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Angie Bray (Ealing Central and Acton) (Con)
1. What assessment he has made of the benefits of comparative performance data in raising standards in the NHS.
The Secretary of State for Health (Mr Jeremy Hunt)
Comparative performance data are essential to raise standards in the NHS. I have therefore commissioned a review from the Nuffield Trust to consider whether aggregate ratings of provider performance should be used in health and social care, and if so, how best this should be done.
Angie Bray
My right hon. Friend will be aware that NHS North West London has made considerable use of comparative performance data to justify closing four A and E departments in one concentrated part of its area. Charing Cross, Ealing, Hammersmith and Central Middlesex are the four A and E departments closest to my constituents, who will be wondering how their closure will raise standards of health care provision locally. Does my right hon. Friend appreciate that there will be strong support among my constituents for any calls to review the decision and the use of comparative performance data?
Mr Hunt
I first congratulate my hon. Friend on campaigning extremely hard on behalf of the views and concerns of her constituents throughout the process of the decision that was finally made by NHS North West London last Tuesday. Comparative performance data have a very important role to play, particularly with regard to excess mortality of people who use A and E on weekends. I am, however, aware of my hon. Friend’s concerns and will consider them carefully if, as is likely, the decision is reviewed by Ealing council.
Grahame M. Morris (Easington) (Lab)
I thank the Secretary of State for his previous answer. Comparative data are essential in compiling an evidence base on which to plan effective health interventions. Will he use the radiotherapy data sets that his Department publishes as a basis to inform planned investments in advanced radiotherapy systems, particularly in regions like mine which lack such equipment?
Mr Hunt
I know that the hon. Gentleman asks a lot of questions about radiotherapy. We use a strict evidence base before we make any investments. We also want to embrace innovation, but our absolute priority is to save as many lives as possible from cancer. He will know that we are in the lower half of the European league tables when it comes to cancer survival rates, and that is something that we are determined to put right.
John Pugh (Southport) (LD)
On collecting performance data, has the Secretary of State seen the NHS Confederation publication “Information overload: tackling bureaucracy in the NHS”, which points to a great deal of duplication in information? What is his reaction to it?
Mr Hunt
There is far too much bureaucracy in the NHS, which is why I have asked the chief executive of the NHS Confederation to report to me on how we could reduce the bureaucratic burden on hospitals by a third. If there is a lesson from the Francis report on the tragedy at Mid Staffs, it is that we need to free up the time of people on the front line to care, which is what they went into the NHS to do.
Mr Jamie Reed (Copeland) (Lab)
The hon. Member for Ealing Central and Acton (Angie Bray) asked a key question. Under the secondary legislation being introduced by the Secretary of State under section 75 of the Health and Social Care Act 2012, local commissioning groups will be forced to allow private providers into the NHS. These private providers will be exempt from the Freedom of Information Act, which will make it harder for patients to compare data between providers. It cannot benefit NHS patients for core clinical services to be given to private providers that do not have to conform to the same standards of transparency as those in the NHS. Will the Secretary of State see reason, ensure a level playing field for the NHS and withdraw the section 75 regulations without delay?
Mr Hunt
Who exactly are the section-75 bogeymen that the hon. Gentleman hates: Whizz-Kidz who are supplying services to disabled children in Tower Hamlets, or Mind, which is supplying psychological therapy to people in Middlesbrough? The reality is that those regulations are completely consistent with the procurement guidelines that his Government sent to primary care trusts. He needs to stop trying to pretend that we are doing something different from what his Government were doing when in fact we are doing exactly the same.
Rehman Chishti (Gillingham and Rainham) (Con)
2. What support his Department has given to local authorities in respect of their new public health responsibilities.
The Parliamentary Under-Secretary of State for Health (Anna Soubry)
The Department has continued to work with all its partners to ensure that there is a swift and effective transition of public health responsibilities to where they should be—back with local authorities. We have made available £15 million to ensure that the transition is successful and complies with all the requirements that we have laid down.
Rehman Chishti
I thank the Minister for that answer. I invited the Silver Star charity to my constituency on Friday, where it offered free diabetes tests to all residents. Will local authorities be encouraged to work with such charities to improve public health?
Anna Soubry
The Silver Star bus is making many journeys because as well as going to my hon. Friend’s constituency, it is coming to mine on Saturday. It is an outstanding charity that provides diagnosis at a local level. I pay tribute in particular to the right hon. Member for Leicester East (Keith Vaz) because the charity goes to communities that are often hard to reach, such as the Asian community, where we need to do good work to reduce the level of diabetes, both type 1 and type 2. I look forward to local authorities working with outstanding charities such as Silver Star.
John Healey (Wentworth and Dearne) (Lab)
Why is the public health grant for next year £58 per person in Barnsley and £53 per person in Rotherham, but £130 per person in Westminster and in Kensington and Chelsea, especially given that deprivation is less and life expectancy at least seven years longer in those wealthy, Tory London boroughs?
Anna Soubry
I do not accept that for one moment. I am exceptionally proud of this Government’s commitment to public health which, in the difficult times that we have inherited, has ensured that local authorities are in some cases receiving an increase of some 10% in spending on public health. That is a record that I am proud of and that the Labour Government could not have matched.
Miss Anne McIntosh (Thirsk and Malton) (Con)
My hon. Friend will be aware that the local authorities and the Food Standards Agency have a public health responsibility to ensure that food entering schools and hospitals is appropriately labelled and is safe and healthy to eat. Does she have absolute confidence in the procedures that have been followed in that regard or might she be prepared to review them?
Anna Soubry
I am grateful for that question. I pay tribute to all my hon. Friend’s work on this matter, especially as Chair of the Environment, Food and Rural Affairs Committee. This has been a difficult time for all concerned. We need to ensure that all food is what it says on the label. Important work needs to be done to ensure that that is the case and to restore confidence to all consumers. We are very mindful of that in the Department.
Keith Vaz (Leicester East) (Lab)
I thank the Minister for her very kind comments. I know that the charity Silver Star is looking forward to visiting her constituency on Saturday and testing her for diabetes. I am sure that we will find her in perfect health. I remind her that, according to the national health service, it will take five years before all diabetics have access to the full nine checks. Will she consider issuing guidelines to local health and wellbeing boards to ensure that they raise awareness of diabetes?
Anna Soubry
I am concerned, as we all are, about diabetes and about the recent report. We have accepted all but one of its recommendations and a lot more work needs to be done. I pay tribute to Silver Star and to the work of Diabetes UK, for example in Boots. I was happy to go to the launch of a new system whereby people can go to clinics at Boots and get the sort of checks that Silver Star is doing. We recognise that there is a lot more work to be done and are making every effort to ensure that there is a huge improvement in the diagnosis and outcomes of everybody who is affected by diabetes.
Simon Hughes (Bermondsey and Old Southwark) (LD)
3. What recent assessment he has made of the future demand for accident and emergency and maternity services at (a) Guy’s and St Thomas’ NHS Foundation Trust and (b) King’s College Hospital NHS Foundation Trust.
The Secretary of State for Health (Mr Jeremy Hunt)
I have accepted the trust special administrator’s broad recommendations on the future of A and E and maternity services in south-east London. Appendix E of the administrator’s final report outlines the forecast A and E activity and births in south-east London, and the methodology used to determine that information. That includes activity at Guy’s and St Thomas’ NHS Foundation Trust and King’s College Hospital NHS Foundation Trust.
Simon Hughes
I am grateful for the Secretary of State’s answer. Following his statement and decision, does he recognise that there are still two significant concerns? The first is that any downgrade of A and E and maternity services in Lewisham will put pressure on the other trusts which they cannot cope with. The second is that there is not yet support among all GPs and clinicians, including in Lewisham, for the current plan. Will he assure me that he will seek their support before anything is implemented, and that he will give us the assurances that we need?
Mr Hunt
I recognise the concerns that the right hon. Gentleman outlines. As he knows, we have allocated £37 million to help the other four A and E departments that will take the 25% of cases that will no longer go to Lewisham to deal with that extra capacity. He is right to say that the way in which the plan is implemented will be critical. We need to do it properly and extremely carefully to ensure that we meet the concerns that he talks about.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
When the Secretary of State announced his decision to downgrade Lewisham’s A and E services and transfer the patients to St Thomas’ and King’s, he said that Sir Bruce Keogh, the medical director of the NHS, had reviewed those proposals and that:
“He believes that…these proposals…could save up to 100 lives every year”. —[Official Report, 31 January 2013; Vol. 557, c. 1075.]
Having read Sir Bruce Keogh’s review, I can tell the House that he makes no mention whatsoever of saving 100 lives each year. Will the Secretary of State now apologise for misleading the House?
Mr Speaker
Order. Just before the Secretary of State replies, I ought to say to the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock) that she is perhaps suggesting that the Secretary of State may have inadvertently, rather than deliberately, misled the House. Could she just confirm that? A nod of the head would suffice.
Mr Speaker
That is the right hon. Lady’s suggestion, and it is for the Secretary of State to respond as he thinks fit.
Mr Hunt
Thank you, Mr Speaker.
Sir Bruce Keogh accepts the calculations that were made in the proposals put forward by the trust special administrator that the plans would be likely to save about 100 lives a year, because they would allow the hospitals in south-east London to move towards the London quality standard, which would mean reducing excess mortality at weekends. Sir Bruce Keogh accepted that, and I accepted his view of it.
Mr Speaker
Order. Many London hospitals and the representatives thereof have an interest in the question. Newark is some distance away, but I feel sure that the hon. Gentleman’s supplementary question will be not about Newark but purely about these London hospitals. On that basis, I am delighted to hear from him.
Mr Speaker
I am disappointed, but never mind. We will hear from the hon. Gentleman ere long on another matter, I feel sure.
Heidi Alexander (Lewisham East) (Lab)
Demand for A and E services at Guy’s and St Thomas’ and at King’s will go through the roof if Lewisham’s full A and E closes. The Secretary of State may claim that he is keeping a smaller A and E at Lewisham, but that is nothing more than dangerous spin. No blue-light ambulances will call at Lewisham under his plans, and even the College of Emergency Medicine says that they do not meet its definition of an emergency department. How on earth can the Secretary of State be so confident that other hospitals in south-east London will be able to cope once he has taken the axe to Lewisham?
Mr Hunt
I recognise that the hon. Lady has been campaigning hard for her constituents, but she massively overstates her case. The reality of the proposals is that 25% of the people who go to Lewisham A and E will no longer go there—the most complex cases among her constituents, who will get better treatment as a result. Those 25% will be spread among four other A and E departments, and we are allocating £37 million to help them upgrade their capacity. That is a sensible proposal that will save the lives of her constituents.
Andrew Gwynne (Denton and Reddish) (Lab)
Local Members of Parliament are right to raise concerns about future capacity at Guy’s and St Thomas’ and at King’s. The recent King’s Fund report showed that between October and December 2012, many A and E departments in England faced their worst winter in almost a decade. Standards of care are deteriorating, with too many people waiting too long to be seen and many being left on trolleys in corridors or waiting in ambulances stuck outside A and E. Does the Secretary of State now accept that the NHS is struggling to cope with the toxic mix of cuts and reorganisation, and that patients in south-east London and elsewhere are paying the price for this Government’s mismanagement of the NHS?
Mr Hunt
Really, from a party that closed or downgraded 12 A and E departments when in office, I would expect a slightly more mature attitude to an extremely difficult and complex problem. We will not take any lessons in meeting A and E targets from that lot. The reality is that we met our A and E targets last year, but in Wales, where Labour cut the NHS budget by 8%, they have not met their A and E targets since 2009.
Mr Russell Brown (Dumfries and Galloway) (Lab)
4. What the reason is for the time taken to produce the Government’s sexual health policy document; and when he now expects it to be published.
Kate Green (Stretford and Urmston) (Lab)
11. What the reason is for the time taken to produce the Government’s sexual health policy document.
The Parliamentary Under-Secretary of State for Health (Anna Soubry)
This is an important document, which we want to get right. I anticipate that it will be published next month.
Mr Brown
Will the sexual health policy document contain a strategic plan, effectively resourced by Government, to address and reduce HIV stigma, especially among health care professionals, the police, media, teachers and social services? Perhaps a good starting point could be to draw on the lessons and the success of the Government’s anti-stigma work on mental health.
Anna Soubry
I certainly support the sentiment behind the hon. Gentleman’s question, and make it clear that I wanted to ensure that the document included the need for everybody to eradicate prejudice in all sexual health work. I was very keen to put that in the document, and I am sure he will join me in welcoming its publication, which will, we hope, be next month.
Kate Green
The under-18 pregnancy rate has fallen by 25% in the past 10 years. Will the Minister confirm that the strategy document will make it clear that it is important to protect specialist, dedicated sexual health services for young people, such as the Brook service at the Talkshop in Trafford in my constituency?
Mr Mark Spencer (Sherwood) (Con)
Does my hon. Friend recognise the excellent progress that has been made in vaccination against the human papillomavirus to prevent cervical cancer in young girls? Will she find the time to meet me to discuss the benefits of vaccinating boys against that virus?
Anna Soubry
Yes, it is always a great pleasure to meet my hon. Friend, and he raises an important issue. I have met a number of other colleagues to talk about their concerns about screening—or rather the lack of screening—for young women under the age of 25 in relation to cervical cancer. That is a concern and we look forward to working on that. I am very happy to meet my hon. Friend.
Liz Kendall (Leicester West) (Lab)
The Government have been woefully complacent about producing their sexual health strategy. The Minister constantly says that responsibility for decisions lies locally, but will she admit that the Government’s reorganisation has created huge confusion, splitting the commissioning of sexual health services between GPs, councils and the national board, and that the Government’s lack of interest has delayed the sexual health strategy by 21 months? Will she explain the reasons for the delay, and when the strategy finally comes out, will she commit to it addressing seriously the rationing of access to contraceptive services for women aged over 25?
Anna Soubry
Is it not remarkable to have criticism of a reorganisation from someone who supported a Government who had nine reorganisations in nine years? The sexual health strategy document is very important, which is why we are working hard to ensure that it is absolutely right. I re-wrote a large section to ensure that it will deliver—[Interruption.] I do not know why the hon. Member for Hackney North and Stoke Newington (Ms Abbott), from a sedentary position, says “Ah.” It is an important document and we want to get it right, and I am sure she will welcome it when it is published. However, let me make it clear: any delay in the document is not preventing rightful commissioning at a local level. I saw that yesterday when I went to Bedford and met the Brook organisation and the Terrence Higgins Trust, which have long been engaged, certainly in that county, in a tendering process from the local authority to continue to deliver excellent services.
Jeremy Corbyn (Islington North) (Lab)
5. What recent discussions he has had with the Whittington hospital on the proposed disposal of its assets and reductions in medical and non-medical staff.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
This is a matter for the local NHS, in particular the Whittington Hospital NHS Trust. Neither the Secretary of State nor the ministerial team have met with the trust recently on this subject.
Jeremy Corbyn
That is a disappointing reply from the Minister. Is he aware that the Whittington is a successful, popular, local district general hospital, yet, as part of its application to become a foundation trust, it is proposing to: sell off a quarter of its land; make 500 of its staff, including many nurses, redundant; and reduce the number of beds to 177, roughly half the current figure? This is, apparently, to provide a better service to the community, a point totally lost on the thousands of local people who are angry at the reduction in their hospital services. They see it as a prelude to its ultimate closure as a district general hospital with an A and E department. Will the Minister take an interest and perhaps intervene to protect a very good local hospital from this not very sensible plan?
Dr Poulter
The hon. Gentleman is right to highlight the fact that the trust has handled this issue badly at a local level, but, as he will know, decisions about local health care reside with local trusts. The point is this: if we look at the plans, the trust is talking about selling off land that is mostly not used for clinical purposes and reinvesting that money in front-line patient care: investing £10 million in improving the maternity department, which has already benefited from £750,000 from the Government only this year; £2.9 million in the same-day treatment centre to support A and E and treat patients faster; and £1.9 million for a new undergraduate education centre and library. Those assets are being sold off to directly influence and improve patient care, which has to be a good thing.
Ms Diane Abbott Hackney North and Stoke Newington) (Lab)
Is the Minister aware of how angry and concerned Londoners are about the threats to their health service—not just about the £17 million property sales at the Whittington and the drop in bed numbers, but about the threat to four A and Es in north-west London and, of course, the A and E in Lewisham? Ministers have accused campaigners of overstating the case. Is that not a complacent attitude? Surely doctors and residents on the ground know the value of these services better than Ministers in Whitehall. Is he aware that Londoners came out in unprecedented numbers to fight for Lewisham hospital and will continue to fight for the best possible NHS services in our region?
Dr Poulter
The hon. Lady is absolutely right to highlight the fact that service changes have to be clinically led, meet the tests we have outlined and engage with communities effectively, but the point is that the previous Government also redesigned and changed services, very often for the benefit of patients. When the redesign of services is clinically led and services are better delivered for patients, that has to be a good thing so let us look at these proposals. If they are clinically led, let us see whether they deliver improved care for patients, and if they do, it is the right thing to do.
Kelvin Hopkins (Luton North) (Lab)
6. What assessment his Department has made of harm caused to babies by alcohol consumed during pregnancy; and if he will make a statement.
The Parliamentary Under-Secretary of State for Health (Anna Soubry)
Foetal alcohol syndrome is a severe, lifelong condition caused by heavy alcohol consumption during pregnancy, and foetal alcohol spectrum disorder is usually less severe. There is a consensus, however, that FASD is more widespread.
Kelvin Hopkins
I thank the hon. Lady for her answer and for her recent letter to me on this subject. She will be aware of the Medical Research Council’s research suggesting that 7,000 babies are born every year suffering from serious genetic and permanent damage. Just as worrying, however, is that even moderate consumption can have an impact on IQ. In America, all drinks containers must have the following written on them:
“According to the surgeon general, women should not drink alcohol beverages during pregnancy because of the risk of birth defects.”
When will the Government insist that all drinks containers in Britain carry the same slogan?
Anna Soubry
The hon. Gentleman makes a very good point. Our advice is clear and the chief medical officer continues to give this advice: women who are pregnant or trying to become pregnant should not drink alcohol. If they feel that they must drink it, they should drink one or two units once or twice a week, at the very most. Our advice is clear, but he makes a good point, and I am happy to discuss it with him further.
Jim Shannon (Strangford) (DUP)
Recent NHS figures show that £2.7 billion was spent on alcohol-related illnesses. Will the Minister consider a campaign across the whole of the United Kingdom, including the Northern Ireland Assembly and Northern Ireland as a region, to combat the issue of drinking during pregnancy?
Anna Soubry
That is a very good point. The overconsumption of alcohol, whether by a pregnant woman or not, greatly concerns the Government, and that is one reason we want to introduce a minimum unit price of 45p. It was a good point well made, and I am always happy to meet the hon. Gentleman to discuss the matter further.
Mrs Madeleine Moon (Bridgend) (Lab)
7. What funding his Department has allocated to research into pre-senile dementia.
The Secretary of State for Health (Mr Jeremy Hunt)
The National Institute for Health Research supports a wide range of research, including a number of studies of pre-senile dementias, more commonly known as early-onset dementias. This includes 85 studies recruiting patients with dementia and a further 17 in the set-up phase.
Mrs Moon
I declare an interest.
Dementia in the ageing population is beginning to be better understood and recognised—I appreciate the Government’s efforts on this—but there are also the frontotemporal dementias, such as Pick’s, corticobasal degeneration, Lewy body, progressive supranuclear palsy, Parkinson’s and stroke-related dementias, which are early onset. There is less understanding and awareness of these dementias. I welcome the Government’s commitment to research in this area, but we also need to extend understanding among nurses, general practitioners and care providers. Will the Government ensure that this wider understanding is available and extended?
Mr Hunt
I thank the hon. Lady for her interest in early-onset dementia. She is absolutely right: there is a widespread lack of understanding of dementia in general, and of early-onset dementia in particular. In addition to the research that I mentioned in my earlier answer, we are also looking at a major programme to engage GPs. Sadly, some GPs still think that it is not worth diagnosing someone with dementia, and there is a lack of understanding that we absolutely have to put right.
Jason McCartney (Colne Valley) (Con)
Government and charitable spending on dementia research is 12 times lower than spending on cancer research, with £590 million a year being spent on cancer research and only £50 million being invested in dementia research. What steps can we all, including the Government, take to increase the amount of investment in dementia research?
Mr Hunt
My hon. Friend makes an important point, and he will be pleased to learn that the Government are more than doubling the amount of money that we put into dementia research. We need to catalyse the private sector companies because although they know that the size of their potential market of people with dementia is huge, they have been frustrated in their attempts to find the breakthrough medicine that we urgently need. We need to use the research to excite their interest and keep them focused on this truly tragic disease.
Julian Sturdy (York Outer) (Con)
8. What steps his Department plans to take to improve dementia diagnosis rates and to reduce regional variations in such diagnoses.
The Secretary of State for Health (Mr Jeremy Hunt)
There are unacceptable variations in the level of dementia diagnosis across the country, and we are committed to driving significant improvements. We have asked local areas, through the NHS mandate, to make measurable progress in improving dementia diagnosis over the next two years.
Julian Sturdy
In North Yorkshire and York, only 43% of those suffering from dementia receive a diagnosis. Given the ageing population in the county, that means that about 7,000 people with dementia remain undiagnosed. Does my right hon. Friend agree that the clinical commissioning groups have a large role to play in the delivery of dementia services, and will he tell us what support those groups will get?
Mr Hunt
My hon. Friend is absolutely right. It is a tragedy for those 7,000 people and their families that they are not getting a diagnosis. With a diagnosis, medicines and drugs could have a big impact and stave off the condition for between one in three and one in four people, and support services could also be put in place for carers. We need a massive transformation, and we need to make it much easier for people to get a diagnosis. We need much better understanding among GPs, as I mentioned earlier, and among hospitals as well, given that 25% of all in-patients have dementia.
Karl MᶜCartney (Lincoln) (Con)
9. What recent discussions he has had with officials in his Department on the forthcoming NHS investigation into mortality indicators.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
Ministers have discussed the terms of reference for the review of hospitals that have been highlighted as outliers for the last two consecutive years using nationally published mortality indicators. The terms of reference were published by Professor Sir Bruce Keogh on Friday 15 February.
Karl MᶜCartney
Just over a year ago, I asked the previous Secretary of State a question about gagging orders and the specific case of Mr Gary Walker, the former chief executive of United Lincolnshire Hospitals NHS Trust. In the light of the recent news that our local health trust is now being investigated amid concerns over patient safety, what assurances can the Minister give the House that such Stalinist gagging orders, which have cost the taxpayer £15 million in the past few years, will be outlawed as soon as possible, to ensure that, under this Government, it will not take 81 requests to ensure that patient safety is paramount?
Dr Poulter
My hon. Friend is absolutely right to highlight the fact that all staff in the NHS should feel able to speak up and raise concerns about patient safety, so that the organisations for which they work can take up their concerns and investigate them. He will be aware that the people who raise such concerns are protected under the Public Interest Disclosure Act 1998.
Barbara Keeley (Worsley and Eccles South) (Lab)
Last week I visited Salford Royal hospital, which has the lowest death and weekend mortality rates in the north-west, and the seventh lowest in the country. It is interesting to note that Salford also has higher ratios of nurses per in-patient bed, and that individual wards in the hospital publish data on their rates of MRSA, ulcers and falls. Does the Minister accept that good practice at hospitals such as Salford Royal should be investigated alongside the poor practice and high mortality rates in other hospitals?
Dr Poulter
The hon. Lady is absolutely right. That is exactly what the review is about. It is going into the 14 hospitals in which concern has arisen over mortality data, looking at the practices there and commissioning a peer review of them from leading clinicians and patient groups. That will help to raise standards of practice where required.
Sir Peter Tapsell (Louth and Horncastle) (Con)
In supporting the points that have just been made by my hon. Friend the Member for Lincoln (Karl MᶜCartney), may I tell the Minister that, as he might expect, there is considerable anxiety among my Lincolnshire constituents over the fact that the United Lincolnshire Hospitals NHS Trust has a higher than average mortality rate? Will he tell us when the promised review of the situation will begin, and who will be conducting it?
Dr Poulter
To reassure my right hon. Friend, the review is being carried out and led by Sir Bruce Keogh, the NHS medical director. We are already well under way in implementing the review. It should be in place by the very early summer to inform Members of this House and to make improvements to patient care at the local trust level.
Ian Austin (Dudley North) (Lab)
People in Dudley were concerned to discover that higher than average mortality rates have led to Russells Hall hospital in my constituency being investigated. I have written to Sir Bruce Keogh to ask whether he or a member of his team will meet me to discuss the inquiry, so that we can find out exactly what has been going on and local people can provide information to it. How does the Minister think that things at the hospital will be improved when nurse numbers in the NHS are being reduced, waiting lists at the hospital have gone up by 177% and the NHS in Dudley has had to spend £20 million on a costly and bureaucratic reorganisation instead of on improving front-line care?
Dr Poulter
I had thought that the hon. Gentleman had risen on a consensual note, raising his constituents’ concerns—and he was right to do that. The review is about making sure that any failings in care in local trusts are picked up and improved. The fact of the matter is that waiting times are down under this Government in comparison with the previous Government and many more additional clinical staff are working in the NHS—about 2,000 more than under the previous Government. At the same time, we have cut 18,000 administrative and management posts, and the money from that is being reinvested in front-line patient care.
Mr Speaker
If the hon. Member for Crawley (Henry Smith) wishes to come in on this question, he may, but he is not obliged to do so.
David Mowat (Warrington South) (Con)
10. What assessment his Department has made of the effect of hospitals built under the private finance initiative on the work of neighbouring hospitals.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
This Government recognise that no hospital operates in isolation. We are providing seven NHS trusts that are facing difficulties as a result of PFI agreements with access to a £1.5 billion support fund to pay for extra costs accrued as a result of those damaging PFI schemes.
David Mowat
I apologise for my voice—perhaps I shall soon be interacting more directly with the NHS.
The Warrington and Halton hospital has independent trust status. It is busy and getting busier. The previous Government built a huge PFI hospital about 10 miles away at Whiston, which does not have the patient volumes to sustain the demands of the botched PFI deal. It is heavily loss-making. Will the Minister provide assurance that there will be no forced merger and that my constituents will not pay for a bad decision made a decade ago?
Dr Poulter
I thank my hon. Friend for his question. He is right to highlight the very damaging PFI scheme signed by the previous Government for the St Helens and Knowsley NHS Trust. The percentage of annual turnover going on PFI payments at the moment is 14.2%. That is unsustainable, which is why this Government are trying to sort out the mess created by the previous Government’s signing up to too many PFI agreements.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
The Minister will be aware that support for excess PFI costs was an important element in the report of the trust special administrator in south-east London, to which the Secretary of State referred in an earlier exchange. That recommendation was widely welcomed. However, as I highlighted in questions a month ago, the Government have not accepted the financial recommendations of the trust special administrator for the capital costs and the transitional costs inherent in his recommendations. If the Government wish to proceed with these changes, will the Government agree to meet those costs as well?
Dr Poulter
The right hon. Gentleman is in dangerous territory talking about PFI schemes to which the previous Government signed up. No hospital operates in isolation. The South London Healthcare NHS Trust was paying out 13.9% of its turnover on the PFI. That was unsustainable. It has caused huge difficulties in the local health care economy and affected patient care, which was a very bad thing to do. The right hon. Gentleman needs to recognise that this Government are providing £1.5 billion-worth of support to many trusts that have struggled under these PFI agreements—
Mr Speaker
Order. I am grateful to the Minister, but we have many questions to get through and the answers are sometimes just too long.
Priti Patel (Witham) (Con)
12. What steps his Department is taking to increase the availability to patients of GPs and specialist health services.
The Minister of State, Department of Health (Norman Lamb)
The Department of Health is currently working with key partners to support the increase of training numbers in general practice. From 1 April, the NHS Commissioning Board will be responsible for commissioning primary care medical services and specialised services. It will have a duty to commission those services in ways that improve quality and promote integrated care. Clinical commissioning groups will be responsible for commissioning most other services.
Priti Patel
The Minister is aware of the need to increase health care provision in Witham town. Can he reassure me that the appalling financial legacy of Mid Essex primary care trust will not hold back proposals to provide much-needed health care in the town?
Norman Lamb
I applaud my hon. Friend for repeatedly raising her constituents’ concerns about this subject. We have made it absolutely clear that primary care trusts must work closely with clinical commissioning groups to ensure that they meet the challenges of the current financial year. As for the future, the joint strategic needs assessment and the health and wellbeing boards will provide real accountability locally, and I think that my hon. Friend will be able to feed into that to ensure that her constituents are given the health services that they need.
Alison Seabeck (Plymouth, Moor View) (Lab)
The Limbless Association wrote to Members of Parliament this month expressing concerns about proposals for the commissioning of extremely specialist prosthetic services, which would reduce patient choice and oblige the patient to follow the money rather than vice versa, and would damage some highly skilled professionals in the field. When did the Minister last meet representatives of the Limbless Association, and will he agree to meet them with me?
Norman Lamb
I should be happy to meet the hon. Lady and members of the association to discuss those concerns further.
Mr Stephen Dorrell (Charnwood) (Con)
There is currently much talk about the importance of integrated services. Can my hon. Friend assure us that when commissioning primary care, the NHS Commissioning Board will emphasise the importance of integrating it with the other community health services supplied by the NHS, and that social care will be included in that fully integrated service?
Norman Lamb
I am happy to give my right hon. Friend an absolute assurance to that effect. The Department and I are working closely and collaboratively with both the Commissioning Board and the Local Government Association to ensure that we deliver integrated care, which is much the best way of keeping patients out of hospital and maintaining their condition.
Fiona Mactaggart (Slough) (Lab)
What is the Minister doing to ensure that there are enough GPs in areas with high, rapid population growth?
Norman Lamb
There are plans to increase the number of training places for GPs, with the aim of providing more than 3,000 extra places by 2015. That will fully meet the needs to which the hon. Lady has referred.
Henry Smith (Crawley) (Con)
13. What steps he has taken to support research on the most common causes of premature mortality.
The Secretary of State for Health (Mr Jeremy Hunt)
We are still far too low in the European league tables for premature mortality, particularly in respect of cancer, liver disease and respiratory diseases. I have therefore made improving our performance a key priority.
Henry Smith
Can the Minister say a little more about what is being done to prevent early mortality as a result of heart disease?
Mr John Baron (Basildon and Billericay) (Con)
19. It is widely accepted that late diagnosis of cancer makes for premature mortality. Will the Government recommend the inclusion of proxy measures such as staging and accident and emergency admissions in the outcomes indicator set, as a way of complementing the one and five-year survival measures? That would give us a more complete picture of how CCGs are performing in encouraging earlier diagnosis.
Mr Hunt
I congratulate my hon. Friend on his campaigning. No sooner do we agree to the inclusion of one indicator in relation to early cancer diagnosis than he finds another that should also be included.
I will certainly consider the issue that my hon. Friend has raised, but I think that there is a broader question about the role of GPs. They should see themselves as being in the front line when it comes to early diagnosis of not just people who walk through the doors of their surgeries, but people in their communities who are at high risk. That is a much more fundamental change that we need to think about.
Paul Blomfield (Sheffield Central) (Lab)
14. What was the change in the level of spending in real terms on adult mental health services in 2011-12.
The Minister of State, Department of Health (Norman Lamb)
It is the responsibility of local commissioners to ensure that resources are used effectively to meet the needs of their local populations. According to the national survey of investment in adult mental health services for 2011-12, cash investment rose between 2010-11, but real-terms investment fell by 1%.
Paul Blomfield
I will meet Sheffield Mind on Friday, and one of the issues we will be talking about is the impact of that fall in spending on crisis care. Mind’s research shows that crisis care teams are often under-resourced and overstretched, with four in 10 trusts having staffing levels below the Department’s own guidelines of 14 staff to 25 service users. Does the Minister think that is acceptable, and if not, what is he going to do about it?
Norman Lamb
The Government inherited an institutional bias against mental health in the NHS. [Interruption.] It is absolutely true; when the 18-week target was introduced, nothing was available for those suffering with mental health problems. Mental health patients did not benefit from choice that was introduced elsewhere in the NHS. I completely agree with the hon. Gentleman about the importance of crisis services, and the first NHS mandate has required the Commissioning Board to do work on the availability of mental health services and to ensure that we can introduce access standards so that mental health service users and patients benefit from the same rights as those with physical health problems.
Patrick Mercer (Newark) (Con)
First, may I thank you for your earlier guidance, Mr Speaker?
May I thank the Department for its approach to the ravages to which Newark health care has been subjected, principally by the last Government, and thank the Minister for his forthcoming visit to Newark and assure him that mental health care services, which have been diminished in Newark, will certainly be top of the agenda?
Norman Lamb
The Minister who will visit Newark is, in fact, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), but I am grateful to my hon. Friend the Member for Newark (Patrick Mercer) for raising this issue and for highlighting the importance of mental health care. The mandate makes it very clear that the Commissioning Board and the NHS must make measurable progress towards achieving parity of esteem by 2015.
Alun Cairns (Vale of Glamorgan) (Con)
15. What recent estimate he has made of the potential savings to the NHS of making better use of technology.
The Secretary of State for Health (Mr Jeremy Hunt)
PricewaterhouseCoopers estimates that the NHS could save £4.4 billion every year through proper investment in IT, which is one of the reasons I set the NHS the challenge of becoming fully paperless by 2018.
Alun Cairns
I am grateful to the Secretary of State for his answer, but can he assure me that investment in new technology will release resources for patient care, rather than follow the pattern over the past 15 years, when investment in new technology has detracted from the available resources?
Mr Hunt
My hon. Friend makes an important point. In encouraging such investment, we are thinking about the nurse who recently reported that in order to admit someone to trauma she had to fill out a 22-page admission form and another 10 forms after that. The whole point of this move is to free up the time of professionals on the front line so that they can spend more time with patients.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
The Secretary of State will be aware that the general practice extraction service contract has recently been awarded to French IT firm Atos Healthcare. Given the concerns expressed by the Public Accounts Committee and the National Audit Office about the way in which Atos has performed in respect of other contracts let by the Government, what has the Secretary of State got in mind to ensure that there are safeguards for patient data under the general practice extraction service contract?
Ms Margaret Ritchie (South Down) (SDLP)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Health (Mr Jeremy Hunt)
The last month has seen the Government take two radical steps that will fundamentally improve the quality of health care in this country. First, in our response to the Francis report on the appalling tragedy at Mid Staffs, we announced the setting up of a chief inspectorate of hospitals based at the Care Quality Commission. That will introduce compassionate care, patient feedback and expert peer review into a system that has been too long dominated by targets and box-ticking. Secondly, in response to the Dilnot report, the Government announced a long-term solution to the funding of social care, which will both help thousands of low-income pensioners avoid having to sell their homes and make us one of the first countries in the world where it is as normal to save for social care costs as it is to save for a pension.
Ms Ritchie
This week I will meet my constituents Neal and Rita Denvir, whose son, Fionn, made a miraculous recovery from meningitis. Many are not so fortunate, however, so will the Secretary of State pledge his support to the Meningitis UK “Beat it now” campaign, and include the newly licensed vaccine for meningitis B in the NHS childhood immunisation programme, so that no family has to live with the terror of that terrifying disease?
Mr Hunt
As the father of two young children, I completely share the hon. Lady’s passion for this issue and I am happy to give my support to Meningitis UK. The decision on whether to include a meningitis jab in the immunisation campaign is made by an independent expert panel, and I will always follow its advice.
Nick Herbert (Arundel and South Downs) (Con)
T2. We used to believe that tuberculosis was beaten in this country, but the number of instances of it is increasing, and there were more than 9,000 new cases last year. Does that not suggest, particularly when the incidence of drug-resistant TB is a concern, that a comprehensive public health strategy is needed to tackle the disease? What steps is the Department taking to lead that strategy?
The Parliamentary Under-Secretary of State for Health (Anna Soubry)
I am grateful for that question, because my right hon. Friend has identified the fact that TB is a growing problem. We are exploring the effectiveness of an approach across health sectors for a national strategy on TB, while ensuring that we recognise the local variances. We need to improve in that area.
Andy Burnham (Leigh) (Lab)
I am sure that, like me, the Secretary of State has spent recent weeks absorbing the Francis report and its recommendations; there are lessons for everyone at every level, particularly on staffing. New analysis to be published later today will show that the NHS is set to lose 12,000 nurses over the course of this Parliament, raising doubts about its ability to respond to Robert Francis’s recommendations on staffing. Will the Government say today whether they accept those recommendations and the principle of a minimum staff-to-patient ratio?
Mr Jeremy Hunt
If the right hon. Gentleman had read the Francis report carefully he would have, first, observed that the appalling tragedies covered in that report happened between 2005 and 2009, when nursing numbers were going up. So to say that this is an issue about nursing numbers is to miss the point completely. This is not an issue where there is a quick fix; it is an issue about the NHS having become dominated for far too long by a culture of targets at any cost. Unpicking that culture is the biggest challenge we face if we are to return a culture of compassionate care to the NHS.
Andy Burnham
I have read both Francis reports, and I think it is essential that everybody learns the lessons—that is what I said—including Labour Members. It is also important that we do not repeat the mistakes, and the first Francis report said that the problems were caused because the trust cut staff to dangerously low levels. The most worrying thing from the analysis that will be published today is that four in 10 of the jobs being lost come directly from services linked to the care of older people. Does the Secretary of State therefore agree that there is a danger that the NHS is already failing to learn the lessons of the recent past? Will he join me in sending a message to the NHS that care of older people should be a priority for improvement, not an easy target for cuts?
Mr Hunt
If we are to learn the lessons of the Francis report and admit to our mistakes, perhaps the right hon. Gentleman will reflect on the fact that, because we decided to protect the NHS budget, there are 8,000 more clinical staff in the NHS today, yet he still wants to cut the NHS budget from its current levels, as he confirmed only last December.
Mr Christopher Chope (Christchurch) (Con)
T3. In today’s edition of the Daily Express, the Prime Minister promises to prevent immigrants freeloading on our NHS. Words are one thing, but can the Secretary of State spell out exactly what actions will be taken to deliver on the Prime Minister’s pledge?
Mr Jeremy Hunt
I am happy to confirm to my hon. Friend that we intend to take some profound steps in this area, because we have a national health service, not an international health service. We have to ask whether it is appropriate for us to be giving free health care to short-term visitors, to students, to people on temporary visas. We will be saying more about that issue shortly.
Paul Blomfield (Sheffield Central) (Lab)
T6. On 13 March 2012, the former Secretary of State said of the Health and Social Care Bill:“There is absolutely nothing in the Bill that promotes or permits the transfer of NHS activities to the private sector.”—[Official Report, 13 March 2012; Vol. 542, c. 169.]However, the new NHS competition regulations break those promises by creating a requirement for almost all commissioning to be carried out through competitive markets, forcing privatisation through the back door, regardless of local will. Will the Secretary of State agree to make the regulations subject to a full debate and vote of both Houses?
Mr Jeremy Hunt
If the hon. Gentleman had listened to my previous answer, he would have heard that the regulations are consistent with the procurement guidelines that his own Government sent out to PCTs. It is not our job to be a champion for the private sector or the NHS sector; we want to be there to do the best job for patients. That is the purpose of the regulations.
Tessa Munt (Wells) (LD)
T4. Two years ago, the Prime Minister welcomed the installation of CyberKnife, the latest in cancer radio surgery equipment at the world-leading Royal Marsden cancer centre, as an example of how the NHS has progressed. Since then, the Royal Marsden has invited successive Health Ministers to visit the cancer centre but no one has accepted the invitation, and I am aware that Ministers have been to see other cancer treatment systems. Will the Secretary of State follow the Prime Minister’s lead and visit the Royal Marsden to see for himself the great progress that has been made there?
Anna Soubry
I understand that the Secretary of State has been to the Royal Marsden, but I am more than happy to accept the invitation and look forward to going along and seeing it for myself.
Graeme Morrice (Livingston) (Lab)
T10. What steps is the Secretary of State taking to prevent the fragmenting of the national health service through a massive reorganisation that is costing £3 billion, diverting much-needed resources from the front line?
The Minister of State, Department of Health (Norman Lamb)
The truth is that the Government inherited a completely fragmented NHS; we had managed institutionally to separate health care from social care, mental health from physical health and primary care from secondary care. At the heart of the legislation we have already passed and the proposed social care legislation, which we hope to introduce very soon, is the principle of integrated care. I am determined that that should be central in every area of the country so that we deliver proper care and avoid crises, keeping people out of hospital.
Mr Adrian Sanders (Torbay) (LD)
T5. The South Devon and Torbay clinical commissioning group is building on the integrated health and social care system for which many have praised the area. Will the Minister help complete the integration by assisting with the inclusion of mental health care services within the regime?
Norman Lamb
I thank my hon. Friend for that question and applaud the brilliant work that has been done in Torbay. There has been a reduction in hospital admissions because they care for people better. As I said in my last answer, it is essential that we integrate mental health in the system as well as physical health so that we give people proper care.
Nick Smith (Blaenau Gwent) (Lab)
On performance data, what plans does the Minister have to expand the friends and family test so that it provides the reasons for patients’ views and real-time feedback on their experience of services?
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
I thank the hon. Gentleman for his question. The friends and family test will give real-time feedback about patient services, but we need to ensure that the data from the test are used effectively by local trusts and scrutinised by the Care Quality Commission and other organisations so that they can go in if there are problems to ensure that they stand up for the rights of patients.
Alun Cairns (Vale of Glamorgan) (Con)
T7. Kevin Davies, a constituent from Cowbridge, visited my surgery yesterday. He is a prostate cancer patient and robotic surgery was deemed to be the most appropriate form of care. Unfortunately, robotic surgery for prostate cancer is not available in Wales and he was forced to travel to Bristol and pay £15,000 for the treatment. Will my hon. Friend agree to work with the Welsh NHS either to come up with a formal agreement whereby facilities are available to Welsh NHS patients or to press it to invest in its own facilities?
Anna Soubry
My hon. Friend makes a good point: in England, the NHS is benefiting from not suffering a cut in funding such as that imposed by the Labour Administration in Wales.
Helen Jones (Warrington North) (Lab)
The Prime Minister promised a fight to save district general hospitals, yet the Secretary of State’s recent decision on Lewisham suggests something completely different. Will the Secretary of State therefore give the House an assurance that the north Cheshire hospitals trust will not be forced into a merger or to downgrade its services because of financial problems elsewhere?
Dr Poulter
I know that the hon. Lady had tabled a question on this matter. The point is that a foundation trust has autonomy and cannot be coerced or forced into a merger. It is for the board of that trust to make decisions for the benefit of patients.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
T8. Patients in Suffolk are very worried about the performance of the ambulance service. In the past two months, less than 60% of ambulances have hit the target for reaching emergency cases. The strategic health authority and others, including all the MPs in the region, are not happy about that. Will the Government intervene, too?
Anna Soubry
With two Ministers in the Department from the east of England, I can assure my hon. Friend that all of us are aware of the concerns that she and other Members have about their ambulance trust and, if I may say so as an east midlands MP, about the East Midlands ambulance trust. I know that Earl Howe, who has responsibility overall, has offered a meeting with Members from the east of England, and I am sure that that meeting will produce the sort of benefits that everyone hopes for.
Mr Andy Slaughter (Hammersmith) (Lab)
Last week’s decision to close four north-west London A and Es, including Charing Cross and Hammersmith in my constituency, will shortly be on the Secretary of State’s desk, as he predicts. It was referred by Labour Ealing council because Tory Hammersmith and Fulham council supports the closures. Will the Secretary of State refer the matter for independent review? This is the biggest hospital closure programme in the history of the NHS. It will see a world-class hospital downgraded to 3% of its size.
Mr Jeremy Hunt
I am aware how concerned people are throughout north-west London about the proposals. If the matter is referred to me by Ealing council, I will indeed ask the independent reconfiguration panel for its independent view on the proposals.
Mr John Baron (Basildon and Billericay) (Con)
T9. The cancer drugs fund has been a huge success and has helped up to 25,000 patients, but the negotiations between the Government and the pharmaceutical companies on its replacement—value-based pricing—is causing real uncertainty for cancer patients and clinicians alike. For example, will new medicines be available to new patients under the new system and what guidance is being given to local cancer drugs funds as they wind down? Can we please have clarity urgently?
Mr Speaker
I think the hon. Gentleman was seeking an Adjournment debate and is disguising his request as a question, for which we are grateful.
Norman Lamb
I thank my hon. Friend for that question. I am happy to discuss it further with him. Value-based pricing will be primarily for new drugs, but obviously I understand his concern. It is the concern of the Government to ensure good access to cancer drugs for patients in the future.
Kerry McCarthy (Bristol East) (Lab)
Recent comprehensive research by the international study of asthma and allergies in childhood found strong evidence of a link between fast food and asthma, but when I asked the Minister which public health responsibility deal partners he had discussed that with, he said that evaluating science was not within their remit. Does he agree that if the fast food companies have the kudos of being classed as public health responsibility deal partners, they ought to look into such research and actually take some responsibility?
Anna Soubry
Those are good points well made, if I may say so. I am more than happy to discuss that further with the hon. Lady, because I take the firm view that everyone involved in making, manufacturing, supplying and selling food has a responsibility to make sure that all of us have longer, healthier, happier lives. I am all for ratcheting up the responsibility deal.
David Tredinnick (Bosworth) (Con)
May I alert my right hon. and hon. Friends to the recently published road map for complementary and alternative medicine in Europe, which cost the European Commission £1.5 million? Will they look at it carefully to see where services can be extended in our own national health service?
Dr Poulter
I assure my hon. Friend that we will look carefully at anything that he wants to put forward, but any treatment on the NHS needs, of course, to be evidence-based.
Helen Goodman (Bishop Auckland) (Lab)
Every year 18,000 epileptic fits are triggered by video games and screen-based activity. Can the ministerial team tell us what research is being done on that and what discussions they have had with the industry to make video games safer and improve the labelling?
Norman Lamb
I would be happy to look into that further. I recognise the significant concern that the hon. Lady raises. Often the diagnosis of epilepsy is not good enough and there needs to be much better co-ordinated care. The issue that she raises is important and I am happy to look into it further.
Andrew George (St Ives) (LD)
In spite of my right hon. Friend’s earlier comments, I am afraid that the regulation that implements section 75 of the Health and Social Care Act 2012 does not maintain the assurances previously given and risks creating an NHS that is driven more by private pocket than concern for patient care. Will the Secretary of State please withdraw that regulation and take it back to the drawing board?
Norman Lamb
We are looking at this extremely seriously. Clear assurances were given in the other place during the passage of the legislation, and it is important that they are complied with in the regulations.
Petition
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jonathan Evans (Cardiff North) (Con)
The petition has arisen following revelations about the unusual nature of experiments carried out on live kittens at Cardiff university, which involve the sewing up of their eyelids. A number of my constituents were so shocked by the revelations that Mr Derek Hector and Mr Dom Spens, who are committed to animal welfare and recognise the importance of this Chamber, organised a petition. They managed to gather 2,000 signatures at Cardiff university and six locations in central Cardiff over a period of barely 24 hours. That is an indication of the concern in my city over the issue.
The petition states:
The Petition of Derek Hector of 68 Heol y Forlan, Whitchurch, Cardiff, CF14 1BA and others,
Declares that the Petitioners consider that vivisection is dangerous to humans since drugs that have been passed for human use following testing on animals have later been found to have caused birth defects, organ failure and death; further that vivisection needlessly kills hundreds of thousands of animals and that vivisection delays the development of safe advances in medical, surgical and veterinary progress. It also declares that vivisection is a huge cost to tax payers, Cardiff University having spent more than £1.5 million during 2011 on the use of animals in experiments and that this is unacceptable when there are other 450 viable alternatives to vivisection which give far more accurate results.
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals for ending animal experimentation throughout Great Britain, including at Cardiff University.
And the Petitioners remain, etc.
[P001156]
Regulation of the Private Rented Sector
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jeremy Corbyn (Islington North) (Lab)
I beg to move,
That leave be given to bring in a Bill to provide for the regulation of letting agents; to protect tenants’ deposits; to require the enforcement of environmental and energy-efficiency standards in private-sector rented accommodation; to amend the law on secure tenancies; to provide for fair rent to be applicable to all rented accommodation; to require landlords not to discriminate against people in receipt of state benefits; to require local authorities to establish a private rented sector office; and for connected purposes.
Parliament has a responsibility to look seriously at the issues facing people who live in the private rented sector. For a long time, the sector has been ignored. Tenant protection was removed in the 1980s by the Housing Act 1988 and, at that time, the private rented sector was quite small. Indeed, in 2001, only 7% of people lived in the private rented sector. By 2011, this had risen to 17%, and by 2025 it will be 22 % of the population. In inner-city areas such as the one I represent, a third of people now live in private rented accommodation.
Private rented accommodation is very expensive, but when I questioned the Prime Minister on this subject he told me that the problem was that housing benefit costs in London had risen to £6 billion. The reason they have risen is because of the number of people placed in private rented accommodation by local authorities, which are fulfilling their statutory housing duties and have no control over rent levels. In return, the Government have now capped housing benefits at a very low level—given the effective rents charged—and the universal cap will cause even greater problems when it is introduced. Members who represent central London constituencies are already witnessing a massive depopulation of our communities as private sector tenants placed there by the local authority are having their benefit limited and they cannot afford to pay the difference between their benefits and the rent charged. Constituents come to me who have a difference of £100 and more between their benefit level and the rent level, which can be stupendous.
It is high time that Parliament looked at the situation facing people in the private rented sector and introduced thorough and comprehensive regulation. That is why I have introduced the Bill. To prepare for the Bill I have organised two public meetings in my constituency and invited private sector tenants to come along and tell me of their experiences. To put it mildly, those experiences are difficult to comprehend at times because of the sheer nastiness of some landlords towards some tenants. I am not saying that every private sector landlord is a bad person, or that they all go into the business with evil intent, but the lack of regulation means that many people suffer appalling treatment at the hands of this market. That is why we have to look at it.
Letting agencies are unregulated. They charge a search fee, which in some cases can run into several hundred pounds, but the search consists of no more than checking through a computer database to see whether they have any properties for that person. It is an unregulated area and it needs to be thoroughly regulated so that all those purporting to operate in the private rented sector can be registered and we know who they are. Deposits are often not returned, and if the landlord or letting agency is legally challenged they say that it was in fact rent in advance and therefore not liable to be returned. Excessively difficult questions are put concerning very minor changes that may have been made to a flat by someone living there.
If someone living in private rented accommodation complains to the local authority about the poor standards, the lack of repair, the lack of insulation or the sheer refusal of the landlord to engage with the tenant, they may be rapidly evicted. They then have no real redress in law to prevent that eviction, because the majority of private rented sector tenants are on assured shorthold tenancies lasting only six months. There is a real problem.
A group of tenants currently based in Hackney, although I expect similar groups to spread across London, have made an excellent submission to the Communities and Local Government Committee inquiry into the private rented sector. Their proposals include secure five-year tenancies, a requirement for landlords to provide a valid reason for ending a tenancy, a public register of all landlords paid for from the Land Registry, a requirement for decent homes standards to apply to all rented accommodation—not just council and housing association homes, but the private rented sector as well—and full vetting of private landlords before they let homes, including criminal record checks, tax records and previous warning letters from councils. It is time we went ahead with these proposals.
My Bill envisages tenant protection and five-year tenancies with a break clause for the tenant so that they can leave ahead of that time if they need to move away, have a job somewhere else or no longer wish to live in that area. Also, the Bill provides for the enforcement of all environmental standards, crucially including energy efficiency standards because the private rented sector tends to cost more and not just in rent levels, which are often horrendous—roughly three to four times what the local authority charges for similar properties in the same area. In addition, the Bill would protect tenants by ensuring that repairs are done and that if the landlord refuses to do them, that does not become a basis for eviction.
My Bill provides for non-discrimination. If someone walked along any high street anywhere in London, and probably anywhere in the country, and looked into a letting agency, they would see a sign saying, “No benefits here.” In other words, anyone in receipt of a state benefit is not allowed to apply for a private rented flat from that agent. That seems blatant discrimination against a very large number of people and ought to be outlawed. The crucial point for me is that we should return to rent regulation by a process of fair rents set by local rent tribunals. That would bring about a sense of fairness in the system, not the excessive and ludicrous profit-taking by a number of often very small landlords.
In order to implement the Bill, I would require the Secretary of State to consult within six months of the Bill becoming law on a formula for fair rents. Every local authority would be required to set up a local authority office to monitor all law that relates to the private rented sector, to ensure the return of deposits and to ensure that repairs are carried out in a decent and timely manner and that people can live in security and decency.
There are some good landlords in this country who have nothing to fear from this regulation. Indeed, some groups of landlords have been in touch with me to say that they would welcome such legislation because it would provide a sense of fairness. But there are many very bad landlords and many people who make ludicrously excessive profits from private sector rentals. I have come across a case in my constituency where someone who was able to buy a council flat under right to buy some years ago at a very heavy discount is now letting the flat at £600 per week. That is enough for that person to live on, from a flat that they were able to buy. This could be replicated all over the country in different situations.
The previous Housing Minister once told me that he thought rent regulation was a very bad idea because it would damage the property market and that was the fundamental driver of economic success in this country, but other countries manage to regulate the private rented sector. Germany, for example, has full regulation, with virtually permanent tenancies and a very good standard of accommodation to go with it. New York, which last time I looked was pretty much a free market capitalist economy in every other way, has a degree of rent regulation.
We need to provide security, decency and reliable landlords for those people who are unable to buy and unable to access local authority or housing association accommodation. The time is well past for us to legislate to look after a quarter of our population who are living in the private rented sector. I hope the House will support the Bill and give me leave to introduce it.
Question put and agreed to.
Ordered,
That Jeremy Corbyn, Mark Durkan, Sir Bob Russell, Mr Elfyn Llwyd, Caroline Lucas, John Healey, John McDonnell, Katy Clark, Grahame M. Morris, Paul Goggins, Mr David Lammy and Mr David Ward present the Bill.
Jeremy Corbyn accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 26 April and to be printed (Bill 140).
Groceries Code Adjudicator Bill [Lords] (Programme) (No. 3)
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I beg to move,
That the Order of 19 November 2012 (Groceries Code Adjudicator Bill [Lords] (Programme)), be varied as follows:
1. Paragraphs 4 and 5 shall be omitted.
2. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.
3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.
I hope that this will be the second day in a row when I can speak to a Bill on which there is broad agreement across the House. The programme motion allocates three hours for debate before we move on to Third Reading, which we think will allow us plenty of time to consider any issues that might be raised on what is—let us remember—quite a narrow and tightly focused piece of legislation, and one that enjoys considerable cross-party support.
Mr Peter Bone (Wellingborough) (Con)
I am always worried when a Minister starts by saying that Front Benchers and the usual channels have agreed on a Bill, because that means the legislation is almost certainly wrong. My specific point is that we had a programme motion that we agreed after Second Reading, so why is it being overruled? Why are we shortening scrutiny when the House and Parliament thought that we would have a whole day for it?
Jo Swinson
I gently point out to my hon. Friend that I did not say that this was something the usual channels were all okay with; I said that there has been a great deal of positivity across the House for the content of the Bill itself. It follows on from previous private Members’ Bills, and on Second Reading and in Committee it was generally welcomed by a large number of Members.
We believe that the programme motion allows sufficient time for scrutiny, because we rigorously tested the Bill on Second Reading and in Committee. Indeed, what we did not know when we passed the original programme motion was that consideration in Committee would finish early, so it was well scrutinised and the time that had been allocated was significantly more than ample.
Huw Irranca-Davies
I concur with the Minister that all members of the Committee were fine members. Perhaps I can help to answer question asked by the hon. Member for Wellingborough (Mr Bone). One reason the Committee got through the Bill faster than anticipated, which we hope we might do again today, was the Government’s fantastic decision to change their mind and include in the Bill the power to impose financial penalties, which saved a lot of time and might also help us today.
Jo Swinson
The hon. Gentleman makes a very good point. Of course, the House is delighted that he, too, has received adequate recognition for his role in bringing that about. I believe that he was the Total Politics MP of the month because of his campaigning, which is obviously a great accolade—I understand that he collects those, as he was once given an award for being the sexiest MP of the year in Wales. He makes the important point that the Government have been in listening mode, and one of the main issues that various Members expressed concern about on Second Reading was that of fines. We have listened to that, and it was obviously discussed further in Committee.
In that context, I think that three hours will be sufficient to debate the amendments. I hope that I can provide my hon. Friend the Member for Wellingborough (Mr Bone) and others with that reassurance. On that basis, I commend the programme motion to the House.
Ian Murray (Edinburgh South) (Lab)
I do not have much to add to the Minister’s opening speech. Labour Members agree with the programme motion for the simple reason that, as my hon. Friend the Member for Ogmore (Huw Irranca-Davies)—the Total Politics Member of the month—said, most of the discussion on Second Reading focused on fines. As the Minister said, the Government listened on that issue, although “caved in” is probably more like it, and decided to include fines in the Bill, under extreme pressure not only from Labour Members but from many organisations and, indeed, from some of her hon. Friends. Had I known that the hon. Members for Christchurch (Mr Chope) and for Shipley (Philip Davies) had tabled so many amendments, we might have asked for more time through the usual channels. However, given that we are where we are and that we are relatively happy and content with what came out of Committee, we will support the programme motion.
Mr Christopher Chope (Christchurch) (Con)
I am always suspicious when a deal is done between the usual channels, and that is what has happened in this case. The Minister said that she thinks it reasonable that there is less time to debate the Bill on Report than was originally intended on 19 November because we do not need more than three hours to scrutinise it. That is very paternalistic. She then argued that because the Committee spent less time discussing the Bill than it might have done, we need less time to discuss it on Report. Surely the reason we need more time on Report is that only then do Members who were not members of the Committee that considered the Bill in detail have a chance to participate in the debate and to table amendments.
Philip Davies (Shipley) (Con)
My hon. Friend is absolutely right. Does he agree that there is bound to be no proper scrutiny in Committee because the Government pack it with people who agree with them—supporters of the Bill whom they want to be there?
Mr Chope
My hon. Friend is right. I am not aware of anybody on the Committee feeling that the Bill was too strong and should be weakened; the only people there either supported it or wanted it to be strengthened. That shows how unrepresentative the Committee was. We now have three groups of amendments and only three hours in which to debate them, after deducting such time as we will spend on considering this programme motion.
Mr Chope
Thereby hangs a subject for a separate debate. The coalition agreement contained a commitment to have a House business Committee by the third year of this Parliament. We now know that that is being interpreted as meaning the end of December 2013, which is rather an extension of the use of the English language. However, that may be the subject of another debate on another occasion. As my hon. Friend suggests, this shows, in essence, that Front Benchers are not to be trusted on these issues, and until they prove their point and we are satisfied, we will be suspicious.
Mr Mark Spencer (Sherwood) (Con)
As a member of the Committee that my hon. Friend criticises, it is difficult not to take offence. Surely he must recognise that the debate that he is forcing now will reduce the amount of time that we have to scrutinise the Bill, and surely the quicker we can get on to that debate the better off we will be.
Mr Bone
An outrageous slur has been made on my hon. Friend the Member for Christchurch (Mr Chope), who has made it clear that he wants more time for debate. The simple answer is that when the House divides on this programme motion and we defeat it, the previous programme, which gave us a whole day for debate, will be in place. I think that my hon. Friend the Member for Sherwood (Mr Spencer) should apologise to my hon. Friend.
Philip Davies
My hon. Friend said that there would be only an hour to debate each of the three groups of amendments because there are three hours and three groups. He was being overly generous, because any Divisions will eat further into that time, so there may be only a maximum of 45 minutes for each group.
Mr Chope
My hon. Friend is right.
I am going to finish soon because other people want to participate in this very short debate. Before I do so, let me point out that the Minister says that one of the justifications for curtailing the amount of time to debate the Bill on Report is that the Committee changed the Bill to introduce an ability for the adjudicator to fine without that having to be the subject of regulations in future. That is a fundamental change to the Bill. I would have thought that that is an argument for having more, not less, discussion on Report.
Andrew George (St Ives) (LD)
The hon. Gentleman stated that actions speak louder than words. Will he point to where he or the hon. Member for Shipley (Philip Davies) raised issues of contention during the Second Reading debate, which surely would have been the opportunity to telegraph to Front Benchers the fact that there were such issues that needed more time for debate at this stage?
Mr Chope
I do not think that Front Benchers needed any telegraph messages from my hon. Friend the Member for Shipley (Philip Davies) or me, because one of the precursors to this Bill was a private Member’s Bill in the previous Parliament that my hon. Friend fought against line by line, in which I joined and supported him. The Bill before us is one that several colleagues and I are still very concerned about. The fact that I did not speak on Second Reading is not an argument that can be used against me, because now we have the chance to consider amendments, whereas on Second Reading we would only have been able to flag up general concerns, and I did not think that necessary because I had done so previously.
Steve McCabe
I am grateful to the hon. Gentleman, and I do not wish to prolong this debate on the programme motion. Is it not fair to say that at the time of Second Reading the country was not engulfed in the anxiety about the food chain that has arisen subsequently, and that it would be a disaster if there were not enough time to debate at least amendments 34 and 35, which cover matters that are on the public’s mind?
Mr Chope
The hon. Gentleman makes a good point. The amendments in the first group include two new clauses in my name, which have been driven by the fact that this issue concerns more than just the United Kingdom. We are talking about a very complicated global supply chain, and we need further explanation of how the Bill will impact on that.
I have severe reservations about changing the programme motion. It is indicative of the fact that this Government are lacking in self-confidence. Why do they not have the self-confidence to allow us to debate these issues for a whole day on Report, as they originally intended? Why do they wish to close down debate? Are they frightened of scrutiny?
Mr Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow my hon. Friend the Member for Christchurch (Mr Chope).
I want to query a couple of things that the Minister said. She is a first-class Minister, and I think that had she been a shadow Minister, she would have been arguing for more scrutiny. I notice that she has now been left alone on the Front Bench with just one Whip, which seems to indicate that nobody in Government wants to be associated with this programme motion. When the Deputy Leader of the House sat on the Opposition Benches, he was a fine proponent of opposing programme motions, and it must be very sad for him to have to take this line today.
There is an intellectual flaw in the Minister’s argument. If she is saying that this is not controversial and that three hours gives us plenty of time for debate, why bring in another programme motion, because the debate will automatically finish within three hours anyway? The centralist, Stalinist approach of this Executive is such that they want to be wedded to programme motions.
I know that that is not the Prime Minister’s view, because in his excellent speech “Fixing Broken Politics”, which he made in May 2009—I am sure that every Member has read it—he roundly criticised programme motions and said that they reduced scrutiny. Basically, a Bill is thought up in Downing street, pushed through its Second Reading and then goes to a Committee that is stuffed full of Members who support it. There is no way of getting on a Committee unless the Whips support the decision. Then, when the Bill comes back to the Chamber to be considered, Back-Bench Members who are interested in it but who could not get on the Committee do not have enough time to make amendments or discuss it. I guarantee that that is exactly what will happen today if the programme motion goes through. Amendments will not be reached and they will not be discussed, and that, of course, is fundamentally what the Government want. They do not want scrutiny of this Bill. Such a situation occurs when Members on both Front Benches are in league together. The shadow Minister, the hon. Member for Edinburgh South (Ian Murray), has let slip that he is happy with the programme motion and that the usual channels have agreed to it.
Mr Spencer
How does my hon. Friend square that argument with the fact that every single Government member of the Committee criticised the Bill on Second Reading?
Philip Davies
I think that what my hon. Friend the Member for Sherwood (Mr Spencer) was trying to say was that every Government member of the Committee was critical of the Bill because it did not go far enough and they wanted it to be strengthened. In effect, that is what the Government wanted them to say, because they could then say, “We’ve had so much pressure put on us that we’ve had to strengthen the Bill.” Those Government Members were put on the Committee not to be unhelpful, but to be as helpful as possible.
Mr Bone
I am afraid that that rings true. On occasion, I myself have been asked to do things on behalf of the Whips and I am afraid that sometimes I have succumbed and made noises that appeared to be contrary to the Government’s views but that turned out to be what they thought all along. The European Union Act 2011 is a fine example of that.
I want to make a brief point of principle. The problem with the timing results from the fact that the programming of Parliament is controlled entirely by the Executive. Parliament has already agreed to a timetable motion, which in my opinion it did not need to do. It does not need programme motions; we should be able to scrutinise Bills for the time that Parliament thinks necessary. The programme motion, which went through on Second Reading, gave a whole day to consider the Bill and give it its Third Reading. That is what we should be doing today. The only reason why the debate is being restricted—again, the shadow Minister let this slip out—is that amendments have been tabled by my hon. Friends the Members for Shipley (Philip Davies) and for Christchurch. The Government are trying to restrict scrutiny.
The Deputy Leader of the House is back in his place—
Philip Davies
The hon. Member for Somerton and Frome (Mr Heath) is not the Deputy Leader of the House— he is a Minister in the Department for Environment, Food and Rural Affairs now
Mr Bone
Oh, sorry. Good God! I apologise to my hon. Friend the Minister. I now understand entirely why he has to be here—had he been Deputy Leader of the House, he would not have been present. I understand that he is now part of the great Government machine and that when someone on a sofa in Downing street decides something, it has to be forced through. I apologise for misunderstanding why he is sitting on the Front Bench today.
The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson) is a very good Minister and she is doing a fine job, but if she believes her own arguments that the Bill is uncontroversial and that three hours is enough to debate it, why not withdraw the programme motion and let the House take its own course? She would then be a star of Parliament—she already is a star, but she would be an even greater star—and that would show the public that the Government are not afraid of scrutiny.
Ian Murray
Does the hon. Gentleman agree that the quickest way to get through this afternoon’s business would be for the Minister to agree with all our amendments? We could then move on to the other debates.
Mr Bone
No. That is exactly the wrong reason. We want to discuss the issues and argue about them. The hon. Gentleman’s amendments might be very good and when I listen to the debate I might support them, but alas we might not get to many of them, because of the restriction of time. Clearly, there is disagreement in the House. Would it not just be easier to withdraw this programme motion and go back to the previous one, which went through, I think, without dissent? I had hoped that the Minister would agree to that, but we will now have to see whether the House will divide on this programme motion.
This is another case of the Executive doing what they want at the expense of Parliament. It is a shame on this Government. It is not what I expected when the new Government came to power. What they promised beforehand with regard to parliamentary scrutiny has not come to pass. The sooner we get a business of the House Committee to run Parliament, this place will be far better.
Groceries Code Adjudicator Bill [Lords]
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:42 - The House divided: - Ayes: 6 / Noes: 448 - Question accordingly negatived.
15:58 - The House divided: - Ayes: 200 / Noes: 253 - Question accordingly negatived.
16:11 - The House divided: - Ayes: 198 / Noes: 252 - Question accordingly negatived.
Philip Davies (Shipley) (Con)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 2—Supplier turnover—
‘Suppliers are not allowed to refer cases to the Adjudicator and cannot have cases referred on their behalf if their turnover exceeds £1bn per annum.’.
New clause 3—Sunsetting—
‘This Bill will expire in seven years from the date it receives Royal Assent.’.
New clause 4—Supplier headquarters—
‘Suppliers are not allowed to refer cases to the Adjudicator and cannot have cases referred on their behalf if they have their principal headquarters outside the European Union.’.
New clause 5—Supply source—
‘The provisions of this Act shall not apply to any supplies which are produced, manufactured or processed, in whole or in part, outside the European Union.’.
Amendment 28, in clause 12, page 4, line 32, at end insert—
‘(a) the nature and type of arbitrations to be conducted under section 3 including:
(i) the law applicable to an arbitration; and
(ii) where the arbitration should be conducted.’.
Amendment 3, in clause 13, page 5, line 18, at end insert—
‘(2) The Office of Fair Trading shall be required to publish a response to the Adjudicator on the recommendations set out in subsection (1) explaining whether they will be acted upon or not.’.
Amendment 30, page 5, line 18, at end add—
‘(3) In assessing changes that could be made to the Code, the Adjudicator shall give due consideration to—
(a) the territorial extent of the Code, especially in relation to activities of large retailers outwith the UK, including work done by subsidiaries of large retailers;
(b) whether intermediaries in the supply chain should be covered; and
(c) whether commercial pressures or criminal activity pose risks to consumer interests by potentially compromising standards of food safety, hygiene and food authenticity.’.
Amendment 33, page 5, line 18, at end add—
‘(3) In assessing changes that could be made to the Code, the Adjudicator shall give due consideration to—
(a) the territorial extent of the Code, especially in relation to activities of large retailers outwith the UK, including work done by subsidiaries of large retailers;
(b) whether intermediaries in the supply chain should be covered.’.
Amendment 34, in clause 14, page 5, line 31, at end insert—
‘(4A) The report must include details of any incidents that have come to the Adjudicator’s attention during the reporting period in which breaches of the Groceries Code or commercial pressure on retailers have led or may have led to actual or potential cases of compromised—
(a) food safety;
(b) food hygiene; and
(c) food authenticity.’.
Amendment 35, page 5, line 34, at end add—
‘(c) the Food Standards Agency.’.
Amendment 27, in cause 25, page 11, leave out lines 7 to 12 and insert
‘This Act shall come into force two months after Royal Assent.’.
Philip Davies
New clause 1 stands in my name and that of my hon. Friend the Member for Bury North (Mr Nuttall).
I do not want you to think, Mr Speaker, that my speech would be better suited to a debate on Second or Third Reading, but it is important that I give some context as to why new clauses 1, 2 and 3—which all stand in my name—are important.
I do not have any interest to declare, but I do have considerable experience that is relevant to the Bill. Before entering Parliament in 2005 I spent the previous 12 years working for Asda. I spent four years working in-store and eight years working at the head office in Leeds, so I have first-hand knowledge of how the supermarket industry works. To be perfectly honest, it works in a completely different way from the way in which people might be forgiven for thinking it works if they listened to previous debates on the matter. We have been given to believe that terrible, shocking, awful, nasty supermarkets care nothing about their suppliers, that their only role in life is to screw their suppliers into the ground and leave them destitute—bankrupt, if we are to believe previous debates—and that the only way to prevent that from happening is to have this ridiculous adjudicator, which is the Bill’s premise. That argument is complete and utter nonsense—that is not how it works at all.
Mark Tami (Alyn and Deeside) (Lab)
I think that I have raised this point with the hon. Gentleman in the past, but the supermarkets’ power means that they are able to tell suppliers, “Provide this product at this price or do two-for-one offers at your cost, or we will go somewhere else.” Does the hon. Gentleman not accept that that is an unacceptable power in some cases?
Philip Davies
I am afraid that the hon. Gentleman is highlighting the misconceptions. The Office of Fair Trading is already able to enforce a grocery code of practice. It is already in place. It is not being introduced by this Bill. The code of practice already exists under the auspices of the OFT. If the hon. Gentleman has any concerns about how supermarkets are operating with regard to their suppliers, he can take his complaint to the OFT and ask it to investigate it. The adjudicator is not supposed to introduce a new code of practice, although we fear that they might. The code of practice already exists. If the hon. Gentleman has evidence of supermarkets breaking the code of practice, I would be happy for him to come forward and tell me about it. If anybody has evidence of supermarkets breaking the code of practice, let us hear about it today and we can all decide what the best course of action is. However, there is no evidence that the code of practice is being breached.
Huw Irranca-Davies (Ogmore) (Lab)
With all due respect, the hon. Gentleman fails to understand one of the fundamental points that was made in Committee, which is that many of the examples of abuse in the supply chain concern primary producers who are literally afraid of coming forward. That is why the anonymity and protection of those producers is built into the Bill.
Philip Davies
I understand the point that the hon. Gentleman makes, but he is basically highlighting that he can give no examples of abuses of the groceries code of practice.
Andrew George (St Ives) (LD)
I respect the consistent position that the hon. Gentleman takes on this matter. However, he cannot ignore the fact that in 2008, the Competition Commission concluded that supermarkets were transferring excessive risk and unexpected costs to suppliers, and that that was having a detrimental effect not only on the suppliers, but on consumers. It proposed the introduction of the code, but made it clear that on its own, the code would not be sufficient. A referee was needed to enforce it, otherwise no complaints would be brought forward. Simply saying that we have to find the evidence ignores the Competition Commission’s conclusions.
Philip Davies
The hon. Gentleman, likewise, has taken a consistent view on these matters. In fact, he has been so consistent that he wanted an adjudicator before a new code of practice had even been introduced, let alone bedded down. He has always been in favour of this solution, even when there was no problem.
The Office of Fair Trading controls the groceries code of practice and is there to investigate any abuses of fair trade within the sector. If the hon. Gentleman has any evidence, he can take it to the Office of Fair Trading. It has all the powers that it needs to investigate any cases. The problem is that there are no such examples.
Andrew George
I am grateful to the hon. Gentleman for giving way again. The Grocery Market Action Group, which I am privileged to chair on behalf of a large number of organisations, gave evidence to the Competition Commission inquiry. That is one reason why it came forward with the clear and firm conclusions that are now being carried forward by the Government. That is the right thing to do.
Philip Davies
The hon. Gentleman keeps making the same assertion. He should take the matter to the Office of Fair Trading. That is the body that oversees the groceries code of practice.
Mr Andrew Turner (Isle of Wight) (Con)
I am going to talk about something completely different. The Isle of Wight has three locations where ferries land. It was found that the ferry companies were not being reasonable. They could not find a solution and neither could anybody else. Exactly the same thing that the hon. Member for St Ives (Andrew George) is describing with food is happening with ferries.
Philip Davies
My hon. Friend is a fantastic representative of the people of the Isle of Wight. However, I would not want you to tell me that I am going off course, Mr Speaker, so if my hon. Friend will forgive me, I will avoid the ferry analogy and stick to the adjudicator and the groceries code.
Let me get to the point that I have been trying to make from the beginning. It is amazing that all the people who would have been happy to vote for the Government’s programme motion to restrict the debate are anxious to intervene as often as possible on my speech, thereby prolonging the debate. I am sure that there is an irony in there somewhere.
The genesis of my new clauses is that the idea that supermarkets will flourish by making their suppliers bankrupt is the most ridiculous premise known to man. A supplier does not have much of an outlet for their goods if they are not bought by a supermarket. Equally, a supermarket does not have much of a shop if it has nothing on its shelves to sell. This is not a one-way street. The supermarket cannot manage without the supplier. The nature of the free market means that they have to work together on each other’s terms. If a supermarket upsets Heinz and has no Heinz beans on its shelves, it will not be a supermarket for very long.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
The hon. Gentleman makes the point about the markets in which the supermarkets operate, but does he at least concede that the power imbalance between the supermarket and the supplier is often very unfair, and that supermarkets have consistently pushed the costs and risks of doing business on to the supplier at the end of the food chain?
Philip Davies
No, I do not agree with that at all. I will come on to this point in a bit more detail soon, but the hon. Lady is forgetting something. The big supermarkets, without a shadow of a doubt, are massive companies that have hundreds of stores in their chains. By definition, a viable supplier to a supermarket chain has to be a very big company as well, otherwise it would not have the wherewithal to supply all the supermarket’s branches. When I get to the detail of my new clauses, I will talk about the thresholds that the Bill should apply. She will see that far from it being the case that vast supermarkets are being awful to very small suppliers, many of the suppliers are bigger than the supermarkets that they are supplying. She ought to bear that in mind.
Mr Mark Spencer (Sherwood) (Con)
My hon. Friend misunderstands the whole supply chain in the UK. There are organisations that provide hubs to supply supermarkets, but those hubs are supplied by very small primary producers such as family firms. Those firms are microscopic in comparison with the supermarkets.
Philip Davies
My hon. Friend makes a good point. If he has a big problem with the middleman, so to speak, for example in the dairy industry, he should pursue his complaint with the middleman, rather than having a go at the supermarket.
The hon. Member for Alyn and Deeside (Mark Tami) made a point about special offers. There is a view that supermarkets have been forcing suppliers against their will to do special offers, such as buy one, get one free or buy three for two. Let me tell the House, as somebody who has worked in this environment, what happens in the real world, rather than in the invented world that people want to talk about.
My hon. Friend the Member for Fylde (Mark Menzies) is here and he will know what happens as well as I do because he worked for Asda at the same time as I did. He will recall that, before I left, Asda decided that it did not want to do special offers any more and that it would have no special offers in its stores. It did not want any buy one, get one frees or three for twos. It asked its suppliers instead to just sell it the product at an everyday low price and to put what they would have invested in a promotion into providing that price. It was not companies such as Asda that were forcing suppliers to do buy one, get one frees; suppliers were falling over themselves to do special offers in the supermarkets and to get their products in the promotional areas.
Some of those firms have massive marketing budgets. They have marketing budgets that supermarkets would love to have. They use that budget to do offers such as buy one get one free or three for the price of two. They are trying to persuade people who buy Daz for their washing, for example, to move to Persil. To persuade people to do so, they give them a buy-one-get-one-free offer.
Philip Davies
I will in a second, because it was the hon. Gentleman who started me off discussing this misconception in the first place, so I will happily let him come back in.
A special offer such as “Buy one, get one free” on Persil is intended to encourage people to buy Persil in the hope that by the time the special offer ends, they will stick to that brand. It is a way of promoting a brand, and it has absolutely nothing to do with the supermarket.
Mark Tami
The hon. Gentleman is talking about very large companies, but does he accept that some smaller companies are almost totally reliant on the supermarkets for their business, and whatever the supermarket says goes? Does he also accept that one thing that we have to recognise from the horsemeat scandal is that if we keep driving prices down, some suppliers will look to cut costs by whatever means they can in order to survive?
Philip Davies
I am grateful to the hon. Gentleman, because he seems to have indicated—I will take it as such—that he will support my new clause 1 or new clause 2. He gets to the nub of the point, although I suspect he has not even bothered to read the new clauses, because if he had he would not have led with his chin in the way that he just has.
I wish to make it clear at this point that, with your permission, Mr Speaker, I would prefer to press new clause 2 to a Division than new clause 1, but I will be guided by you later on that.
Mr Peter Bone (Wellingborough) (Con)
I am grateful to my hon. Friend for giving way. He has been exceptionally generous throughout his speech.
I have been looking at new clauses 1 and 2, and they seem to be the same except for the level of turnover specified in them. Is that the case, and will my hon. Friend go into some detail on that?
Philip Davies
As ever, my hon. Friend is eagle-eyed. The amendments are the same, but the purpose of tabling two was to give the House a choice, because as it happened, I envisaged the interventions that the hon. Member for Alyn and Deeside (Mark Tami) has made.
At Asda, we found huge reluctance on the part of suppliers to stop special offers. They lobbied Asda for ever to do more and more of them to promote their brands, and an everyday low price did not offer them the same marketing opportunity.
Mr Spencer
I applaud my hon. Friend’s campaign to get his whites whiter, but he must recognise that there is a fundamental difference between a supplier of a brand of washing powder and a supplier of a cauliflower, carrot or parsnip, because it is not possible to brand a carrot or a cauliflower.
Philip Davies
I am grateful to my hon. Friend, and again, I take his intervention as a signal that he will support my amendment. That brings us on to the nub—
Mr Speaker
Order. I do not wish to interrupt the hon. Gentleman for any length of time, still less to be discourteous to him, but above all I would not want the House to be inadvertently misled. He has no amendments in this group, but he does have a series of new clauses tabled, if memory serves me, in his name and that of the hon. Member for Bury North (Mr Nuttall), namely new clauses 1 to 3, on which I know the House will now focus with beady eyes.
Philip Davies
I am grateful, Mr Speaker, and you are absolutely right, as ever. My hon. Friend the Member for Sherwood (Mr Spencer) seems to indicate that he is prepared to support new clauses 1 and 2, and I will be grateful to him for that. It seems that the longer we go on, the more support I am garnering for my case, so I am encouraged to go on a bit longer.
Mr Spencer
My hon. Friend will recognise that putting a figure on turnover as suggested in the new clauses would mean that there was a difference between somebody supplying a low-value product such as a carrot and somebody supplying a high-value product such as a bottle of champagne. If we were to put a firm figure in the Bill, as time and inflation moved inevitably forward, that figure would become smaller and smaller in real terms and small and medium-sized enterprises would be dragged over the threshold.
Philip Davies
My hon. Friend appears to be indicating that he prefers new clause 2 to new clause 1, which further persuades me that I should seek to press new clause 2 to a Division, if you allow me to do so, Mr Speaker.
The Bill was sold to people on the back of what I believe was a false premise—the idea that supermarkets are screwing suppliers into the ground remorselessly and hoping that as many of them as possible will go bust. It is a completely nonsensical argument.
Justin Tomlinson (North Swindon) (Con)
On the evidence of what has happened so far, has the current groceries code been well utilised since its introduction?
Philip Davies
My hon. Friend asks a good question and strikes at the heart of why the Bill is a nonsense. There is no evidence that the groceries code is being abused. Nobody has yet been able to come forward with any such case. They all give reasons why they cannot do so, but the fact remains that there are none. There is no evidence that the code is not being applied properly.
Andrew George
As the competition authorities have repeatedly found, there is a significant climate of fear in the sector. That is why it is highly unlikely that anyone will use the code until the adjudicator is in place. I ask the hon. Gentleman to look at clauses 4, 10 and 12 in particular, which should give him the reassurance that I believe he is looking for. Potentially powerful suppliers will not abuse their power, because of the reasonableness that is a golden line running through the Bill.
Philip Davies
I am grateful to the hon. Gentleman, but again, I do not want to get on to parts of the Bill that are subject to amendments in future groups, so I will resist that temptation.
Supermarkets can operate properly only with the good will of their suppliers. There are often cases in which, for example, a supplier has a problem at short notice—we have seen that recently with the issue of horsemeat. Things have to be taken off sale at short notice and production dries up quickly. That happens when foreign bodies are found in certain products, which have to be taken off the shelves. A supermarket can operate only if it then has other suppliers that it can go to and ask to fill the void at short notice. It goes to another supplier and says, “We’ve got some empty shelves and a lack of supply. Can you come and help us out?” Do people really think that the supplier would help out a supermarket chain that was trying to bankrupt it or screw it into the ground? Of course it would not.
