new homes built—is growing by more than 100,000. This has to be reversed and DCLG Ministers are determined to get more homes built. That policy addresses the cause of rising housing benefit costs rather than the Department for Work and Pensions’ capping of benefits, which treats only the symptoms and simply penalises the victims of housing scarcity. Regrettably, the Bill will make the task of DCLG Ministers more difficult.
Private sector housebuilding must be boosted, but even if housebuilders got back to building at the levels of the boom years before the credit crunch of 2008, we would still be constructing far fewer homes than the number of households formed annually and still be adding to the national housing deficit each year. It is essential that the social housing sector massively boosts its output. I declare my interests as chairman of the Hanover Housing Association and president of the Local Government Association and stress the value of councils themselves building more homes once again.
With a steady source of secure income from their rent rolls, social landlords can borrow at low interest rates and can grow significantly with only modest capital subsidies. The disruption caused by the forthcoming succession of cuts to support for their tenants will hold back this potential for growth. Social landlords are making much increased provision to cover expected rent arrears. This diminishes the resources available for new work. The loss of income also reduces the confidence of their private sector lenders and deters ambitious development programmes which the nation desperately needs.
This is not a good Bill for housing. Directly in the private rented sector and indirectly but very significantly in the social housing sector, this latest instalment in the cumulative impact on very low-income households is likely to mean not just personal hardship for tenants but a negative influence on the whole housing scene and an undermining of other government departments’ genuine efforts to tackle not the symptoms but the cause of this country’s immense housing problems.
Baroness Massey of Darwen
My Lords, speaking at this point is always something of a challenge as most things have already been very effectively said. I shall be brief but I wish to build on the many brilliant and incisive speeches that have made reference to child poverty. I shall focus my remarks on the potential impact of the Bill on children and I shall conclude that the Bill needs a complete reworking.
I am aware that the Government wish to deliver a new welfare system. The question is: why punish children? Have we not learnt from all evidence, including recent significant reports, that every intervention with young children is the greatest safeguard we have for saving money in the long term, with reductions in criminal and other risky behaviour and greater achievement by children as they grow up? The noble Baroness, Lady Gardner of Parkes, mentioned economic sense. Surely giving children all the help they can get is economic sense. I submit that it is inaccurate and disrespectful to blame child vulnerability on parents who are deliberately out of work or addicted to drugs and alcohol. These are not the majority of parents.
I recall the responses to the Autumn Statement and to the Bill by charities, particularly those engaged in fighting child poverty. The Children’s Society urged the Government to reconsider the Bill, stating that, if it were passed, millions of children and families would suffer. The Child Poverty Action Group has said that the Bill will increase both absolute and relative child poverty and that the precepts of the Bill are “indefensible”.
I remember, too, as a trustee of of UNICEF UK, report cards on child well-being across the world’s richest countries—the result of research carried out for UNICEF by the Innocenti Research Centre. Report Card 7, published in 2007, provided a picture of child well-being across six dimensions, including material well-being, health and education. Britain did badly across the board. Report Card 10, on measuring child poverty and which covered the period up to 2009, indicated the relationship between the proportion of GDP spent on children and its consequences, and showed that policy choices by Governments significantly affected the lives of the poorest children. As to the UK, the report concluded that even though the UK had missed its own targets to reduce child poverty to 1.7 million by 2010, it had one of the largest reductions in child poverty. This was attributed to the previous Government’s focus on increasing household income.
The research and concerns that I have mentioned, and there are many others, speak for themselves. Why are the Government seemingly ignoring the evidence base for child poverty, ignoring those organisations that work with children and families, and ignoring the calls of families themselves who are worried about how they will feed, clothe and maintain the welfare of their children? Are all these people wrong? I think not.
Barnardo’s, as noble Lords will know, works directly with young people and their families through a network of services across the UK. Barnardo’s states that the Bill will impose real-terms cuts to the incomes of highly vulnerable and disadvantaged families who are receiving in-work or out-of-work benefits. Many such people are in work but on low incomes. The policy will punish children by trapping them in poverty. It is naive to berate certain groups for pushing children into poverty. We need to look at the true, broader picture. For young people aged between 16 and 24 who are seeking jobs, the allowance is £56.25 a week, and many vulnerable young people, including those leaving care, have no family to support them. How are they to cope?