My hon. Friend the Member for Sherwood made the point that the limits in my new clauses may impede small business at some point in future. However, new clause 2 specifies a turnover of £1 billion a year, and all I can say is that, my word, supermarkets must be a force for good if they can turn small and medium-sized enterprises into firms with a £1 billion-a-year turnover. That should be something to celebrate, not to criticise supermarkets for. Suppliers would be delighted to be companies of that scale. I am not entirely sure which ones in his constituency he is thinking of, but if he has any examples of firms that he is worried may have a turnover of £1 billion a year, I would like to meet them to find out what their fears are.
Mr Christopher Chope (Christchurch) (Con)
My hon. Friend makes a good point. Can he illustrate to the House what he thinks would be £1 billion-worth of cauliflowers?
Philip Davies
My hon. Friend makes a good point, which strikes at the heart of new clauses 1 and 2. We can argue about the necessity of the Bill, and as far as I am concerned it is not only unnecessary—as my hon. Friend the Member for North Swindon (Justin Tomlinson) made clear, there are no complaints about the existing code, so it is a solution looking for a problem—but the most unconservative-minded thing that we could possibly see. I have no problem with the Liberal Democrats supporting it, because of course they are always a left-wing tribe, but I am worried that members of my own party are supporting this intervention in the free markets.
Two companies, free to make their own decisions, are making agreements and signing a contract, and then we in the House think that we should intervene in that contract that they have both entered into freely and say, “By the way, we don’t think you should have signed that contract.” I have always thought that companies are more than capable of deciding those things for themselves.
Mr Spencer
Again, my hon. Friend misunderstands the concept of what the groceries code adjudicator is intended to achieve, which is related to exactly the point that he has just made. When an agreement has been made between two parties, if both sides stick to it there is no problem, but there is a problem when one side tries to change that agreement and goes back on it at a later date.
Philip Davies
My hon. Friend makes a good point, and he seems to make the point that the Bill is totally unnecessary. I am not a lawyer—my hon. Friends the Members for Christchurch (Mr Chope) and for Bury North are, and I will happily bow to their expertise—but it seems to me as a layman that if two sides sign a contract and one side then breaks it, there are already laws in place to ensure that the matter can be seen through in the courts. The courts ensure that contracts entered into voluntarily are honoured, so we do not need to do that. The Office of Fair Trading already looks after the groceries code, which deals with these matters anyway.
Andy Sawford (Corby) (Lab/Co-op)
I am listening carefully to the hon. Gentleman’s point about the role of the courts. Does he accept that the reason why many Opposition Members believe the Bill is important and helpful to farmers, producers, consumers and, ultimately, supermarkets, is the imbalance in economic power and in the relationship between small suppliers and the supermarkets? That the resources available to large supermarkets are vastly disproportionate to those available to small suppliers would be demonstrated in a court process.
Philip Davies
This is a red letter day for me, because I now have another volunteer to support my new clause 1 and new clause 2, which I will come on to in a second. The hon. Gentleman may well not have read them and therefore may have intervened inadvertently, but when he actually finds out what is in new clause 1 and new clause 2—if I am ever allowed to get on to that—he will find that he agrees with the point I am making. I do not agree with the principle of the Bill; I am the first to make that clear, and that relates to the purpose of new clause 3. On new clause 1 and new clause 2, the Bill was sold on the premise articulated by the hon. Gentleman—we have big supermarkets that are in a vastly preferential situation to very small suppliers, and that the House should be looking after those very small suppliers where they face problems. That is the premise of the hon. Gentleman’s point, and that is what my hon. Friend the Member for Sherwood is indicating. That is how the purpose of the Bill was sold.
I believe the Bill is totally unnecessary, but I am the first to accept that that is a minority view and that it will go ahead. My new clauses seek to ensure that the Bill hits its given purpose—to look after the small suppliers that my hon. Friend the Member for Sherwood is rightly keen to look after. I do not disparage him for that. Currently, the Bill will not just look after the small suppliers that my hon. Friend and the hon. Member for Corby (Andy Sawford) are so concerned about; it will give an avenue for complaint to all suppliers of supermarkets, whatever their size. All I can do is reiterate the fact that the vast majority of suppliers to supermarkets are huge companies in their own right, and that some of them are bigger than the supermarkets they supply.
Let us make no bones about it. One way or another, the suppliers—whether in terms of special offers, deals or whatever—hope that ultimately the adjudicator will deliver a benefit to their bottom line. Suppliers hope, through whichever avenue, that this will ensure that they have a healthier bottom line.
Mr Spencer
My hon. Friend must also recognise that the role of the groceries code adjudicator is as a referee. If a large corporation—we all know they exist—is in a trading disagreement with a supermarket, then the supermarket could use the groceries code adjudicator to make sure that it gets a fair deal from that large supplier.
Philip Davies
My hon. Friend makes his point. As it happens, I am a Conservative. I know it is an old-fashioned view these days in the Conservative party, but I believe in the free market. Companies such as Asda, Tesco, Morrisons and Sainsbury’s are big enough to look after themselves. They do not need a referee to look after a contract on their behalf against any supplier; big companies are more than capable of doing that themselves. My hon. Friend may take the point that it is the role of Parliament to intervene in every contract negotiation between two companies.
Philip Davies
I will in a second. I will deal with this intervention and then give way to the hon. Gentleman. My hon. Friend the Member for Sherwood may think that the role of this House is to intervene in all sorts of contract disputes. Why limit it to supermarkets? There are lots of industries where one big person negotiates deals with a smaller supplier; it does not just happen in the supermarket trade. It seems to me that my hon. Friend is arguing for a total business ombudsman looking at every negotiated contract. That is not the kind of country I want to live in; it is certainly not what I consider to be Conservative.
Huw Irranca-Davies
I thank the hon. Gentleman for giving way; he is being very generous. New clauses 1, 2 and 3 lay his cards on the table; essentially, they support the free market option. That is what they are about, regardless of the technicalities. Did he listen to Radio 4, as I did the other morning, when Billy Bragg was being interviewed? He made the comment that when we leave everything to the free market we end up with horsemeat.
Philip Davies
I have no doubt that the hon. Gentleman does not believe in the free market—that is why he sits on the Labour side of the House. I have no quibble with Opposition Members agreeing with this nonsensical Bill. He was elected to try and introduce this kind of interventionist nonsense. What I object to is Government Members believing in this kind of stuff. I have no quibble with him believing it.
Mark Tami
The hon. Gentleman has painted a picture, which no doubt he actually believes in, where the supermarkets are fair and always have everyone’s best interests at heart. What would they have to fear, regardless of the size of the companies that could take them through this process? According to him, they have never done, and will never do anything wrong.
Philip Davies
In a Westminster Hall debate I heard one of my hon. Friends, who is in favour of the Bill, make it abundantly clear that he thought the adjudicator would have nothing to do, and that it would, in effect, be a sinecure post. The adjudicator would just be there in case he was needed at some point. It is unnecessary, and I do not believe in creating unnecessary bureaucracies. They end up empire building. They start off small and targeted, but of course once they find out that they have nothing to do they find something to do, even when it is not necessary.
Philip Davies
I am going to make some progress. These are the same Members who were happy for the debate on three groups of amendments to be restricted to three hours, and they now want to try to prolong the debate for as long as possible. If they still want to intervene at a later point I will try and allow it, but I am sure other Members want to speak.
The Bill was sold on its supposed support for small suppliers. If that is what it is about, let us make that support clear in the Bill. New clause 1 states that the adjudicator could not have cases referred to it by, or on behalf of, companies with a turnover exceeding £500 million a year. New clause 2 is exactly the same, but puts the figure at £1 billion a year. To try to be as helpful as possible, I have done some investigation to try to work out what sort of companies would be covered by my new clauses, so that we can see what we are talking about. Perhaps the Minister will be able to tell us whether the purpose of the Bill is to help those companies.
Returning to my point, suppliers hope the Bill will help their bottom line. If it does not, as a company there is no point to it. That is what they are hoping for. Who pays for an increase in the bottom line of a supplier? It will not be the supermarkets. I am sure the Opposition believe the idea that supermarkets’ profits are going to be eaten into, that there will be some kind of magical transfer of wealth from the supermarket to the supplier, and that the supermarket will give up its profits and it will all feed through and go to the small farmers. It does not work like that. What will happen is this: supermarkets work to very, very low margins. The whole purpose of supermarkets is to cut the price and increase the volume—that is how they look to increase their profit. If there is a benefit to the suppliers’ bottom line it will only come from one person: the consumer. Consumers will end up paying more for their products—that is what the Bill will deliver.
If people want to tell their constituents that they are voting for them to pay more for their products, I am happy for them to do so—at least it would be honest, at least they would be saying, “Look, because we want to look after suppliers, you’ll have to pay more for your shopping, but we think it’s a price worth paying.” I would respect that. It is a perfectly respectable view.
Mark Menzies (Fylde) (Con)
My hon. Friend’s new clauses—on the £500 million and £1 billion thresholds—are incredibly sensible. We are talking about companies such as Procter & Gamble, Heinz, Unilever, Coca-Cola, Nestle, Mars, Kellogg’s—multi-billion dollar, multinational corporations—and it would be indefensible for a groceries adjudicator to spend its time on them, instead of on protecting small independent suppliers. He is absolutely right that it will lead to higher prices, because it will make buyers timid: they will not negotiate hard on behalf of the customer, because they will not want their time taken up with a groceries adjudicator. They will not want the bad publicity, so they will settle for second best, and people will get higher prices. He is on the money.
Philip Davies
I am grateful to my hon. Friend, who knows a great deal about this subject.
If people want to transfer money to suppliers either, in their idealistic world, from supermarkets or, in the real world, from their constituents, and if they think that a price worth paying, let them say so. If they reject my new clauses, however, I want them to be clear with their constituents about whom they are benefiting as a result of higher prices and who they will be paying their higher prices to. My hon. Friend the Member for Fylde (Mark Menzies) listed a few of them, but I will give a more extensive list, with your permission, Mr Speaker. We are talking about companies such as Esso, which supplies petrol to supermarkets. Do supporters of the Bill really want to help Esso, which is far bigger than any supermarket chain? Is the purpose of the Bill to enable Esso to go along with its complaint to the adjudicator, so that the adjudicator can faff about looking at a complaint from Esso about Tesco or Asda? Is that what the Bill is all about?
Dr Whiteford
The hon. Gentleman’s argument, to which I am listening carefully, seems to have been predicated on the premise that there is no problem, so why on earth would there be a problem between these big corporations?
Philip Davies
I will try to put it more simply for the hon. Lady’s benefit: I do not agree with the Bill, as I think I made abundantly clear—I did not want to mislead anybody. If we are to have a Bill, however, I want it to focus on the people I think she had in mind when she decided to support the Bill. If anybody wants to intervene and say that when they had the idea of supporting the Bill, the first company they had in mind was Esso, let them do so.
Philip Davies
I thought my right hon. Friend was in favour of farmers, but he is obviously in favour of Esso.
Sir James Paice
It pains me to have to point out to my hon. Friend that petrol is not a grocery and is not covered by the code, so he is making a completely spurious point.
Philip Davies
I am grateful to my right hon. Friend. Perhaps then we can move on to Procter & Gamble. Would it be covered by the Bill? Is that a spurious point too? When he supported the Bill and was telling his farmers how marvellous it was that the Government were supporting an adjudicator, did he say to them, “By the way, the biggest suppliers will have the greatest opportunity to benefit and could clog up the adjudicator with complaints before you get your own complaint heard, and one of those companies is Procter & Gamble”? Did he tell them that that was the sort of company he had in mind? No, I do not think he did.
Mr Spencer
Again, my hon. Friend is misrepresenting the role of the groceries code adjudicator. When a deal is done between two suppliers, whether large or small, as long as it is stuck to, there will be no role for the adjudicator. Those large companies can do their negotiations, and those deals will stand fast. The adjudicator would get involved only when the supermarket goes back and tries to change the original agreement. That is its role.
Philip Davies
So my hon. Friend does not think that Procter & Gamble is big enough to look after itself. He thinks poor little Procter & Gamble—that poor mite—needs a state adjudicator to intervene on its behalf because it might find itself at the wrong end of an unfair negotiation with a supermarket.
Justin Tomlinson
We are on the side of David, not Goliath. It seems eminently sensible that my hon. Friend’s new clauses would focus attention on the genuine David, not on supporting the real Goliath.
Philip Davies
I am grateful to my hon. Friend. We were told that that was exactly the purpose of the Bill in the first place. When it was being sold to us, nobody said it would benefit Procter & Gamble. As has been rightly said, if we want the adjudicator’s time freed up to look after the small suppliers, we do not want its time being taken up by these big multinational corporations.
As it happens, I am going to say something that might seem controversial, but to be perfectly honest I do not particularly care. If supermarkets are going around screwing Procter & Gamble into the ground to get the cheapest possible price to pass on to their customers, I say, “Good on them!” Procter & Gamble’s profits will not be massively impacted on by the supermarkets. I want supermarkets to negotiate robustly with big companies in order to get prices down for my constituents. The Labour party is supposed to support the working person—the people on fixed incomes—but the early indications are that its Members will vote to protect Procter & Gamble’s interests over the interests of their constituents. What on earth has the Labour party come to, when it sides with Procter & Gamble?
It is not just Procter & Gamble, however. We have Harvest Energy, Green Energy Fuels, Imperial Tobacco, Arla Foods and Gallaher—the top suppliers to supermarkets. The naive people who think that the adjudicator will not empire build are living in cloud cuckoo land. If they think that the adjudicator will not look into all sorts of things, they obviously have no experience of these matters.
Mr Speaker
Order. I am slightly concerned that the hon. Gentleman has been diverted from the path of virtue on which he embarked some minutes ago. He was talking specifically about his new clauses, but he has since taken a series of interventions that, in a sense, have caused the debate to elide into a Second Reading consideration of the merits or otherwise of adjudicators and so on. I know that he will want to return to the terms of his new clauses, on which, of course, he can expand at such length as he sees fit, as I am sure he will. I call Mr Philip Davies.
Mr Speaker
Just before that, I call Mr Huw Irranca-Davies on a point of order.
Huw Irranca-Davies
On a point of order, Mr Speaker. It might be of some help to the hon. Member for Shipley (Philip Davies) and to you, as Speaker, to be aware that the new clauses refer specifically to the groceries supply code, but many of the elements that he is introducing into his speech have no connection with the groceries supply code. The companies to which he refers might supply supermarkets, but they do not fall within the remit of the groceries supply code.
Mr Speaker
I am grateful to the hon. Gentleman. I am sure he is seeking to be helpful, but I thought I had myself made the point perfectly adequately that the hon. Member for Shipley (Philip Davies) would wish to return to the terms of his new clauses, which are themselves entirely orderly.
Philip Davies
I am grateful, Mr Speaker, but people ought to be aware that the Bill leaves great scope for the adjudicator to decide what to do. People should not have too much faith. The Bill deliberately gives it massive power and freedom.
Mr Bone
We have very limited time, because the House agreed to the programme motion, so perhaps we could speed things up. I notice that the Minister has been deep in conversation and looking at the new clauses. I wonder if she might intervene and accept new clause 2, because then we could move on.
Philip Davies
My hon. Friend is for ever an optimist, but I am afraid that, in my experience, logic is not usually the great winner in these debates. Unless the Government come up with an idea themselves, they appear reluctant to accept anybody else’s amendment, simply because they did not come up with it themselves.
Do we think the Bill should be directed at Walkers snack foods? What about Coca-Cola? That is a poor, small firm that needs looking after when it negotiates with supermarkets!
Philip Davies
My hon. Friend makes a good point. The Bill would still allow Walkers to screw the potato suppliers—who provide the raw materials—into the ground as much as it liked, but it would prevent Asda, for example, from trying to negotiate the best deal with Walkers for its crisps.
I have mentioned Coca-Cola. I also wonder whether Heinz Ltd would really need to take a complaint to an adjudicator. Is Heinz not big enough to look after itself? Why on earth are we passing legislation to intervene in disputes between big supermarkets and big suppliers such as Heinz, Diageo, United Biscuits, Kraft Foods, Nestlé, Premier Foods, Fullers Foods, Britvic Soft Drinks Ltd and Mars? Are we really saying that the House must set up a state regulator to intervene in negotiations or disputes between massive multinational companies? Those companies have recourse to the courts if they feel that a contract has been breached. Are we really saying that Heinz does not have the wherewithal to take a case to court if it feels that a supplier has dealt with it unfairly? Does anyone want to stand up and say that Heinz does not have the wherewithal to take such a case to court? Who wants to make that point?
Mr Spencer
I will happily challenge my hon. Friend on that point. Those large companies have the ability to negotiate deals, and those deal will be stuck to. The groceries code adjudicator will not get involved in those kinds of negotiations. The adjudicator will have a role to play when a supermarket tries to go back on a deal and change it at a later date.
Philip Davies
We all know that that is the case, but my point is that if companies such as Heinz, Walkers, Nestlé or Coca-Cola feel that a supermarket has breached a contract with them, they can take the case to court. We do not need the state to set up an adjudicator to decide which side is right. As it happens, I am quite relaxed about supermarkets trying to screw those big suppliers into the ground to get the best possible deal. Those suppliers are making massive profits, and I would prefer to see that money benefiting my constituents rather than adding to the bottom line of those multinational companies.
Philip Davies
I will let the hon. Gentleman explain why he wants to add to the bottom line of those multinational companies.
Andrew George
The hon. Gentleman is, in truth, arguing for the abolition of all the competition authorities. That seems to be the direction that his argument is taking. In fact, clause 4 makes it clear that the decision to investigate would be made if the adjudicator had reasonable grounds for suspecting a breach of the code, and clause 10 makes it clear that any supplier who brought a complaint that was “vexatious or…without merit” would be required to pay some or all of the costs involved. Paragraph 48 of the Competition Commission’s final report stated that it envisaged that the groceries code adjudicator
“would prioritize the resources of its office to focus on those disputes and complaints concerning suppliers without market power over and above those concerning suppliers of major branded products that have market power.”
It is clear that such decisions must be made by the adjudicator, and I am perfectly content that the Bill has the capacity to ensure that that description—
Mr Speaker
Order. I am loth to interrupt the hon. Gentleman in mid-flow, but interventions seem to be becoming progressively longer. There is no problem about their frequency, but there is about their length. We must now hear from Mr Philip Davies.
Philip Davies
I am grateful to you, Mr Speaker.
The hon. Member for St Ives (Andrew George) misreads the Bill, but I will come to the point about the recovery of investigation costs when we debate the other groups of amendments. The Bill does not say that those costs have to be recovered in that way; it says that they “may” be recovered. He seems to have huge faith in allowing the adjudicator to do just as it pleases, but I do not want it to do just as it pleases. I want it to follow strict rules that will prevent it from empire building, and that is part of the purpose of my new clauses.
Justin Tomlinson
The adjudicator will clearly have finite amounts of time and resources. Surely it would be better for it to focus on the smaller suppliers who do not have the confidence or the resources to take on the supermarkets.
Philip Davies
My hon. Friend is absolutely right; that is the purpose of the Bill. The big multinational companies that I have mentioned are the biggest suppliers to the supermarkets, in that they supply the biggest volume of the 40,000 or so products on sale in supermarkets at any given time, and they therefore have the most scope to benefit from the Bill. Why on earth should we wish to enable them to do that? I do not know the answer, and no one has yet argued that Heinz or Nestlé cannot afford to take their contractual disputes to court or explained why we need an adjudicator to act on their behalf. They do not need an adjudicator; they are perfectly big enough and bad enough to look after their own interests without needing an adjudicator to step in, and so are the supermarkets.
When there is an agreement between a huge multinational supermarket such as Asda, which is owned by Wal-Mart, and a huge multinational supplier such as Heinz or Walkers or Nestlé, let them get on with it. If there is then a row about who has broken a particular rule, let them get on and sort it out themselves. Believe you me, Asda needs Heinz products in its stores just as much as Heinz needs Asda to sell its products. It is a perfectly even arrangement between the two; the one could not manage without the other. Let them sort the disputes out between themselves. Why on earth are we legislating to get involved in those disputes? That is completely ridiculous. Members are arguing that the introduction of a groceries code adjudicator will help small suppliers, and supporting new clauses 1 or 2 will give them an opportunity to make it abundantly clear to the House that the Bill is designed to help the smaller suppliers to supermarkets.
I want to explain why I have used the figure of £500 million in new clause 1 and £1 billion in new clause 2, and why—with your permission, Mr Speaker—I shall put new clause 2 to a vote. I have listed some of the suppliers that would be covered by the £1 billion figure in new clause 2. The adjudicator will deal with retailers with a turnover of more than £1 billion. The Bill is effectively saying that other people need protecting from such huge organisations, and that they are too big not to have an unfair advantage in any contract negotiation. The Bill therefore puts in place a kind of backstop. My point is that if a supermarket with a turnover of £1 billion a year is deemed big enough to look after itself without any extra help or support, surely suppliers with a similar turnover are in exactly the same situation. If a supermarket with such a turnover is deemed too big to be trusted to negotiate properly, why would a supplier with a similar turnover need the protection of the adjudicator? Where on earth is the logic in that?
Ian Murray
We have all been listening carefully to the hon. Gentleman, but I want to make two important points. First, his proposals are not backed by the industry itself. The Food and Drink Federation and the British Brands Group do not support the proposed restrictions in his new clauses. Secondly, although I have some sympathy with his wish to move further down the supply chain, his proposals were not accepted in Committee.
Philip Davies
That is an extraordinary intervention. The hon. Gentleman is saying that he is not minded to support my new clauses because the representatives of the food and drink industry, who represent massive suppliers, do not support them. The Opposition are not going to support them because they want to look after the interests of those massive organisations that pay the bills of the Food and Drink Federation. Can the hon. Gentleman not make a decision for himself on this matter? Has he not got the capability to understand the equation for himself? I will make it simple for him. Why do suppliers with a turnover of more than £1 billion need help, if a supermarket retailer with a turnover of more than £1 billion does not need help? It is a nonsensical position for anybody to hold.
Mr Bone
I am considering whether to support new clause 3. Am I right in understanding that if, in seven years’ time, the post of adjudicator turns out to have been superfluous, it would just fade away, whereas if it has been a good measure, Prime Minister Cameron would, in his 21st year or whatever, be able to reintroduce it?
Philip Davies
My hon. Friend is right. He knows as well as I do that if such a sunset clause is not introduced, and if the Bill is shown to be a completely unnecessary waste of time and an expensive bit of bureaucracy that we could well have done without, it will carry on endlessly. Nobody will have the guts to do anything about it. The provision will provide a mechanism for getting rid of the legislation if it is seen to be unnecessary. If it were seen to be necessary—who knows, I do not think it will, but it might—people could bring it back and would be anxious to get the legislation in place again. My new clause 3 will stop some ridiculous white elephant carrying on in perpetuity, when it is seen to be unnecessary. I say in passing that it would be sensible if more Bills had sunset clauses included in them, so that we can analyse whether they have been worthwhile and have done what was said on the tin.
My intention in this group of amendments has been to focus on new clauses 1 and 2. With your permission, Mr Deputy Speaker, I would like to divide the House on new clause 2, which would put the same £1 billion threshold on suppliers as applies in the Bill for the retailers themselves. There seems no good reason to me why the same figure should not apply to both sides of the equation. A Division will enable us all to see who has gone into the Lobby to look after the interests of big multinational suppliers and who effectively wants their constituents to pay more for their shopping to benefit the bottom line of those companies.
I do not believe I was sent to Parliament to boost the profits of Heinz, Mars or Nestlé, who are perfectly capable of looking after their own interests. I want my constituents to pay the lowest price necessary for the products they buy in the supermarket. They are already struggling with the cost of living. How ridiculous it would be if we were to put legislation in place that made them pay more than they would otherwise need to pay for their shopping. I hope that the Government will see sense and realise that the same equation should apply on both sides of the supply chain—to retailers and suppliers. I hope they will think about that and listen to reason. If they do not, I hope the House will force them to do so.
John McDonnell (Hayes and Harlington) (Lab)
I shall provide a brief background to amendment 3 and to the other amendments tabled in my name.
I am chair of the Bakers, Food and Allied Workers Union parliamentary group. We meet that union, which represents the workers in the baking and confectionary industry, on a regular basis. We have had a long campaign over a number of years to express our concerns about below-cost selling in the baking and confectionary sector. The concern relates to the Bill’s general provisions, but because I raised it on Second Reading, I shall not delay us further except to explain that the same pressure suppliers have felt from supermarkets has had its effect on the baking industry, as it has on farming and elsewhere.
The pressure to cut overall costs has reduced the quality of the product. Concerns have also been expressed over the years about the safety of ingredients. Some consumer organisations have pointed out the deterioration of the quality of bread as a result of the amount of water introduced into bread production, which has undermined the nutritional benefits from eating bread and has had an impact on the population’s health.
The anxiety is that the same sort of pressure has been applied to the baking industry. The result for members of the bakers’ union has been reductions in wages and job cuts, and the reduction in overall pay means that this sector has significant levels of low pay; in fact, it is one of the most low-paid sectors in our industry at the moment. Another impact of that pressure is deteriorating working conditions and terms of employment. Bakers have expressed the concern that skills within the sector have been undermined, too. With people’s potential to be upskilled undermined, it means further pressure on wages.
These are vulnerable workers, therefore, and they are fearful of raising their concerns about what is happening in this sector. That is why the bakers’ union has combined with employers and others to welcome this Bill. It feels that it gives its members protection when they blow the whistle on some of the supermarket practices that lead to deteriorating conditions in the industry. That, then, is the background to the amendment.
The bakers’ union welcomes clause 13, which enables the adjudicator to recommend to the Office of Fair Trading changes to the code as issues arise over time. It is important, however, that this process is seen to be open and transparent. That is what amendment 3 is designed to achieve. It would simply ensure that the Office of Fair Trading is required to publish its response to the recommendations in the groceries code adjudicator’s review. The response should explain whether the OFT has acted on those recommendations. The amendment would introduce a process of openness and transparency that will lead to accountability. It would place a statutory duty on the OFT to make its functions patently open to scrutiny from the general public and the industry itself.
I expect that my hon. Friend the Member for Edinburgh South (Ian Murray) will speak about amendments 34 and 35, which relate to the wider concern that we now feel about the nutritional content of some of the consumer goods that are placed before us. My amendment responds to some elements of that concern by proposing that recommendations whose implementation would improve the nutrition of our country and the operation of a particular food sector are in fact implemented, or reasons are given for the fact that they are not being implemented.
Andy Sawford
When Labour Members tried in Committee to strengthen the relationship between the adjudicator and the Office of Fair Trading, we were given very unsatisfactory reassurances. We were told, for example, that the adjudicator could use the publicly available telephone line to contact the OFT. Any measures that strengthen that relationship must surely be welcome.
John McDonnell
I followed the dialogue that took place in Committee and read the reports of it. That has been one of the joys of my life over the last couple of months. The Minister said that an amendment such as mine was unnecessary, and would not give the Bill any additional force. She suggested that if the OFT repeatedly failed to act on the adjudicator’s recommendations, two routes would be available. Select Committees, she said, would have “a role to play”, and it would also be possible for any supplier to conduct a judicial review of the OFT, in particular to establish whether it was behaving reasonably or in relation to its duties under the Enterprise Act 2002.
I shall not comment on the hotline issue mentioned by my hon. Friend the Member for Corby (Andy Sawford), because I thought it too bizarre, to say the least. I took it to be just part of the knockabout of Committee stages in which Members engage just to keep themselves awake. I shall, however, deal with the issue of the judicial review. Of course it is open to any supplier to initiate such a review, but it is virtually impossible that it would succeed on reasonableness grounds, especially in the context of the OFT’s powers and the broad range of the adjudicator’s role. I do not think that it would be a constructive process. Moreover, the time required for it would not deal with the immediacy of some of the adjudicator’s recommendations.
As for Select Committees, of course they have a role, but they have no directional force. They can recommend, but their recommendations are often ignored, or there is a long gestation period between the initiation of a review and the acceptance and implementation of recommendations in the subsequent report.
I understand the reason for the Minister’s responses in Committee. I realise that she does not want to over-bureaucratise the process. However, I think that the world has changed and moved on since the Committee stage. There has been, for instance, the issue of public concern about the content of consumer goods following the horsemeat scandal. People expect the Government to be decisive, as well as open and transparent, in tidying up the current mess, but in the long term they expect a system that will monitor the operations of the supermarkets and other parts of the grocery supply chain. It is necessary to ensure that when we have a structure in place it operates openly, transparently and effectively, and that is what my amendment seeks to do.
If we cannot give the OFT a duty to report on whether or not it has acted on a recommendation from the groceries code adjudicator or has taken it into account, that demonstrates the weakness of the Bill. The amendment does not even require a detailed report giving reasons for the OFT’s decision, although there will probably be a public clamour for such a requirement following the rejection of a recommendation. This is a simple, minor amendment, which I think the House would be expected to support in the current climate. For that reason I intend, if time permits, to press it to a Division.
Sir James Paice
I listened carefully to what was said by my hon. Friend the Member for Shipley (Philip Davies). I fully accept the logic of saying that there are some very large food producers in the world whose market dominance is such that they do not need the protection of the Bill. However, I think that a careful reading of it demonstrates that it will ensure that the instances cited by my hon. Friend will not actually come to pass. I remind him of my earlier point—which was endorsed, in different terms, by the hon. Member for Ogmore (Huw Irranca-Davies)—that this was purely about the groceries code adjudicator. Many of the businesses listed by my hon. Friend may be only partly involved in groceries. For instance, a number of the products of Procter & Gamble, about which he spoke at length, are not grocery products. Moreover, the trading arms of big multinational conglomerates are likely, as individual suppliers, to be much smaller organisations.
Let me now deal with a point of principle raised by my hon. Friend. He sought to pour scorn on those of us who are also Conservative Members, but who support the Bill. He said that he was entirely in favour of a free market. I too am in favour of a free market, but I also believe in a fair market. If we took the definition of a free market to its extreme, which my hon. Friend came close to doing, we would end up with a single retailer and a single supplier, because that it is the eventual aim. The game of Monopoly is the arch-example of a total, unfettered free enterprise. I strongly believe, not that markets must be regulated, but that when there is a clear imbalance in a market, some element of fairness is necessary. I remind my hon. Friend that one of the great market philosophers, Adam Smith, said that a true market was one in which there were equal numbers of suppliers and purchasers.
Justin Tomlinson
That is the point of new clause 2. It would focus time, resources and attention on the suppliers whom we need to protect in order to ensure that there is no monopoly from their point of view.
Sir James Paice
I will come to that specific point, but let me first deal with the more philosophical point raised by my hon. Friend the Member for Shipley, who made it clear that he did not consider those of us who share these Benches with him to be true Conservatives if we supported the Bill. I wish to rebut that view. The Bill is necessary because—as has just been suggested by my hon. Friend the Member for North Swindon (Justin Tomlinson)—notwithstanding what was said by my hon. Friend the Member for Shipley, there are plenty of examples of supermarkets exceeding what I believe to be fair terms of trade.
During my time as a Minister, I had a number of meetings with supermarket chief executives, either alone or in a group. Most of them—and, indeed, other senior directors and officials from supermarkets—would argue, as has my hon. Friend the Member for Shipley, that there is no need for the Bill, and that they are already doing everything fairly, above board and properly. I can only conclude that many chief executives do not know what is being done in their names by people operating much further down the chain. Reference has been made to buyers. Since the code was introduced in 2010, there have been numerous examples, some quite recent, of suppliers being verbally required by supermarkets to use a nominated haulier, even though the supplier may be able to find an equally good and competent haulier to do the job for less money. There are also examples of supermarkets seeing that a supplier has made a certain amount of profit in one year, but instead of saying to them, “We think you’re being excessive and therefore we should pay you slightly less for your product next year,” which we could all accept, they say they want a cheque now—today—for £1.5 million or more before they will even consider doing business with that supplier next year. That is not acceptable; it is not a moral way of doing business, which is why I strongly believe the supermarkets need to be investigated. The debate has understandably ranged over a number of different types of commodities, but the most glaring examples of these practices have been in the fresh produce sector.
My hon. Friend also said that having a supermarket adjudicator would be a waste of time if it turned out that he had nothing to do. My attitude is different. I would be delighted if the adjudicator had nothing to do, because it would demonstrate that everything was being done in accordance with the code and that all suppliers were being treated fairly—although I have to tell my hon. Friend that I do not believe there is any chance whatever of that being the case. Indeed, a number of cases are already being brought forward for the adjudicator to deal with, and I have described a couple of them. I think the threat of such action may well prove to be the answer to our problems, but it is wrong to suggest that there is no need for an adjudicator on the basis that the code is in place, as it is clearly not enforceable through the Office of Fair Trading.
My hon. Friend also seems to ignore the point made by my hon. Friend the Member for St Ives (Andrew George). The Competition Commission’s reason for all this was to look after the consumer. The whole thrust of its argument was that shifting risk from the retailer to the supplier was putting the long-term interests of the consumer at risk, with the result that while items may be cheaper today, they may be far more expensive in future, or the supply chain may no longer exist. That is not in the long-term interests of the consumer.
Philip Davies
I will ignore the nonsensical—and, to be frank, idiotic—point that this measure will be of benefit to consumers. My right hon. Friend said he would be happy for the adjudicator to have nothing to do. Will he tell us how much the adjudicator is going to be paid?
Sir James Paice
I do not know, because it has not been made public. That is a complete irrelevance, however. It is not a reasonable argument, because the situation in this case is the same as it is for judges: if everybody obeyed the law, we would not need any judges, but we would still have them, just in case. There is ample evidence that there will be cases for the adjudicator to adjudicate on, however. The Bill contains a number of limiting provisions, too: the adjudicator can decide not to take up a reference; the adjudicator can fine somebody if the reference has no serious foundation; and the adjudicator’s job is only to arbitrate on alleged breaches of the code, which is quite a narrowly drawn document. I strongly believe the Bill is right as drafted.
Gavin Shuker (Luton South) (Lab/Co-op)
The right hon. Gentleman acquired extensive knowledge of the food sector in his time as a DEFRA Minister. As this new clause addresses the balance of power between suppliers and retailers, I wonder whether in his time as a Minister he came across any evidence that big suppliers were putting downward pressure on retailers in the way the hon. Member for Shipley (Philip Davies) has advanced.
Sir James Paice
The honest answer is that, no, I did not come across such evidence, but it may well have been happening and I just did not know about it, because, as my hon. Friend the Member for Shipley rightly said, those very big suppliers can look after themselves. I am not arguing against what has been said. Indeed, I would have had some sympathy for new clause 2 and the £1 billion threshold if I thought my hon. Friend’s motives were justified, but as a result of the rest of his argument I completely lost any support for it that I might otherwise have had. I also think the Bill as currently drafted will militate against big organisations acting in such ways. The Bill is designed to deal with problems that we all agree arise, and which tend to fall on small and medium-sized enterprises.
Andrew George
I entirely endorse my right hon. Friend’s comments. Following the logic of the arguments advanced by the hon. Member for Shipley, the conclusion we would draw is that the Bill should look both ways, as it were. I have drawn that conclusion and would like the Bill to reflect that, by seeking to ensure there is fair dealing across the supermarket supply chain, so that if a supplier became too powerful, complaints could be made the other way.
Sir James Paice
It is entirely for the Government to decide whether to accept new clause 2. It does not cause me a huge problem, but I believe it to be completely unnecessary for the reasons I have described. Nothing I have said could be deemed to suggest I am against it, but I just do not see any need for it. I certainly believe, however, that there is a very real problem that needs to be addressed, and this Bill seeks to do precisely that. That is not the basis on which my hon. Friend the Member for Shipley proposes his amendments, however; as he has said, he does not agree with the Bill at all. I do agree with it, and I would like its provisions to become law as soon as possible.
Ian Murray
It is a great pleasure to follow the right hon. Member for South East Cambridgeshire (Sir James Paice). As his contribution shows, we have a cross-party and cross-House consensus on this matter, and we should take it forward.
Amendment 28 provides that when the adjudicator publishes guidance, she must include guidance about which law applies to arbitration and where the arbitration should be conducted. That is particularly important where there are suppliers from remote parts of the United Kingdom. Article 11 of the Groceries (Supply Chain Practices) Market Investigation Order 2009—that rolls off the tongue—provides for a dispute resolution scheme. The scheme provides for the application of certain arbitration rules, with London as the default location for any arbitration. Clauses 12(5) and 12(6) of the Bill make provision for the amendment of the scheme and the application of the Arbitration (Scotland) Act 2010 to arbitrations carried out by the adjudicator. However, it will be important for suppliers and retailers alike to be given statutory guidance on the law applicable to arbitrations and the choice of location for arbitration. Our amendment would require the adjudicator to issue such guidance.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr George, I am sure that you are not listening to a message while you are in the Chamber. I hope that we do not see a repeat and that your phone is completely switched off.
Ian Murray
Thank you, Mr Deputy Speaker.
We know the origins of the code came from the Competition Commission report in 2008; we have already discussed the excessive risks to suppliers, particularly overseas ones. The practices behind that would have had the potential to harm those producers overseas who are the most vulnerable and to be an obstacle to progress on the pay and conditions of, and innovation by, farmers and farm workers in developing countries. UK shoppers rightly enjoy the widest range of choice, via large retailers. The outstanding quality of produce cannot be in doubt, but the Bill has the opportunity to ensure that there is protection for all territories and to make a large contribution to the development of other countries. Amendment 30 asks for the code to be extended to other territories and asks the adjudicator to look at this matter when making recommendations to the OFT.
The subsidiaries issue is also worth exploring, as it shows clearly that the large retailers have different arrangements in place. That has to be taken into account, which is what the amendment seeks to achieve. It would be good to get clarity from the Minister on what the process would be if difficulties were identified with regard to the code in these subsidiaries or other territories. The relationship of the code in the complex matrix of buying and production is from the large retailer to the immediate supplier. As the Bill stands, that means that the large retailer is able to set up subsidiaries to buy apples from X Ltd rather than directly from the supplier.
Amendment 34 stands in my name and that of my hon. Friend the Member for Ogmore (Huw Irranca-Davies), and it goes to the heart of some of the main issues that have been discussed in the House over the past few months. Our amendment calls on the Government to ensure that the GSCOP, which the adjudicator referees, covers the issue of commercial pressures that can be put on suppliers and that drive down quality and safety, creating possible food scandals, such as the recent revelations around horsemeat in beef products.
The amendment would explicitly enable the adjudicator to include in its annual report details of any incidents where it had become aware that commercial pressure had been applied to suppliers to drive down costs, standards and health and safety, resulting in a drop in food standards or authenticity. To answer some of the criticisms that will probably come from the hon. Member for Shipley and his like, I should say that the amendment is directly related to clause 14 and the annual report to the OFT, not necessarily in the sense of the issues arising where someone takes a case to the adjudicator to deal with in terms of the code.
Amendment 35 would require the adjudicator to send its annual report to the Food Standards Agency. That would create an important link between the adjudicator and the FSA in terms of some of the issues related to the horsemeat scandal that we have seen in recent weeks. As has been reported, the UK’s National Beef Association has blamed what it called the “bullying culture” that retail buyers have used for decades for the presence of horsemeat in beef products. Its national director, Chris Mallon, has said the public and retailers were paying the price for
“short-sighted, price-led purchasing tactics”.
He said that buyers had
“adopted a bullying culture aimed exclusively at securing as much farm food as possible, for as little cost as possible, and the result is tortured supply chains that add so much unnecessary cost that short cuts on quality and traceability, and even cheating by some suppliers, was inevitable.”
That quote shows how important it might be to include the amendment in the Bill.
Consumers must have confidence that the food they buy is correctly labelled, legal and safe, but over recent weeks that confidence has been hit hard. Many of the problems in this particular scandal have been outright criminal, and, of course, the criminal courts will deal with those, but Ministers have been slow to act, as has been shown in our debates in this House. The Food Safety Authority of Ireland has been ahead of the UK every step of the way. By having an annual reporting requirement on food safety and hygiene through the adjudicator, some of the issues that have been raised eloquently by the national director of the UK NBA could be dealt with.
The amendment has another link with the Food Standards Agency, as its budget has been cut from £143 million to £132 million. Although we should not get into a debate today about budgets of particular Government agencies or Departments, it would be an important step to say that the adjudicator, in its report to the OFT, could refer some of these cases. That might help to soften the blow caused by the reduction in resources.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
It would be helpful if the hon. Gentleman made clear his belief, which is certainly my belief, that no matter what commercial pressures there are, it does not excuse criminal behaviour on the part of producers, processors or retailers.
Ian Murray
I agree 100% with the Minister. We hope that by having the adjudicator reporting annually to the OFT on those issues, steps would be taken before any criminal activity had taken place. That might be dealt with at a much earlier stage in the process, because the adjudicator may come across instances where it feels the costs have been driven down so low as to compromise food safety. Our approach would allow a supplier to take such issues to the adjudicator, and they may be included in the adjudicator’s annual report. That might help to stop things reaching the stage we have seen in the past few weeks. The amendment could play an important part in tackling future abuses that could occur—that goes to the heart of what the Minister has just said. Does the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who is going to reply, agree that it is crucial that the adjudicator is alert to these issues? Will she therefore support our amendment to allow the adjudicator to report any abuses it sees occurring on food hygiene and food safety issues directly to the OFT? My hon. Friend the Member for Ogmore might want to expand on some of those points.
Amendment 3, tabled by my hon. Friend the Member for Hayes and Harlington (John McDonnell), is critical as it would require the Office of Fair Trading explicitly to respond to the recommendations that the adjudicator publishes. If the adjudicator were to include a food hygiene or food safety issue in their annual report to the OFT, it is only fair that the OFT should have to respond to those recommendations. That should be considered in how the GSCOP and the adjudicator are set up.
As the Bill stands, the adjudicator can make recommendations to the OFT should it determine that changes should be made to the groceries code. Of course, only the OFT can change the code, but, critically, nothing in the Bill binds it merely to respond to the recommendations. We are not saying that a binding clause in the Bill should ensure that the OFT acts on every recommendation, but the OFT should at least be bound to respond to the recommendations so that the industry has some transparency on the issues raised in the report. We made that point in Committee on a number of occasions. The Minister responded that if the OFT continued to ignore the recommendations, the Government would step in and do something about it. Indeed, she suggested that there could be some review of the OFT’s processes. That is all well and good, and I appreciate the fact that she gave that reassurance, but we are looking for a two-way dialogue between the adjudicator’s office and the OFT. My hon. Friend the Member for Ogmore and I have put our names to the amendment and we will certainly support my hon. Friend the Member for Hayes and Harlington if he wishes to press it to a Division.
Let me turn briefly to some of the issues raised by the hon. Member for Shipley. Sometimes we need regulation to allow the free market to work properly. Indeed, the whole purpose of the groceries code and the groceries code adjudicator is to ensure that those markets work properly without a damaging imbalance in the power of the various factors concerned. The large companies listed by the hon. Gentleman can look after themselves, and he is right to raise that issue, but they will not go to the adjudicator. The adjudicator has been set up to consider supplier imbalances in market power, as considered by the Competition Commission. I am sure that the adjudicator would not wish to consider an imbalance in the other direction just because she is not mandated to do so.
As for the sunset clause, the hon. Member for Shipley cannot have it both ways. He says that the adjudicator will have nothing to do, but also says that the adjudicator will look after the interests of the very large organisations. If the adjudicator will have lots to do, we will not want a sunset clause after seven years. The adjudicator will therefore carry on. New clause 3 is unnecessary as we must show our confidence that the adjudicator will do a good job.
I do not think that I need to deal directly with the amendments tabled by the hon. Member for Christchurch (Mr Chope), given that we have already dealt through amendment 30 with whether the ActionAid and Traidcraft issues of international territorial extent can be dealt with. I have some sympathy with amendment 27, as one of the big arguments in Committee was that the adjudicator could not come in on day one after Royal Assent—I think the hon. Member for St Ives (Andrew George) also mentioned that in one of his amendments—to consider the issues happening now as well as to collect evidence on what has happened since the groceries code came into effect. The amendment would be very sensible; the quicker the adjudicator gets up and running the better as she will have to deal with either lots of issues or, if the hon. Member for Shipley is correct, none.
I will wish to test the view of the House on amendment 34, which is, of course, consequential on amendment 35. We would also like to support my hon. Friend the Member for Hayes and Harlington if he wishes to press amendment 3.
Mr Spencer
I shall not detain the House for long, but I want to make some general comments about some of the amendments and new clauses.
I rise with an enormous amount of frustration, because in my opinion a number of Members seem not wholly to understand the role of the adjudicator and how they will fit in to the grocery supply chain in the United Kingdom. There has been an enormous amount of debate on new clauses 2 and 3, tabled by my hon. Friend the Member for Shipley (Philip Davies), which I would like to explore. I understand his motivation in trying to ensure that the adjudicator deals with smaller companies, but I think he misunderstands how the grocery supply chain works.
Philip Davies
My amendment does not seek to restrict the remit only to very small suppliers but to suppliers with a turnover of up to £1 billion; surely my hon. Friend cannot argue that a supplier with a turnover of £950 million is a very small supplier.
Mr Spencer
I am grateful to my hon. Friend for his intervention, as it allows me to clarify that that is my exact point. At no point will there be such a negotiation, as this is not a David and Goliath situation. We are talking about two Goliaths, so the adjudicator will have no role. My hon. Friend has made a career of criticising unnecessary legislation and it seems strange that he should now want to introduce an unnecessary clause into a Bill. I hope that he recognises that new clause 2 would not be necessary simply because the adjudicator will not have a role in negotiating between two Goliaths.
Justin Tomlinson
Surely the new clause will send a crystal clear message to the adjudicator, when they take on the role, about where they need to focus their efforts.
Mr Spencer
Again, there is a misunderstanding of what will happen. We are talking about very large companies that are negotiating with very large companies. They both have an equal amount of commercial muscle, so no one party will be able to bully the other. That is quite important. The adjudicator is meant to get involved as a referee and negotiate when one large party abuses a smaller party and uses its commercial muscle to push something through.
Andrew George
I support the arguments that my hon. Friend is making. He knows that this is a dynamic and creative market in which a number of intermediaries and subsidiaries have been created with a turnover of more than £1 billion, which could be used as a means of sidestepping the legislation if new clause 2 was accepted.
Mr Spencer
I recognise that. I pay tribute to the hon. Gentleman, who has worked on this matter since before I became a Member. Perhaps that is something that the adjudicator could look at as we move forward. There is this ability to put a film between parties and cause an issue. That comes back to small suppliers, who supply the middlemen.
New clause 3 would cause the Bill to expire after seven years. It would be disappointing if it did so. Using the analogy of a football match, if we get to half time and the referee has not needed to issue a yellow card, no one suggests that we do not need a referee in the second half.
George Eustice (Camborne and Redruth) (Con)
We have had plenty of time to understand how supermarkets deal with their suppliers and it is precisely because of that that everyone who has looked seriously at this issue has concluded that we need an adjudicator.
Mr Spencer
I am happy to agree with my hon. Friend and I pay tribute to the work that he has done to bring the legislation to this point.
Mr David Nuttall (Bury North) (Con)
Does my hon. Friend agree that, regardless of whether there have been complaints, the existence of the adjudicators office will bring a cost so it would make sense to bring the whole thing to an end if it is not proving worth while to the consumer?
Mr Spencer
My hon. Friend makes an interesting point. We could make the same argument across government; if crime starts to fall in an area, do we withdraw the police because they are not necessary? We have to have a referee to make sure that the rules are being obeyed. The groceries code adjudicator will be a great referee and will have the teeth to make sure that the Goliath does not bully the David. That is something that the Government should be proud of and take forward to bring a little parity and common sense to the market.
Huw Irranca-Davies
I am pleased to speak in this debate and I welcome the speeches that have been made so far. I did not expect it to be as sparky as it has been, but I welcome that because it allows us to flush out the arguments about the amendments and new clauses, as well as the fundamental principles of what we are trying to achieve.
I did not intend to speak to new clauses 1, 2 and 3, but I wish to reiterate the comments made by the hon. Member for Sherwood (Mr Spencer), the right hon. Member for South East Cambridgeshire (Sir James Paice) and others. A great deal of discussion in Committee focused on the fact that the adjudicator’s office will intentionally be small, mean and lean. It will not be some behemoth, as the hon. Members who spoke to new clauses 1, 2 and 3 suggested it would be. It is supposed to be an intelligent organisation that does not go on fishing expeditions but responds to good intelligence. I suspect that if there are no cases to follow, the report will be very slim indeed. I suspect that the adjudicator will not respond to Procter & Gamble or anyone else if they are asked, “Please look at the power relationship within the supply chain and how we are being disgracefully abused.”
The hon. Member for Shipley (Philip Davies) spoke to new clauses 1, 2 and 3 at great length. New clause 3 gives the reality to the mission, which is at a set moment in time to get rid of the adjudicator, which would fly in the face of the advice that has come down over years from the Competition Commission and others that there is a need for such an adjudicator. Lean and mean, yes, but the hon. Member for Shipley should have some faith in the adjudicator and, having advertised the position and given her the power and set up the office on a lean, mean basis, he should allow her to decide where to investigate to achieve a good, efficient supply chain.
Philip Davies
The hon. Gentleman seemed to be criticising me for moving my new clause at great length. Does he accept that I spoke at great length because I took such a large volume of interventions, not least from him?
Huw Irranca-Davies
I am in no way being critical of speaking at great length. I can extemporise for the nation myself on occasions. I do not criticise the length of time and I am glad that the hon. Gentleman has had the opportunity to expound his arguments. I have no doubt that he and colleagues who spoke in support of his new clauses believe firmly in what he was saying and believe that we should have much more of what he regards as a free market. I am not anti-free market. The hon. Gentleman may not realise it, but I spent six years working in the private sector running leisure centres, theatres and so on. I understand how the free market works. I have worked within it as a manager and as a business person. I am opposed to the approach that says that we can beggar our neighbour or have a race to the bottom.
The hon. Member for Shipley challenged Members to go and explain to their constituents why they would argue against the cheapest possible price. I will not argue that we should have the cheapest price for every product on a supermarket shelf if that means sacrificing much-needed employment protection such as the Gangmasters Licensing Authority or sacrificing the standards in British agriculture of which we are rightly proud, such as animal welfare standards and so on. His argument that we should provide the very cheapest by lowering standards on food safety, food provenance, nutrition or employment rights is the argument that has previously exposed to their detriment multinational companies when they have been caught out for exploitation or low standards. We have only to think back, in a wholly different sector, to some years ago and to Nike in the previous World Cup when the very footballs on the field were being produced in sweatshop conditions in developing countries. Was that to its benefit?
I want to speak to our amendments 34 and 35, which stand in the name of my hon. Friend the Member for Edinburgh South (Ian Murray) and myself. Another illustration, if the House wants a more recent case, is the issue of food provenance and safety. No hon. Member can seriously argue that the commercial pressures along a complex supply chain have had no bearing on the entry of significant levels of adulterated meat. That is where a pure free market ideology will take us, and that is why I stand out firmly against the spirit in which the new clauses were tabled.
Justin Tomlinson
The hon. Gentleman is making some excellent points, and I want to support them by gently reminding him that new clause 2 will prevent the adjudicator from supporting those very multinational companies that he seeks to name and shame.
Huw Irranca-Davies
The hon. Gentleman has intrigued me. Let us say that a larger operator over the turnover steps forward to the adjudicator with evidence that does not affect it directly but affects a series of smaller suppliers right down the chain. Does he seriously suggest that the adjudicator should not be able to take action on that? I trust the adjudicator to follow the evidence and identify the power relationship if the supply chain is being abused. If the evidence comes from a larger operator, all to the good. I want the adjudicator to step in and take the right action.
Ms Margaret Ritchie (South Down) (SDLP)
Does my hon. Friend agree that there is a need to protect all within the food supply chain? I represent a constituency in Northern Ireland and I am conscious of the dysfunctionality in that chain in relation to food prices, but also now in relation to food provenance and labelling.
Huw Irranca-Davies
The hon. Lady is right. She speaks to the spirit and the letter of the amendments, to which I will now turn my attention. Amendments 34 and 35 are critical in view of what has passed before our eyes in the time since the Bill left Committee.
As hon. Members will know, last week Sodexho, one of the biggest catering firms in the UK and indeed in Europe, which supplies processed meat to schools, hospitals and our armed forces, withdrew all its frozen beef products after discovering adulteration with horsemeat. This is where the race to the bottom and the aim to be the cheapest of all lead us, when the cost of horsemeat going into mince is a quarter of that of good British beef, without appropriate regulation—and enforcement of that regulation.
Mr Heath
It is important that people understand what that advice is and what the data suggest. It has been set out very clearly by the chief medical officer, and I do not want anyone to go away from this debate believing that one in 20,000 people are subject to serious medical consequences from consuming bute. It is clear that the highest level that could be found in food products is, by a factor of thousands—by a factor of 103—lower than that shown to have any adverse consequences for human health. Moreover, those adverse consequences affect only a very small proportion of people receiving pharmaceutical doses of the drug. It is very important that we understand the risk factors, and I am sure that the hon. Gentleman does not wish to misrepresent them.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sure that we do not want to continue this debate and that the hon. Gentleman is desperate to get back to the subject of the amendment.
Huw Irranca-Davies
Absolutely. I make the point to illustrate how important this amendment is in terms of food safety and provenance. I just want to correct the record. The Minister said that it was one in 20,000, but it is roughly one in 2,000. I repeat to the Minister that the advice given directly to the Government was that there is a possibility of adverse effects—
Mr Deputy Speaker
Order. Do not test my patience any more. We can both agree that you are desperate to speak to the amendment and now you are going to go back to it. We do not want to have to bring someone else in just yet, do we?
Huw Irranca-Davies
I would love to give way to the right hon. Gentleman as long as he does not seek to draw me in to contravening your guidance, Mr Deputy Speaker.
Sir James Paice
I do not know why on earth the hon. Gentleman thinks that I might want to draw him into confrontation with you, Mr Deputy Speaker.
I want to challenge the hon. Gentleman on a more fundamental aspect of the amendments. In an earlier intervention on my hon. Friend the Member for Shipley (Philip Davies), the hon. Gentleman rightly made the point that the whole Bill is about enforcement of the grocery code of practice. I understand his wanting to raise the horsemeat scandal whenever he can, but does he really believe that these amendments—especially amendment 34, which would require the adjudicator to report on issues of food safety, food hygiene and food authenticity—fall within the code of practice? He is proposing to extend dramatically the power of the adjudicator and the role of this legislation way beyond anything that the Competition Commission ever envisaged.
Huw Irranca-Davies
I thank the right hon. Gentleman for not tempting me to infringe the guidance you have given, Mr Deputy Speaker.
We had a great deal of debate in Committee on the ability of the groceries code adjudicator to comment on several issues concerning the supply chain. In fact, on both sides of the House, several hon. Members said that if the adjudicator were aware of abuses elsewhere they would expect the adjudicator to inform the relevant authorities. I shall be interested in the Government’s response to the amendment, but I would have thought that there was almost an obligation on the adjudicator to report any observed abuse in the management of the supply chain. That is what the amendment seeks to achieve. I agree with my hon. Friend the Member for Edinburgh South that amendments 34 and 35 are important, and we are convinced that the adjudicator should have an eye to this function as well as his or her core role on the supply chain.
Mr Chope
I support new clause 2. In most people’s eyes the Bill was designed essentially to protect the UK supplier, particularly of fresh produce, as my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice) said. What the hon. Member for Ogmore (Huw Irranca-Davies) has just delivered is a scaremongering speech designed to undermine British suppliers of fresh meat and produce. That is extremely regrettable.
Last night I attended a speech given by the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon). His speech was entitled, “Deregulation for Growth”. I must admit to being slightly confused about what I have heard so far during this debate, because it seems to be about regulation. How, I ask the Minister, will the Bill be consistent with the Government’s growth agenda? Perhaps she will tell us when she responds.
The Minister last night said that there was a two-for-one principle—that for every £1 of additional burden imposed through regulation, £2 of savings of regulation had to be found. That brings me to new clauses 4 and 5, which are designed to highlight the fact that the Bill as drafted will embody the law of unintended consequences writ large. It will potentially benefit suppliers not only from elsewhere in Europe, but from right across the globe, when most people who support the Bill think they are doing so in order to help the farmer down the road in the United Kingdom. That is far from the case. What will happen is that the Bill will enable suppliers from overseas to exploit our system, at a time when our own suppliers and producers are not able to access overseas markets on an equivalent basis.
Mr Chope
My hon. Friend anticipates the argument that I am going to put. I was in discussion about whether an amendment referring only to “outside the United Kingdom” would be in order and selectable. On advice—obviously, I am responsible for deciding whether to act on advice—I decided that my new clause was much more likely to be selected if, instead of referring to the United Kingdom, I referred to the European Union. That is because of single market and European Union rules. Obviously, I wanted to ensure as far as possible that my new clause would be selectable, but my hon. Friend makes a good point. He is saying that the whole public debate is about why cannot we buy British—buy UK food and thereby avoid the risk associated—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I gently remind Parliamentary Private Secretaries —[Interruption.] Order. A Member is speaking, and unfortunately every time a PPS walks past, it is at eye-level of the camera. The first time it is not too bad, but it is happening constantly. We all want to hear Mr Chope, and I am sure the PPSs would like to hear a little more from him.
Mr Chope
The only comfort that I take is that my remarks are evidently creating such confusion on the Front Bench that Ministers need an enormous number of messages sent to them from the Box. I take some consolation from that.
It is incumbent upon the Minister when she replies to explain how the Bill will help UK producers while not giving benefits and privileges to producers from the rest of the European Union, let alone from outside the European Union. I should like to give the Minister the maximum amount of time to respond to the debate.
Amendment 27 seemed to be warmly endorsed from the Opposition Front Bench. I do not understand why the Opposition did not table such an amendment themselves in Committee or on Report. The amendment proposes that the Bill come into force two months after Royal Assent. Then it would be clear on the face of the Bill when it would come into force. If this is such fantastic legislation, why do we not bring it in in the normal way—the whole Bill, two months after Royal Assent? I hope the Minister will respond to those points and particularly to the powerful argument advanced by my hon. Friend the Member for Shipley (Philip Davies) in relation to new clause 2.
Mr Bone
I shall be brief, because under the programme motion we have only half an hour left to discuss the whole of the remaining stages of the Bill. The programme motion has been proved to be hopeless, as we will not even get to the next group of amendments.
I refer the House to my entry in the register. I cannot quite relate to the supermarket industry, but I can relate to the travel industry, where the margins are similar and the competition levels are as great, and there are a number of big suppliers who put pressure on smaller suppliers. In my day, I was one of those smaller suppliers, but I did not come across the practices that have been described as happening in the supermarkets, where there have been nasty attempts to force the use of the hauliers demanded by the supermarkets. I did not come across such things, so I accept that this is a very different case.
The whole House supports the small producers, who are unfairly penalised by the actions of very large supermarkets. However, the House should not be united in giving support to companies that may be even greater than the supermarkets. I am attracted by and minded to support new clause 2, unless the Minister—and a very fine Minister she is, too—can persuade the House that there is some fundamental reason not to support it. It is possible that having listened to arguments from all parts of the House, she will say that the Government accept new clause 2.
That is the sort of thing that I would like to see more often in Parliament when reasoned cases are made which do not in any way affect what the Government want. In fact, new clause 2 enhances what the Government want. If big companies are excluded from being able to use the adjudicator, that will allow the adjudicator more time and allow the adjudicator to reach decisions more quickly on the small suppliers that matter. That is why I intervened on the former Minister, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice). I wanted to see whether there was a reason why we should not adopt new clause 2. I see no reason why we should not go ahead and accept it. I hope the Minister will do that, but if not, I am minded to support it in a Division.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I thank all the hon. Members who have contributed to the debate on this series of amendments and for tabling the amendments, through which we have discussed and probed various issues.
It might be helpful to recap briefly on why we are here, which relates to the reasons why I may have to disappoint hon. Members and not be able to accept their amendments—that is, the purpose of the groceries code adjudicator and how we have come to the Bill before us. That relates to the Competition Commission report, which found that although the market was functioning effectively in delivering low prices to consumers, some practices by large retailers could have an anti-competitive effect.
The Competition Commission found that, through buyer power, the large retailers were engaging in practices that transferred excessive risk and unexpected costs to their suppliers, and that this in turn could reduce the incentive of suppliers to invest and innovate, which would act against the long-term interests of consumers. It is worth noting that all six members of the Competition Commission group who undertook the market investigation into groceries agreed that the transfer of excessive risks or unexpected costs by grocery retailers to their suppliers is likely to lessen suppliers’ incentives to invest in new capacity, products and production processes. If unchecked, those practices would ultimately have a detrimental effect on consumers. Paragraph 11.375 of the commission’s report states clearly that all but one member of the investigation panel considered the adjudicator essential for the monitoring and enforcement of the code and that the code on its own would not be enough. That relates to the points my hon. Friend the Member for Shipley (Philip Davies) raised earlier.
The Competition Commission’s report is absolutely key. It created the groceries supply order and the code is derived from it, and that is what needs to be enforced by the adjudicator. That is why the Government will resist the amendments that would encourage the adjudicator to deviate from the report.
It is worth mentioning that creating the adjudicator was in all three major parties’ manifestos. It has been endorsed by the Business, Innovation and Skills Committee in pre-legislative scrutiny. It is appropriate at this moment to report to the House that, following our discussions on Second Reading and in Committee and other representations, pre-appointment scrutiny by the Select Committee will now happen. I am delighted that the Government have been able to accommodate that request, because such scrutiny from a Select Committee is welcome, leads to better legislation and strengthens Parliament.
Philip Davies
Is the Minister saying that she is incapable of making her own decision and exercising her own judgment and that she believes that her role is simply to rubber-stamp what the Competition Commission and a Select Committee say and leave all other critical faculties at home?
Jo Swinson
No, but I think that it is very important to listen to Parliament, as I have outlined. Indeed, I think that was the point that some of my hon. Friend’s colleagues made earlier.
A code without an adjudicator is, to borrow an analogy from my hon. Friend the Member for St Ives (Andrew George), like a sports match with a rule book but no referee. The hon. Member for Ogmore (Huw Irranca-Davies) described the climate of fear, which can mean that suppliers are unwilling to come forward, and that is why the independent adjudicator is necessary.
New clauses 1, 2, 4 and 5, which were tabled by a combination of the hon. Members for Shipley, for Christchurch (Mr Chope) and for Bury North (Mr Nuttall), would all restrict the operation of the adjudicator so that it would be less extensive than the coverage provided by the code, either by excluding suppliers above a certain turnover or excluding supplies from outside the EU. I do not think that in principle that is a sensible approach to take. As I have said, the groceries code was put in place by the Competition Commission, after a detailed and thorough investigation, to rectify certain features of the groceries market that were causing long-term detriment to consumers. The adjudicator’s prime purpose is to enforce the code, so it is sensible and coherent that they and the code should have the same coverage.
With regard to the suggestion in new clause 2 that suppliers with a large turnover should be excluded, it is important to point out that the Competition Commission and the Select Committee explicitly considered that and concluded that excluding certain suppliers would not be appropriate. The Committee stated in its report that such an approach “would be impractical” and that because GSCOP applies to suppliers of all sizes, so should its monitoring enforcement. The Committee stated that the adjudicator is the gateway to the dispute resolution procedure, so with no access to the adjudicator large suppliers would have only the courts for redress, not the arbitration process, which is also very helpful. If the evidence from large suppliers on whether retailers are complying cannot be taken into account, smaller suppliers—this point was made earlier by other hon. Members—might also lose out because the evidence might be crucial to the case. According to the Select Committee, large suppliers might be better able to bring widespread potential breaches to the adjudicator’s attention than small suppliers. For all those reasons, it is important that the scope of the adjudicator fits that of the code.
We had many discussions on whether we should restrict who can complain. In Committee and in the earlier pre-legislative scrutiny those discussions centred on whether trade associations should be allowed to complain. We have decided to allow evidence from any source whatever. Ruling out evidence from particular sources would weaken the adjudicator, which I suspect might be the intention of the amendment, given that it has been tabled by those who do not want the adjudicator to be in place at all.
Mr Bone
The Minister is quite wrong on that. I am not coming from that position; I came to that view after listening to the debate. Does she not fear that there is a danger that allowing large suppliers to go to the adjudicator will clog up the system so that it cannot look after small suppliers, which is what it is supposed to do?
Jo Swinson
I do not believe that is the case. The adjudicator will obviously be able to make their own assessments. The industry is confident that there will be very few complaints, and I wholeheartedly hope that will be the case, but if we find that there are many breaches of the code, and if the evidence comes from a variety of sources, the adjudicator will need to look at that and be empowered to make recommendations and requests, and they will need to be properly and adequately resourced in order to do so. Therefore, an arbitrary restriction on who can complain would actually make the adjudicator’s life harder and, indeed, could increase the risk of judicial review, so we will reject the new clause and encourage hon. Members to oppose it if it is pressed to a Division.
The hon. Member for Shipley seemed to suggest that the provision would cost consumers more money, but all the supermarkets that gave evidence on the matter said, when asked, that complying with the code had not caused them to raise prices, so his concerns are misplaced. This will not cost consumers. Indeed, surveys have shown that 84% of consumers support the adjudicator, and I am sure that hon. Members will be well aware from their mail bags that there is a great deal of public support for the adjudicator.
Ian Murray
The Minister is making a compelling case for the Bill, which we all support. I wonder whether she will reflect on the fact that some of the evidence we received in Committee and before showed that the groceries code and a well-functioning adjudicator will help innovation in the supply chain sector and therefore has the opportunity to lower prices for the consumer.
Jo Swinson
The hon. Gentleman makes an important point. The Competition Commission was very clear that innovation could be stifled by the potential anti-competitive practices in the sector, so it absolutely follows that encouraging innovation by ensuring that no anti-competitive practices are going on will allow consumers ultimately to get a better deal, and that is in their interests.
A few red herrings were put forward on the question of whether Esso and tobacco companies would be protected in some way by this. I refer hon. Members, as the right hon. Member for South East Cambridgeshire (Sir James Paice) did, to the Groceries (Supply Chain Practices) Market Investigation Order 2009, which is very clear. It states, on page 3:
“Groceries means food (other than that sold for consumption in the store), pet food, drinks (alcoholic and non-alcoholic, other than that sold for consumption in the store), cleaning products, toiletries and household goods, but excludes petrol, clothing, DIY products, financial services, pharmaceuticals, newspapers, magazines, greetings cards, CDs, DVDs, videos and audio tapes, toys, plants, flowers, perfumes, cosmetics, electrical appliances, kitchen hardware, gardening equipment, books, tobacco and tobacco products”.
That is what was found to be relevant through the Competition Commission’s investigation. I think that it is important to note for the record that some of those earlier red herrings were just that.
The hon. Member for Ogmore said that the adjudicator’s office would not involve huge costs. It is estimated that the costs of running it, including all running costs and staff salaries, will be £800,000 a year. As for how much of that is for the adjudicator themselves, they are currently acting as adjudicator-designate for one day a week on £23,000 a year, going up to three days a week on the same rate once we have Royal Assent and commencement, as we very much hope we will.
On new clauses 4 and 5, it is fundamentally right that large supermarkets should treat their suppliers fairly wherever those suppliers are located. The Competition Commission’s finding of decreased innovation and investment in the supply chain is likely to result from unfair treatment of suppliers and to cause detriment to consumers, regardless of whether those suppliers are outside the EU or the UK. Excluding overseas suppliers would therefore not be helpful to the fundamental purpose of the provision and would, indeed, undermine it. The code and the adjudicator complement each other and so they need to have the same scope. I resisted in Committee amendments that would have expanded the adjudicator’s role beyond merely enforcing the code, but I must now also resist amendments that would limit the adjudicator’s scope to being narrower than the code. I hope that my hon. Friends will withdraw their amendments, but if they choose not to do so I will advise colleagues to vote against them.
John McDonnell
Does that mean, then, that the Minister can now place it on the record that the Government expect the OFT to respond in a public, open, transparent and timely manner to any requests or recommendations by the adjudicator?
Jo Swinson
I absolutely give that assurance. If a body such as the OFT receives information, particularly from a respected public servant, we would expect it to respond appropriately as part of its general duty, but we do not want to be overly prescriptive in how we set that out in legislation. I hope that that reassurance is helpful to the hon. Gentleman and I urge him not to press his amendment.
Amendment 28 would require the adjudicator to set out in guidance which laws will apply to arbitration and where it will be conducted. The amendment is superfluous, because it would duplicate information that is already in the groceries supply order. We discussed arbitration in Committee, as did the other place when it debated the Bill. Article 11 of the order sets out the rules that will apply and the fact that
“the seat or legal place of arbitration will be London…or such other city within the United Kingdom as the Supplier nominates.”
Of course, the adjudicator may choose to publish guidance on arbitration, but we do not believe that it is necessary to make that a requirement under the Bill.
Jo Swinson
No, I am not. We have had an interesting debate, although I suspect it could have been more concise; nevertheless, we are where we are.
The hon. Member for Christchurch (Mr Chope) tabled amendment 27 on commencement. I am happy to make a commitment that the Government intend commencement to take place two months after the Bill receives Royal Assent. It is, however, usual procedure not to set that out in legislation, but to allow the Secretary of State discretion to commence an Act by order.
Finally, I cannot accept, in fact or in spirit, new clause 3, which was tabled by the hon. Member for Shipley. I agree that we do not want statutory offices to continue when they are not needed, and the Government have been working according to that principle. Indeed, in accordance with our general policy on sunsetting, the Bill’s sunset clause—clause 15—means that the Secretary of State must review the adjudicator every three years and may decide, if appropriate, to abolish the office. However, proposing an arbitrary end to the Act is not appropriate. If, in seven years’ time, the problems with large retailers that have led to the creation of the Bill and the adjudicator persist, we would not want the Act to be repealed automatically. I reassure Members that the Secretary of State will be rigorous in reviewing this matter. I believe that that is a much better way to ensure that statutory offices do not continue unnecessarily.
I hope that hon. Members are satisfied with my assurances and explanations, and that they will not press their amendments. If that is not the case, I urge hon. Members to reject the amendments before us.
Philip Davies
We have had a good debate. I am grateful to my hon. Friends who have supported my proposals. I am particularly grateful to my hon. Friend the Member for Wellingborough (Mr Bone) who, as he has made clear, came to listen to the debate before making his mind up. He has decided that if new clause 2 was not accepted, we would be in the ludicrous situation whereby retailers with a turnover of more than £1 billion will be subject to the code, but can be taken to the adjudicator by suppliers with a turnover of more than £1 billion who are perfectly big enough and capable of looking after their own interests and taking any disputes to court.
Unfortunately, while my hon. Friend the Member for Wellingborough came to the debate with an open mind, the Minister did not. She made it abundantly clear that she had already decided what the Government’s view was and that the Report stage of the Bill was a completely pointless exercise. Perhaps that is why we have had only three hours to discuss all of today’s proposals. She made it abundantly clear that she was not prepared to listen to the debate or to any arguments because the Competition Commission had told her what she should say and she was not prepared to deviate from that. That makes a farce of having Report stages of Bills. I will allow her to reflect on that.
We cannot allow it to stand that we will be setting up an adjudicator to which multinational companies with a turnover of more than £1 billion will be able to go to make complaints against retailers that also have a turnover of more than £1 billion. We should deliver the best deal for our constituents, not add to the bottom line of big multinational corporations. For that reason, I wish to withdraw new clause 1, but to press new clause 2 to a vote. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 2
Supplier turnover
‘Suppliers are not allowed to refer cases to the Adjudicator and cannot have cases referred on their behalf if their turnover exceeds £1bn per annum.’.—(Philip Davies.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Heath
I beg to move, That the Bill be now read the Third time.
Before I go any further, I wish to thank hon. Members on both sides of the House for their help in shaping this Bill, which is important to my Department and to the Department for Business, Innovation and Skills, where my hon. Friend the Member for East Dunbartonshire (Jo Swinson) is Under-Secretary. It is something of a cliché on these occasions to say that the Bill has been improved by debate, but I genuinely feel that that has been the case with this Bill. It has also been helped by the sense of common purpose in the House for making progress on it.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Will the Minister give way?
Mr Bailey
I hope that my remarks will not preclude that. In my capacity as Chair of the Select Committee on Business, Innovation and Skills I often need to berate Ministers for not doing what the Committee’s in-depth research has demonstrated to be necessary. On this occasion, although the Under-Secretary had concerns about some of our recommendations, on reflection she pretty much adopted whatever the Committee said was appropriate. Just as I berate Ministers on occasion, I want publicly to thank the Under-Secretary for her flexibility and reasonableness.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before the Minister answers that rather lengthy intervention, bordering on a speech, I remind the House that this business must be completed by 4.45 pm. If any interventions are to be made, can they be short, please?
Mr Heath
Thank you for that timely reminder, Mr Deputy Speaker. I shall be brief in my list of thanks.
I thank the hon. Member for West Bromwich West (Mr Bailey) for what he just said. I also thank his Committee and the Select Committee on Environment, Food and Rural Affairs for their work on improving the Bill.
I want to start with my hon. Friend the Under-Secretary who, as the hon. Gentleman says, has done a superb job of listening to people as the Bill has made progress. She took up a baton that was already well on its way thanks to her predecessor, now the Secretary of State for Energy and Climate Change, to the right hon. Member for Meriden (Mrs Spelman) as Secretary of State for Environment, Food and Rural Affairs, and to my immediate predecessor, the right hon. Member for South East Cambridgeshire (Sir James Paice). I can exclusively reveal that there was a conspiracy within government, of which I was part in my previous role as Deputy Leader of the House, to ensure that the Bill made progress whatever other priorities arose as we all felt that it was important.
I also want to mention the contribution of a few others who are not in government. It was a delight to find myself so often in the Lobby with my hon. Friend the Member for St Ives (Andrew George), and he has campaigned vigorously for the measure as chair of the grocery market action group. I stood shoulder to shoulder with him when we were in opposition to make it a reality and his efforts have been appreciated. I hope he feels that they have been rewarded as the Bill reaches the statute book.
The hon. Member for Ynys Môn (Albert Owen) has long pressed for the adjudicator, including in his private Member’s Bill. His pleas fell on deaf ears at the time, but now all is sweetness and light and the Opposition are united with us in taking the Bill forward. I should add, as I am trying to be as consensual as possible, that I know from what my hon. Friend the Under-Secretary has said that colleagues on the Opposition Front Bench made debates in Committee enjoyable and that they made a genuine contribution. As they know, we have listened to what they have had to say and have on occasion been able to agree with them. That goes for the hon. Member for Edinburgh South (Ian Murray) and the hon. Member for Ogmore (Huw Irranca-Davies), who often secretly agree with me but sometimes cannot express it openly—
Mr Heath
I could not possibly; it would embarrass the hon. Member for Ogmore too much.
Now that I have awarded bouquets around the House, I want simply to say that the Bill establishes an adjudicator to enforce the groceries supply code of practice. As recommended by the Competition Commission’s market investigation in 2008, the adjudicator will ensure that large retailers treat their direct suppliers lawfully and fairly. The adjudicator will be able to receive anonymous complaints from any source and may decide to launch an investigation if it is felt that there are reasonable grounds to suspect that the code has been broken. We anticipate there will be around two to four investigations per year and if the adjudicator is satisfied that the code has been broken, a range of sanctions will be available. The adjudicator can make recommendations to a retailer, require it to publish details of the breach, and, in the most egregious cases, impose a financial penalty.
We also announced our preferred candidate for the adjudicator last month. Christine Tacon has a wide range of experience in the groceries sector, has held senior corporate roles in retailers and direct suppliers and spent 11 years as managing director of Co-operative Farms, the largest farming operation in the UK. Members will be pleased to note that she will undergo her pre-appointment hearing with the Business, Innovation and Skills Committee tomorrow, although Ministers retain the final decision on her appointment. We are confident, and we hope that the Committee agrees, that she will be an excellent adjudicator.
We are satisfied that we have given the adjudicator sufficient powers to enforce the code effectively and during pre-legislative scrutiny we broadened our drafting so that the adjudicator could receive information from any source, giving us a good Bill. At the urging of hon. Members on Second Reading, we tabled amendments in Committee to give her the powers to impose fines from the outset. On Report we proposed additional safeguards in relation to clause 15(11) to cover the Secretary of State’s powers to restrict the information on which the adjudicator can start an investigation.
At every step along the way we have improved the Bill, and we now have a Bill of which the House can be proud. The Government have listened to the concerns of hon. Members from all parties to ensure that we create the most effective adjudicator possible, and we believe that we have now achieved that goal. I am delighted to note that a press release from the grocery market action group on 8 February announced in large letters:
“Fair Trade campaigners say Supermarket Watchdog has teeth.”
My hon. Friend the Under-Secretary wanted a watchdog with teeth and even brought the visual aids to support that contention on Second Reading.
We have done our work. I believe that we have a good Bill. I commend it to the House. The sooner we get this adjudicator in place, the better it will be for our producers, consumers and retailers.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before I call Ian Murray, I should say that a lot of hon. Members want to speak, and the debate has to finish at 4.45 pm. No pressure on you there, Mr Murray.
Ian Murray
I will be quick, but let me start by returning the thanks to the Front-Bench team—the Minister of State, Department for Environment, Food and Rural Affairs, and the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), who I recall on Second Reading stamped her authority and said that we would not have fines in the Bill. We now have fines. They stamped their authority in Committee and said that they would not send the appointment of the adjudicator to the BIS Select Committee because it would be a dereliction of their parliamentary duty and was not an important enough position to be subject to a Select Committee pre-appointment hearing. I am delighted that Ministers have come round to our way of thinking. I am also delighted that they came round to the way of thinking of the other place by putting trade associations into the Bill. The Bill is far better now than when it first entered the House, and the Ministers listened to some close analysis and persuasion from the Opposition.
Let me right a wrong that happened in Committee. It is traditional at the end of Committee proceedings to thank all the officials, the Chair and everyone who has been involved in the Committee. I forgot to thank one person—my hon. Friend the Member for Ogmore (Huw Irranca-Davies)—when I was wrapping up the Committee. He has done more in the House than many to get us to where we are today, and I would like to right that wrong by putting on record my thanks to him for everything that he has done and, of course, for his wonderful speech earlier today.
I have tried twice to thank the hon. Member for St Ives (Andrew George) both in the Chamber on Second Reading and in Committee. Just before thanking him, he popped up and threw a wobbler at me of some description. I am delighted that I have been able to thank him today without him doing that.
Of course, my hon. Friend the Member for Ynys Môn (Albert Owen) first brought the matter to the House in his private Member’s Bill, and it should be a proud moment for him today as we send the Bill to the palace for Royal Assent. The last two thanks are to everyone who served on the Committee. We had lively debates. I am disappointed that my hon. Friend the Member for Vale of Clwyd (Chris Ruane) has not taken the opportunity to be in the Chamber. The Under-Secretary of State for Business, Innovation and Skills, had been on her feet for only about 20 seconds in Committee when my hon. Friend popped up and suggested that we should call the new adjudicator Oftrolley. I could not let the moment pass without putting it on record that I am disappointed that he is not here.
We have used a lot of terminology such as “toothless tiger”, and there was a danger that the Bill would be that. The Bill now has teeth. There are still some things that Opposition Members would have added to the Bill, but unfortunately that has not come to pass. We hope that the Ministers will be amenable to changing the way in which the adjudicator works as the process beds in. There are problems with the code itself. The hon. Member for—is it East Bedfordshire?
Ian Murray
Sherwood, of course. I was not even in the right part of the country. The hon. Gentleman used the example in Committee of the dairy farmers dispute. In fact, that dispute would not have been covered even if the adjudicator had been in place, because there had not been a breach of the code. That example was interesting in terms of trying to keep the code live and make sure it is as responsive to the industry as possible—not just to the suppliers. The hon. Member for Shipley (Philip Davies) made some important points. It needs to be responsive to the supermarkets. They make such a considerable contribution to our economy, and we must not forget the role they play. The code has to be responsive to their needs too.
We set three tests for the Bill at the outset, and we have met all of them. We are a little disappointed on intermediaries and supply chain issues, and I hope that Ministers will reflect on those. I gave a commitment on Second Reading and in Committee that we would work constructively with the Government to make this a better Bill. We have done that and we have got a better Bill. Everyone who has been involved in this process for far longer than I have been should be very proud tonight that we will have an adjudicator and, I hope, a far better supply chain and a far better supermarket market.
Mr Spencer
I shall just take 60 seconds to add my congratulations to those on the Front Bench for introducing this Bill. I also pay tribute to the hon. Member for Ynys Môn (Albert Owen) who, before I was a Member of Parliament, had pushed this issue forward through a private Member’s Bill. It is worth noting that it took a change of Government for the Bill to receive Government support, and the coalition should be proud that it has managed to introduce legislation that will level the playing field.
All hon. Members can support fair play, and it is worth reminding everyone that the Bill is not about an adjudicator poking their nose into a private deal or relationship between a supplier and retailer. It is about ensuring that, after they have done the deal, they all stick to the rules and play by the book. I am very proud that the coalition Government have introduced the Bill and will get it on to the statute book. I look forward to fair play in the retail sector.
Albert Owen
It is a pleasure to follow the hon. Member for Sherwood (Mr Spencer). The Minister was right to congratulate those he named in his speech, but he was wrong to say that my private Member’s Bill fell on deaf ears. It fell on some deaf ears among the Liberal Democrats, some in the Conservative party and, yes, some in my party. But I was able to build a consensus on the issue. The reason it did not reach the statute book—as you will recall, Mr Deputy Speaker, as someone who was on the Committee for its very quick single sitting—was that occupational hazard for Members of Parliament known as a general election. But before the election we were able to get all three parties—and some minority parties—to put it into their manifestos. So whoever became the Government would have taken the issue forward.
On Second Reading, I said that the Minister would go down in the folklore of the grocery industry for introducing the Bill. We needed a proper adjudicator. The code had been in place for some time, and nobody argued the need for it, but we had to argue the need for a referee. I single out the hon. Member for St Ives (Andrew George) for his opposition to what was happening at the time. I worked closely with him on my private Member’s Bill, which he sponsored. Indeed, we had sponsors from the entire country.
The Bill is good for consumers, good for producers and good for supermarkets. The supermarkets will come to terms with it in the future and will wonder what the fuss was all about. The adjudicator will be fair, independent and give us all confidence in the future. I do not have time to go on, but I want to thank everyone involved, including my hon. Friend the Member for Edinburgh South (Ian Murray) and others. This is a proud day for the whole industry and we can be proud that we have reached consensus and that the adjudicator will be put in place with the necessary tools to do the job.