It has been estimated and admitted by the Minister after the Second Reading debate in another place that 200,000 children will be pushed into poverty by the impact of this Bill—a figure mentioned in previous speeches. This is despite the fact that the Government are legally committed to meeting the targets set out in the Child Poverty Act, as my noble friend Lady Lister of Burtersett, has said. If we take the policies introduced by the Government since they came into office, it can clearly be shown that the poorest half of the population has become poorer, with the poorest losing out the most. At present, 3.6 million live in poverty. The Child Poverty Act places a duty on the Government to end child poverty by 2020. The Institute for Fiscal Studies, however, predicts that by 2020-21 absolute and relative child poverty will be 23% and 24% respectively; therefore, a further 1 million children will have been pushed into poverty by 2020.
The Government decided to cut benefits by linking them to consumer price index, rather than retail price index, inflation. If the Government were to introduce the second of these—the RPI—the poverty figure would grow. Families are suffering from the changes to the hours rules for working tax credit, from recent cuts to housing benefits and from the time-limiting of employment and support allowance for people who are too ill to work—to name but a few issues. In addition, the localisation of support for people on low incomes who pay council tax will be introduced. This will reduce the budgets of many families on out-of-work benefits. The abolition of the Social Fund and its replacement with local schemes seems very likely to be damaging to vulnerable families.
I could go on about reductions in childcare tax credit, increases in VAT, the tax credit for babies under one year-old, the increase-in-earnings taper of working tax credit, caps in housing benefit and the family element of child tax credit, which has been abolished for middle earners. Others have discussed other inequities very comprehensively.
I return to my primary concern about the Bill: it will be detrimental to the well-being of children, especially vulnerable children. The link between benefits and inflation should be preserved; benefits should increase by at least the level of the consumer price index; or the most vulnerable children should be protected by removing from the Bill child benefit, child tax credit and the child elements of universal credit.
The Bill needs a complete reworking. Let us hope that we can do that in Committee. I do not think that children should suffer the potential for greater child poverty. As I said earlier, any deterioration in child health and well-being will cost us dear in future. All children are the future and we jeopardise that at our peril.
Baroness Sherlock
My Lords, this has been an extraordinary debate. I hope that someone gives the proceedings to the Prime Minister to read. With it, they could give him a DVD of his pre-election appearance on the “Andrew Marr Show” in 2010 when he told the nation that he wanted to,
“take the whole country with me. I don't want to leave anyone behind. The test of a good society is you look after the elderly, the frail, the vulnerable, the poorest in our society. And that test is even more important in difficult times, when difficult decisions have to be taken, than it is in better times”.
We have heard many compelling arguments today against this Bill but I suggest that that statement from the right honourable David Cameron is one of the best. How far this Government have come from the days when its leader promised to protect the most vulnerable families in financially difficult times. Perhaps coalition has not tempered him after all.
My noble friend Lord McKenzie destroyed the case for this Bill in his powerful opening speech and many noble Lords have backed him up since then. Precious few speakers have disagreed with him. The noble Lord, Lord Bates, did his best, as did the noble Lord, Lord Sheikh, and they both stressed the need for fairness as cuts were being made. Coincidentally, that point was also made by the Chancellor of the Exchequer, George Osborne, when he introduced the Autumn Statement on 5 December 2012 when this Bill was announced. He spoke of the need to find savings in a way that was fair. He said that we need,
“to have a welfare system that is fair to the working people who pay for it”.—[Official Report, Commons, 5/12/12; col. 877.]
Just in case the point was not clear, the Guardian reports the Chancellor telling the “Today” programme:
“It is unfair that people listening to this programme going out to work see the neighbour next door with the blinds down because they are on benefits”.