Sir James Paice
I add my congratulations to everyone involved from the early days, including my hon. Friend the Member for St Ives (Andrew George). The Minister said that it was a great pleasure to find himself in the same Lobby as the hon. Gentleman: for me it was more of a shock. Nevertheless, it was welcome and I am delighted that the Bill will now make progress.
Many people have portrayed the Bill as supermarket knocking or bashing. I hope that it is not seen as that. Supermarkets play a fantastic role. They have brought before the consumer a great range of products that might never otherwise have been available, in a competitive environment. However, there are people within the supermarket structures, as I touched on in an earlier intervention, who are perhaps acting with excessive zeal and, I am quite certain, going outside the terms of the code. I am not at all surprised if people much higher up the management structures are not aware of what is being done lower down by those who want to make their names as competitive buyers. I hope the Bill will be sufficient to ensure that such malpractices are stamped out, because I am sure they are not what most people want to see. As I said earlier, I feel particularly strongly about the fresh produce world, where these problems are most evident.
Finally, there is a long-held cynical view that any legislation that has all-party support is by definition bad. I hope that this proves to be the exception to that rule. There is some justification for that belief about many other pieces of legislation, but I believe the House is right to have approved this one with such a massive majority over and over again, and I look forward to it fulfilling all the hopes that people have of it.
Huw Irranca-Davies
I applaud the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath) and the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), for their handling of the Bill. They gave way in areas where there was compelling evidence and pressure to do so; they resisted in areas where they felt it appropriate to do so. That is what Ministers should do while we keep pushing hard on issues that we think they should listen to and argue strongly against. They have been sympathetic. They have not given way on everything, but the Bill is improved and I commend them for the way that they have stewarded it.
Jo Swinson
I thank the hon. Gentleman for giving way in his thanks to me to allow me to put on the record my thanks to the officials Iain, Heeran and Richard, who have served us so excellently, and to thank them also for their Christmas present to me of some plastic teeth to go with the cuddly dog and tiger for my office.
Huw Irranca-Davies
I am glad I gave way to give the Minister the opportunity to convey her thanks to the officials.
I thank our Front-Bench spokesman, my hon. Friend the Member for Edinburgh South (Ian Murray), whose role has been significantly underplayed. He has worked extremely hard both on the Front Bench and behind the scenes to get us to where we are today. I thank the Committee members, many of whom volunteered to serve on the Committee because of their specific interest in the Bill. That is highly commendable. Tribute has rightly been paid to the contribution down the years of the hon. Member for St Ives (Andrew George) and of my hon. Friend the Member for Ynys Môn (Albert Owen). It is a great day that they now see the Bill going on to the statute book.
The external organisations that lobbied so hard are too numerous to mention, but the British Retail Consortium, Action Aid, War on Want and all the farmers unions from every part of the United Kingdom all played a tremendous role, as did many others that I do not have time to name.
We wish the adjudicator well and hope they never have to name and shame, impose fines or carry out an investigation. We hope their very presence will instil a discipline within the supply chain, but if not, the remedy now exists.
Andrew George
Following the contribution from the hon. Member for Ogmore (Huw Irranca-Davies), may I say that despite the consensus, which is often considered a weakness, the Bill is an excellent example of how a measure can be significantly improved during the parliamentary process?
In congratulating the many people who have been involved in the Bill’s progress, my hon. Friend the Minister of State may have left out the Minister of State, Department of Health, my hon. Friend the Member for North Norfolk (Norman Lamb). During his brief sojourn in the Department for Business, Innovation and Skills, he introduced a very significant change, which enabled the adjudicator to initiate an inquiry on the basis of market intelligence.
I add my thanks to all those involved. The hon. Member for Edinburgh South (Ian Murray) has been very kind, and I hope I did not bite his hand off when he was offering those thanks. I should also like to thank the previous Member for South East Cornwall, Colin Breed, who highlighted the issue more than a decade ago. There are many more people who should be thanked. I have met the adjudicator-elect, Christine Tacon, and was very impressed.
If the supermarkets have nothing to hide, they have nothing to fear. They should embrace this, because I believe that the adjudicator can do something to improve fair trading in this country.
Philip Davies
What a nauseating love-in! We have this ridiculous idea that the adjudicator will be good for suppliers, good for supermarkets and good for consumers —a painless panacea all round. We are told that suppliers and supermarkets will have money while consumers will pay less. What a lot of old guff. If anyone believes that, they will believe absolutely anything. Basically, this will—
City of London (Various Powers) Bill [Lords]
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mark Field (Cities of London and Westminster) (Con)
I beg to move, That the Bill be now read a Second time.
The Bill would make some relatively minor changes to street trading controls in the City of London and to the law on the walkways within the square mile. The only place where street trading can take place in the City is on Middlesex street, as part of the famous Petticoat lane market. The limitation on street trading can be traced back over a century and is reflected in the City’s current local legislation, which confines such activities to the street market on Middlesex street.
The reason for the City’s particular code lies in its demography—it is primarily a business area, not a residential one—and the unique demands that that imposes. As hon. Members will be well aware, the City was not always almost entirely a place of offices and of the commercial sphere. Until the rise of the railways, it was a significant residential area. It was home to more than 130,000 residents in 1801, but there was a precipitous drop as the railways emerged in the 1830s and 1840s, and the impact of the second world war, in particular, ensured that much of the residential population is now in the Barbican area.
However, London’s attractiveness as a tourist destination and the greater accessibility of the St Paul’s area via the Millennium bridge from Tate Modern at Bankside brings large numbers of tourists on a daily and hourly basis from south of the river. That has meant an increased demand for retail development around New Change and some retail development in the Broadgate area, and I suspect that before the world is too much older there may yet be further retail development in the area around Aldgate. It is development in the area around St Paul’s cathedral, in particular, and the New Change area adjacent to it, that has prompted a review of the existing code. The aim has been to try to meet the needs that the changes are generating while at the same time preserving the essentially business environment that the City needs in order to prosper.
In consequence, the City of London corporation now wants to utilise the Bill to liberalise the regime in two specific respects. First, the Bill is designed to enable temporary street trading licences to be issued to enable the use of public thoroughfares, such as Cheapside, for street markets and similar events. The new retail development at New Change, beside St Paul’s, aims to attract shoppers not just during the week, but at weekends. It provides a particular prompt because such liberalisation would enable promotional activities to be held. Of course, the timing of such events would have to be carefully managed because, as is well known, the City is relatively empty on most weekends.
Secondly, the Bill would allow ice cream and related products to be sold outside food premises. That, too, is prompted by increased tourist demand, particularly in the vicinity of St Paul’s. It is difficult to imagine the consumption of ice cream as an attraction at the moment, given the cold winter we are having, but I hope that it will be only a matter of weeks or, being pessimistic, months until that will prove extremely welcome.
These new regulatory changes are balanced by provisions for more effective enforcement of the street trading controls, including an increase in the maximum fine to the level that applies elsewhere in London and extension into the City of the powers available in other London boroughs to seize goods and property used in connection with unlawful street trading. I am well aware that that power of seizure may not be liked by all colleagues, even by some of my hon. Friends, including my hon. Friend the Member for Christchurch (Mr Chope). However, it reflects the powers that are available in the rest of London, although I should point out that it does not go as far as the powers that are available in the City of Westminster or even in the London borough of Wandsworth. I am sure that my hon. Friend is well aware of those powers. Street trading in the City is very limited in scope, but where it does exist effective provisions are needed to control it.
Mr Christopher Chope (Christchurch) (Con)
My hon. Friend will be aware that other Bills recently debated in this House, including the Nottingham City Council Bill, the Canterbury City Council Bill, the Reading Borough Council Bill and the Leeds City Council Bill, all contained similar provisions to those contained in this Bill, but they were cut out when those Bills were considered in the other place, and those amendments were accepted by this House. Why is the City of London holding out against this?
Mark Field
As I said, there is a case to be made that the City of London is a different sort of local authority in a different sort of area given the preponderance of office space rather than residential space and its character as a business quarter. The corporation has tried to ensure that we encourage tourism. It is obviously in everyone’s interests to have a large amount of tourism throughout the UK, and attractions such as St Paul’s cathedral will remain of global importance. However, there is also a recognition that the square mile—the area of the City of London—is rather unusual in this regard. Therefore, the very limited changes proposed in the Bill should apply to the City despite the great efforts that my hon. Friend has made to ensure that such changes are not made in places as far flung as Reading, Canterbury and Nottingham.
These powers are intended not least to deal with the problem of ice cream vans trading illegally in the City—a rather small category of pedlarship, as my hon. Friend will recognise. These illegal traders have given rise to numerous complaints from the public, from schools, from businesses, and indeed from the chapter of St Paul’s cathedral. The City has brought cases against some traders, but the maximum fines that can be imposed have not, on their own, been adequate to deter this activity. That is why we are moving beyond the idea of a maximum fine to try to create a new power of seizure so that we can properly enforce the rules that are already in place.
Mark Field
I shall endeavour to do so when we get into Committee, where we will have the full details.
The reason why prosecution is such an ineffective means of dealing with these things is that the fines are so derisory. The fine is currently set at level 2—only £500—and we are trying to raise it to the new maximum level of £1,000. However, even at that level it is so nugatory that the power of seizure would be more effective. As my hon. Friend is aware, the sheer cost of starting a legal action is outweighed manifold by the moneys that can be brought in through fines.
The European Union services directive has been raised in connection with the Canterbury City Council Bill and other recent local Bills. I thought that it might be helpful if I went into that in a little more detail than I had intended at this stage, having been prompted to do so by a brief discussion with my hon. Friend earlier. As Members are well aware, the EU services directive came into force on 28 December 2009. In respect of the City of London, the Department for Business, Innovation and Skills accepted in correspondence some two years ago that the general prohibition on street trading can stay. It stated:
“We think that, by virtue of recital 9 to the Directive, there is a reasonable argument that a complete prohibition on street trading, as is the current situation in the City, except in respect of Middlesex Street is not caught by the directive at all (and so does not need to be analysed against the requirements of the Directive).”
Baroness Wilcox raised three issues on Second Reading in the Lords. One of them is pertinent to this debate and I will put it on the record, because I know that my hon. Friend would want to address it and it would make sense for me to do so now rather than in response to further interventions. The issue is whether a provision restricting ice cream street sales to a business occupier might indirectly be discriminatory against temporary service providers who have no established premises in the UK. I accept that this remains a live issue to an extent.
BIS set out some of the concerns in correspondence in July 2011 and suggested that most business occupiers in the City would be UK nationals or companies, and that the provision could therefore be seen to be indirectly discriminatory. The Department also recognised that for temporary service providers—in other words, someone who is not established here—the requirement is not likely to meet the directive’s necessity and proportionality principles. Indeed, the Department suggested that we take independent legal advice on the issue and, following a meeting with BIS in September 2011, the City corporation sought the opinion of leading counsel, which was sent to BIS in the past few weeks. On 14 February, BIS indicated that it “may disagree” with the opinion and confirmed as much on 19 February, but without giving any reasons beyond stating that the opinion had not changed its view that clause 9 is likely to be considered indirectly discriminatory in the context of service provision.
I hope the House will forgive me if I go into some detail, not just on leading counsel’s case, but more importantly on why we feel that this issue could and should properly be dealt with in Committee rather than by delaying this Second Reading. Leading counsel’s advice was, in summary, that the intended beneficiaries of the Bill are sellers or suppliers of food who are being allowed to trade a little way outside the premises that they occupy, that the commercial activity taking place in the street is a spill-over from that which is carried out in the associated premises, and that it is, therefore, clearly distinguishable from the right to sell ice cream as a street trader. As a result, such activity is subject to provisions on the freedom of establishment in the EU services directive. The counsel further advised that that is compatible with the provision in the services directive, as there is no restriction on who may open a food business in the City.
Likewise, the Bill does not make it any harder to open such establishments. In fact, many of the food businesses in the City of London are operated by nationals of other member states. Indeed, anyone who has tried to buy a coffee or a sandwich in a shop in the City will know that it is almost impossible to find anyone who is not a national of another state working in such an establishment.
For the specific purposes of this Second Reading, we strongly believe—I hope that this will satisfy my hon. Friend—that this does not affect any of the Bill’s provisions, particularly the provision of temporary street trading licences, about which I will say more in a moment. Therefore, the corporation will seek the views of businesses and discuss the issue with them. As has been said, similar elements were struck out of Bills relating to Canterbury, Reading and Nottingham, but we feel that there is a special case for the City of London and, given counsel’s opinion, we hope that we will prevail in Committee. This matter has been properly considered and should be fully examined in Committee. It should not delay the relatively smooth progress of the Bill through Second Reading.
Mark Field
I very much share my hon. Friend’s concern about the lack of clarity and about the fact that, given that this has been in play for three years, the implications were not addressed in advance. Too much legislation from Europe seems to get through on the nod and the problems of compatibility only become apparent at a later stage. As I have said, a question remains, but we have received strong advice from leading counsel and hope that we will prevail on this matter when we examine it in Committee.
We feel that this is a useful, minor liberalising measure that will be welcomed by those who work in the City and the countless hundreds of thousands of people who visit the City daily. The tourists come in their millions every year. I make the pledge to my hon. Friend the Member for Christchurch that I will be happy to table an amendment in Committee, in conjunction with the City corporation, if it appears that the advice that we have had from legal counsel is contrary to the EU services directive. However, I hope that we can proceed with the Bill even though there is a small element of doubt in relation to the directive.
Mr Chope
To clarify, is my hon. Friend saying that the discussions on this matter will take place before the Bill is considered in Committee so that there is time for it to be amended to reflect the outcome of those discussions or is he saying that any amendments will be made subsequent to Committee stage?
Mark Field
The Committee stage is clearly not imminent, so there will hopefully be time for fully fledged discussions in which the corporation can make its case robustly, given the opinion that we have received from counsel. That will provide the opportunity for amendments, but one would hope that they will not be needed and that the case can be smoothed over in advance of Committee stage. I will willingly do that on behalf of the corporation to try to get the Bill through the Committee stage, whenever such further proceedings can be arranged.
I believe that the corporation is right in its view that the street trading provisions in the Bill are consistent with the directive. The Government, in the shape of Department for Business, Innovation and Skills officials, have indicated that they are content on two of the three main points that have been raised, although they have recently expressed concerns about the third point, which we have already discussed. Clearly, it would not be in anyone’s interest, least of all the City corporation as promoter of the Bill, to do anything that could reasonably be regarded as contrary to EU law. We therefore need to get clarification on this matter.
I will go through the Bill in a little more detail. The substantive provisions begin with clauses 3 to 5, which make provision for temporary street trading licences. Those licences will last for up to 21 days and may be granted for any area in the City other than Middlesex street. The organisers of an event would be able to apply for a licence on behalf of any number of street traders.
Clause 6 will bring the maximum fine for illegal street trading in the City into line with the rest of London. Currently, the maximum fine in the City is a level 2 fine of £500, whereas for the rest of London it is a level 3 fine of £1,000. That is a straightforward measure to harmonise the situation.
Clause 7 provides for the seizure and forfeiture of vehicles and goods used for the purpose of unlawful street trading. As I have said, this is in substance the same set of powers that exists in the rest of Greater London under the London Local Authorities Act 2007, which introduced a new enforcement regime into the street trading code laid down by the London Local Authorities Act 1990. Seized property may be forfeited to the court or sold to meet an award of costs on the conviction of a person for the offence. Otherwise, it must generally be returned to the person from whom it was seized. Provision is made in the Bill for the disposal of property that cannot be returned and for compensation for any unlawful seizure. Special provision is made for the return or disposal of motor vehicles or perishable items. Clause 7 also enables a fixed penalty notice to be given for illegal street trading, as can happen in the rest of Greater London and areas outside the capital.
Clause 8 will end the need to enact a byelaw to vary the charges that apply to street traders. That procedure is so cumbersome that the charge for street traders in the City has remained unchanged for the past 24 years. It seems to me that only MPs’ salaries have remained unchanged for the same length of time. Perhaps I am exaggerating slightly. However, the charge has remained unchanged at £15, which contrasts with the charge for street trading imposed in, for example, the neighbouring Tower Hamlets, which is £32. I should say that Middlesex street is bisected by the boundary—it runs from north-west to south-east, and the southern side is in the City of London and the northern side in Tower Hamlets. It would make sense to harmonise the charges.
Mark Field
I have been regularly to Petticoat lane, mainly before my time as a Member of Parliament, and it did not strike me that there was an immense difference at that time, although that was some time ago. Notwithstanding the different charges, there did not seem to be a particular disincentive to have a stall in Tower Hamlets rather than in the City of London. I should perhaps stress to my hon. Friend that the charge is designed only to reflect relevant costs, but having been set at £15 since 1989, putting it up to £32 does not seem a huge imposition on those who would trade on the City side of Middlesex street.
Clause 9 will enable food premises to sell ice creams from stalls or dispensers on the public highway outside the premises. If approved, a stall may be set up within 15 metres of the business premises. That distance was chosen as a reasonable outer limit given the nature of the public areas in which the sale of ice cream might take place. If a location closer to the premises were deemed more appropriate by the House, I believe that could be set out by the corporation.
Finally, clause 10 will make two small changes to the law on City walkways. I should say that walkways are neither footpaths nor highways in the conventional sense but private access ways over which the public are given a right to pass on foot. The concept was initiated by the City in a private Bill enacted as long ago as 1967. Walkways are found, for example, in the Barbican. In the immediate aftermath of the second world war, as part of the rebuilding following the bombing, there was the dream of creating the Barbican, and indeed the dream of creating a business district within the City of London with relatively few residents. Pedways were envisaged at first-floor level, not just in the Barbican but beyond. The clause will enable the corporation to impose a charge to recoup administrative costs incurred whenever a landowner requests a new declaration or a variation of a walkway. The second element of clause 10 will enable a fixed penalty notice to be issued when there is unlawful parking on a City walkway, as already occurs when there is unlawful parking on a footpath.
The Bill is a modest measure aimed at relaxing the existing street trading code in the City of London to provide important flexibility. It will enhance the attractiveness and vitality of the City both for its residents—for the first time in more than two centuries we saw an increase in the residential population of the City of London in the most recent census—and for those who work in and visit the City. As I have said, the emergence of New Change as a new shopping centre means that the City will become a more attractive place over weekends, and more and more shops there are open on Saturdays and Sundays. I therefore ask the House to give the Bill a Second Reading.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I rise to speak only briefly, because as hon. Members will know, traditionally the Government neither support nor oppose private Bills unless for some reason they contain provisions that are contrary to public policy. In such cases, it is the Government’s role to bring such matters to the attention of the House, which is why I wish to set out the Government’s concern about the Bill’s compatibility with the requirements of the European services directive, to which the hon. Member for Cities of London and Westminster (Mark Field) referred. That concern was raised on Second Reading in the other place in April 2011 by the then Under-Secretary of State for Business, Innovation and Skills, Baroness Wilcox.
Despite some developments on the issue, the promoters of the Bill have not yet been able to satisfy us that all the concerns that we raised have been satisfactorily addressed. The good news, however, is that whereas back in 2011 we had several concerns about the Bill’s compatibility with the directive, now we have only one. The remaining concern relates to clause 9, which seeks to allow only those with business premises to sell ice cream from a receptacle outside those premises. The Government’s view has been that the clause does not comply with the services directive, because it may indirectly discriminate against non-UK nationals. Our concern, therefore, remains the same as in 2011.
However, I appreciate that the promoters of the Bill have sought external legal opinion to support their contention that clause 9 is compliant. As had been said, it has recently been given to the Department. The Government are looking at it and we hope it will be possible to reach agreement before the Committee stage. If there cannot be agreement, then in that scenario we would be compelled to submit a report to the House setting out the legal reasons why we believe that clause 9 does not comply with the services directive. I think it is helpful for the House to be aware that discussions on legal clarity are ongoing.
Mr Chope
I am grateful to the Minister for giving way. Can she explain what would happen in that scenario? If the Government cannot agree with the promoters they will issue a report, but where would that leave us as legislators? Would that happen before the Committee stage so that the Committee is able to respond to the Government’s view, or would it be left until later? The Bill might not come back for a Report stage.
Jo Swinson
My hon. Friend raises an important point. It is a formal process. If the Government think there is a legal problem—that the Bill is not compatible with provisions that we are signed up to—we will report against it. We hope to be able to reach agreement before Committee, but we will keep the House informed at every stage. That will enable the House to assess these issues in the light of the Government’s advice and assessment of the legal situation. This is ongoing. The new legal opinion has been produced and must be considered properly. However, I wanted to ensure that the issue was flagged to the House so that if the Government must issue such a report, it will not be a surprise. It might well yet be that that does not come to pass. They are the only comments the Government wish to make on the Bill, and I am sure that the rest of the Second Reading debate will now continue.
Ian Murray (Edinburgh South) (Lab)
The view of the local Member should be paramount on how this legislation will work. The hon. Member for Cities of London and Westminster (Mark Field) said that this is a modest measure that will enhance the life of the City of London. That is an important thing for the local Member to say, and I hope cognisance is taken of it.
I have been skimming through the Bill, Mr Deputy Speaker. You will not be surprised to hear I was told that I was speaking on it shortly before the hon. Gentleman got to his feet to promote it. I am fascinated by clause 9. I think of the streets of my own city of Edinburgh, which is vibrant with street traders selling things. The clause is peculiar, given that it is limited to ice cream, but the clarity the Minister has provided on trying to resolve the issue relating to the directive is welcome. If the Bill is allowed to go to Committee and the Department for Business, Innovation and Skills can find a way to resolve it, I hope the Bill will be enacted.
A street trader licence at £15 sounds like a bargain to me. Indeed, I am sure street traders up and down the country will be wondering why it is so cheap in the City of London and not on their own patches. The Bill is limited in scope. If it means that we can all wander down the streets of the City of London and buy an ice cream from an approved receptacle or place of sale, then we are willing to support it. We do not have any objections.
Mr Christopher Chope (Christchurch) (Con)
It is worth reminding ourselves that if a blocking motion had not been tabled, we would not be having a Second Reading debate—it would have gone through on the nod. What we have heard so far, with the helpful explanation given by the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for East Dunbartonshire (Jo Swinson), shows the importance of ensuring that we have a Second Reading debate on a Bill of this import. It may not affect the whole country, but it involves important principles. As we have heard, it may have an impact on national law in relation to the European Union services directive, as incorporated into United Kingdom law.
I am disappointed that the hon. Member for Edinburgh South (Ian Murray) admits to having only just got to grips with the issue. There has been a lot of notice of the Bill and, as the Minister said, it was discussed in another place as recently as April 2011, so I am surprised that he did not brief himself sooner. Had he done so, he might have been in a position to help the debate, particularly on the draconian powers of seizure and forfeiture in relation to ice cream vans and receptacles used in street trading.
It is worth considering the Bill in the context of the street trading and pedlary regime. The consultation on that regime, which the Government have said is ongoing, has been extended into the middle of next month and is designed to bring to Parliament’s attention issues arising from the EU services directive. When that directive was implemented, people thought it would have no impact on street trading, but it is now having such an impact that the Government are saying that the only way to ensure compliance is to abolish the pedlars legislation completely.
The City of London regime exempts the City from some provisions of the pedlar legislation, but the Government’s agenda seems to be to do away with pedlary altogether and, given the issue of equal access to street trading, effectively to deny people the privilege of trading freely in this country on the basis of a certificate from a police authority stating that they are of good character. As was clear from the Minister’s comments, the implication might be that it indirectly discriminates against non-EU nationals, but since when have we said that there should not be some privileges associated with being a British citizen?
That principle should be strongly upheld in the City of London. I pay tribute to the work done there. It is the heart of the British economy and over generations has exercised a form of local self-government that is an exemplar for other local authorities up and down the land. I was much involved in trying to ensure that powers to take over the City of London and make it just like any other borough were not carried.
That brings me to my point. That there are provisions relating to street trading in other London boroughs, such as Wandsworth, to which my hon. Friend the Member for Cities of London and Westminster (Mark Field) referred, might itself be a good reason why the City should retain its distinctive position—perhaps slightly aloof from other London boroughs. I do not know how he would describe it, but it is certainly different—and proud to be different—and just because some boroughs seem to have been heavy-handed in how they deal with enforcement and forfeiture, that is no reason why the same should apply in the City of London. I hope that my hon. Friend will accept that there is a reason for not being uniform or homogenised.
Mark Field
I naturally agree that the City of London is special, and perhaps aloof, in comparison to all the other London boroughs, except of course for the City of Westminster, which I also represent in the House. I would not want to upset my other city. My hon. Friend is absolutely right to say that we already accept that, so far as pedlary is concerned, a different set of rules has applied in the City of London for more than a century. The question is: why did the City of London suddenly want to impose a maximum fine of £1,000, rather than £500, simply to harmonise with other local authorities? My fear is that even £1,000 would be insufficient as a disincentive without commensurate powers of seizure for those who persistently offend against these byelaws.
Mr Chope
I am grateful to my hon. Friend for that intervention. On the question of the level of fines, I would be more impressed—although I do not blame him for the situation—if there were some hard evidence of the number of cases that had been brought to court, the number of cautions that had been given or the number of offences that had not been prosecuted for one reason or another. During our discussions on the various pedlary and street trading Bills, certain assertions have been made by the Bills’ promoters—I do not want to taint the Corporation of London with the problems of the others—and it would be helpful if my hon. Friend provided some evidence.
Mark Field
The sheer cost of bringing legal proceedings is exorbitant. The fact that £1,000 would be the maximum amount that a persistent offender could be fined is therefore a strong disincentive. My hon. Friend will be aware that a hamburger van or ice cream van in central London can make a huge amount of money in a very short time, given the through-flow of people on the streets. It is a matter of concern—certainly in principle, although there is not necessarily any evidence—about the numbers of people who have gone through the whole legal process, given the fact that the New Change shopping parade has now been updated. It has been up and running only for the past 18 months, but its emergence will make the City of London a more attractive proposition for a significant number of tourists at weekends. I am afraid that the area could therefore attract more illegal ice cream sellers, and it is as a result of those concerns that we feel the need to move ahead. As I have said, the City of London is no longer lacking at weekends—
Mr Deputy Speaker (Mr Nigel Evans)
Order. This intervention is bordering on being longer than the hon. Gentleman’s speech on the moving of the motion.
Mark Field
I think I would probably have to speak for another 21 minutes before that was the case, Mr Deputy Speaker.
Mr Chope
Indeed, Mr Deputy Speaker, I was tempted to ask to intervene on my hon. Friend. I am grateful to him for expanding on that important point, and I am grateful to you for your indulgence in enabling the point to be made. I accept that the City of London is in a separate position from that of other local authorities.
I want to move away from the generalities and turn to the specifics of the Bill. The power in clause 3 relating to temporary street trading is effectively a liberating provision when compared with the current regime. It will enable street trading to be carried out over a limited period and, as the explanatory memorandum makes clear, it represents a relaxation of the restrictive code. I am not going to argue against that, because to do so would be to argue against the principles that I have fought hard for in many similar Bills in the House. I would not quibble with the detailed contents of the measures on temporary street trading.
Philip Davies (Shipley) (Con)
I share my hon. Friend’s view, but when it comes to scrutiny of the Bill, is he happy that the arrangements have been sufficiently relaxed?
Mr Chope
I think my hon. Friend knows the answer to that: I would like to see a much more relaxed arrangement. Any relaxation, however, is probably better than none. It is important for people to be able to enter the marketplace as business men without the need for much capital. I view that as fundamental in an entrepreneurial society. The City of London obviously epitomises the entrepreneurial society, which is why it is good for the City of London to encourage street traders and people starting out in their business life and career to be able to show what they are worth, perhaps initially by getting a street trading licence, perhaps operating like interns on a temporary basis and seeing how it goes. I believe that clause 3 is—I hope I do not have to eat these words later—a clause for good, so I support it.
The issue of temporary licences is not one that greatly concerns me, but I am concerned about whether the case for increased penalties has been made. It is easy to say that it is expensive to prosecute. We know that companies will say, “We do not prosecute people who are shoplifters because it is not worth the candle. It will cost us too much to prosecute and when we get people before the courts, the fines will be so derisory that we will not achieve much purpose and we will have been put to a lot of needless expense.” That argument is often put forward on behalf of public authorities, which are funded by local or national taxpayer resources.
Having said all that, this country is one that believes in the rule of law, and I would have thought that an important principle of the rule of law is that if an enforcement authority feels that breaches of specific local byelaws or local legislation are to the detriment of the people living in the area, it should be quite happy to prosecute, recognising that a cost is associated with that. Ultimately, the taxpayer pays a lot of money for prosecuting people and even more money if those people are convicted and sentenced to prison, but we do not say that it is not a good thing to do that, as it is an important matter of principle. I am not impressed, in respect of clause 6, with the idea that prosecuting authorities should not bring prosecutions just because they think it is not financially expedient to do so on the grounds that insufficient money will come back to them. Apart from anything else, the penalties that will be increased will be court penalties; as I understand it, they will not be to the benefit of City of London local council tax payers. The penalties would go to helping to meet the costs of the national Exchequer, as they are pooled for very understandable reasons. In the absence of hard evidence, I am not convinced of the case for increasing the penalties as set out in clause 6.
I have a much greater problem with clause 7. As I said in an intervention, the provisions on enforcement of seizure, the return of seized items, compensation, forfeiture of seized items, seizure of perishable articles, motor vehicles and disposal orders have been considered on a number of occasions by Members, most recently in respect of four private Bills promoted by the city of Leeds, the city of Nottingham, the city of Canterbury and Reading borough council. Those provisions were removed from all four Bills. My hon. Friend may say, “Ah, but this Bill relates to London, and the same provisions have been passed in the case of other London local authorities.” That is true, but they were passed against the wishes of my hon. Friend the Member for Shipley (Philip Davies), who I am pleased to see is present, and against my wishes, as well as, I believe, those of many other people.
Mark Field
My point was not simply that London is the capital city, but that the Bill deals specifically with the City of London. Given the importance of the business fraternity and given how few residents there are in the City, I believe that there is a case for reinforcing what my hon. Friend said earlier—that the City of London is and should be treated as a special case in this regard—particularly as the street trading provisions are so much more limited than they are in the other towns to which he has referred.
Mr Chope
I take the point. However, the other side of the coin is that the City of London seems to have managed perfectly well up to now and no big issue has arisen, but there suddenly seems to be a need to introduce draconian seizure provisions.
Line 25 of clause 7 starts off on the wrong basis. It begins:
“Subject to subsection (2) and section 16E (seizure of perishable articles or things), if an authorised officer or a constable has reasonable grounds for suspecting”.
The tradition has always been that what is necessary is a reasonable ground for belief. It is hard to disprove a reasonable ground for suspicion, because suspicion is subjective anyway, so having to establish a reasonable ground for suspicion really means not having to establish anything whatsoever, in terms of a person having a guilty mind. All that is necessary is to establish a reasonable ground for suspecting.
I know that my hon. Friend is very fair-minded, and I hope that he will consider tabling an amendment in Committee. Amendments that we have tabled to a number of similar Bills—it appears almost as if all Bills such as this are drafted by the same people, and that may well be so; the same solicitors or agents often act on behalf of different local authorities—have been accepted on the basis that “reasonable grounds for belief” is a much fairer way of dealing with the issue that the promoters and my hon. Friend wish to address. Whatever else may be the case, I am sure that the City of London would not want to be accused of being other than fair-minded in relation to, in particular, the rule of law.
Mark Field
The City of London could never be anything other than entirely fair-minded. My hon. Friend will, of course, be well aware that section 38 of the London Local Authorities Act 1990 refers to reasonable grounds for suspicion. It should also be said that both Westminster city council and the London borough of Camden were given powers to seize equipment which an officer or constable had reasonable cause to believe was intended to be used to commit an offence, which is an even stronger basis. I accept, and I hope my hon. Friend will accept, that the position is not altogether clear-cut, although he makes a valid point about the distinction between belief and suspicion.
Mr Chope
I thank my hon. Friend for those comments. Meanwhile, in their consultation paper, the Government have proposed national legislation or regulation changes that local authorities can apply to opt in to. Effectively, they plan to impose, from the centre, a uniform regime covering issues such as this—issues of reasonable grounds for belief or suspicion, for instance—along with standard tests that would apply to the whole street trading regime and to the enforcement of infringements of it. I know that it is easy to argue the prematurity case in relation to Bills such as this, but I should be grateful if my hon. Friend could respond to that point.
Mark Field
In fairness, there is a lot to be said for having a national law and for trying to standardise and harmonise things, but in my view it would still be essential to have provisions that take account of individual cities’ own unique circumstances. We have to start from where we are, however, and the Government are phenomenally busy with a huge amount of legislation on a wide range of matters—some of which I think my hon. Friend has some support for—and the reality is that we are not going to get such uniformity or harmonisation any time soon, so we need to make progress through private Bills such as this one.
Mr Chope
My hon. Friend’s comments serve to remind me that last night I was in the City of London Guildhall library where our party colleague the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) made a speech entitled “Deregulating for growth,” which is a principle I am sure my hon. Friend and I both support. Too much legislation adds new regulation, however, which is counter-productive to the policy of promoting growth in our economy, and anything the City of London does in adding further regulation will come under more scrutiny than if that is done by a little borough council somewhere else in the country, as the ethos of the City of London is based on having the minimum amount of regulation necessary to ensure we get economic growth and successful financial and professional services industries in the City. It is against that background that I raise my concerns about clause 7.
Philip Davies
As my hon. Friend knows, I agree with his views about giving local authorities of any description the power of seizure, especially on such flimsy evidence as provided for in this clause. Is he reassured in any way by proposed new subsection 16A(2), which says an article can be seized only
“if it may be required to be used in evidence in any proceedings in respect of the offence in question”,
or is that merely a mask covering something that is still unacceptable?
Mr Chope
On the face of it, that does not seem too bad, but if we look at other provisions in clause 7, we see that there are difficulties. Proposed new subsection 16A(1)(c) states that an authorised officer may seize
“any receptacle or equipment being used by”
the person in question. My hon. Friend will know from having read the Bill that a receptacle could be a motor car or van from which ice-creams are being sold. These receptacles or pieces of equipment are therefore potentially quite valuable, and the fact of having them seized could cause the person concerned a significant problem, particularly if they are seized on dubious grounds.
Philip Davies
It is stated that such an item can be seized only
“if it may be required to be used in evidence.”
Does my hon. Friend agree that that does not really provide any safeguards at all, because anything could be seized on the basis that it may be required, as that does not mean that it is required?
Mr Chope
My hon. Friend is on to a good point. It is stated later in the Bill that such an item could be retained for up to six months on the basis that it may be required in connection with a prosecution. However, a prosecution may then never take place and the person will have been deprived of their goods for six months. That may have achieved the enforcement authority’s objective, but it generates a grave injustice for the victim of that seizure. That is why there needs to be a proper balance struck between the rights and responsibilities in the Bill’s enforcement provisions. We should be most reluctant to give powers of seizure not only to constables, but to authorised officers, who could be
“any officer or employee of the Corporation”
or
“any person by whom…any enforcement functions under this Part fall to be discharged”
or
“any employee of any such person”.
That is getting quite remote from the person in charge, and the more remote we go, the more scope there is for abuse.
If the only redress is something that may come six months later, there may be no redress at all. For example, if the ice cream van—the “receptacle”—is seized in March, it might only be returned in September, by which time the main ice cream selling season will have passed and so the person’s livelihood will have been taken away from them for the duration of the season. That illustrates the potential gravity of what is being proposed.
My hon. Friend the Member for Shipley (Philip Davies) might say that new section 16B deals with the return of seized articles, with subsection (3) stating:
“Subject to subsection (8), following the conclusion of the proceedings the article or thing shall be returned to the person from whom it was seized”.
Again, however, the devil is in the detail, as we see in the provisions dealing with the return of an ice cream van. New section 16B(5) provides that
“where a receptacle seized…is a motor vehicle used for ice cream trading, the Corporation or the Commissioner of Police…shall, within 3 days of the receipt of an application in writing by the owner or registered keeper of the vehicle, permit the person to remove it.”
In other words, the person would be able to take it back. However, the Bill goes on to state that they would not be able to do so
“where the circumstances mentioned in subsection (7) apply”.
One of those circumstances is perfectly reasonable— the person has been convicted of an offence under the legislation already. I am not going to quibble about that, but I do quibble with new section 16B(6)(b), which states that one of these circumstances is where
“the owner or registered keeper of the vehicle is being prosecuted for a previous alleged offence”.
In other words, someone gets arrested and prosecuted, and the proceedings have not been determined—so the presumption of innocence surely continues to apply—yet the mere fact that they are being prosecuted puts them in a more prejudicial position than if there were no prosecution. It is reasonable to look at some of the issues that we might want to raise in Committee, and that provision removing a person’s ability to recover their ice cream van within three days of it being removed if they are being prosecuted for another offence is draconian, over the top and unnecessary.
Philip Davies
I very much agree with my hon. Friend, but will he turn his eye to clause 16B(6)(c) as well? Not only is the position as he suggests, but another circumstance is where
“the vehicle has been used in the commission of such an offence or previous alleged offence.”
Is he aware of exactly who determines whether it has been used in such an offence or how an allegation of an offence would apply? That provision seems rather loose too.
Mr Chope
My hon. Friend is on to a good point. The Bill does not say that the vehicle must have been used by the same person in the commission of such an offence. It could have been acquired in all innocence from a previous ice cream vendor in market overt, in an auction or by a private treaty sale. The vehicle’s new owner would not know that it had been used in the commissioning of an offence in the past, so he would be penalised because, unknown to him, the vehicle had been used in such a way. Surely that would be unreasonable. If the EU services directive wants to create level playing fields, I urge my hon. Friend the Minister to consider whether there should be a level playing field, which we do not have at the moment, between those who have purchased ice cream vans but find out later that they have been used in connection with an offence in the City of London and those who purchase ice cream vans that have not been used for such offences. There should be a level playing field between those two categories of person.
Philip Davies
I absolutely agree with my hon. Friend, who is very good at picking up on these anomalies in Bills. Will he talk a little about how that measure applies to an alleged offence, as it applies even to an offence that has not necessarily taken place and that has merely been alleged?
Mr Chope
Exactly. When people are given free rein to bring legislation before this House and to create new offences, the temptation always seems to be to draft the offences in the widest possible terms. It is incumbent on us to put pressure on the promoter of the Bill and to ask whether the proposals are reasonable or whether they go over the top. This is a good example of the drafting being far wider than it needs to be.
Mark Field
My hon. Friend is well aware of how the provision is designed to operate. The vagaries of the British weather mean that the period of time in which anyone would want to sell ice cream is often limited, but if someone committed an offence over a period of two or three months of hot summer weather and had their ice cream van seized, it would mean that they could not get it back every three days and continue with impunity to commit another offence before the constable impounded it again. The intention is simply to ensure that someone who has committed an offence should not be entitled to continue to do so simply because the wheels of the legal process take a long time to work. That is what the measure is designed to do and it is quite common in a range of areas, not just with ice cream vendors in the City of London.
Mr Chope
I am sure that repeated offences or patterns of behaviour are widespread, as my hon. Friend says, but they are often dealt with by a civil injunction in the county court or even the High Court. There is no need to bring into the scope of the offence many innocents at large just because it is sometimes cumbersome to get an injunction. An injunction is a perfectly legitimate way of restraining such behaviour.
Mark Field
How would my hon. Friend feel as a council tax payer if the local authority in his area was taking out injunctions for such offences at vast cost rather than dealing with them? He and I are both constituency MPs and we deal daily with constituents who are concerned for a variety of reasons about the lack of enforcement action taken by our local authorities. This seems to me to be a sensible enforcement provision, whereas taking out an expensive and time-consuming injunction would clearly not be a sensible way forward.
Mr Chope
My hon. Friend will not be surprised to hear that I am not sure that I agree with him. One of the benefits of the injunction is that a breach can result in someone being brought before the courts for contempt of court and, ultimately, in their losing their liberty. That goes even further than this provision.
All we are talking about here is the liberty of ice cream vans. With injunctions, the person themselves can lose their physical liberty because they are in contempt of court. My hon. Friend should not belittle the traditional use of injunctions as a proper and effective remedy against persistent aberrant behaviour, which none of us support. In none of my arguments on any of these Bills have I wanted to excuse or encourage unlawful behaviour. All I have wanted to do is ensure that the responses are proportionate and that people who are innocent are not caught up in the panoply of the criminal law without knowing about it. In this particular case, someone could lose their ice cream van when they did not know that it had been used before.
Mark Field
I must confess that I hoped my hon. Friend would be delighted to see that there are 10 subsections dealing with the return of the seized articles and only three dealing with the seizure itself.
Mr Chope
That is almost a commentary on regulation. We regulate, and to deregulate we have to create provisions that are a lot more complicated than the original regulation. Reverting to the brilliant lecture that I attended last night, one of the representatives from a large City firm said that we must be alert to the danger of “comfort in complexity”. That is a good thing to bear in mind. My hon. Friend says that we introduce powers to seize and then we have to set out at even greater length the exemptions to the seizure regime. How complicated is that? It is unnecessarily complicated, regulatory and burdensome on people who might want to start a new enterprise that could result in their becoming multimillionaires and working for people in the City, whom Opposition Members so despise but we realise are important to the British economy. That is by the by.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I did not quite catch what the hon. Gentleman said. I apologise that I was not here from the start of the debate, but I was watching from my office. Did he say that Opposition Members despise the City of London?
Mr Chope
I am not going to accuse the hon. Gentleman of despising the City of London. If he wants to put on record his support for the City, I am sure that he will have an opportunity to do so in the debate. But I am sure he recognises that quite a lot of Opposition Members make statements that give the impression that they are hostile to the City.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am sure that the ice cream van is waiting for you to deliver a fresh flake rather than take us somewhere we do not want to be. It is not like Mr Chope to wander away and be tempted in other directions. Let us get back to where we should be.
Mr Chope
Mr Deputy Speaker, you are quite right to have a go at the victim, which is me. I was led astray by that intervention, and I accept full responsibility.
If a product is perishable, the consequences of having it seized may be that it loses all its value. That is important. I am not sure that the provisions relating to perishable items in clause 16E are sufficient. The clause says:
“No article or thing which is of a perishable nature … shall be seized under the provisions of section 16A … unless the Corporation gives a notice in writing under subsection (2) to the person from whom the article or thing is seized.”
I would have thought it best to say that nothing perishable should be seized. Ice-cream could be removed and, if necessary, the van seized. The seizure of perishable articles is quite an oppressive power.
Proposed new section 16E(2) states:
“Where a perishable article or thing is seized…the person from whom it is seized shall be given a notice in writing…giving the address from which the article or thing may be collected; and…stating that if that person is not the owner of the article or thing, then that person should give the owner the information referred to in paragraphs (a) and (b).”
On the face of it, one would think that that would ensure that perishable articles were not seized, but when one looks at the small print one sees that they will be seized, and that is unfair and unjust. Indeed, such provisions have been removed from similar Bills because Members on the Government Benches—I cannot speak for Opposition Members—thought that they were disproportionately heavy in their application to ordinary people.
I have some grave concerns about the powers of seizure, especially when dealing with items of greater value than the maximum penalties under the Bill. A specific provision provides that it is open to the authorities to seize equipment, including motor vehicles, of a value higher than the maximum fine that could be imposed under any circumstances. That, in effect, deprives people of their assets, perhaps temporarily, in a disproportionately heavy manner.
Philip Davies
I wondered whether my hon. Friend was going to mention the provision on compensation for seizure. Proposed new section 16D(4) states:
“The court may only make an order for compensation under subsection (3) if satisfied that seizure was not lawful under section 16A.”
That comes back to reasonable grounds for suspicion, which appears to me to be framed so as to ensure that compensation never has to be paid, even when seizure has happened wrongly.
Mr Chope
As so often, my hon. Friend is right. By looking at all the language in the Bill, one is able to see the consequences. The exemptions are so hedged around that it will be difficult for anyone to comply with them, especially if the ultimate test is whether someone has a reasonable suspicion. That particular fault-line runs throughout these clauses. I have many concerns about the powers, especially as they relate to motor vehicles and perishable goods, but I do not need to go into the detail of disposal orders at the moment.
Clause 8 deals with charges for licensed street traders. I have always tried to be fair and give credit where it is due, and I think that my hon. Friend the Member for Cities of London and Westminster makes a strong case on this issue. If one side of the street is controlled by one local authority and the other side by another local authority, there is an argument for saying that the prices charged for street-trading licences should be the same. My hon. Friend may remember the days when the Foreign Secretary lived on one side of a street in Lambeth and the other side of the street was in Wandsworth, and there was an enormous disparity in council tax—the figure in Lambeth being very much higher than that in Wandsworth. That shows the sensitivity when one part of the street is in one borough and another part of the street in another local authority area, resulting in differential pricing.
Philip Davies
I intervene to remind my hon. Friend that the Ministers have changed places and he can now commend the current incumbent of the Front Bench for his excellent speech last night.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Chope has rightly pointed out that he has already congratulated the Minister on that speech, and I am sure that he was coming to the end of where he needs to be—on the Bill, rather than on the ability of someone speaking last night in the library.
Mr Chope
I will not do so, Mr Deputy Speaker. I do not want to cross you on this or any other matter.
I am delighted that the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), is on the Front Bench to listen to the next part of the debate, as this is the issue that concerns his own Department—clause 9 on trading outside business premises. For reasons that I can understand, the City of London says that in order to bring a little more vibrancy to life in the City of London, particularly at weekends and particularly for tourists, why not allow people to sell ice creams off the street, rather than just from fixed locations in shops and cafes? It says that people should be able to sell ice creams from a receptacle, which could include an ice cream van, located within 15 metres of business premises.
Listening to the speech from my hon. Friend the Member for Cities of London and Westminster, I was not sure whether the definition of business premises included St Paul’s cathedral chapter or not, and whether St Paul’s cathedral itself would be covered.
Mark Field
Ecclesiastical venues are an extremely serious business, but I do not think the intention was that St Paul’s chapter should be included as a business premises. There are a number of genuine business premises within the vicinity and curtilage of St Paul’s cathedral and they would be included.
Mr Chope
I am grateful to my hon. Friend for that. Although I might quibble with the fact that the corporation is retaining for itself the ability to approve the design, location and purpose of the receptacle, I think the principle is a good one. I do not understand why it should be thought that this may indirectly discriminate against non-EU nationals, which is what the Minister who spoke earlier in the debate said she thought it might do. How would it do that?
My hon. Friend the Member for Cities of London and Westminster, with all the resources of the City of London behind him, at the behest of the Department got leading counsel’s opinion on the matter. Leading counsel’s opinion was submitted to the Department in February. By 14 February a holding reply had been issued. By 19 February—my right hon. Friend the Minister is rightly listening to this—the Department had already decided that leading counsel’s opinion, which had taken many months to produce, was wrong. Where does that leave everybody?
Surely the situation should have been anticipated by BIS a long time ago. It was BIS that proposed implementation of the EU services directive. Even now, two years—or is it three years?—after it has been implemented, we cannot even get a definitive ruling on whether the directive applies in such a way as to negate the legitimate aspiration of the City of London to enable people who already have businesses operating in the City of London to extend those businesses for the purpose of selling ice creams when the season is right. We must be absolutely mad if we think that should be outlawed because it might indirectly discriminate against non-EU nationals. I invite the Minister to let his imagination run riot and envisage any other legislature in the European Union stating that it would be wrong to bring in such a provision enabling their own people to engage in enterprise because it might indirectly discriminate against Brits, for example. I cannot believe that such an argument would be given the time of day in any other Parliament in the European Union. I hope that can be resolved.
There is also a procedural issue. As I understand it, there are no petitions against the Bill, so it will go into Committee unopposed. Unless it is amended in Committee, the House will not be able to amend it later, because it will not be considered on Report. We encountered that issue with the Nottingham City Council Bill, the Canterbury City Council Bill and others, which were originally not opposed but then went to the other place, where they were opposed. However, this Bill has already been to the other place.
Therefore, I think that it is important that my right hon. Friend the Minister, when responding to the debate, makes it explicit—it is already pretty explicit—how he and the City of London corporation will negotiate with the Department over the proper interpretation of clause 9 vis-à-vis the services directive. It is no good if the Bill goes through Committee before that is resolved, because there will be no scope under the procedures of this House to make amends later. If the Minister produces the certificate of incompatibility in due course, where will that lead?
Mark Field
It is absolutely clear that the City of London corporation would not wish any legislation that was incompatible with EU law to go through. The dispute between leading counsel and the Department needs to be resolved before we can proceed beyond Second Reading, and that does not prevent the Second Reading debate taking place today. I am confident that we will be able to get this matter resolved in a way that will satisfy not only my hon. Friend the Member for Christchurch (Mr Chope), but the Department and the sponsors of the Bill.
Mr Chope
My hon. Friend refers to the need to deal with Second Reading today. As is perhaps implicit from what I have been saying, there are many parts of the Bill that I think are good, but there are some that I am not so happy about and some issues that I think need to be resolved. I am not minded to oppose the Bill’s Second Reading, because I think that my hon. Friend brings a constructive approach to these debates, which is no more nor less than we would expect of him and, certainly, of the City of London itself. It recognises that some of us believe that these Bills are better discussed than pushed through without proper discussion. In that spirit, I hope that some of the concerns I have expressed during my short contribution to the debate can be reflected upon to see whether any amendments should be proposed in Committee.
I am not often lost for words when it comes to the details of Bills, but I have nothing to say about the provisions on walkways set out in clause 10. I think that any reasonable person would accept the analogy between a walkway and a footpath, so I am certainly not going to quibble about that.
Having put on the record some of my concerns about the Bill, I would like to congratulate my hon. Friend the Member for Cities of London and Westminster on the way in which he introduced it. I hope that in due course he will get some clarity from the Department, and perhaps even an admission that it let people down by not recognising the implications of the EU services directive for street trading and pedlary in this country.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. If the hon. Gentleman is trying to catch my eye, would I be correct in saying that he was not here at the beginning for the opening speeches?
Philip Davies
I was in the House. As I had been on such a long haul in the previous debate, I popped out for a quick drink.
Mr Deputy Speaker
It must have been quite a long drink. As the hon. Gentleman knows, it is not quite the normal thing and I am sure that he would like to apologise before I call him to speak.
Philip Davies
I am very grateful, Mr Deputy Speaker. I do apologise for the discourtesy to you and to my hon. Friend the Member for Cities of London and Westminster (Mark Field). As I said, I popped out for a drink after the previous debate, where I had been on duty for quite some time.
Philip Davies
It was indeed. However, you will be pleased to know, Mr Deputy Speaker, that I watched the monitor while I was drinking said cup of tea, and so I did catch the points that my hon. Friend made. You will be relieved to know that I do not intend to detain the House for long, but I am sure that you did not expect me to.
I want to begin where my hon. Friend the Member for Christchurch (Mr Chope) left off, by congratulating my hon. Friend the Member for Cities of London and Westminster. He is a reasonable man who listens to the points that are made in debate and, where good cases are made, responds in a positive way. We have not always seen that in previous debates on private business, and we should commend him for his approach to these matters. This Bill is certainly not as bad as some of the Bills that we have considered. As my hon. Friend the Member for Christchurch said, some of its clauses are positive changes that we welcome.
It is always right on these occasions that we congratulate my hon. Friend the Member for Christchurch on how he scrutinises such Bills, which it would be perfectly possible to allow to go through on the nod. Yet they do a great disservice to lots of decent people who are trying to earn a crust, and to show some entrepreneurial spirit in doing so, but find themselves on the wrong side of poorly drafted legislation. It is to his credit that we scrutinise these things in some detail so that we can try to avoid those pitfalls.
Like my hon. Friend, I strongly support the purpose of clause 3 on temporary street trading. As he says, this is a relaxation of the law that will enable more people to engage in entrepreneurial enterprise, and for that we should be grateful. However, I am not entirely sure exactly what is intended in all cases when this part of the Bill is brought into play and a licence is granted. It strikes me that the clause is not really intended for the benefit of entrepreneurs, as my hon. Friend seemed to think when he extolled its virtues. He seemed to be saying that it was good because it would be of benefit to entrepreneurs, but I am not entirely sure that that is its purpose, although it may well be its end result.
Let me explain what I think is the real purpose of the clause. Certain people in the City of London may on occasion want to have some swish event, or perhaps not even a swish event but just a celebratory event, on the streets of the City of London. They may realise that in order to make that event as good and as appealing as possible, they would be assisted by the provisions in the clause, without which the event might not be quite so popular. The clause seems to be intended for their benefit rather than the benefit of the people whom my hon. Friend apparently had in mind. However, that is by the by.
Mark Field
It is fair to say that clause 3 is designed to relax the strict rules that have been in place for the past century. I do not think there is any desire to return to the days of Bartholomew Fair or other such terrible things that took place in far-flung parts of the City of London. As my hon. Friend may be aware, the Winter Wonderland in Hyde park has been a tremendous success, and something along those lines, but on a much more limited scale and for a short period of up to three weeks, might be borne in mind for the City of London. It would be sensible to enable provisions for that.
Philip Davies
I agree. To be honest, that was the type of event that I had in mind with regard to the clause, although it states that the corporation may grant a licence
“subject to such conditions as the Corporation may determine.”
I am not entirely sure, but that may involve some harsh conditions that will not be particularly attractive to anybody. We can leave that as a matter for negotiation between any potential trader and the corporation, because it is in the corporation’s interest that some people will want to take it up. I think we can say that clause 3 makes a positive change and I am happy to support it as drafted.
On clause 6, I agree with my hon. Friend the Member for Christchurch on penalties. I, too, was not clear that a case had been made as to why this change should be made. I heard my hon. Friend the Member for Cities of London and Westminster, who promoted the Bill, say—this demonstrates that I was watching the monitor while drinking my tea—that the clause was intended to bring the level of the fine in line with that in other areas. I understand that, but that is not to say that those other authorities are on the right track. That argument seems to take it as read that because other authorities impose fines at a certain level, they must be right. Some may argue that they are not and that the current level is more appropriate.
Mark Field
I think that my hon. Friend would recognise that a fixed penalty notice provides a more efficient means of enforcement than going down the seizure route. One would hope that harmonising it to a level 3 fine of £1,000 instead of the current £500 fine would make seizure, which is the subject of other clauses, less likely. The fixed penalty route is a more efficient way of doing things.
Philip Davies
I accept that point, but I am not necessarily persuaded that we should ratchet up the fines. Of course, if there is good evidence to do so I would be happy to listen to it.
My main concern relates to clause 7 and enforcement, and this has been a common theme when we have debated other, similar Bills. The clause would give rather big powers to any authorised officer. Subsection (1)(c) states that such powers will be given to “any employee” of the corporation, but that extends the powers over seizure and other things covered by the clause far too wide. It seems far too draconian.
I am sure that the overwhelming majority of people who work in local authorities up and down the country do their job diligently, well and to the best of their ability, without abusing the authority that has been given to them. That tends to be how things are done up and down the country.
Mark Field
May I provide my hon. Friend with some reassurance? Part of this process is designed to help save the time of hard-pressed police officers, which is an issue that I am sure applies as much to the West Yorkshire constabulary as it does to the City of London. I assure the House that any officer exercising a power of seizure or issuing a fixed penalty notice will receive proper training. The corporation ensures that that applies to all current staff in cases involving, for example, litter offences and highway obstructions. My hon. Friend can be assured that council employees will receive proper training through training sessions in order to be made aware of their powers and the limitations of those powers under the Bill.
Philip Davies
I am grateful to my hon. Friend. That point is extremely helpful and shows that he understands my concern. He will correct me if I am wrong, but I do not think that that point is made clear in the Bill. It may well be the intention and I am certain that it is his intention. However, the people who run the City of London will change over time and the new people may well take a different view about the level of training that is needed. It might be helpful if it was made clear in the Bill what level of training is required before people are given this kind of power.
I worry about giving local authority officers what are, in effect, police powers, especially as liberally as in this provision. My hon. Friend seemed to indicate that the aim of this measure was to relieve pressure on the police. The point that I made earlier stands. Although the overwhelming majority of council officers carry out their work diligently and appropriately, I am sure that we have all come across examples of the pettifogging council officer. Funnily enough, I had to deal with one myself, a traffic officer, in Bradford not long ago. I am sure that such officers are not unique to Bradford. I worry about giving such powers, willy-nilly, to too many people without any of the appropriate safeguards.
Bob Stewart (Beckenham) (Con)
I think it is correct that if enforcement action is to take place, a police officer or someone in authority has to be present.
Philip Davies
I do not think that that is the case. That is one of the things I worry about.
I am delighted by the arrival of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) in the Chamber, particularly as we are talking about the laws on seizure and about giving council officers the authority to seize people’s goods, because he has shown time and again that he, too, is nervous about such provisions.
My hon. Friend the Member for Christchurch was right to highlight that all the issues flow from proposed new section 16A on seizure, which is contained in clause 7. It states that there must be
“reasonable grounds for suspecting that a person has committed an offence”.
It would be difficult for any officer to fall foul of such a loose definition. This is not a trifling matter. We are talking about somebody seizing somebody else’s goods. That is a big power. I think that a higher test should have to be met before council officers are authorised to go around seizing people’s goods.
As my hon. Friend the Member for Christchurch said, it is not just any article that is being
“offered for sale, displayed or exposed for sale”
that can be seized. Proposed new section 16A(1)(b) states that
“any other article or thing of a similar nature to that being offered or exposed for sale which is in the possession”
of the person may be seized. Even if something is not being offered for sale, the officer is still authorised to take it away from the individual. Paragraph (c) also includes
“any receptacle or equipment being used by that person.”
These are wide-ranging powers of seizure that we are in danger of giving to any employee of the corporation, notwithstanding the reassurance that my hon. Friend the Member for Cities of London and Westminster gave about the level of training that will be given, just on the basis of “reasonable grounds” for suspicion. There is a great danger that, on occasion, that authority and power will be misused by people, perhaps out of frustration or for another reason, if appropriate safeguards are not put in place.
The Bill says—I made this point in a brief intervention earlier, but I want to expand upon it—that something may be seized only
“if it may be required to be used in evidence”.
Reading the Bill for the first time, that sounds like quite a good safeguard, because people will not be able to seize things willy-nilly and they will be able to use them only in evidence. However, it states that it can be seized if it only may be required, which is essentially no safeguard at all. Anything can be seized on the basis that it may need to be used in evidence—who is to decide that?
The officers who seize goods will naturally take a precautionary position, and I would not blame them for that. They will want to seize as much as possible, because they will not want somebody further down the line to ask them, “Why did you leave them with that bit of stuff? That could have been crucial evidence to prosecute them.” I suspect that in the training that my hon. Friend the Member for Cities of London and Westminster mentioned, officers will be told, “Take as much as you can, because it may be crucial. The bit that you leave behind may have been the crucial bit.” I fear that the provision is written to look like a safeguard but is no safeguard whatever.
As my hon. Friend the Member for Christchurch said, the Bill mentions receptacles, and vans, cars or any other type of vehicle could be described as receptacles for the purpose of the Bill. There are serious concerns about the people who can seize products and the definition of when it is appropriate to do so.
Uncharacteristically, my hon. Friend did not really touch on the return of seized articles, but proposed new section 16B(4) sets out what will happen when
“after 28 days any costs awarded by the court to the Corporation have not been paid”.
There are some potentially contradictory points on the matter that do not really flow on from one another. On the one hand, if that point applies, the Bill allows the City of London to dispose of products
“in any way the Corporation thinks fit”.
However, it then states that
“any sum obtained by the Corporation in excess of the costs…shall be returned to the person”.
That is highly unlikely, given that the corporation can dispose of products in any way, shape or form. However, it also states that the corporation has
“a duty to secure the best possible price which can reasonably be obtained for that article or thing.”
I cannot reconcile the corporation being able to dispose of an article in any way it sees fit with the fact that it is being asked to obtain the best possible price for it. Those seem completely contradictory statements. If we are saying that the corporation has to get the best possible price, proposed subsection (4)(a), whereby it can dispose of an article in any way it thinks fit, seems redundant.
The best possible price that can reasonably be obtained for something depends on how the corporation gets rid of it. If it sells it in a similar way to the person who was trading it and from whom it was seized, it can get the full retail price. I am not entirely sure how it will fulfil its duty to secure the best possible price for something. What will it be expected to go through to fulfil that condition? It seems to me that in the real world, it will not make any effort whatever to go out and sell something at the best possible price. It will dispose of it.
Mr David Nuttall (Bury North) (Con)
I am grateful to my hon. Friend for giving way. He is being generous with his time.
Is my hon. Friend not concerned, as I am, that the real tragedy will be that once goods are seized, the trader involved may well lose their livelihood? Is that not the danger?
Philip Davies
Absolutely, particularly if the products are just going to be disposed of.
Philip Davies
That would be a helpful intervention, but I am not entirely sure that the Bill’s sponsor can give that commitment, to be perfectly honest. I certainly do not think we should press him to do so. However, such anomalies in the Bill make it unclear what will happen.
I do not want to dwell on the issue of vehicles, but where people are being prosecuted for a previous alleged offence, or where a vehicle has been used in a previous alleged offence, that is dangerous territory. The clause makes it clear that no offence needs to have been committed for things not to be returned to the owner; it just needs to have been alleged that things were used in a previous offence. That is no basis on which to take things away from people and refuse to return them. That flies in the face of all natural justice and the British way of doing things. I must say in passing that I am not known for being soft on crime, but I draw a distinction between where a crime has been committed and where one has been alleged. The Bill does not adequately draw a distinction between the two.
Philip Davies
My hon. Friend made that point very well during his speech and I do not want to reiterate his point, but he is absolutely right.
Remaining on the subject of the return of seized items, I have some minor worries about this section. Proposed new section 16B(8)(a) refers to circumstances in which:
“if no proceedings have been instituted before the expiry of 28 days beginning with the date of seizure”.
As my hon. Friend the Member for Bury North (Mr Nuttall) made clear, 28 days can be an awfully long time to go without goods if one’s livelihood depends on them. It would be a bit of a kick in the teeth if one were not allowed to have one’s goods when no offence had been committed or was being pursued, and it could have a big impact on one’s livelihood for that month.
Proposed new section 16B(8) goes on to state that an article shall be returned:
“unless it has not proved possible, after diligent enquiry, to identify that person or ascertain the person’s address.”
I am not entirely sure what the definition of a “diligent enquiry” is, or how diligent a “diligent enquiry” needs to be. I fear that some of the provisions will be used to give an excuse for not returning goods to their proper lawful owner. We should be minimising the opportunities for that.
Although my hon. Friend the Member for Christchurch did not mention this point, it is worth noting that proposed new section 16C(4) states that the court may order forfeiture of goods even if the value exceeds the maximum penalty for the offence that has been committed. We are in the strange situation where we are levying a maximum penalty, but if the goods exceed that maximum penalty they can still be forfeited. I am not sure on what basis that can be either right or fair. If there is a maximum penalty, surely that should be the maximum penalty. The provision flies in the face of natural justice, and it would be interesting to have some clarification on it.
My hon. Friend the Member for Christchurch made the point that proposed new section 16D(1)(b)(ii) states that people might have to wait six months before compensation, which is a lengthy period of time. The court will only be able to make an order for compensation if it is satisfied that the seizure was lawful under proposed new section 16A. I hope my hon. Friend will come back to section 16A and whether we can strengthen
“reasonable grounds for suspecting that a person has committed an offence”.
Otherwise, the corporation would never have to pay compensation, irrespective of how it acted, but that cannot be the intention of my hon. Friend the Member for Cities of London and Westminster. Surely, it should be forced to pay compensation if it has acted in a way that is not becoming. We would all like to see that, I am sure, yet we are in danger of giving it a get-out-of-jail card and letting it get out of paying compensation.
I agree with the points made by my hon. Friend the Member for Christchurch about perishable items. I thought he made them very well, so I will not repeat them—[Interruption.]—despite the encouragement from Opposition Members to extol the virtues of his argument a bit more. Perhaps I will, under their provocation, Mr Deputy Speaker—
Philip Davies
But for now I shall resist the temptation.
Instead of repeating my hon. Friend’s points, I will try to pick out those that he might have missed out. Safe to say, subsection (5) to proposed new subsection 16E provides that
“the Corporation shall have a duty to secure the best possible price”
for these perishable goods. How on earth will it go about obtaining the best possible price for these perishable goods? Will it be setting up its own market stall? I do not think so. I wonder why that provision is in the Bill, given that it obviously is not going to happen.
Subsection (4) provides that the goods will be disposed of, if the person from whom it was seized
“fails to collect it within 48 hours of the seizure”,
but just because something is perishable, it does not mean it will go off in 48 hours. It might have a much longer date. I am not sure, therefore, why we have only got 48 hours for all perishable goods, irrespective of how long they could be used for. It seems that we are just presuming that everything being sold will go off within 48 hours, but that clearly does not apply to all perishable goods. I hope that some thought will be given to whether that provision is appropriate, too draconian or just totally inflexible. As we all know, perishable goods go off at various different times.
On the seizure of motor vehicles—or ice cream vans, as my hon. Friend the Member for Christchurch pointed out—I wonder how this is going to work. As far as I can see—I could be wrong, and I hope that my hon. Friend the Member for Cities of London and Westminster can help me—the Bill does not make it clear who would pay for the seizure, transportation, storage and return of the vehicle concerned. When the police seize or confiscate a vehicle—for example, when people are driving around without any insurance—they bring in a transport company to take it away and lock it up, and people must pay a release charge to get the car back again. Presumably, the corporation would have to go through the same kind of operation. It would not just leave the vehicle where it was, because presumably that is the whole point—it was causing an obstruction or should not have been there, and so the corporation would want to move it.
If the corporation uses the provisions to bring in a garage to tow away and store a vehicle, a cost will be incurred, but it is not clear from the Bill who would be liable for meeting the cost. Would the cost fall on the trader or the corporation? If the cost was incurred by the trader, but it was later shown that no offence had been committed, would the corporation reimburse the trader? As far as I can see—I stand to be corrected—the Bill does not make any of those things clear. It would be particularly helpful, therefore, if we could have some clarity. It is bad enough someone having their vehicle seized, if no offence has been committed, but if they then have to pay to have it returned and cannot claim back the money, it would be a further kick in the teeth. I hope that my hon. Friend will consider those points, on which I am seeking clarification. Clause 9, as my hon. Friend the Member for Christchurch said, seems a sensible provision. It will allow businesses more freedom to trade outside their own premises, and I heartily endorse it.
I hope that my hon. Friend the Member for Cities of London and Westminster will accept the spirit in which the scrutiny of the Bill has been carried out today. It is our intention to improve it, and I do not think there has been any attempt to wreck it or to stop it. We in this House take seriously our job of protecting people’s freedoms, and of protecting people from unnecessary or over-zealous regulation and legislation. The Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is in his place, has a good track record of trying to stop unnecessary regulation, legislation and bureaucracy.
I hope that my hon. Friend the Member for Cities of London and Westminster will accept that my hon. Friend the Member for Christchurch and I are simply trying to prevent any unintended consequences that the legislation might have so that it will achieve what he wants it to achieve and does not do what my hon. Friend and I fear it might well do if it goes through unchecked.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) was not in the Chamber at the beginning of the debate, and I am sure that he will mention that to the House. I am also sure that he will speak only briefly.
Jim Fitzpatrick
I am grateful for that clarification, Mr Deputy Speaker. I said in an intervention that I had been watching the debate from my office, and I apologised to the hon. Member for Cities of London and Westminster (Mark Field) for missing his speech. I congratulate him on bringing the Bill to the House. I will speak briefly, because I am in the Chamber principally to lead for the Opposition on the Humber Bridge Bill, which is next on the Order Paper, and which a number of colleagues are keen to get on to.
I think that the hon. Member for Christchurch (Mr Chope) described the attitude of Opposition Members towards the City of London as “hostile”. There is no doubt that some Opposition Members are hostile to the City, but they are not here tonight and I want to support my hon. Friend the Member for Edinburgh South (Ian Murray) on the Front Bench as he is in favour of the Bill. I do so for several reasons. I acknowledge the contribution that the City makes to the UK economy. I am a constituency MP in the neighbouring borough of Tower Hamlets, and we benefit greatly from the generosity and support of the City. We appreciate the partnership with the Corporation of London. On a personal basis, as a member of the Worshipful Company of Shipwrights, I have had the honour of participating in a ceremony at which I was granted the freedom of the City, although it was pointed out that I do not have the right to drive my sheep across London bridge, were I to have any.
I am a great admirer of the traditions, history and heritage of the Corporation of London. I am pleased to support the Bill, which will now go into Committee. I am also pleased to correct the record in relation to what was said about Opposition Members earlier. I also hope that we will be able to deal with—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am not going to be tempted either way any more, and I am sure that the hon. Member for Poplar and Limehouse has now come to the end of his speech. I am going to bring in Mark Field.
Mark Field
I thank all Members who have contributed to the debate, some of whom have made rather longer contributions than others. My hon. Friends the Members for Christchurch (Mr Chope) and for Shipley (Philip Davies) have approached the debate in a relatively good-humoured way, and I hope they will feel that I have dealt with the points that they have raised. Once the Bill goes into Committee, we will be able to take on board a number of the concerns that have been expressed, particularly those relating to the European services directive. That is obviously an ongoing concern. I was pleased to see that both my hon. Friends were on my side on that matter, and on the side of the corporation. We will endeavour to ensure that the provisions are compatible with EU law, along the lines of the judgment that we have received from leading counsel.
I also want to take this opportunity to thank my constituency neighbour, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). He made a good point about the importance of the City of London Corporation. It is an anomalous organisation, in that the City is the only area that still retains a business vote. Indeed, local elections will be held in the City within the next month. The City takes very seriously its responsibilities beyond the square mile, and takes great pride in the work that it does in the London boroughs of Tower Hamlets, Newham, Hackney and Islington, which make up the City fringe. We all benefit as Londoners from the phenomenal work done in West Ham park, Queen’s park, Epping forest and Hampstead heath, to name a few other of our most important open spaces maintained with great love and affection by the City of London Corporation. [Interruption.] As my hon. Friend the Member for Beckenham (Bob Stewart) rightly points out, this applies to West Wickham common as well, for great historical reasons going back over a century.
I will not detain the House any longer. I very much hope that we can move rapidly beyond Second Reading of this important little bit of legislation. It will not make a huge difference, but some great benefits—not just to the City of London but to many of its residents, businesses and the huge numbers of visitors we see every year—will derive from the Bill when it passes rapidly, I hope, into law.
Question put and agreed to.
Bill accordingly read a Second Time and committed.
Humber Bridge Bill
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Andrew Percy (Brigg and Goole) (Con)
I beg to move, That the Bill be now read a Second time.
I move the Second Reading on behalf of other Members from the region who are in the Chamber, including the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), the hon. Members for Kingston upon Hull North (Diana Johnson) and for Scunthorpe (Nic Dakin), my hon. Friend the Member for Cleethorpes (Martin Vickers) and my right hon. Friend the Member for East Yorkshire (Mr Knight). We have been united on this Bill, which seems to have attracted some interest from other parts of the country. We welcome that, and thanks to my hon. Friend the Member for Christchurch (Mr Chope) highlighting the existence of the Bill, we look forward to hordes of visitors to our region from his area and elsewhere.
Let me explain in a few words why across the Humber and across the political parties we jointly believe the Bill to be necessary. We ran a long cross-party and cross-estuary campaign to get action taken on the very high tolls on the Humber bridge. As we know, this was successful when we received a grant from the Chancellor of £150 million to enable the tolls to be halved. That has had a huge impact on the numbers crossing the bridge, which was absolutely necessary given the challenges in the region, with two of the poorest boroughs in the country.
While the Minister is in his place on the Front Bench—and I see that the former Secretary of State for Transport, my right hon. Friend the Member for Putney (Justine Greening) has joined us—I would like to pay tribute on behalf of myself and colleagues for the work they did to make this happen. We are indebted to them for their efforts and hard work. Without their personal involvement, I am not so sure that we would have got the results that we have seen.
I want to refer in a little detail to some of the changes introduced by the Bill and to explain their necessity. Somebody once said to me that the bridge was built on the back of a 1950s Bill, constructed in the 1970s and opened in the 1980s. Indeed, I was three years old when it opened, and we have worked out that my hon. Friend the Member for Cleethorpes was nine when the original Bill for the construction of the bridge was introduced back in 1959. The bridge board building has been constructed for some considerable time, and those who have visited it will appreciate that; it is almost in a time warp and is like stepping back in time.
There used to be 22 members from the various local authorities serving on the bridge board, and I declare an interest as a former member of that board. I was not one of the 22 members, but one of the 22 reserve members—in total, we had 44 potential members of the Humber bridge board representing the four local authorities in the region. It has to be said that the local authorities were different at that time. It was an unwieldy institution, and the Bill will formally reduce membership to four and add two members from the private sector, which we all believe is necessary to give the bridge a new look and a new drive. Those two additional members will be drawn from the business community, and there is provision to allow for their reasonable expenses. This might have been a cause of concern to some people, but I assure Members that the four members of the local authorities will continue to draw their expenses for attending the bridge board from the local authority remuneration scheme, and there is no intention at all to draw any salaries or additional expenses from the Humber bridge board. This provision is necessary just for the out-of-pocket expenses of the two private sector members, so that they can reclaim their travel expenses, which they cannot do at the moment. There is no intention of creating director salaries for the local authority members.
Philip Davies (Shipley) (Con)
According to clause 5,
“The Board may pay to each director of the Board such allowances and expenses as the Board may from time to time determine.”
I am not entirely convinced that the Bill imposes a great deal of restraint on the directors. Perhaps my hon. Friend can help me out.
Andrew Percy
Obviously, all members of the board will be created equal. It is essential for private sector members to be able to claim out-of-pocket expenses, but local authority members will continue to be remunerated by their authorities through local government schemes. Given that they are elected representatives, if they made any attempt to draw salaries they could expect a backlash at the ballot box.
It could be argued that the bridge is more advantageous to people living on the south bank of the Humber, but at present 98% of liability for the burden of debt lies with the city of Hull because of the way in which it was constructed. Protracted negotiations took place involving one authority in particular, but the objections of that authority were overcome. It was agreed that the bridge was of equal importance to all four, and that the burden should therefore be shared equally between them.
I hesitate to say this, given the political beliefs of some of my colleagues who are in the Chamber, but no traffic enforcement is currently possible on the Humber bridge. I was told recently that it was possible to drive through the tolls at 100 mph naked on a motorbike without committing any traffic offences. Not many people do that, of course, but we cannot allow such safety issues not to be addressed. Those who do not pay the toll cannot currently be pursued, and the current speed limit is not enforceable. Allowing the board to deal with that is simply a practical measure.
Jacob Rees-Mogg (North East Somerset) (Con)
Is there a problem with boy racers from Cleethorpes driving along the bridge at excessive speed, and has it ever been known for a Member of Parliament to do so?
Andrew Percy
I will not be drawn down that path. I understand that the person who apparently holds the speed record on the bridge may be well known publicly, but I will not name that person. It is certainly no one in the House.
At present, the board is allowed no flexibility in regard to dispensation from tolls. For those of us who represent the south bank, that is an important issue. Health and other services have increasingly been concentrated on the north bank over the past decade or so. Certain cancer and heart treatments are offered in Hull, but it is not currently possible for any toll dispensations to be given to the cancer and cardiac patients who must travel to the north bank regularly for their treatment.
It causes outrage locally that, while the Home Office will pay the tolls of the families who visit prisoners on the north bank and jobseekers can claim support through Jobcentre Plus, health patients receive no such support. It will now be up to the bridge board to decide whether it wishes to exercise such a discretion, and it has indicated that it is sympathetic to the requirements of certain types of patients who require regular treatment on the other side of the river.
As I said at the outset, there has been a cross-party campaign to modernise the bridge. We feel that the current structure is too rigid, that it does not give the board the commercial freedoms that it requires, and that consequently this change is essential.
Philip Davies
It appears that the Bill does not allow the board to increase the maximum toll, although it can vary tolls. Will it be able to increase them in future, and what will be the implications for people more widely?
Andrew Percy
The situation in respect of the tolls is that they could be raised and returned to £3 overnight under the order currently in place, without any consultation with the public.
This is what happens at present. A toll inquiry is held—at great cost to the board—at regular intervals, to which local MPs, including myself and many other Members present, trot up and argue passionately against any rise in the tolls, often on social or economic grounds. The bridge board’s primary responsibility and function, however, is, and will remain, repaying the debt, so those arguments are completely irrelevant.
Huge sums of money are spent whenever an inquiry is demanded and is granted by the Secretary of State, and at the end of that process the inspector’s recommendation has always been that the tolls must be raised. The Bill will allow the bridge board to raise the tolls in line with the retail prices index, should it wish to do so—although I hasten to add that the bridge board has recently said it expects to hold the tolls at £1.50, so there would be a real-terms cut year on year for the next three or four years at the very least.
The charade of a process that has gone on until now in respect of toll rises did not give the public any real say. There was a lot of debate and a lot of hot air was generated, but at the end of the day the situation fundamentally came down to the bridge board’s finances and therefore every toll rise was always consented to, with the exception of one, when a Minister intervened in the run-up to an election.
Bob Stewart (Beckenham) (Con)
Is my hon. Friend saying that once the cost of the bridge has been repaid the toll will substantially reduce or disappear?
Andrew Percy
We may all be dead and buried by the time that happens—I include myself in that. The freedoms introduced by the Bill will allow the bridge board to refinance in a way that it currently cannot, and it will be for the bridge board to determine what it wishes to do with the bridge once the cost has been repaid. It may want to start raising money for a replacement bridge, because I am assured that the existing bridge will reach the end of its lifespan at some point.
Under the Bill, the bridge board will be entitled to raise tolls in line with RPI. As part of the changes, it has for the first time established user groups and business groups to engage the public properly in any consultation. The situation will be largely unchanged, however: the primary focus will always be whether the bridge board’s finances are sound and whether it can repay the debt, which is its No. 1 legal responsibility. That is done through the tolls, as has always been the case. It is not done at general expense to the taxpayer. Indeed, we have paid for the bridge four times over and still owe about £150 million. The situation in respect of tolls will be unchanged, therefore, except that we will not have to go through this potential charade of having an inquiry at the end of which there is no real discretion.
We are all in agreement about this Bill. We have all supported the campaign for a long time. The fact that tolls have halved has had a huge impact locally.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
I rise to emphasise that there is cross-party, cross-Humber support for the Bill. I pay tribute to the work of the hon. Members for Brigg and Goole (Andrew Percy), for Cleethorpes (Martin Vickers) and for Beverley and Holderness (Mr Stuart), the right hon. Member for East Yorkshire (Mr Knight), my hon. Friends the Member for Scunthorpe (Nic Dakin), for Kingston upon Hull North (Diana Johnson), for Kingston upon Hull East (Karl Turner) and for Great Grimsby (Austin Mitchell), and the right hon. Member for Haltemprice and Howden (Mr Davis), too. We have all worked together to establish a new way of looking at the Humber bridge. I also pay tribute to the Secretary of State for International Development for the work she did in her previous post. To emphasise the cross-party consensus, I should point out, too, that the Minister who will be replying to the debate is a Liberal Democrat.
It is said that the way to bring two communities together is to build a bridge. We did that to bring the communities of east Yorkshire and north Lincolnshire together. In a way, that bridge became a cause of division, however, and it certainly did not allow us to fulfil the economic development potential of the region. This Bill changes that, not least because the bridge board will have the power to promote and participate in the economic development of our sub-region.
Because of the tolls and because of the archaic, centralised and almost Stalinist way in which the Humber Bridge Board was set up—it was a creature of its post-war time—it was impossible to use that bridge between the two communities to maximise our economic potential. Now, with the local enterprise partnership, with an emphasis on localism, we are determined to make that work. We have done an awful lot by halving the bridge tolls, which is very important, but we need to set up a new structure, reducing the 22 board members to four local authority members—and we need to include all the local authorities, because one was not included under the current structure. We also need to add to that the knowledge and expertise of the business community. Allowing those things to happen will mean that we can take advantage of the huge potential in renewables, chemicals, logistics and digital gaming, which are all huge for our sub-region.
Mr Graham Stuart (Beverley and Holderness) (Con)
I agree with every point that the right hon. Gentleman has made, but will he join me in paying tribute to my right hon. Friend the Member for Putney (Justine Greening), who, when she was a Treasury Minister, played such a role in not only finding the money to halve the tolls, but setting out the vision, which he has just described, of a more dynamic board, rather than the Stalinist one we had before?
Alan Johnson
I clearly recall paying tribute to the right hon. Member for Putney, but I am happy to do so again—she is so good, they pay tribute to her twice.
I do not want to speak for long. This Bill is very important for our little corner of the world. There is not a person, organisation, agency or business opposed to this development, and I very much hope the Bill gets its Second Reading this evening.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I wish briefly to set out the Government’s position on the Bill and the background to it. In short, the Government supports this Bill, and in recognition of that I am joined on the Front Bench not only by my right hon. Friend the Member for Putney (Justine Greening), but by the Minister of State, Department for Transport, my right hon. Friend the Member for Chelmsford (Mr Burns). We see the Bill as an essential part of a sustainable settlement for the management and finances of the Humber bridge to endure for the next 25 years or so. This is the outcome of considerable work by all the local MPs—of all parties—the four Humber area local authorities and the Humber Bridge Board, working together to respond positively to the Government’s Humber bridge review. I would like to record my appreciation of that work.
The Government launched the Humber bridge review on 14 June 2011. We consulted widely, and completed work on assessing the economic impacts of the bridge, and the level of its tolls, on the Humber area economy. We announced our conclusions on 29 November 2011. The Government recognised that the Humber bridge has a unique history, and had a unique burden of interest relative to its construction cost, and therefore offered to write down some £150 million of the bridge debt. That was conditional on the bridge board and local authorities submitting a proposal for reform of the structure of the bridge board, and the Humber area local authorities taking on full responsibility for the remaining lower level of debt, and sharing that responsibility out much more broadly and realistically between them.