So there we have it: this Bill is intended to penalise the workless in order to be fair to working people. What we have heard today has exposed that statement as being as misleading as it is disgraceful. We are not in a position where the country is populated by workshy people, living in houses where they claim £80,000 in housing benefit a year. The noble Baroness, Lady Gardner of Parkes, may want to know that in fact the limit for housing benefit is £400 a week.
As many noble Lords have noted, contrary to what the Government would have us believe, this Bill leaves behind some of the hardest-working members of our society; 68% of those hit are in work. The Bill will take an average of £165 a year from the pockets of 7 million working households. The Autumn Statement means that the real income of a one-earner working family is set to fall by £534 a year on average in 2015-16. That is without the average £14 a week in bedroom tax coming over the horizon for a third of social sector tenants, or the loss of council tax benefit of at least £5 a week for poor families.
The noble Lord, Lord German, said it is better to take small sums from a large number of people. They may be small sums to some people but I warrant that £10 a week will be sorely missed in those households. The Government’s whole argument about the need to incentivise and reward work is, as the right reverend Prelate the Bishop of Ripon and Leeds said, smoke. In fact I would go further than that. It is really music hall smoke and mirrors—the old-fashioned kind, where you direct the spotlight at the unemployed man in the front row while the accomplice goes round the back and picks the pockets of 40,000 soldiers, 300,000 nurses, 150,000 teachers, 510,000 shop assistants and more than 1 million administrators. This really is playing politics with the lives of hard-pressed families.
What really will be the effects of the Bill? We have heard only too clearly in the moving descriptions of the impact on the most vulnerable from the noble Lord, Lord Adebowale, and in the account from the noble Lord, Lord Best, of the problems being caused to so many low-income and middle-income families by the changes to housing support. According to Crisis, there has been a 22% increase in the number of people approaching their local authority as homeless in the past two years. Rough sleeping rose by 23% last year in England. The changes already made, and those coming through universal credit, have aggravated the problems caused by the serious shortage of affordable accommodation, as described by my noble friend Lord Whitty. This Bill will play its part by pushing low-income families further into a series of impossible choices. This point was made clearly by my noble friend Lord Touhig in a very comprehensive and powerful speech. Should they pay for food or heating; pay the bills or the rent?
Once again, as we heard from my noble friends Lady Donaghy and Lady Lister, there will be a disproportionate impact on women and children. Recent House of Commons Library research has shown that changes to tax and benefits in the Autumn Statement will hit women four times as hard. Of the £1.065 billion from new direct tax, tax credit and benefit changes in 2014-15 that the Library analysed in the Autumn Statement, an estimated 81%—£867 million—will come from women. This Bill is a key culprit. The list of benefits to be hit even includes statutory maternity pay. I do not think that we would have guessed that from the Chancellor’s description of the Bill’s rationale. I suppose that if I were about to give birth I might well have my blinds drawn at 8 am, but I do not think that was quite what the Chancellor had in mind.
It is not just mothers but children who are being hit. The right reverend Prelate the Bishop of Leicester, in a very powerful and impressive speech, reminded us that we are now in the shocking situation of being on course, according to the IFS and CPAG, to see a million more children in relative poverty by 2020. If the noble Lord, Lord German, thinks this poverty measure favours his Government, I would hate to think what would happen to child poverty with one that did not. I would be grateful if the Minister would tell the House how the Bill fits with section 14 of the coalition agreement, which states:
“We will maintain the goal of ending child poverty in the UK by 2020”.
Given the points made on this by my noble friends Lady Lister and Lady Massey of Darwen, what measures do the Government propose to bring forward to compensate for the effects of the Bill?
We have heard lots of figures today but if we remember no other statistic, let us remember this one from the Children’s Society: 11.5 million children will be adversely affected by the Bill. We heard very descriptively from my noble friend Lady Massey of Darwen about the risks posed to children. As Save the Children noted, the Bill will render parents less able to afford the basics in the short term, and will seriously limit the life chances of their children in the long term.