The bridge board and local authorities responded positively, and came forward with a proposal for reforms, which the Government accepted, and a deal was struck on 29 February 2012, almost a year ago to the day. Some of those reforms could be enacted by the Government with secondary legislation, and that was done during 2012, as I will describe. Other reforms required primary legislation, and the Government agreed to support a private Bill to be promoted by the bridge board to achieve them—that Bill is what we are supporting today.
Looking at the reform package as a whole, the core principles for the governance of the bridge set by the Humber Bridge Act 1959 do not change. The first of those is that the bridge is owned by the Humber area community through the Humber Bridge Board, with democratic accountability through local authority members forming a majority on the board. The second is that the costs of building and maintaining the bridge be borne by its users, through the charging of tolls. That is the long-standing practice for major estuarial crossings in England and Wales. The third principle is that the bridge board has the responsibility to run the bridge efficiently and safely, and to set an adequate level of toll to meet its costs. Any shortfall in toll revenue is made up by a levy on the bridge board’s constituent local authorities. Turning to the component parts of the reform package, two reforms were enacted by the Government in 2012. First, the Humber Bridge (Debts) Order 2012 wrote down £150 million of the £332 million bridge debt, and set a fixed interest rate of 4.25% on the remaining debt. That enabled the bridge board to reduce the bridge tolls substantially on 1 April 2012, including halving the toll for cars from £3 to £1.50. Incidentally, the Chancellor was given the credit for announcing that, but it is only fair to say, even if I get myself into trouble, that the driving force in securing the reduction was the right hon. Member for Putney rather than the Chancellor.
In the first nine months of reduced tolls, 429,000 additional vehicle trips were made across the bridge, an increase of 9.2%. Secondly, the Humber Bridge Board (Membership) Order 2012 reduced the bridge board from 22 local councillors to four, one from each of the Humber area local authorities.
This private Bill provides for those parts of the reform package that require primary legislation. I want to draw attention to two reforms that meet the Government’s requirements for the February 2012 deal. First, clause 3 brings representatives of the local enterprise partnership onto the board, giving the Humber area business community a stake in the good management of the bridge and the opportunity to bring its energy and commercial expertise to its day-to-day running. Secondly, clause 7 ensures that the incentive on the bridge board to set a toll adequate to meet its costs is shared equally between all the Humber area local authorities. That is a major improvement from the previous arrangement, when approximately 98% of the cost of any revenue shortfall fell on the council tax payers of the city of Hull.
The other provisions in the Bill have been worked up by the bridge board and local authorities to modernise the powers of the bridge board to manage its affairs efficiently and transparently and to allow it to act commercially to develop sources of revenue other than tolls, while remaining democratically accountable to the local community. On that basis, we have agreed as a Government to support them. I shall not go through them all now, but I want to draw attention to clause 11, which removes the Secretary of State from the decision-making process on setting the level of tolls while retaining the local community safeguards and rights to be consulted on any change in the tolls. That will save much time and taxpayers’ money and is a good example of the implementation of the Government’s localism agenda.
The Humber bridge review provides an affordable and long-term sustainable solution for repaying the Humber bridge debt and allows the bridge to play its fullest possible part in the success of the Humber area economy and community.
Mr Graham Stuart
The Minister will be aware that 70% of the bridge’s capacity, with the highest tolls in the country, was unused in an area of high unemployment and low average income. This is a tremendous step forward for the area and, when we combine it with the improvements to the A164 and the Beverley southern relief road, he and other Ministers can be proud of the coalition Government’s contribution to the area and its transport infrastructure at a time of such general austerity.
Norman Baker
I am grateful for those comments and concur with the analysis that this will make a significant difference to the economy of the area, for which Members across the House have argued successfully.
The agreed reforms support effective local management of the bridge and accountability to the local community, taking into account the views of all stakeholders and ensuring value for money for the taxpayer. The private Bill is an essential part of the reform package, and I commend it to the House.
Nic Dakin (Scunthorpe) (Lab)
I want simply to make a few points. First, I recognise the contribution many people have made to the management and governance of the bridge over many years. They have done a good job within the statutory requirements that the bridge board has placed on them, but now is the time for the changes in the Bill to release the dynamism that is necessary if the bridge is to be fit not only for the present but for the future. Hon. Members who have already spoken have emphasised the opportunities that the Bill presents, and it is also an opportunity to deliver localism in action. That localism is represented by the fact that MPs from across the parties and across the region have worked together in unison, as have local authorities, the business community and the local enterprise partnership. Not just the reduction of tolls, in which the right hon. Member for Putney (Justine Greening) assisted and for which she has properly been recognised in this debate, but the setting up of local enterprise zones and the local enterprise partnership have helped to drive the local area forward. That is localism in action, which will be further underscored and driven forward if we support the Bill tonight.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to speak in the debate. It has been a long time coming in many ways and I thank the Minister for his résumé and for his efforts. I also thank the former Secretary of State, my right hon. Friend the Member for Putney (Justine Greening), who, right from the start, saw the area’s potential and the impact the bridge tolls were having on the local economy. Like my colleagues, I thank them for that. As the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) said, we build bridges to unite people. We did not quite succeed in that respect, but we have now shown that united action by politicians of all colours on both sides of the river can achieve something. I hope that we will push forward with other enterprises for the Humber. It is a great economic area with fantastic potential, and I am sure that the Bill will seal the deal.
My hon. Friend the Member for Brigg and Goole (Andrew Percy) said that I was eight or nine when the original Humber Bridge Bill was first introduced. Sadly, that is the case. I am also one of the campaigners of longest standing. I was looking it up; in 1986 I spoke in a debate in the former Grimsby borough council to demand abolition of, or a reduction in, the tolls.
What has been said of the business potential of the local economy is particularly important. My area, especially around Immingham docks, is a major centre for the haulage industry and it has greatly benefited from the changes. But in many ways it is the personal cases that emphasise the point. People on the south bank have to travel to Hull for cancer treatment and treatment for other serious illnesses, and the tolls have been a particular burden on the families of many people whom I represent and those in neighbouring constituencies. Unless we get this Bill on the books, the board cannot reduce the tolls for those seeking treatment, and it is important that we get it as soon as possible.
Andrew Percy
My hon. Friend has reminded me of Humber Action Against Tolls and in particular Jenny Walton, who has struggled with a terrible illness and has been on the receiving end of the high tolls. She should get a lot of credit for the work she has done.
Martin Vickers
My hon. Friend has stolen my words. I was going to mention Jenny and the great work that she has done.
Some colleagues may express fears about the powers of the board. They need to remember that four out of six members of the board will now, in effect, be directly elected and accountable to their local communities, and that will be a restraint. Only if you live in the area do you appreciate how big an issue this is locally. Public opinion will ensure that the board drives tolls down to their absolute minimum not only in the foreseeable future but beyond that. It has already announced that it can maintain tolls at the present level for another three years.
Philip Davies
As my hon. Friend may know, I used to live in the area, in the constituency of my right hon. Friend the Member for Haltemprice and Howden (Mr Davis). My hon. Friend spoke about the concerns about and the opportunities presented by reducing the cost for people who have certain medical conditions. Does he feel that it would be worth putting any of those things in the Bill so that they are not left to the discretion of the board members, so that we can guarantee the outcome that he seeks—reductions for patients and control of future price rises?
Martin Vickers
I can see why my hon. Friend would consider that desirable, but if we start listing illnesses that qualify for exemption from the toll, we will discriminate against other perhaps lesser known illnesses. It is easy to say that we will exempt cancer patients, but what about others with equally serious diseases? It would be wrong, and it is surely for local people to determine these things.
One important part of Cleethorpes is the tourist trade. We have already seen the tourism industry pull together with some initiatives to attract people across the bridge such as “With entry into Pleasure Island you get your toll back.” It has clearly been a boost for the local economy, which is desperately needed in an area of high unemployment where growth is the key to the future. I urge colleagues to give the Bill a Second Reading and support it throughout its various stages.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
I rise very briefly to put on record the Opposition’s support for the Bill; to congratulate the hon. Member for Brigg and Goole (Andrew Percy) and his colleagues on making sure that it was debated this evening; and to thank my right hon. and hon. Friends for indicating the cross-Chamber support for the Bill.
The Minister outlined in some detail the nature of the Bill and we look forward to discussing it more fully in Committee. It is also nice that the right hon. Member for Putney (Justine Greening) is in her place to hear the nice things that have been said about her. We have crossed swords on several issues over the years, and it is nice when sometimes we can congratulate Members on the other side, rather than criticise them. We support the Bill and we look forward to its swift passage.
Mr Christopher Chope (Christchurch) (Con)
It is because of me that this debate is taking place at all. I was much criticised by my hon. Friend the Member for Brigg and Goole (Andrew Percy) for saying that we should have a debate. I said to him privately, and repeat publicly, that I thought that such a debate would redound to his benefit, because he would be able to explain the good work that he had put into trying to achieve the objectives of the Bill. I said to him that if the Bill were not debated on Second Reading, it would—because it is an unopposed Bill and there is no petition against it—go to an Unopposed Bill Committee, and then come back to the House for Third Reading, without a Report stage, so there would be no opportunity for people to move any amendments or make any points about it, whether good or bad. I hope that my hon. Friend now understands the virtues of a debate. The fact that other Members are in their places shows that they, too, understand the importance of being able to articulate concerns about, or the good points of, a piece of legislation.
It is great to hear support from those on the Opposition Front Bench for the principle of the Laffer curve—reductions in price can increase the volume of activity. We have heard that, in relation to the top rate of tax, they do not believe that the volume of activity would increase. I suggest that they are now speaking with forked tongue, because on this Bill they have conceded the point that reducing the costs increases the activity and thus the yield. I have at home on the back of a napkin the Laffer curve drawn by Dr Laffer himself, and I will revisit that as a result of this debate.
On a serious point, I hear what my hon. Friends say about local control, but the Bill would give up any direct control over the level of tolls in the future—that is the impact of clause 11. As my hon. Friend the Member for Shipley (Philip Davies) implied in his intervention, there is something to be said for having on the face of the Bill some safeguards for local people against possible future increases in the level of tolls beyond the rate of inflation. At the moment, they have been halved, but nothing in the Bill would safeguard against the introduction of differential tolls, for example.
Andrew Percy
I take my hon. Friend’s point, but the primary responsibility of the bridge body is to service the debt, so either way local taxpayers pay. Either the road user pays through the tolls or responsibility reverts to the local authorities. So there is no safeguard because the safeguard of not having a toll rise is that it would then revert to the local taxpayers to pay for anyway.
Mr Chope
I take my hon. Friend’s point, and the arrangements are now for a much more equitable relationship. Certainly when I was a Transport Minister it was an impossible subject to deal with, because there was no incentive for the other local authorities involved to be reasonable on these issues. However, that would not stop something being written on the face of Bill. Even if there is no demand locally for it and there are no petitions against the Bill at this stage, it would still be possible for people to petition against the Bill when it gets to the other place if they are concerned about the lack of any assurances in relation to tolls.
I raised with my hon. Friend the issue of the maintenance fund. Clause 9 says that the maintenance fund can be reduced. Money can be taken from the maintenance fund and spent on other things. I believe that we have too much crumbling infrastructure in this country, much of it owned and managed by local authorities that have refused to use the money that has been given to them, often by central Government, for the purposes of the proper maintenance of that infrastructure. In my constituency, the A338 Bournemouth spur road comes to mind as an example. I am concerned that we give power in the Bill for money that has specifically been put aside for the maintenance of an important structure to be spent on something else.
We know that bridges decay, and what is happening with the new Forth bridge is an example. I hope that when he responds to the debate, my hon. Friend will explain why the promoters of the Bill feel that the existing maintenance fund is topped up too high. If it is topped up too high and they want the power to reduce it, why was that not taken into account in the negotiations over the reduction in the debt and the taxpayers’ money that went into it?
Those are reasonable questions to ask in the context of a debate such as this. I was chided for asking what this had to do with my constituents. My constituents are national taxpayers and they do not want to be told that the Humber bridge needs to be rebuilt and the only way it can be rebuilt is with national taxpayers’ money because the maintenance fund was not used for the purposes for which it was set up. That is my concern and that is why I ask these questions in relation to clause 9.
I do not and never did wish to prevent the Bill from making progress, but it is important that we establish a principle that such legislation does not go through on the nod, so that we all know what we are talking about and we give it our express consent, rather than letting it go through by default.
Philip Davies (Shipley) (Con)
I commend all my colleagues on both sides of the House from east Yorkshire and north Lincolnshire for their efforts in coming together to get the Bill to this stage. Clearly, they all work together well. I also congratulate my hon. Friend the Member for Christchurch (Mr Chope) on making sure that we can have a debate about these matters.
People may ask what this has to do with the people in Shipley. Well, people in Shipley use the Humber bridge too. On their many visits to east Yorkshire and north Lincolnshire they are expected to cough up when they go over the Humber bridge, just as much as anybody in east Yorkshire is expected to cough up when they go over it, so of course we all have an interest. As I made clear in an earlier intervention, I lived for a number of years in Haltemprice and Howden and at that time was a regular user of the Humber bridge. I am delighted with what the Government have done in reducing the cost for people using the bridge, which will be warmly welcomed in that part of the world. I am all for reducing taxes and costs.
I have no objection to the Bill. It is a good rule of thumb that if it is good enough for my hon. Friends the Members for Cleethorpes (Martin Vickers) and for Brigg and Goole (Andrew Percy), it is good enough for me. But like my hon. Friend the Member for Christchurch, I would not want the Bill to have any unintended consequences. I think that it is incumbent on us to point out any problems we think there might be with the Bill, and then it is ultimately for its promoters to decide whether they want to take heed of that view or ignore it. If they have considered it, do not have a problem and want to ignore it, that is fine by me, but I think that it would be remiss of us not to flag up some issues so that people can take them away to consider.
I do not want to go through the whole Bill and so will focus my remarks on the two main considerations that I think might impact upon, and potentially upset, local residents. One relates to the bridge toll. It seems slightly bizarre to me that after the Government have reduced the charge for crossing the bridge, which I think we all approve of, we might be about to allow other people effectively to overturn that reduction in the not-too-distant future and start putting up charges.
My hon. Friend the Member for Cleethorpes indicated that he thought that the matter should be decided locally, and that because those people would all be elected locally, they faced the prospect of being voted out if they put the fees up and it proved unpopular. But that is not necessarily how I read the Bill. If the members of the Humber Bridge Board were directly elected, there would be some merit in his argument, because they could be directly elected on the basis of their record on the board—but that, of course, is not how it works.
Schedule 1 makes it clear that the board members will not be directly elected at all; they will, in effect, be appointed by the various local authorities. They might well be elected councillors in their particular field, but when they come up for re-election to Hull city council, North Lincolnshire council or the East Riding of Yorkshire council, they will not simply be voted in for their particular ward based on their track record on the Humber Bridge Board. They might represent a ward in which there are not many people who use the bridge, so it might not be a big consideration when they come up for re-election. They will face re-election based on their track record of working hard in the local ward and on the other work they do on the local council.
Therefore, I do not see that there will be direct elected legitimacy, as my hon. Friend the Member for Cleethorpes would have us believe, based on how he responded to my earlier intervention. I still fear that people will be able to use their position on the board to vote through toll increases that are unpopular with the local community but will not face the sanction that he would like them to face at a subsequent election.
Martin Vickers
My hon. Friend is making a perfectly good argument for having more directly elected officials and politicians, and in principle I am very much in favour of that, but the reality, of course, is that he could apply the same argument to the role of Government Ministers, who are not directly elected. It is just an impossible situation. As I said in my contribution, the key is that four of the six board members are elected. Because of the importance of the issue in the locality, I can assure him that it would be very foolish of the board members to act irresponsibly in any way when it comes to toll increases.
Philip Davies
I take my hon. Friend’s point, and he might be satisfied that there will be sufficient accountability. I merely wanted to flag up the fact that people might want to consider some additional safeguards in the Bill to prevent tolls from reaching levels that would be unacceptable to the local community. I know that that is not his intention or, as far as I can see, that of any Members from Humberside—an awful term that I object to greatly. I do not think that it is the intention of anyone from either side of the Humber to see fees go up. I do not think that anyone supporting the Bill wants to see that. My concern is that that might be an unintended consequence of the Bill without additional safeguards.
Mr Chope
My hon. Friend makes a good point. The Bill gives the board the power to have differential charges for the residents of the four local authorities concerned and for non-residents, so there is the possible scenario whereby the charges for residents of the four local authorities would be kept down while the charges for visitors, such as my constituents and those of my hon. Friend, would be pushed up. Should not the Bill provide a safeguard against that?
Philip Davies
My hon. Friend makes a good point. We wish to represent the best interests of our constituents too, so we need to be cautious about that.
Andrew Percy
I have enormous respect for my hon. Friend, and I understand his argument, but I think that he is failing to understand that the primary purpose of the board is to service the bridge’s debt. That is what it is there to do and that is what the tolls are necessary for, so the idea that it is suddenly going to shove them up to five quid overnight is wrong—it is not going to happen, to be polite about it. We must remember that the primary purpose of the board is to service the debt, and that is done either through the tolls or through a levy on the local authorities.
Philip Davies
I take my hon. Friend’s point and his reassurance. However, he must accept that although we have seen a change in strategy this evening, as my hon. Friend the Member for Christchurch has noted, some people will believe politically that the best way to raise money to service the debt is to increase taxes or, in this case, charges. The people on the board may not accept the idea of my hon. Friend the Member for Brigg and Goole that the best way to increase the revenue stream is to reduce the price—they may take the view that the best way to service the debt is to increase prices—so there is no guarantee that what he suggests will always prevail. I will not go on for too much longer because I do not want inadvertently to talk out his Bill, but there is a concern about what might happen, and it is worth putting that on the record and asking him to think a little more about whether a provision should be inserted in the Bill to prevent any potential problem further down the line.
I have two final points. The first is about the people whom my hon. Friend the Member for Cleethorpes wants to be given a full or partial relief from the toll, perhaps because of medical conditions. He said that when one makes a list one might inadvertently miss something off and cause a problem, and I understand that. However, an intention to give certain people a relief is only that—an intention. Nothing in the Bill would force it to happen or guarantee it. People could have their hopes raised and then see them dashed. It would be unfortunate if the board had a change of heart, or its personnel changed, and it no longer felt that a relief was appropriate or affordable because, as my hon. Friend the Member for Brigg and Goole says, their primary responsibility is to service the debt.
It might therefore be worth inserting a provision—it does not have be as specific as my hon. Friend the Member for Cleethorpes perhaps inferred from my intervention—to make it clear that there should be some form of relief for people with, for example, serious medical conditions. It need not specify anything in particular but would make sure that what he intended happened in reality. One of the many unfortunate things in politics is people’s hopes being raised and then dashed when other people have made promises that they cannot keep. It would be good if we could demonstrate in the Bill that this provision would be an inevitable consequence of its being passed, whereas at the moment it is just an aspiration and a hope that cannot be guaranteed.
My final point is about clause 5, on allowances and expenses, about which I made an intervention earlier. I took the point made by my hon. Friend the Member for Brigg and Goole about out-of-pocket expenses. I do not think that anybody will reasonably object to people being able to recover their out-of-pocket expenses, but that is not exactly what the clause says. It says:
“The Board may pay to each director of the Board such allowances and expenses as the Board may from time to time determine.”
With the best will in the world, whatever the intention and whatever expectations people may have, that gives an awful lot of scope under the Bill for people to be paid allowances and expenses that local residents may consider at some time to be excessive. This kind of thing can often build up resentment if it does not come with the support of the local public. If the intention is for people to have their out-of-pocket expenses repaid—I would not object to that and I am certain that the vast majority of local residents would not, either—perhaps the Bill should make it clear that that is what it means, rather than say
“such allowances and expenses as the Board may determine from time to time,”
which would give people scope to vote for considerable amounts of money that others would find unacceptable or offensive.
Philip Davies
My hon. Friend is right. The Bill gives carte blanche to the board to vote for any amount of money it chooses. There does not seem to be a restriction, aside from the expectation voiced by my hon. Friend the Member for Cleethorpes that the four elected people would be voted out on their ear at the next election. There is no guarantee, however, that that would happen. People will not be judged on that alone. I ask my hon. Friend the Member for Brigg and Goole to consider these points. I understand what he and Members from all parties and from both sides of the Humber intend to happen, and I would not wish the Bill not to deliver on their or their constituents’ hopes and expectations.
I congratulate my hon. Friend the Member for Christchurch on allowing us to have this debate. All the private Bills we have debated over a number of years have involved certain points that the promoters have not given consideration to or that, with hindsight, they might have done differently. This debate has given us an opportunity to look at such points. I hope that my hon. Friend the Member for Brigg and Goole will take some of our concerns on board and even table some modest amendments when the Bill goes to Committee.
Andrew Percy
This has been a good debate. I thank my hon. Friend the Member for Christchurch (Mr Chope), who has not spoken for a very long time, for allowing us to have it, although I do not think I would have thanked him if his intention had been to talk the Bill out. I take on board his genuine principle that legislation should be properly scrutinised in this place, frustrating though that may be for us locally. His contribution was welcome for its content and its length. I will ask the bridge board to respond to him about the maintenance fund. My understanding is that, at present, it has to be set at a certain level, even when it is not necessary to spend it all. The Bill does not allow the board to use the maintenance fund to offset interest payments and suchlike. I understand that that is where the flexibility comes from, but I will ask the board to respond.
I do not agree with my hon. Friend on taxpayers’ national liability. As I have said throughout the debate, the liability rests ultimately with local people through either the money paid by users or the levy on the local authorities. If the bridge fell down overnight, it would be put up, I hope, according to the same principles on which the original bridge was constructed. The Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) has set out those principles, which are that those who use the bridge pay for it. I do not think there would be any recourse to taxpayers. Obviously, they put up the loan originally, but the payments would come from the tolls.
I thought we would get through this debate without any mention of the dreaded “H” word, but I forgive my hon. Friend the Member for Shipley (Philip Davies) for using it and will respond to his reasonable point about allowances, which I am sure all local MPs will want to pursue. However, the new members—the four members from each authority—would have to be appointed every year through their full council meeting, so if they went a bit bonkers and sought to pay themselves £100,000 per year, they could be thrown off the board by their local authorities. That is an extra check of democratic accountability, because they are accountable to their local authorities. That could have happened in the past—although it never has—because a local authority, had it wanted to, could have used its own procedures to introduce a special responsibility allowance to pay the chairman of the bridge board. It would also be foolish for board members to suggest payment of anything other than out-of-pocket expenses. I think that local MPs from all parties would be particularly critical of them if they tried to do that.
On the toll rise, I understand the point about safeguards. However, the current safeguard, which I think is what my hon. Friends the Members for Christchurch and for Shipley are asking for, does not provide much of a safeguard, because when a toll increase is sought, it is always granted on the grounds that it is necessary to fulfil the primary responsibility of the board, which is to repay the debt and maintain the bridge in good order. That will remain the primary responsibility and tolls will be set to reflect that.
Given that the board is finely balanced between two Conservative members and two Labour members, the politics of the situation mean that a rise would never happen. I do not suspect that the business community will be coming to the bridge board wanting to put up the bridge tolls—probably quite the reverse.
Some excellent points have been raised which I and other local MPs will want to pursue. I am delighted that we have got to this stage and that we have not run out of time, because this is a much-needed change for our local area. We are all delighted to have been involved in making it.
Question put and agreed to.
Bill accordingly read a Second time and committed.
Alternatives to Vivisection
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Jonathan Evans (Cardiff North) (Con)
The petition has arisen following revelations about the unusual nature of experiments carried out on live kittens at Cardiff university, which involve the sewing up of their eyelids. A number of my constituents were so shocked by the revelations that Mr Derek Hector and Mr Dom Spens, who are committed to animal welfare and recognise the importance of this Chamber, organised a petition. They managed to gather 2,000 signatures at Cardiff university and six locations in central Cardiff over a period of barely 24 hours. That is an indication of the concern in my city over the issue.
The petition states:
The Petition of Derek Hector of 68 Heol y Forlan, Whitchurch, Cardiff, CF14 1BA and others,
Declares that the Petitioners consider that vivisection is dangerous to humans since drugs that have been passed for human use following testing on animals have later been found to have caused birth defects, organ failure and death; further that vivisection needlessly kills hundreds of thousands of animals and that vivisection delays the development of safe advances in medical, surgical and veterinary progress. It also declares that vivisection is a huge cost to tax payers, Cardiff University having spent more than £1.5 million during 2011 on the use of animals in experiments and that this is unacceptable when there are other 450 viable alternatives to vivisection which give far more accurate results.
The Petitioners therefore request that the House of Commons urges the Government to bring forward proposals for ending animal experimentation throughout Great Britain, including at Cardiff University.
And the Petitioners remain, etc.
[P001156]
Local Government Finance (Herefordshire)
(11 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Bill Wiggin (North Herefordshire) (Con)
As the House will know, the Government are set to provide approximately £72 billion of grants to local authorities in England for 2013-14. Despite the enormity of that figure, there is no disputing that overall spending must be reduced. However, even though the cake is smaller—indeed, precisely because the cake is smaller—we must ensure that rural areas such as Herefordshire receive their fair share of funding. For far too long, the historical balance has been tipped against them.
Herefordshire is the fourth most sparsely populated county in England. It is made up of five market towns, villages, remote farms and hamlets, as well as Hereford city in the centre. At 42,500, the number of elderly residents in Herefordshire as a proportion of the population is well above the national average. Just over a fifth of Herefordshire’s population, 22%, is aged 65 and over, compared with just 17% in England and Wales as a whole. Rural sparsity is an expensive challenge for a small county. Costs for transport, social care, schools, ambulances and health services are all pushed up. Yet Herefordshire is not and has not been a well resourced council. The 2012-13 budget figures show that formula grant funding per capita is £311, which is 13% below the national average of £358.
What can we do? The council has just voted to raise council tax by 1.9%, because it feels that with only 1% being given by the Government, if it freezes the council tax it will fall further and further behind over time. I support a freeze in council tax, and I do not agree with increasing it, as that will have a real impact on already stretched household budgets, especially for the retired and those living on pensions. Councillors have made efficiency savings of £21 million since 2011, and a further £9.1 million of savings are due to be delivered this year, and once the fat has been trimmed the pickings are lean. Factor in a below-average level of council tax, alongside a relatively low base, and it is clear that Herefordshire is running out of options. That is a state of affairs with which many of my colleagues representing rural areas will be depressingly familiar.
We know from research that urban authorities receive far greater levels of financial assistance under the current system. Recently, the Government have taken some positive steps towards redressing the balance. Technical adjustments mean that the formula will do a better job of reflecting the additional cost of providing services in rural areas.
Jesse Norman (Hereford and South Herefordshire) (Con)
I congratulate my hon. Friend on securing the debate. As the other MP for the glorious county of Herefordshire, may I add my voice to his on the issue of underfunding and draw his attention and that of the House to a study that I commissioned in March 2010? It showed that the cumulative underfunding for Herefordshire in the period from 2005 to 2010, compared with comparable authorities, was £174 million over five years, or roughly £35 million a year, including a shortfall of £85 million in support for Herefordshire council. I commend my hon. Friend for drawing wider attention to the issue of gross underfunding and the important challenge that faces the country and the Government.
Bill Wiggin
My hon. Friend and neighbour—it says in the Bible, “Love thy neighbour”, and he is an easy man to love and I know his constituents love him deeply—is absolutely right to be concerned. There is some good news, because on 4 February my hon. Friend the Minister announced that 95 authorities would receive a transitional efficiency support for services in sparse areas grant, of which £531,374 would go to Herefordshire. That and the technical adjustments that I mentioned are excellent news and speak of the coalition’s determination to bring about real change, and let us never forget Labour’s pledge to deliver £52 billion of local government cuts.
There is still work to be done. First, the efficiency support for services in sparse areas funding has been provided for 2013-14 only. A one-off grant cannot be budgeted for in rising to the challenges that rural authorities face when delivering services in geographically sprawling areas. Those are permanent challenges that can, and will, never be completely overcome. It is time to give serious thought to our long-term future.
Secondly, the counterintuitive damping mechanism is undoing much of the Government’s good work to date. There is undoubtedly common sense in promoting stability and protecting councils from violent change. However, there is no logic in freezing the system completely for six years, which benefits only a select few London commuter belt authorities with high house prices. The Government should look again at that time scale.
Under the summer consultation figures, Herefordshire should have benefited from an extra £6 million per annum. No less than 74% of that, or £4.4 million, was subsequently lost through damping. Across the country as a whole, that figure rises to at least £60 million. That is a huge amount. Quite simply, the mechanism is preventing money from being allocated where it is needed. Expectations were raised and sadly dashed. Herefordshire council specifically requested that the Government’s adjustments for sparsity be reflected in cash terms and excluded from the damping or smoothing effect, yet that has not happened. We now face a situation where the rural penalty has been reduced at best by one or two points from 50%, when it really needs to be down to 40%.
It is true that the changes to business rates from 1 April will mean that local authorities can keep 50% of business rate growth. That is designed to increase local employment and income by attracting new businesses to an area. However, while useful, it may be an incentive that urban authorities, with their existing infrastructure, may be better placed to benefit from than rural areas such as mine. I ask Ministers to look again at Herefordshire council’s suggestion. Alternatively, damping could be unwound or the special grant continued until the sums truly add up.
Rural communities have been chronically underfunded for more than a decade. My constituents have faced further blows from rising fuel costs, energy bills and, as has been recently in the news, turbulence for beef farmers. Approximately a fifth of households in Herefordshire live in poverty. The gap between the most and least deprived areas is widening, and there are many deprived areas in the constituency of my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) as well. The Government have recognised this need and have risen to the challenge only to be dampened down. I ask my hon. Friend the Minister to look at this again. If he cannot un-dampen or de-dampen in the immediate short term, then can he try looking at the longer term so that councils can budget wisely rather than raise council tax?
In short, I criticise the council for seeking to tax constituents further, but I congratulate it on the savings it has made so far. Our Government have made a mistake by allowing damping to undo their good intentions, and with the long periods of time that these budgets cover, I congratulate and thank my hon. Friend for what he has done to try to help—£531,374 is most welcome. We all know that budgets must shrink and I am not calling for more spending, only a fairer allocation.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
I thank my hon. Friend the Member for North Herefordshire (Bill Wiggin) for raising this important topic, and for offering me the opportunity to set out what we are doing to help local government, particularly in rural areas, from April onwards.
On 4 February, I put before the House the final settlement for 2013-14. I want to be clear that behind all our thinking on local government funding is the fact that it is vital that councils continue to play their part, as my hon. Friend said, to tackle the inherited budget deficit by making sensible savings and delivering value for money for the taxpayer. As I did on 4 February, I want to make it clear that this is a new settlement for local government, one now based on self-determination and financial independence for local authorities. We are seeking to shift power from Whitehall to town hall. We are providing a direct financial incentive for councils to promote growth, something my hon. Friend touched on in his speech. Authorities will directly retain nearly £11 billion of business rates instead of returning them to the Treasury, and they will be able to keep the growth on that share of business rates. Councils that strive and deliver the benefit of growth by doing the right thing by their communities will bring in jobs and business, and will gain the financial rewards themselves.
Importantly, in this settlement we have accepted, as my hon. Friend noted, that rural areas have been comparatively underfunded. We have therefore ensured that there is proper recognition of the additional costs of delivering services in rural areas. We have made adjustments to relative needs formulae to reflect the greater cost of providing services in rural areas—one of only three formula changes in the settlement. We have increased the weight for super-sparse areas in the formula; doubled the sparsity weight for older people’s social care and the district level environmental, protective and cultural services block; 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 declining by less in predominantly rural authorities than in predominantly urban authorities, within all classes. The spending power of Herefordshire council is reducing by less than the England average in both 2013-14 and 2014-15.
We listened to representations from rural authorities and had good conversations with them during the consultation process. That is why, as my hon. Friend said, we have also provided an £8.5 million grant to help 95 rural authorities with sparse populations to secure efficiencies in services in 2013-14. He is right to say that this is a one-year grant, giving councils a year to go further with some of the efficiency work that many of them are doing very well. As I promised, I will continue talking to councils over the next few months about the long-term future of rural areas. As he said, Herefordshire council will also receive one of the largest allocations of that funding—£531,000—and Hereford and Worcester fire authority will receive an additional £13,000. This extra funding will support rural areas to achieve sustainable savings in the services they provide in sparsely populated areas.
Overall, the settlement provides a fair funding deal, with protections for the most grant dependent authorities, whether they are rural or urban, and leaves councils with considerable total spending power. The settlement is not about what councils can take—that is the local government finance of the past—but about what they can make. It represents a watershed moment for council finances, with the localisation of £11 billion of business rates, providing a strong incentive for councils of all types to go for growth and reducing their dependency on central grant. It means that 70% of funding will be raised locally, compared with just over 50% at the moment.
As a top-up authority, Herefordshire council gets the support of an element of funding that will stay fixed in real terms and pays no levy on growth in its business rates. That means that it keeps 49% of all the business rates it collects, with no upper limit. Herefordshire has forecast that it will collect more in business rates in 2013-14 than is implicit in its business rates baseline, meaning that it will get an immediate boost from the new business rates retention system.
Then there is the new homes bonus, which rewards councils for delivering more homes and through which more than £2 million of funding will go to Herefordshire council in 2013-14. This is a fundamental change from the old system. Councils striving for growth, building houses and delivering local businesses will find themselves rewarded with increased revenue. Local authorities can and should now move away from the “begging bowl” culture and focus their efforts on delivery, growth and efficiencies. That is also why we introduced the new efficiency challenge award of a further £9.2 million that councils, including Herefordshire, can bid for.
To be clear, councils account for a quarter of all public spending—I appreciate that my hon. Friend made this point—so it is vital that they continue to play their part in tackling the horrendous inherited budget deficit by making sensible savings and delivering value for money for the taxpayer. Many are doing that very well. We are giving local authorities that bit of extra time and the reforms necessary to allow them the freedom to deliver that. As it looks to 2014 and beyond, local government needs to continue to find better and more efficient ways of doing things, and there remains scope for sensible savings. The best councils are protecting the front line—from weekly bin collections to library services and meals on wheels—getting rid of waste and inefficiency and helping to keep council tax down.
I wish to make it clear again that we want to keep the focus on safeguarding vital public services and protecting families and pensioners in rural as well as urban areas. That is why, despite financial pressures, for the third year running we will continue supporting those who insulate residents from further council tax hikes and why we have set aside an extra £550 million for local authorities to support council tax. All councils have a moral duty to freeze council tax at a time when the standard and cost of living for our hard-working residents are tough.
I join my hon. Friend in calling clearly and firmly for Herefordshire council to reconsider finding that saving of just 0.9% in order to take advantage of the scheme and freeze council tax for the benefit of its residents. It says it needs to increase council tax by 0.9% at a time when, despite the pressure it said it felt last year, it managed to increase its reserves. I suspect that, like me, residents across Herefordshire will wonder how those two things can be married. Those who would prefer to continue with increases and see residents miss out should answer to local taxpayers and have the courage to go for a figure that would require a referendum in order to get local democratic support.
The settlement represents a fair funding deal that protects the most grant-dependent authorities, provides new opportunities for councils to benefit from the rewards of growth, and supports authorities to drive through further service reforms and efficiencies. It recognises the additional costs of providing services in sparse areas, reducing funding per head by less in predominantly rural authorities than in their urban counterparts. The additional £8.5 million of funding will support rural authorities this year in finding further savings in sparsely populated areas.
I congratulate Herefordshire on the excellent work that it has done so far in curbing its budgets and being efficient, but there is more that it can do. As my hon. Friend said, it should certainly be protecting its taxpayers by implementing a council tax freeze. Councils everywhere should now seize the opportunities that the settlement presents and focus their efforts on going for growth.
Question put and agreed to.
Ministerial Correction
(11 years, 3 months ago)
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Defence: Procurement
(11 years, 3 months ago)
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Stephen Barclay
To ask the Secretary of State for Defence how many urgent operational requirements have been identified in each of the last three years; how many such requirements have not been fulfilled; and how many such requirements were delivered (a) later than originally planned and (b) over budget.
[Official Report, 21 May 2012, Vol. 545, c. 438-39W.]
Letter of correction from Philip Dunne:
An error has been identified in the written answer given to the hon. Member for North East Cambridgeshire (Stephen Barclay) on 21 May 2012.
The full answer given was as follows:
Peter Luff
[holding answer 15 May 2012]: Urgent operational requirements (UORs) address urgent and unforeseen capability gaps in support of a current or imminent military operation by providing for the rapid purchase or modification of equipment. Where a requirement is specific to a particular operational theatre and can be delivered quickly, it will be funded from the Government Reserve rather than the Defence budget.
According to departmental records, the numbers of Urgent Statements of User Requirement which have been endorsed by the Permanent Joint Headquarters and subsequently entered the urgent operational requirement process are as follows for the past three years:
FY 2009-10 | FY 2010-11 | FY 2011-12 | |
|---|---|---|---|
Requirements entering UOR process | 154 | 115 | 58 |
Subsequently cancelled | 53 | 22 | 4 |
Business cases under development | 3 | 19 | 40 |
Of the remaining endorsed requirements:
FY 2009-10 | FY 2010-11 | FY 2011-12 | |
|---|---|---|---|
Delivered on time or early | 60 | 26 | 4 |
On track to deliver on time | 8 | 25 | 8 |
Delivered, or now planned for delivery, later than originally approved equipment delivery date | 30 | 23 | 2 |
Within approved cost | 93 | 70 | 14 |
Exceeding approved cost | 5 | 4 | 0 |
Note: The requirement for some UORs can change over time and the original approval dates and costs may subsequently be adjusted to allow these changes to be addressed. Therefore not all the instances of later delivery or cost growth represent shortcomings in project management or initial estimating. |
Not all requirements which enter the UOR process, progress to a business case and subsequent delivery stages. The reasons for the cancellations shown in the table may include the fact that, while a requirement may be extant, there is currently no equipment solution that can meet it. In such cases, attempts will be made to mitigate the risk through a non-equipment solution such as changing tactics, techniques or procedures. In other cases, the requirement may be cancelled by commanders in theatre because the evolving nature of operations means it is no longer needed. The ‘Business cases under development’ entry in the table represents those requirements where a solution is still being identified or the details finalised prior to approval.
The correct answer should have been:
Peter Luff
[holding answer 15 May 2012]: Urgent operational requirements (UORs) address urgent and unforeseen capability gaps in support of a current or imminent military operation by providing for the rapid purchase or modification of equipment. Where a requirement is specific to a particular operational theatre and can be delivered quickly, it will be funded from the Government Reserve rather than the Defence budget.
According to departmental records, the numbers of Urgent Statements of User Requirement which have been endorsed by the Permanent Joint Headquarters and subsequently entered the urgent operational requirement process are as follows for the past three years:
FY 2009-10 | FY 2010-11 | FY 2011-12 | |
|---|---|---|---|
Requirements entering UOR process | 144 | 106 | 54 |
Subsequently cancelled | 51 | 28 | 13 |
Business cases under development | 4 | 3 | 19 |
Of the remaining endorsed requirements:
FY 2009-10 | FY 2010-11 | FY 2011-12 | |
|---|---|---|---|
Delivered on time or early | 60 | 55 | 13 |
On track to deliver on time | 3 | 2 | 6 |
Delivered, or now planned for delivery, later than originally approved equipment delivery date | 26 | 18 | 3 |
Within approved cost | 80 | 71 | 22 |
Exceeding approved cost | 9 | 4 | 0 |
Note: The requirement for some UORs can change over time and the original approval dates and costs may subsequently be adjusted to allow these changes to be addressed. Therefore not all the instances of later delivery or cost growth represent shortcomings in project management or initial estimating. |
Not all requirements which enter the UOR process, progress to a business case and subsequent delivery stages. The reasons for the cancellations shown in the table may include the fact that, while a requirement may be extant, there is currently no equipment solution that can meet it. In such cases, attempts will be made to mitigate the risk through a non-equipment solution such as changing tactics, techniques or procedures. In other cases, the requirement may be cancelled by commanders in theatre because the evolving nature of operations means it is no longer needed. The ‘Business cases under development’ entry in the table represents those requirements where a solution is still being identified or the details finalised prior to approval.
Westminster Hall
(11 years, 3 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Responsible Dog Ownership
(11 years, 3 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Ian Lavery (Wansbeck) (Lab)
As ever, it is a pleasure to serve under your chairmanship, Mr Gray.
Responsible dog ownership may not be at the top of everyone’s political agenda, and it might not be at the top of every party’s political agenda, but, nevertheless, it is of national importance. I look forward today to addressing a number of issues that have been raised over the past few years.
The UK is a nation of dog lovers. I dare say that the majority of dogs are kept as pets by loving owners and families. Children adore the tricks and licks of their loving pets. Of course, the elderly generation often keep dogs for personal affection and constant companionship.
Following the last general election, the coalition Government said they would
“promote responsible pet ownership by introducing effective codes of practice under the Animal Welfare Act, and will ensure that enforcement agencies target irresponsible owners of dangerous dogs.”
That has not happened. This morning’s debate will accentuate the weakness of the coalition’s recent proposals and announcements on dog ownership, and hopefully provide a robust framework for cross-party agreement on much stronger and more detailed legislation to be introduced sooner than the Government currently anticipate. There is cross-party agreement on most parts of the announced legislation, and there is not much difference between the parties other than perhaps on the timing of the required legislation’s introduction.
The statement by the Secretary of State for Environment, Food and Rural Affairs on 6 February was described by the Select Committee on Environment, Food and Rural Affairs as “belated” and “woefully inadequate.” The Committee called for the Department for Environment, Food and Rural Affairs urgently to introduce a Bill to consolidate fragmented legislation on dog control and welfare.
Additionally, the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), said:
“Current laws have comprehensively failed to tackle irresponsible dog ownership. DEFRA’s belated proposals…are too limited.
Since 2007 dogs have killed seven people, including five children, in private homes…More than 100,000 strays are found each year; incidences of cruelty and neglect are rising and many dogs are out of control due to the irresponsible or deliberate actions of a minority of owners.
The evidence we received from DEFRA and the Home Office did little to reassure us that either Department is giving sufficient priority to dog control and welfare issues.
The Home Office approach to tackling antisocial behaviour is too simplistic; and fails to reflect the impact that poor breeding and training by irresponsible owners can have on a dog’s behaviour…New rules should give enforcement officers more effective powers, including Dog Control Notices, to prevent dog-related antisocial behaviour. Local authorities need to devote more resources to the effective management of stray dogs.”
The hon. Lady has done terrific work on dog ownership, which is an important topic, and she is much in line with the views of Opposition Members. Dog ownership is a massive issue, and the responsibility that comes with ownership increases almost daily.
Mr Gray, may I gently stray ever so slightly to the issue of stray and loose horses? I do not often get the opportunity of having both the Minister and the shadow Minister, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), in the same room. In my constituency there is an issue with wild and loose horses. Mr Gray, I see that you are shaking your head to suggest that I should not stray on to that ground, but perhaps the Minister will agree to meet me to discuss that out-of-hand legislation. [Interruption.] Thank you, Mr Gray. [Laughter.] I have in my notes, “will not be accepted by the Chair.”
Dog ownership is an important issue, and I have some key facts and figures that are quite enlightening. There are approximately 9 million dogs in the UK. Every year 250,000 people attend GP surgeries, minor injury units or accident and emergency departments after being bitten by dogs, and there are more than 6,000 hospital admissions resulting from dog attacks. The cost of dog attacks to the NHS is probably some £10 million. There are some 5,000 dog attacks on postmen and postwomen each year, of which 70% are on private property where irresponsible owners are immune from prosecution. That is obviously another major part of the debate.
The number of dogs dangerously out of control continues to increase. Police, local authorities and animal welfare groups work together in a few areas to promote responsible dog ownership, but only on a voluntary basis. Fourteen people have been killed in dog attacks since 2005—eight children and six adults—and hundreds of children received life-changing injuries and disfigurements during the same period. Enforcement action and the number of prosecutions remain low, as do court penalties.
Some 8 million dogs are kept as pets in the UK, yet there are many stray dogs running wild on our streets. Experts suggest that during 2011-12, nearly 120,000 stray dogs were found, of which 7% were destroyed. Having 120,000 dogs running wild hardly demonstrates responsible ownership. Despite our dog-loving culture, many people seem to be afraid of loose dogs, which is understandable. A pack of dogs running towards someone is a frightening experience, and I am sure it has happened to most people in this room. Whether or not the dogs appear vicious, people tend not to enjoy such an experience. Many of those animals are quite domesticated; they are not wild dogs or banned breeds, but they are set loose to God and good nature by their irresponsible owners or get loose by other means.
This year, a survey on stray dogs conducted by Dogs Trust reported a 24% rise in the number of individuals convicted of cruelty and neglect to dogs, which is shameful. There was a 22% rise in convictions related to dogs and a 21% rise in disqualifications from keeping animals. Again, those are hardly the signs of a dog-loving nation. The figures are frankly unacceptable in any civilised society. Due to many problems and many more false dawns, progress on responsible dog ownership and regulation has been slow.
The announcements made earlier this month by the Secretary of State for Environment, Food and Rural Affairs set out the Government’s proposals concerning dogs. They include measures on the compulsory microchipping of dogs, the seizure of dogs and the extension of the law to cover private property. On 15 February 2013, the Select Committee on Environment, Food and Rural Affairs published a report following its inquiry into dog control and welfare. As I mentioned, the report—“Dog Control and Welfare”, HC 575—made a series of recommendations and was critical of the Government’s approach. Concerns are rife about the poor condition of many dogs, including those bred for sale and those connected to pedigree breeding.
As I mentioned, incidences of out-of-control dogs have been increasing in the UK. Statistics show that 210,000 people are attacked by dogs in England annually, including 6,000 postal workers. It is not just postal workers but visitors to people’s properties: people going in through the back door or the back gate, doctors, nurses, postal workers and other communication workers. All those people are suffering greatly because of the current legislation on public and private land.
Since 2005, 14 people have been killed by dogs, the majority in their own homes. Many organisations are working assiduously on responsible dog ownership, and there are some shining examples, including the Royal Society for the Prevention of Cruelty to Animals, Dogs Trust, the Communication Workers Union, Blue Cross, the Battersea Dogs and Cats Home, the Retired Greyhound Trust and many others. They deserve credit, as I am sure we will agree throughout this debate. Without their assistance, I am not sure where we would be on welfare and responsible dog ownership.
The RSPCA believes that prevention is better than cure. It says that the Department for Environment, Food and Rural Affairs had a golden opportunity finally to tackle the big issues, but instead merely tinkered with existing legislation rather than making the comprehensive reform called for by dog law enforcers. The RSPCA believes that preventive measures, such as dog control notices, are required, as well as the introduction of dog registration to improve ownership, and education on dog welfare and safety. Such measures could prevent suffering to animals as well as protecting public safety where there are concerns that owners are failing to control their dogs or do not know how to do so effectively.
The CWU has campaigned hard and is continuing to do so, because its members are experiencing increasing problems with dogs and the irresponsible actions of their owners. The CWU launched its “Bite Back” campaign in 2008 following two horrific attacks on postal workers in Sheffield and Cambridge, when both victims were nearly killed. Some 23,000 postal workers have been attacked in the last five years. The “Bite Back” campaign has achieved dangerous dog law changes in Scotland and Northern Ireland and secured the introduction of the Control Of Dogs (Wales) Bill by the Welsh Assembly, with full cross-party support.
The CWU is seeking similar positive changes here in England. There is a worry that for whatever reason, England has been left behind in those positive national changes. The public have a picture in the back of their mind of a postie being chased around the garden, which they find quite humorous—it has been the focal point of many jokes and cartoons—but it is not really funny when we scrape the surface. Let us look at the frightening statistics involving ordinary people. Some 23,000 postmen were attacked by dogs in the last five years, or 5,000 every year. An average of 12 are attacked every day, and as I just explained, two were nearly killed in 2007-08. Dog attacks peaked at 6,500 in 2008. Action is required now to introduce legislation not only to promote responsible dog ownership but to enforce it legally.
Roger Williams (Brecon and Radnorshire) (LD)
I congratulate the hon. Gentleman on securing this important debate. He is giving comprehensive statistics on ownership and problems with dogs, but so far he has not mentioned irresponsible dog breeding, which lies at the heart of the issue. As long as there are irresponsible dog breeders, we will always have irresponsible dog owners and dogs that get out of control.
Ian Lavery
I thank the hon. Gentleman for that intervention. I have mentioned dog breeding, but only slightly, and I agree fully with those sentiments. There are so many issues involved in responsible dog ownership. That is a main issue, and I hope to cover the rest later in my contribution.
The first of the three main issues arising from the written ministerial statement was a requirement that dogs be microchipped with the owner’s details. The second was a change in the criminal law, in section 3 of the Dangerous Dogs Act 1991, to extend the offence of a dog being dangerously out of control to all places, including private property. The third was to allow owners of dogs seized as suspected dangerous dogs or prohibited types to retain possession of their dogs until the outcome of court proceedings.
The Secretary of State said that microchipping makes a clear link between a dog and its owner. More than 100,000 dogs stray, are lost or are stolen each year, and many must be kept in kennels before being re-homed. A microchip allows them to be reunited quickly with their owners, reducing stress for dog and owner alike. It will also lead to substantial savings for local authorities and welfare charities, which spend some £57 million a year on kennelling costs, and will mean that fewer dogs are destroyed. Up to 6,000 are put down each year because their owners cannot be found.
The Government announced the introduction of regulations to require the microchipping of all dogs in England from 6 April 2016. After that date, owners will need to have their dog microchipped and registered on one of the authorised commercial databases available, and they will have to register the details of any new owner before they sell or give away a dog. Owners will be required to keep their contact details up to date on the microchip databases.
Caroline Nokes (Romsey and Southampton North) (Con)
I congratulate the hon. Gentleman on securing the debate. I fear that I might be about to incur the wrath of the Chair, but does the hon. Gentleman agree that it is imperative that any database, and the registration of changes of ownership, must be absolutely robust so that we do not end up with a situation like the passporting of horses? There are 75 passport issuing organisations, and nobody has confidence that a given microchip and passport link to the right horse. Does he agree that in the case of dogs, we must ensure that the system is absolutely robust?
Ian Lavery
Yes, of course. I fully agree, and will probably cover the issue in the next few minutes. If we are to have microchipping, it is extremely important that it is absolutely robust and foolproof. If we cannot guarantee that, we will be wasting our time.
The progress made on microchipping has been well received by all parties; it is one of the most important parts of the statement. There is still a lack of clarity, and some might say an undoubted dragging of feet, on the potential introduction of legislation in 2016.
In the Minister’s response, I should be delighted to hear further clarity on microchipping: the age at which dogs will be required to be microchipped, whether there will be any exemptions, how the law will be enforced, who will carry out the enforcement of the law and how it will be funded. Does the Minister expect enforcement to be proactive or reactive? Will microchipping a dog actually prove ownership of the animal? That is important. If a local authority receives a stray dog that is not microchipped, and if it is not claimed but in kennels, will the local authority be able to microchip the dog and re-home it? Will the requirement to keep contact details up to date on the database be cheap for dog owners? Will there be a maximum fee, to ensure that the introduction of microchipping, although most welcome, is not cost-prohibitive for many people? A lot of vulnerable people have dogs and cherish them. What education and awareness- raising will DEFRA do over the next two years to encourage compliance with the microchipping regime?
The second major issue is the suggested amendment of the Dangerous Dogs Act 1991. Extending section 3 to cover all places, including private property, is a major step forward, and will be welcomed on both sides of the House. It will extend the law and give better protection to people in their own homes, as well as to those I mentioned previously who enter private property, such as postal workers. Again, however, more clarity is required. For example, will the extension cover going inside a private dwelling, or will it remain at the front door and just cover the front garden? What private property will the law cover? Will there be a defence for dog owners protecting their property and, if so, what will it be?
Any amendment is important because the legislation is important. To effect the change in the law, DEFRA is to introduce amendments to the Dangerous Dogs Act as soon as parliamentary time permits. Put simply, there is not much disagreement in the Chamber this morning, but I disagree about the timing: it is not good enough to say that the legislative changes on private property will be introduced when there is parliamentary time. We need a guarantee that the legislation will be introduced at least in this Parliament. Indeed, we need to ensure that the legislation is introduced as soon as possible—this week would be fine as far as many people up and down the country are concerned. The Dangerous Dogs Act is seen by many as extremely poor legislation and as wholly ineffective, so it would be better to have consolidated legislation covering everything, rather than tinkering with other pieces of legislation.
The third major issue is the seizure and kennelling of suspected dangerous dogs. To ensure the welfare of suspected prohibited dogs that have become the subject of court proceedings and to ease the substantial cost to the police service, the Government have decided that the police will no longer need to seize and kennel such dogs pending the outcome of court proceedings if they do not consider the dog to present a risk to the public. The police will have the discretion to release a suspected prohibited dog when they are completely satisfied that it is in the care of a responsible owner. They will be allowed to put extra restrictions on the owner, such as requiring the dog to be muzzled and on a lead when in public. Such changes will be made by way of amendment to the exemption scheme, and can be done through secondary legislation. Someone mentioned this being the animal equivalent of an antisocial behaviour order, an ASBO, suggesting it should be a DOGBO. I have not seen that before, and I am not personally convinced, but the cross-party line is fully supportive.
The Government consider that allowing suspected prohibited dogs to be exempted from seizure in those circumstances strikes the right balance between protecting the public from potentially dangerous dogs and ensuring that the dogs are safely and properly looked after and not unnecessarily removed from their homes. There needs to be clarity on the issue. I am concerned that one or two dogs might slip through the net. I am not sure that the police are properly qualified to identify vicious or dangerous dogs. A beautiful white poodle could be totally vicious, and the biggest dog in the world could be quite placid and not vicious at all. Let us be honest about that: categorisation is difficult. The police are extremely talented at deciding about individuals and personalities from how they react, but I am not sure that they are well qualified to determine which dogs may be vicious and what owners must do to retain possession of their dog during a court case, if indeed they want to.
Further clarity is required. For example, is the Government’s proposal to allow dogs to remain with their owners effective at the point of potential seizure, or at the discretion of the police once the dog has been seized and kept in kennels? Has DEFRA made an estimate of the percentage of dogs seized each year that are likely to be affected by the proposal? If so, what is that percentage and how did the Department arrive at it? Why has DEFRA not looked at the court processes more closely, to require a time limit on expert witness exams for all dogs seized? I have already posed a whole number of questions, to which I have added more, but many issues need clarification, probably on all sides, to continue constructive dialogue.
With the Environment, Food and Rural Affairs Committee highlighting the need for a more fundamental approach to dog control, will the Government commit to updating and consolidating all dog control legislation? Will DEFRA commit to asking the Law Commission to conduct a review into dog control legislation, as per the Select Committee recommendations? Will DEFRA be providing any new money for training and education? The money that was mentioned in the written statement and subsequently, which I have not discussed yet, appears to have been spent already, as far as the Opposition can see. There is no new money.
I want to place on record my congratulations to my own authority, Northumberland county council: the public protection service’s animal welfare team has been awarded a gold footprint in this year’s RSPCA community animal welfare footprints scheme. The team at Northumberland county council ensure the highest standards of stray dog welfare during the collection and kennelling process; they carry out proactive work to educate owners and preventive measures to reduce strain and long-term stays. Although some north-east councils have achieved the silver and bronze awards, Northumberland was the only council in the north-east to achieve the gold footprint award in 2012, so good on it. It is good to see that in my region we are being proactive in putting the right resources into responsible dog ownership.
Members might be aware that I have an interest in greyhounds—indeed, I have owned and raced a number of them in recent years, with varying success—and I have been a very responsible owner. The greyhound is a truly remarkable athlete. It is one of the oldest breeds in the world: it is mentioned in the Bible, in Chaucer and in Shakespeare, no less. It is arguably the most protected of all canine breeds. The introduction of the Welfare of Racing Greyhounds Regulations 2010 under the Animal Welfare Act 2006 was a major advance, helping to raise welfare standards across greyhound racing, and we can take a leaf out of that book. All the 30 or so greyhound tracks in England must be licensed and inspected, as must their owners and their owners’ properties. That is about responsible ownership. The Greyhound Board of Great Britain is the regulator and looks after greyhounds’ welfare in the UK.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
A few years ago, I was involved in a campaign about the horrendous disposal of greyhounds after their working life. Greyhounds are given to people who kill them and bury them. One person was found to have buried hundreds in a field that he owned. Greyhounds may be looked after when they are running, but, sadly, their welfare after they finish running is really suspect.
Ian Lavery
I thank my hon. Friend for that. That is a wholly different issue. I have been involved with greyhounds all my life. There was an horrendous episode in Seaham, in the north-east; it was like the killing fields of greyhounds. That spurred the Government to introduce the regulations that I mentioned, so that every greyhound must be microchipped, and every greyhound is now microchipped. That is why I suggest that we should take a lead from the greyhound legislation and ensure that all dogs are microchipped. The case that my hon. Friend mentioned was horrific, and it was symptomatic of the times, but things have changed greatly. That is why I mentioned greyhound racing. There was a huge problem, but it has now been rectified because of legislation.
Michael Connarty
Before my hon. Friend moves on, I should say that an organisation in Scotland homes former running greyhounds, and I have been involved in its campaign. Retired greyhounds make wonderful pets; they are very loving and sensitive. Everyone who has homed one has been absolutely happy with it.
Mr James Gray (in the Chair)
Order. Before the hon. Gentleman answers, I should say, as the resident “Gray-hound”, that we are straying slightly from the topic of the debate. Quite a number of people are seeking to catch my eye, and it might be courteous to them if we keep our remarks reasonably short.
Ian Lavery
Thank you, Mr Gray. In reply to my hon. Friend, I would say that the issue is microchipping. I agree that greyhounds make fantastic pets. My point is that, because of the disasters involving greyhounds, legislation introduced microchipping immediately. That has had a great impact, and we should look at it. That is why I mentioned the welfare of greyhounds and the regulation of greyhounds and their owners.
Like many other re-homing charities, the Retired Greyhound Trust is committed to promoting responsible dog ownership, and it does a fantastic job. Members will want to join me in paying tribute to the wonderful work of many re-homing organisations. They are leading the way on promoting responsible dog ownership. Without their efforts, this country could not declare itself a nation of dog lovers. So, good on the Retired Greyhound Trust. We should look at best practice and try to convert it without delay into national legislation for all breeds of dogs, as well as regularly monitoring dog owners.
Many other issues relate to responsible dog ownership, and I am sure that they will be covered in the debate. They include the absence of dog control notices, the status of dog ownership and the £50,000 funding for innovative local community projects to encourage responsible ownership. There is also legislation—we really could have done with this, although that is a separate issue—on attacks on guide dogs, which everyone here utterly deplores. What penalties can be imposed on the owners of dogs that attack guide dogs? Can owners be treated as though their dogs had attacked an individual, because such attacks cause individuals huge distress?
We still have no timetable for the proposed legislation. There should be no further delays in implementing any of the measures. I welcome the progress that has undoubtedly been made, but I emphasise the need to act now, not later, to avoid more people being injured and to protect the welfare of dogs themselves.
Mr James Gray (in the Chair)
Order. Before I call the next speaker, it might be worth saying that six hon. Members are trying to catch my eye. A quick glance at the clock indicates that they will have something like six minutes each. There is no formal limit, of course, but, as a courtesy, it might be helpful if Members keep that in mind.
Sir Tony Baldry (Banbury) (Con)
I think I am the only Member of the House who is a member of the Kennel Club. That came about when one of my pugs won the Westminster dog of the year award. Rather cruelly, The Times carried a photograph of the pug and me, saying that I was the one on the right. Following that, I got an invitation to join the Kennel Club.
Time is short, so let me just tell the hon. Member for Wansbeck (Ian Lavery) that the phrase “when parliamentary time is available” does not mean that legislation will not be introduced in this Parliament; it just means that it has not been introduced in this Session. I strongly suspect that the Minister will make it clear, when he responds, that the Government intend to introduce legislation as soon as the Leader of the House and the business managers make parliamentary time available.
The EFRA Committee has just produced an extremely good report, which made 30 recommendations. It would be helpful if the Minister could indicate, when he winds up, which of them the Government do not agree with. It might be more helpful for the debate to focus on the issues of contention, rather than the issues on which we all agree. The Committee’s report was really good: it deals with attacks on postpeople and on guide dogs, it talks about the need to reform the Dogs (Protection of Livestock) Act 1953 and, I think we all agree, it rightly raises the need for the compulsory microchipping of all dogs.
I want, however, to focus on irresponsible ownership and dangerous dogs. Some of the genuinely saddest evidence given to the Select Committee was that of the hon. Member for Liverpool, Wavertree (Luciana Berger)—I hope she will catch your eye, Mr Gray, and that my comments move her up the list of speakers—and her constituent Angela McGlynn. A relation of Angela McGlynn’s had been killed by a family pet—a pit bull. She told the Committee that it had not bitten anyone before, adding:
“We do not know why it did it, but it did.”
It is very tragic that this family pet had suddenly turned and killed a baby.
The most disturbing evidence given to the Committee was that of PC Keith Evans, who was representing, and an adviser to, the Association of Chief Police Officers. Talking about the pit bull, he said that:
“it is the best breed of dog, pound for pound, for killing what is in front of it. It does this through hundreds of years of selective breeding.”
Effectively, one has years of selective breeding of muscle, weight and jaw strength, which is very frightening.
Everyone in the debate has rightly been disparaging of the Dangerous Dogs Act. I think I am probably the only person here who was a Member of the House in 1991, when hon. Members will recall that a series of really nasty attacks on people by pit bull terriers took place, and both tabloid and broadsheet newspapers carried stories of such attacks nearly every day. Quite rightly, the Government of the day sought to introduce the best legislation possible in the time available, and they were advised to focus on the breeds and types of dog that were causing the attacks. It was clear from the evidence that Mr Evans gave to the Environment, Food and Rural Affairs Committee that the police and the Association of Chief Police Officers still believe that certain breeds should be on the list of dangerous dogs, but more needs to be done. In its report, the Select Committee recommended the introduction of
“Dog Control Notices, using as a model Dog Control Notices introduced in Scotland. This will provide the police and local authorities with a comprehensive and tailored set of powers for tackling all aspects of dog-related crime and antisocial behaviour”.
PC Evans told the Select Committee that the pit bull is
“without doubt, the breed of choice for certain elements of the criminal and irresponsible dog owners within our communities. It has become quite a status symbol.”
As the hon. Member for Wansbeck made clear, one can have a vicious poodle, and other breeds of dogs may be quite vicious.
I believe that hon. Members are 99% agreed on the matter, and if this were a Second Reading debate, we would be broadly in agreement. The hon. Gentleman made some good points for interrogation in Committee, such as whether cases of trespassing involve the front door. I suspect that we need to do a lot more on the reform of the Dangerous Dogs Act 1991 to be confident that when legislation is introduced, it will command the greatest possible public support and not simply cause people to say, “The 1991 Act was rubbish and this one is not much better.” I do not think that the matter merits a Green Paper, but especially given that the legislation might not necessarily be introduced in the next Session of Parliament, it would be helpful to have a discussion paper detailing the Government’s thinking on the matter. That would focus all our minds on what we can do collectively to deal with dangerous dogs.
It is not responsible dog ownership that we need to be concerned about. The vast majority of dog owners are responsible and love their dogs. We need to be concerned about irresponsible dog ownership and the serious issue of dangerous dogs, and of dogs increasingly being used in crime, in antisocial behaviour and to intimidate people. As hon. Members on both sides of the Chamber will testify, there is nothing more intimidating than seeing dangerous dogs being paraded around the streets as status symbols by those who seek to intimidate others.
Will my hon. Friend the Minister tell us how the Department for Environment, Food and Rural Affairs managed to get the lead on dogs? The Home Office and subsequently of the Department for Communities and Local Government used to be responsible for dogs, and I am not sure how, in the great lottery of life, DEFRA ended up with that responsibility. Although that is a question about the boring machinery of governance, it is quite interesting. Will the Minister also tell us how we might focus not on the issues on which we all agree, but on those that still cause contention, such as how to deal most effectively with dangerous dogs?
Angela Smith (Penistone and Stocksbridge) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Wansbeck (Ian Lavery) on securing the debate, which gives us another opportunity to discuss such an important issue. As my hon. Friend made clear, there are more than 9 million dogs in the UK, and the number of our fellow human beings who are attacked by dogs is startling. Every year, 250,000 people are bitten by dogs and attend GP surgeries, minor injuries units and A and E, and more than 6,000 people are admitted to hospital with more serious injuries. The annual cost to the Exchequer is more than £9.5 million.
In addition to the drivers, health visitors, midwives and doctors whom my hon. Friend has mentioned, about 5,000 postmen and women are attacked each year, or 12 each day. My hon. Friend mentioned Paul Coleman, a postman in Sheffield who nearly lost his leg when he was attacked by a dog in 2008. That attack triggered my involvement in the campaign to improve dog control in this country. To this day, Mr Coleman makes regular contributions to the local radio station because he is still traumatised by the attack and he feels strongly that we need to improve dog control law. Since 2005, 14 people—eight children and six adults—have been killed, which is a truly appalling statistic.
There is another story to be told concerning animals. We have already heard about the increasing incidence of attacks on guide dogs by other dogs, and I was pleased to see that the Environment, Food and Rural Affairs Committee considers that attacks on guide dogs should be taken as seriously, and given the same status, as attacks on their owners, and that the Committee recommended the introduction of jail sentences of up two years for attacks on guide dogs. I support that recommendation, and I hope the Government will act on it. In addition, the number of dog-on-dog attacks and attacks by out-of-control dogs on other animals has increased.
More generally, we need to improve welfare standards and attitudes towards dog control in this country. The local newspaper The Star reported yesterday that a dog walker in Sheffield found
“a beaten dog which had been tied to a tree, its legs broken”.
The report stated that the dog’s head was “smashed in” and it was “set on fire”. I am ashamed to report that incident in my home city, but it underlines the extent of the problem in this country. Someone, somewhere is responsible for this, and such an incident underlines the fact that the problem is not only one of dog control but dog welfare and attitudes towards dog ownership, which is why this debate is so important.
The history behind the debate is extensive. The current situation is primarily the result of the work that the Communication Workers Union has undertaken, in conjunction, initially, with the RSPCA, on the “Bite Back” campaign since 2008. In a private Member’s Bill that I secured in 2009, we called for the extension of the existing law to private property. Work on the campaign continued, and the CWU worked very hard with the RSPCA and the Dogs Trust. We secured a consultation from the outgoing Labour Government in early 2010, mainly because Northern Ireland, Scotland and Wales had already indicated that they were going to legislate. The Government and the Prime Minister, therefore, wondered why on earth, if the rest of the UK could do it, England could not do the same. The same question remains today. Those three countries—the other parts of the Union—have consolidated and updated their legislation, so why cannot we do the same?
We had the consultation, but we then had a significant wait for a response from the incoming coalition Government, and that response was frankly inadequate, although I acknowledge that there was progress. There was agreement to extend the law to private property and on the principle of microchipping. We then had a further consultation, which many of us thought was unnecessary, but we are where we are. Two weeks ago, we heard the outcome of the consultation, which was a commitment to legislation but with no timetable. That is not good enough. We need a timetable for implementing the Government’s proposals. Delay is not good enough. We have waited four years for action.
The number of dog attacks on other animals and on human beings is increasing year on year, and the cost to the Exchequer is £9.5 million annually. Surely, it has to be recognised that not only should the current proposals be put into legislation, but we must implement the EFRA Committee’s recommendation that the Law Commission should look at the overall issue of dog control legislation with a view to comprehensively updating and consolidating it as Northern Ireland, Wales and Scotland have done.
I am convinced that in the long run, savings can be made for the Exchequer if we get dog control legislation right because, more than anything, if we build prevention and education into that legislation, primarily with the use of dog control notices, that is the principal means of securing savings for the Exchequer.
The Government have some questions to answer, which my hon. Friend dealt with in detail, so I will not go through them again. I look forward to the Minster’s response. More than anything, I want to know when the agreed proposals will be implemented and, beyond that, whether the Government will ask the Law Commission to look at consolidating and updating the legislation?
Roger Williams (Brecon and Radnorshire) (LD)
I, too, congratulate the hon. Member for Wansbeck (Ian Lavery) on obtaining this important debate. I did not intend to make a contribution, but I want to make a few points.
Just before Christmas, I attended a conference with about 150 local authority dog wardens. It was addressed by the shadow Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Wakefield (Mary Creagh). The unanimous view there was that if the problem of dangerous dogs is to be addressed, identification of dogs is particularly important. Everyone agreed that microchipping is a good thing, but other issues were raised, including the cost of microchipping. More than 2 million dogs in this country are microchipped, but the less responsible owners are least likely to microchip their dogs, and those with limited resources might find the expense of microchipping too burdensome, and that problem should be addressed. The main question at the conference was about the database. Who will hold and maintain it, who will pay the cost of running it, and who will have access to it? I suspect that local authorities, the police and the RSPCA will have access, but will it be open to a wider range of organisations?
The hon. Member for Wansbeck and other hon. Members have referred to the sort of damage that dangerous dogs do to human beings. That may be traumatic at the least and sometimes, unfortunately, fatal. Some young children and babies have, sadly, been killed by dangerous dogs. I want to pay a little attention to livestock worrying. I come from a livestock rearing area and am a livestock farmer. During the last two years, the person who runs my farm experienced baby lambs aged between one day and a week being killed, perhaps 20 at a time. They knew who owned the dog, but the owner maintained that they did not know the dog was guilty of the crime. When considering dangerous dogs, we also must take account of livestock worrying.
Penny Mordaunt (Portsmouth North) (Con)
The hon. Gentleman makes an excellent point. My constituency casework includes other household pets, particularly puppies, being killed by unidentifiable dogs whose owners have just walked away.
Roger Williams
The hon. Lady makes the point that not just commercial livestock are affected, but pets. However, I must emphasise that the problem with livestock worrying is not just the financial loss, but the terrible task of having to clear up dead bodies that have been pulled apart by dogs that are out of control.
From my side of the coalition, I would only say that if the practical difficulties of putting the plans in place can be overcome, and if setting up and maintaining a database with access for responsible organisations can be achieved, there is no reason why the legislation should not be introduced so that it is on the statute book before the end of this Parliament instead of leaving it until the next Parliament.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
It is a pleasure to speak under your chairmanship for the first time, Mr Gray. I have no financial interest to declare, but as an organising secretary of the Communication Workers Union group in Parliament, I have worked on the issue for many years when it was not so much in public view.
We must face facts. On this issue, we have a do-nothing Government. They have been provoked into re-announcing exactly the same promise they made last year and perhaps the year before. In 2010, the then Leader of the Opposition assured the Communication Workers Union’s health and safety representative, David Joyce, who has done a massive amount of work on this, that legislation would be introduced if he was elected. The Government have not done so.
The provocation came from a critical Select Committee report, and I suppose that another promise from the Government is better than the Liberal Democrats’ standard response—I note that a Liberal Democrat Minister will respond to the debate—which is to apologise for ever having made the promise, and then reneging on it. I hope that the Minister will recover some credibility for himself, if not for his party, which is a lost cause, by giving a fixed timetable for implementing the legislation in this Parliament instead of yet another vague promise.
The Select Committee’s report is not a bad effort by the hon. Member for Thirsk and Malton (Miss McIntosh), who is part Scottish and perhaps knows that in Scotland, Ireland and Wales legislation has been implemented to give people there better protection than in England. The Committee referred to the welfare of dogs. English people may have a soft spot for dogs, but perhaps they should have a soft spot for victims because clearly much needs to be done.
The report says that if a breeder has more than two litters a year from a bitch, they should be licensed. No. They should be banned. No dog owner should be allowed to breed from a dog more than twice a year, but that is what causes many of the deficiencies. There are weaknesses in the report.
One of the first people to be called by the Select Committee was Mr David Joyce, health and safety officer of the Communication Workers Union. Many of the responses, even to the Government’s present plans, are in line with those of the “Bite Back” campaign, which was formed in 2008 after two postal workers received life-threatening injuries in dog attacks; one in Sheffield, I believe, and one in another area.
The facts cannot be restated often enough: 23,000 postmen and women have been attacked in the five years since the “Bite Back” campaign started—that is five years of inaction by the Government to change the law—and 5,000 postal workers are attacked every year. It is worth calling Parliament’s attention to the fact that, as more parcels are now delivered by postal workers, more people have to go up to the door, knock on it and have it opened. The possibility of further attacks is increasing all the time, and we must therefore do something about it.
The Government’s proposal is welcome, and they will extend it—if they do bring in a timetable and it is not just another open, weak promise—to introduce legislation for attacks on private property and for compulsory microchipping. However, why are the Government not proposing to introduce—as has been done in Scotland and Northern Ireland, and is proposed in Wales—to have dog control orders, which are very important? Why are the Government not introducing compulsory insurance for dogs?
It is a travesty that the Government are proposing to end criminal injuries compensation scheme payments for dog attacks in the case of irresponsible dog owners—it is already a Government proposal—and yet they are not going to introduce compulsory insurance. If someone registers their dog with the Dogs Trust, for £20 a year, they get third-party liability insurance for the dog, with up to £1 million cover. That cost of £20 a year is less than one week’s food for a dog. It is estimated that, over a dog’s lifetime, a dog owner can spend up to £16,000—in fact, some estimates even put the figure at £31,000, when looking after high-quality breeds that are taken off to Crufts, and so on. It seems that the insurance costs less than the dog’s inoculation for flea and worm treatment, but the Government do not intend to introduce it. If they are taking away criminal compensation payments, surely some kind of compulsory insurance for dogs must be introduced, so that anyone attacked by a dog is compensated for their injuries in a proper manner.
We have heard about the children that have been killed. Four of those have been killed since 2008, when the “Bite Back” campaign started, and Governments have not responded to that. Five adults have been killed since 2008, and nothing has been done about it. How many people have to die or be injured seriously by dogs before the Government do something about it? Irresponsible dog ownership will only be controlled by the Government imposing a serious penalty on people who have such dogs in any area and use them in any way, whether that involves attacks on guide dogs—and I totally support the idea of an aggravated attack: attacks on caring dogs should be treated as though they are attacks on the owners. The Government must do more. Their offer is not enough at this time, and responsible dog ownership requires not only microchipping, but dog owner control orders and compulsory insurance for dogs, as well as many other things.
Finally—I know that other Members want to speak—Dave Joyce sent round a portfolio for people to read, and I wonder how many people took the trouble to open it, to see the type of dog we are talking about, and the injuries to a child. They should look at that if they have not seen a victim face to face, and realise that we are talking about saving people—it is not just about nips or a torn piece of clothing—from serious, vicious dog attacks. It is time that the Government lived up to their responsibilities, kept their promises and delivered a timetable for legislation.
Neil Parish (Tiverton and Honiton) (Con)
It is a great pleasure to serve under your chairmanship, Mr Gray, and I thank the hon. Member for Wansbeck (Ian Lavery) for securing the debate.
I am saddened by the comments made by the hon. Member for Linlithgow and East Falkirk (Michael Connarty), because until then we kept the debate fairly non-party political. It is a bit rich to say that nothing happened and no people were bitten in the 13 years that Labour were in power, and had time to do something, and to blame everything on the coalition Government. However, because of limited time, I will not rant and rave about that for too long.
I say to the Minister that I very much welcome the fact that the Government have listened since the first consultation. Originally, only puppies were to be microchipped, which would have taken an awfully long time, but the Government have now said, quite rightly, that all dogs should be microchipped. I would like to see that come in sooner rather than later.
The Committee took evidence from postal workers, and I have every sympathy for all postal workers—as well as other workers who go into homes, such as midwives—who have been bitten, especially where particular dogs are known to bite. That is also one of the conundrums: it is not only about which dog bites and whether it is vicious, because many people know that their dogs bite yet they still do not lock them up, keep them out of the way, or keep them under control. That is what we have to emphasise. I am a farmer by background, and I know that animals will sometimes turn, as will dogs. It is unfortunate when animals turn, but it is not the same penalty as for dogs that are known to be dangerous. I welcome, therefore, what we can do to help with measures on private property. I also welcome the fact that we will have universal microchipping, but we must have an accurate database. At Blue Cross or Battersea dogs home, they can only identify the owners of about 30% of the dogs that come in and are microchipped. An up-to-date database must be put together.
However, let us deal with dangerous dogs in particular, and with people who breed dogs to be dangerous, and beat them to make them dangerous. It is not the dogs that are at fault, but the people. They will not get their dogs microchipped, and they will not get insurance, because they do not want their dogs linked to them. They want to ensure that they run beneath the radar screen, which is why we have to be careful when bringing in legislation that we do not make things more onerous for all the people who legitimately own dogs, while not getting to people who breed dogs to be dangerous, and beat them up to make them even more dangerous. Whether it is a DOGBO, an ASBO or whatever sort of BO, we have to proactively get those people. It is not only about legislation. People can legislate as much as they like; we can legislate in Parliament until the cows come home, but it does not mean that the law will be enforced. Very often, there is enough legislation, but it is not being enforced.
I turn to the issue of breeds. Either we keep the Dangerous Dogs Act in its entirety, and we add to the breed-specific legislation, or we scrap it. A lot of dogs are crossed with Japanese breeds, Canadian breeds, and all sorts of breeds, which can actually mean that a dog is just as vicious as a pit bull. Again, that is done to get round the legislation, and the people doing it are not the nicest people in society. They do not go to Sunday school; they are out to cause damage to people. Other Members mentioned what has happened to guide dogs. We have had the evidence. I cannot imagine being blind, because fortunately I have my sight, but it is bad enough for someone who is sighted to have their dog attacked as they are walking along the road. However, if a blind person is walking along the road and their dog is viciously attacked, it is hugely upsetting, dramatic and traumatic. Not only is it traumatic for the owner, but if the dog is destroyed or killed, or maimed in such a way that it can no longer carry out its function and help the blind person, there is a huge financial burden, because it probably costs £1,500 to £2,000 to train a dog on the routes the person takes. We have to take such matters seriously.
We also have to take seriously the internet sale of puppies, not only from this country, but from eastern Europe and the Republic of Ireland. A lot of puppies are coming into the country, and many of them are not only dangerous, but potentially very ill. People who are sold such puppies have enormous vet bills in order to put the dogs right, and sometimes the dog dies and, again, there is huge trauma.
We need not worry too much about the cost of microchipping, because many of the charities that deal with dogs, such as Blue Cross and Battersea, are happy to put in the microchips to help people who cannot afford them.
I think the Minister is sympathetic to the cause, and I really want to hear from him what we will do about tracing people who are breeding and training dangerous dogs, and inflicting them on innocent individuals and other dogs.
Mr James Gray (in the Chair)
Order. Before I call the shadow Minister, I apologise to the hon. Members for Liverpool, Wavertree (Luciana Berger) and for Rotherham (Sarah Champion), both of whom sought to catch my eye but unfortunately have been squeezed out because of the time.
Huw Irranca-Davies (Ogmore) (Lab)
I congratulate my hon. Friend the Member for Wansbeck (Ian Lavery) on an excellent opening contribution to a wide-ranging debate, and I also thank all other hon. Members who have taken part in it. Let me point out not only the contribution made by my hon. Friend the Member for Wansbeck, but the contributions of my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Linlithgow and East Falkirk (Michael Connarty). Although my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) was not called, she has taken part in many of these debates before. They are all fine campaigners on the issue. Hon. Members on the Government Benches have also been in these debates before. We have been here before. The need to tackle irresponsible dog ownership has been a consistent theme during the past three years.
The hon. Member for Tiverton and Honiton (Neil Parish) rightly said that it is not the case that dog attacks never took place before the current Government came to power, but we do know that in the final months of the Labour Administration, a consultation was set up specifically to consider the issue. It reported on 1 June 2010, and here we are now, nearly three years later, almost going into the fourth year of this Government.
I genuinely say to the Minister that I welcome the announcements that have been made. We do. We want to support him, but we sometimes feel—to stretch the analogy a bit—like a trusty old Welsh sheepdog, trying to herd the Home Office and DEFRA Ministers through the gate that is clearly identifiable at the other end of the field. The darn sheep keep wandering off into the long grass; they keep being distracted. We want to get the measures implemented. We want to move away from the good words and away from what I have to say are re-announcements. Many of the things we heard a couple of weeks ago were re-announcements.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I thank my hon. Friend for kindly giving way. Is it not the case that it is not just Labour Members who feel frustrated? Hon. Members on both sides of the House feel frustrated because we have not seen any movement since the consultation closed in June 2010. We are speaking on behalf of all our constituents who are affected. My constituent, Angela McGlynn, lost a child. She desperately wants action from the Government and instructed me to come here today on her behalf, to say, “Please—when is this action coming forward?”
Huw Irranca-Davies
My hon. Friend makes the point succinctly on behalf of her constituent and all the others. We are talking about families who have lost loved ones, in her constituency and elsewhere, in traumatic situations; families who have been attacked and owners of guide dogs and companion dogs who have been attacked. The hon. Member for Brecon and Radnorshire (Roger Williams) mentioned dogs that are out of control in rural areas. All those issues have to do with irresponsible ownership, rather than the type of dog. That is why, although we welcome the announcements and, indeed, the re-announcements that have been made, there is an element of frustration, which has been relayed in the debate today. We are saying, “Get on with it.” We will support the measures. We will rally behind the Government to the nth degree to get things done.
The hon. Member for Banbury (Sir Tony Baldry), who has great experience of the issue, raised the possibility of the Minister beginning discussions on the overall issue of the dog legislation that is in place—a theme that was picked up by other hon. Members. I agree with the hon. Member for Banbury, but we are in year 3 and going into year 4 of this Government. We would have preferred to be doing things now and getting on with it. It is not as though we have been quiet on the issue. It is not as though the RSPCA, Dogs Trust, the CWU, the Royal College of Nursing, the Police Federation and others have been quiet; they have all been very streamlined on the issue.
One of the big problems previously was that Ministers would say, understandably, “Well, there isn’t any agreement.” Actually, there has been a tremendous amount of agreement. It is rare to get this level of agreement, and it extends to such things as dog control notices. It extends to saying that we should have a fundamental look at the overall complexity of the legislation and whether it should be overhauled. There is agreement on microchipping. I say to the Minister, “Go on. We’ll rally behind you on this. We need to do it. Let’s keep the cost low and the burden minimal. Let’s ensure that it works, that it’s efficient, that the technology is right and that the databases are secure and actually talk to one another.” Yes, there are technical issues, but let us get on with it. Let us deal with the internet trading and backstreet trading. Let us deal with the strays and the resulting kennelling costs for local authorities, the police and others. Thousands upon thousands of dogs are euthanised every year. That is appalling in a society that purports to love its animals—a pet-owning nation.
What is going wrong? It is a classic market failure in many ways. There is demand for the breeding of dogs and for the selling of dogs on the internet. There is demand for illicit trading in dogs. We must step in and take control. We must ensure that resources are in place and that there is enforcement. The hon. Member for Tiverton and Honiton, in his very good contribution, made the point well about enforcement, but enforcement carries resource implications. Whether local authorities, police or charities are doing the work, we need to find a way to do more with less—to pick up the phrase of the day—but also to ensure that enforcement is happening.
My hon. Friend the Member for Wansbeck did a tremendous job of highlighting the challenges ahead. He talked about the £57 million a year of kennelling costs for local authorities. He talked about the cost to the police of kennelling dogs. More than 100,000 dogs stray, or are lost or stolen every year. Six thousand dogs are put down every year. What a tragedy that is in terms of animal welfare. There is also the impact on local authorities and others. There are attacks on communication workers, social care workers, home visitors and so on. It is an absolute tragedy. There are 5,000 attacks on postal workers every year. There was a 12% increase in the number of warnings issued by the RSPCA to dog owners last year because of poor welfare.
What is going on? It may be a result of the economic times we are in. I do not know. Certainly when I visit Battersea Dogs and Cats Home or other organisations, they tell me that more dogs are being abandoned, and it is not just breeds that are perceived to be dangerous; dogs across the board are being left. They are being tied to lamp posts; they are being left at shopping centres for someone to come along and pick up. There are major implications in what is happening, but I say quite genuinely to the Minister that he has our support in taking action, as well as saying the words.
We need to get on with it. There have been calls from hon. Members today for the Government to set out a timetable. As a former Minister, I am familiar with the form of words, “When parliamentary time allows”, but I am also familiar with Ministers then coming to this Chamber or to the main Chamber and saying, “What I mean by that is that we will do it within this parliamentary Session. We’ll have to work with the Whips; we’ll have to work through the usual channels, but we will do it.” That is the sort of commitment we are looking for. We want to know that action will be taken and when. We want to know when the Minister will ask us for our support—to wade in on his side.
Michael Connarty
I know that my hon. Friend on the Front Bench is trying to persuade the Government, rather than chastise them, but surely there is a major problem in this respect: if Scotland, Wales and Northern Ireland have introduced or are introducing dog control notices and the Dogs Trust offers, at £20 a year, proper liability insurance for dog owners, should the Government not bring in those notices in England, and also make it compulsory for dog owners to insure their dogs under a scheme such as the one I mentioned so that victims can be compensated?
Huw Irranca-Davies
My hon. Friend raises a very good question for the Minister. As my hon. Friend the Member for Penistone and Stocksbridge said, if Northern Ireland, Scotland and Wales can do it—the reforms are of different types, but they are moving ahead on the issue—why cannot England? My hon. Friend said that fundamental question remains today; we are still at the same point.
I tabled written questions for the Minister. I asked, pursuant to the statement that he made, whether the Government planned
“to bring forward in this parliamentary Session an amendment to the Dangerous Dogs Act 1991 to allow for the prosecution of attacks that take place on private property.”
The response from the Minister was:
“I will answer the question as soon as possible.”
Today is a good opportunity to do that. I also asked whether the Government planned
“to bring forward in this parliamentary Session amendments to existing legislation to allow for the introduction of compulsory microchipping in England.”
The Minister responded:
“I will answer the question as soon as possible.”
Again, today is a tremendous opportunity for the Minister to make clear when he will do that. We are looking to rally behind him. He will know that despite the initial warm response, there have been criticisms, from Blue Cross, Dogs Trust and the RSPCA, that the plans do not go far enough. I look forward to his response, including a definite timetable, so that across the parties we can rally behind action, not just words.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
It is of course a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Wansbeck (Ian Lavery) on initiating the debate. It has been a good debate in general, because we are all united over the broad principles of what we are trying to do.
Despite points of difference on occasion being expressed, there has been a very warm welcome to what the Government announced in the written ministerial statement and a firm view that we are going in the right direction. We are united, because we all want to encourage responsible dog ownership and to help to tackle irresponsible owners. The question therefore is, what are the right measures to achieve those objectives and how quickly can we introduce them?
We are absolutely clear that we will bear down on irresponsible owners who allow their dogs to attack people, and we will do specific things to address the appalling number of stray and abandoned dogs on our streets. I say that because the Government consider owning a dog to be a serious undertaking that should not be undertaken lightly. We are working closely with the animal welfare charities to encourage people to take more responsibility for their own actions and those of their pets. I speak for the Government, but I know that I speak for the House when I say that we care about dogs, about improving dog welfare and about protecting public safety.
The measures that we have announced—the compulsory microchipping of all dogs in England by 6 April 2016, an extension to the law on dangerous dogs to give the police powers to tackle attacks on private property and the ability for prohibited dogs that do not cause a threat to be returned to their owners under strict conditions—are all aspects of achieving the balance between protecting the public and the welfare of the animals people own. We have worked closely with the Home Office to ensure that there are measures to tackle antisocial behaviour that involves dogs—I shall return to that point. I hope that that will deal with the problems with dog control orders, because we can achieve the same objective through different routes in our criminal law system. We have a route available to deal with the issues.
I reject one aspect of the criticism: I want to make it absolutely clear that the measures are far-reaching. The Chair of the Select Committee on Environment, Food and Rural Affairs, the hon. Member for Thirsk and Malton (Miss McIntosh), described them as “woefully inadequate”—they are simply not. They go to the root of the main problems associated with dogs and dog ownership. We are trying to tackle two issues here: to improve the welfare of dogs generally and to address concerns about public safety from dog attacks. The two issues need different but complementary solutions.
I shall deal with microchipping first, because the hon. Member for Wansbeck referred to it extensively. Compulsory microchipping is, in the first instance, a dog welfare measure. It will promote responsible dog ownership, by improving the traceability of owners, and help local authorities and charities to reunite more of the 100,000 dogs that stray or are stolen each year. Many such dogs have to be kept in kennels before being returned to their owners or re-homed. Having dogs stuck in kennels for any length of time is potentially detrimental to their welfare and costs animal welfare charities and local authorities nearly £60 million a year.
Microchipping will allow dogs to be reunited with their owners more quickly, and that is good for the dog and good for the owner. Indeed, 6,000 dogs have to be put down each year because their owners cannot be found. Quite frankly, that is a disgrace. Moreover, microchipping dogs will help to ease the burden on our charities and local authorities and allow more precious resource for other dog control and welfare work and for educating owners.
The Government’s proposal on microchipping has been widely welcomed by the police, local authorities, veterinary bodies and animal welfare charities. We have listened to their comments, and therefore, as was mentioned earlier, the initial proposal was different from what is now suggested. Following the consultation, we adapted our proposals in the light of the comments. From 6 April 2016, owners in England will need to have their dogs microchipped and registered on one of the commercial databases available. They will have to register the details of any new owner when they sell or give the dog away. Owners will be required to keep their contact details up to date on the microchip databases. My Department is working with database providers and microchip suppliers to ensure minimum standards of service for commercial databases and standards of microchips and that updated implantation guidance and training is available, as well as a one-stop 24-hour inquiry point for microchipped lost and found dogs.
My hon. Friend the Member for Brecon and Radnorshire (Roger Williams) referred to the cost of microchipping. I thank the Dogs Trust in particular for its very generous support, whereby a free microchip will be available for all unchipped dogs throughout England. Other animal welfare charities are offering free microchipping at their centres, including Battersea Dogs and Cats Home and Blue Cross, and the Kennel Club is providing free scanners for local authorities, which is also very welcome. I do not think someone not being able to afford the cost will be an excuse.
The hon. Member for Wansbeck asked what age of dog will be microchipped; veterinary advice is that eight weeks is appropriate. He also asked whether there were exemptions; the answer is, no, we do not plan to have exemptions, because as soon as we create exemptions, we create loopholes, and we do not want loopholes in the system. Let me be clear that enforcement is not about harassing responsible owners, but an offence will be committed if someone owns a dog that is not microchipped and the offender will be subject to prosecution.
Roger Williams
The Minister has covered the cost of microchipping, but what about the cost, about which people are concerned, of maintaining the databases?
Mr Heath
The databases are already in place. They are available; they are being used and will continue. We do not propose to establish new databases. They will be available to the police and local authorities to access. There will be a single portal, which we are working on, so that no one has to worry about whether they use one database or another. Those databases will be used.
Mr Heath
I have very little time to answer the hon. Member for Linlithgow and East Falkirk (Michael Connarty), because I want to move on to the Dangerous Dogs Act 1991, which is extremely important.
The second key element of our proposals is to address the scourge of dog attacks on people. I will not repeat the statistics but simply say that regular attacks by dogs on people are totally unacceptable. We need to toughen up the law, and we propose to do so. Many hon. Members have asked when we will introduce the changes. The hon. Member for Ogmore (Huw Irranca-Davies) was kind enough to accept that there are conventions in Government, with which he is familiar, whereby I cannot possibly commit to a particular time for the introduction of legislation. It will not happen this Session, because we are only a couple of months away from its end. Introducing new legislation at this point will simply not happen.
I will be equally clear and say that it is certainly our intention to introduce legislation in the next Session of Parliament—not before the end of this Session, but in the next Session. That is our intention. [Interruption.] A shadow business manager—the hon. Member for Penistone and Stocksbridge (Angela Smith)—is cheering, but she knows the constraints under which I make that statement. I simply say that we intend to do so, because, subject to parliamentary approval, we want the proposals to be in place during the next year. I hope that answers the major question that hon. Members asked.
Other matters were raised about whether the Law Commission ought to deal with the legislation. I do not think that this is a case for the Law Commission; it is not complex law and there are no legal ambiguities. It is of course always better to consolidate legislation, but I am not sure whether it is necessary in this case. Look at what the Home Office is proposing on dog control orders and the antisocial behaviour proposals being introduced. They will provide a very firm vehicle for the control of dogs and the anticipation of such offences, which the Home Affairs Committee has been looking at—
Mr James Gray (in the Chair)
Order. Members who want to leave the Chamber before the next debate should do so quickly and quietly.
Local Government Finance
(11 years, 3 months ago)
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Mr George Howarth (Knowsley) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gray.
My purpose in asking for this debate is to highlight the unfairness of the financial and other support provided to local government. I am particularly concerned about Knowsley, the wider Liverpool city region and the overall rationale behind the way that resources are being allocated.
The first issue that needs to be questioned is the general support for local government. The Local Government Association made it clear that the loss of grant over the current spending review period will leave a gap by 2019-20 of £16.5 billion. That is not a small figure; it is a very significant figure in terms of local government expenditure. Indeed, the National Audit Office said that local authorities are planning to reduce spending by £4.6 billion in real terms by March this year, and after absorbing additional costs arising from increased demand for local services that means there will be real cuts in real services.
The NAO also points out that Departments did not break down their analyses to identify regional or other variations. That is an important issue, which I will return to later. If we were to go purely on what we have been told by individual Departments, and particularly the Minister’s Department—Communities and Local Government—we would not know what the regional variations are. I am particularly indebted to Knowsley council and the LGA for providing a briefing that enabled me to make that breakdown. It is pretty sobering reading.
Knowsley anticipates cuts in services—not in back-office functions or luxuries, but actual services to the public—of £17 million during the next two years, which is a 15% cut. That means that over the next three years the council must find savings of £36 million, on top of the £32 million savings it has already made. We are talking about one of the smallest metropolitan boroughs having to make cuts during the period of this Parliament of £68 million.
Like all organisations, Knowsley council sensibly looked at where it can make reductions that do not affect front-line services, and where it has been able to make those changes it has done so. It has even been able to make small improvements in some services, recognising the priorities that exist. However, the fact of the matter is that the council now has nowhere else to go in terms of efficiency savings and changes in policy that could be made without a direct impact on services.
Mr Howarth
I will give way first to my hon. Friend the Member for Sefton Central (Bill Esterson)—or is it Sefton East?
Bill Esterson (Sefton Central) (Lab)
It is Sefton Central. My right hon. Friend used to represent part of Sefton Central when his constituency was Knowsley North and Sefton East.
Sefton council faces a total cut of £116 million for the period 2011 to 2014, and like Knowsley council it has no choice other than to cut services, including the library service in Aintree village, which is relied upon by many elderly and vulnerable people. The Government said that councils should resolve these problems by use of reserves. I am sure that my right hon. Friend will agree that that is an incredibly short-sighted approach, as those reserves can only be used on one occasion and once they are gone they are gone.
Mr Howarth
I am grateful to my hon. Friend the Member for Sefton Central for making that point. I have a very great affection for Aintree library, because when it was in my constituency I used to hold surgeries there.
My hon. Friend is right. If he looks at the NAO report, “Financial sustainability of local authorities”, which was produced in January, he will see that the NAO points out that although 93 local authorities
“used reserves in 2011-12, the remaining 260 either made no changes to their reserves or added to them.”
There is an argument about the use of reserves, which the Government have made, but the NAO report goes on:
“There is evidence that local authorities are reducing services, for example in adult social care and libraries”.
Certainly in the Liverpool city region, in terms of reserves there is really nothing left other than what prudentially is needed.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
My right hon. Friend mentioned efficiency savings. Does he share my concern that when Liverpool city council was asked to make £141 million of cuts during the last two years, the opportunity to make efficiency savings was limited because so little notice was given that drastic and severe cuts would have to be made?
Mr Howarth
I think the Government have the illusion that local authorities are stuffed full of people with nothing useful to do, and that all anyone has to do is to identify where those people are and all the problems will be solved. However, the reality is that there is no headroom left at all in most local authorities, and increasingly we will find that that will directly impact on services. If there is a reduction in the number of social workers, it has an impact on adult social care, families under stress, children’s services and so on. There is a real problem.
To highlight my hon. Friend’s point, I will look at the latest settlement in terms of metropolitan areas as a whole and in terms of other sorts of local authority. If we deal with things by region, the Liverpool city region is experiencing a two-year cut of £166 per dwelling; in London, the two-year cut is £129 per dwelling; the English average is a two-year cut of £105 per dwelling; Wiltshire is experiencing a two-year cut of £50 per dwelling; and Surrey—that hotbed of deprivation—is experiencing a two-year cut of £19 per dwelling. There can be no doubt about where the cuts are being targeted.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
My right hon. Friend talked about fairness, or rather the lack of fairness. I wonder if he has any comment to make about the fact that if we look at what is happening over a four-year period, we see that the cut for Liverpool amounts to a staggering £329 per head, putting it right at the top of the amount of cuts in local services that the Government are demanding, despite Liverpool being No. 1 in terms of national assessments of deprivation. Does he think that is fair, and does he have any kind of explanation as to why the Government would do that?
Mr Howarth
I am grateful to my hon. Friend for making that point. She is absolutely right. To be perfectly honest, I do not think it is any accident that Liverpool, which is No. 1 in the multiple deprivation ranking, is experiencing one of the highest cuts per dwelling anywhere in the country over the period. It is also significant that Knowsley, which ranks fifth in terms of deprivation and is therefore not far behind Liverpool, is experiencing a £206 cut per dwelling over the two-year period, which is one of the highest cuts—if not the highest—in the country.
Of course, that has a real impact. Knowsley council told me, and I have no reason to disbelieve it, that cuts in services and jobs are now unavoidable. It is having to anticipate cuts of £9 million to health and social care and to children’s and family services over that period. It is looking at 340 job losses, which will mean that services suffer, and that in economic terms more people will be thrown on to the scrap heap in areas such as Knowsley, where we have relatively high levels of unemployment.
Is the situation a statistical fault or deliberate policy? When system funding cuts are deepest in the areas such as Knowsley that are least able to bear them, and not in areas with relatively few problems of deprivation, we are bound to conclude that Knowsley is being targeted. As has been pointed out by my hon. Friends the Members for Liverpool, Riverside (Mrs Ellman) and for Sefton Central, surrounding areas that, at least in part, have a similar character are experiencing the same thing. It cannot therefore be an anomaly that relates only to Knowsley, a point to which I shall return in a moment.
No doubt, the Minister will make the point that the Government have brought in innovations that might help. For example, he might talk about the new business rates retention system, but the problem is that it is no longer needs-based. All the evidence is that redistribution will be to more prosperous areas, which will get to keep more of the business rates, so Knowsley will again not benefit. The National Audit Office has pointed out:
“Business rates income has been volatile across individual local authorities.”
I cannot therefore see that as the knight on a white charger that will save areas such as Knowsley.
There is also the new homes bonus, which is supposed to reward councils that boost new house building, but for every £1 lost through the top-slice, Knowsley will get back only 15p through the new homes bonus, whereas, for example, Uttlesford in Essex will get back £19 and Basingstoke will get back £18. Again, the evidence is that the benefits are being shifted away from the areas with the greatest levels of deprivation to those with much lower ones.
It is a similar case with arrangements for council tax support. The Local Government Association concluded that local authorities will have no choice but to pass on the cut in that support to the working poor. People who are in low-paid work and may be in receipt of council tax benefit will feel the greatest impact, because the Government are providing only 90% of the required funding. In fact, the Government have got their sums wrong: the average is 11.4%, but the actual cut in Knowsley is 12%. That cut is not transparent, but is taking place by stealth, even though the Government claim that the arrangement is a new and helpful innovation.
Before I finish, I want to say a quick word about welfare reform. With the bedroom tax, 5,000 households in Knowsley will lose £13 if they are considered to have one bedroom too many, or more than £20 for two bedrooms. I attended a public meeting in Northwood in my constituency on the bedroom tax, and I heard tale after tale of people who will have nowhere to go. They will have no options, because there are no two and one-bedroom properties to move into. Even though Knowsley has comparatively low rents, work done so far shows that 123 families—mainly larger ones, with four or more children, in private rented property—will be seriously impacted by the benefit cap. It is clear that the emphasis is moving away from areas with few problems compared with areas such as Knowsley, and that all the impact will be in areas like Knowsley.
I want to draw a few conclusions. The worst effects in finance and other support for local government have been targeted on areas with the highest levels of deprivation. The statistics I have presented, including those provided by the Local Government Association, point to that as an inescapable conclusion. Whichever way we look at it, frankly, it is shameful that the poorest areas in the country are asked to bear the brunt of the cuts. Without doubt, critical services—they are more critical in areas that suffer high levels of deprivation—will be cut severely.
Similar conclusions can be drawn about welfare reform, particularly in relation to the bedroom tax, the benefit cap and universal benefit. Those hit hardest will be those who work—described as the working poor—the disabled and those dependent on benefits, who are least able to bear the brunt of the cuts.
Where are we and where are we heading? I do not want to push the comparison too far, but we are very much heading back to the days of the Poor Law and the Speenhamland system of outdoor relief. With the bedroom tax, I can even imagine that we will need a modern equivalent of workhouses, because people will have nowhere to go. If we can make comparisons with the worst aspects of the 19th century, the Government should hang their head in shame at what they are doing.
Targeting the poorest areas is wrong in principle but, as the National Audit Office suggests, the Government are making no effort to monitor the effects of the changes. Before we know it, we will find families spiralling into debt or greater deprivation after April, with no plan for that when it comes about. Perhaps the Minister will not share my analysis of the problem—I am almost sure that his briefing will lead him in a completely different direction—but I hope that, at the very least, he will agree that all those matters need to be closely monitored after April, on almost a daily basis. The Government need a back-up plan for how they will respond if the sorts of problems that I have described arise. If they do not have one, frankly, they do not deserve to be in government.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
It is a pleasure to serve under your chairmanship, Mr Gray. I thank the right hon. Member for Knowsley (Mr Howarth) for and congratulate him on raising an important issue. However, I was a little surprised by his choice of topic, because the settlement, as he will appreciate and other Members have commented, is for not only Knowsley, Liverpool, Merseyside, Manchester or even Great Yarmouth, but the whole of local government. It is a landmark in the sense that, after years of doffing their caps to Whitehall, all councils can now take charge of their own destiny.
I was particularly surprised that the right hon. Gentleman chose this debate and made the case he has tried to make about the situation in Knowsley, bearing in mind that Knowsley has not only been in line with the English average of changing spending power this year, but has a spending power of £3,122 per dwelling in 2013-14, compared with the average in this country of only £2,216, so credit to him for his ability to try to make a case that Knowsley is being treated in any way unfairly.
Mr George Howarth
I am grateful to the Minister for giving way so early in his speech. Does he not recognise that those resources were distributed on the basis of need? My case reflects the fact not that Knowsley is standing with its hand out waiting for the Government to dispense largesse, but that there are high levels of need there.
Brandon Lewis
That argument might hold more weight if such areas were not getting almost 50% more than the national average in the first place. Even a constituency such as my own, which has three of the most deprived wards in the country, gets around £2,200. I struggle to have sympathy with the right hon. Gentleman’s argument that getting almost 50% more than the national average is a hardship.
In all the deficit denial and doom mongering that some people have been engaged in, an important message is in danger of not being heard. However, the recent move by Moody’s has once again reminded us of that message. The size of the deficit and the simple fact that local government accounts for a quarter of public spending mean that local government cannot remain immune. It is one of the biggest players in the public sector and it has its part to play in reducing the deficit.
I want to make it clear to hon. Members that this settlement is a fair deal to both the north and the south. Manchester, Liverpool, Nottingham and Newcastle all have higher spending power per dwelling than the national average. I have already commented on the fact that Knowlsey has the highest settlement in its area.
Mrs Ellman
Will the Minister explain how it can be fair that the areas with the highest deprivation such as Knowsley and Liverpool—Liverpool is right at the top of deprivation levels—are suffering the harshest level of cuts?
Brandon Lewis
I dispute whether that is even correct, bearing in mind that the base point that such areas start from is so much higher than anywhere else. It was the previous Government who left areas with high deprivation, such as Hastings and Great Yarmouth, with a cliff-edge drop in funding of up to 20%, which this Government have had to fix. Places such as Wokingham have been mentioned before in debates on the settlement—Surrey was also mentioned today—but it must be remembered that all the councils under discussion today are at least £500 better off per household than Wokingham is in 2013-14. Knowsley itself is pretty much at the average with regard to its reduction, but it has a spending power of £3,122, compared with an average of just £2,200, so this settlement is fair. Thanks to the new efficiency support grant, the seven authorities that face the biggest hit to their spending power in 2013-14, a couple of which I have just mentioned, are eligible for a funding boost, which ensures that no council faces a spending power decrease of more than 8.8%, despite the previous Government leaving them with one closer to 20%.
Vitally, the system now works in a council’s favour. Through the Localism Act 2011 and the financial reforms in this settlement, some 70% of local authority income will be raised locally. Councils now have more power than ever before, but they need to understand the implications of this settlement and to act in their residents’ best interests and work harder on their behalf. They can do that by redesigning council tax benefit to cut fraud, promoting local enterprise to get people back into work, or redesigning services to make them more efficient and sustainable. There are still savings that can be made. I disagree with the earlier comment about the council tax support position. The money the Government have put in, the opportunities that exist for savings and the flexibilities that have been given to the sector can more than make up for what is needed to be found. Last year, local government showed commendable skill in reducing its budget while still protecting front-line services. Many residents thought services had actually improved. This is about not how much money is spent, but making sure that it is spent in the right way.
Luciana Berger
The Minister will know that the leader of Liverpool city council has extended an invitation to the Secretary of State to come to Liverpool to tell us how he thinks more efficiency savings can be found, bearing in mind that we now have to make additional cuts on top of the £141 million that have been made so far. Will the Minister also accept an invitation to come to Liverpool to see for himself the extent of the cuts, bearing in mind the levels of deprivation that exist, and tell us where he thinks further efficiency savings can be made?
Brandon Lewis
I suggest to the mayor of Liverpool that some of his language has been extremely unhelpful and somewhat unfair, particularly when Liverpool starts with a per dwelling spending power of around £2,700. Many areas of the country, even deprived areas such as those in my constituency, would be keen to have such spending power. I am happy to come to Liverpool during the course of this year. In fact, I will be visiting the fire service soon, and so will be happy to visit the council as well. I suggest the council looks at the booklet, “50 ways to save money”. Part of taking that local power and being a locally directly elected mayor is about having responsibility. There is that old phrase, “With great power comes responsibility.” Instead of looking to everyone else to solve their own issues, councils should be looking at what they can do locally; that is what local accountability and local democracy are about. Through our community and neighbourhood budgets, we are rewiring the system and bringing people together from across the board—local authorities, the police and the health service. We are seeing such alignment with the whole place community budgets. Areas close to Liverpool and Manchester are finding local savings worth millions of pounds, and providing an opportunity to realign the public sector to make it more streamlined and efficient.
Thanks to the autumn statement, which exempted local government from another 1% top-slice, councils have time to put their house in order and put people first. They should start that process by freezing council tax, which rose exponentially under the previous Government—it more than doubled. We have now put money aside to put tax rises on ice for a third successive year. Already a huge number of councils are doing the right thing, including, I am glad to say, Knowsley, as well as Derby, Dorset, Northampton and Watford. Areas such as Lancashire are going further and actually cutting council tax by about 2%. In many cases, councils have far more in reserves than they are losing through cutbacks. Liverpool, Manchester and Leeds have reserves twice that of their spending power reductions. The local funding settlement used to be the end game, but now it is just the starting point.
Mr George Howarth
The Minister and the Government tend to treat reserves as some kind of luxury that local authorities can easily live without. Before I came to this place, I spent several years as the chair of the finance committee on Knowsley council. I am no accountant, but I do know that a council has to have reserves to hedge against unexpected areas of expenditure—perhaps a surge in inflation that they cannot cope with or pay settlements that they were not anticipating. It is prudential to have reserves, not in any way a flagrant abuse of the system.
Brandon Lewis
The right hon. Gentleman makes a fair point. It is right for a council to have reserves. However, it is also right to use those reserves at the right time and to keep only a prudent amount of reserves. Many people in this country cannot understand how local government can say that it is struggling when at the same time it has built itself up in the past couple of years, even under these changes and savings, to have the highest level of reserves it has ever had—they have increased to around £16 billion. When authorities such as Liverpool, Manchester and Leeds have reserves roughly twice that of their spending power reductions, I suspect that most residents will have some lack of sympathy with their argument that there is not enough money to protect their services.
Furthermore, councils will be able to retain around £11 billion-worth of business rates, which will deliver £10 billion extra to the wider economy. In recent years, Newcastle, Manchester and Liverpool all saw their business rates rise above the national average of 4.8%, but thanks to the old begging bowl system, they missed out on the opportunity of making the most of that money. That will not be the case in the future; they will get the benefit. It will be about what councils make and not what they take that counts. If they bring in more businesses and more jobs, they will be rewarded. With regard to the comment on the new homes bonus, with more than £650 million being allocated this year, the same applies. If councils build, they will get the money. It does not matter where they are in the country. If they build the houses, they will get the money.
In this settlement, we capture a new ethos in local government. We are looking to generate more income through the new homes bonus, business rates retention and the new transition challenge award where councils that are sharing services and management, and being innovative to ensure that they can spend money on the front-line services can make a pitch for that part of the bid.
The right hon. Gentleman mentioned reserves. What is also important for councillors and council officers to remember is that those reserves are not the council’s money to sit on and protect. The money that councils have is taxpayers’ money to be spent on services for taxpayers. If councils are willing to put people above political ponderance, to look to the future, and not in the rear-view mirror and do things because that is the way we have always done them, they have a once-in-a-generation chance to move forward, finance themselves in a new way, be genuinely local and deliver for their local residents.
Planning and Regeneration
(11 years, 3 months ago)
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John Penrose (Weston-super-Mare) (Con)
It is a pleasure to have you in the Chair looking after us this afternoon, Mr Dobbin, particularly because the topic of preserving urban views and regenerating high streets is tremendously important to towns and cities up and down the country.
I hope we can all agree that there are two fairly severe challenges facing our built environment, no matter which part of the country we may be talking about. On the one hand, a housing crisis is looming. The Minister’s colleague, the Minister for Housing, has been making the tours of the TV studios and radio airwaves to make the point that we have an incipient housing crisis, caused by years and years of under-building, and that if we are not careful and if we do not do something about the situation relatively quickly we face the prospect of owner-occupation being something that will fairly rapidly become just the preserve of the rich. That will happen unless we start to build significantly more houses. The figure bandied around is that more than 100,000 homes—in fact, several hundred thousand homes—will have to be built every year for several years, in order to catch up with the backlog.
Given the levels of building needed to match current and expected demand, the pressure on finding sites and space will be intense. Even if we use all the brownfield sites that are available, it is true that if we do not find other spaces to build on, the pressure on our green fields will inevitably grow. I suspect many people view that prospect with alarm; it is an extremely unpleasant and inconvenient fact. If we can find alternatives, clearly we should use them.
In addition to the threat, or challenge, of the housing crisis, our high streets also face two very serious challenges: one of long standing, the other relatively recent. The long-standing challenge is that, for several decades, out-of-town shopping centres have been threatening to suck the life out of our high streets by pulling shoppers away from town centres to out-of-town locations, and in some cases they have actually done so. That has been going on for many years. Back in the 1980s or 1990s, John Gummer, a distant predecessor of the Minister, started to introduce restrictions on planning permissions for out-of-town shopping centres. That process has continued; in fact, as recently as last year the latest set of planning guidelines further sought to restrict permissions.
That is a well-established threat; it has existed for some time. More recently, of course, the advent of online shopping means that many more people are now shopping from home over the web, and as a result a great many retail store chains have concluded that they need fewer shops to cover the entire country. Inevitably, that has reduced demand for shopping locations on Britain’s high streets.
Those two challenges mean that change is inevitably coming to our towns and cities. That should not surprise us. Change is fine; it is okay and it is something that Britain’s built environment has had to face up to over decades, indeed over centuries. In fact, if we look at townscapes and cityscapes—the way that towns and cities look—we see that all of them are the product of successive waves of development, in some cases going back very many years. We are in London. London has been occupied for at least a couple of millennia and the signs of successive waves of development during human occupation of this site are around for us to see, even now.
It is the case in most cities, with—I suspect—the possible exception of one or two places, such as the one that the Minister represents, the city of Bath, which of course is—
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
Extremely beautiful.
John Penrose
Bath is indeed extremely beautiful; it is also a very rare example of a single, fairly homogenous and relatively planned style of building. With very few exceptions such as Bath, or more modern examples such as Milton Keynes, most of the rest of Britain’s towns and cities are not planned. The way they look is the result of a set of rather accidental phases and stages of development. As a result, some of those phases and stages of development, which have inevitably happened because towns and cities have had to react to society’s changing needs over decades and centuries, have created a look that in some cases may be beautiful and in some cases may be very, very average indeed. In fact, I suspect that many of us can think of some parts of some towns and cities that everybody would cheerfully see being redeveloped quite rapidly. And there is everything in between.
In some cases, we have lucky accidents of beautiful parts of our towns and cities, and in other cases the unlucky accidents of rather ugly places. We need to face up to the fact not only that change has always been a facet of the development of our built environment but that it will always be so. Our towns and cities need to carry on changing if they are to cope with the changing demands of society. They always have and they always will. Given the twin challenges I have just set out, it is extremely likely that we are due for another bout of change—another rapid stage of evolution in what our towns and cities need to do. Nowhere is that more true than on the high street, as it tries to face up to the challenges that I described.
The question is not whether change is coming—clearly it is—but rather how we react to it; how our built environment reacts to it and how local residents are able to use the buildings that we have inherited from our predecessors and those that we are building and developing to bequeath to our successors in whichever urban environment we live and work.
Consequently, it is crucial to ensure that we keep the best bits of what we have already. As I said, there are plenty of examples of beautiful townscapes and wonderful locations, from London’s Mall through to city-centre locations from Edinburgh right the way down to Cornwall, and back again. We need to ensure that as we allow our towns and cities to change, to develop and to react to the pressures on them, we keep the best pieces and do not casually or accidentally allow them to be destroyed in the process of development.
We already have some mechanisms to do that. For example, we have listed buildings. A very small proportion of this country’s buildings—roughly 4%—are subject to listing orders. That means that if they are of particular historic or architectural importance, they are legally protected from being damaged by future development. Equally, we have conservation areas, which is where I think the Minister and the rest of his Department come in. Those areas are protected by planning laws. Local councils can designate a conservation area, and that allows a measure of protection to ensure that it is properly looked after and a homogenous look is maintained.
Greg Mulholland (Leeds North West) (LD)
I thank my hon. Friend for giving way and I congratulate him both on securing the debate and on the passion for tourism that he has shown on both the Front and Back Benches. Does he agree that although listing and conservation areas are very welcome, there is a bit of a failing, because in neither case is sufficient weight put on actually keeping a building for what it was actually designed to be, even though in many cases that is perfectly possible?
John Penrose
I agree with my hon. Friend that, wherever possible, it is often more historically authentic to try to maintain a particular building for its original purpose. However, it may no longer be possible to maintain a building for its original purpose; a good example would be Martello towers, which, for those who have temporarily forgotten, were part of Britain’s defences during the Napoleonic wars, guarding our coastline from invasion. Clearly, whatever we may think about the likelihood of a French invasion in the future, Martello towers are no longer part of this country’s sea defences, so it would not be sensible to have them as a military installation any more. Many of them have now been very successfully converted, and most conservationists would argue is that if it is not possible, either for economic or other reasons, to maintain a building for its initial use, it is far better to make sure that it has a modern use than to have it sit empty, because if a building sits empty it very rapidly decays. Although I instinctively sympathise with my hon. Friend’s comment, if it is not feasible we need to be flexible and accept the case for change.
Moving on from listed buildings and conservation areas, I recently called for an addition to the available tools for protecting the best of what we currently have, to ensure that as the process of change moves forward in our towns and cities, what is good is not accidentally destroyed. In addition to individual listed buildings and conservation areas, we also need to give consideration to listed views—some way of protecting the skyline or particular avenues of views in towns and cities. There is already a small measure of protection. For example, here in London a number of view corridors are protected, so that people can see the dome of St Paul’s from various points in the city, including a hill on Hampstead heath. But those corridors are narrowly defined and do not provide a ready way of protecting the incidental, day-to-day or small-scale beauty that most of us can think of in towns and villages in our constituencies.
Most people, as they take the dog for a walk or go for a walk on a Sunday with their family, for example, will know local spots where the view is perfect and they love it. They will pause when looking at such a view to appreciate it, whether it is a towpath on a canal, a bandstand in the park or the local high street; it does not matter exactly what it is. It is hard for existing legislation to protect that aspect of what is good-looking and therefore worth preserving in our urban environment. It would help if we moved towards rounding out and completing the suite of protection measures that we have.
Deciding what protections we need, and designating the bits that are worth saving, would allow us to move faster and more vigorously towards the kind of change and updating in urban environments that we have already mentioned, particularly high streets, given the housing requirements that we know about. If we know about the bits that are worth keeping, inevitably and logically it follows that everything else is at least fair game for being updated, redeveloped and regenerated more rapidly, so that it can be altered to reflect what society needs from it with less fuss than before.
We can move faster in reacting to the forces of housing requirements and the hollowing out of high streets, but only if we know what is worth keeping—because we will have designated it, as I have described—and what is not so special, which, if it is changed, we should not be so worried about. Having designated the stuff that is worth keeping, we should be more relaxed about everything else, allowing more rapid development and not being so precious about what regulatory and planning constraints we place on some things.
If people look around while walking on most high streets in Britain, in most places they will usually see a ground floor with retail and sometimes leisure—restaurants, or whatever—and above that, except in the centre of the biggest cities, they will see one or two storeys of lightly used residual construction in buildings that have been standing for 100 years. The upper floors tend not to have been designed to be used above retail and, in many cases, they are hard to access and use for anything terribly productive. In many otherwise thriving high streets, above those one or two extra storeys above the ground floor there is just fresh air.
Those spaces ought to be some of the most valuable, productive and useful in our towns and cities, yet they are lightly used or unbuilt, by and large because such buildings were constructed in the 19th century or earlier and, if they are not historically important, the chances are that they are not terribly useful either. We should allow the ones that are not designated as important and historically, visually or architecturally significant to be redeveloped more easily. To do that, we need to be a bit more relaxed about the regulations that we apply.
My gentle suggestion—my starter for 10—is that if we want to free up the opportunity for our high streets to be redesigned and redeveloped more easily, and make space for more housing in town centres, reducing the inevitable pressure on the fringes of towns, on the green belt and green fields, we should consider allowing developers to build up rather than just out. I suggest to my right hon. Friend the Minister that to do that we should allow buildings to be redeveloped, particularly on high streets, knocked down if necessary and built up. It should be economic to rebuild them. A building that is four or five storeys high, when it is currently only one or two, makes the economics of redevelopment work much more effectively.
We could extend the permitted development rules, which currently allow small-scale extensions and additions to buildings, to allow additional height to be added to some town centre buildings. We could set a maximum height, for example, up to the maximum height of other buildings in the same block, or to that of a local church tower or the tree canopy—something that is not absurdly tall. I am not talking about building the Shard in towns around the country. I am talking about a small addition that would make more of our towns and cities look more like a Parisian boulevard, for example, with shops, restaurants, cafés and other commercial premises on the ground floor and a mixture of either offices or apartments a few floors above. Those are great places to live and work; they are elegant and in some cases beautiful. Doing that would make sure that we were hanging on to the important parts that are already beautiful in our developed and built environment.
That small change could be transformational and could save our high streets, or allow them to develop and mutate as they must if they are to survive, and could, I hope, reduce pressure on our green fields by providing alternative places to build much needed houses. This is a small suggestion—a modest proposal—and I hope that the Minister takes it in the spirit in which it is made. I look forward to his reply after listening to the thoughts of other colleagues.
Martin Vickers (Cleethorpes) (Con)
It is a pleasure to serve under your chairmanship, Mr Dobbin. I congratulate my hon. Friend the Member for Weston-super-Mare (John Penrose) on securing this important debate, which covers a range of subjects, all of which are keenly considered important by those whom we represent.
The full title of the debate is “Role of planning in preserving urban views and regenerating high streets”. Our high streets are coming to terms with the change in shopping habits. Can the planning system do anything to help speed and assist that regeneration? The key question is, is the planning system a help or a hindrance in that process at the moment? Clearly, it has a part to play. I served for five years as a cabinet member on a local authority, in charge of planning policy. Thankfully, I was not in charge of implementing individual decisions, which of course is the most contentious part of it. The part that I found most difficult was the speed at which the planning system works. Whether people are on the side of a developer or a shopkeeper wanting to make a minor change, or objecting to an application that they feel will blight their part of town, they want a speedy resolution of the issue.
We can all relate to the listed views that my hon. Friend mentioned. As he represents a different seaside resort, I am sure he has a different view, but he should come to witness the sunrise over Cleethorpes. All of those things add to the quality of life, so they are important.
The Government have made some important changes to the planning system since the coalition agreement, including the new planning framework, all of which has been very good. One aspect about which I have reservations is that more decision making is being passed to unelected officials, be it the Planning Inspectorate or whatever, whether on appeal or because a local authority is seen to be failing in its duty. A vital part of the local democratic process is that local councillors should be in charge of making planning decisions. Those of us who have served on a local authority appreciate that people expect us to be involved in and to influence planning decisions, whether small or large. That goes right to the heart of our local democratic process.
Cleethorpes High street has a good mix, and it is surviving despite the onslaught from out-of-town developments and neighbouring Grimsby, where the main shopping centres are located. I appreciate that shoppers do not take note of political boundaries. In fact, Grimsby and Cleethorpes are one area. Thirty years ago, Freeman street in Grimsby was the hub of the local retail community, which served a vast housing area where many who worked on the fish docks lived. Freeman street has declined into a street of boarded-up properties with the occasional charity shop, a few takeaways and little else because the local authority, on which I served for a period, did its level best to maintain the high street as it was without recognising that the main shopping centre had moved elsewhere. We tried to preserve the high street, and it was like continually putting plasters on to a wound.
We must recognise that the high street is changing. Out-of-town retail parks have, to a considerable extent, become a replacement high street. People can go to the local out-of-town supermarket, which is surrounded by half a dozen outlets of a similar nature. People can get everything in that one place, which we must recognise. I want to preserve high streets where they are commercially viable and, in effect, wanted by the local community.
I am not a particular fan of the recommendations of the Mary Portas review, although not because I do not support its aims and objectives—I served on a town team for a great many years. Across the country, there are councils, chambers of commerce, traders associations and the like that have tried virtually everything contained in the Portas review, including adjusting planning controls and doing their best to keep parking charges at a reasonable level.
We must recognise that parking charges are an important part of a local authority’s income. When I was a councillor, parking charges represented just over £1 million of income. Yes, people can say that doing away with or restricting parking charges would boost the local economy and might attract more business, thereby boosting business rates, but it is a long-term process. In the meantime, the local authority is stuck with having to provide services on hard-pressed budgets. That income simply cannot be replaced. Yes, there are schemes. North Lincolnshire council, which forms part of my constituency, has had a very successful scheme in recent months that has proven a godsend to many of the smaller towns and has helped things along considerably.
Promenades are an important part of seaside resorts such as Cleethorpes and Weston-super-Mare, and they are equally part of the retail mix. Yes, promenades have their amusement arcades, but if we want a vibrant seaside resort, there has to be a mix of arcades, retail, cafés, restaurants, and so on. We urgently need to do all we can. My own party produced a document on seaside resorts prior to the election called, as I recall, “Not the end of the line.” The document considered many of those issues, and perhaps it is worth the Minister digging the document out of the files so that we can see whether we can proceed with some of its suggestions.
My hon. Friend mentioned the need for change of use so that people are able to bring many of the now surplus retail units back into use—every town has parades of shops that are now redundant as retail units. Yet more help is needed, perhaps including a programme of support, so that owners can change those units into residential use. We all know of the chronic housing difficulties in many parts of the country, and many of the surplus retail properties are owned by small-time developers or redundant family businesses that have now closed down with people moving on. It would be helpful if the Minister were to consider those things.
Mr David Lammy (Tottenham) (Lab)
I congratulate the hon. Member for Weston-super-Mare (John Penrose) on securing this important debate, in which I am grateful to have the opportunity to speak.
As a former Minister with responsibility for heritage, I want to say that the hon. Gentleman is right when he remarked on the important balance of preserving what we have come to understand across communities as beauty in relation to our heritage. I remember the delicate discussions when I was a Minister in the Department for Culture, Media and Sport on balancing the interests of heritage against new building.
In London we have broadly got that right. We can point to exemplary new architecture that contributes to the London skyline, such as the Gherkin, the Shard and the London Eye. Those buildings are controversial—some people like them, and some people dislike them—but they contribute to the sense that London is a modern, forward-looking city. None of us would want to see the important centre that is Westminster, and the important heritage that lies here, destroyed. The London Eye, across the way by County hall, adds to that and provides the right balance. Equally, there were delicate discussion on how the Shard might affect the views from the Tower of London and the important line of sight that goes right down to Richmond park, and we arrived at the right balance. Those discussions will continue as new developments are proposed.
When we consider what has been achieved in parts of London that have been run down and are in need of regeneration, such as the royal docks and the huge work by the London borough of Newham under the leadership of its mayor, Sir Robin Wales, particularly around the Olympic site and the Westfield development, there has been a huge contribution of modernity, and the right balance has been struck for the vibrant multicultural community, which has experienced tremendous poverty over the years.
I thought it was important to contribute to this debate because at the same time, a story has been unfolding on our London high streets—a quiet disaster in need of serious regulation. I am slightly concerned by the presumption made by the hon. Gentleman, unless I misunderstood him, that protection should apply to heritage, beauty, what we need to preserve and where we need development, but that we more or less do not need regulation for the rest. I want to introduce to this debate a growing depth of concern, across London and now in some of our other major towns and cities, about the look and shape of our high streets and how individual people can affect that. What people see here in London, from Ealing to Tottenham to Hackney to Peckham, is a proliferation of betting shops, payday loan shops and fast food restaurants, usually in the shape of chicken shops. They are not Kentucky Fried Chicken but Tennessee, Kansas or any other state. They are rife in boroughs such as Waltham Forest and Haringey. Pawn shops also proliferate.
That is disastrous to the high street. No one says that it is a problem to have one or two bookmakers, but it is a problem to have, as Haringey Green Lanes does, nine in a stretch of no more than 800 metres. Do we need 22 bookmakers from Seven Sisters tube station up Tottenham High road and Fore street and into Enfield? What kind of regulatory environment has led to that? The hon. Gentleman was a Minister in the Department for Culture, Media and Sport with some responsibilities in that area. It is time for his colleagues in DCMS and the Department for Communities and Local Government to come together to establish the right planning and licensing environment to preserve what we understand as a high street. If we just allow mini Las Vegases to develop across London, we will be thumbing our noses at a licensing regime that worked well. All developed countries take the planning and licensing of gambling seriously.
Greg Mulholland
I suspect that the right hon. Gentleman would agree with me and the all-party save the pub group. We point out that it is not the rigidity of the planning system but its weaknesses that are causing problems. He and I have both highlighted the ludicrous situation that a viable pub can be turned into a betting shop without the need to go through the planning process, which undermines the whole topic that we are discussing.
Mr Lammy
I am grateful to the hon. Gentleman for that contribution. I was moving in that direction, but I saw him in his seat and knew that he would elucidate very well the situation faced by our pubs, particularly on the high street, so I navigated my remarks into his terrain. However, I will leave him to give the peroration that I know he is about to give. He will know that the reason for the proliferation and saturation of bookmakers on our high streets is relaxed planning laws that have allowed them to move into former pubs, banks and estate agents’—frankly, to move anywhere—when they should be in a sui generis class of their own. Any civilised democracy would seek to regulate that area of activity carefully. I am not suggesting that it should be the same as how we might choose to regulate lap dancing clubs, for example, but I think we have wisdom as human beings in taking gambling seriously and requiring a certain kind of regulation for it.
I see that later this week, an Adjournment debate will be held in the House on fixed-odds terminals in betting shops. These new machines, which allow people to lose up to £100 in 20 seconds, are driving the proliferation of betting shops. I am deeply concerned that the Government seem not to want to do anything about them on either the licensing or the planning side. Where will we be in five years’ time? What misery will be wrought on communities? Can it be right for the borough of Haringey to have more bookmakers than bookshops? Is that really the message that we want to send to our young people?
Ministers have said that they want local authorities to use article 4 powers to designate an area to exclude a particular category of activity, such as betting shops. The problem with article 4 is that it does not prevent betting shops from opening in banks or estate agents, and it certainly costs local authorities a hell of a lot of money that they do not have at this time to use the powers. The Government must act, and they must get serious about licensing. A fear is developing across the community that the Government will not act because their receipts from taxation on these activities are such that the Treasury is prepared to turn a blind eye.
We will pick up the tab in disastrous lives if we allow such activities to continue. If we allow chicken shops and takeaways to open up next to schools across the country, the NHS will pick up the tab for the resulting obesity. If we allow betting shops to prey on poor people—the latest evidence suggests that the proliferation is occurring in poor and deprived areas—we will pick up the tab for broken marriages. Wives and daughters in particular feel the pain. We will pick up the tab for the consequences. Because my hon. Friend the Member for Walthamstow (Stella Creasy) does it so successfully, I need not articulate how much damage payday loan shops cause, with the huge interest rates—up to 1,000%—that they are now charging in this deeply recessionary period. If we allow that to continue, I am afraid that the sorts of scene that one can see in parts of downtown America will be visited on this country.
That is why, when we talk about urban planning, it is important that we talk about what is real to people in their lives today and on their high streets. They want a place where they can go have a drink, which is why I absolutely support the activity of the hon. Member for Leeds North West and the work of the Campaign for Real Ale to highlight the loss of pubs throughout this country. People want somewhere to shop. They want independent shops as well as major retailers. Yes, they want to bet on the grand national, but they do not want to be overrun with bookmakers. They certainly do not want to be overrun with fast food shops, given that we know that too many are particularly dangerous for young people.
I hope that the Minister will say something in his response about those issues. It is not the first time that they have been raised in the House; they have been raised time and time again. Co-ordination and consideration is needed between two Departments in order to get a grip on the regulatory environment for planning on our high streets.
Greg Mulholland (Leeds North West) (LD)
It is a pleasure to serve under your chairmanship, Mr Dobbin. I am delighted to take part in this important debate. I do so wearing two hats: I am a proud member of the all-party group for small shops, which clearly have a huge interest in this topic, and I am the chair of the all-party save the pub group. I will focus my comments on those interests.
I want to start, however, by telling the Minister and my hon. Friend the Member for Weston-super-Mare (John Penrose), the former Tourism Minister, that I very much welcome the fact that the Government have rightly put a lot of emphasis on the importance of our high streets and town centres as hubs of not only commerce, which they clearly are, but social interaction and cohesion.
My hon. Friend talked about some of the issues that high streets and town centres face with out-of-town shopping centres and online, mobile retailing. I warmly welcome the Government’s work on the Portas review and the town team partners scheme, and I am delighted that Otley, in my constituency, has received a share of the multi-million-pound fund to take forward elements of the scheme’s plans. That is encouraging local people to get on and promote town centres, and those people are often best placed to do that.
I have four town centre high streets in my constituency —in Headingley, Otley, Yeadon and Meanwood. Those areas are all different, but they all rely on a mix of retail, food and entertainment, including pubs. It is important to acknowledge that, although the way people are shopping is changing, retailers are taking up and working with those changes; indeed, they are using them to benefit themselves, their business and therefore their town centre and their community.
It is important that we do not make the mistake of talking about the death of the great British high street. Although some high streets might be changing, some businesses on them are doing extremely well and succeeding. A good example that is some businesses in Otley are providing wonderful local goods, some of which are foodstuffs and some of which are other things. Those goods are made locally and transported short distances. That is the kind of thing people want to buy from an independent retailer and cannot buy in the same way from larger retailers.
At the same time, other businesses are using innovation and coming up with different products, ideas and ways of retailing. Many small independent retailers, unlike some of the large chains that have collapsed, have shown that they can embrace the internet era. They can have a shop front physically showing people their products or services, while having an attractive online offering that allows them to sell to a far greater area.
We must accept that there are challenges, however, and the Government are right to do so. The message that I want to get across to the Minister is that we must not fall into the trap of thinking that the way to deal with some of those challenges is simply to deregulate the planning system and say, “If we allow developers to get on and do whatever they want, that will regenerate the economy.” That is a mistaken view, and I am glad that it is not taken by my hon. Friend, but it is taken by some people. Simply relaxing planning could be disastrous for many town centres. It would be entirely wrong simply to say that people can do what they want, without any interface with local teams, whether town or parish councils or chambers of trade.
I want to put on the record my concern at the suggestion that there should be no need to go through the planning process for change of use from office to retail. If an office is genuinely no longer wanted as an office, and no one wants to take it on as an office, that suggestion would be reasonable, but let us allow local communities to have a say. That is what the Government say that they believe in promoting through the big society, so it simply does not make sense to give blanket powers that could have a detrimental effect on many high streets.
John Penrose
I understand the case that my hon. Friend is eloquently making. Does he agree, however, that if local communities have a say, it is important that that say is genuinely representative of what local people think? He, I and many others here could point to local campaigns against this or that development—usually whipped up by people who have something commercial to lose if the new development is installed—that do not represent the views of local people once the development has gone through. In some cases, a vehement campaign is fought against Tesco or whomever it may be, but not one year later, once the local Tesco or whatever it may be has been built, everyone who signed up to the campaign ends up shopping there. It is therefore important to make sure that the democratic voice genuinely represents the actual behaviour of local people, rather than the views of just a few vehement protestors.
Greg Mulholland
My hon. Friend makes an interesting point, but the simple point is that people should have a say, and they cannot have a say if it is denied to them by allowing further relaxation of the general permitted development rights. That is why I strongly urge the Minister to make representations that such a suggestion could be very unhelpful. With town centre developments, as opposed to other kinds of development, we have the opportunity to get the view of local retailers, town councils, chambers of commerce and chambers of trade that is not simply about opposing development, but about building a vision for the local area. Those people know best, and we must not deny them the right to express their views.
I want now to turn to pubs. I said that the British high street is changing. For many years, the mainstay of our high street might have been the old-fashioned post office or the butcher. Many of those things are important, and they are surviving and, indeed, thriving, which is to be welcomed. I pay tribute to the work the Government have done with the Post Office network to ensure that the local post office remains a mainstay. However, the mainstay of many high streets can and should be the British pub. The pub has served a purpose in high streets and marketplaces for hundreds of years. As many retail businesses necessarily change around them, many pubs do not need to change; they are still surviving and still thriving. Many of the issues that they face are not about the amount of trade they do. It is important to recognise that other issues affect them, but the problem with the planning system is that it does not do that adequately.
As the Minister knows, I commended the work on the national planning policy framework, which is a huge improvement on what we had before. For the first time, it mentions valuable local services, including pubs, and gives them a value in planning law, which is hugely welcome. However, that does not sit alongside the reality of the use class orders and the general permitted development rights, which remain in place.
I have mentioned the nonsense that a viable, wanted pub can be turned into a betting shop against the wishes of the local community, the town council, the chamber of trade and all the retailers and residents of an area. That can also be the case with a supermarket. That is simply not acceptable. In many areas up and down the country, people find that a local pub that is wanted, used, viable and making money can be sold. Indeed, pubs are being sold in their hundreds behind the backs of local communities by indebted lease pub companies, whose model is now facing the end. Pubs are sold direct to supermarkets, but the community has no say whatever. That simply cannot be acceptable.
The save the pub group warmly welcomed the call by the Department for Communities and Local Government for councils to adopt supplementary planning guidance for pubs and other local services. Of course, some councils have done that, and the Minister has taken a keen and direct interest in some of those cases. Cambridge city council is an excellent example of a proactive council that considers pubs to be important. It has introduced supplementary planning guidance to deal with some of the problems that pubs face. I am extremely disappointed that the British Beer and Pub Association, which unfortunately represents Britain’s large pub companies and brewers rather than fighting for the future of many British pubs, is seeking to overturn that decision by judicial review. Not only is that disgraceful, but it shows the organisation for what it is. I hope that through the work of the save the pub group and the Department for Communities and Local Government we can encourage more councils to introduce such guidance.
The work that the Department for Communities and Local Government is doing does not excuse the fact that it operates a planning system that does not adequately and commonsensically prevent unreasonable moves from one use class order to another. It is still possible to demolish a free-standing pub overnight, even if the pub is wanted and a small business man or woman wants to carry on running it. That is a permitted development right, which is nonsensical. Likewise, a pub can be turned into a supermarket, a betting shop or a solicitors’ office, which are very different uses of the premises. Communities may lose a valuable and wanted pub and have a supermarket imposed on them and on local retailers.
To return to the point made by my hon. Friend the Member for Weston-super-Mare, when communities are genuinely opposed to such a change, they do not even have the opportunity to comment on whether they want a local Tesco to be imposed on them. Such a development might damage the small retailers in a town centre and affect the mix of shops in the area, which is the reason why people come and shop there in the first place. The wrong kind of development can be extremely damaging.
The simple message is that much of what the Government have said and done has been welcome and positive, particularly the work on the Portas pilots. The national planning policy framework was a great piece of work, which has hugely improved the planning framework. Will the Minister tell us why officials and Ministers in the Department for Communities and Local Government still refuse to amend use class orders or look again at the general permitted development rights to clear up the absurd loopholes that are damaging communities and town centres across the country? It would be possible to make simple changes under secondary legislation to give communities a say by requiring any change of use of a valued community facility, such as a local pub, to go through the planning process. Overnight, that would stop such assets being sold behind the backs of communities; it would stop there being 22 betting shops on the street in Tottenham that the right hon. Member for Tottenham (Mr Lammy) mentioned; it would stop Tesco and Sainsbury’s stores being imposed on communities without their having any say whatsoever; and it would stop the nonsense of viable, profitable businesses being closed. The damage that such changes of use do to the local economy is borne out by the fact that twice as much of the money spent in a pub is recycled into the local community as of the money spent in a supermarket.
I finish with a word of warning to the Minister, who is a big friend of pubs, and who is passionate about them and about other small shops, business and services. The Government have announced that they will introduce a statutory code of conduct for the giant leased pub companies to stop them overcharging their lessees year after year—a scandal that has closed and is closing many otherwise viable, wanted businesses. That is good news, but already some of the leased pub companies have threatened to start mass disposals of their pubs. Around the country, pubs are being bought up by small breweries, micro-breweries and local entrepreneurs and by communities, some of whom are using the community right to buy. Unless the DCLG takes responsibility and changes use class orders and general permitted development rights, the leased pub companies will be able to dispose of such pubs for other use, as they have threatened to do, without giving the community a say in the matter. Joined-up thinking is required, and my right hon. Friend the Minister and his colleagues must take that responsibility seriously and deal with the problem. It is a simple matter for them to ensure that, where such pubs are viable and wanted and where a realistic offer is made for them, they are sold as pubs, so that they can continue to be an important part—indeed, the mainstay—of our high streets and our communities up and down the country.
Roberta Blackman-Woods (City of Durham) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Dobbin. I begin by congratulating the hon. Member for Weston-super-Mare (John Penrose) on securing the debate. It is an extremely important debate, and because the Minister and I serve beautiful city constituencies—in his case Bath and in my case Durham—it is relevant to both of us. The hon. Member for Weston-super-Mare made two important points that I agreed with and want to emphasise. First, change is coming to the high street and we need to think better how to prepare for and manage it to ensure that the cityscapes that we treasure are not damaged. Secondly, we must recognise that planning is important in shaping places and that it can be positively used for the benefit of our communities. We do not hear that very often; we usually hear that planning is a brake on growth and that it is damaging. I was glad that the hon. Gentleman used Milton Keynes as an example of what positive planning can achieve. We might not see the outcome of planning decisions for several years, but 30 years on we can see that Milton Keynes has benefited from careful planning.
Several hon. Members made important points about their communities and protecting their high streets. I will, rather cheekily, pick up a point that the hon. Member for Cleethorpes (Martin Vickers) made strongly. He said that localism was important, and he was worried that some of the changes that the Government are making might damage localism and take decisions away from local planning authorities. The Opposition objected to the changes contained in the Growth and Infrastructure Bill, which will transfer many decisions to the Planning Inspectorate. It is a pity that the hon. Gentleman’s colleagues did not join us when we opposed the Government’s plans.
My right hon. Friend the Member for Tottenham (Mr Lammy) and the hon. Member for Leeds North West (Greg Mulholland) made powerful speeches about use class orders, which picked up on the point made by the hon. Member for Weston-super-Mare. They made important points about the need for local people and local authorities to have more control over use class orders, which I will discuss in more detail later. The Government have just produced a school food review report that suggests that fast food outlets should not be available near schools. It will be interesting to know whether the Minister has had any conversations with his colleagues in the Department for Education about how that could be implemented.
More generally, we heard a plea for more flexibility to be given to local authorities on how use class orders are used, which I have been advocating for a long time. I see no reason why use class orders cannot simply be given to local authorities to use as they want. Local authorities represent their communities and know about what use classes should be available, how they should be used and how to rescind one and to put another in its place. If the Minister wants to extend his localism credentials, this is something I could give him on a plate: take use class orders away, look at them and give them to local authorities. That would be a much more sensible way forward.
To return to the comments made by the hon. Gentleman, he referred to how local councils can already protect views through conservation areas, under the Civic Amenities Act 1967, which established the right of local authorities to designate a conservation area. The policy has been fairly successful, because we now have 8,000 conservation areas throughout England. Under the Act, conservation areas are defined as
“areas of special architectural or historic interest, the character or appearance of which it is desirable to preserve or enhance”.
That can and often does in practice include views, so although I agree with the hon. Gentleman entirely, I am not exactly sure what additional protection he thinks is needed for particular views.
John Penrose
I was thinking either of the much larger example of an entire skyline, which would be hard to preserve, protect or allow to alter in a particular way through the conservation area designation, or of the very narrow, specific example of a particular line of sight, perhaps on a small scale, down a particular street with something that happens to be framed at the end of it, which would be a criminal waste to allow to be got rid of but which is too small and too specific for the conservation area legislation to work.
Roberta Blackman-Woods
I thank the hon. Gentleman for that helpful clarification. Local authorities can already designate and protect views through their local plans, however, which leads me to wonder whether we need additional regulations.
My right hon. Friend the Member for Tottenham talked about what is already happening in London; the Greater London authority plan includes some good examples of whole views being protected, in particular urban landscapes that are thought to define London. The plan not only protects the views but gives more detailed guidance about what should happen to protect them. That facility is available to all local authorities through their local plans, but I suspect that they are not all using it as well as they might be. Perhaps this afternoon we should be putting a big plea out to local authorities to ask them, when they are putting their local plans together, really to think about views—outside a particular street or part of it—that might be important to the local community or area and that need to be protected. They should outline what the views are and put additional guidance in place. They could all learn easily from the London experience, where that seems to have been done rather well.
The hon. Member for Weston-super-Mare mentioned that UNESCO also protects views, to and from world heritage sites, one of which I have in my constituency. He made a strong point and a lot more could be done by local authorities to ensure that such views are protected. From time to time councils have to be reminded, when a development application appears before them, that they have to think about the world heritage site. Those three elements already in existence go a long way to giving the protection that the hon. Gentleman was discussing.
I want to pick up on one other point made by the hon. Gentleman, which was about using additional regulations to pre-empt where developers might want to develop. That is an extremely difficult thing to do: always being one stage ahead of developers is probably impossible. Each case is best dealt with on its merits, bearing in mind the protections that can already be drawn down by local authorities. I am absolutely not convinced that more regulation is needed in this instance.
A lot of hon. Members this afternoon have raised issues about the high street, and it is worth picking up on a few points. Some of the figures about use of the high street are interesting: high streets with strong conservation areas are doing better. For example, Cambridge is doing well in protecting its high street and the volume of commerce taking place in retail there. That tells us something about how communities are starting to think about their own high streets and how tourists are thinking about them, because a high street is a lot more than simply a retail experience. The hon. Gentleman brought out this point well: we sometimes get bogged down in thinking about our high streets only in terms of retail. It is tempting to do that because we get regular figures about what is happening to the retail sector, which is important because it is an indicator of the health of our high streets, so we need to take the figures seriously. But what they tell us is that we need to diversify the high street and to think a lot more about community and housing use. This strays on to the point made by the hon. Member for Leeds North West about the importance of pubs. They are part of the leisure offer that is important on our high streets, but which we are very much in danger of losing.
Again, use class orders are important, because we need councils to have the flexibility to decide whether the retail space that might not be fully occupied can instead be office, leisure or housing use, and to be able to change it back. One of the problems with use class orders is that it is sometimes difficult constantly to change use, but we need that degree of flexibility. I will be interested to hear what the Minister says.
No one mentioned how complicated it is at the moment for local authorities to draw down money to support regeneration of the high street, outside of Portas. On that Portas money, even if local authorities got £100,000, we know that only about 12% of the money has been drawn down so far. There are lots of different tiny funding pots, and we perhaps need to bring them together into a more coherent regeneration framework, so that local authorities can find a straightforward way to develop their high streets in line with the local community opinion of what should be provided. I am probably telling the Minister that Portas is good as far as it goes, but it is not the whole answer.
The hon. Member for Weston-super-Mare has done us a great service in bringing forward this subject for debate this afternoon. We need to think about how to protect what we value in the high streets, how to encourage them to develop and, in the current climate and from now on, to diversify. We need additional tools to do that, but I am not sure that they include additional planning regulation.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
It is a pleasure, Mr Dobbin, to serve under your chairmanship and to participate in this debate, which has been led by my hon. Friend the Member for Weston-super-Mare (John Penrose). I join the right hon. Member for Tottenham (Mr Lammy) in praising my hon. Friend for his work when he was Minister for Tourism and Heritage. He was also the gambling Minister and, as the right hon. Gentleman said, some issues remain outstanding from my hon. Friend’s era. Before responding to my hon. Friend and the hon. Member for City of Durham (Roberta Blackman-Woods)—I will echo many of her comments—I will refer briefly to some of the other excellent and helpful contributions.
My hon. Friend the Member for Cleethorpes (Martin Vickers) asked whether planning was a help or a hindrance, and reminded us that he had five years’ experience of being in charge of planning. He worried about the speed of operation on some occasions and then chided the Government for putting pressure on local planning authorities if they did not act quickly. There was a slight inconsistency in his comments, but he clearly cares as passionately as I do about the importance of local decision making, and I suspect that he will be pleased to see the amendments that have been tabled to the Growth and Infrastructure Bill in another place to deal with the concern that he expressed. We are looking for ways of speeding up some matters, not least, for example, current consultation on the planning application procedure, and I think that will be welcomed by him and other hon. Members here today.
On issues relating to change of use from commercial to residential and some other permitted development rights, one of the consultations has now finished and the Government are considering their reaction to it. My hon. Friend the Member for Leeds North West (Greg Mulholland) referred to some other aspects of permitted development and I draw his attention to the fact that consultation is still open—
Mr Foster
Before we had our short break, I was referring to the excellent contribution from my hon. Friend the Member for Cleethorpes. I look forward to his dusting off that old policy document from the Conservative party and making it available to my Department. We will look at the various proposals for seaside resorts with great interest.
The right hon. Member for Tottenham rightly praised my hon. Friend the Member for Weston-super-Mare for his work as a former Minister. I pointed out that my hon. Friend also had a remit in response to gambling. One of the things that he was able to do towards the end of his period of office as the Minister with responsibility for gambling was to help ensure that the Government could announce a review of the concerns that the right hon. Member for Tottenham raised in respect of what he called bookmakers. That increasingly seems to be a misnomer as more and more of them seem to do their business from fixed-odds betting terminals, about which the right hon. Gentleman joined with me and hon. Members of all parties in expressing concern. I am delighted that the review that he rightly said is needed is now under way.
I congratulate my hon. Friend the Member for Leeds North West on his excellent work as a member and chairman of the save the pub group. I am delighted that he was full of praise for the work that the Government have done in response to the concerns expressed about tied pubs and so on. I am grateful to him for praising the Government on the national planning policy framework and—notwithstanding the comments made earlier by my hon. Friend the Member for Cleethorpes—the work that we are doing on the Portas pilots and the town team partners, of which Otley, as he reminded us, is one and is benefiting from that scheme. He also rightly pointed out that not all regulation is bad. I have made that point on several occasions. Those who seek to deregulate merely for the sake of deregulation have missed the point. Although the Government are seeking to remove unnecessary red tape, we are also mindful that some regulations are critically important.
I join my hon. Friend the Member for Leeds North West in praising areas such as Cambridge that have introduced supplementary planning guidance, among other things, to protect pubs in their immediate neighbourhood. I repeat what I said to him earlier: consultation on some of the matters that he raised closes on 7 March, so any right hon. and hon. Members who wish to contribute to the discussions are welcome to do so.
The hon. Member for City of Durham saved me a lot of effort. For once, even though we are on opposite sides of the Chamber, I have great sympathy with much of what she said in response to the contribution made by my hon. Friend the Member for Weston-super-Mare in this excellent debate.
My hon. Friend began by reminding us that we face various challenges. He said that on the one hand we need to get more houses built, but on the other hand there are pressures in achieving that without encroaching on the green belt. He also pointed out what happens in our high streets and the dangers that have existed, particularly in relation to out-of-town supermarkets and developments. He rightly praised a former Member of the House, Mr Gummer, for his work. I remind my hon. Friend that we have gone further in the national planning policy framework, which has now established a clear sequential test. Before out-of-town developments can take place, all the various stages of that testing procedure must be gone through.
My hon. Friend said, with great perspicacity, that change is always necessary to meet changing demand. He was not putting his head in the sand. He accepted that change has to take place. It has to take place in the high street in response to, for example, online shopping. My hon. Friend the Member for Cleethorpes gave the example of a street in Grimsby where the challenge of changing circumstances has not been picked up and has had pretty disastrous consequences.
My hon. Friend the Member for Weston-super-Mare clearly accepts that we have to get a balance between conservation, design and urban development. He pressed me in much the same way as he did in his excellent article in The Daily Telegraph on 2 January, when he wrote that
“individual buildings are preserved by listing, but we need a similar set of rules to ensure the best city and townscapes are saved too.”
Like the hon. Member for City of Durham, I must say to my hon. Friend that we already have in place measures that will deliver what he seeks to achieve. Many local councils are already taking innovative planning approaches to safeguarding urban views and are developing strategies to support their high streets. There are many different ways in which that is being done, but it is predominantly through local plans and the supporting evidence that goes alongside them.
Others have adopted sensitive approaches to heritage conservation—I know my hon. Friend cares passionately about that—urban design, designated conservation areas and so on. For example, South Kesteven council has undertaken a townscape character assessment of Grantham, which considers the town’s evolution and character to guide decisions on new development, achieving what I think he seeks. The document assesses the design of the buildings and the relationship between them as a contribution to the distinctiveness of the town. It details key views to landmark buildings and heritage assets, which are issues of material consideration in various development proposals.
The right hon. Member for Tottenham referred to examples in London, where he thinks we have got it about right. The supplementary planning guidance in the London plan sets out protected panoramas, linear views, river prospects and townscape views that contribute to the character of the city. Other parts of the country have adopted a similar approach. The right hon. Gentleman praised my constituency of Bath. Bath and North East Somerset council has already done something along the lines that he seeks. Burnley, Hampshire, Preston and the Royal Borough of Windsor and Maidenhead are other examples.
The hon. Member for City of Durham made a very important point. Powers exist, but perhaps not enough councils are aware of the opportunities to achieve the sort of thing that my hon. Friend the Member for Weston-super-Mare wants. I will certainly talk to my ministerial colleagues about her suggestion that we should do more to promote the powers that already exist, and perhaps share with councils examples of good practice that could achieve much of what my hon. Friend wants. I am grateful to the hon. Lady for that suggestion. We will do what we can to take it forward.
My hon. Friend raised issues to do with high streets. He suggested that we look at the parapet above the shop with its often rather garish colouring, where, very often, we see empty spaces. He will be delighted to know that I recently announced a challenge to the Portas pilot and to the town teams to make proposals for the large sum of money that I have earmarked to bring back into use, for residential purposes, the spaces above shops. I entirely accept that there are difficulties, which he alluded to, including access to the space above shops and security, which is why we have asked the many teams to consider innovative solutions. We are on to the issue; we are providing some money and help from the Department, and we have many people looking for bright ideas. I know that he wants me to go even taller, which I will come to.
John Penrose
I may be pre-empting the Minister’s next remark, but I urge him to think a little more radically. I welcome the measures and steps that he describes as having already been taken. In some cases, because buildings were designed for a different purpose 100 or 150 years ago, it is not possible to retrofit them in a way that delivers the additional potential uses as accommodation, offices or whatever. Therefore, the only way to get them to work, even without public money, is to allow enough commercial headroom for entire buildings to be redeveloped.
Mr Foster
As my hon. Friend said, he has forestalled me. In the few minutes I have left, I have headroom to refer to that issue. He made it clear that he does not seek new regulation. He talked about the possibilities for townscapes and views. They already exist but they could be promoted further. He suggested that having done that, we might also increase the density of all sorts of developments and go higher above shops, if necessary with demolition.
I assure my hon. Friend that I will discuss his various proposals with the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Grantham and Stamford (Nick Boles), who is the Minister with responsibility for planning. However, may I say to my hon. Friend that what he seeks is already possible within existing legislation and the current planning rules? It is up to a local authority that wants the type of development he proposes to ensure that such a possibility exists within its local plan, and individual planning proposals can then be introduced. However although it is possible to do that within current planning rules, I will discuss the issue further with the planning Minister, and we will contact my hon. Friend to arrange more discussions with him.
John Penrose
The Minister is being very generous in giving way. I welcome his remarks, but is he indeed correct that such powers exist? We think that some powers to protect urban views may already exist, but are not being properly used, so will he undertake to disseminate that information more widely? Clearly, although the powers exist, they are not being widely used and might benefit from being more thoroughly understood.
Mr Foster
I am more than happy to assure my hon. Friend that we will look at the exact legislation with respect to his specific points, and if it is necessary to disseminate that information more widely, we certainly will, just as we will for legislation on streetscapes.
I know that hon. Members wish to get the next debate under way, but may I comment on the Portas pilots? I am grateful for the widespread support for the work done, notwithstanding the concerns expressed by my hon. Friend the Member for Cleethorpes. Some very exciting proposals are emerging from the Portas pilots and town teams considering various issues. We intend to disseminate examples of good practice as widely as possible to help develop those who are not one of the 300-odd schemes with which we are directly engaged. I am delighted that high streets and town centres can benefit from those very exciting proposals.
I want to comment on my hon. Friend the Member for Leeds North West, who is now back in the Chamber. In his absence, I praised him for his work on the all-party save the pub group. I absolutely assure him that we are very alert to his concerns. As he knows—he referred to this—the right to bid gives a community the opportunity to register a facility, such as a community pub, as a community asset, which is one way to provide some protection. In my constituency, as he knows from tweets I sent out only the other day, I recently got a pub to look at being listed as a community pub. That is one option, but I entirely accept the issues he raised about whether we need changes to planning use class orders. I assure him that the Government are considering that.
Finally, I am enormously grateful to my hon. Friend the Member for Weston-super-Mare. I know that he feels strongly and passionately about this issue, on which he has even put pen to paper in national newspapers. I think I can assure him that in most areas where he wants developments, opportunities already exist, and that in most places where he wants protections, they already exist. I assure him that we will look at the issues raised in the debate. We will at least help to disseminate the information available more widely, and if changes are needed, we will consider them.
Israel/Palestinian Authority
(11 years, 3 months ago)
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Gordon Henderson (Sittingbourne and Sheppey) (Con)
May I say how delightful it is to have you chair this debate, Mr Dobbin? I am pleased to have secured this half-hour debate, because it gives me an opportunity to raise the issue of hate incitement against Israel and the west by the Palestinian Authority.
The year 2013 has been identified as the year of peace for Israelis, Palestinians and all the people of the region, but Israelis and Palestinians in particular face many difficulties if they are to secure peace. Overcoming those difficulties will require determination and willingness to compromise. For Israel’s part, they will need to readopt the land for peace doctrine that in the past has secured landmark peace agreements with its neighbours.
The Palestinians also have an important role to play, and I want to use this debate to raise one thing that they ought to do. It is clear that a culture of hate has wormed its way into the very fibre of Palestinian society. Incitement to hate is pervasive in Palestinian school textbooks, on television programmes and at cultural and sporting events. Palestinians have been consistently and unremittingly taught to hate Jews, Israel and the west.
Mr Lee Scott (Ilford North) (Con)
I congratulate my hon. Friend on securing this debate. Does he agree that as the children of a future for Palestinians and Israelis alike, teaching them to love rather than hate each other and their doctrine can be the only right way forward?
Gordon Henderson
I agree with my hon. Friend, who makes a perfectly sensible point. I shall say something along those lines later.
Incitement has been done with very little condemnation by the international community, including, I have to say, the United Kingdom. My contention is that that activity fundamentally harms the peace process and any hope for a two-state solution. Ignoring incitement and hate education because we do not want to rock the boat will not help us along the path to peace, and it does not provide the steady foundations needed for peaceful coexistence.
Incitement takes many forms. It ranges from the denial of Israel’s right to exist to the abhorrent glorification of violence and infamous Palestinian terrorists. PA officials readily speak to western audiences about their determination to reach peace with Israel, but a very different story is presented to their domestic audience. Official Palestinian Authority media regularly paint a picture of a world in which Israel does not exist. In its simplest visual form, that is expressed through the distribution of maps depicting geographic Israel replaced by the “State of Palestine”.
During the Palestinian application for statehood at the United Nations in September 2011, the PA’s official TV channel broadcast a map that depicted all of modern Israel and the Palestinian territories wrapped in the Palestinian flag with a key through it. Therefore, at a time when President Abbas was telling the UN that he sought two states living side by side, residents on the west bank were being shown a map carrying an unmistakeable message of Palestinian sovereignty over the whole area. In addition to denying Israel’s existence, official Palestinian Authority media vilifies and demonises Israel and the Jewish people. Last summer, a PA TV broadcast showed a painting depicting Israel as an ogre with a Star of David skull cap that impales and eats Palestinian children in Gaza.
Just this month, PA TV broadcast a music video honouring a number of convicted terrorists. The song featured excerpts of a speech by President Abbas, stating, “We will not rest until all prisoners are freed and the prisons are emptied.” One of the terrorists who was honoured in that video was Ibrahim Hamid, who is serving 54 life sentences in Israel for planning a series of suicide bombings that killed 46 Israelis during the second intifada.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I congratulate the hon. Gentleman on securing this important debate. The matters that he brings to the attention of the House are truly shocking and put a question mark over the status of the Palestinian Authority as a partner for peace. Would it be good for the Government to direct more of their funding to support genuine co-existence projects that bring peace between Palestinians and Israelis on the basis of two states?
Gordon Henderson
I agree with the hon. Lady. Teaching peace will always be better than teaching hatred. We must encourage the Government to put money into such a venture. I will come on to how the money is currently being spent by the British Government.
Andrew Percy (Brigg and Goole) (Con)
I congratulate my hon. Friend on securing this debate. In addition to the hon. Lady’s suggestions, we must also ensure that we expose those terrible examples of output on PA TV. The one that my hon. Friend mentioned a few moments ago was changed after that exposure. The key to bringing about such change is ensuring that British Government officials and representatives in the region make official protests about every single example of such output on TV.
Jim Dobbin (in the Chair)
Order. I remind Members that we need to leave adequate time for the Minister to reply.
Gordon Henderson
Thank you, Mr Dobbin. I will do my best to speed up. I agree with my hon. Friend, and I hope the Government will take that lesson on board. I have brought with me some examples that I will be passing over to the Minister. In the past, there has perhaps been a denial of such things, but when the examples are seen in black and white, they are hard to deny.
As a direct result of PA-endorsed incitement, dying for the sake of Palestine remains an ideal that is an accepted part of Palestinian discord. Shockingly, the official Facebook page of Fatah in the Lebanon recently posted a photo of a mother dressing her young son with an explosive suicide belt and encouraging him to blow up the sons of Zion.
Dr Matthew Offord (Hendon) (Con)
Fatah’s Facebook page routinely publishes pictures and slogans venerating arms and violence against Israel. In some pictures, young children are even shown carrying rifles. Does my hon. Friend agree that such glorification of violence during the peace process plays into the hands of the extremists and makes the idea of a two-state solution impossible?
Gordon Henderson
I agree with my hon. Friend. It is shameful that such incitement to hatred has been denied by too many people. I appreciate the Minister’s efforts in recent weeks to further the matter in the Foreign Office, but what discussions has he had with his colleagues in east Jerusalem on the issue of incitement and hate education and how will the Foreign Office play a part in ending it?
The Palestinian school textbooks have included the same inflammatory messages that I have mentioned. I read with great interest a recent report into this matter by the Council of Religious Institutions of the Holy Land. The US-funded report concluded that both Palestinian and Israeli textbooks could do more peacefully to portray the other side. The findings once again highlighted the fact that both sides in the conflict need to prepare their populations for a peaceful future. The report also shows the need for those responsible for Israeli ultra-Orthodox education to re-examine the material that they are putting out.
However, there are shortcomings in the report about which any reasonable and unbiased person should have concerns. Those shortcomings could explain why a number of the study’s scientific advisory panel and leading stakeholders have refused to endorse the report. For instance, the report fails to emphasise that the ultra-Orthodox school system, which makes up only 8% of the Israeli student body, is not Government-regulated. It does not represent an official Israeli line and should not be seen on a par with the PA-authorised textbooks. The report’s other major failure is that it justifies the levels of incitement found in Palestinian textbooks by asserting that perhaps it is because the Palestinians are at an earlier stage of nation building, are the weaker of the two adversaries and have suffered more hardships in day-to-day life. We must not be distracted on the path to seeking peace by that sort of moral relativism.
Consistent with the Palestinian Authority’s policy of glorifying terrorists, the PA financially reward terrorism by paying a monthly salary to Palestinian prisoners in Israeli prisons convicted of terror offences. It pays a monthly salary of anything between £240 and £2,100 to prisoners serving multiple life sentences for involvement and facilitation of deadly acts of terrorism, including suicide bombings. The longer the time in prison, the higher the salary. To put it crudely, the more horrific the terrorist activity and the more Israelis who are killed, the larger the salary. In total, the PA is paying salaries totalling approximately £3 million each month to 5,500 Palestinian terrorists in Israeli prisons.
I was shocked to learn that those payments are part funded by the British taxpayer. Indeed, the payments come from the PA’s general budget, into which the UK contributes more than £30 million each year. I am unaware of any known safeguards in place preventing the use of UK aid to that end. Previous attempts by my parliamentary colleagues from all parts of the House to raise that issue have been met with apparent denial and a declaration that the payments are simply “social welfare payments to the families of prisoners.”
I wholeheartedly believe that dependent spouses or children should not be held responsible for the crimes of family members, and I doubt that any of my colleagues here today would disagree with me. None the less, PA legislation repeatedly refers to “salaries”—or ratib in Arabic—and not “social assistance” or “welfare payments”. Crucially, that legislation stipulates that a prisoner is not obligated to give his salary to his family. Unmarried prisoners also receive the same basic salary as those who are married and have children. Finally, a small stipend for wives and children paid to prisoners is received separately from the standard salaries.
Guto Bebb (Aberconwy) (Con)
I congratulate my hon. Friend on securing this debate. As he is aware, numerous questions have been asked of our Government in relation to those payments. Time and again, we have been told that they are salaries and not social assistance. However, in December 2012, a Palestinian Authority statement, which was released through its official news service, explicitly stated otherwise. That statement, which is made in the name of the Palestinian Minister responsible for prisoners’ affairs, Issa Karake, announced that those payments were salaries and not social assistance. It went further by stating that any talk of social assistance was incorrect rumour. How can my hon. Friend square that issue with the denials made by our own Government?
Gordon Henderson
I cannot—I have to ask my hon. Friend to put his question to the Government, because I cannot answer for them. However, since these payments are not explicitly given to those in need, it seems logical to assume that they are given as a form of reward for prisoners’ terror acts; to me, that is quite logical.