We also heard very powerful arguments from the noble Baroness, Lady Grey-Thompson, the noble Lord, Lord Low, the right reverend Prelate the Bishop of Ripon and Leeds, my noble friend Lord Macdonald of Tradeston, and others, about the impact of the Bill on disabled people. The Disability Benefits Consortium states that since the emergency Budget of 2010, disabled people have suffered a £500 million drop in their income. The Government tried originally to claim that they were protecting disabled people by exempting some benefits for disabled people and carers from the reduced uprating. Mr Osborne said in the Autumn Statement debate:
“We will support the vulnerable, so carers’ benefits and disability benefits, including disability elements of tax credits, will be increased in line with inflation”.—[Official Report, Commons, 5/12/12; col. 879.]
The truth was expressed succinctly by Richard Hawkes, the chief executive of Scope, who said:
“This bill doesn’t protect disabled people. In fact, it cuts support for the many disabled people who are looking for work”.
I think that the Minister has some explaining to do.
We are entitled to judge the Government by their own criteria. Has the Prime Minister passed his own test of creating a good society that does not leave behind the poorest in difficult times? When we are debating a Bill which, as my noble friend Lord McKenzie pointed out, means the unemployed will see their JSA rise by 71 pence a week while 8,000 people get an average tax cut of £2,000 per week, noble Lords may judge for themselves. Has the Chancellor passed his own test about being fair to working people? I think we know the answer to that, as well. In the Bill those working people are being asked to pay the price not only of the Government’s indefensible priorities but of the failure of their economic policy.
I was glad that the Minister acknowledged that unemployment is still a problem. The money this Bill will save will be about the same as the increase in social security spending resulting from the forecast rise in unemployment just between the Budget last year and the Autumn Statement. The pain will be felt by millions of households who are already close to the edge. The noble Lord, Lord German, asked us all where we would get the money from. As my noble friend Lady Hollis pointed out in her extraordinarily compelling speech, at heart the issue is simple. The Government have a choice and are choosing to cut payments to struggling households in order to fund a £3 billion tax cut for the highest earners in the country. I look forward to hearing the Minister defend that choice.
Lord Newby
My Lords, I thank all noble Lords who have taken part in today’s debate. It is an issue about which all participants feel passionately and I can well understand why. I will try to respond to as many questions as possible, but let me begin by reminding the House of the purpose of the Bill. As my noble friend Lady Stowell pointed out in her opening speech, this Government inherited an exceptional fiscal challenge. The financial crisis of 2008-09 resulted in the largest deficit since the Second World War and the UK experienced one of the deepest recessions of any major economy. Even before the recession began, the UK had the highest structural deficit of any country in the G7. This level of public spending was simply not sustainable. There are still tough choices to make. The savings from this Bill provide a significant contribution towards delivering the savings needed to ensure that spending is on a sustainable path. It is, of course, never an easy decision to take action on welfare spending and I understand only too well that the welfare system provides vital support to millions of people. I also understand that while benefit rates will rise in cash terms, they will be fall in real terms.
In these tough economic times, people have seen significant restraints in their pay across the public and private sectors. With welfare expenditure accounting for £1 in every £4 spent, it is simply unrealistic to think we can achieve the savings we need without taking further action on welfare. We have already had to take tough decisions on welfare spending in this Parliament, yet despite these, more than £200 billion was spent on welfare last year. Under the previous Government, spending for working-age people and children increased by around 60%—equivalent to an extra £1,400 cost per household in Great Britain. This is the context against which this Bill must be judged.
However, in making what we believe are necessary limits in welfare spending, I cannot stress enough that our motivation is not, to quote various noble Lords today, to “demonise”, to “stigmatise”, to brand the poor as undeserving, to impose a harsh ideology on them or to divide and rule. It is simply to help—albeit painfully—provide a sustainable platform for the public finances and the economy going forward. This is something that every citizen of the UK will benefit from in the longer term.
The right reverend Prelate, the Bishop of Ripon and Leeds, asked me for an assurance or statement that the vast majority of benefits claimants were not skivers. I am extremely happy to give such an assurance. Nobody in your Lordships’ House believes that to be the case; all of us know only too many people who are working extremely hard to make ends meet. I particularly acknowledge the point made by the noble Baroness, Lady Donaghy, about people on low incomes often having several jobs and still struggling to make ends meet. I acknowledge that that is the reality for many people in Britain today.