As I have shown today, those are the very same acts of terror that are all too frequently praised by the Palestinian Authority. I have no doubt that the Minister will have been in contact with his colleagues at the Department for International Development about this issue. However, can he tell me what discussions he has had with his Palestinian and Israeli counterparts on this issue? Furthermore, what assessment has he made of this very serious matter?
In conclusion, the PA’s failure to deliver on their commitment to end incitement explicitly undermines the principles and conditions on which the peace process is built. That incitement highlights the extent to which Palestinian society has not publicly begun to absorb the changes needed for a practical and genuinely peaceful co-existence with Israel. I contend that incitement is a form of abuse of Palestinian children. We must remember that those children are the next generation of peacemakers and state-builders. Simply put, no peace agreement will be able to guarantee peace in the medium to long term if a generation of Palestinians is growing up indoctrinated to hate Israel, Jews and the west.
I am reassured that this is an issue that the Government are starting to regard with increased seriousness. Indeed, the Prime Minister made his position clear at a United Jewish Israel Appeal dinner late last year, when he said:
“Britain will never support anyone who sponsors a football tournament named after a suicide bomber who killed 20 Israelis in a restaurant. We will not tolerate incitement to terrorism.”
The Government rightly hold Israel to account when Israeli policies stand in the way of peace in the region. By the same reasoning, it is important that they adopt a similar policy with regard to the Palestinians. The Palestinians will take any British silence as a green light to continue this practice. We must insist, as a policy, that the PA end the indoctrination of its youth with views that jeopardise a future of peaceful co-existence.
To that end, I ask the Minister to give me an assurance that the Government will make, and will continue to make, representations to the PA that incitement against Israel is unacceptable and in contravention of the Oslo agreement. Widespread PA-endorsed incitement has gone unchallenged for too long. The PA are clearly not making any effort to educate their people in peace and co-existence with Israel. As we move forward into this “year of peace”, the need to abandon all messages of incitement is more important than ever.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
I echo the pleasure of other Members in serving under your chairmanship, Mr Dobbin; as long-established friends, it is particularly good to start in such a way.
My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) has secured an important and timely debate, and I appreciate his courtesy in sending me a copy of his speech earlier this afternoon. I welcome this opportunity to reiterate the Government’s position on incitement. We oppose, in all circumstances, the advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence. We deplore incitement on either side of the Israeli-Palestinian conflict, including any comments that could stir up hatred and prejudice in a region that, perhaps more than any other, needs a culture of peace and mutual respect, as my hon. Friend and other hon. Members made clear.
We do not hesitate to raise instances of incitement with both the Palestinian Authority and Israel whenever we feel that it is appropriate to do so. I am in regular contact with our colleagues in the consulate general in Jerusalem, and in answer to my hon. Friend’s questions, I can say that we have a regular dialogue with both the PA and the Government of Israel, in which we reiterate the need for both sides to prepare their populations for peaceful co-existence, and we take some of the specific issues that he has raised directly to Palestinian sources through our colleagues in Jerusalem.
By opening my response in this way, I emphasise my concern, which I know the House understands, about incitement, but I will not provide a commentary on all such allegations, not all of which we can verify, and nor can the UK be held responsible for them. As I will make clear, and as my hon. Friend made clear in his remarks, it is not possible to deal with this in isolation from the backdrop of the ongoing issues between the Palestinians and Israel that have beset the region for too long.
I do not fully share the bleakness of the rhetoric with which my hon. Friend began his remarks, particularly his comment that Palestinians have been consistently and unremittingly taught to hate Jews, Israel and the west. I genuinely find that far too wide an expression to cover all Palestinians everywhere in the region. I also feel that to neglect any sense of any activity that may have been perpetrated by Israelis during the occupation as any part of popular anger against Israel misses an important part of the context. That is not to minimise the damage done by incitement, but not to mention that and not to feel that it is part of the context is, in my view, simply wrong.
On the PA’s leadership, it is important to stress that we consider that the track record of President Abbas and Prime Minister Fayyad shows their genuine commitment to non-violence and a negotiated two-state solution. To quote the words of Israeli President Shimon Peres last April:
“President Abbas is constant in his announced position—for peace, against terror, and for a two-state solution. I think we have never had a wider basis to conclude peace than under his leadership.”
The Israeli Government have repeatedly praised the strength of the co-operation between the Palestinian and Israeli security forces in improving security and preventing violence, including violence against Israel. It is for these reasons that we firmly believe that the PA, under President Abbas and Prime Minister Fayyad, are indeed firm partners for peace.
Andrew Percy
I am a little alarmed at that statement by the Minister, because there are many examples—example after example, indeed—of senior Palestinian officials at the very top levels attending sporting competitions named in honour of people who have murdered innocent Israelis, or of their attending ceremonies to rename squares and streets after people who have murdered innocent Israelis. So while they may say one thing to the west, they may be saying something slightly different in Arabic.
Alistair Burt
The Prime Minister was clear in his denunciation of those who set up sporting tournaments or who support activities named in memory of the so-called martyrs and the suicide bombers. Of course, that is the clear position of the UK Government.
Again, however, to neglect the context in which people see the position of prisoners and those who have been engaged in activities against Israel is to fail to understand the context of the issues that we are discussing. It does not make the glorification right—it is not right—but not to understand how that operates in the occupied territories is to miss something fundamental. To place it all in terms of the rhetoric and not to understand the wider context will not help us to get to where we need to be, in our encouragement for all engaged in this issue to find a solution, which—as my hon. Friend made clear—has prime importance this year in particular.
Gordon Henderson
May I make it clear that I understand the context in which the incitement takes place?
Gordon Henderson
I used this debate today particularly to refer to that incitement. I mentioned the fact that Israelis are not blameless in this situation—I understand that—but what is wrong, under any circumstances whatsoever, is some of the practices that have taken place to incite hatred against Israel and Jews, and there is no condoning of those practices whatsoever.
Alistair Burt
I am grateful to my hon. Friend for his clarification, and given time—in the next eight minutes—I am happy to make our position even clearer. However, he did not spell out the context in his speech as clearly as he has just done, and that is vital. We will condemn the incitement and the naming of events after the so-called martyrs, but not to understand the context is to miss something, and I appreciate what he has just said.
Alistair Burt
This is perhaps the last intervention that I will take, and then I must deal with some of the issues that have been raised.
Mr Hollobone
I appreciate that the Minister condemns the glorification of violence, but the point is that—in effect—that glorification is being part-funded by the UK taxpayer, because British taxpayers are paying £30 million a year to the general budget of the Palestinian Authority, and the state TV and radio broadcaster is pouring out some of this hatred, as shown in some of the evidence that the Minister has heard today. Unless the UK Government get cross about that incitement, it will not stop.
Alistair Burt
The Government’s memorandum of understanding with the Palestinian Authority makes it clear that our aid to the PA is intended to contribute towards a peaceful and prosperous Palestinian state and society, by improving fiscal sustainability, improving public satisfaction and lowering fiduciary risk. The memorandum of understanding makes it clear that all funds must be used to deliver against those agreed outcomes.
We engage closely with the PA to ensure our money has maximum effect on achieving the intended goals of the project. We have a number of safeguards in place to ensure that our money is spent as intended—we keep them under constant review—including safeguards to ensure that UK money does not support Hamas or other terrorist organisations, either directly or indirectly.
I am well aware of the allegations surrounding PA financing to Palestinian prisoners, including to those convicted of acts of terrorism. The PA Prime Minister has made it clear, both in public and to the UK Government, that payments to families are intended to sustain families whose primary breadwinner has been imprisoned, while payments to prisoners in Israeli jails are made at the request of Israeli authorities to meet basic living conditions. We have discussed these issues with the PA at the highest levels in recent months, and continue to encourage the PA to ensure that these payments are more transparent, needs-based and affordable. I assure hon. Members that these discussions are current and ongoing.
Although there are genuine issues with nomenclature and translation, it is still vital to make certain that correct payments are being made, which we believe, up to now, have been appropriate. But it is essential to be clear about this. I note the strength of feeling among hon. Members. I will give an assurance that we will continue to press the PA in relation to this issue, and I expect colleagues to raise it in due course.
The issue of textbooks comes up on occasion. There was a recent US-funded study into Palestinian and Israeli textbooks. Allegations of methodological flaws have been raised. I am not sure that they are sufficient to deal with the underlying results of the study, which we have only just been able to glance at. Our sense is that it is in line with previous studies, which have found that incitement and extreme negative characterisations are very rare in both Israeli and Palestinian textbooks. However, also in line with previous studies, the report found a profound need for textbooks on both the Israeli and Palestinian sides to do more to promote a positive portrayal of each other, reflecting the principles of co- existence, tolerance, justice and human dignity. We will continue to engage both the Palestinian Authority and Israeli authorities in relation to the background of that report.
My hon. Friend has a number of issues in his back pocket. I had a briefing on some of the material some weeks ago, through Palestinian Media Watch. There are some tough examples. I think that I was expected to be shocked, but I was not. Hon. Members should not mistake me. Some material was shocking and offensive. It has no place in any political or historical discourse in which any credible democratic authority has a part. But my deep and genuine worry is that this incitement is not simply a cause of separation between peoples and hatred; I am afraid that it is a symptom of it.
My overwhelming feeling in looking at some issues, particularly in relation to children, was sadness that those on both sides of the divide who wish to emphasise difference and separateness are steadily winning that battle. One example, which my hon. Friend may be aware of, is a little girl of about seven years of age reciting with pride a poem about a suicide bomber, or so-called martyr. If we see a child reciting a poem about such a thing, instead of what ought to be filling her mind, how do we react? Anger towards her is clearly not appropriate. Whoever’s fault it is, it is not hers. I felt sadness for her, but anger that those who possess the ability to take down some of the barriers between Palestinians and Israelis simply do not do so, but continue actions that perpetuate the hatred.
The Palestinians should not praise the so-called martyrs and the suicide bombers, and we will rightly condemn this, but progress in the middle east peace process, perhaps, will play an even more effective part in ensuring that what we all wish to see—the growing together of people, without these barriers—comes to pass. Israel must examine its own actions in the occupied territories, to ensure that it does not allow an opportunity to fuel popular anger about Israel, which has not come about solely because of exposure to the media, but by the experiences of occupation of too many in those territories. To neglect that is to miss something of considerable importance.
Accordingly, we believe that the only way to combat violence and incitement is to reach a comprehensive two-state solution to the Israeli-Palestinian conflict. We are urgently working with both the US and the European Union to start the peace process. This was a major subject for discussion in talks between my right hon. Friend the Foreign Secretary and Secretary of State Kerry yesterday in London. That is the most important way forward. Incitement on either side of the Israeli-Palestinian conflict is unacceptable and worthy of the condemnation of the House. If we do not get progress in 2013 on the middle east peace process, the context in which incitement and violence takes root will not be truly dealt with. I urge all hon. Members to focus the same determination on that issue as on their rightful condemnation of incitement where they see it.
Communications: Social Media
(11 years, 3 months ago)
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Steve Rotheram (Liverpool, Walton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Dobbin.
On 19 December 2012, the Director of Public Prosecutions, Keir Starmer, issued interim guidelines on prosecuting cases involving communications sent via social media. It was a welcome move in the right direction and I hope that Parliament and the judiciary will study internet abuse more closely and begin, as I have been urging Ministers to do for some time, to distinguish between the different degrees of online abuse.
As I explained in my Adjournment debate in September last year, trolling first came to my attention following the tragic death of Liverpool teenager, Georgia Varley, in October 2011. Since then, it has become clear that there is no clear-cut definition of trolling. Too often, this is confused with cyber-bullying, cyber-stalking or even child grooming. Trolling is something very different. I would characterise it as something said online that carries online consequences and poses no offline, real-world risk to the individual in receipt of the message. Trolls demonstrate immoral and unethical behaviour and, quite often, as in the case of Georgia, they trade entertainment on the back of an individual’s personal grief. In essence, the victims of trolls suffer psychological, not physical, abuse.
It is a growing problem in British society and one that Parliament and the legal process have been slow to recognise. I want to focus on concerns regarding the advice given to prosecutors, suggesting that messages sent that are of a grossly offensive, indecent, obscene or false nature do not meet the public interest test, inasmuch as they are unlikely to lead to prosecutions. Indeed, Crown Prosecution Service rules state:
“Just because the content expressed in the communication is in bad taste, controversial or unpopular, and may cause offence to individuals or a specific community, this is not in itself sufficient reason to engage the criminal law”.
That should concentrate the minds of parliamentarians. There are rightly concerns because the guidelines fail to articulate exactly what trolling is or identify what kind of people are commonly victims of it; instead, the guidelines attempt to issue a one-size-fits-all solution that is not contextually bound and takes no consideration of personal relationships between the sender, the recipient and/or the subject matter.
The guidelines set out by the DPP that most relate to that issue are referenced in section 127 of the Communications Act 2003. The interim guidelines attempt to make a clear distinction between the different degree of abuse sent via social media, and so instruct prosecutors accordingly. For example, because of the seriousness of the potential offence threatened in a message as outlined in paragraphs 12(1), 12(2) and 12(3), such misdemeanours would be prosecuted robustly using, it has to be said, mainly legislation designed for offline offences.
We are advised that offences deemed to have been committed in accordance with paragraph 12(4), which are likely to be grossly offensive, indecent, obscene, menacing or false, are unlikely to lead to a prosecution despite the distress, hurt and needless anxiety that such contraventions can cause. That is where the guidelines have failed adequately to address the growing problem. Indeed, the directive highlights one of the major problems for prosecutors, because, in accordance with the guidelines, something said online is not punishable in law in the same way as something said offline. In essence, the guidelines fail to address the increasing grey area of trolling: the difficulty of proving what a troll intends and what a victim interprets the troll’s intention as being. That, coupled with the ease with which anonymity is afforded to social media users, has led to deliberately manipulative and deceptive behaviours with which prosecutors have not been able to get to grips. Put differently, there is a fundamental failure to grasp the intention of trolls: namely, it is their sole purpose on the internet grossly to offend with obscene messages. The DPP’s justification for what I perceive to be leniency is that it is not in the public interest to prosecute such people, which is germane to my critique of the guidelines because, in my opinion, they misinterpret the public interest.
In describing the dilemma, I am aware of a quote from an illustrious former Prime Minister and Merseyside MP, Harold Wilson. He said:
“I doubt whether any Member could provide a legal definition of what he means by the public interest, capable of covering changing national conditions and of being applied to all…cases”.—[Official Report, 22 April 1948; Vol. 449, c. 2035-2036.]
I do not profess to being legally trained, so I would no doubt fail the Wilson test, but as the use of social media increases exponentially, the exposure to such gratuitous activity increases in proportion. It stands to reason, therefore, that the public’s propensity to want to see such crimes dealt with by the criminal justice system will have increased consequently.
Paragraph 39 of the guidelines specifically addresses the question of public interest. The guidelines advise that if a suspect has taken swift action to remove the communication or has expressed genuine remorse, he or she should not face prosecution. I broadly welcome that clarification, but swift removal does not necessarily mean someone has not already been grossly offended. The internet allows individuals to build an audience of tens, hundreds or even thousands within a very short space of time. Under the guidelines, an individual troll could post a series of grossly offensive messages that are seen by many people, but simply removing the posts within a short space of time—and “swift removal” is not defined in the guidelines—makes it hard for action to be taken against that troll.
Similarly, deletion does not take away the possible psychological impact on someone who has already seen the message. Deleting a message from the internet does not delete it from someone’s mind. Additionally, the guidelines advise that if swift and effective action has been taken by others, such as a service provider, to remove the communication in question, or otherwise to block access to it, prosecution is not in the public interest. Surely that would depend on the particular type and frequency of such transgressions. The guidelines are a “get out of jail free” card that offers virtually no deterrent whatsoever. To all intents and purposes, prosecution can be avoided because of the discretion of others, which is something we should not endorse.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate the hon. Gentleman on securing this important debate. I have two points. First, he talks about people retweeting a message on Twitter. Does he agree that, whether someone is the first or the fifty-thousandth person to retweet a message, there should be equal liability? Otherwise some people would not be prosecuted because they retweeted later than others. Does he also agree that it is good to have a review of the guidelines? We need to make the public aware of how defamation laws apply to social media, otherwise people will say, “Well, I did not know.” The message has to go out to the country: “If you commit a crime or breach the defamation law, you will have to face the consequences.” We need new guidance, but, equally, people must be aware of the existing guidelines.
Steve Rotheram
The hon. Gentleman will know that, in law, ignorance is no excuse. So someone could be prosecuted for defamation if they transgress the guidelines. On the first point, I believe that anyone who engages in social media should be aware of the social consequences of posting such tweets or Facebook statuses, as my assistant, who is a regular Facebook user, tells me they are called.
The guidelines advise that if a communication is not intended for a wide audience, nor is that the obvious consequence of sending the communication, the offender should not face prosecution, particularly where the intended audience did not include the victim or target of the communication in question. That is weak and, with respect, misunderstands social media. In the case of an RIP memorial page on Facebook, for example, a troll’s message on a status is not directed solely at the person who authored the status but is also directed at other people who have commented on the status and all those who have visual access to it. In the case of Georgia Varley, more than 4,500 people had liked her page and were therefore able to see a whole host of comments, unfortunately including those posted by trolls. That calls into question how the DPP uses the term “wide audience.” Does a prosecutor have to investigate the computer literacy of a suspect to determine whether they knew the exact figure of the audience in receipt of their post? Additionally, the subject of an RIP memorial page on Facebook would, of course, be deceased. The intended victim of the troll, therefore, is not necessarily the deceased person but the reader of the message.
The guidelines also advise that if the content of a communication does not obviously go beyond what could conceivably be tolerable or acceptable in an open and diverse society that upholds and respects freedom of expression, no prosecution is necessary. Of course I agree with that, but I also believe that greater consideration must be given to enforcing the law when grossly offensive comments have been made. There should be some online equivalent to offences committed offline. Only two people in England have been successfully prosecuted and jailed for sending messages considered to be grossly offensive, indecent, obscene or menacing. Is that really an effective deterrent to the people who are sitting at their computers right now, contemplating sending a disgusting message that might cause gross offence?
I understand that questions have been raised about a person’s right to freedom of speech offline versus their right to freedom of expression online, and I accept that it is about proportionality, but the reality is that anyone who knows anything about trolling will say that the problem is that too much grossly offensive material exists, and it would be far too resource-intensive for the criminal justice system to investigate each and every case.
I agree with paragraph 29 of the guidelines, which suggests that any parliamentary proposal would have to ensure that it did not have
“a chilling effect on free speech”.
We must take into consideration the European Court of Human Rights directive, which protects an individual’s right to speech that is offensive, shocking or disturbing. There is still a debate to be had about whether free speech even applies to the sending of communications via social media, or whether it is classed as freedom of expression, which is not an absolute right.
We are talking about vile, insulting and unacceptable behaviour, such as the comments that I have seen posted on RIP memorial pages on Facebook and that were revealed in a BBC “Panorama” documentary. We are not talking about someone’s legitimate right to express themselves freely. There is a world of difference between a fair comment and a wilful denigration without validity that aims simply to cause as much hurt and offence as possible. If we try to protect trolls’ freedom to offend grossly, we are essentially defending the indefensible.
The guidelines clearly give preference to physical abuse or the risk of physical abuse over psychological abuse. When I met the Crown Prosecution Service, its view was that, given the complexity of online abuse, the police are not afforded enough time to compile the evidence necessary to take a case to court. Often, a maximum of six months is not long enough to gather sufficient proof of the alleged offence for a successful prosecution. In any such investigation, the police must routinely combat fake accounts, fake identities, fake e-mail addresses and issues with mobile communications, such as pay-as-you-go devices. Deception makes it difficult for officers to know where to start when looking for a troll hiding behind the anonymity of a computer.
However, that should not prevent us from trying to rectify the problem and eradicate the grey area that I have described. In fact, as I have said, I believe that granting the police and the CPS additional time to gather evidence for court cases would allow them to obtain evidence that meets the test of what is grossly offensive and even expose patterns of behaviour in some individuals that could lead to criminal prosecution.
As well as additional time to compile evidence, the police need innovative approaches to assist them. For example, the university of Central Lancashire is in the early stages of looking at ways to identify trolls through written word patterns. Dr Claire Hardaker, a lecturer in linguistics and English language at the university, said:
“Everyone has a unique way of writing, of putting certain words together, which is subconscious. Many teenagers say they are able to identify who sent a text to them just by the style of writing and word habits or the way the words are written. Someone might be pretending to be someone else, but by analysing the way they write online, we can determine a probable, age, gender, even a probable region from where they come from.”
Such creative approaches could be invaluable in convicting trolls. However, it is also true to suggest that any such invention will be for nothing until the DPP can adequately provide prosecutors with a definition of trolling that is separate from cyber-bullying, cyber-stalking or grooming and that can be robustly prosecuted where appropriate.
One conclusion that I reached early in my investigations into trolling is that a multi-agency approach is needed to tackle the problem effectively. As I have repeated, I am of the firm belief that the way to deter individuals from sending grossly offensive comments on social media is to change the culture of online users. That in turn requires a clear lead from the judicial system. That does not necessarily mean changing the law, but it does mean changing the application of the law, which the guidelines fail to do. The final part of Harold Wilson’s quote in the Commons is:
“In the last resort this House is, and must be, the authority which decides whether or not any particular practice is in the public interest.”—[Official Report, 22 April 1948; Vol. 449, c. 2037.]
He was, of course, right.
I conclude by thanking hon. Members for taking part and by asking the Solicitor-General the following questions. How does he define internet trolling? Does he agree with the DPP’s assessment that messages sent via social media that are grossly offensive, indecent, obscene or false are unlikely to warrant prosecutions because it is not in the public interest to do so? Does he agree with the approach set out in paragraph 12, which is to assess initially offences that may have been committed using social media? What steps is he taking to work with prosecutors to find new ways to identify trolls, such as the scheme devised by the university of Central Lancashire? Finally, will he consider my request to increase the period of time that the police have to collect their evidence on trolls before a case must be brought before the courts?
The Solicitor-General (Oliver Heald)
It is a great pleasure to serve under your chairmanship, Mr Dobbin. I congratulate the hon. Member for Liverpool, Walton (Steve Rotheram) on securing the debate. It is a topic about which he feels strongly and on which he has led and campaigned for some time. I agree that the sort of behaviour that he has described in this debate and on earlier occasions is completely unacceptable and wrong and must be tackled.
My hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) and the hon. Gentleman made the point that a multi-agency set of different approaches are needed if the issue is to be tackled effectively. My hon. Friend mentioned defamation, and the hon. Gentleman will be aware of some of the constructive work being done with media sites to ensure that comments are taken down quickly and effective action is taken, but much more can be done.
I start by addressing the hon. Gentleman’s four questions. The interim guidelines distinguish a range of different kinds of behaviour in the social media field. I am sure he would agree that a prosecutor would tackle a case where there is a credible threat of violence, for instance, differently from another case. Similarly, if an individual is being targeted and harassed persistently, that is another kind of case. There are offences that can be used to prosecute particular kinds of conduct.
There are cases involving activities such as credible threats or harassment, therefore, and then all the other cases, which can vary widely in what they involve. They do not necessarily have the aggravating factors that would lead a prosecutor to charge someone with a serious indictable offence such as threats to kill, or harassment, but it does not follow that the cases in that other category, which are so different from each other, will not be prosecuted. In fact, the guidance is designed to cover the whole field.
Secondly, the wording of paragraph 12 is subject to public consultation. I will ensure that what the hon. Gentleman said today is conveyed to the Crown Prosecution Service, so that his comments are not only on the record in this place but part of the consultation. The approach taken in the interim guidelines is to distinguish offending of different gravity. A case of trolling, which, broadly speaking, is social media jargon for posting provocative or disruptive messages, can fall into any one of the categories of offending set out in the interim guidelines, depending on the facts.
Thirdly, I thank the hon. Gentleman for drawing attention to work in the academic sphere to develop technology and expertise that might assist the police in the investigation of such offences. The consultation extends to those with an interest in such matters. The police, certainly, are interested in the techniques. Finally, there is the question of whether statutory time limits need to be extended. That needs to be considered in the context of the consultation. The issue is important.
More generally, I provide assurance that the CPS can and does prosecute cases successfully. The CPS reports an increase over recent months in the number of social media cases. Since the publication of the interim guidance on 19 December, the principal legal adviser to the Director of Public Prosecutions agreed that 15 cases should be proceeded with by prosecution. The interim guidelines issued by the DPP have been developed to assist prosecutors. They were also developed in conjunction with the Association of Chief Police Officers. The idea is that points of the sort that the hon. Gentleman made about the academic evidence can be taken into account in the consultation. It is important to remember that the police investigate offences and gather the evidence, and that the guidelines are intended to help them as well.
The public consultation provides an opportunity for practitioners, other interested parties and the general public to contribute to the framing of the final guidance. I hope that the hon. Gentleman agrees that we should urge people with an interest in the issue to take part; I will ensure, as I hope he will, that as many colleagues as possible and those outside this place take the opportunity.
The interim guidelines set out four broad categories for prosecutors to consider when deciding on the appropriate charges. Have there been credible threats of violence? Are there communications that specifically target an individual? Has there been a breach of a court order? Finally, does the communication breach section 1 of the Malicious Communications Act 1988 or section 127 of the Communications Act 2003, which the hon. Gentleman mentioned?
Malicious communication may warrant a far more serious charge being pursued. The interim guidelines are aimed at requiring the prosecutor to consider a range of potential offences that might arise. The hon. Gentleman rightly highlighted the deeply unpleasant practice of trolling in the case of Georgia Varley—a website set up to commemorate that young girl’s life was targeted. Under the interim guidelines, prosecutors are reminded that communications used to threaten and target others can give rise to a range of serious offences. The hon. Gentleman is right: the person who died would not be the target in such circumstances, but the relatives and the people who cared for that individual are targeted, or can be. When a particular person is targeted but a harassment charge is not possible, because of the legal requirements, clearly prosecutors would carefully weigh up whether they can take the case under section 1 of the Malicious Communications Act. It might well be in the public interest to do that.
Similarly, section 127 of the Communications Act provides an important safeguard against the misuse of social media, such as the sending of grossly offensive messages. The wording of the legislation is broad enough to encompass quite a range of behaviour. The guidelines should assist prosecutors in assessing each individual case. We do not want to restrict free speech but, as the hon. Gentleman said, with rights come responsibilities. While recognising important principles of free speech, the interim guidelines do not offer a charter for those who want deliberately and repeatedly to harass and cause distress. It is important to recognise that.
Another point to make to the hon. Gentleman is that paragraph 12.4 of the interim guidelines, the large category of messages, is set out as a particular category. There is then an analysis of the court cases concerning sections 1 and 127—the judges’ comments and how the cases should be looked at in the European context. All that is examined. Finally, there is a paragraph that deals with what the threshold would have to be in order to prosecute cases. It is therefore a more reasoned and complex exercise than might have been thought.
The requirement of prosecutors to prosecute cases of this sort has been demonstrated in cases that the hon. Gentleman is aware of, such as that of Sean Duffy, who was successfully prosecuted and sentenced to 18 weeks’ imprisonment following the death of a young lady. Matthew Woods was prosecuted under section 127 of the Communications Act and sentenced to eight weeks’ imprisonment for posting on a Facebook page grossly offensive messages regarding the missing children, April Jones and Madeleine McCann. It is wrong, however, to think that those would be the only cases involving social media to be charged and brought before the courts with the risk of imprisonment. Such offences are very much the ones that do not involve threats to kill, blackmail allegations or harassment charges. The hon. Gentleman should bear in mind that there are offences involving indictment and Crown court trials, with substantial sentences available, that could be used in appropriate cases.
The consultation runs until 13 March—
Written Ministerial Statements
(11 years, 3 months ago)
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Arctic Star and Bomber Command Clasp
(11 years, 3 months ago)
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The Minister of State, Ministry of Defence (Mr Mark Francois)
I am pleased to be able to provide further details of the new Arctic Star and Bomber Command clasp to the House today. This follows Sir John Holmes’ independent medal review and the announcement by the Prime Minister, on 19 December 2012, that these awards should be made in recognition of the great bravery of those who contributed to two very significant campaigns of world war two.
Since the Prime Minister’s announcement, I have ensured that the necessary work on matters such as design, manufacture and eligibility criteria has been undertaken as quickly as possible in order to get medals and clasps to veterans and widows as soon as we can. We estimate that up to 120,000 veterans or next of kin could be eligible for the Arctic Star and 125,000 for the Bomber Command clasp.
Her Majesty the Queen has now approved designs for the new awards on the basis of recommendations made by the Royal Mint advisory committee. The design for the Arctic Star is based on the other world war two stars and the Bomber Command clasp, to be worn on the ribbon of the 1939 to 1945 star, follows the design of the Battle of Britain clasp.
Production of both awards is now getting under way and we should be in a position to present the first awards in a few weeks time. Both the Arctic Star and Bomber Command clasp are available to veterans and to the next of kin of those who are deceased. Priority in issuing the awards will be given to veterans and widows. Other next of kin may also apply now but will have to wait slightly longer to receive their award.
The qualifying period for the Arctic Star is “service of any length” recognising the particular severity of the conditions experienced by those who served in the Arctic. While the primary intent is to recognise those who served on the Arctic convoys, eligibility is extended to include all who served north of the Arctic circle in world war two. Those eligible will include members of all three services as well of course as the merchant navy who crewed the ships taking the vital supplies to Russia.
The criteria for the Bomber Command clasp requires prior qualification for the 1939 to 1945 star, to which it will be affixed, with the additional requirement to have flown at least one operational sortie with a Bomber Command operational unit. A clasp was deemed more appropriate, by Sir John, in the case of Bomber Command as aircrew had already received either the aircrew Europe star or the France and Germany star and another medal would have constituted “double-medalling” for the same service.
Eligible veterans and next of kin are now encouraged to apply for the new awards and details, including an application form, can be found at: www.veterans-uk.info or by telephoning the MOD medal office on 08457 800 900, a local rate number.
Details of the designs of the Arctic Star and Bomber Command clasp and the eligibility criteria have been placed in the Library of the House.
Votes A Excess Votes
(11 years, 3 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
The Ministry of Defence Votes A excess votes will be laid before the House on 26 February 2013 as HC 992. This declares an excess of personnel for years 2009-10, 2010-11 and 2011-12, and requests an increase in the Votes A limits for these years.
Organisation on Security and Co-operation in Europe (Appointment)
(11 years, 3 months ago)
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The Prime Minister (Mr David Cameron)
My hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) has been appointed as a full member of the United Kingdom delegation to the Parliamentary Assembly of the Organisation on Security and Co-operation in Europe in place of my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch).
Better Bus Areas
(11 years, 3 months ago)
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The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I am pleased today to launch the bidding process for designation of better bus areas, and to announce that Sheffield will act as a trailblazer for better bus areas as part of its city deal.
Last March in “Green Light for Better Buses” I announced my intention to reform the way in which we directly support the bus market through the bus service operators grant (BSOG). A key part of this is the development of better bus areas.
These are an innovative way of supporting the bus market for local transport authorities and bus operators working in partnership. Within better bus areas BSOG for services run commercially will gradually be devolved to local authorities and this grant will be supplemented by a top-up fund worth 20% of the commercial BSOG. This money will enable local transport authorities to tackle the local problems that hold back the bus market. I am today publishing guidance for local transport authorities wanting to become a better bus area. Applications need to be with the Department by 21 June and decisions will be made by 1 October 2013.
South Yorkshire passenger transport executive has been working with the Department to develop Sheffield as a trailblazer better bus area and I am pleased to announce that their application, which forms part of Sheffield’s city deal, has been successful. The better bus area will increase funding for buses in Sheffield by £530,000 this financial year and just under £1.6 million in future years.
Between September and November last year we consulted on the arrangements for implementing our proposed reforms to the BSOG system. We have now had a chance to review all the responses to the consultation, and are now considering the final arrangements for devolving part of the BSOG budget to local authorities outside BBAs as well as some changes to the categories of bus service which qualify to receive BSOG. I expect to make a detailed announcement on these arrangements around Easter, with a view to implementing them in October this year.
Work Capability Assessment
(11 years, 3 months ago)
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The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I am pleased to announce that Dr Paul Litchfield, the chief medical officer for BT, has been appointed to carry out the fourth of the five independent reviews of the work capability assessment (WCA) required by the Welfare Reform Act 2007.
The review will continue the process started by Professor Malcolm Harrington to refine the WCA to better identify those who are capable of work over the short and medium term and those who will require longer-term financial support.
Dr Paul Litchfield is chief medical officer and director of health, safety and wellbeing for BT, a post he has held since 2001. His fields of expertise include mental illness and the impact it can have on work prospects. As a member of the World Economic Forum’s Global Agenda Council, he has also played a key role in raising the profile of the economic impact of chronic disease.
An independent scrutiny group, chaired by Professor David Haslam—past president of the Royal College of General Practitioners, national professional adviser to the Care Quality Commission, and chair designate of the National Institute for Health and Excellence (NICE)—will oversee the review process.
Dr Litchfield replaces Professor Malcolm Harrington as independent reviewer. Professor Harrington’s third review, published in November 2012, found that real progress has been made to improve the WCA.
Dr Litchfield will present his report to the Secretary of State for Work and Pensions before the end of 2013.
Grand Committee
(11 years, 3 months ago)
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The Deputy Chairman of Committees (Viscount Simon)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Police and Fire Reform (Scotland) Act 2012 (Consequential Provisions and Modifications) Order 2013
(11 years, 3 months ago)
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Lord Wallace of Tankerness
That the Grand Committee do report to the House that it has considered the Police and Fire Reform (Scotland) Act 2012 (Consequential Provisions and Modifications) Order 2013.
Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 27th Report from the Secondary Legislation Scrutiny Committee.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I will provide the Committee with a brief summary of what the order seeks to achieve. It is made under Section 104 of the Scotland Act 1998, which allows for necessary or expedient changes to legislation in consequence of an Act of the Scottish Parliament. The order is made in consequence of the Police and Fire Reform (Scotland) Act 2012, which received Royal Assent on 7 August 2012. I shall refer to this as the 2012 Act.
The 2012 Act creates a single Police Service of Scotland, which will be maintained by the Scottish Police Authority. This service will replace the eight existing police forces maintained by local police authorities and the two central bodies which currently provide national policing services in Scotland. The 2012 Act, together with this order, repeals the Police (Scotland) Act 1967 and replaces it with a new statutory framework for policing.
The 2012 Act also creates a single Scottish Fire and Rescue Service. This newly created service replaces the two unitary fire and rescue authorities and six joint fire and rescue boards which are currently in place. The 2012 Act amends the Fire (Scotland) Act 2005 to establish this single fire service.
Additionally, the 2012 Act provides for the Police Complaints Commissioner for Scotland to be renamed the Police Investigations and Review Commissioner, with expanded powers to carry out investigations into serious incidents and other matters relating to the police. The 2012 Act also places independent custody visiting in Scotland on a statutory footing, ensuring compliance with the Optional Protocol to the Convention Against Torture.
As will be seen, it is a very substantial order in terms of size, but I can assure the Committee that it is entirely consequential in content. Its intention is not to make any new policy but simply to ensure the continuity of current arrangements when the 2012 Act comes fully into force on 1 April by updating existing legislation to refer to the newly created Scottish Police Authority, Police Service of Scotland and Scottish Fire and Rescue Service.
The order makes provision for mutual aid and collaboration agreements between the new Scottish services and other forces and services in the United Kingdom. For police, this replaces provision in the Police (Scotland) Act 1967 and, for fire, it provides a clear statutory footing to ensure that the current relationships continue to work effectively. The order will also make certain transitional and savings provisions, again for the purpose of guaranteeing continuity of services.
Following its scrutiny of the order, the Secondary Legislation Scrutiny Committee drew the attention of this House to the instrument on the grounds that it gives rise to issues of public policy which may be of interest to it. I take this opportunity to thank the committee for its consideration of the order and address the issue that it raised.
Article 9 of the order makes it an offence to cause disaffection among members of the Police Service of Scotland, the British Transport Police or the Civil Nuclear Constabulary. It also makes it an offence to induce a member of any of those forces to withhold services.
With regard to the scope of the offence, I assure your Lordships that it is not the intention that an individual would be charged under the offence set out in Article 9 for merely expressing an opinion or legitimate concerns. The UK Government would expect a prosecution to follow only where there was a real and serious attempt to cause disaffection. Such action could lead to a breakdown in the ability of the police to maintain public order and to protect society. Any attempt to undermine the role of the police in this way is a serious matter and must be addressed. That is why we consider this offence to be necessary.
Offences parallel to that proposed in Article 9 already exist in relation to all UK police forces and the specialist forces; namely, the British Transport Police, Civil Nuclear Constabulary and Ministry of Defence Police. The Home Office has confirmed that there is no intention to remove the offence in England and Wales, and it is my understanding that its repeal is not being contemplated in Northern Ireland either. These offences are considered to be essential to the proper operation of policing. The intention of the order is to ensure that the new Police Service of Scotland can continue to work effectively with the other police forces within the UK. Not to include this offence would cause a discrepancy between constables of the Police Service of Scotland and those of other UK forces. It would also cause a discrepancy, for example, between members of the British Transport Police operating in Scotland and their colleagues in England and Wales.
It may well be the case that your Lordships’ House will wish to consider the terms of this offence in a wider context. I would submit that the purpose of this order is simply to maintain continuity and consistency between the new Police Service of Scotland and other forces across the UK. It would not be appropriate if the Scottish Government had proposed removing the offence for forces operating in Scotland as this would leave a significant gap for effective policing throughout the United Kingdom. Moreover, if your Lordships’ House continues to have concerns about the general policy surrounding the offence of disaffection, it would not be appropriate to use this technical piece of subordinate legislation to address such wider concern here as this order is concerned with maintaining effective policing in Scotland and ensuring continuity of current policing arrangements.
With regard to the instrument as a whole, it is worth noting that this order is part of a much wider legislative programme to provide a smooth transition to the new police and fire services in Scotland. Indeed, 15 other instruments have been laid to date in the Scottish Parliament, and I understand that 10 more are planned, while a related order, the Scottish Administration (Offices) Order 2012 (SI 2012/3073) was considered by Her Majesty in Council and subsequently laid before this Parliament on 19 December 2012.
Work on this consequential order has been undertaken by more than 20 departments within the United Kingdom Government, the Scottish Government, the Northern Ireland Executive and the Welsh Assembly Government, who have agreed that the provisions in this order are necessary to ensure the effective operation of the new police and fire services in Scotland and the continuation of effective relationships with their partners throughout the UK. With the 2012 Act completing its passage through the Scottish Parliament only in June last year, agreement on the policy and the drafting of the instrument has been concluded at an excellent pace, with great credit to all those involved across the different Governments.
It is also fair to point out that neither coalition party in the Government here at Westminster was supportive of the measure when it went through the Scottish Parliament. Indeed, my party opposed it and the Conservative Party abstained. Nevertheless, I believe that it is consistent with the spirit and mutual respect that we give effect to an Act properly passed by the Scottish Parliament. Indeed, it was passed by 101 votes to six with 14 abstentions. I believe that it demonstrates the United Kingdom Government’s commitment to working with the Scottish Government to make the devolution settlement work. I hope that this Committee will agree that this order is a sensible use of the powers in the Scotland Act and that the practical result is an example of how we can make devolution work. I commend the order to the Committee. I beg to move.
The Earl of Mar and Kellie
My Lords, I am perfectly happy with what the Scottish Parliament has legislated for and I am happy with the order. I should like to record my surprise at the strategy of going for a national police force in Scotland. It certainly has been the tradition in Scotland and across the whole of Britain as an island that policing should be organised locally. At home, I have maps which point out where the Alloa borough police force was: it had a chief constable, a sergeant and 10 constables. The tradition in Britain has been one of local policing.
I also acknowledge that in another part of English-speaking Europe, in Ireland, that it always has had national policing. After 1922, the Royal Irish Constabulary was replaced by two national forces—the RUC and the Garda Siochana. I want to record the fact that I am surprised by the strategy which apparently we want to have in Scotland, while I am very happy about us having a strategy in Scotland.
Lord McAvoy
My Lords, the Opposition support the measure, which as yet is another example of continuing devolution. I will not pay tribute to the Minister’s staff today because the last time I praised one of them, she mysteriously vanished and we have never seen her again. I do not know quite what he has done to her but I hope that she survives and makes a further appearance. The noble Earl, Lord Mar and Kellie, has mentioned the Scottish tradition of policing but we all have to recognise devolution and its implications. There was a consultation process that was very supportive and there did not seem to be any dissenting voices to the proposal. As the Minister rightly says, this is necessary after the 2012 Act. I cannot quite remember the context in which he mentioned torture, but I do not think that that has relevance on this.
There are comparisons with other nations and regions of the United Kingdom—we all understand the Northern Ireland one—but the Scottish Government have considerable powers and I can understand why there are reservations about having a national police force against a background of the police always being regionally organised. I was on the police and fire committee of Strathclyde regional council, which has a very good operation. The Minister mentioned that there were 14 abstentions in the Scottish Parliament—I presume that that was his own party, or did the Liberal Democrats vote against? I welcome the conversion and hope that we can have further co-operation like that.
Although the report is rightly subject to scrutiny and questioning, I want to develop a wee bit further the principle of disaffection. As a trade unionist, the word “disaffection” towards anything raises questions. It has been mentioned that some of the clarification that the Minister’s staff was able to pass on was on questions asked by the committee regarding who could be charged with disaffection. The initial reply seemed to indicate that only certain police could be charged with disaffection, but further clarification suggested that it could apply to a member of the public as well. Although I totally accept the Minister’s point that the Government do not envisage anyone being charged with this wrongly, unfairly, or whatever, he will know better than I do that legal history is full of people who have been prosecuted for offences for which at the time it was indicated they would not be prosecuted. So, I would like further clarification on disaffection because the police are different. It is acknowledged that they are not allowed to join trade unions. We have to have law and order and a legal system, so it is right that in case anybody tries to suborn or undermine the police in carrying out their duties, the defence should stay in.
I press the Minister to go a bit further in giving us assurances that no “innocent bystanders” who have had a pint too much on a Saturday night and preach treason—I have certainly done that myself a few times with pints of soda water and lime, I hasten to add—will be prosecuted. I seek assurances that ordinary members of the public, letting off steam—to use one of the expressions mentioned—will not be liberally prosecuted. I will leave it at that and hope that the Minister can give us some of those answers. That will reassure me.
Lord Wallace of Tankerness
My Lords, I thank both my noble friend Lord Mar and Kellie and the noble Lord, Lord McAvoy, for their contributions to the debate. I note the concerns of my noble friend with regard to the establishment of a national police force. He will be aware, as I indicated in opening, that our Scottish Liberal Democrat colleagues in the Scottish Parliament voted against this. At one point the noble Lord, Lord McAvoy, suggested that the 14 were Liberal Democrats—if only we had 14 Members in the Scottish Parliament. It was five Liberal Democrats and one Green who voted against and 14 Conservatives who abstained. The point is not about whether we support this policy intent, but that the Act was properly passed by the Scottish Parliament, and by a large majority. It is very consistent and in the spirit of the devolution settlement that this Parliament, through the use of a Section 104 order, should give effect to the intentions of the Scottish Parliament in areas where, because of its competence, it was not able to do so. It is in that spirit of making the devolution settlement work that we bring forward this order.
Damages-Based Agreements Regulations 2013
(11 years, 3 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Damages-Based Agreements Regulations 2013.
Relevant documents: 17th Report from the Joint Committee on Statutory Instruments.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, as regards the draft Conditional Fee Agreements Order 2013 and the draft Damages-Based Agreements Regulations 2013, perhaps I may remind noble Lords that conditional fee agreements, or CFAs, are means of funding litigation that are usually entered into by claimants where the lawyer agrees not to take a fee if the claim fails. If the claim is successful, the lawyer may charge an uplift known as a success fee, in addition to their fee. Under the existing regime, the success fee is recovered from the losing defendant, in addition to the base fee.
The statutory power under which the draft Conditional Fee Agreements Order 2013 is made governs the regulation of CFAs and the recoverability of success fees payable under a CFA. Under Section 44 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012—the LASPO Act—the success fee payable under a CFA is no longer recoverable from the losing party, but will be payable by the successful client subject to a prescribed cap.
Lord Justice Jackson, in his report, Review of Civil Litigation Costs, argued that the current regime had led to excessive costs in civil litigation, with risk-free litigation for claimants and additional costs being paid by defendants. He therefore recommended that recoverability from the losing side should be abolished in all cases, and this has been reflected in the provisions of Section 44 of the LASPO Act.
Lord Justice Jackson also recommended that CFA success fees in personal injury cases should be limited to 25% of damages, excluding damages awarded for future care and loss. The Government accepted this recommendation and agreed that claimants who have been compensated for personal injury should have their damages protected from having too much deducted by their lawyer as a success fee.
The draft order revokes the 2000 CFA order, but replicates its provisions in Articles 2 and 3. Subject to the cap in personal injury cases, the maximum success fee that can be charged remains 100% of the solicitor’s base costs.
Article 4 makes provision for a cap on success fees in personal injury cases only. The aim of the cap is to protect claimants’ damages, specifically those relating to future care and loss, which can run into many thousands of pounds in the most catastrophic injury cases. This cap will apply similarly, although not identically, to lawyers’ fees under damages-based agreements—or DBAs—under the draft Damages-Based Agreements Regulations 2013, to which I will come later.
Article 5 sets the cap. This means that in personal injury claims, the CFA must not provide for a success fee which is greater than 25% of the damages awarded to the claimant, excluding those for future care and loss. In effect, this means that the success fee can be taken only from general damages for pain, suffering and loss of amenity, and damages for past loss.
I know that there has been concern about the 25% cap and some representatives argue that this should be against all heads of damages. However, the Government have said consistently—including on many occasions during the passage of the LASPO Act through Parliament—that there will be a cap on the amount of damages that may be taken as a success fee of 25% of the damages, excluding damages for future care and loss. This follows Lord Justice Jackson’s recommendation and, as I said, is intended to protect claimants’ damages, and specifically those relating to future care and loss.
Article 6 contains a transitional and a saving provision. Essentially, this means that the order will not apply to any CFA entered into before Section 44 of the LASPO Act comes into force on 1 April 2013.
Furthermore, the order will not apply in respect of those proceedings for which implementation of Part 2 is delayed. Those proceedings are personal injury claims in respect of diffuse mesothelioma, privacy and defamation proceedings and proceedings in respect of and relating to insolvency.
I now turn to the draft Damages-Based Agreements Regulations 2013. A damages-based agreement or DBA is a privately funded arrangement between a representative and a client whereby the representative’s agreed fee is contingent on the success of the case, and is determined as a percentage of the compensation received by the client. Until now, DBAs have not been permitted in litigation before the courts, but their use has developed in non-contentious business—that is, work that falls outside the courts, including employment matters. However, Lord Justice Jackson recommended that DBAs should be extended to all areas of civil litigation. He argued that this would provide litigants with a choice of funding methods and the freedom to choose the one that they considered most appropriate for their case.
Section 45 of the LASPO Act therefore permits the use of DBAs in all areas of civil litigation. This section enables the Lord Chancellor to regulate their use and, in particular, to specify the maximum payment that may be made from damages under a DBA in particular proceedings. The draft regulations revoke the 2010 DBA regulations but replicate their provisions in respect of employment matters. The draft regulations prescribe the requirements with which an agreement between a client and a representative must comply in order for it to be an enforceable DBA in both civil proceedings and employment matters.
Under the existing regulations governing DBAs in employment matters, the maximum percentage of damages that a representative may take as a fee is 35%, and that continues. Lord Justice Jackson recommended that the lawyer’s fee under a DBA in personal injury proceedings should not exceed 25% of the claimant’s damages, excluding damages for future care and loss. The Government agree that claimants should have their damages protected from excessive legal fees.
As I mentioned earlier, a similar, although not identical, approach has been taken for CFAs. The Government believe that there should be a cap of 50% of the damages that may be taken as the lawyer’s fee in all cases outside of personal injury and employment matters. This is to protect claimants’ damages, and is based in part on a recommendation by the Civil Justice Council.
In order to be enforceable, a DBA in civil proceedings must meet the requirements specified in these regulations. Regulation 3 requires the DBA to specify the circumstances in which the payment from the claimant’s damages will be payable. It will be for the representative in civil proceedings to consider his likely costs before reaching agreement as regards the payment to be made from the claimant’s damages. The definition of payment excludes expenses—for example, medical reports—but specifically includes counsel’s fees, which would be paid for as a disbursement by the representative.
Regulation 4 sets the cap as I have outlined. Regulations 5, 6, 7 and 8 replicate the provisions from the 2010 regulations for employment matters. These detailed provisions in relation to information and other matters are necessary because employment matters may be undertaken by non-lawyers such as claims managers. On the other hand, civil litigation can be undertaken only by qualified legal representatives, who are subject to regulation by their professional bodies and whose conduct may be subject to challenge through those bodies. It is therefore considered that further regulation at this stage is not required.
In drafting these regulations we have borne in mind the indemnity principle. Put simply, the indemnity principle means that the losing party cannot be ordered to pay more in costs than the successful party has already agreed to pay his representative. The Civil Procedure Rules have been amended to provide that the court may not order the losing defendant to pay a claimant any costs that exceed the agreed payment, and thus breach the indemnity principle.
The claimant will need to pay his lawyer only if the costs recovered are less than the agreed payment. This means that, as well as possibly paying a sum directly from their damages, claimants might also be required to pay an additional sum to their representative to meet these expenses.
Both these instruments are important elements of our reforms.
The Deputy Chairman of Committees
My Lords, there is a Division in the Chamber. We will adjourn for 10 minutes.
Lord McNally
My Lords, both these instruments, which are important elements of our reform, come into effect on 1 April 2013. The reforms overall are intended to make civil costs more proportionate. They also include particular provisions to protect claimants and damages, as I have set out. These instruments have been subject to consultation, and we have improved the drafting as a result. I believe they are proportionate and appropriate. I therefore commend the draft instruments to the Committee.
Lord Phillips of Sudbury
I have only one simple point to make. It is a question to the Minister regarding the Conditional Fee Agreements Order, particularly the 25% cap, which does not apply to any future losses. In proposing this legislation, the Minister rested his case heavily on proposals made by Lord Justice Jackson in his review. Is the Minister aware of a lecture Lord Justice Jackson gave on 29 February last year? In this lecture, he made a point, which appears in the footnote, stating:
“The Personal Injuries Bar Association (PIBA) and the Bar Council have recently sent to me forceful submissions that the 25% cap should apply to ALL damages, as it did before April 2000. I can see the sense of allowing that dispensation in appropriate cases provided that the success fee is only payable by the client as it was pre-April 2000”.
That seems reasonable and it seems doubly reasonable given that the author of these proposals, Lord Justice Jackson, himself had second thoughts which he expressed in public last year. I am wondering, therefore, why the limitation to past losses survives into this statutory instrument and whether the Minister could take this away and follow the latest thinking of Lord Justice Jackson, which is supported by the Bar Council and, I suspect, the Law Society.
Lord Beecham
My Lords, I always like to be consistent and it certainly would be inconsistent of me not to begin with a complaint about the process here. These regulations come to us some five weeks before they are to take effect. The Bar Council has drawn attention to this, rightly stressing that a major change in the law, particularly in relation to DBAs, is being introduced with very little time before they come into effect for people to work out how they are going to be applied.
As the Minister has said, it has always been permissible for damages-based agreements to be implemented in non-contentious matters in tribunals. As he has also said, these were extended by regulations to employment cases. That opened the way to the revival of what used to be called “champerty” in previous times, which of course was unlawful. We are now legalising it under the new nomenclature of damages-based agreements and I can see that there is a case for doing that. Nevertheless, significant issues and questions arise from the Government’s proposal.
Reverting to the timescale, it should be pointed out that other changes affecting contentious litigation are in hand. These include changes to the Road Traffic Act portal and small claims limits in cases, including, potentially, personal injury cases. With all that happening, one might have thought that it would be sensible to bring all the changes together and to do it at a time which allows the parties and the professions to prepare adequately. I hope that the Minister will look again at the timetabling with a view to deferring implementation of whatever regulations finally emerge for six months until October of this year. I am particularly indebted to those who have briefed me, and no doubt other Members of your Lordships’ House and perhaps of this Committee, in relation to these matters, including the Association of Personal Injury Lawyers, the Bar Council, the Law Society and, especially, Professor Rachael Mulheron.
A number of issues arise and I hope that the Minister will be patient while I list them. If he is not able to reply to them all today—he may well not be—I hope that he will take these matters back and consider them. I was going to raise the question of the cap, which was raised by the noble Lord, Lord Phillips. I, too, identified the change of mind by Lord Justice Jackson, to which the noble Lord referred. It is notable of course that the 25% cap in terms of damages-based agreements applies only to personal injury cases. It is a 35% cap in employment cases, which can equally be quite substantial, although not, I guess, running into the millions of pounds of the exceptional cases of clinical evidence and the like to which the Minister referred. Nevertheless, it certainly can be comparable with many ordinary personal injury cases. In those cases, the cap is 35% including future loss, so there is a serious question about the composition of the figure against which the percentage is to be calculated.
Lord Phillips of Sudbury
Before the noble Lord, Lord Beecham, sits down, does he agree that in his own extremely eloquent exposition on these two statutory instruments, and indeed in my own offering, there was a notable absence of reference to the basis upon which I suspect he, and certainly I, put forward our points—that is, access to justice? The majority sitting in this Grand Committee are lawyers, and we take it so much for granted that what we are seeking to amend in these regulations is exclusively for the benefit of improving access to justice. I invite him to concur with me that anyone reading Hansard who saw no reference to that in the course of our two offerings should know that this underpins everything that we have said.
Lord Beecham
I am grateful to the noble Lord for making explicit what was certainly implicit in what he and I were saying. Access to justice is certainly the core argument here. I should perhaps also have declared an interest in that from time to time as we have discussed these matters I have put in time as a now unpaid consultant with the firm of solicitors in which I was formerly a partner.
Lord McNally
My Lords, as a non-lawyer—perhaps the only one in the Room—I fully appreciate that the noble Lords’ interventions were about access to justice. As I have told the noble Lord, Lord Beecham, on earlier occasions, my legal qualifications rest on one of nine papers that I did for part one of my degree on English legal institutions. I remember champerty and maintenance from that paper. It came as quite a shock to me to find, in the process of the Bill, that not only was champerty not outlawed, it was now to become legal. But there we are—such is the passage of time.
Lord McNally
Actually, I knew that. As Harold Wilson said when he retired and Jim Callaghan succeeded him, “I have made way for an older man”.
I take the point made by the noble Lord, Lord Phillips, but let me be blunt. I am always suspicious of Ministers who at any time rest too much on a report, no matter how learned. I do not rest the case for the 25% cap on that being Lord Justice Jackson’s original recommendation, although indeed it was. A sharp-eyed lawyer would say that the noble Lord’s quote about Lord Justice Jackson did not endorse the counterview but simply said that it had merit, which is not the same as advocating that the Government change their policy. Even if it were, this is the Government’s policy. It is the right policy because it protects the future earnings and the future cover for victims in these cases. It remains our policy on that merit, and we are willing to defend it on that basis.
I understand the point made by the noble Lord, Lord Beecham, about speed. I pointed out that very little of what we are doing is entirely new. We fully recognise that at this time there is a need for ability, nimbleness and fleetness of foot in all parts of the legal profession, if we are to take advantage of the changes that are going through. We are not persuaded that the timescales we have set are unreasonable, and we will not be deferred from the course that we have set. We have taken account of reasons for delay regarding mesothelioma and privacy, which I quoted. However, these orders will go through to take account of the fact that LASPO comes into effect on 1 April 2013.
Perhaps I might deal with a number of the specific questions that the noble Lord, Lord Beecham, raised. He was very correct to raise the issue of the American experience in DBAs. I also met the organisation that came over to present its case. I left that meeting with some of his concerns about what this might bring into our legal system. The noble Lord’s description of hedge funds for legal claims is something that we are very conscious of. What we have decided so far is to keep the matter under review. That phrase can often hide weasel words and weasel intent, but we want to see just how much this is going to become a factor in our legal system, while making sure that some of the warning signs that the noble Lord has quite legitimately raised are on the radar of Ministers as well. We will keep this matter closely under review.
The noble Lord raised the issue of VAT on the 25% cap. The 25% cap on success fees is as recommended by Lord Justice Jackson. Including VAT on the success fee on lawyers’ fees within the cap will provide further protection for the claimant’s damages and add certainty for the claimant as to the likely deduction from their damages. This approach is also consistent with the existing cap of 35%, inclusive of VAT, on payments to be made from damages in respect of DBAs in employment matters. The noble Lord also asked about the indemnity principle. DBAs are an alternative method of funding and it would be for solicitors to advise their clients on the most appropriate method of funding according to the circumstances of each case. He also mentioned there being one set of regulations. There is one set of regulations covering both civil litigation and employment cases, as recommended by the Civil Justice Council. We have listened to the concerns of the Law Society and others that there should not be too much regulation in respect of civil litigation in these instruments. This is because failure to comply with the provisions in the instruments would make the agreements unenforceable. As I have said, lawyers are properly regulated in any event.
The noble Lord asked whether the cost of ATE insurance is within or outside the 25% cap. This is an expense and is therefore outside the cap. On why DBA regulations do not contain requirements on termination for civil litigation, as in employment cases, the DBA regulations of 2010 made provisions for employment cases which can be taken forward by non-lawyers. Detailed safeguards need to be built in as a result. Civil litigation can be conducted only by lawyers, who are subject to their own professional regulations.
I think that that covers most of the issues. If not, perhaps I might say to the noble Lord that I welcome the thoroughness with which he has examined these regulations and, as I say, if I have not covered the questions in precisely the detail that I should have done I will make sure that a suitable letter is lodged in the Library of the House. I nevertheless think that the timetable that we have set, the consultation that we have undertaken and the changes that we have made after that consultation, with our having listened to the Bar Council, the Law Society and other interested parties, make the regulations fit for purpose. I therefore recommend them to the Committee.
Lord Marks of Henley-on-Thames
My Lords, before my noble friend the Minister sits down, I have one question on the point made by the noble Lord, Lord Beecham, about damage-based agreements for defendants. It is my understanding of the regulations that DBAs are not appropriate for defendants, whereas conditional fee agreements are and always can be available to defendants. DBAs depend upon the damages awarded to the client or monies paid by another party to the party entering into the DBA. Clarification on that from my noble friend may be helpful, but it is certainly my understanding.
Lord McNally
I am grateful to my noble friend for that question. I am informed that neither the Act nor the regulations enable defendants to use DBAs, not least because a DBA is enforceable only where the agreement makes provision for the payment of the fee from damages awarded. My noble friend asks an extremely pertinent question and I hope that I have given a clear answer.
Lord Beecham
It is a clear answer, but there does not seem to be a particular rationale for excluding defendants from this process. If they secure the retention of a sum of money claimed under the agreement, why should the DBA not be available to them? To confine it to claimants seems too narrow a concept. If the intention of the Government, as it clearly is, is to use the DBA as an alternative method of financing, it should be available to both sides because nobody is being compelled to undertake a DBA. That still requires some further thought.
Lord McNally
I will certainly give it further thought, but the question was whether the regulations as presently set out debar the use of DBAs by defendants. The answer is yes. I will reflect and put those further reflections in the letter.
Conditional Fee Agreements Order 2013
(11 years, 3 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Conditional Fee Agreements Order 2013.
Relevant documents: 17th Report from the Joint Committee on Statutory Instruments.
Criminal Legal Aid (Determinations by a Court and Choice of Representative) Regulations 2013
(11 years, 3 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Criminal Legal Aid (Determinations by a Court and Choice of Representative) Regulations 2013.
Relevant documents: 16th Report from the Joint Committee on Statutory Instruments.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, I shall speak also to the draft Legal Aid (Information about Financial Resources) Regulations 2013 and the draft Civil Legal Aid (Costs) Regulations 2013.
The draft Criminal Legal Aid (Determinations by a Court and Choice of Representative) Regulations 2013, which are being made under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, replace relevant regulations in the Criminal Defence Service (General) (No.2) Regulations 2001, made under the Access to Justice Act 1999.
The regulations mirror the Access to Justice Act regulations in effect, although there are differences in terminology and structure. For example, the regulations refer to making a determination that an individual qualifies for legal aid, rather than to granting a representation order following a decision that an individual qualifies. This change of terminology is made only to reflect amended wording in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which I will refer to from here on as LASPO.
Operational practices will not need to be altered in any way as a result of the regulations. The key change is that under the Access to Justice Act 1999, the default position is that a court makes a decision that an individual qualifies for legal aid, unless specified otherwise in regulations. However, due to the rollout of means testing in the magistrates’ court and subsequently the Crown Court, the circumstances in which a court may grant legal aid have been gradually reduced. LASPO reflects this shift, and the default position is that it is for the director of legal aid casework to make a decision that an individual qualifies for legal aid, unless otherwise stated in regulations. The regulations set out the limited circumstances in which a court can make a decision that an individual qualifies for legal aid. That merely codifies current practice.
The regulations also limit the circumstances in which an individual can select a representative of their choice in criminal proceedings, and set out the specified circumstances in which a court can permit an individual to select enhanced representation. The regulations specify the circumstances where the court may permit an individual to select a different provider to the provider selected by a co-defendant.
In relation to advocates, the regulations generally provide that individuals may not select an advocate in proceedings before a magistrates’ court, and set out circumstances where the court may permit an individual to select an advocate in the magistrates’ court. The regulations also provide that individuals may select only a provider and a single junior advocate in proceedings in the Crown Court and above, and set out circumstances where the court may permit an individual to select a Queen’s Counsel or more than one advocate. The provisions have the same effect as the current provisions in relation to choice of representative under the Access to Justice Act.
The draft Legal Aid (Information about Financial Resources) Regulations 2013 make provision in relation to requests for information by the director of legal aid casework to the Department for Work and Pensions, Her Majesty’s Revenue and Customs and relevant Northern Ireland departments to facilitate decisions about an individual’s financial resources for the purpose of legal aid available under Part 1 of LASPO. This could include, for example, a determination that an individual is financially eligible for legal aid, or is liable to make a contribution toward the cost of their representation when in receipt of legal aid.
The draft regulations replace regulations in relation to criminal legal aid under the Access to Justice Act 1999 but they will also extend to civil legal aid, so that information-sharing in relation to both criminal and civil legal aid are on the same statutory basis. This will allow the director, as the authority responsible for granting legal aid, to properly verify information provided by an applicant for legal aid about their financial status.
The regulations provide an information gateway so that a person making a decision on the financial eligibility of someone who is applying for legal aid or is in receipt of it can request certain information to confirm their benefit status with the Department for Work and Pensions or to confirm details of an individual’s employment or whether they are carrying on a business, trade or profession with Her Majesty’s Revenue and Customs or the equivalent departments in Northern Ireland.
Efficient and secure data-sharing between the DWP, HMRC, the relevant Northern Ireland department and the Legal Aid Agency will safeguard taxpayers’ money by limiting the opportunity for fraud and dishonesty and improving the administrative efficiency of the financial eligibility tests for legal aid.
I stress that these arrangements will make no substantial difference to defendants, solicitors or courts in terms of forms or process. There is therefore no risk of any delay to existing court proceedings or any additional burden on defendants or solicitors. Nothing within the new legislative framework dilutes the Government’s obligation to protect an individual’s personal information and maintain confidentiality. Indeed, the primary legislation specifically makes it a criminal offence to disclose the information for any purpose other than to facilitate decisions about an individual’s financial resources for the purposes of legal aid.
Lastly, the draft Civil Legal Aid (Costs) Regulations 2013 make provision about costs orders in civil proceedings in favour of or against a legally aided party and, in certain circumstances, against the Lord Chancellor. They substantially reproduce provisions that currently exist in regulations made under Section 11 of the Access to Justice Act 1999.
These draft regulations bring together the rules on costs into a single set of regulations. The existing rules on costs appear in both the Community Legal Service (Cost Protection) Regulations 2000 and the Community Legal Service (Costs) Regulations 2000. Provisions relating to the statutory charge, which currently appear in the Community Legal Service (Costs) Regulations 2000, will be brought forward separately.
Section 26(1) of LASPO sets out the general principle that costs ordered against a legally aided party to civil proceedings must be reasonable, having regard to all the circumstances including the financial resources and conduct of the parties to the proceedings. This is known as “cost protection” and is a feature of the existing civil legal aid system. It caps the amount of money that a legally aided party may be ordered to pay if they lose their case. The intention of this is to ensure that they are not deterred from resolving their issues through legal action for fear of being personally liable for unaffordably high costs.
The definition of family proceedings in these regulations has been amended to reflect the treatment of family proceedings in the LASPO Act. Under these regulations more types of family cases are subject to the exclusion from cost protection, although those that have been added are very similar to the existing list. We have maintained the position in the current regulations whereby cost protection applies to applications for domestic violence protection orders and public law children cases.
Part 2 of the draft regulations provides that cost protection does not apply to lower forms of civil legal services. Cost protection applies in relation to forms of service that permit the legally aided party to be represented in court proceedings because such a party will have satisfied a more stringent merits test than for lower forms of assistance.
Part 3 of the draft regulations sets out the rules governing costs orders against a legally aided party as well as the grounds on which a costs order might also be made against the Lord Chancellor where he has provided civil legal aid to a party to proceedings.
The draft regulations provide that in limited circumstances a court can order the Lord Chancellor to pay to the non-legally aided party the whole or part of the costs incurred by that party in the proceedings, other than the costs which the legally aided party is required to pay. The draft regulations also make provision about the assessment of resources and procedures in relation to costs orders against the legally aided party and the Lord Chancellor. The final part of the draft regulations sets out the principles to be applied when a costs order or a costs agreement is made in favour of a legally aided party.
Subject to the changes that I have just outlined and some amendments to structure and terminology, these draft regulations substantially replicate the effect of the existing regulations made under the Access to Justice Act 1999. I therefore commend these draft regulations to the Committee and beg to move.
Lord Beecham
I will deal first with the Criminal Legal Aid (Determinations by a Court and Choice of Representative) Regulations 2013. Again, I have a series of questions that arise partly from the drafting and partly from my ignorance. Again, I trust that the Minister will be generous enough to reply, if not today then subsequently.
I begin with Regulation 9, which deals with the withdrawal of determinations by the court and prescribes that the court before which criminal proceedings are listed may withdraw determinations in certain circumstances. I draw attention in particular to Regulation 9(c), where a reason would be that the provider named in the representation order that recorded the original determination declines to continue to represent the individual. The previous two conditions I can quite understand; first, the individual declines to accept the determination terms that he was offered—arguably, that is not unreasonable—and, secondly, the individual requests that the determination is withdrawn, which is also reasonable. However, I do not understand why, if the provider named in the representation order declines to continue to represent the individual, the determination should be withdrawn unless that determination relates specifically to that advocate. If that is the intention, it should perhaps be clearer, but if it is broader than that it would presumably leave the party unrepresented. Perhaps that needs some clarification.
Regulation 11 says:
“The … court may make a determination … only if it has considered an application made in accordance with”,
the subsequent paragraph. To comply with that, the application must,
“be made by the individual seeking the determination”—
that is obviously straightforward—
“be in writing; and … specify what the relevant court is being asked to determine and the grounds upon which it is being asked to do so”.
My question relates to whether that process is covered by legal aid or advice, or whether the individual is simply left to make his own representations. For some defendants, that could potentially be a matter of considerable difficulty. What is the process to facilitate the making of an application by an individual in those circumstances?
Regulation 12 identifies the right to select a provider, except for a number of categories—or, rather, the other way round; it limits the choice except for a number of categories. The first one is that,
“the provider … is employed by the Lord Chancellor to provide criminal legal aid”.
I find it a curious word to use, that the Lord Chancellor purports to “employ” advocates on behalf of a defendant. To me, that has connotations that might be a little invidious, bearing in mind the recent decision of the courts that recorders and part-time judges are deemed to be employed by the Lord Chancellor and therefore are required to be included in the pension scheme. If employment is to be used in this context, might that not also lead to some potential complications in relation to the status of people “employed” by the Lord Chancellor and possibly even lead to them being included in some sort of governmental pension scheme? The wording needs some explanation.
Regulation 13 deals with the position where there are co-defendants. Under these circumstances, the regulations prescribe that,
“the right of an individual … does not include the right to select a provider who is not also instructed by the individual’s co-defendant”—
in other words, to have two advocates as opposed to one—
“unless the … court or the Director determines that … there is a conflict of interest between the individual and that co-defendant; or … there is likely to be a conflict of interest”.
Again, I ask whether there is any process of appeal against such a decision. After all, the question of whether a conflict of interest might exist would not necessarily be straightforward. What is the process for determining in these circumstances whether there is likely to be a conflict?
Curiously, the regulation then goes on to provide that Regulation 13(1), the basic provision about instructing co-defendants,
“does not apply where the provider selected by the individual is an advocate”.
I simply do not understand what that means. This may be a failing on my part, but I do not understand the purpose of that provision.
Finally, I come to Regulation 16 which deals with criminal proceedings before a magistrates’ court. With a limitation to which I will refer in a moment, on proceedings before a magistrates’ court,
“the Act does not include a right to select an advocate”.
I do not know why that should be the case—I do not know whether it is a new or an existing provision—but it would seem to require some explanation. Why should a defendant not have the right to select an advocate?
The proviso in the regulation says:
“The relevant court may determine that the individual can select an advocate”,
on two conditions. The first is that,
“the proceedings relate to an extradition hearing … or an indictable offence”;
and the second that the,
“court determines that because there are circumstances which make the proceedings unusually grave or difficult, representation by an advocate would be desirable”.
One would have thought that in any extradition proceedings, and on most indictable offences, it would be almost a matter of course that the appointment of an advocate would be desirable. What are the circumstances in which it is thought that it would be inappropriate for an advocate to be selected by the defendant? By definition, these look to be significant matters. Again, what is the procedure to appeal any such decision? Supposing the court was to find that, in its view, these proceedings were not,
“unusually grave or difficult”.
That is very largely a subjective judgment. What is the purpose of this and why are the Government going to these lengths to put barriers in the way of a defendant selecting an advocate?
Happily, I have much less to say about the other two sets of regulations. Indeed, I have nothing to say on one set at all. However, in respect of the Civil Legal Aid (Costs) Regulations, there is a point to question. First, I noticed that there was no consultation on these regulations, which is a slight surprise—although it is fair to say that I think no specific question was asked in response to the original consultation. Nevertheless, I would have thought it sensible to have invited comment on the draft regulations.
Finally, we come back to the matter of timing. Paragraph 9 of the Explanatory Memorandum says that guidance is,
“not being prepared specifically on this instrument”,
but that:
“A programme of training and guidance is being prepared by the Legal Services Commission to support the transition to the new arrangements. This will be … available to legal aid providers ahead of the commencement of the Act on 1 April 2013”.
What exactly has happened about this? To what extent has training taken place and has it been in conjunction with the Bar Council and the Law Society? Will the profession—and, for that matter, the courts—be ready as of 1 April 2013 to deal with these matters? What training and support has been given to the courts, especially the magistrates’ courts, to deal with the new regime?
Lord McNally
My Lords, again, I am extremely grateful to the noble Lord, Lord Beecham, for what he quite rightly termed a cross-examination. I will try my best to cover the points he raised, along with the same health warning that I gave last time, which is that if I find on reflection that I have not fully covered the point he raised, I will write to him and make that letter available in the Library of the House and to interested parties.
On the withdrawal of a determination under Regulation 9(c), the relationship between a defendant and a solicitor could break down, for example, so legal aid might be withdrawn but that would not leave the party unrepresented. They could apply for transfer to a new firm. Regulation 11(2)(c) applies, for example, where an individual seeks a QC or two advocates, so would already have legal aid for solicitors and a junior advocate to assist. The noble Lord also asked about determinations by a court under Section 16 of the Act and pointed out that there seem to be very limited circumstances in which the court may grant representation.
The framework laid out in the Access to Justice Act 1999 is different from that laid out in the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Under the Access to Justice Act, the default position is that the court can grant representation. However, with the rollout of means tests to magistrates’ courts and later to Crown Court, the circumstances in which the court can grant representation have gradually reduced. The responsibility for granting representation has therefore gradually passed to the Legal Services Commission—although, in practice, Her Majesty’s Courts and Tribunals Service staff make the decision. The Criminal Defence Services (General) (No. 2) Regulations 2001 reflect that position. LASPO reflects that shift, and the default position is that it is for the Director of Legal Aid Casework to decide whether to grant representation. The court may do so only when expressly authorised by regulations. The regulations set out the limited circumstances in which a court may do so—for example, where an urgent determination is required in a case of contempt of court.
The noble Lord, Lord Beecham, queried the use of the term “employed”—people being employed by the Lord Chancellor. That is the same language as in the current regulation, and covers the staff of the Public Defender Service, currently operated by the LSC, who will be employed by the Lord Chancellor under LASPO. Is there a process of appeal for conflicts of interests under the regulations? No, there are no provisions for appeal, but the person concerned could renew the application. As to why there has been no consultation on costs of regulation, as the draft regulations substantially replicate existing cost regulations, there is no need for consultation on the precise terms. The principles are well known, used and understood.
We are confident that the programme of training and guidelines will be rolled out in advance of implementation. On the question of representation in magistrates’ courts, I explained the situation under Regulation 16. The only challenge will be via judicial review. Our experience over the past 10 years is that existing provisions work well. Both LASPO and the current thinking of the Secretary of State and Lord Chancellor indicate a move on representation via legal aid.
The Secretary of State for Justice has asked whether access to criminal legal aid is being given in a way that provides the right balance between the needs of justice and the needs of the public purse. The Ministry of Justice has begun work on how we might find a better balance between costs and the needs of justice, and we will bring forward proposals and changes in due course. In the mean time, though, as I say, these regulations very much reflect present position, with the minor shifts that were involved in LASPO. In those circumstances, I commend them to the Committee.
Legal Aid (Information about Financial Resources) Regulations 2013
(11 years, 3 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McNally
That the Grand Committee do report to the House that it has considered the Legal Aid (Information about Financial Resources) Regulations 2013.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments.
Civil Legal Aid (Costs) Regulations 2013
(11 years, 3 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McNally
That the Grand Committee do report to the House that it has considered the Civil Legal Aid (Costs) Regulations 2013.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments.
Bank of England Act 1998 (Macro-prudential Measures) Order 2013
(11 years, 3 months ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Bank of England Act 1998 (Macro-prudential Measures) Order 2013.
Relevant documents: 18th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee.
Lord Newby
My Lords, the background to these regulations is the failure of the previous system for regulating financial services to provide clear responsibility for financial stability, which was shared in an opaque way between the Treasury, the Bank of England and the FSA. This meant that it has been all too easy for the identification and management of risks to financial stability to fall between the cracks in what those organisations believed were their respective roles in protecting and promoting stability in the financial sector. That confusion was a key contributing factor to the emergence of the financial crisis in 2007. None of those three institutions was effectively horizon-scanning to identify macroprudential risks to stability across the system as a whole.
In the light of those failings, the Financial Services Act gives the Bank of England clear responsibility for financial stability. The Bank will no longer,
“contribute to protecting and enhancing”
financial stability; it will “protect and enhance” it. To support this objective, the Act creates a new committee of the Bank, the Financial Policy Committee, with a role of identifying, monitoring and managing systemic risks to the UK financial system. In order to carry out this role, the FPC will need macroprudential measures to mitigate the risks to stability that it identifies.
The FPC will act through the regulators that work directly with financial institutions. The FPC will do this in two ways: primarily through recommendations, which can be made to the regulators, to industry, to the Treasury, within the Bank and to other persons—and, where appropriate, through directions to the PRA and FCA. The FPC’s direction power will be limited to the measures set out in this order. The regulators must comply with a direction but they will have discretion over the timing and implementation method of the direction.
Before discussing the measures that will be granted to the FPC, it is worth noting that there is international consensus on the need for macroprudential regulation. International regulations such as Basel III and CRD4 go some way towards establishing minimum standards while retaining room for national discretion, although areas such as the leverage ratio remain under discussion. The UK strongly supports the ability of national supervisors to exercise discretion where appropriate.
In February 2011, the Government and the Bank established an interim FPC to undertake, as far as possible, the work of the statutory FPC ahead of the passing of the relevant legislation. One of the tasks set for the interim FPC was to analyse and recommend macroprudential measures for which the statutory FPC should have direction-making powers. Following the interim FPC’s recommendations in March 2012 on the tools that the committee should have, the Government consulted on these tools, seeking comments on our intention to: make the FPC responsible for setting the level of the UK’s countercyclical capital buffer; provide the FPC with a direction-making power to impose sectoral capital requirements; and provide the FPC with a time-varying leverage ratio direction-making tool, but no earlier than 2018 and subject to a review in 2017 to assess progress on international standards.
The statutory instrument relates to the ability to set the sectoral capital requirements, or SCRs. I will deal with this tool first, then briefly cover the others. The interim FPC recommended that the statutory FPC should have a power of direction to vary financial institutions’ capital requirements against exposures to specific sectors over time, arguing that often the overexuberance that precedes crises begins in specific sectors before spreading further. The Government agree that this targeted approach would allow these risks to be managed in a more effective and proportionate manner than raising capital requirements more generally.
There are, of course, risks associated with the use of these tools. Although the majority of respondents to the Government’s consultation supported the introduction of SCRs, some noted that the FPC risked being perceived as applying an industrial policy via the application of sectoral capital requirements. The FPC has stated that it would wish to avoid an “overly activist, fine-tuning approach”, which should limit this risk. However, there may be times when using the tools in a granular way would be necessary. The Government will keep the use of this tool under review to ensure that it is being used in an effective, proportionate way. There is also a risk that imposing sectorally specific requirements would merely displace excessive risk-taking in other sectors. The FPC will need to monitor carefully the impact of any policy interventions using this tool and may need to consider adjusting more general capital requirements if displacement is a significant problem. I should take the opportunity to highlight one change that the Government have made to the order since the version that was published for consultation. The current order excludes investment firms that are not regulated by the PRA from the FPC’s SCR power. This will ensure that systemically important firms are captured, while smaller firms are not subject to additional requirements.
I now move on to discuss briefly the other macroprudential tools that the Government intend to give the FPC: the role of setting the UK’s countercyclical capital buffer—the CCB—and from 2018, the power to intervene to limit leverage ratios. These are not covered by the draft order, but give useful context to the debate. The CCB is part of the Basel III agreement and will be implemented in Europe by the capital requirements directive, known as CRD4. It aims to ensure that banking sector capital requirements take account of the macrofinancial environment in which banks operate. It will be deployed by national jurisdictions when excess aggregate credit growth is judged to be associated with a build up of system-wide risk to ensure that the banking system has a buffer of capital to protect it against future potential losses. Requiring banks, building societies and larger investment firms to build up capital during periods of overexuberance should help to increase the resilience of the financial system and might also dampen the credit cycle. Unwinding these requirements in the downturn once the particular threat has passed might help to mitigate contractions in the supply of lending. It is clear that with its macroprudential focus, the FPC will be the body best placed to determine the level of the CCB. This was supported by the results of the Government’s consultation.
As the CCB is expected to be provided for in the CRD4, the simplest way to incorporate it into UK law is via regulations made under Section 2(2) of the European Communities Act 1972 to transpose into UK law the provisions of the CRD4 which relate to the CCB. It is vital that the FPC’s decisions in relation to the CCB should be subject to comparable procedural and reporting requirements to the FPC’s other tools. Therefore, in addition to the requirements imposed by the EU legislation, the Government intend to ensure that the CCB will be subject to the same transparency requirements as other FPC decisions, with a summary of the FPC’s discussions when taking decisions on the CCB set out in the FPC’s meeting record and the FPC’s use of the CCB covered in the biannual FSR. The Government will make any necessary changes to achieve this in the regulations which incorporate CRD4 into UK law.
Lord Eatwell
My Lords, that was interesting introduction to this order as it spent most of its time discussing measures that are not included. It also began with a preamble that was an extraordinary rewrite of history, referring to a failure to identify macroprudential risks prior to 2008. Will the Minister specify any Government or regulatory document that includes a reference to macroprudential risk before 2008 and before publication of the Turner review? He will be hard put to find it. There are some academic articles on systemic risk but the whole issue of macroprudential risk was simply not on the horizon at that time.
I was also somewhat distressed to find that the Government still believe that following the Basel III approach of using capital related to risk-weighted assets is still at the centre of the approach to the determination of stability, particularly in the banking sector. This is using weapons with which we fought the last war to try to deal with the new war. It is an excessive emphasis on the asset side of the balance sheet to the detriment of the liability side, and indeed has been criticised very strongly recently by the IMF. I hope that the Government will rethink their approach and not continue to rely on this outdated measure.
I want to talk about some of the measures before us rather than some that might appear in the future, although the Minister has tempted me to ask what is happening with the leverage ratio. Leverage collars, which after all apply to the liability side of the balance sheet, have been demonstrated to be far more effective than risk-weighted capital requirements. Do the Government still plan to weaken the Vickers proposal of a leverage ratio of 25:1 and to fix the requirements simply on the Basel minimum of 33:1? When thinking about the leverage ratio, is the FPC planning any distinction between deposits and wholesale funding in the specification of a leverage cap?
In its earlier consideration of these measures, the FPC rejected the adoption of a loan-to-value ratio in mortgage finance, arguing that this was a political decision. In this instrument, though, we find the requirement on financial institutions to maintain additional own funds with respect to exposure to residential property. Will that not have the same effect? Is it not a back-door method of introducing loan-to-value restrictions by the requirement to hold additional capital against residential exposures?
Turning to the sectors specified in this instrument, it is striking that the measures are confined to financial instruments issued by financial sector firms. Why is that? If there were a bubble in the stock market, it could involve predominantly financial instruments issued by non-financial firms. Why is this legislation restricted only to instruments issued by financial institutions?
Another peculiarity of the drafting of this instrument is that it refers only to an increase in requirements of holding of own funds. It refers to “additional funds required” and that the PRA may require additional own funds both by banks and by other financial institutions. How will the PRA reduce the amount of funds required since the instrument only allows it to require additional funds? How will that happen?
I also regret the exclusion of smaller firms, to which the noble Lord referred in his introductory remarks. The Treasury seems to have totally failed to understand that a significant amount of the financial crisis was due to the aggregation of a large number of small firms doing the same thing at the same time, which had the same consequence as a large firm doing the similar thing in terms of the development of systemic risk.