We have to return to the main point. If the savings from this Bill were not delivered here, they would have to be found somewhere else. That would mean additional pressure on other public services. To put this figure into context: £1.9 billion is equivalent to the salaries of about 45,000 nurses or around 40,000 teachers. To put it another way: it is equivalent to 500,000 primary school places. Anybody opposing the Bill needs to explain where the money is coming from.
Baroness Hollis of Heigham
My Lords, did the Minister and his colleagues make the same consideration when they decided to take £3 billion in tax relief and give it back to millionaires? Will that money not also have to be found for the 40,000 nurses and so on? Is he about to tell us?
Lord Newby
Do not worry, my Lords, I am coming to that. The implications of some of the speeches we have heard today are that we should not be making cuts at all, that no civilised society would, even in today’s circumstances, reduce public expenditure. For those who take that view, all I can say is that we simply cannot possibly agree. For those who accept that we should be reducing the deficit but disagree with these changes, my challenge is and remains this: what would they cut instead? The noble Baroness, Lady Hollis, was clear that she would reduce payments to pensioners—
Baroness Hollis of Heigham
My Lords, what I said was that I would scrutinise the tax relief available for the building up of pensions which costs £32 billion, of which at least £8 billion comes from the fact that people on higher rate incomes get higher rate tax relief. That is what I said I would scrutinise: not money from pensioners, but from the way that pension savings are artificially supported by tax relief, two-thirds of which goes to the better off.
Lord Newby
My Lords, I am extremely grateful to the noble Baroness for correcting me. In that case, and in view of her earlier intervention, I think that what she and the noble Baroness, Lady Sherlock, are saying is that the money will be raised from the millionaires who, in their view, are getting a windfall benefit of £3 billion. I believe that that is what both noble Baronesses have said. But it is clear that either they have not read or they do not believe the report from the Office for Budget Responsibility which suggests that the impact of reducing the higher rate of tax from 50% to 40% is probably £100 million and may be negative. The Government therefore simply do not accept the figures which have been quoted against us. The figure of £1 billion a year to which I think the noble Baronesses have referred was based on an HMRC static comparison. What we know only too well is that given the chance of paying 40% or 50%, the rich—surprise, surprise—change the way in which they order their affairs. There is no pot of gold through a 50% tax rate. My view is that, frankly, the Opposition are all confusion about this.
In the Second Reading debate on the Bill in another place, the right honourable David Miliband was widely praised for saying:
“The Government have projected the cost of all benefits, all tax credits and all tax relief for the next few years, and I am happy to debate priorities within that envelope. I will take the envelope that they have set, but let us have a proper debate about choices, not the total sum—a priorities debate, not an affordability debate”.—[Official Report, Commons, 8/1/13; col. 217.]
The Government have set out their priorities, but frankly, Labour has not begun to set its out. I do not know whether the Opposition agree with David Miliband. I certainly do not know, within the context of overall expenditure cuts, what their priorities will be. We have decided to protect pensioners as a top priority; does Labour agree? We have decided to take millions of people out of income tax as an incentive to work; does Labour agree? We have decided that people on high earnings should no longer get child benefit; does Labour agree? If it does not—and on some of those points, I simply do not know whether it does or not—what other cuts is it proposing in order to keep within the Government’s spending envelope, or within the terms of its own Fiscal Responsibility Act 2010 which committed the Government to halving government borrowing by the 2013-14 financial year. We look forward to hearing the answers, but it is clear that we are not going to hear them today.
Baroness Lister of Burtersett
My Lords, the noble Lord made the point about raising people out of tax, but in my speech I said that that is the least good way of targeting help on low-income families. It is a much worse way than, say, improving child benefit. Can he explain why the Government think that it is better to put money into personal tax allowances rather than protecting the incomes of people who are too poor to pay tax?
Lord Newby
My Lords, we think it is a basic principle that people on very low incomes should not be paying income tax. It may be a difference of view between this side of the House and the other side, but this is the view that we have taken. This is the policy that we are introducing and we will continue with it.