The measures also refer to the requirement to ask or require that banks treat particular exposures as if they give rise to an increased level of risk, which is true not just of banks but also of investment firms. How is this level of risk to be specified by the FPC? Is it as a risk weight or as a modification of the stochastic distribution model used in the calculation of the firm’s value at risk? How is it to be done? If it is with respect to the modelling, does that now mean that the ability of firms to use their own risk models is to be modified and that there is to be a standardisation of risk models used by firms in the calculation of capital requirements?
The noble Lord referred to the use of these measures in what he called a granular way and what in the instrument is referred to as a solo basis. What will the relationship be between the FPC’s requirements of measures and competition policy, in the sense that imposing measures on a single firm would have competition implications? Will the views of the competition authorities be taken into account?
I assume that this is the first of a series of instruments that will implement the various proposals aired in the consultation papers issued by the interim FPC. Perhaps it would be helpful if the Minister gave us some timetable as to when those other instruments will be laid before the House.
Lord Newby
I am grateful to the noble Lord for those extremely thoughtful questions, and I will do my best to answer them. He said that systemic risk was not on the horizon before the crisis. I think that the phrase was first used in academic literature in 1979. Although the phrase was not in common parlance, it was well understood, at least by some people, that a bubble was building up that was capable of creating systemic risk. The first problem was that it took a long time for the authorities and the Government to accept that there was a bubble. The second was that when they realised that there was a problem, and indeed when there was a crisis, it was far too late to forestall it. It was then necessary to deal with a crisis rather than dealing with a problem at an early stage.
The noble Lord said that we rely far too much on Basel III and that it is a weapon of the last war. We are part of an international discussion on Basel III. Although Basel III is part of the armoury that we use, it is only one part. Indeed, the measure that we are looking at today is not a Basel III measure. Even if the noble Lord was correct that Basel III does not deal with every issue that we will be grappling with, it is not the only tool that we are looking at.
The noble Lord asked me about the leverage ratio, and whether we still plan to weaken the Vickers ratio. I do not believe that the Government’s view on this has changed.
Lord Newby
The Government said in response to Vickers that they believed he was going too far, and I do not believe that that view has changed. The noble Lord asked about the loan-to-value ratio and whether that tool would not have the same effect as introducing a loan-to-value ratio. In an aggregate sense, in many ways it does so. However, the advantage of this approach over adopting a loan-to-value limit is that it places an overall requirement on an institution in terms of its lending to the property sector, but still gives that institution the flexibility to provide loans at a high loan-to-value ratio. This might take place, for example, in a minority of cases in which the circumstances of the person to whom the loan is being given makes that loan prudent. In many ways it could have the same overall effect on the sector, but it gives institutions greater flexibility than a prescriptive loan-to-value ratio.
The noble Lord asked why the stock market was not included and why we were not including firms in that sector. The answer is that at this point the FPC believes that the definition of which firms are covered includes those firms that are most likely to cause a problem. The FPC has taken the view that firms in the stock market are not creating an equivalent risk to those elsewhere and those already covered. That is its judgement, which one can take a view on. The noble Lord disagrees, but that is the answer to the question.
The noble Lord asked about the order using the word “increase” and how it is envisaged that any increase might be unwound. When the FPC considers that any increase is no longer required, it will revoke the direction.
Lord Eatwell
Let us suppose that we are in the situation that we are in today, that there is no direction in place and that we wish to reduce the own funds. How do we do that?
Lord Newby
My Lords, I do think that that is an eventuality that the order caters for because, as the noble Lord says, it uses “increase”. If I am wrong on that, I shall let him know but, as he has said, the order is relatively straightforward. It will be for the PRA to decide whether it wants to do that, and it may do so, but obviously I will correct the record if I am wrong. It may require an amendment to the order for it to do that.
The noble Lord asked about the aggregation of a large number of small firms. This issue formed part of the consultation. The strong view came back that the effect that was being sought could be achieved by limiting the order at this point to larger firms. If any evidence built up that a large number of small firms could cause a risk beyond that currently envisaged, it would be for the FPC at that point to make appropriate provision.
The noble Lord asked how the FPC would specify risk. It will be for the PRA to determine capital models allowed by firms within the overall levels set by the FPC.
The noble Lord asked me about the timetable—whether there would be more orders and when they were going to be. There may be more orders, but none is envisaged at the moment. There is not a conveyor belt of other orders that are half-thought of. The view is that these measures are adequate for the time being. It is always open for further orders to be brought forward, but there is no perceived need for any further orders at this point.
There is one issue that I have not dealt with concerning the relationship between the FPC and the competition authorities. I hope that the noble Lord will forgive me if I write to him on that subject.
Lord Eatwell
Before the Minister sits down, perhaps we could go back to how an increased level of risk is to be specified by the FPC. Is that to be specified as a change in risk weights in old-fashioned Basel I structures, or is it to be specified as a modification of the value at risk models used by the financial institutions? If it is the latter, are we moving away from the ability of institutions to use their own value at risk modelling towards a standardised model?
Lord Newby
My Lords, as I said earlier, the PRA will set overall levels; the capital models allowed by firms will, I believe be determined by the PRA.
Lord Eatwell
I am sorry, but the noble Lord contradicts the instrument before us. It states clearly,
“if they gave rise to an increased level of risk specified by the FPC”.
It is not the PRA, it is the FPC that has to specify this increased level of risk.
Lord Newby
My Lords, I am told that the FPC has the discretion to do either or both of those things, but the PRA will scrutinise how the FPC’s levels are implemented by individual firms.
Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013
(11 years, 3 months ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Financial Services and Markets Act 2000 (PRA-regulated Activities) Order 2013.
Relevant documents: 18th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee.
Lord Newby
My Lords, I shall speak also to the other three orders made under the Act. As I said in respect of the previous order, the Financial Services Act establishes a system based on clarity of responsibility and focus for the new regulatory bodies, avoiding the confused and ineffective tripartite system that it replaces.
The new system will make the Bank of England clearly responsible for financial stability and will provide for two focused regulators with clear remits. The Prudential Regulation Authority, or PRA, will be responsible for the prudential regulation of firms that manage complex risks on their balance sheets. The Financial Conduct Authority, or FCA, will be a focused conduct of business regulator. This group of statutory instruments relates to the scope of the responsibilities and powers of the PRA and FCA. The Government’s guiding principle in all these orders is that there should be clarity of responsibility and effective co-ordination mechanisms where necessary.
First, I turn to the draft order made under Section 22A of the 2000 Act, which establishes which activities will be prudentially regulated by the PRA. The draft order provides that deposit-taking, effecting and carrying on contracts of insurance, and certain other activities in relation to the Lloyd’s market will all be PRA-regulated activities. All firms that carry them out will be regulated by the PRA. That reflects the complex nature of the risks borne by firms that engage in such activities and the need for specialist prudential regulation. Additionally, the activities of some investment firms are of such scale and complexity or are interconnected with other firms to such an extent that they may pose risks to the entire financial system or to other PRA-authorised firms. The PRA will be able to designate such investment firms to be prudentially regulated by the PRA.
The draft order sets out the criteria which the PRA will apply when considering whether an investment firm should be designated. First, the firm must hold, or be seeking to hold, permission to deal in investments as principal. In other words, it must be an investment firm or be applying to be an investment firm. Secondly, the firm must be of a type and size that is required to have initial capital of €730,000 under the capital adequacy directive. This means that it must be relatively large and complex. Finally, the PRA must conclude that designation is desirable, having regard to its objectives.
When deciding on the designation, the PRA must also give consideration to certain other factors. It must consider the assets of the firm in question. If the firm is part of a financial group, the PRA must also look at the size and complexity of other investment firms in the group, and at whether the activities of the firm in question could affect their safety and soundness. The draft order was first published more than a year ago and it has the overwhelming support of consultation respondents. I hope that it will be equally acceptable to the Committee.
Next, I turn to the threshold conditions order. The threshold conditions are the minimum requirements that firms need to meet to become authorised. They are a key supervisory tool and provide the basis for triggering certain of the regulators’ powers to intervene. On the recommendation of the Joint Committee on the draft Financial Services Bill, which carried out pre-legislative scrutiny on the Bill, the Government reviewed the threshold conditions to ensure that they support judgment-led and forward-looking regulation.
The revised conditions set out in the draft order will provide clarity about which aspects of a firm’s business are of interest to each regulator. They will also deliver clear, relevant and unambiguous standards which firms are required to meet and which will be used by the PRA and FCA in exercising their judgment. Lastly, they are aligned with the priorities of the FCA and the PRA—for example, including a reference to whether firms are “resolvable”, which will be a key consideration for the PRA in understanding the risks posed by individual firms to the financial system as a whole.
I turn next to the Financial Services Compensation Scheme order. The FSCS plays a crucial role in the financial services sector, supporting consumer protection and confidence in financial services while serving to protect and enhance financial stability. The Government are committed to retaining a single Financial Services Compensation Scheme, so that there is a single point of contact on compensation for consumers. However, given the important role that the FSCS plays in the financial system, both regulators will interact with the FSCS, and the Government have legislated that in the new regulatory system the FCA and PRA will have joint oversight responsibility for the FSCS and split rule-making responsibility.
As the scope of prudential regulation by the PRA is set out in secondary legislation, it is also necessary to specify the claims that each regulator may or may not make compensation rules for by statutory instrument. Broadly reflecting the division in regulatory responsibilities between the PRA and the FCA, the order makes the PRA responsible for making compensation rules in relation to claims for deposits and claims under a contract of insurance.
The order also provides that the PRA may make compensation rules relating to the activities of managing the underwriting capacity of a managing agent at Lloyd’s, or arranging contracts of insurance written at Lloyd’s. The inclusion of these activities in the order reflects the PRA’s regulatory responsibility in these areas but does not mean that the PRA will be expected to make compensation rules for them. To be clear, the FSA does not currently make compensation rules for these activities and it is not expected that the PRA will do so. Conversely, the FCA will be responsible for making rules to deal with claims for all other matters. This will include claims for mis-selling.
Finally, I turn to the mutuals order. The FSA’s most important regulatory functions and powers were established in the Financial Services and Markets Act 2000. However, the FSA also has a range of functions under the legislation that governs the establishment and operation of mutuals. This order does two things. First, it replaces references to the FSA in the various pieces of mutuals legislation with references to the FCA, the PRA or, in some cases, both. Secondly, it inserts mechanisms similar to those in the Financial Services Act requiring the two regulators to consult each other and co-ordinate their actions in certain cases.
The division of the responsibilities under mutuals legislation follows the general division of responsibilities between the PRA and the FCA under FiSMA. The PRA is given all of the FSA’s mutuals functions that are relevant to the safety and soundness of PRA-authorised mutuals. The FCA will take over the other functions of the FSA, including those related to registration, the register and the public file, the enforcement of offences and the majority of the functions related to administering mutuals in general.
I draw to the Committee’s attention that the order applies the PRA’s objectives to its functions under mutuals legislation but not the FCA’s. Applying the PRA’s objectives means that when carrying out a function under mutuals legislation, such as directing the merger of two building societies, the PRA will be held to account for whether its actions promote its objectives. However, the FCA’s tasks under mutuals legislation are mostly administrative in nature. It will have little discretion as to how it goes about them, so it would not really be possible to hold the FCA to account for whether it was approaching its tasks in a way that advanced its objectives. In the legal sense, there is little to which the FCA objectives could apply. The FCA’s objectives of course apply to all its regulatory activity in relation to mutuals that is carried out under FiSMA, such as making rules and imposing requirements.
With that explanation, I commend these orders to the Committee and I beg to move.
Lord Eatwell
My Lords, I am grateful to the noble Lord for introducing these orders. Like him, I will deal with them altogether. Before doing so, I declare an interest as a non-executive director of a financial services firm as set out in the Register of Lords’ Interests. Turning first to the PRA-regulated activities order, I still am somewhat puzzled as regards the whole definition of the large investment firm. Are we simply relying on the CRD definition expressed as €730,000-odd or is there some broader definition of what is meant by a “large investment firm” which the PRA has in mind?
Also with respect to that, under Article 6.5, what is the procedure if the FCA disagrees with the PRA’s decision to withdraw a designation? The consultation process should form a check on the PRA and not just act as a rubber-stamping on behalf of other bodies. There should be some scrutiny of important decisions that the PRA wishes to undertake, although of course without undermining its powers. What will be the dynamic when there is some form of disagreement and how are those disagreements to be mediated?
The threshold conditions are entirely appropriate but I want to focus on Article 2A about suitability. I found the discussion of suitability as a threshold condition—a very important threshold condition in any regulatory system—to be rather more vague than I would have expected. For example, under Article 2E(e) those who manage the affairs in investment firms have to have “adequate skills and experience”. Who defines adequate? What is meant by adequate? Does adequacy refer to a particular examination standard or standards of experience which might be expected?
In addition, the PRA might be expected to act with probity. Do we need a more precise definition of probity or will we simply regard it as having not yet been caught? How will we determine the conditions of suitability? Should they not be more precise, as individuals who wish to work in the financial services industry surely should have precise conditions and not be turned down on the basis of those rather general statements?
I have rather more questions on the Financial Services Compensation Scheme. Again, I will start with the problem of consultation between the PRA and the FCA. It seems to me that the PRA and the FCA are required to develop rules for access to the FSCS. How will they disclose that? What is the rule-making procedure referred to in this instrument? What will the procedure look like? Will they review the FSCS’s current rules? Presumably, they will. When we have had that review, will there be a transparent report to Parliament of the substance of that review?
There is a relationship between the discussion of mutuals and the FSCS. As the noble Lord will be aware, there has been considerable disquiet, to put it mildly, among mutuals with respect to the contributions that they make to the FSCS relative to those made by banks. I may have missed it, and if I have I apologise, but has there been any development on the levies made on mutuals in their contributions to the FSCS?
Turning specifically to the order before us, are there any substantial changes to the functions of the regulator in relation to mutuals contained in this order, or is it purely a transfer activity? Let us take one example which attracted my attention as I read through the order and raised this question. Paragraph 5 of Schedule 1 states that the FCA has an obligation to,
“maintain arrangements … to determine whether persons are complying with requirements”.
That is pretty vague. What sort of arrangements do we mean? Could there be some clarity as to what is to be implemented here?
Given the Government’s determination to make five regulators where there was once just one, what will happen with respect to consultation between the PRA and the FCA when action is required rapidly; for example, in criminal proceedings? How can we ensure that the consultation procedure will be prompt?
Overall, we are broadly content with the orders. We are concerned specifically about a lack of clarity at various points, to which I have referred, and about the introduction of additional complexity because of the requirement for consultation at various stages between the PRA and the FCA. I would like some reassurance on those points.
Lord Newby
My Lords, if there is a leitmotif running through the noble Lord’s questions, it has to be about how the two bodies work together. This theme ran also through previous debates in your Lordships’ House and gets to the core of arguments about whether the Government were right to split the FSA at all. The view that we took is that we needed to give greater focus to the two elements of regulation. It was very important, having done that, we then set in place ways in which the two regulators would work together. As the noble Lord knows, there are a number of points in the Act where the two bodies are required to establish memoranda of understanding explaining exactly how they are going to work together. The success of the new structure will depend to a very large extent on that working. I know that the bodies as they are establishing themselves are absolutely aware of that and are putting co-ordination and consultation procedures in place.
Perhaps I may deal with some of the specific points that the noble Lord raised. He asked whether the designation of a larger firm was simply the €730,000 capital requirement. The order takes a number of criteria into account, not all of them from the CRD. I read some of them out. The PRA, for example, has to conclude that designation is desirable, having regard to its objectives—this is part of the regulator exercising judgment. That is an additional criterion beyond the €730,000; it is not automatic.
The noble Lord asked what would happen if the FCA disagreed with the PRA’s decision to withdraw designation. This is a decision for the PRA. We expect it to give considerable weight to the views of the FCA, but it is ultimately a matter for the PRA.
The noble Lord asked whether the definitions should be more precise, in particular the definition of “probity”. The Government do not consider that the concept of probity is significantly more subjective than other criteria against which the regulator must make regulatory judgments. Recent conduct and mis-selling scandals have shown more than ever how important it is that firms conduct themselves with probity, and it is right that the regulators can make an assessment on whether this is the case and take action where it is needed. A general question for legislation is how far it attempts to define terms which are in common parlance and have a common understanding. Our view is that in this respect the legislation goes as far as it should do.
The noble Lord asked about mutuals and whether there had been a change in class. This has been a long-standing beef of the mutuals; they feel that they have to bear the burden of the incompetence, folly and recklessness of others. That is a question for the authorities to decide, but for the time being they remain in the same levy class that they have already stayed in.
I shall try to deal with one or two other points. The noble Lord asked about the procedure for FSCS rules. The same procedure applies as for other rules; there is a duty to consult but no duty to carry out a cost-benefit analysis. There are no plans to change the rules as part of the transition. Once the transition has taken place, it will obviously be for the new regulators to decide whether they are happy with them, but we are not planning to do that at the same time.
On the question of consultation between the FCA and the PRA on mutuals functions, the order makes express provision for consultation where it is needed. The general provisions relating to the FCA/PRA MoU, which I referred to earlier and which are set out in Section 6 of the Act, will apply in this area as they will in many others.
I hope that I have answered the majority, if not all, of the questions posed by the noble Lord, and I commend the regulations to the Committee.
Financial Services and Markets Act 2000 (Threshold Conditions) Order 2013
(11 years, 3 months ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Financial Services and Markets Act 2000 (Threshold Conditions) Order 2013.
Relevant documents: 18th Report from the Joint Committee on Statutory Instruments.
Financial Services and Markets Act 2000 (Financial Services Compensation Scheme) Order 2013
(11 years, 3 months ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Financial Services and Markets Act 2000 (Financial Services Compensation Scheme) Order 2013.
Relevant documents: 18th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee.
Financial Services Act 2012 (Mutual Societies) Order 2013
(11 years, 3 months ago)
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Lord Newby
That the Grand Committee do report to the House that it has considered the Financial Services Act 2012 (Mutual Societies) Order 2013.
Relevant documents: 19th Report from the Joint Committee on Statutory Instruments.
House of Lords
(11 years, 3 months ago)
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Introduction: The Lord Archbishop of Canterbury
(11 years, 3 months ago)
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Tibet
(11 years, 3 months ago)
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Lord Alton of Liverpool
To ask Her Majesty’s Government what discussions they have held with the Government of China about self-immolations in Tibet and China’s approach to human rights in that region.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, I am sure the whole House will join me in welcoming the most reverend Primate to the House in his new role. We all look forward to working with him on some extremely important issues, on which he has great expertise.
We are deeply concerned about the large number of self-immolations in Tibet. We regularly raise our concerns with the Chinese authorities. My right honourable friend Hugo Swire issued a statement on 17 December. Tibet was discussed at the last round of the annual UK-China human rights dialogue in January 2012. We encourage all parties to work for a resumption of substantive dialogue as a means to address Tibetan concerns and to relieve tensions. We believe that long-term solutions depend on respect for human rights and genuine autonomy for Tibetans within the framework of the Chinese constitution. Our position on Tibet is clear and long-standing. We regard Tibet as part of the People’s Republic of China.
Lord Alton of Liverpool
My Lords, with 105 self-immolations and 88 deaths, including three more in the past two days, many of them young people, the Dalai Lama has said that this futile waste of people’s lives brings tears to his eyes. As the noble Baroness considers how best to respond to these events, would she undertake to read the report Tibet: Breaking the Deadlock, which the noble Lord, Lord Steel, and I published following our visit to Tibet, and which focused on the need to create dialogue, to end attempts to discredit the Dalai Lama, to examine human rights issues and constitutional arrangements, and to address the reasons why these extreme actions are occurring, leading to this heartbreaking and tragic waste of people’s lives?
Baroness Warsi
I know that the noble Lord has a long-standing interest in this matter. Indeed, I have had an opportunity to look at the recommendations of the report that he mentions. I am sure he will be heartened by the fact that we agree, at least in part, with some of its recommendations about the People’s Republic of China and the Dalai Lama returning to dialogue to take these matters forward bilaterally. Of course, I have real concern about the tragic cases of self-immolation. I have had an opportunity to read the casework on some of them. Tragically, those who die do so at great loss to their communities and families, but those who survive end up suffering for many years with very little treatment. It is a matter that we continue to raise.
Lord Anderson of Swansea
My Lords, China is building better rail and road links to Tibet, which help the Han Chinese colonise that region. Of course, in spite of all these bilateral and multilateral meetings, China ignores any pleas for human rights in China itself, internationally or in Tibet. Does the Minister have any evidence that China is altering its stance in response to human rights in Tibet or internationally, commensurate with its new economic power?
Baroness Warsi
My Lords, we are concerned about the lack of meaningful dialogue to address the underlying grievances against a clearly worsening situation. We continue to encourage all parties to work for a resumption of substantive dialogue as a means to address the Tibetan concerns and to relieve tensions. Of course, we continue to make the case to China that any economic progress can be sustained only if there is social progress as well.
Lord Steel of Aikwood
Does the Minister, having read the report to which she has kindly referred, recognise that in the three years since, two important things have happened? One is that there was a change of leadership in China; the second is that the Dalai Lama has given up his political role as head of the Tibetan Government in exile. Therefore, would she and her colleagues try to encourage the Chinese authorities to enter into dialogue with the Dalai Lama as a religious leader in order to stop these immolations and try to improve relations between the Tibetan people and the Chinese?
Baroness Warsi
Many of us around the world recognise the Dalai Lama as a spiritual leader, but my noble friend will be aware of the position of the Chinese Government. That is not the way he is seen within the People’s Republic of China. The noble Lord will also be aware of the UK-China annual human rights dialogue, and we continue to raise these concerns at that point.
The Archbishop of York
My Lords, I thank the Minister for her answer to the question asked by the noble Lord, Lord Steel. I still want to probe a bit further. He is certainly exiled, but the Dalai Lama is not only a spiritual and religious leader of the people of Tibet; he is also recognised throughout the world. Will the Government nevertheless impress upon the Chinese Government that they should recognise and respect the Dalai Lama as a religious leader and not as a political leader? If they did that, it is possible that they would then have a dialogue.
Baroness Warsi
The most reverend Primate raises an important wider issue: the freedom of religion within China and the recognition of religious groups and therefore of religious leaders. It is a matter that we raise in generic terms, although I cannot categorically say whether the specific issue of recognising the Dalai Lama as a spiritual leader has been raised.
Lord Wills
What representations have the Government made about the fate of Gedhun Choekyi Nyima, the young boy identified in 1995 by the Dalai Lama as the new Panchen Lama, the second highest office in Tibetan Buddhism? The Minister will recall that shortly after that identification, that young boy was taken into what the Chinese Government called “protective custody” and has never been seen since. What assurances have the Government sought about his fate and well-being, and if they have not made any representations, will they do so?
Baroness Warsi
Representations were made about the young boy. Indeed, I think his name appeared on a specific list that was handed over during one of the UK-China human rights dialogues. We have also put forward the idea of him being allowed access to an independent organisation that could assess his current health and whereabouts.
Lord Triesman
My Lords, I associate these Benches with the welcome that has been given to the most reverend Primate. We all wish him every success in the contribution he will make in this House. The last major dialogue that the Minister has reported to us was in January 2012. Obviously, there has been a change in the leadership of the Chinese state and Communist Party in the period since. I wonder whether other channels are available that might be used. I am thinking particularly of the business group, the 48 Group Club, which has managed to establish decent relationships with the Chinese Government and is not always associated with the past that this country has had with China, which has not been held in great esteem in many respects by the Chinese people historically. Is there a dialogue going on with those groups? Can we improve it and can we achieve the objectives to which the noble Lord, Lord Steel, referred just a few moments ago?
Baroness Warsi
The noble Lord makes an important point. I cannot answer it directly. I am not sure whether other groups are being used as alternative avenues to make our views clear. I can, however, inform him that the annual dialogue is now overdue and that officials have been in contact with each other with a view to try to fix a date for further discussions.
Citizenship Test
(11 years, 3 months ago)
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Lord Roberts of Llandudno
To ask Her Majesty’s Government whether they have received representations about the new UK Citizenship test.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the new Life in the UK Test, which is taken for settlement and citizenship purposes, will begin on Monday 25 March and will have British history and culture at its heart. We have not as yet received any direct representations, although public comment on the new handbook has been broadly positive.
Lord Roberts of Llandudno
I thank the Minister for his reply. However, does he not consider that the new handbook is impractical and irrelevant and does not deal with the problems that people need to tackle when they come to Britain? The book contains 3,000 hard facts to be mastered. For instance, does he think it appropriate that every person who sits this test should know when the Emperor Claudius invaded Britain?
Lord Roberts of Llandudno
I am sure that somebody will know. I can go back to Wales; other people can go back to other places. It was AD 43. However, given that there is some discontent regarding the questions asked, would the Minister be prepared to meet some of us who share that concern to discuss a more practical handbook on life in the United Kingdom?
Lord Taylor of Holbeach
My Lords, I am always very happy to learn and would be delighted to meet my noble friend. However, I do not agree with his summary of the new handbook. I think that it contains relevant British history and culture, which is the whole purpose of the exercise: that is, to provide facts on which people can base a life of settlement and, indeed, citizenship in this country. Therefore, I disagree with the premise of my noble friend’s supplementary question but I am very happy to meet him.
Lord Foulkes of Cumnock
My Lords, has the Minister tried to take the test himself and, if so, did he pass?
Lord Taylor of Holbeach
I have a sample test here and it is very fortunate that the correct answers are given in bold type.
Lord Elystan-Morgan
My Lords, does the handbook contain any reference to the invasion of these islands by the Anglo-Saxons?
Baroness Smith of Basildon
My Lords, we introduced the citizenship test in 2005 and remain committed to it, but clearly a significant amount of time, effort and money has gone into these changes and the questions mentioned by the noble Lord, Lord Roberts. It has to be said that when the Prime Minister failed the test on live television in America, one has to doubt whether we have all the right questions. Given that 20% fewer foreign criminals have been deported and given the lengthy delays in the processing of visas, far exceeding what is reasonable or should be expected, as Her Majesty’s Inspector has pointed out, should the priority be changes to the citizenship test or should the key focus be on sorting out the problems connected with immigration and visas?
Lord Taylor of Holbeach
I do not think that it is necessary to tackle just one task at a time. Making this test relevant was an important task. Noble Lords will know that the current handbook has been in use for six years. It was time to have an update and to make it more relevant. The noble Baroness referred to serious issues on the part of UKBA, particularly its ability to cope with appeals. We are well aware of this and I am absolutely certain that the chairman of UKBA has this matter at the top of his agenda.
Lord Lloyd of Berwick
Is the noble Lord aware that those people who have been resident in this country for many years apparently cannot apply to take the new test if they are over 65? Is 65 really too old to become a citizen of the United Kingdom?
Lord Taylor of Holbeach
I was not aware of that fact and, being over 65 myself, I would like to think that I am still in command of all my facilities.
Lord Taylor of Holbeach
Perhaps I should rephrase that. More than 93,000 people have taken an online test, the sample test hosted by the Home Office, and the outcome was that the average score was 86%.
Baroness Trumpington
My Lords, may I just reassure the Minister that I was not the Emperor Claudius’s land girl?
Lord Taylor of Holbeach
I am sure that the House is very reassured by that.
Baroness Gardner of Parkes
My Lords, I have been in this country for almost 60 years. I could not possibly pass that test, although I thought I had assimilated a bit of Britishness while I have been here. My accent remains unchanged, of course. I am concerned about more serious situations in immigration, raised by the Front Bench opposite. With the help of the noble and learned Lord, Lord Woolf, a former Lord Chief Justice, we have managed to obtain a right to be here for someone who has been here now for three years. She was here legally for five years, having come here as an au pair, then illegally for about 20 years. Now she has to wait, and after five years she can apply for citizenship. During that investigation, I discovered that the problem is that when you arrive, you are told that you have to have been here for six years. When you get to five and a half years, they change it to eight years. When you get to seven and a half years, they change it to add another two years. Is it not time that we looked at the prospect of relating the number of years you have to wait to what was in force at that time of your arrival?
Lord Taylor of Holbeach
My noble friend has illustrated that the rules on these matters are complex, but we do keep them under review. We really want to facilitate the opportunity for people who want to make a life in this country to settle and to achieve citizenship. That is the purpose of the test.
Death Penalty
(11 years, 3 months ago)
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Lord Sheldon
To ask Her Majesty’s Government what steps they are taking to end the use of the death penalty worldwide.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)
My Lords, we continue to work towards global abolition in line with the FCO strategy for abolition of the death penalty. We regularly raise this issue in bilateral discussions with countries of concern and fund projects in support of abolition. In December last year we worked intensively to help ensure that the UN General Assembly resolution against the death penalty was supported by more countries than before.
Lord Sheldon
My Lords, we need to limit the death penalty, which is much used in China. It is more limited in other countries, and it still exists in parts of the United States. Generally, there has been a reduction in the death penalty, but further limitations must be pressed.
Baroness Warsi
I agree with the sentiments of the noble Lord. That is why we work with countries on a two-pronged approach—those countries which wish to retain the death penalty on their books but want, effectively, to impose a moratorium and then move towards abolition.
Baroness Hollins
My Lords, Mr Warren Hill, a man with intellectual disability, was due to be executed in Atlanta, Georgia just a week ago today. Due to the very welcome intervention of the Foreign and Commonwealth Office and other advocates, there was a stay of execution. I understand that the state of Georgia is still hoping to execute Mr Hill before 1 March, when its licensed medication runs out. Could the Minister advise the House what other steps the Foreign and Commonwealth Office is taking to try to ensure that Mr Hill’s mental disability is properly assessed, that the method of execution is considered and that this man is granted a reprieve?
Baroness Warsi
I cannot answer the specific questions that the noble Baroness raises, but I will write to her with details of that very specific case. I can assure her that we have done casework on individual cases with individual states. Our consular section has intervened and expressed its interest in matters such as this, but we have also worked with organisations such as Reprieve, in which Clive Stafford Smith and his colleagues have worked quite closely with lawyers in assisting and supporting people on death row. However, I will write to the noble Baroness about the specific case she raised.
Lord Dholakia
My Lords, I declare an interest as a member of the All-Party Parliamentary Group for the Abolition of the Death Penalty. In that capacity last week, I visited South Sudan and Tanzania. What is being done, first, through the Commonwealth Secretariat and, secondly, through bodies such as CHOGM to impress upon Commonwealth countries to sign Resolution 44/128 of the 1989 United Nations resolution on abolition? More importantly, can we encourage more countries to have a moratorium on carrying out death sentences, as Tanzania has done?
Baroness Warsi
The Commonwealth is an important institution within which to have these discussions and, of course, the signing of the Commonwealth charter in December only last year is a way to further strengthen the underpinning of the values of the Commonwealth family. However, individual countries within the Commonwealth take different views in relation to the use of the death penalty. We continue to work with them on a bilateral level, as well as through multilateral organisations, to try and move them to a position of abolition.
Lord Faulkner of Worcester
Can the Minister give an assurance that no European state is exporting to the United States pentobarbital or any other drug that is used in execution?
Baroness Warsi
My Lords, I read about that somewhere in my brief, but I am not sure exactly where it was. Rather than give the noble Lord an answer that is not entirely correct, I will write to him with a very specific answer.
Lord Low of Dalston
My Lords, as the Minister will be aware, Afzal Guru was hanged in India on 9 February this year—the second execution in that country in three months—following an eight-year hiatus in executions. Reports suggest that four more prisoners, after their mercy petitions were rejected, are due to be executed imminently. What efforts are the Government making to encourage the Indian Government to stop this regressive move? Was this one of the issues that the Prime Minister raised with the Indian Government when he recently visited India?
Baroness Warsi
The matter was raised during the recent visit. We made representations via my right honourable friend the Minister of State, Hugo Swire, who has responsibility for India. He raised that matter when he visited Delhi with a large delegation on 21 February. We have separately made representations through the EU, and will continue to raise through the EU-India human rights dialogue India’s use of the death penalty. Of course, the matter is extremely concerning, because there was effectively a moratorium, as the noble Lord said, between 2004 and 2012. We would like it to move back to that position, with a view to formal abolition.
Baroness O'Cathain
My Lords, the noble Baroness, Lady Hollins, told us about the dreadful situation facing Mr Hill, and my noble friend agreed that she would “write” about this issue. However, today is 26 February and the execution is, I understand, due to take place on 1 March. Can we do something a bit more than write? Can she not make a positive statement that she is going to do something about it today?
Baroness Warsi
I was intending to do exactly that. My noble friend makes an important point in terms of the timing. I can assure her and the noble Baroness, Lady Hollins, that I will deal with this matter when I return to my office in about half an hour’s time.
Lord Clarke of Hampstead
My Lords, would the Minister care to comment on the recent wave of executions in Iran, which have been stepped up to number many dozens in the past few months? Does she agree with me that the inhuman and barbaric treatment of the people of Iran underlines once again the fact that the people who decide on these executions are inhuman and disregard the wishes of their own people?
Baroness Warsi
The noble Lord is right. Tragically, Iran executes more people per capita than anywhere else in the world—at least 352 people in 2012 of whom we have records. Tragically again, the death penalty is regularly used for non-serious crimes. In doing so, Iran fails to meet even the most basic minimum standards under international law and, also tragically, consistently refuses to engage with the international community on this issue.
Energy: Electricity Generation
(11 years, 3 months ago)
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The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, I begin by wishing my noble friend a very happy 94th birthday, which I know he celebrated a couple of days ago. The Government are taking decisive steps to secure our supplies. We are reforming the electricity market to drive the investment we need to ensure that we have a diverse range of energy supplies, and through the Green Deal and ECO, we are looking to reduce our usage of energy. I am also pleased to announce that we have had investment from Carrington gas, which will come on stream in 2016, and Hitachi’s investment of £700 million in purchasing Horizon demonstrates that the Government’s approach is right, and that the UK remains an attractive place to invest.
Lord Ezra
My Lords, I thank my noble friend for her kind remarks. In spite of advancing years, I continue to take a keen interest in energy matters. Does the Minister agree that, while in the medium and long term, shale gas, new nuclear and other installations may help to meet increased electricity demands, there is a serious short-term problem, to which she referred? In that connection, will she indicate what steps the Government will take, in addition to those that she mentioned, to avoid a possible shortage of electricity-generating capacity within the next two to three years, bearing in mind the early closure of existing coal and some nuclear plants, and the warning from Ofgem that, as a result, reserve electricity capacity will fall well below normal levels?
Baroness Verma
My Lords, the Government are taking action to ensure that the UK economy continues to enjoy high levels of electricity supply security in the short, medium and long term. Our proposals for electricity market reform will drive investment, ensuring that we have a diverse mix of energy sources. Those proposals also include legislating for a capacity market to ensure that we have sufficiently reliable capacity on the system in the long term. The legislation, which will come to your Lordships’ House for consideration shortly, will enable a capacity market. With regard to the short term, we expect to see some reduction in margins as we move towards the middle of the decade; we saw similar reductions in the previous decade.
Lord Tomlinson
Does the Minister agree that we are falling further and further behind the necessary timetable for getting new nuclear power on stream? Without that new nuclear power, we will see the proportion of our energy that is generated from nuclear rapidly declining as we close the existing stations, and we will become more and more dependent on imported energy. At the same time, we will of course fail to meet our Kyoto targets. In those circumstances of an increase in imported energy, will the Minister answer the question I asked her yesterday, and which she failed to answer: what is the effect on imported energy requirements of the devaluation of sterling, which is further exacerbated by the loss of our AAA status?
Baroness Verma
My Lords, new nuclear is one of the country’s options. As I have said many times at the Dispatch Box, it is part of an energy mix. However, like all things, it goes through the proper procedures, as the noble Lord would expect. We have a lot of interest in investment in the UK from outside; I just mentioned Hitachi’s purchase of Horizon. The noble Lord needs to be reassured that we are going through processes that need to be properly done through planning and all the other necessary requirements of new nuclear. On yesterday’s question, if the noble Lord had been here, he would have heard my noble friend’s response.
Lord Lawson of Blaby
Following the very pertinent Question of the noble Lord, Lord Ezra, will my noble friend assure the House that if the need arises, our coal-fired power stations will be kept open for as long as necessary, regardless of the European large combustion plants directive? Looking further ahead, will she agree that the Government need to give every encouragement they can to the fastest possible development of our indigenous supplies of shale gas, which is clearly the fuel of choice for power stations in the foreseeable future?
Baroness Verma
My Lords, my noble friend raises a number of important and key points. Of course we are looking at ensuring that we do not have a dip in our secure energy supply. We are also making sure that our new energies will take over when the old gas and coal-powered stations come off stream. We cannot meet our carbon emission reduction targets if we have unabated coal continuing to come out of our power stations. However, we are looking at increasing our gas supplies as well as all our other alternative energy supplies.
Baroness Worthington
My Lords, as the Minister mentioned, the most effective way to combat potential insecurity of supply is to invest in demand management and reduction. I was very pleased to hear mention of the capacity mechanism that we expect to be part of the Energy Bill. I understand that officials have been working on proposals for this. Will the Minister confirm what state of readiness the proposals are in, and when we might expect to see them, since they are the best way of combating security of supply problems?
Baroness Verma
The noble Baroness is absolutely right. We need to ensure that we reduce our usage of electricity and of other energies. We have had a consultation. We are now looking at the responses to it. I hope to come back to the Dispatch Box with our response later in the year.
Parliamentary Commission on Banking Standards
(11 years, 3 months ago)
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The Chairman of Committees
That the Lord Archbishop of Canterbury be appointed a member of the committee to join with the Commons as the Parliamentary Commission on Banking Standards.
Presumption of Death Bill
(11 years, 3 months ago)
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Baroness Kramer
My Lords, I understand that no amendments to the Bill have been set down and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Mobile Homes Bill
(11 years, 3 months ago)
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Lord Best
My Lords, I understand that no amendments to the Bill have been set down and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Public Service Pensions Bill
(11 years, 3 months ago)
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Lord Newby
Lord Newby
My Lords, this group contains a large number of technical amendments. Amendment 1 reflects the fact that some of the obligations in the Bill are set in the main clauses and not in scheme regulations. This means that the drafting of Clause 3, which allows only for consequential, supplementary, incidental or transitional changes as a result of provisions in scheme regulations, leaves a theoretical gap in powers that we would like to plug. If such changes were required solely as a result of provisions in the Bill rather than in scheme regulations, we might not be able to do so without making new primary legislation. We do not believe that that would be appropriate, so the amendments in this group seek to address the slight gap in the current drafting.
Of course, this extends the powers to cover only consequential, supplementary, incidental or transitional changes that result from clauses that have been debated at length in both Houses. Parliament is already aware of the desired effects of the Bill. These powers ensure that the effects can be realised. As we discussed on Report, any use of these powers to amend primary legislation could only be for consequential purposes and to Acts that have already been passed. I therefore hope that noble Lords can support this small but sensible amendment.
Amendments 4 and 5 are minor technical amendments. They are simply to provide consistency throughout the Bill in the form of cross-references to Schedule 4 to the Pensions Act 1995. They ensure that the same format is used in Clauses 34 and 35 as is used in Clause 10.
Amendments 8 and 9 are again minor amendments intended to clarify the wording, in this case of amendments I brought forward on Report. Noble Lords will recall that those amendments give schemes flexibility to define pensionable earnings for the purpose of the final salary link, and also safeguard the value of members’ final salary benefits. The safeguard is that the amount of earnings in the new scheme that are pensionable earnings for the purpose of the final salary link must not be materially less than the amount that would have applied had the person been in the old scheme until the point they eventually left service. The amendments simply clarify the safeguard. They make it clear that it applies to what would have been the person’s pensionable earnings had that person been in active service in the old scheme or deemed transfer scheme, rather than the new scheme. They would, of course, not have been in actual active service in those schemes after 2015, since they would have been in active service in the new scheme instead. The amendments do not change the substance of the meaning of the previous amendments in any way, but are just clarificatory.
Amendment 10 is concerned with circumstances where a pension that is calculated in accordance with the final salary link has been put into payment and the person subsequently returns to public service employment. It is designed to allow flexibility for schemes to continue their current treatment of a final salary pension in payment in such circumstances. Our intention is for the final salary link to accord with the rules on final salary benefits in each scheme that are currently in force. Some schemes currently allow the final salary benefits to be recalculated after a period of re-employment. The provisions in Schedule 7 allow this approach to continue where there is continuity of service, as provided for in paragraph 3. However, many schemes currently treat final salary benefits that have already been put into payment as fully crystallised, and consequently unaffected by any future period of employment in scheme service. Our amendment would allow for scheme regulations to provide that this continues to be the case too, if desired. Rules of existing schemes can also continue to provide for some limited aggregation of periods of employment, as some do at the moment. This amendment assists schemes in the implementation of the recommendation of the noble Lord, Lord Hutton, to honour the benefits built up under the current final salary schemes.
Amendment 11 consists of a series of minor, consequential amendments to the Pensions (Increase) Act 1971. It clarifies how the uprating provisions of that Act apply to those with service in both an existing scheme and a new one. The 1971 Act provides for the uprating of pension benefits for deferred and pensioner members of the public service schemes. The intention is that while a person is a member of a new scheme after 2015, and they have also old scheme benefits, those old scheme benefits should be treated for uprating purposes as though they remained an active member. This should remain the case until the member takes the old scheme pension or leaves the new scheme. This means that for those persons whose existing scheme is a final salary scheme, their benefits in that scheme will be uprated through the final salary link provisions in Schedule 7 to the Bill. For those persons whose existing scheme is a career average scheme, their benefits should continue to be revalued as if they remained an active member. This amendment clarifies how the provisions in the Pensions (Increase) Act apply in the circumstances I have just described.
Where people continue in service, the old scheme benefits should not be treated as deferred from 2015. To do so would mean that those benefits would be uprated in line with prices from 2015, which would run counter to the treatment of old scheme benefits recommended by the noble Lord, Lord Hutton.
The final amendment in this group relates to an amendment I introduced on Report to paragraph 30 of Schedule 8. This paragraph amends Schedule 4 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 to enable those active members of the Legal Services Commission pension schemes to transfer into the Civil Service scheme on 1 April 2014 to have full access to the transitional provisions contained in Clause 18. This subsequent amendment is a minor tweak to paragraph 30 to ensure that, in addition to those active members, deferred members of the LSC pension schemes who rejoin within a five-year period will also benefit from the transition provisions. This is entirely consistent with wider government policy on the treatment of deferred members of public service pension schemes. It will ensure that employees of the LSC are not unfairly disadvantaged by the changes to their pension provision. I beg to move.
Lord Eatwell
My Lords, I am grateful to the noble Lord for explaining the content of these essentially technical amendments. I particularly welcome the approach, which is in accord with the recommendation of my noble friend Lord Hutton.
I have but one question of the noble Lord, and that is why his remarks were not prefaced by an apology to the House for having put down these amendments as late as 5 pm yesterday afternoon.
Lord Newby
My Lords, I have my apology prepared and I will now give it. I thought it was the next group of amendments about which the noble Lord was particularly concerned.
I apologise to the House for the late tabling of these amendments. There is nothing sinister about it. As noble Lords will have understood, I hope, from my explanation of them, they were extremely minor technical amendments. The reason for the delay was simply to ensure that all legal issues had been adequately addressed in the final drafting. I had hoped we could have done it sooner, but that was the sole reason for the delay in the amendments being submitted. I repeat, I am sorry that we did not do it earlier.
Lord Newby
(a) the affirmative Commons procedure, if the order specifies a percentage decrease for the purposes of subsection (2), and(b) the negative Commons procedure, in any other case.”
Lord Newby
My Lords, on Report, I asked the noble Lords, Lord Whitty and Lord Eatwell, to withdraw their amendments on the revaluation order because of my intention to return with an amendment of my own. I said that I would consider the parliamentary procedure for the revaluation order where it specifies a negative figure, and the amendments that I have tabled, albeit at the last minute, are in line with that commitment.
As I have made clear on several occasions before, it would be wrong to rule out revaluations that set out negative figures on the very rare occasions where either the CPI or earnings were in negative territory. This would be unfair to the taxpayer and represent an asymmetric sharing of risk, which was specifically referenced by the noble Lord, Lord Hutton, in his report.
The amendments that I have brought forward do not affect the ability to track growth directly. I do not wish to rehearse at length the strong arguments I have deployed in the past. However, these amendments increase the level of parliamentary scrutiny in the highly unlikely event that we see negative growth. Where the Treasury order sets a negative figure, which I remind the House it can determine only on reasonable and justifiable terms by reference to the general level of prices or earnings, the order will be subject to the affirmative procedure. This will ensure that Parliament has an opportunity to debate the measure. Given the uniqueness of a situation in which the revaluation of benefits could lead to a decrease in entitlement, the Government believe that this is an appropriate and sensible additional safeguard of members’ interests.
However, I should point out that the vast majority of the revaluations will involve run of the mill legislation that simply sets out the relevant increases in line with announced government policy. For example, if the new schemes are already in place, the order for this year would simply set out the positive change in prices in line with the CPI and the positive change in earnings in line with the average weekly earnings measure. Both of these have been in the public domain for quite some time.
When we are not experiencing something extraordinarily unusual such as negative growth, it would go too far to provide for the affirmative procedure for every order as provided for in the amendment of the noble Lord, Lord Eatwell. Therefore, I hope that the noble Lord will understand why I am not able to accept his amendment. The Government’s amendments strike the appropriate balance between parliamentary scrutiny and sensible regulation-making. I hope they will provide some comfort and that noble Lords will be able to support them. I beg to move.
The Lord Speaker (Baroness D'Souza)
I should advise your Lordships that if this amendment is agreed to I cannot call Amendment 3 for reason of pre-emption.
Lord Eatwell
My Lords, I am grateful to the noble Lord for introducing these amendments, and for reacting as he promised on Report to the issues raised there by me and my noble friend Lord Whitty. His speech was slightly imperfectly drafted as it referred on several occasions to the unlikelihood of negative growth. In fact under this coalition Government negative growth has become an all too common characteristic of our economy. He was, of course, referring to the negative growth of prices and earnings. In that dimension, he may hopefully be more accurate.
Our amendment was put down at 4.30 pm yesterday afternoon because of the absence of any government amendment at that time dealing with this issue. The government amendment appeared half an hour later. In the circumstances we are pleased that the Government have understood some of the important issues raised, particularly by my noble friend Lord Whitty, and have brought forward appropriate amendments to take into account the arguments that he made both in Committee and on Report. I will therefore not move Amendment 3, and will be quite happy to see government Amendment 2 nodded through.
Lord Newby
Lord Newby
Lord Newby
Lord Newby
“( ) In this Act, the “affirmative Commons procedure”, in relation to a Treasury order, means that the order may not be made unless a draft of the instrument containing it has been laid before, and approved by resolution of, the House of Commons.”
Lord Newby
“Final salary link not to apply again to a pension in payment5 (1) Scheme regulations may provide that where a pension in payment under a scheme to which section 18(1) or 31(2) applies has been calculated by reference to this Schedule, the pension cannot be recalculated by reference to this Schedule where there is a subsequent period of pensionable public service (within the meaning of paragraph 3).
(2) Provision made under sub-paragraph (1) may in particular be made by amending the scheme under which the pension is in payment.”
Lord Newby
“3A After section 8 of the Pensions (Increase) Act 1971 there is inserted—
“8A Section 8(2): references to “service”
(1) In a case where—
(a) paragraph 1 or 2 of Schedule 7 to the 2013 Act (final salary link for persons who remain in old scheme for past service) applies in relation to a person, and(b) the person’s final salary falls to be determined by reference to that paragraph,references in section 8(2) above to the service in respect of which a pension is payable include the person’s new scheme service (within the meaning of Schedule 7 to the 2013 Act).(2) In a case where—
(a) a person is a member of a relevant old scheme by virtue of pensionable service for that scheme (“the relevant old scheme service”),(b) the person is also a member of a scheme under section 1 of the 2013 Act or a new public body pension scheme (“the new scheme”) by virtue of pensionable service for that scheme (“the new scheme service”),(c) the relevant old scheme service and the new scheme service are continuous, and (d) the person’s employer in relation to the relevant old scheme service is the person’s employer in relation to the new scheme service (or any other employer in relation to the new scheme),references in section 8(2) above to the service in respect of which a pension is payable include the person’s new scheme service.(3) In this section—
(a) “relevant old scheme” means a career average revalued earnings scheme (within the meaning of the 2013 Act) to which section 18(1) or 31(2) of that Act applies (restriction of benefits under existing schemes);(b) “employer”, “new public body pension scheme” and “pensionable service” have the same meanings as in that Act.(4) For the purposes of subsection (2)—
(a) paragraphs 3 and 4 of Schedule 7 to the 2013 Act (continuity of employment etc) apply as they apply for the purposes of paragraphs 1(2) and 2(2) of that Schedule;(b) regulations under section 1 of the 2013 Act (in the case of a new scheme under that section) or rules (in the case of a new public body pension scheme) may provide that where a pension is in payment under a relevant old scheme, references in section 8(2) above to the service in respect of which a pension is payable do not include any subsequent period of pensionable service in relation to a scheme under section 1 of the 2013 Act or a new public body pension scheme.(5) Provision made under subsection (4)(b) may in particular be made by amending the relevant old scheme.
(6) In this section, “the 2013 Act” means the Public Service Pensions Act 2013.””
“(11A) Where an individual—
(a) was a member of a relevant LSC scheme immediately before the transfer day,(b) had been a member of that scheme immediately before 1 April 2012, and(c) becomes, on or after the transfer day, a member of a civil service scheme by virtue of employment in the civil service of the State,the individual is to be regarded, for the purposes of section 18(5) of the Public Service Pensions Act 2013, as having been a member of the civil service scheme immediately before 1 April 2012.(11B) In sub-paragraph (11A)—”.”
Enterprise and Regulatory Reform Bill
(11 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text
15:59 - Division on Amendment 10. - Ayes: 186 / Noes: 204 - Amendment 10 disagreed.
16:54 - Division on Amendment 23. - Ayes: 194 / Noes: 227 - Amendment 23 disagreed.
18:53 - Division on Amendment 40 - Ayes: 155 / Noes: 178 - Amendment 40 disagreed.
Lord Teverson
“Interpretation of the green purposes: duty to assess impact on the Climate Change Act 2008
(1) In interpreting the purposes set out in section 1(1), it is the duty of the Board of the UK Green Investment Bank to assess whether the implementation of its investment strategy, or similar document outlining or amending the proposed investment portfolio, will as a whole, increase the likelihood of achieving carbon budgets and greenhouse reduction targets under the Climate Change Act 2008.
(2) In subsection (1), whether or not an investment strategy will increase the likelihood of achieving carbon budgets and greenhouse gas reduction targets shall be assessed compared to a scenario where the identified investments or investment categories did not proceed.
(3) In undertaking the assessment required under subsection (1), it is the duty of the Board of the UK Green Investment Bank to have regard to the advice and reports of the Committee on Climate Change as required under sections 34, 36 and 38 of the Climate Change Act 2008.
(4) The Board must not make a decision to adopt or amend its investment strategy or similar document as described in subsection (1), unless it is satisfied, as a result of the assessment conducted under that subsection, that the proposed investment portfolio will, as a whole, increase the likelihood of achieving carbon budgets and greenhouse gas reduction targets under the Climate Change Act 2008.”
Lord Teverson
My Lords, the purpose of my amendment, which I tabled early in the process, before any government amendments, was really to make sure that the Green Investment Bank does what it says on the tin. It should invest not only in the individual areas that are listed so comprehensively in Clause 1, the first of which is,
“the reduction of greenhouse gas emissions”,
which I shall pursue in a moment. It goes on to list,
“efficiency in the use of natural resources … natural environment … biodiversity … environmental sustainability”.
We could not have a better list of good things for this bank to invest in.
However, the difficulty is, as the Bill goes on to say, that any investment has to meet only one of those excellent purposes, but there can be conflict environmentally in certain areas over certain actions. For instance, an important coastal reclamation project to ensure biodiversity might produce a negative carbon outcome over the medium to longer term. It is a possibility, although clearly it will not happen all the time. My amendment seeks to ensure that the bank, looking at the position overall rather than at individual investment decisions, has to make sure that we bring down carbon emissions overall and that this is put within the context of the Climate Change Act. I see that as being absolutely essential and I am delighted that the Government have put down their own amendments with a similar requirement, so I look forward to the Minister explaining them in more detail. At this point, I beg to move.
Baroness Worthington
My Lords, we also welcome the fact that the Government have listened to our debate in Committee and have tabled amendments to make more explicit the green purposes of the Green Investment Bank. As has been said many times, with no ability to borrow, the bank can scarcely be described as a bank, and with unclear purposes it might also cease to be green. We welcome the Government’s amendments, but there is a remaining concern. When we discussed this in Committee, we were looking for specific references to the meeting of the UK’s carbon budget under the Climate Change Act 2008. The amendments tabled for consideration today do not contain that explicit reference, which is a great shame, and we hope to reinstate it. References to “global greenhouse gas emissions” may be welcome, but which country, let alone which bank, can truly be expected to make a contribution to such an outcome? The factors influencing global emissions are complex and manifold, and where the UK could make a difference to global emissions is by showing leadership on policy and instruments to tackle climate change. The Climate Change Act was drafted not only with a view to contributing to solving the global problem but to demonstrating leadership at home. The Green Investment Bank has been created to contribute to the latter part as much as the former and therefore the legislation which shapes this decision should refer to our existing, world-leading climate change mitigation legislation. I hope that the Minister will accept these amendments, which seek to achieve this.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, I welcome the contributions from my noble friend Lord Teverson and the noble Baroness, Lady Worthington, to this debate, and indeed the cross-party support that there is for the UK Green Investment Bank. The bank will be a key driver of the transition to a green economy and is already making investments in green infrastructure projects. The bank has already committed more than £400 million to projects across a range of sectors, including waste, non-domestic energy efficiency and offshore wind. These investments are illustrative of the impact we expect the bank to have in the coming years.
In turning to the first amendment, I emphasise the large measure of agreement between the Government and noble Lords who have tabled this amendment. We agree that the reduction of greenhouse gas emissions is a key objective for the bank and accept that it would be right to give this objective statutory recognition. However, we want to do this in a way that best reflects the bank’s corporate governance framework and its position as a Companies Act company. Clause 1 sets out five statutory green purposes which, read together, set the parameters of the bank’s activity to ensure that it must always remain green. These green purposes provide an overarching framework for the bank’s green activity while preserving the necessary breadth to adapt to evolving green priorities over the long term. The Government consider that this breadth is essential as there are important activities which are clearly “green”, but may not reduce greenhouse gas emissions, including recycling and improving water quality. We would not want the Bill to be amended in such a way that put doubt on the bank’s ability to invest in these areas, and I welcome noble Lords’ support for this approach.
As I have said, the Government agree that the reduction of greenhouse gas emissions is an important objective for the bank. That is why we have included a statutory green purpose explicitly to this effect, and why we have tabled our own amendments, to which I will turn shortly. However, it is important that we focus on the key objectives for the bank and do not introduce additional requirements that might complicate its decision-making process. We need to ensure that under its constitution, the Bank can operate as a commercial company. This is important because the bank’s impact may be diluted if the board is concerned that the Government or the courts may seek to second-guess its commercial judgments. That is why the Secretary of State has given an operational independence undertaking to the board.
It is equally important that the legislation provides sufficient clarity for the board and does not expose its investment decisions to increased risk of challenge by bringing a clear public element to the Bank’s functions. Furthermore, by adding another test on which the board will have to be satisfied when making investment decisions, this amendment raises the prospect of the legislative framework conflicting with the bank’s own constitution, something we believe is avoided through the Government’s proposed amendments to the Bill.
At the same time, we do not believe that our ambition in this area is any less than that of noble Lords. The Government’s amendments do not refer to a significant reduction in greenhouse gas emissions because we do not believe that it would be possible to give sufficient clarity to the bank’s directors if we were to introduce such imprecise wording. Indeed Amendment 1 would not require the board to make a significant reduction to greenhouse gas emissions. The Government’s preferred approach of making the new obligation part of the company’s objects would, however, give the bank’s directors strong encouragement to maximise the reduction of greenhouse gas emissions, as that would be the most likely way to maximise the success of the company.
The noble Lord, Lord Smith of Kelvin, who is chairman of the UK Green Investment Bank, has said that he supports this approach, and I welcome his letter, which I received a couple of days ago. The noble Lord has been very clear that he welcomes a statutory obligation on the bank in respect of the reduction of greenhouse gas emissions, but has said that it is important that this is achieved in a way that is consistent with the bank’s internal constitution and with the directors’ general duties to the company.
We also agree with noble Lords that it is important that the bank contributes to a reduction in UK greenhouse gas emissions. As this Bill must make provision for the long-term future of the bank, we believe that the best approach would be to achieve this through an amendment to the company’s objects and we intend to make such an amendment shortly. Amendment of the objects after designation will of course require the affirmative resolution of both Houses of Parliament.
Finally, I will comment on two further aspects of this amendment. Amendment 1 would require the board to have regard to the advice and reports of the Committee on Climate Change. I am happy to give a commitment on behalf of the noble Lord, Lord Smith of Kelvin, and the other members of the bank’s board that they will do so. We would, however, much prefer not to impose a specific statutory obligation on the board which might cast doubt on the breadth of the general duty on all directors—under Section 172 of the Companies Act 2006—to have regard to the impact of the company’s operations on the environment.
Secondly this amendment, unlike the Government’s amendments, does not impose a corresponding disclosure requirement on the board. We believe it is important that there is a tailored disclosure obligation on the board in respect of this new requirement to ensure full transparency and accountability. This approach is of course in keeping with the best standards of corporate governance.
I will now turn in more detail to the Government’s own amendments in this area. Amendment 3 requires the Secretary of State to be satisfied that the bank’s objects are such that, in acting consistently with them, the bank’s investment activities—taken as a whole—would be such as the bank considers likely to contribute to a reduction of global greenhouse gas emissions. The new obligation on the board is therefore imposed through the company’s statement of objects in its articles of association. This reflects the approach we have taken in respect of the green purposes and ensures that the new obligation forms part of the directors’ general duties to the company, including the duty to promote the success of the company in line with its objects. We believe that this will be the most effective approach. It also eliminates the possibility of inconsistency with the company’s corporate governance framework and reduces the risk of legal challenge to the board’s investment decisions.
The new provision goes significantly beyond the assurances we have already given in this area and ensures that the bank will continue to focus its investments in areas that will deliver such reductions. As I have said, the noble Lord, Lord Smith of Kelvin, has indicated his support for the Government’s approach.
Amendment 8 would prevent any alteration to the bank’s objects which is not consistent with the requirement for the bank’s investment activities as a whole to deliver a reduction in greenhouse gas emissions. This will ensure that this new obligation will continue to apply even if there were to be a change in the company’s ownership.
The third substantive element is the imposition of a bespoke reporting requirement in respect of the new obligation on the directors to ensure that the bank’s overall investment portfolio reduces greenhouse gas emissions. Previous debates have touched on the bank’s commitment to transparency, and the bank’s board has already agreed that the bank will voluntarily report on the greenhouse gas impacts of its investments. This new reporting requirement will complement that commitment by requiring the bank’s directors to include in their directors’ report an explanation of the steps that they have taken to ensure that the bank’s investment activities would be likely to contribute to a reduction of global greenhouse gas emissions, together with a statement of their views on the likely effect of the bank’s activities on global greenhouse gas emissions. In addition, the bank will be required to report on the greenhouse gas emissions associated with its own activities under the forthcoming changes to the narrative reporting requirements on quoted companies.
Finally, turning to Amendments 4, 9 and 12, the Government strongly believe that any new obligations in this area should be imposed through the company’s constitution rather than through a separate public law requirement, which might not be wholly consistent with the directors’ duties under the company’s constitution. The amendments tabled by the noble Baroness, Lady Worthington, seek to combine the two approaches by imposing an obligation in respect of an Act of Parliament through the company’s constitution. The Government consider that this approach will not deliver the degree of clarity that is needed.
The Climate Change Act 2008 imposes obligations on the Government, not on the UK Green Investment Bank—there is a difference. Reference to this Act in the company’s constitution cannot therefore provide the clarity that the bank’s directors need for effective decision-making. At the same time, I do not believe that these amendments show greater ambition than the Government’s approach.
The Government are proposing that, under the bank’s constitution, the directors will have a general duty to ensure that the bank’s investment activities, taken as a whole, contribute to a reduction of greenhouse gas emissions, both globally and in the United Kingdom. This is not a stand-alone duty but must be read alongside the directors’ general duty to act in the way that they consider would be most likely to promote the success of the company, using the definition of success set out in the company’s objects. The directors would fail in this duty if they were to aim for a very small net reduction in greenhouse gas emissions even if, acting consistently with their other duties, they could achieve a much more significant reduction. We therefore do not believe that an additional obligation linked to Climate Change Act targets would in practice affect the board’s decision-making or the scope of its ambitions in this area.
In conclusion, we agree that the reduction of greenhouse gases will be a key objective for the bank but we wish to ensure that statutory intervention on this point reflects the bank’s position as a Companies Act company and its corporate governance framework. We believe that the Government’s amendments, which will create a requirement through the objects for the bank’s investment portfolio to deliver a carbon reduction and set out in statute the reporting mechanisms that sit behind this requirement, will address noble Lords’ concerns in the way that best reflects the bank’s corporate governance. I therefore ask my noble friend Lord Teverson to withdraw his amendment.
Lord Teverson
My Lords, I thank my noble friend the Minister for his explanation of the government amendments and how they relate to the others. I have to admit that bits of them are certainly better than my own amendment. I welcome very strongly the undertaking from the Dispatch Box that there will be regular reports from the board to the Committee on Climate Change. I also welcome the extra disclosures and the fact that alterations to the company’s objectives have to comply with reducing carbon emissions as well, which is an important point.
I have been trying to understand what difference would be made by the addition of the reference to the Climate Change Act proposed by the noble Baroness, Lady Worthington. I like the reference to the Climate Change Act but it is difficult to see, if you are reducing carbon emissions—which is part of the overall objective of the Green Investment Bank—how you would then not be closer to complying with carbon budgets and those requirements.
I am happy with the Government’s response. I thank the Minister for having responded in that way and for making those commitments at the Dispatch Box. I beg leave to withdraw my amendment.
“(2A) The second condition is that the Secretary of State is satisfied that the Bank’s objects in its articles of association are such that, acting consistently with them, its activities in making, facilitating or encouraging investments in each relevant period would (taken as a whole) be such as the Bank considers likely to contribute to a reduction of global greenhouse gas emissions.
(2B) In subsection (2A), “relevant period” means each financial year of the Bank taken together with all of its preceding financial years.”
“( ) The second condition is that the Secretary of State is satisfied that, if the alteration were made, the Bank’s objects in its articles of association would remain such that, acting consistently with them, its activities in making, facilitating or encouraging investments in each relevant period (within the meaning of section 2) would (taken as a whole) be such as the Bank considers likely to contribute to a reduction of global greenhouse gas emissions.”
Lord Teverson
“(7) It is the duty of the Secretary of State to provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.
(8) The duty in subsection (7) must be fulfilled no later than 31 December 2013.
(9) In the event the European Commission approves the State aid notification concerning borrowing, it is the duty of the Treasury and of the Secretary of State to permit the Green Investment Bank to begin borrowing from the capital markets no later than 30 June 2015, or, if State aid approval has not been received by that date, no later than one month from the date of approval.”
Lord Teverson
My Lords, this is perhaps a weightier issue. When I was looking at the background to this amendment, which is really about the Green Investment Bank’s financial muscle, I was looking for some inspiration on climate change and carbon emissions, and I came across this statement:
“We need to cut our carbon emissions to tackle the challenge of climate change. But the low carbon economy also provides exciting opportunities for British businesses. We will encourage private sector investment to put Britain at the forefront of the green technology revolution, creating jobs and new businesses across the country”.
More important is the next sentence, which says,
“we will create Britain’s first Green Investment Bank—which will draw together money currently divided across existing government initiatives, leveraging private sector capital to finance new green technology start-ups”.
Hallelujah. These statements are from the 2010 Conservative Party manifesto, which is intriguingly entitled Invitation to Join the Government of Britain. As Liberal Democrats, we actually did, so in many ways it was a successful manifesto. The serious point that comes from this is exactly the one that is in those manifesto statements. For a Green Investment Bank to be able to do what it says that it will do, it must be able to lever, not just now but into the future, sufficient funds to meet the vast requirement for green investment that this country needs. As we know, in the energy sector alone that is some £200 billion in generating capacity and in networks over the next 10 years, though we will hope to reduce that through demand-side reduction. But there is a great task to do.
I fully welcome the Government’s commitment to £3 billion of real money at a time when the national accounts are finding it difficult to find spare cash. I strongly welcome, as I have in the past, the availability of this £3 billion. I agree with the chairman of the Green Investment Bank, who said in this Chamber at Second Reading that this was sufficient money for them to get on with, and to start to create a track record for, the bank. It is very important that the Green Investment Bank starts to build up this track record. For a major financial institution, that will take considerable time and very careful investment. I also probably agree that the £3 billion will last until 2015 in terms of commitments, if not actual investment that will go beyond that.
The Government have still not responded to the fact that money is starting to be invested now—and we will arrive at 2015, or maybe 2016, when these commitments are used up, with an investment track record created on the way—but you cannot build up a reputation of trust in a bank, which, as we all know, is essential, unless you know that the doors are going to remain open for business, apart from just collecting the money that has been lent or the investments that have been made on the dividends, beyond three years from now. For anybody who wants to take the Green Investment Bank seriously as a long-term instrument for green regeneration in this country, as was so eloquently described in the Conservative Party manifesto, surely we need to have some reassurance, some positive sign, and some certainty that there will be resources to invest after that period. So far, the sounds that have come out of the Treasury, if not BIS, which sponsors this Bill, is that it is pretty reluctant to make that commitment. That undermines the chairman and the chief executive of the bank, whom I have met. Their appointments are excellent, and I congratulate the Government on them, but we pull the rug from under their feet if we do not assure them that there is a financial future, an investment future and a lending future beyond 2015.
Another area that I shall briefly bring up is that it concerns me to some degree that the £3 billion is going to be available to the Green Investment Bank beyond 2015-16, if that period is needed. To build up a track record in terms of investment, it has to make the right choices. I was very pleased that the Minister underlined the investment independence of the bank. That was a very strong and important message, not just to us but to investors and future users of this fund. It would be a tragedy if the board of the Green Investment Bank felt under pressure to spend that money because otherwise it would lose it. Those pressures will be much less if there is a route to further finance for the future. All this amendment does is to put in a simple way a simple mechanism by which that process starts now. In the finance sector, with extremely long gestation periods for investment in green industries, we need certainty now for the time when this £3 billion runs out. I will be very interested to hear the Minister’s assurances on those areas. I beg to move.
Baroness Worthington
My Lords, during the debate in this House much has already been said about the absurdity of creating a bank and then effectively tying its hands behind its back by not allowing it to borrow. The Government’s statistics show that green industries in the UK are bucking the overall trend, showing healthy growth and contributing to the reduction in our balance of trade deficit. The bank could and should be helping to increase this welcome outcome but, apparently in ignorance of this fact, the Government have provided it with only a relatively limited amount of starting capital and have explicitly stated that it cannot borrow until an economy-wide criterion is met. Its ability to plan for the future and to help further strengthen growth in these particular green sectors is therefore severely limited, and it cannot contribute to getting the wider UK economy back on its feet at precisely the time when we need just that. This amendment seeks to ensure that there is a plan in place for the bank’s future development by setting a deadline by which borrowing will be allowed and creating a defined timeline that removes the uncertainty that currently hangs over the bank’s future, allowing it to plan for the future. Doing so helps to ensure that green growth can help to bring the UK’s economy back to good health even as it helps to restore the health of our environment. Denial of borrowing powers or setting a date for borrowing powers shows a lack of commitment, and the bank will be weakened and undermined as a result.
The arguments presented here and in previous discussions have been very persuasive. I hope the Government will accept this amendment. In the event that the noble Lord, Lord Teverson, does not feel able to test the opinion of the House, we will press the issue to a vote.
Viscount Younger of Leckie
My Lords, the Government are fully committed to providing the UK Green Investment Bank with the funding it needs to become a successful and enduring green financial institution. In Budget 2011, the Government committed to providing the bank with £3 billion until 2015, and I appreciate the endorsement by my noble friend Lord Teverson of the sufficiency of the initial funding of the bank. This is a significant injection of capital, which would allow the bank to build market confidence and begin mobilising investment in green infrastructure projects. As the noble Lord, Lord Smith of Kelvin, explained in his excellent speech at Second Reading, the bank’s initial priority must be to show the Government and private capital markets that it is a well-run organisation with a good track record, worthy of the injection of more capital or borrowing money from capital markets. The noble Lord, Lord Smith, also made clear that, as chairman of the UK Green Investment Bank, he will approach the Government as a shareholder well before 2015 if he believes that it would be in the company’s long-term interests to borrow, either from Government or from the capital markets, from April 2015.
I believe this is the right approach. The bank will, of course, require additional funding in due course, but it is too early to make commitments about the level and type of funding for the bank from 2015-16 or the precise timing of an application to the Commission in respect of borrowing. We should instead take the necessary steps to ensure that the bank has the confidence of investors and other market players by 2015 and put in place a proper process by which the board can discuss its future funding needs, and how these can best be addressed with its shareholder.
As part of this process we have given a commitment that the Government will seek state aid approval in respect of borrowing from the European Commission before the end of this Parliament. Amendment 10 would go further by setting a statutory timetable for a notification to the European Commission and, subject to this, for permission for the bank to borrow from the capital markets. We do not believe that this is either warranted or wise. The Government should not be committed by statute to making a premature or ill-thought-through application, particularly as this would have cost and resource implications both for the Government and indeed the European Commission.
We should also be clear that the level of bank borrowing will need to be agreed by the Government as part of their future spending plans. We should not be apologetic about this. Any borrowing by the bank would score against the national debt targets and it is essential for sustained growth that the Government maintain tight fiscal discipline. I want to emphasise again, in response to the comments made by my noble friend Lord Teverson, that the Government will consider the full range of funding options for the bank from April 2015, but it is important that we do not run before we can walk. In the light of these points, I hope the noble Lord will agree to withdraw this amendment.
Lord Oxburgh
Can I draw the Minister’s attention to the fact that this is not a commitment to borrow? As he is well aware, perception is almost as important as reality in the matter of fundraising. This amendment would send a very clear message to the investment community that the Government are serious about backing this bank.
Viscount Younger of Leckie
I thank the noble Lord for his intervention. However, it would put the opportunity to borrow in the Bill, and we do not believe that this is the right thing to do at this stage given that the Green Investment Bank is just starting up. As I said, it needs to be able to walk before it can run.
Lord Teverson
My Lords, I thank the Minister for going through that. I understand entirely the issues around public sector borrowing, commitments and national debt and all the areas that are key parts of the coalition’s programme for government. I understand what the Minister is saying about there being a way forward after this time, and welcome the fact that the Government will keep this under review and that it will start to be looked at in some of the future budget forecasting. On that basis, I will give him the benefit of the doubt. It is not an especially strong response to something that is genuinely needed, but I accept the good will of the Government and I beg leave to withdraw the amendment.
“( ) Where an order has been made under section 2, each report prepared by the directors of the Bank for a financial year under section 415 of the Companies Act 2006 must include—
(a) an explanation of the steps that the Bank took in that year to ensure that its activities in making, facilitating or encouraging investments in that year and in any previous financial years would (taken as a whole) be likely to contribute to a reduction of global greenhouse gas emissions, and(b) a statement of the directors’ views on the likely effect of its activities in those years on global greenhouse gas emissions.”
Baroness Turner of Camden
“( ) In the case of alleged unfair dismissal, should the conciliation officer fail to secure a settlement, the claimant may proceed forthwith to an employment tribunal.”
Baroness Turner of Camden
My Lords, at Second Reading I expressed concern about the provisions of Clause 7 and subsequent clauses. They seemed to me to be designed to make it as difficult as possible for employees to access employment rights. Indeed, the Government made it clear that they wished to decrease the number of tribunal cases. I accept that many issues arising in the course of employment could be better dealt with through conciliation, such as alleged failure to pay a bonus or holiday pay, but alleged unfair dismissal is not one of those cases.
Loss of a job can be completely destructive to the individual concerned and to the employee’s family as well. It is already necessary for an employee to have at least two years in the employment concerned before being able to claim unfair dismissal. In many cases, the length of time in the employment can be much longer. Dismissal can result in illness, mental breakdown and marriage problems, particularly if alternative employment is hard to find, as it is at present. Many people who lose their jobs at the age of 50 or over are still unemployed a year later. I have known of cases where an individual who loses his job does not immediately tell his family but pretends to go to work at the usual time, spending time in the local library, if there is one, and then returning home at the normal time, pretending that the job still exists.
The loss of a job is life-destroying. For these reasons, the drawn-out procedures recommended in the Bill are quite inappropriate. The individual concerned should have easy access to a tribunal. Even if it does not result in a return to the job, if the individual wins the case there will at least be some compensation. Even if the case is not won, the individual will have had the opportunity to put his or her case to an independent body—a tribunal including lay people with knowledge of working procedures.
This is a human rights issue as well as an employment issue. Therefore I hope that the Government will consider my amendment and agree to adopt it, or something very similar. I beg to move.
Lord Young of Norwood Green
My Lords, I have great respect for my noble friend Lady Turner because she brings not only sincerity but a wealth of experience to these issues. I will be interested to hear the Minister’s response to the amendment.
I want to raise with the Minister the question of funding for ACAS, on which we had an exchange prior to his inauguration in his current role. The noble Lord, Lord Marland, in his response in Committee in relation to funding for ACAS to support the work of the conciliation, said:
“We will produce in the new year a further impact assessment on how this process will work and whether the funding should be upfront, which the noble Baroness asked for. We are working to determine the extent of the funding and how best it is to be provided. I hope that by the time we get to the Report stage in the Chamber, quite a lot of the questions will have been answered”.—[Official Report, 5/12/12; col. GC 198.]
I do not know whether the Minister is in a position to respond, but I look forward to his response.
Viscount Younger of Leckie
I thank the noble Lord, Lord Young of Norwood Green, for that question, which I will address in due course.
I recognise that the amendment tabled by the noble Baroness, Lady Turner, is prompted by her concerns that the purpose of this clause is to prevent those who feel that their employment rights have been breached from reaching an employment tribunal. I reassure her that it is not. While it is and will remain the case that those who wish to bring a claim to an employment tribunal should be able to do so, we recognise that, for many, this can be a costly and stressful process. We are therefore committed to providing parties with the opportunity to resolve their disputes without the need for judicial determination, and early conciliation will do just that. However, while it will be mandatory in most cases for prospective claimants to present the details of their case to ACAS in the first instance, the decision to engage in early conciliation will be entirely voluntary.
Where the claimant or, indeed, the respondent declines the offer of conciliation, or where conciliation has failed, there will be no alternative but for the conciliation officer to conclude that settlement is not possible. A certificate will be issued as soon as that point is reached, either within a few days or after one or two weeks, and the prospective claimant will then be able to proceed to tribunal should they wish. Those prospective claimants for whom determination at tribunal is the preferred or only solution will be able to lodge their claim once the certificate has been received. This will be the case for all prospective claimants, not just those with an unfair dismissal claim.
The second amendment proposed by the noble Baroness would have the effect of removing the requirement for the conciliation officer to try to promote the reinstatement or re-engagement of a prospective claimant by the employer or, if that is not what the prospective claimant wants or it is not practicable, to seek to agree an appropriate sum by way of compensation. This is the same requirement that currently rests on conciliation officers in fulfilling their post-claim functions. While I accept that reinstatement or re-engagement may not be an attractive solution to many prospective claimants, that will not be the case for all. It is right, therefore, that the conciliation officer should endeavour to promote such an outcome where it is right to do so, and, where it is not, then seeking to reach an agreed sum by way of compensation could mean that the dispute will not need to come before an employment tribunal.
I turn to the first of the government amendments in this group. Schedule 2 amends various pieces of primary legislation so that the relevant time limits for bringing a tribunal claim will be extended where necessary in order to provide sufficient time for early conciliation to take place so that the claimant is not disadvantaged. Currently, other than in a small number of jurisdictions, claimants have three months from the date of the matter giving rise to the claim in which to lodge the claim with the employment tribunal. The amendments made by Schedule 2 address concerns that the early conciliation process will disadvantage prospective claimants by consuming some of the limitation period and therefore the time in which they have to prepare any claim that they want to lodge with an employment tribunal, and thereby dissuade them from engaging fully with the conciliation offered by ACAS.
Schedule 2 effectively stops the clock for those jurisdictions where early conciliation applies so that the time during which a claim is subject to the early conciliation process will not count for the purposes of calculating the passage of the limitation period for that claim. In addition, where the limitation period would expire during the prescribed period for early conciliation, or within a month after the day on which the ACAS certificate is deemed to have been received, Schedule 2 automatically extends the limitation period for that claim so that the claimant has one calendar month from the deemed date of receipt of the certificate in which to lodge that claim at an employment tribunal.
This amendment changes none of that. It is no more than a technical amendment to correct one of the references in the schedule. Section 18 of the Employment Tribunals Act 1996 lists the claims for which ACAS conciliation is available and, as conciliation is not available for claims in respect of breaches of Section 188A of the Trade Union and Labour Relations (Consolidation) Act 1992, it is therefore inappropriate for the changes to the limitation period made by Schedule 2 to apply to such claims. It is, however, the Government’s intention to amend the list of proceedings in Section 18 by secondary legislation in due course. We will add Section 188A to that list and, when we do so, will ensure that the extension to the limitation period applies in such cases too. Amendment 15 will therefore ensure that the changes made to limitation periods by Schedule 2 apply to the right claims.
I now turn to Amendments 22, 36 and 91, which is our second set of government amendments. As many noble Lords will be aware, a recent judgment of the European Court of Human Rights in the case of Redfearn v UK found that the UK has an obligation to ensure that individuals who have been dismissed on the grounds of political opinion or affiliation are able to bring a claim before an employment tribunal in order that the tribunal can decide whether the dismissal was fair.
Mr Redfearn was dismissed from his job as a bus driver following his election as a British National Party councillor. His work involved transporting passengers, the majority of whom were Asian. There were no complaints about his performance. None the less, his employers took the decision to dismiss him on the grounds that his political affiliation would give rise to considerable anxiety among passengers and their carers, and jeopardise the reputation of his employer.
The European Court of Human Rights considered that it was both reasonable and appropriate for the UK to have a requirement for a qualifying period of service before an employee can bring an unfair dismissal claim. However, the court held that where the reason for the dismissal was the employee’s political opinion or affiliation, the qualifying period, which prevented employees such as Mr Redfearn who had not acquired the qualifying period of service from bringing claims for unfair dismissal, breached the Article 11 right to freedom of association. The court said that where the reason for dismissal was the employee’s political opinion or affiliation, the state should at least allow for an independent evaluation of the proportionality of such a dismissal in the light of all of the circumstances of the case.
Like the majority of people in this country, we in this House do not share Mr Redfearn’s political views, but the protections provided for in Article 11 also extend to those whose views offend, shock or, indeed, disturb. The Government have therefore decided to bring forward this amendment, which will mean that the two-year qualification period will not apply to claims where the dismissal was on the grounds of political opinion or affiliation. Importantly, employers will still be permitted to argue that they had a fair reason for dismissal and that it was reasonable to dismiss for that reason. Dismissals for political reasons will not be automatic unfair dismissals.
Amendment 36 provides that the provision will apply only to claims where the effective date of termination is after the date on which this section comes into force, while Amendment 91 provides that the clause will come into effect two months after the date of Royal Assent of this Bill.
I now turn to government Amendments 16, 35, and 87—the third set of government amendments. The purpose of Amendment 16 is simple: to ensure that the information held by ACAS in the course of performing its duties is properly protected. As noble Lords will know, particularly many of those on the Benches opposite, ACAS undertakes a range of functions in the course of pursuing its general duty of improving industrial relations, including not only the provision of conciliation in individual and collective disputes, but also advice and guidance via its helpline as well as mediation and training. As a consequence, ACAS holds large amounts of information about individuals and organisations that should not, quite rightly, be a matter of public record. The introduction of early conciliation will add further to this pool of information. While ACAS is able to rely on the provisions of the Data Protection Act 1998 and the Freedom of Information Act 2000 to ensure that certain sensitive information is not released, these provisions are not comprehensive enough to safeguard all the records held as part of the operation of early conciliation.
This and previous Governments have taken the view that information relating to respondents in employment tribunal claims should not be made publicly available until the matter is due to come before the tribunal—both to protect employers from unfounded claims that are subsequently struck out and to allow the parties the space to resolve the matter without the need for a hearing. To this end, the register of claims was closed in 2004, a decision that has been reviewed and affirmed by this Government following lobbying for it to be reopened.
There have been a number of requests to ACAS for the release of information relating to claims made to the employment tribunal since the register closed, but these have been refused on the grounds that the information held is a court record. Such a justification will not apply to records held as part of early conciliation and it is therefore necessary to provide ACAS with the protection to allow it to carry out its role with the confidence of those with whom it has contact. The amendment will introduce a prohibition preventing ACAS from releasing specified information, and this will cover information not otherwise protected. While breaching the prohibition carries a criminal penalty, the decision about whether or not to press charges will be a matter for the Director of Public Prosecutions.
Amendment 35 provides that the prohibition will apply only in respect of requests made after the clause comes into force, which, as provided for in Amendment 87, will be immediately on Royal Assent. I hope that noble Lords will agree that this is a necessary step to ensure that ACAS continues to have the trust and respect of all those it serves.
The final amendment in the group, Amendment 38, removes an unnecessary provision from the Bill. The amendment deletes a transitional provision relating to Clause 17 which is no longer required.
I turn to the question raised by the noble Lord, Lord Young of Norwood Green, about whether we can provide further information on additional resourcing required by ACAS. I promised to come back to him. The consultation on implementing early conciliation closed on 15 February and my officials are now considering the responses. The decisions which flow from this will inform the additional resourcing necessary. I can reassure the noble Lord that ACAS will be properly resourced to deliver early conciliation.
I hope that the noble Baroness, Lady Turner, is reassured by what I have said and will therefore withdraw her amendment.