A number of noble Lords asked why we are proceeding via a legislative route. We believe it is only right that we set out our plans in advance and give as much certainty as possible. The Bill gives certainty on further savings, making a crucial contribution to our plans and helping us to maintain credibility, not least in the markets. We have to keep reminding ourselves that even a one percentage point rise in effective mortgage rates would add £12 billion a year to households’ mortgage interest payments, costing the average household with a mortgage around £1,000 a year. Given the current level of the deficit, such an interest rate rise, in the absence of a credible fiscal policy, is perfectly plausible. The IMF made this element clear when it said in October:
“To anchor market expectations, policymakers need to specify adequately detailed medium-term plans for lowering debt ratios, which must be backed by binding legislation or fiscal frameworks”.
This Bill takes us in that direction.
A number of noble Lords asked what will happen if inflation soars. First, the independent MPC remains committed to maintaining price stability, which is defined by the Government as an inflation target of 2%, as measured by the 12-month increase in the CPI. Although inflation is forecast by the MPC and the Office for Budget Responsibility to be above the 2% target in the near term, it is then forecast to fall back towards the target in the medium term. It is right that the Government make plans based on the best available forecast. However, we know that these are forecasts and targets and we are aware that external factors and unforeseen events can produce a different outcome.
We always monitor the rate of inflation and the impact that it has on households and the wider economy. That is why, in the Autumn Statement, we took action to help households with the cost of living, including cancelling the January fuel duty rise, providing funding for local authorities to freeze council tax and announcing a further increase in the personal allowance. We will continue to monitor the rate of inflation closely, based on monthly data on consumer price inflation published by the Office for National Statistics, and the impact that it has on the cost of living for families. This will continue to be a key consideration for this Government’s policies in the future.
Many noble Lords raised concerns over the impact of this Bill on poverty, particularly child poverty. I will start by saying that any two-dimensional measure for poverty, which looks at relative income only, is not an adequate way to measure progress on poverty. The most recent decrease in child poverty—a fall of 300,000 in the number of children in relative poverty in 2010—was due to the recession causing a fall in median income and pushing the poverty line down. That is clearly absurd, which is why we are consulting on a better measure of child poverty, one that includes income but goes beyond it to tackle root causes; for example educational failure, problem debt or worklessness.
In terms of how we tackle this issue, it is worth while looking at the success of the previous Government in dealing with child poverty. In the period 2003-04 to 2010, £170 billion was spent on tax credits but there was little or no progress in reducing the levels of child poverty. We in this Government want to look at some of these basic issues around educational failure, problem debt and worklessness. We recognise, as I am sure all noble Lords do, that education is one of the key factors in getting poor children out of poverty. That is why this Government are committed to providing additional funding for disadvantaged pupils through the pupil premium, which will rise by £2.5 billion a year by 2014-15. We are also spending £200 million extra in universal credit to support families with childcare costs. For the first time, this support will be made available to families who work fewer than 16 hours per week, which will mean that 100,000 more working families will be helped with their childcare costs. All two year-olds from low-income households will be able to access 15 hours per week of early education, starting with the poorest 20% in 2013 and extending it to 40% in 2014.
Debt is also a major problem for poor families, who not only take out debt but often take it out at extortionate rates of interest. That is why we are putting in place stronger, more responsive regulation of unsecured lending and other forms of consumer credit to ensure that borrowers are protected and can be confident of getting a fair deal, and why we have given the Financial Conduct Authority power to regulate loan sharks and cap interest from payday lenders for the first time.
However, work is the best route out of poverty. As my noble friend Lady Stowell set out at the start of this debate, the Government are reforming the welfare system to improve incentives for individuals to enter work. Universal credit will not only improve the financial incentives offered for people who want to work but will simplify the benefits system. Replacing the main benefits with one single payment and removing the complex system of hours rules and different tapers that currently exist means that claimants will understand that they are better off getting a job and increasing their hours. Under universal credit, 3.1 million households will benefit by an average of £39 a week and up to 250,000 children will be taken out of poverty. Any household whose migration to universal credit is initiated by the DWP will receive transitional protection, and there will be no cash losers from the policy.
A number of noble Lords have spoken eloquently about issues facing the disabled. I repeat that we have protected those benefits designed to reflect the additional costs that disabled people face as a result of their disability. Of course, as we have heard, this does not mean that no disabled people will be affected. In common with other working-age recipients, many disabled people will also be claiming benefits that include help towards everyday living expenses or housing costs, but those benefits for the extra costs of disability are protected. I am afraid that I cannot give the noble Lord, Lord Macdonald of Tradeston, the assurance that he is seeking in respect of ESA, but I suspect he is not too surprised about that.
Government policy towards disability is not limited to benefit levels. We will shortly be publishing the most comprehensive analysis of available data about disability since 2005, entitled Fulfilling Potential: Building a Deeper Understanding of Disability in the UK Today. This will help inform the next stage of our disability strategy: the development of actions, outcomes and indicators. It will help increase public understanding, change attitudes and enhance the commitment to improving the lives of disabled people. We are setting up a new disability action alliance, bringing together organisations of disabled people and organisations from across government and the public, private, voluntary and community sectors. This will take forward practical actions at both the national and local level, making a real difference to the lives of disabled people. We will publish a further strategic document and action plan to include the alliance actions as well as actions across government in the spring.
There have been a number of questions about the cumulative impact of the various changes that have been made in recent years and why the Government have not produced an analysis of these to the extent that people would like. Looking at the cumulative impact of tax, tax credit and benefit reforms since the June 2010 Budget, the top 20% of households continue to make the greatest contribution towards reducing the deficit as a percentage of their income and benefits in kind from public services. So far, HMT’s analysis has not included universal credit. Separate analysis shows that three-quarters of the gainers from UC are in the bottom 40% of the income distribution.
As noble Lords know, the analysis in this area is extremely complicated, and breaking down the results in detail is extraordinary difficult to do accurately, if not impossible. Similarly, not all policy changes can be modelled robustly, and the IFS has acknowledged that the effects of dynamic reforms such as those to disability living allowance and housing benefit cannot be precisely modelled. In these circumstances, it would be simply irresponsible for the Government to do so.
I shall try to respond to a number of specific questions as quickly as I might. The noble Lord, Lord German, asked me to commit the Government to no further welfare cuts in this Parliament. I remind him that at the Autumn Statement 2012, the Government said that detailed spending plans for 2015 and 2016 would be set in the first half of this year. We cannot prejudge the outcome. By “first half of this year”, we mean the back half of the first half of this year.
The noble Lord, Lord Bates, referred to the living wage. The Government support the idea of the living wage. Civil servants are paid the living wage; and contractors, for example at the DWP, are paid the living wage. My guess is that the living wage will increasingly become the norm, particularly in London.
The right reverend Prelate the Bishop of Ripon and Leeds asked about asylum seekers. Asylum-seeker benefit rates are a matter for the Home Office and are not within the scope of the Bill. I will draw his remarks to the attention of my colleagues in the Home Office, because I know that the right reverend Prelate feels strongly about that matter.
The noble Lords, Lord Kirkwood, Lord Whitty and Lord Best, and the noble Baronesses, Lady Donaghy and Lady Lister, in various ways talked about how the growing disparity between benefits and earnings impacts among other things on the housing market. There are very long-term, secular changes in the relationship between benefits and earnings and, as the noble Lord, Lord Whitty, said, there are long-term failings in the operation of the housing market. We will have many opportunities to discuss these, no doubt in Committee but more generally in your Lordships’ House. I am sorry that I have not been able to deal with them tonight. There are quite a number of issues that noble Lords have raised this evening that I have been unable to cover, and I look forward to debating them in Committee.
Welfare spending accounts for more than a quarter of all public spending. In these touch economic times, when people across the public and private sectors have seen significant restraint in their pay, this Bill finds the right balance between finding savings from welfare while ensuring that benefits and tax credits continue to be increased in cash terms. I commend the Bill to the House.