Baroness Turner of Camden
I thank the Minister for that response. The issue is very complicated and one will need to look at the record in some detail. In particular, I noted that in response to my amendment he stated specifically that after certification by the conciliation officer it will be possible for a dismissed employee to make a direct appeal to a tribunal. That is a very thoughtful response to what I said and I am very pleased to have it on the record.
The Minister also seemed to be prepared to make certain other concessions to make it easier for an employee in a dismissal situation—which he seemed to appreciate is a pretty desperate one for many people— to have access to conciliation and to a way of sorting out their problems without necessarily having to sit and wait for a very long time for their case to come before a tribunal. That is all very useful and in those circumstances I am very willing to withdraw the amendment. I will look very carefully at what the Minister said today as I think there are some concessions that I very much welcome. I beg leave to withdraw the amendment.
“ACAS: prohibition on disclosure of information
In Part 6 of the Trade Union and Labour Relations (Consolidation) Act 1992 (ACAS etc), after section 251A insert—“251B Prohibition on disclosure of information
(1) Information held by ACAS shall not be disclosed if the information—
(a) relates to a worker, an employer of a worker or a trade union (a “relevant person”), and(b) is held by ACAS in connection with the provision of a service by ACAS or its officers.This is subject to subsection (2).(2) Subsection (1) does not prohibit the disclosure of information if—
(a) the disclosure is made for the purpose of enabling or assisting ACAS to carry out any of its functions under this Act,(b) the disclosure is made for the purpose of enabling or assisting an officer of ACAS to carry out the functions of a conciliation officer under any enactment,(c) the disclosure is made for the purpose of enabling or assisting—(i) a person appointed by ACAS under section 210(2), or(ii) an arbitrator or arbiter appointed by ACAS under any enactment,to carry out functions specified in the appointment,(d) the disclosure is made for the purposes of a criminal investigation or criminal proceedings (whether or not within the United Kingdom),(e) the disclosure is made in order to comply with a court order,(f) the disclosure is made in a manner that ensures that no relevant person to whom the information relates can be identified, or(g) the disclosure is made with the consent of each relevant person to whom the information relates.(3) Subsection (2) does not authorise the making of a disclosure which contravenes the Data Protection Act 1998.
(4) A person who discloses information in contravention of this section commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(5) Proceedings in England and Wales for an offence under this section may be instituted only with the consent of the Director of Public Prosecutions.
(6) For the purposes of this section information held by—
(a) a person appointed by ACAS under section 210(2) in connection with functions specified in the appointment, or(b) an arbitrator or arbiter appointed by ACAS under any enactment in connection with functions specified in the appointment, is information that is held by ACAS in connection with the provision of a service by ACAS.””
Viscount Younger of Leckie
My Lords, Clause 11 attracted a great deal of debate in Grand Committee. Much of it was concerned with the proposal that judges should sit alone in the Employment Appeal Tribunal as a matter of course, where there is a divergence of opinion between the Government and noble Lords opposite. The concerns expressed by noble Lords then were similar to those raised when the Government brought forward measures last year to allow judges to sit alone to hear unfair dismissal cases in the employment tribunal. Those concerns centred on the loss of the contribution that lay members would make to determining what was fair and reasonable conduct by parties, based on their knowledge of social relationships in the workplace.
This clause relates not to employment tribunals but to the Employment Appeal Tribunal. As noble Lords will know, the EAT differs from the employment tribunal in that, unlike the tribunal, where cases will often involve matters of fact and require an assessment of reasonableness, appeals before the EAT are taken solely on points of law. The current practice is for the EAT panel that is hearing proceedings to be constituted such that it mirrors the composition of the tribunal from which the appeal arises—so, if the matter is heard by a judge sitting with two lay members in the employment tribunal, the EAT will sit with a judge and two members.
It is the narrower focus of the EAT on points of law that persuades us that lay members have a much less valuable role to play here than in the employment tribunal itself. As the noble Lord, Lord Young of Norwood Green, said in the debate on changing the composition of the employment tribunals for unfair dismissal, lay members,
“bring real knowledge and understanding of industrial situations … real experience in a wide range of industries and occupations”.—[Official Report, 28/3/12; cols. 1449-50.]
However, this is not a function or a requirement of the EAT.
I am sure that noble Lords will agree that it is incumbent on government to ensure that we use our resources—both judicial and lay member—wisely. The Government are committed to creating a tribunal system that not only is efficient for users but offers value for money for the taxpayer. Indeed, I remind noble Lords that the Equality Act covers a range of sectors, including service provision, property rights and education, and only one of these—work—is dealt with in the employment tribunal system. The remaining equality sectors are dealt with in the civil courts, where judges sit, and have always sat, alone.
There is, however, an issue on which we can agree, and that is in relation to the exercise of the Lord Chancellor’s order-making power. That will allow the Lord Chancellor to order that specified proceedings should be heard by a panel, rather than by a judge alone. However, as the noble Lord, Lord Young of Norwood Green, rightly observed in Grand Committee, the drafting of the Lord Chancellor’s power could allow an order to be made specifying the number zero. For example, the Lord Chancellor could by order provide that appeals in discrimination cases should be heard by a judge and zero employer-representative and zero worker-representative members. Such an order would therefore remove the judicial discretion that exists in the clause to direct that a panel should hear an appeal. While the Government currently have no plans to use the order-making power, we had never intended that any Lord Chancellor should be able to use the power in this way. Amendment 19 inserts into the clause a requirement for the Lord Chancellor to specify in any order whether the panel should consist of two or four appointed members.
The noble Lord, Lord Young of Norwood Green, also raised the further concern that the power as drafted does not specify that the panel should comprise an equal number of employer and worker representatives. Again, the Government have never intended that any Lord Chancellor should be able to constitute uneven panels. My noble friend Lord Marland recognised the genuine concerns raised by noble Lords and agreed to look again at the wording. Amendment 20 honours this commitment and amends Clause 11 to restrict the power so that any order made by the Lord Chancellor must provide for an equal number of employer-representative and worker-representative members. The provision in Amendment 20 would also apply where a judge gives a direction for a panel; the judge will need to direct an equal number of employer-representative and worker-representative members. As a result, lines 35 to 38 on page 7 of the Bill are no longer needed and Amendment 18 deletes that duplication. I beg to move.
Baroness Turner of Camden
My Lords, I listened with interest to the Minister; I was very much opposed to Clause 11 at Second Reading and I am still not at all happy about it. I have always believed that the involvement in procedures of lay members is a matter of much interest to us all. The workers who appear before tribunals have always been concerned that they should include lay members with some knowledge of working practices, particularly at appeal stage. The value of the involvement of lay members with knowledge of workplace procedures and conditions is widely respected. The individual claimant knows that the appeals tribunal contains people with a knowledge of employment relations and this gives the claimant confidence in the proceedings.
I do not know why the Government are proceeding along these lines, except that there is apparently an estimated saving. However, the saving is only between £120,000 and £130,000 a year, which is not all that much if it results in a loss of confidence in the proceedings. The value of lay members has been specifically recognised by the Court of Appeal. I have been approached by lay members who are very concerned that their services may be dispensed with. They referred me to the case of Balfour Beatty and Wilcox, where the contribution made by lay people has been directly acknowledged and congratulated.
As it stands, Clause 11 should not be part of the Bill; there is no real good reason to depart from present practice. I accept that the Minister has already offered some modification, but I still believe it is necessary to involve lay people. They make a contribution to the procedures and are widely respected, by employees appearing before them and by employer organisations. I can see no reason for dispensing with them in the present procedures. I do not think that the savings involved are worth what may result in a total abandonment of the existing procedures which have served us well and which have the respect of the people who appear before them. We need more concessions from the Minister about what Clause 11 actually means and how it will operate.
Baroness Brinton
My Lords, I support many of the points made by the noble Baroness, Lady Turner. Indeed, I made some of them in Committee. One of my particular concerns was the issue of diversity and ensuring that lay members were able to inform a judge of their experience of employment practice and diversity than may be apparent to a judge sitting on his or her own.
I welcome the government amendments. In particular, it is extremely helpful to have spelt out the equality of employer and employee representatives, whether it is two or four. I am grateful for that.
I have a question based partly on the noble Viscount’s comments and on the concern of the noble Baroness, Lady Turner, about what the government guidelines will be for when a judge may not sit on their own. I reiterate my support for the government amendments—they go some way—but we still need some clarification.
Lord Young of Norwood Green
My Lords, I thank the Minister for addressing the specific concerns that we raised in Committee. I wish to put that on record. Obviously, I share some of the concerns of my noble friend Lady Turner, which were echoed in part by the noble Baroness, Lady Brinton, who, in her usual forensic way, rightly drew to our attention not only the question of diversity but the guidance that should be issued. I, too, will be interested to hear the Minister’s response on those aspects.
Viscount Younger of Leckie
I thank the noble Baroness, Lady Turner, supported by my noble friend Lady Brinton, for setting out some of her concerns about this clause. I have certainly listened very carefully to the noble Baroness, Lady Turner, who spoke so eloquently.
The Government have also listened to noble Lords’ concerns about the Lord Chancellor’s order-making powers. I have already spoken about the amendments that we have brought forward to address the points that noble Lords made in Grand Committee. In answer to the question raised by my noble friend Lady Brinton, we have no plans to steer the Lord Chancellor on the necessity to have a panel and to prescribe proceedings as such. However, we are working on that important point that she made and on the diversity point, which I also want to pick up on.
I should also make the point that there is no evidence to suggest that judges sitting alone—this is implicit in the noble Baroness’s question—will have a negative impact on the determination of discrimination appeals, which can be brought only on a point of law. This might address the question that was raised by the noble Lord, Lord Young. The Equality Act also covers a range of sectors, including service provision, property rights and education. Only one of these, work, is dealt with in the employment tribunal system. The remaining equality sectors are dealt with in the civil courts where judges sit, and have always sat, alone.
I hope that I have been able to reassure the noble Baroness, Lady Turner, to some extent—I am not sure that I have—and other noble Lords that this measure, which is a proposal that was supported by 60% of those responding to the Resolving Workplace Disputes consultation, is not intended to undermine the value that lay members bring to the tribunal system as a whole. Nor will it have the adverse consequences that they fear.
Baroness Brinton
My Lords, I wonder whether the noble Viscount might write to those who have spoken in this debate to give us some inkling of where a judge would be expected not to sit on their own. I am struggling to see where the dividing line is. I apologise for raising this again, as I raised it in Committee. It just feels too far in the future to be able to be confident on the issue.
Baroness Turner of Camden
My Lords, I support what the noble Baroness has just said. It is very important that we should know what area of diversity, if we can call it that, or what issues would mean that it would be appropriate for a judge not to sit on his own but to have the support of lay people. I can think of a whole range of issues that it would be appropriate in such circumstances for lay people sitting on the appeal tribunal to deal with. Perhaps the Minister could indicate what those issues would be.
Viscount Younger of Leckie
It may be helpful, in answering the question for my noble friend Lady Brinton, to say that the guidance for employment judges to consider when deciding to sit alone, which I agree is important, is set out in the Employment Tribunals Act 1996. That is unchanged. It requires them to consider the likelihood of a dispute arising on the facts that suggests lay member involvement could be beneficial. It is for them to decide. Indeed, the likelihood of issues of law arising that would suggest that a judge sitting alone is sensible is another factor. He would need to take account of the views of the parties and what other proceedings might be heard concurrently. However, to answer the noble Baroness’s question in depth, I think it is best that I write to her and other noble Lords concerned over this particular issue on guidance.
Baroness Brinton
I thank the noble Viscount for that response. It was helpful. I look forward to receiving the letter.
“(7) In proceedings heard by a judge and two or four appointed members, there shall be an equal number of—
(a) employer-representative members, and(b) worker-representative members.”
“Dismissal for political opinions: no qualifying period of employment
In section 108 of the Employment Rights Act 1996 (qualifying period of employment), after subsection (3) insert—“(4) Subsection (1) does not apply if the reason (or, if more than one, the principal reason) for the dismissal is, or relates to, the employee’s political opinions or affiliation.””
Lord Young of Norwood Green
My Lords, in Committee a number of noble Lords expressed our concern about confidentiality in settlement agreements and the inability of these agreements to be raised at an employment tribunal in the future. We felt that this was a totally wrong direction for the Government to proceed in. The worst aspect of this would amount to what we consider to be a charter for bullies. As the legislation currently stands, despite the attempts to introduce a number of amendments, which were rejected by the Government, there is no protection. We believe that this is a thoroughly unsatisfactory approach that will be detrimental to basic employment rights in relation to potentially unfair dismissal. It is on those grounds that we seek to test the opinion of the House.
Baroness Turner of Camden
My Lords, I support my noble friend’s amendment to Clause 12. It would make it easier for employers to end employment by offering the individual a sum of money in return for a compromise agreement. The clause extends the “without prejudice” rule, which exists where a compromise agreement is offered as a means of ending an existing dispute. Any negotiations cannot then be considered by an employment tribunal. Clause 12 enables an employer to offer a sum of money and a compromise agreement in return for leaving employment when there is no pre-existing dispute. These negotiations will remain confidential and cannot be admitted as evidence before an industrial tribunal.
The TUC opposes these provisions as it believes that they will send a clear signal to employers that it is acceptable to sack employees without following a fair dismissal procedure. The provisions are also complex and can lead to legal wrangles, particularly where an employer has not acted properly in the negotiations and could be accused of discrimination. For these reasons, I support my noble friend.
Viscount Younger of Leckie
My Lords, this clause has been the subject of substantial debate in both Houses, and the noble Lord, Lord Young, has given notice of his intention to oppose it. I hope that I will be able to answer the concerns that have been raised. The clause forms part of a package of measures to facilitate the appropriate use of settlement agreements, encouraging the resolution of workplace disputes outside tribunals. Settlement agreements, or compromise agreements as they are currently known, offer a consensual and mutually beneficial outcome for both parties as distinct from the “no fault dismissal” idea, which we have been clear the Government are not taking forward. The clause does not affect an individual’s right to bring an unfair dismissal claim using other evidence or to bring other types of claim.
This legislative change builds on an existing system that has been successfully used for many years by many employers. It aims to provide additional certainty to enable a wider range of employers, particularly smaller businesses without in-house HR functions, to use settlement agreements with more confidence and in an appropriate way. We are clear about the importance of guidance for employers and individuals, an issue that has been the subject of substantive debate in both Houses. We have recently published our response to the Ending the Employment Relationship consultation on the principles to underpin the use of settlement agreements, and this will inform the development of substantive guidance that we will publish in support of the clause.
In response to concerns raised by all groups, we will include in a new statutory code an explanation of “improper behaviour” to ensure that employees understand the protection and employers are confident that they are acting appropriately when negotiating settlement. A draft statutory code is currently out for public consultation and the Government are working closely with businesses, ACAS and other stakeholders to ensure that the system is understood and can be easily and successfully used by employers and employees. This clause is part of a package of measures to better enable employers and employees to understand and use the existing system of settlement agreements as a mutually beneficial way of resolving workplace issues without resorting to a costly and distressing tribunal process. I therefore commend this clause to the House.
Lord Young of Norwood Green
My Lords, I have listened carefully to the Minister, but I have found little in his words to alter my opinion. He talked about small firms that do not have HR departments. That is part of the problem. This provision is somehow meant to be a remedy for that situation. It does not matter what size a company is. Small firms often fall down because they think that HR is something that they do not have to have any expertise in. I would submit that no matter what the size of the company, if it does not understand its obligations to an employee, eventually the situation is going to end in tears. I do not believe that what the Government are proposing is fair and balanced, and we do not believe that it will encourage employers to be more professional in the way they treat their employees. For these and the reasons we expressed at length in Committee, I wish to test the opinion of the House.
“( ) The tribunal shall have regard to an employer’s ability to pay—
(a) in deciding whether to order the employer to pay a penalty under this section;(b) (subject to subsections (2) to (4A)) in deciding the amount of a penalty.”
Viscount Younger of Leckie
My Lords, I shall speak also to Amendments 25 to 28. I turn to these amendments as the provision for the employment tribunals to impose financial penalties on employers. This is a response to points raised in Grand Committee. Much of the debate on this clause related to amendments tabled by noble Lords opposite in Grand Committee, which were intended to probe the practical application of the new regime, including the reasons for setting the level of penalty at 50% of the value of the award, and to seek that failure to follow grievance or disciplinary procedures be prescribed as an aggravating feature for the purpose of attracting a penalty. Further amendments sought to address concerns, which we share, about the non-payment of tribunal awards.
As my noble friend Lord Marland explained at the time, the decision to make the penalty 50% of the value of the award was informed by the national minimum wage penalty regime introduced by the previous Government, where the level of the penalty is also set at 50%. While we sympathise with the intent behind the amendment to specify that a failure to follow grievance and disciplinary procedures should constitute an aggravating feature, the Government are clear that it should be for the tribunal to determine what constitutes aggravating features, based on the facts of the case before it.
We are at one, however, with the desire to improve the position on the non-payment of tribunal awards. Proposals put forward by noble Lords opposite in Committee attempted to use the financial penalty regime to address non-payment. While the intent was clear, the effect would have been limited, in that penalties would be imposed in fewer cases than those in which awards go unpaid. While non-payment is not a matter for this Bill, I can reassure noble Lords that we are taking action to address this through research into the root causes of the problem and changes to employment tribunal process.
These government amendments are a further area where we share a common view. The noble Baroness, Lady Hayter, set out in Grand Committee her concerns about the unintended consequences that might arise in the event that a financial penalty was imposed on an insolvent business. She argued that for companies in insolvency the objective of the financial penalty regime, which is to encourage employers to have greater regard to their employment obligations, was not relevant and that there was a risk, without a specific exemption, that the tribunal may choose to levy a penalty. If that were the case, the Exchequer would then have a claim on the assets of the company, leaving less available for distribution to other creditors. The potential liability might also threaten a company rescue, as the penalty may rank as an expense of an administration.
As we have made clear, the Government do not want to fetter judicial discretion in the exercise of this power by tribunals. We agree with the noble Baroness that there may be no merit in imposing a penalty where the respondent is insolvent, but we do not believe that it is necessary to carve out an exemption in statute. Instead, Amendment 24 inserts a provision in the clause to require tribunals to have regard to the ability of the respondent to pay when deciding whether a penalty is appropriate.
Such a power, which already exists with regard to cost and deposit orders, will allow the tribunal to have regard to the circumstances of the business and the wider impacts of a decision to impose a penalty. It will also apply more widely than to just insolvent companies and so could be relevant to those on the brink of insolvency, for which the imposition of a penalty might well be the final straw.
My noble friend Lady Brinton also raised concerns in Grand Committee about the effect of the £100 floor where there is a multiple claim against a large employer, particularly in the event that the employer goes bust. We agree that there are real concerns here which the previous amendment does not wholly address in so far as it does not provide the flexibility for tribunals to impose any penalty when, in fact, one may be both appropriate and affordable. Amendment 25 therefore effectively removes the floor of £100 in respect of multiple cases only, and tribunals will be able to use their discretion both as to whether a penalty is appropriate and as to the level of that penalty, subject, of course, to the upper limit of £5,000. So, if a group of 400 employees brought a multiple equal pay claim against their employer and the tribunal found that there had been a breach, with aggravating features, the tribunal could decide impose a financial penalty. The change we are making through this amendment will mean that instead of the requirement to impose, in those circumstances, a penalty of at least £40,000, based on the original provision that set a minimum of £100 per claimant, the tribunal will have discretion to determine what level of penalty is appropriate. The upper limit of £5,000 per claimant will continue to apply.
Amendments 26, 27 and 28 make drafting and consequential changes to the clause, but they do not alter its effect. The principles of a minimum and maximum amount of financial penalty continue to apply, with penalties levied at 50% of the value of the award in single claims and up to 50% of the value of each award in multiple claims. I believe these amendments constitute a real improvement to the drafting and effect of the clause, and I beg to move Amendment 24.
Baroness Brinton
My Lords, I rise briefly to thank the noble Viscount for the amendments that he has laid before the House today. I think they go a considerable way to allaying the concerns and fears I had.
Baroness Hayter of Kentish Town
My Lords, if it will not embarrass the Minister too much, this side must also add our thanks for these amendments which, to a certain extent, take account of the issues I raised about companies in formal insolvency which risked a penalty being made by a tribunal, given that companies in insolvency clearly have financial difficulties. This is partially dealt with by Amendment 24, and we are grateful for that.
However, there are two other issues on which I would like the Minister to respond because the amendment does not prevent a tribunal levying a penalty on a company in formal insolvency. One is that in formal insolvency, the old management is no longer there. It is not in charge; it is a new, quite separate, professional insolvency practitioner, who has been brought in to sort things out. Therefore, any penalty would not be levied on the people who had done wrong, if you like, and had caused the tribunal’s award. Nor could it act as a deterrent to repeating the breach because the company would now be in someone else’s hands. The only effect would be to deplete the assets available for the creditors, including the employees, as suggested by the Minister.
Viscount Younger of Leckie
My Lords, I do not think that I am too easily embarrassed but I am pleased indeed that these amendments largely address the issues raised by noble Lords, particularly those opposite, in Grand Committee. I am pleased that we all, as a House, feel that there is an improvement to the provisions on the financial penalties, and I commend these to the House.
I would like to address, where I can, a number of questions raised by the noble Baroness, Lady Hayter. Where I cannot address the questions—some were a little technical—I will of course write to her and copy in other Peers who are involved. First, the noble Baroness raised the issue of the amendment failing to address the question of companies in formal insolvency. I think the gist of the question was that the levy would not be imposed on the persons who did wrong. The tribunals are well used to hearing arguments around the ability to pay and it is they, we believe, who are best placed to take a view on whether the imposition of a financial penalty is appropriate in a particular set of circumstances. It will not always be the case that a penalty should not be imposed on an insolvent business—for example, a company that has been trading in administration for many months and yet has still failed to comply with its obligations. I also take the point that there needs to be certainty for purchasers, which was a further point the noble Baroness raised. I think it is best to reply to that very specific question in writing. On that note, I commend these amendments to the House.
“This section does not apply where subsection (3) or (4A) applies.
(2A) Subsection (3) applies where an employment tribunal—
(a) makes a financial award against an employer on a claim, and(b) also orders the employer to pay a penalty under this section in respect of the claim.(3) In such a case, the amount of the penalty under this section shall be 50% of the amount of the award, except that—
(a) if the amount of the financial award is less than £200, the amount of the penalty shall be £100;(b) if the amount of the financial award is more than £10,000, the amount of the penalty shall be £5,000. (4) Subsection (4A) applies, instead of subsection (3), where an employment tribunal—
(a) considers together two or more claims involving different workers but the same employer, and(b) orders the employer to pay a penalty under this section in respect of any of those claims.(4A) In such a case—
(a) the amount of the penalties in total shall be at least £100;(b) the amount of a penalty in respect of a particular claim shall be—(i) no more than £5,000, and(ii) where the tribunal makes a financial award against the employer on the claim, no more than 50% of the amount of the award.But where the tribunal makes a financial award on any of the claims and the amount awarded is less than £200 in total, the amount of the penalties in total shall be £100 (and paragraphs (a) and (b) shall not apply).”
Lord Low of Dalston
“Personal liability for victimisation on the ground that a worker has made a protected disclosure
After 47B of the Employment Rights Act 1996 (protected disclosure) insert—“47BA Liability of employees and agents
(1) A worker has the right not to be subjected to any detriment by any act by an employee or agent of his employer, done on the ground that the worker has made a protected disclosure.
(2) It does not matter whether in any proceedings the employer is found not to have contravened this Act by virtue of section 47BB(4).
(3) A does not contravene this section if—
(a) A relies on a statement by the employer or principal that doing that thing is not a contravention of this Act, and(b) it is reasonable for A to do so.47BB Liability of employers and principals
(1) Anything done by person A in the course of A’s employment must be treated as also done by the employer.
(2) Anything done by an agent for a principal, with the authority of the principal, must be treated as also done by the principal.
(3) It does not matter whether that thing is done with the employer’s or principal’s knowledge or approval.
(4) In proceedings against A’s employer B in respect of anything alleged to have been done by A in the course of A’s employment, it is a defence for B to show that B took all reasonable steps to prevent A—
(a) from doing that thing, or(b) from doing anything of that description.””
Lord Low of Dalston
My Lords, Amendment 29 would add to the protection given to whistleblowers, or those who raise concerns about malpractice or wrongdoing at work by inserting into the Employment Rights Act 1996 provisions which make it clear that a worker has a right not to be subjected to a detriment by a co-worker for making a protected disclosure. It would create vicarious liability on the employer by providing that anything done by a co-worker in the course of his employment, or by an agent for a principal with a principal’s authority,
“must be treated as also done by the”,
employer or principal. The amendment also provides that it does not matter,
“whether that thing is done with the employer’s or principal’s knowledge or approval”.
However, it is a defence for the employer to show that he took all reasonable steps to prevent the co-worker behaving in that way.
It is not difficult to see the need for such provisions, which are modelled on provisions in the Equality Act 2010, given all that we had heard recently about the pressure brought to bear on whistleblowers in the NHS. I do not intend to beat the arguments to death, especially because I am delighted to be able to say that there have been constructive discussions since Committee stage, in which the Government have decided to accept the general thrust of my amendment and come forward with their Amendment 34, which we will no doubt hear about in a moment. This is very much to be welcomed. The Government having brought forward their own amendment, I am happy to withdraw my amendment in due course, provided that the Minister can give me some clarification on the following point.
A concern has been raised by some trade unions regarding the personal liability of workers as set out in proposed new subsection (1E) in government Amendment 34. This allows a defence to personal liability where the employer asked the worker to do a detrimental act against a co-worker—that is to say, where the co-worker relies on the statements of the employer and it is reasonable for them to do so. This, it is feared, impliedly creates personal liability in a way that no other part of the section does. There are some concerns that this will lead to individual workers being sued.
Perhaps it would be helpful to the House if the Minister were now to outline the purpose and scope of his amendment. I beg to move.
Viscount Younger of Leckie
I thank the noble Lord, Lord Low, for suggesting that I intervene at this early stage in the debate and set out the effect of government Amendment 34. It would introduce the principle of vicarious liability into the whistleblowing protections. It has exactly the same purpose and effect as the noble Lord’s amendment. However, we feel that the drafting of the government amendment better achieves our shared objective and mirrors the provisions in the Equality Act on vicarious liability for discrimination. I look forward to further comments that the noble Lord, Lord Low, may make. I have noted some questions that he has raised, which I will attempt to address later in this debate.
Baroness Turner of Camden
My Lords, briefly, I have tabled Amendment 30 in this group because the TUC wrote to me and pointed out, among other things, that if you left the Bill as it stood, with the protected disclosure being limited to something in the public interest, that could well be construed to mean that a worker would not be protected if he or she made a disclosure affecting the provisions on health and safety at work. The TUC wanted to make sure that a worker would be protected if he made a disclosure in regard to the health and safety and general interests of the workforce; that is the intention of my amendment. However, when I looked at the amendment moved by the noble Lord, Lord Low, it seemed to me that it covered practically everything, including that which I was intending to cover in my amendment. Therefore, it had been my intention not to move my amendment and to say that, instead, I supported Amendment 29 absolutely and completely. That is still my position.
Lord Touhig
My Lords, I warmly welcome the Government’s approach on the prevention of detriment from co-workers as set out in Amendment 34. This seems to well support the amendment tabled in the names of the noble Lords, Lord Low of Dalston and Lord Young of Norwood Green, and myself. It is good that there has been some agreement that there should be protection from bullying and harassment by co-workers, and that our concerns have been listened to. Right at the beginning, I thank the Minister, the noble Viscount, Lord Younger of Leckie, his predecessor, the noble Lord, Lord Marland, and their officials, who have actually engaged in discussions with a number of people. We have made good progress as a result.
In Grand Committee, I referred to the evidence of staff nurse Helene Donnelly at the Mid Staffordshire NHS inquiry. She was a whistleblowing nurse who told the Francis inquiry of how she was physically threatened by colleagues after raising concerns about the standards in the accident and emergency department. Robert Francis, in his report, drew upon her case and said that Mrs Donnelly was offered no adequate support. She had to endure harassment from colleagues and eventually left for other employment. Clearly, such treatment was likely to deter others from following her example; she was aware of colleagues on whom her experience had this effect.
I do not intend to detain the House, but this lady suffered all sorts of threats; she was told by colleagues, “We know where you live”, and she became so nervous that her parents or husband had to meet her in the car park when she left the hospital at night so that she would not have to walk across the car park alone in the dark. On one occasion, another nurse followed her into the toilet in their locker room, locked the door, demanded to know if she had any problems with her and began threatening her if she did. I fear that this is an example that could be repeated in many parts of the country. It is important that we make sure that people are protected when they act in the public interest and blow the whistle.
This has come up again recently. Despite the progress that we have made over the years in supporting and protecting whistleblowers, the recent case of Gary Walker, a former National Health Service chief executive, highlights another area of the law that needs to be examined, and that is gagging clauses. Mr Walker was a former chief executive of the United Lincolnshire Hospitals NHS Trust who raised a concern about patient safety, namely the pursuit of targets for non-urgent cases within the hospital to the detriment of urgent cases. The facts were similar to those of Mid Staffordshire, and following the publication of the Francis report, an inquiry was ordered into the United Lincolnshire Hospitals NHS Trust.
I am concerned about the use of public money, because I understand that Stephen Barclay MP, a member of the Public Accounts Committee in the other place, has received confirmation that £15 million of public money has been used to gag whistleblowers. I urge the Government to do more on this issue. An amendment on gagging clauses was laid in Committee, and I invite the Minister to look at it because, in my view—and I am sure that many in the House would agree—gagging people who work in the public service and have issues they need to bring to public attention, and using public funding to stop them from doing that, is quite improper. We should do everything we can to put a stop to it. This is not just a waste of public money: it is an abuse and a threat to our liberties.
Lord Young of Norwood Green
My Lords, I, too, welcome government Amendment 34, which implements protections that we called for in Committee. The amendment took us a bit by surprise considering that in Committee the Government were so adamant that the amendment was not necessary and when we met the Minister just a fortnight ago, we had no indication that they had changed their mind. However, no matter when the epiphany occurred, we are delighted that the Government have now conceded that specific protection is needed. I was going to say that we should not look a gift horse in the mouth, but given the problem with horses and food standards perhaps that is not an appropriate metaphor.
As the noble Lord, Lord Low, has explained, Amendment 29 would place vicarious liability on employers for the actions of their employees where bullying or harassment of whistleblowers by their co-workers occurs. My noble friend Lord Touhig gave the details of the case involving nurse Helene Donnelly, so I will not reiterate them. However, one of the key findings of the Robert Francis inquiry into the Mid Staffordshire NHS Foundation Trust was around the culture of intimidation and lack of transparency which prevented more individuals speaking out and blowing the whistle on bad practice, which ultimately led to patient safety being put at risk.
Throughout the passage of this Bill, we have argued that the thrust of Clause 15 is to increase the barriers to protected disclosures just at the time when events from the Savile case to Mid Staffs show us that we should be making it easier, not harder, for individuals to feel able to blow the whistle on serious misconduct. We welcome the fact that on this area, as with the Government’s later amendment around good faith, and on blacklisting, the Government have listened to concerns raised across this House and in another place and have brought forward amendments to change the direction of travel. Nevertheless, as has been mentioned by other noble Lords during this debate, there is a need for the Government to clarify the extent to which liability attaches to the worker who perpetrated the harm. The judgment of Lord Justice Elias in the case of NHS Manchester v Fecitt makes apparent the need for clarity on this point, as the case turned on the fact that protection afforded under PIDA for whistleblowers was against retributive action by the employer and not co-workers. I would be grateful if the Minister would confirm that the lack of liability attached to the worker will in no way impact on the extent of the liability now placed on the employer for the actions of their employees.
Viscount Younger of Leckie
My Lords, as I said earlier, we agree with the aims of this amendment and think that noble Lords are right to seek to mirror the equivalent provisions in the Equality Act 2010. However, the first part of the amendment does not entirely reflect the relevant provision in the Equality Act and, as drafted, that part of the amendment would not enable a whistleblower to bring a claim against a co-worker if they cause them a detriment. The equivalent provision in the Equality Act does allow for claims against co-workers and we think that it is right that the legislation is the same here.
Before I conclude, let me explain this thinking, particularly in view of the comments made by the noble Lord, Lord Low of Dalston. Individuals have a personal responsibility to make sure that they act in the right way towards people with whom they interact. The law recognises this in many different ways. For example, the law of negligence makes you personally liable if you crash your car into someone and contract law makes you liable if you misrepresent an item that you are selling to somebody. If you are a taxi driver and you crash your car into someone, or a salesman and you misrepresent an item you are selling, the principle of vicarious liability means that your employer will be liable, too. We think that the same should be true in whistleblowing. If you cause a co-worker a detriment after they blow the whistle, perhaps by bullying them, you should be liable for that conduct and your employer should be liable, too. This amendment therefore will encourage workers to behave appropriately to each other and will encourage employers to have the right processes in place to protect whistleblowers. I hope that noble Lords will agree with this approach and I ask the noble Lord, Lord Low, to withdraw his amendment.
Amendment 30 relates to the Government’s introduction of a public interest test to the whistleblowing protections. As noble Lords will be aware, the Government have introduced the test to rectify the loophole which has occurred as a result of the decision in the Parkins v Sodexho case. This decision widened the scope of the protection to include disclosures concerning breaches of personal contracts rather then being restricted to matters of public interest. This amendment would amend the test the Government have introduced. It would mean that a qualifying disclosure would have to be in the health, safety and general interest of the workforce, and this is somewhat narrower than the test which currently exists in Section 43B of the Employment Rights Act 1996. This would impose a stricter qualifying criteria than the test which will exist in Section 43B after the Government’s amendment introducing a public interest test comes into effect. The result would be less protection for whistleblowers and this means that many may choose not to make disclosures, despite the fact that the disclosures would be in the public interest. The Government’s introduction of a public interest test is simply to amend the legislation in light of the Parkins v Sodexho ruling and return it to operating within its original remit.
Before I conclude, I want to respond to some comments that the noble Lord, Lord Touhig, made relating to the Mid Staffordshire fiasco. The Government had intended to call for evidence on vicarious liability and other whistleblowing areas following the completion of the Bill. However, the Mid Staffs inquiry has provided evidence which was previously lacking in relation to vicarious liability. It is therefore prudent to make a change now through the Enterprise and Regulatory Reform Bill to introduce protections into the whistle- blowing framework. I hope that that answers the point about the timing of our amendment alluded to by the noble Lord, Lord Young of Norwood Green.
The noble Lord, Lord Touhig, also raised the use of taxpayers’ money to gag whistleblowers. I think that he mentioned the sum of £15 million. As I am sure he is aware, the use of settlement agreements to resolve a dispute is a common practice in both the public and the private sectors as a means of avoiding the cost and stress of employment tribunals. They often involve a sum of money. However, in the cases to which he refers, they cannot buy silence as such clauses are null and void in the whistleblowing context. Therefore, I hope that the noble Lord will not press the amendment.
Lord Low of Dalston
Will the Minister respond to the point I raised about proposed new subsection (1E) and personal liability? Does he have anything to say about that?
Viscount Younger of Leckie
I thank the noble Lord for that reminder. Although I do not have anything to say about it, I will most certainly write to him to clarify the points that he raised.
Lord Low of Dalston
That would be extremely helpful. I am very grateful for the Minister’s suggestion in that regard. I echo the words of the noble Lord, Lord Touhig, in thanking the Minister and his officials for the constructive approach that they have adopted to these amendments. I am sure that the Francis report and the revelations about bullying and intimidation and a culture hostile to disclosure in the NHS have weighed with the Government. I am glad that they have taken what I think is a wise political decision to recognise the force of the arguments for importing the vicarious liability provisions of the Equality Act into the whistleblowing legislation. Indeed, I think the Minister has made the point that the Government’s amendment is a little stronger than mine. On that basis, I am very happy to withdraw the amendment.
“(4A) The Secretary of State shall make amendments to this section under the powers of subsection (4) to provide for the definition of “workers” to include applicants.”
Lord Young of Norwood Green
Opposition Amendment 31 would use the new power introduced in Committee by the Government to amend the definition of “worker” in Section 43K of the Employment Rights Act in order to extend protections to job applicants.
The purpose of this amendment is to make clear within the Public Interest Disclosure Act, the legislation which establishes specific protection for whistleblowers, that individuals should not face discrimination from consideration for future employment because they have made a protected disclosure in the past. The blacklisting of so-called troublemakers by companies is an issue that is particularly important at the moment. Evidence of blacklisting on a vast scale, including allegations in relation to major public projects such as Crossrail and the Olympic Park, is incredibly serious. We now know of the existence of secret files on thousands of workers in the construction sector, including by the construction firm Balfour Beatty, which has confirmed that it conducted blacklisting checks on individuals seeking work on the construction of Olympic venues. Many of those affected still have no idea that they were included on the secret construction blacklist, only uncovered by the Information Commissioner’s Office in a raid in 2009. This action will have resulted in many people—possibly thousands—being denied employment and their livelihoods, many of them on the basis that they have raised concerns over issues of misconduct or health and safety in previous workplaces, where it is absolutely in the public interest and the interest of the surrounding workforce that these concerns be raised. This is a national scandal and the Government must do everything in their power now to ensure that, first, if blacklisting is proven, adequate sanctions are taken against the perpetrators and, secondly, the law is strengthened to provide greater protection for workers in the future.
The amendment would use the new power that the Government have introduced to extend protection to job applicants from discrimination by an employer on the ground that they have been a whistleblower in the past. At present, if a prospective employer accesses a blacklist or becomes aware of a job applicant’s whistleblowing history and decides on that basis not to give them a job, the applicant has no cause for legal action, a point highlighted by Mr Justice Langstaff in the case of BP v Elstone in 2010, when he stated:
“It is true that the statute does not prohibit action against a whistleblower should he be recognised as one when an applicant for employment, as it might have done”.
The Equality Act 2010 provides protection at the point of recruitment, but, just as is the case for harassment of whistleblowers by co-workers, it is crucial that PIDA—the legislation providing specific protection for whistleblowers—is brought into line with these provisions.
Since Committee stage, we have had a very fruitful discussion with the Minister on this specific point, during which the Minister indicated that the Government would be willing to look at the inclusion of job applicants within the definition of “worker” for the purposes of PIDA. This was followed up in a letter from the Minister, in which he stated that, in relation to the new power in the Bill to expand this definition, before exercising this power, the Government are planning a call for evidence on these and other issues,
“such as the need to protect job applicants who have suffered because they were blacklisted for blowing the whistle”.
I thank the Minister for listening on this important issue. I ask him to confirm to the House that this is still the Government’s intention, that the Government are minded to include job applicants within this definition, and that this review will be carried out soon after the enactment. I beg to move.
Viscount Younger of Leckie
My Lords, the issue of whistleblowers finding it hard to find a new job once they have blown the whistle against an employer was discussed in Grand Committee, and the Government agreed to take the issue away, as the noble Lord, Lord Young of Norwood Green, has said, and consider the problem that had been presented.
The Government very much understand the concerns here and, in considering this issue and looking at the provisions we are putting in place, are confident that if there is evidence showing that this problem exists, it can be addressed through secondary legislation. By taking a power to amend the definition of “worker” in Section 43K of the Employment Rights Act by secondary legislation, the Government have allowed themselves time to consider the scope of the definition of “worker” and to determine who needs to be covered. If changes, such as the inclusion of job applicants or other groups, are then necessary, these can be achieved in a relatively short time by making an order to amend Section 43K. With that in mind, I hope noble Lords will agree that there is no reason to make this decision at this point without first considering any evidence to confirm the existence of a problem. Once this Bill has completed its passage, the Government will launch a call for evidence to establish whether there is a case for reviewing the legislation, including its scope. The Government have agreed to meet the chair of the PCaW whistleblowing commission, Sir Anthony Hooper QC, and look forward to discussing whether and how we might work together.
I hope that this goes some way towards reassuring the noble Lord, Lord Young, that the Government are taking action in this area. With that in mind, I hope that he can agree to withdraw his amendment.
Lord Young of Norwood Green
I have listened carefully to the Minister’s remarks, which I welcome broadly. I trust that the secondary legislation will be affirmative legislation. I hope that he regards this issue as time critical. From listening to the tenor of his remarks, I feel that he does. We believe that the evidence is out there. Having heard the Minister’s comments and hoping that he will take into account the points I have made, I beg leave to withdraw the amendment.
Viscount Younger of Leckie
My Lords, government Amendment 32 is simply a matter of drafting. It divides into two clauses Clause 15, which, after the amendment made in Grand Committee, is rather long. This will make the provisions easier for people to read.
Amendment 33 is the government amendment on the good faith test in whistleblowing claims. Amendment 33 amends Part 4A of the Employment Rights Act 1996 to remove the requirement that certain disclosures be made in good faith. As a result, a claim will not fail as a result of an absence of good faith. Instead, the employment tribunal will have the power to reduce the compensation awarded to the claimant where it concludes that a disclosure was not made in good faith. This is an issue that my noble friend Lord Marland indicated we should return to on Report.
I note the argument that by introducing a public interest test the Government have inadvertently created a double hurdle for potential whistleblowers to navigate. To succeed, a claimant would need to show that they reasonably believed that the disclosure was in the public interest and that it was made in good faith. It is not the Government’s intention to make it harder for whistleblowers to speak out. It remains a government commitment that they have the right protection in law. However, I can see that by fixing the legal loophole created by Parkins v Sodexho in the way that the Government propose, there is a risk that some individuals may be concerned that it is too hard to benefit from whistleblowing protection, and therefore they will decide not to blow the whistle. We have listened to the arguments made by noble Lords on this point, but the Government remain unconvinced that the good faith test should be removed in its entirety. There are instances where it is important that the tribunal is able to assess the motives of a disclosure, even where it was in the public interest.
The judiciary tells us that the good faith test is well understood and utilised. As such, the Government have not sought to alter the substance of the test, but have reconsidered how it should affect the outcome of a claim. Currently, the good faith test can affect the success of a claim. This amendment moves the test so it will be relevant only when considering remedy. Instead of a claim failing, the judge will have the discretion to reduce a compensation award by up to 25% in the event that they find the disclosure was not made in good faith. We believe this to be an acceptable compromise, and my conversations with the noble Lord, Lord Stevenson, the noble Lord, Lord Mitchell, who is in his place, and the noble Lord, Lord Young, have assured me that this goes a good way to addressing their concerns.
Amendment 37 sets out the relevant transitional provisions for the whistleblowing provisions of the Bill. The changes apply only where the qualifying disclosure is made after the date on which this section comes into force. Amendment 92 provides for the commencement of most of the whistleblowing clauses of the Bill. I beg to move.
Lord Touhig
My Lords, on the good faith test, I certainly welcome Amendment 33, as I think it does mitigate the effects of the introduction of a public interest test as set out in Clause 15. The removal of the good faith test at the initial stages of a whistleblowing claim cuts down the number of hurdles that a whistleblower has to satisfy in order to establish a prima facie case. Having worked closely with the charity Public Concern at Work from the very first time I introduced a whistleblowing Bill when I was a Member of the other place, I know that it, too, welcomes the Government’s response here, as it certainly attempts to strengthen the protection of whistleblowers.
The publication of the Francis report, about which I spoke a moment ago, and the recent revelations about the NHS chief executive, show, in my view, that there is a compelling case for reviewing whistleblowing. We had attempted to persuade the Government in the past that the Public Interest Disclosure Act should be reviewed. I certainly welcome the Minister’s remarks. If I understood him correctly, he said that the Government will work very closely with Sir Anthony Hooper, who is to chair the commission that Public Concern at Work has now set up to look at these matters. I am very pleased that the Government will be co-operating with the commission. It will start taking evidence in March. It is in the interest of all of us that we make sure that as much information as possible goes to this commission so that if a strong case is made for further review, revision or amendment of the Public Interest Disclosure Act, we can do that together in the interest of protecting people who blow the whistle to protect us.
Lord Young of Norwood Green
My Lords, I welcome government Amendment 33, which implements an amendment tabled by my noble friend Lord Wills in Committee. This amendment addresses concerns that were raised across all sides of the House that the Government’s decision to introduce a public interest test to the Public Interest Disclosure Act would discourage whistleblowers from coming forward by placing an additional legal test on individuals in order for them to be assured of protection from retributive action by their employer.
It was already the case that in order for whistleblowers to qualify for protection under PIDA it had to be shown that the individual had made such a disclosure in good faith. Throughout the passage of the Bill, we have argued, alongside Public Concern at Work, the organisation that first lobbied for the protection of PIDA, that the combination of a public interest test with the existing good faith test will create legal uncertainty over how these two conditions should interact and potentially dissuade many more individuals from coming forward with concerns. As I and many other noble Lords have repeatedly said, now is not the time to be putting up more barriers to individuals who may blow the whistle but are scared of the consequences, as the Francis report highlighted.
The Government need to be doing all they can to foster a culture of greater openness and transparency within institutions such as the NHS in order to ensure that people feel supported and listened to when raising concerns. We welcome the move by the Government to remove the good faith test from PIDA, leaving just public interest as the primary test for any disclosure made in relation to protections under that Act. It implements what we have been calling for throughout, which is greater clarity and certainty around the Act, and we thank the Government for listening and responding to those concerns. I also endorse the points made by my noble friend Lord Touhig about the forthcoming commission and examining the need to review PIDA. Once again, I thank the noble Viscount and we will support the amendment.
Viscount Younger of Leckie
I thank noble Lords for all the discussions we have had on this important issue. We are all agreed that it is important that the legislation supports whistleblowers when making the very difficult decision to blow the whistle. The Government have outlined their reasons for this provision and I hope that it meets the concerns that noble Lords had in this area. I thank them for flagging this issue to the Government and, in particular, I thank the noble Lord, Lord Wills, whom I see in his place, for his help and advice on this matter. I hope that noble Lords agree with this approach.
“Power to reduce compensation where disclosure not made in good faith
(1) Omit the words “in good faith” in the following provisions of Part 4A of the Employment Rights Act 1996 (protected disclosures)—
(a) subsection (1) of section 43C (disclosure to employer or other responsible person);(b) paragraph (b) of section 43E (disclosure to Minister of the Crown);(c) subsection (1)(a) of section 43F (disclosure to prescribed person).(2) In section 43G of that Act (disclosure in other cases), in subsection (1)—
(a) omit paragraph (a);(b) in paragraph (b), for “he” substitute “the worker”.(3) In section 43H of that Act (disclosure of exceptionally serious failure), in subsection (1)—
(a) omit paragraph (a);(b) in paragraph (b), for “he” substitute “the worker”.(4) In section 49 of that Act (remedies for detriment suffered in employment), after subsection (6) insert—
“(6A) Where—
(a) the complaint is made under section 48(1A), and(b) it appears to the tribunal that the protected disclosure was not made in good faith,the tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the worker by no more than 25%.” (5) In section 123 of that Act (compensatory award for unfair dismissal), after subsection (6) insert—
“(6A) Where—
(a) the reason (or principal reason) for the dismissal is that the complainant made a protected disclosure, and(b) it appears to the tribunal that the disclosure was not made in good faith,the tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the complainant by no more than 25%.””
“Worker subjected to detriment by co-worker or agent of employer
(1) In section 47B of the Employment Rights Act 1996 (protected disclosures), after subsection (1) insert—
“(1A) A worker (“W”) has the right not to be subjected to any detriment by any act, or any deliberate failure to act, done—
(a) by another worker of W’s employer in the course of that other worker’s employment, or (b) by an agent of W’s employer with the employer’s authority,on the ground that W has made a protected disclosure.(1B) Where a worker is subjected to detriment by anything done as mentioned in subsection (1A), that thing is treated as also done by the worker’s employer.
(1C) For the purposes of subsection (1B), it is immaterial whether the thing is done with the knowledge or approval of the worker’s employer.
(1D) In proceedings against W’s employer in respect of anything alleged to have been done as mentioned in subsection (1A)(a), it is a defence for the employer to show that the employer took all reasonable steps to prevent the other worker—
(a) from doing that thing, or(b) from doing anything of that description.(1E) A worker or agent of W’s employer is not liable by reason of subsection (1A) for doing something that subjects W to detriment if—
(a) the worker or agent does that thing in reliance on a statement by the employer that doing it does not contravene this Act, and(b) it is reasonable for the worker or agent to rely on the statement.But this does not prevent the employer from being liable by reason of subsection (1B).”(2) In section 48 of that Act (complaints to employment tribunals), in subsection (5)—
(a) for “includes, where” substitute “includes—(a) where”;(b) at the end insert—“(b) in the case of proceedings against a worker or agent under section 47B(1A), the worker or agent.””
“( ) Section (ACAS: prohibition on disclosure of information) does not apply in relation to a disclosure, or a request for information, made before that section comes into force.”
“( ) Section (Dismissal for political opinions: no qualifying period of employment) does not apply where the effective date of termination of the contract of employment in question is earlier than the date on which that section comes into force.
“Effective date of termination” here has the meaning given by section 97(1) of the Employment Rights Act 1996.”
“( ) Section (Disclosures not protected unless believed to be made in the public interest), (Power to reduce compensation where disclosure not made in good faith), (Worker subjected to detriment by co-worker or agent of employer) or (Extension of meaning of “worker”) does not apply to a qualifying disclosure made before the section comes into force.
“Qualifying disclosure” here has the meaning given by section 43B of the Employment Rights Act 1996.”
Lord Lea of Crondall
“Employee consultationEmployee consultation
(1) Regulation 11 of the Information and Consultation of Employees Regulations 2004 (S.I. 2004 No. 3426) is amended as follows.
(2) After paragraph (1) insert—
“(1A) In any event an employer shall start the negotiation process set out in regulation 14(1)—
(a) not later than 6 April 2014 if the undertaking has 1,000 or more employees;(b) not later than 6 April 2015 if the undertaking has 500 or more employees; and(c) not later than 6 April 2016 if the undertaking has 250 or more employees.””
Lord Lea of Crondall
My Lords, the amendment has a great deal to do with enterprise. Perhaps I may begin with an anecdote. A British company recently wanted to take over a Swedish company, and when the MD went to Gothenburg there was a meeting over lunch with the works council. The workers’ chief representative on this body asked him the following question: “Mr Struthers, if you take over this company, do you think it will help us to increase our world market share?”. Mr Struthers reported when he got home that he had been flabbergasted; no such question had ever been put to him in such circumstances in a lifetime of working in British industry and commerce.
We in this country have reached a crisis of non-representation of employees in most of British industry and commerce. I am talking here about a lack not of co-determination, as in Holland, Germany and Scandinavia—we will no doubt have time to talk about that next month—but of the most rudimentary processes for meaningful information and consultation, IC, with the workforce generally. By that I mean, as the rubric on the IC default mechanism states,
“consultation with a view to reaching agreement”.
According to the ACAS Workplace Employment Relations Survey, WERS, the proportion of firms or enterprises with no joint consultative committee at any level increased from 65% in 2004 to 76% in 2011. The conclusion is that the CBI pays lip service to this principle only on odd days of the week. Local team briefings and so forth are the most that is generally provided; and the research shows that the local manager often knows as little about what is happening in the company as a whole as the workers on the shop floor—and he or she is certainly in no position to engage in authoritative consultation about such questions as restructuring, which could lead, for example, to collective redundancies that are simply handed down as a fait accompli, thereby shutting the proverbial stable door.
This is the American business model of accountability exclusively to the shareholders—one might say to the share price—side by side, in case I overlook it, with rocketing increases in inequality of pay from top to bottom, with contempt for any notion that the enterprise is “one happy family”, as used to be said, or even that, “we are all in this together”.
Years ago, there used to be interest in these matters in the Department of Employment and Productivity, but now we have an ideology in the Department for Business, Innovation and Skills—I should make it clear that I am not suggesting that it is open to individual civil servants to change that ideology—that is totally orientated to the notion not only that we should remove the concept of two sides of industry but that one side of it is now without a voice or role in any sort of decision-making. Therefore, in practice, BIS does as little as possible to make progress on joint consultation. Indeed, it puts huge resources, side by side with the CBI, into killing off any real advance, particularly if it arises from EU legislation. All this is in the supposed interests of a competitive economy. What a blinkered view it is that is reflected in this ideology on what makes a modern competitive enterprise.
One model is of autocracy, with the interests of the few far outvoting the interests of the many. This ideology is more or less universal in BIS, with the notable exception of the Secretary of State, Vince Cable, who, in the light of the current debate on the scandals in top remuneration and tax avoidance, has described the IC regulations as “a potentially powerful mechanism” that,
“has been underutilised to date”.
Let me therefore try to do Mr Cable a favour, otherwise he will have to await the return of a Labour Government in two years’ time. In that broader context, it is now clear in Labour Party policy, to give one instance, that there will be worker representation on the remuneration committees of boards. You do not need to be Einstein to figure out that for that to be meaningful it is necessary for there to be a substructure for two-way communication.
One reason why the debate has got stuck is the ideology of what is called, “the British voluntary system of industrial relations”. It is true that the so-called voluntary system meant that it was not laid down by the state. However, that did not mean that there was no general system. On the contrary, it was a very substantial system, both through collective bargaining and other types of collective representation, depending on the subject, on such matters as are identified in the default list in the IC regulations. The fashionable point being made is, “Well, what have the unions been doing about it?”. Let me be very frank and ask the Minister a direct question. Is he aware that so far as triggering the IC regulations are concerned, to which I shall refer in more detail in a moment, in the vast majority of cases union representatives cannot even get through the gate, never mind to the canteen at lunchtime? Some senior figures in the central arbitration committee have even been heard to say that this is the intention—that is, that this is a “non-union” channel, meaning that union reps should not set foot in the place unless they are recognised. Unions are therefore damned if they do, and damned if they do not.
Lord Monks
My Lords, I rise to support the amendment moved by my noble friend Lord Lea. The amendment concerns the information and consultation arrangements with which I have long been associated, first at the TUC and then at the European TUC. Its origins lie in some unexpected and sudden plant closures in the early 1990s, in particular a Renault plant over in Brussels. As a result, the European TUC pressed the European authorities to introduce a directive requiring advance information to be provided about imminent changes to representatives of the workforce, and then for consultation to take place with a view to reaching agreement. A directive was drafted to that effect.
It was a battle to persuade the then Labour Government to agree to this directive, but they did so in 2001 and the directive was enacted at European level. It is fair to say that they remained unenthusiastic about it. The TUC and the CBI were asked to come up with an agreement, and from the start it was clear that both the Government and the CBI wanted to qualify the universal right to information and consultation by introducing this minimum threshold of support. I acknowledge that it was also clear that some union leaders were apprehensive that the directive might be used to undermine the collective bargaining process, either by groups of workers using the consultation channel competitively with the negotiated channel, or by employers wishing to withdraw or to marginalise trade union recognition. This influenced the TUC to accede to the 10% threshold which is now UK law in these regulations. In view of the subsequent history, this agreement was a mistake. The law has had little effect—my noble friend referred to the recent book by Professors Purcell and Hall of Warwick Business School.
Since the law was introduced, we have had the crash of 2007-08, and of course the economy remains very fragile. Not only have the banks experienced corporate governance failures on a very large scale, but there have been more general failures too. The most spectacular has been the way that executive pay and bonuses have continued to surge upwards at double-digit rates every year. All this has been occurring at a time when recession has been very marked for nearly everybody else; real pay levels generally have been in decline; and British performance levels on nearly all measures have been poor.
I acknowledge that Ministers in the Government have struggled to find a way to stop top executives helping themselves, and to break this culture of conspicuous excess. They have not succeeded. The Business Secretary has said that the regulations could be used to influence executive pay and bonuses. However, here lies the reason behind this amendment. Most of the companies in the UK, large and small, do not have any arrangements comparable to a German works council or a French comité d’entreprise: bodies which can hold top executives to account. Many UK companies have hidden behind the 10% threshold which, as has been explained, is a number very hard to achieve for worker representatives. It is true that unions, too, with conspicuous exceptions, have not been very active in this area, finding the 10% threshold just too arduous to jump over.
It is therefore time to revisit these provisions. The noble Lord, Lord Heseltine, has made a persuasive case to this House for the UK economy to become more like Germany’s. A hallmark of the German model is the system of works councils and collective bargaining, widely used to keep managements and workforces in close step, and to keep companies on the path of long-term, sustainable success, not simply focusing on short-term shareholder value and lavish, self-rewarding systems. The amendment aims to help the UK on to a better path than is currently the case. It is time to make this law work, to align ourselves with the most successful European economies and to change our law—and for all concerned to make that change effective.
Baroness Brinton
My Lords, I rise briefly to say that the noble Lord, Lord Lea of Crondall, has exposed a problem with the practical arrangements that have come up through the 10% trigger. I, too, studied the Warwick Business School research, which makes a valuable point—which perhaps the CBI missed—about the combination of having documentation available and also having pre-meetings so that employees can get together to discuss issues and to be well informed. This is a particular problem for very large companies on split sites. I would be grateful if the Minister would explain the response that there might be in order to overcome this problem. Even if it is not helpful to enact it in legislation, perhaps the Government might encourage the members of the CBI to relax the trigger or make the facility such that it is not such a barrier, because clearly this is an issue.
Lord Young of Norwood Green
My Lords, I will be brief because my noble friends Lord Lea and Lord Monks covered the territory very well. I was glad to see that they received some support from the noble Baroness, Lady Brinton. I doubt that the Minister will rush to fully embrace the suggestion that the 10% trigger should be changed. However, one thing that the previous Government did and that this Government have maintained is employee engagement. Many statistics demonstrate that the more companies engage with their employees, the more they will improve their productivity. That was demonstrated in 2007-08 when companies were in serious trouble and there was a very positive response from trade unions. Therefore, there is a justification for the proposal made by my noble friend Lord Lea and supported by my noble friend Lord Monks, and I await with interest the Minister’s response.
Viscount Younger of Leckie
My Lords, I thank noble Lords for their interventions in this short debate. I will start by clarifying a point about the 10% hurdle. It does not need to be 10% of employees at a single point in time. Cumulative requests over a six-month period totalling 10% would trigger the requirement. It may be helpful for noble Lords to understand that.
I share the view of the noble Lord that employees can make an important contribution to the commercial decision-making process—an issue brought up by the noble Lord, Lord Lea of Crondall. They have a shared interest in the long-term success of the organisation, as well as having experience and knowledge that can increase operational effectiveness. The noble Lord, Lord Young, made a strong case for the inclusion of employees to this extent.
There are many ways in which employees can be consulted by their employer—formally or informally, voluntarily or as a result of statutory requirements. The Information and Consultation of Employees Regulations 2004 are one such formal mechanism. They implement a European directive and were developed through a landmark framework agreement between the CBI and the TUC. If 10% of employees request formal information and consultation arrangements, the employer is required to introduce such arrangements in accordance with the regulations. Employees can make the request direct to the employer, but, if they are concerned about raising their heads above the parapet, they can make the request to the Central Arbitration Committee and their names will be kept confidential from the employer.
It is true that the take-up of the right to formal information and consultation has been low, but I do not believe this means that we should remove the 10% trigger. If there is no demonstrable interest from employees, it is surely unreasonable to require employers to introduce information and consultation machinery. Employees are unlikely to be committed to engagement and discussions risk becoming desultory, wasting the time of all concerned. Nor should it be difficult for a workforce to secure the necessary number of signatures if formal information-sharing and consultation is of genuine value. Unions can play a role by ensuring that employees are aware of their rights and by helping them make the case more widely to colleagues. As the Parliamentary Under-Secretary of State for Trade and Industry, the noble Lord, Lord Sainsbury of Turville, said at the time, the regulations,
“balance the rights and responsibilities of employees and employers”.—[Official Report, 21/12/04; col. 1712.]
Lord Lea of Crondall
I am afraid I can describe the dialogue between this side of the House and the Government only as a dialogue of the deaf. I referred to people having no voice. The Minister referred to people getting e-mails or this, that and the other, but he did not say that they would have a voice. He said that there was progress in this field. Does he not accept the figure that I read out, which showed that there had been a 10% increase from the mid-1970s in the proportion of enterprises with zilch consultation and no machinery—no works councils and no joint consultative committees at all? The noble Lord implied that I had inaccurately said that unions were locked out at the gate, and purported to correct me.
Viscount Younger of Leckie
I did not imply that the figures were inaccurate; I just noted that the noble Lord had mentioned them. I am sure that what the noble Lord said about unions being shut out at the door was accurate, but I would be interested to hear examples of this.
Lord Lea of Crondall
That is very interesting. The impression given was that there was another route via the Central Arbitration Committee for workers who had the same obstacle to which I referred. However, the organising of workers across an enterprise is no straightforward matter for a union; you cannot just ring up one person.
The picture that HMG seem to have is quite incompatible with what the workplace employment relations survey describes. When it comes to a so-called voluntary model, it will not have escaped the Minister’s attention that in Scandinavia, the Netherlands and Germany, the works council is part of the machinery and does not require this complicated obstacle course. All I am saying is that the Minister should go away and reflect on the fact that 10 years of experience has produced progress backwards and that it is about time the Government revisited this issue, not wait for the progress that will be made in two years’ time under the Labour Government. I beg leave to withdraw the amendment.
Lord Whitty
“( ) In all its operations the issue of benefit or detriment to consumers shall be paramount, and where appropriate consumers shall be held to include small businesses.”
Lord Whitty
My Lords, we now move to the competition and consumer part of this Bill. I move Amendment 40 and speak to the other amendments in this group, all of which are in my name. I have been briefly promoted to the Front Bench for this section and I should declare my past and present interests. I am a former chair of Consumer Focus and of the National Consumer Council, and I am very pleased to see one of my distinguished predecessors, the noble Baroness, Lady Oppenheim-Barnes, here for this section. I am also currently an honorary vice-president of the Trading Standards Institute.
Most of this group of amendments are designed to ensure that consumer interest runs through the whole of this part of the Bill and the whole of the operations of the new Competition and Markets Authority. The Bill starts out very well. Clause 20 states commendably and unequivocally:
“The CMA must seek to promote competition”—
here and abroad—
“for the benefit of consumers”.
It is clear in this part of the Bill that competition is not an end in itself or an ideological description of what the capitalist system should look like; it is about the benefit of consumers and avoiding detriment to them. There may be wider public interest issues in relation to mergers, cartels and anti-trust issues, but this part of the Bill deals with the competition dimension, and the definition right at the beginning relates to the benefit of consumers.
I regret, however, that once that declaration is past, the operational requirements placed on the CMA hardly mention consumers. They are not mentioned in Clause 23 on mergers, not in Clause 24 on interim measures, not in Clause 27 on cross-market issues, not in Clause 31 on anti-trust, and so on. After Clause 23, no clause mentions consumers in the main part of the Bill. There is an amendment from the Minister that does, but there is no formulation here.
Moreover, there are in this Bill 50 pages of detailed prescriptions as to how the CMA should carry out its task. I find that very odd in the first instance. Indeed, I think it was to the noble Lord, Lord Marland, that I suggested that Schedules 4 and 5 be scrapped entirely except for one paragraph, which says in effect that the CMA board should conduct its own procedures. The detailed laying down of procedures is perhaps slightly tangential, as it offers a target to the very litigious oligopolists who have to deal with regulators. I am sure that the sector regulators, the OFT and the Competition Commission have experience of people picking up tiny bits of the regulations and catching the regulators out on these competition and cartel issues. By extension, it is also important for legal reasons that there is a reference to consumers throughout these clauses and schedules, if indeed we are maintaining them.
There is one reference to consumers, in Schedule 5, paragraph 63, which simply says “Omit section 8” of the Enterprise Act 2002, which it states promotes good consumer practice. This is very odd, and it is clear that the way the people who have designed how the CMA will operate have not ensured that consumer interest runs through the whole DNA of the new CMA. These amendments attempt to change that.
Amendment 40, the key amendment in this group, says that benefit or detriment to consumers is paramount in all operations. This is my basic theme for this evening. Incidentally, my amendment also includes a reference to small businesses. Much of the trading and some of the detriment of oligopolistic and monopolistic practices affects small businesses as much as it affects individual consumers. I have therefore explicitly put that point in. Indeed, I received a letter today from the Federation of Small Businesses very much supporting that reference.
Amendments 42 and 43 would make it explicit that the chair of the CMA is subject to the appropriate Select Committee of another place. This is partly so that it can judge whether the putative chair has consumer interest at heart in his or her approach to the job. Amendment 44 would require the CMA’s annual plan to include an assessment of the benefits to consumers of its actions and investigations. Amendment 47 would require CMA panel members to have experience or knowledge of consumer affairs. Amendment 48 takes it slightly further and would require that three members of the panel have direct experience of consumer representation or of consumer law.
It is particularly important to state this here about the panel operations, because although Schedule 4 does not prescribe any consumer experience, it prescribes a lot of other experience that people on the panel should have. It says that some should have experience of newspapers, an interesting point to which I may return at a later stage. It says that some should also have experience of communications, utilities, other business, and Northern Ireland specifically, but there is no reference to experience in the consumer world.
Amendment 51 deals with the deletion which I just mentioned: that of Section 8 in the OFT’s responsibility for promoting good consumer practice. That general requirement on the new body to inherit the OFT’s responsibilities for promoting good consumer practice surely should be located somewhere in the remit of the new body.
We need to rectify the omission of consumer references. My Amendments 41 to 44, 47, 48 and 51 need to be treated as a batch, because they all attempt to do so and to put the consumer first.
Two other amendments in this group deal with a slightly different issue. Amendment 52 deals with the issue, which I have raised with the Minister before, of how some of the other functions that are currently with the OFT are devolved to other organisations. Clause 22 allows the OFT to hand on and transfer functions to the CMA or Ministers, but in practice a lot of what the OFT currently does is going elsewhere: to trading standards, to Citizens Advice, to the National Trading Standards Board, which has no clear corporate identity let alone a statutory identity. The Minister has written to me, this issue has been addressed in papers on the consumer landscape, and I am not necessarily against it, but surely if we are looking at what is happening to the end of the OFT and the rise of the CMA, we ought to be clear in this Bill where those current issues are going.
Some have already happened; Consumer Direct has already gone to Citizens Advice. Some are being talked about; scams procedures are being dealt with by Trading Standards. But some are going to bodies that are themselves under serious pressure. According to UNISON members in Trading Standards—I have no reason to dispute this—Trading Standards across England and Wales has suffered a 13% cut in funding and a 15% cut in staff, which has led to a 26% cut in inspections and a 29% cut in prosecutions. If we are loading further functions on to Trading Standards, we need to ensure the resources are there to do so.
The Minister is likely to say—indeed, it may even be scheduled in our forward business—that some of this is going to be dealt with by orders under the Public Bodies Act. However, for a complete picture of what is happening to the OFT’s responsibilities, surely we need some reference in this Bill. We need to be clear where those responsibilities are going and that the new CMA, wherever it is devolved to, will ensure that those responsibilities have a national focus as well. While the day to day operation may go down to Trading Standards or to Citizens Advice, there needs to be a statutory body that is responsible for the effective overall delivery of consumer education, consumer information and inspection and for dealing with widespread consumer scams.
Baroness Oppenheim-Barnes
My Lords, I have to start my remarks with the words, “Oh dear”. We have reached a disappointing spot in the advance of the protection of consumers, with the part of the Bill to which the noble Lord, Lord Whitty, referred leaving out, as it does, all the references that he wants to add about consumer protection. One reason is that the CMA and the consumer body are very different from what exists today. There is direct access for consumers to the Office of Fair Trading. If that is not enough and can be improved, why not improve it? The same applies to all the competition clauses throughout the Bill. They may be good—some of them probably are—but I do not see that what exists today warranted such a total and revolutionary change in the way that these matters have been discussed, enacted and valued by those consumers, consumer organisations and others who have benefitted from it in the past.
The noble Lord, Lord Whitty, spoke in particular about the phrase “promoting competition”. I am not quite sure how you promote competition—I have no idea—but what is important is to ensure that there is protection against anti-competitive practices that are directly harmful to the interests of consumers. It is as simple as that. I do not see the proposed amorphous body getting to the kernel of the problems that will affect consumers.
The noble Lord, Lord Whitty, rightly said that the trading standards departments will need a great deal more financial support than they are likely to get. They are respected by consumers and others alike. They have dealt successfully over the years and most people have thought of them as among our most trustworthy and available resources. They are being given a much more important role, which I am content about, and I am confident that they will, given the right resources, be able to carry it out. They have had the experience and, as long as they are given the opportunity to digest the role, they will know what they will be required to do in borderline cases.
Once again I come to the point about access for consumers. This will now go because the Office of Fair Trading is going. Apparently, collections will be made from the experiences of citizens advice bureaux and of the trading standards officers themselves. They will receive information about the big consumer concerns that will confront them but, once again, there is no clear process in the Bill—and certainly not the funding—for the citizens advice bureaux, which are all staffed by voluntary and diverse workers, to go to their top echelons. They will have to collate the information and carry out research on it, which they have not yet had to do to such an extent, and then pass it on to the trading standards officers. They will discuss it with them and then decide whether the matter—it could be a competition matter—should go to whichever of the respective bodies. That will be their responsibility.
As I pointed out in Grand Committee—I apologise for raising this matter again—the funding of the National Association of Citizens Advice Bureaux, which was announced by the noble Lord, Lord Marland, at Second Reading, was going to be £1.7 million. I was able to look up the figures for 1979, when we were closing some citizens advice bureaux. The National Association of Citizens Advice Bureaux said that it needed more money, and I gave another £1.7 million then, making the amount up to £3 million altogether. In today’s money, goodness knows what that would be. Since Grand Committee, I have looked even further and have found that in 1981, while the process was still going on, I increased funding to £4 million for the citizens advice bureaux alone. If it cannot do its job properly because it has not got enough money, then the whole chain of information going down through trading standards, to the CMA, to whoever will be receiving it, will not have strong enough links. I hope that my noble friend will be able to tell us something encouraging about that.
I do not propose to say anything about the Monopolies Commission replacement part of the CMA at this stage. That may be more appropriate later.
Viscount Younger of Leckie
My Lords, Amendments 40, 41, 47 and 48 recognise the importance of consumer protection and consumer interests and I thank the noble Lord, Lord Whitty, for the opportunity to debate this important issue. I also know that the noble Baroness, Lady Hayter, has spoken strongly in favour of consumer rights and I note and acknowledge her interest in this area.
As we said in Grand Committee and in the other place, empowering and protecting consumers is a vital element of our approach to promoting growth in the UK economy. Indeed, in the coalition agreement, the Government committed to take action to protect consumers, particularly the most vulnerable, and to promote greater competition across the economy. That is why we have put consumer interests at the heart of the CMA, and in particular, by the following: first, by giving the CMA a single general duty to seek to promote competition for the benefit of consumers; secondly, to retain the OFT and Competition Commission’s markets powers that aim to make markets work better for consumers; thirdly, by giving the CMA primary expertise on unfair contract terms legislation and additional consumer enforcement powers to address business practices that distort competition or impact on consumer choice in otherwise competitive markets; and lastly, by transferring the OFT’s super-complaint function, which provides a fast track process for complaints by consumer bodies.
Given the vital role the CMA will play in protecting and promoting consumer interests, and this vast range of consumer functions, we do not consider that these amendments are required. Further, in some respects the amendments could produce the wrong result. Amendment 40 cuts across existing legislation where the CMA is required to consider a range of objectives. For example, in carrying out its regulatory appeals functions, the CMA must take into account the objectives of the sector regulators, which may include media plurality or energy security. A requirement for consumer benefit or detriment to be paramount in all its operations might therefore cast doubt on the ability of the CMA to carry out its regulatory appeals functions fairly.
Amendment 40 would also provide that “consumers” include SMEs where appropriate. While I agree with the sentiment, I do not believe that it is actually necessary to deal with SMEs in this way. The existing legislation has not to date constrained the OFT from considering business to business markets, because if there are competition issues in these markets they will usually ultimately affect end consumers as well.
With regards to Amendments 41, 47 and 48, as a core function of the CMA, I expect the board and panel members to have great expertise in consumer issues. However, it would be inappropriate to establish a legislative criterion of this kind for appointments to the CMA board and CMA panel. We should not impose unnecessary constraints on the sort of people who can be appointed to these. As is currently the case for the Competition Commission panel, we expect the CMA panel to be made up of a range of experts, such as lawyers, economists, accountants and business people. Between them, they have the range and depth of expertise to deliver on inquiries across the economy, including on consumer issues and different markets.
I now turn to Amendment 44. In the current regime, the OFT is not subject to a statutory requirement to estimate impact on consumers in relation to its work. At present the OFT and Competition Commission estimate the impact of their past work on consumers over a rolling three-year period, using a common approach. Looking backwards helps to make the impact estimates more precise, and looking over three years helps level out peaks and troughs in impact. Requiring the CMA to estimate impact of its future work would be significantly less precise and in many cases difficult to forecast. Merger cases, for example, are responsive to market developments, and the CMA cannot pre-empt the outcome of independent market inquiries. This amendment could also leave the CMA at risk of judicial review if forecasted consumer benefits were not realised, and it could incentivise CMA to underestimate, and underachieve.
On Amendment 51 we do not consider that the OFT’s function to promote “good consumer practice” needs to be transferred to the CMA. As we said during our debate in Committee, in the current regime, Section 8 of the Enterprise Act 2002 gives the OFT a general function of promoting good consumer practice, which recognises its leading role in providing consumer education, its function in relation to approving consumer codes and its international consumer advocacy work.
In the new consumer landscape, the Citizens Advice service will take the lead role in providing consumer-facing education from the OFT as well as taking over responsibility for consumer advocacy from Consumer Focus; the Trading Standards Institute will have the role of approving consumer codes. The CMA will continue to have an international consumer role—for example, to represent the UK at the OECD’s Committee on Consumer Policy. A specific provision has been made for this in paragraph 19 of Schedule 4 to the Bill.
Baroness Oppenheim-Barnes
At the beginning of his response, my noble friend said that the fast track would be a helpful element in the Bill. I have looked everywhere but I cannot see anything about a fast track. It would be helpful if he could tell us a little more about it. Who is at the beginning of it and who is at the end, and where is the information coming from?
Viscount Younger of Leckie
I thank my noble friend for that point. Given that it is a very specific question, I will most certainly write to her.
Lord Whitty
My Lords, I thank the Minister for that reply and the noble Baroness, Lady Oppenheim-Barnes, for her interventions. I am afraid that I am not hugely reassured. If the Minister is correct in saying that the issue of the consumer interest or the protection against consumer detriment runs through the Bill, it is important that that is reflected in it at various points. I did not expect him to accept all my amendments, but I thought that he might be a little more benignly disposed towards one or two of them than he appears to be. Part of the problem is that the detailed prescriptions as to how the CMA will work, running to 50 pages with no mention of consumers at all, will be seized upon by corporate lawyers and people representing those who wish to continue anti-competitive and anti-consumer activities. They will say, “You have to abide by this and never mind about the general broad principles. That is what it says here, and it does not mention consumer detriment or protection at all”.
There is a lack of specific reference in the procedural aspects to consumer experience in terms of the membership of the board and the panels. I would not mind so much if other expertise was not mentioned, but consumer expertise is not mentioned. As the noble Baroness, Lady Oppenheim-Barnes, has said, early on there were reassuring noises that the access that consumers have to OFT services will not be diminished, but nothing in what the Minister said actually explained how that would be the case when everything else is shifting things away from the OFT down the line to trading standards offices, citizens’ advice bureaux and so forth. They may well be able to do a decent job. I hope that they will, and that they have the resources, funding and staffing needed to do so, but there must be some responsibility centrally to make sure that that happens. That is not reflected in this Bill and it is not reflected in the terms of the new CMA. I think that the Minister really ought to accept at least some of my amendments. Amendment 40 summarises all of this, and therefore I shall seek the opinion of the House.
Lord Whitty
Lord Whitty
My Lords, Amendment 45 is a more straightforward amendment in which I am trying to save the Government from themselves. I hope they will see the sense of that.
The meaning of this amendment may be a bit obscure from reading it on paper because it simply says “leave out paragraph (g)”. It would actually delete the reference to Monitor which, as noble Lords will know, is the expanded economic regulator for the National Health Service. The Government would really be very wise not to allow the terms of this Bill and the role of the Competition and Markets Authority to get entangled in the issues of the health service. It is therefore quite strange to me that the Government have kept the reference to Monitor. Paragraph 16 gives the CMA responsibility for writing a report every year on the other regulators as to how they have conducted their concurrent competition regulations and enforcement, and how they have been using their competition powers. Given that we are constructing a new organisation it is understandable that it is going to do that.
We have had some serious issues in relation to some of the sector regulators using other powers rather than their competition powers. For example, Ofgem has tended to use its licence powers rather than competition powers and has been very resistant to a referral to the Competition Commission; one could argue that Ofwat has managed to introduce hardly any competition into the sector at all, and so on. But those are very different from the issues that are going to confront Monitor, and to ask the CMA, in looking at these other regulators, to have a periodic assessment that applies the same terms as the utilities and transport regulators to the health service seems extremely foolish.
In part, the Government recognise this because their amendment in Committee also included Monitor, in terms of the ability of the Secretary of State to instruct the CMA to take over the competition responsibilities of the sector regulators, and they dropped that. That was extremely wise. This is a lesser issue but it is important, because during all the debates on the Health and Social Care Bill, Ministers here and in another place said that while they were introducing a degree of competition into the health service, competition would not outweigh other considerations.
Competition has a place in the National Health Service. One can argue about how much but it is never paramount. I do not think that even the most ardent advocates of a change in the National Health Service would regard competition as being more important to patients and the delivery of the National Health Service than the integration of services and the assurance that the quality of services in physical and social terms was important, and the degree to which competition existed was very much a secondary or tertiary issue. To give the CMA powers of supervision of a complex regulator such as Monitor, the prime consideration of which is to deliver a National Health Service that is integrated, available and flexible for the patient, and to try to override that with competition assessments that are equivalent to those used in the gas or electricity industries or the railways is not a sensible move.
Regrettably, this is also part of a wider picture. Orders are being produced under the Health and Social Care Act that also give rise to anxieties about the assurances given to us during the passage of the Act—I am looking particularly to the Liberal Democrat part of the coalition because the assurances were primarily directed at them—that competition would not outweigh other considerations in the regulation of the health service and that in particular the health service would not be open to the introduction of general competition policy, particularly EU competition law. That was a clear reassurance given us by the noble Earl, Lord Howe, and Ministers in another place throughout the difficult period when we were dealing with the Bill. It may be that the Government have changed their mind but certainly the combination of Monitor appearing in this Bill, supervised by the CMA, and the pushing of the boundaries of competition in some of the draft orders that are coming under the Health and Social Care Act seems to be a worrying tendency.
Tonight we are dealing with only this Bill. There is no reason at all why the effectiveness of the CMA is affected one way or another by whether it judges and marks Monitor, but the anxieties of having Monitor in that list are considerable. Any debate on the National Health Service is always highly emotive and not always entirely rational, but it would be wise for those who are promoting the role of the CMA in this respect to keep out of that area. I hope that the Minister and his colleagues will see the sense of doing just that. I beg to move.
Lord Mackay of Clashfern
My Lords, this is a matter that I find rather difficult. The noble Lord, Lord Whitty, has made a pretty important point in relation to Monitor. I had a certain amount of interest in the Health and Social Care Bill, although I am not a Liberal Democrat, as it happens—
Lord Mackay of Clashfern
Yet, yes. I will not predict the future. I do think that the duties of the general competition authorities and the duty of Monitor are fairly different in their character. I look forward with interest to what my noble friend has to say because I am sure he will have a very full answer to this. Until I have heard that, at the moment I am doubtful about the wisdom of putting Monitor under the authority of the general competition authorities.
Viscount Younger of Leckie
My Lords, the Bill strengthens the regime for the competition powers that will be held concurrently by the Competition and Markets Authority and sector regulators. The CMA will have stronger powers to co-ordinate Competition Act enforcement work and sector regulators will have explicit duties to consider using the Competition Act.
As part of these arrangements, and to ensure appropriate transparency and accountability, the CMA will be obliged to publish an annual report on the operation of the concurrency arrangements and the use of concurrent competition powers by the CMA and the sector regulators with concurrent powers. Amendment 45, moved by the noble Lord, Lord Whitty, would exclude Monitor from the scope of this report.
After lengthy debate on the Health and Social Care Act, Parliament decided that Monitor should have concurrent competition powers. Under the reforms being implemented through that Act, competition will not be pursued as an end in itself. We have said that competition will be used to drive up quality and will not be based on price. Nothing in this Bill affects this—certainly not the requirement to publish a report on how the concurrency arrangements have worked and the use of concurrent powers—or the Government’s commitment that Monitor will have concurrent competition powers so that a sector-specific regulator with healthcare expertise can apply competition rules.
However, Monitor’s concurrent competition powers in relation to the provision of healthcare services in England need to be co-ordinated with the CMAs, which can apply competition law in wider markets than Monitor; for example, in cases affecting the whole of the UK and in markets for pharmaceutical products or mobility aids. It is therefore quite right that Monitor be included within the concurrency regime and the CMA’s report on concurrency in particular.
I will address the question raised by my noble and learned friend Lord Mackay of Clashfern. I hope I can go some way towards allaying his fears, particularly regarding the application of competition law in health services, which was also alluded to strongly by the noble Lord, Lord Whitty. Competition law will not apply to the NHS Commissioning Board or clinical commissioning groups in their roles as commissioners of services because the case law is clear that, where public bodies carry out an activity of an exclusively social nature, neither that activity nor the bodies’ purchase of goods or services for the purpose of that activity will generally be treated as an economic activity. Also, a significant proportion of services delivered by foundation trusts would not be subject to competition law, as these NHS services are not provided in a market. They include accident and emergency, trauma, maternity, obstetrics, critical care and many others, particularly in remote rural areas.
A foundation trust will typically deliver some services to which competition law potentially applies and some to which it will not. If the intention or effect of an agreement was to prevent, restrict or distort competition, Monitor will, in considering a case, look at the benefits to patients alongside the detrimental effects to competition. When deciding on a remedy or penalty, Monitor will take into account the beneficial deterrent effect of a formal decision and possible fine against the impact that its payment might have on the public body and ultimately the taxpayer. Therefore, I ask the noble Lord, Lord Whitty, to withdraw Amendment 45.
Lord Whitty
My Lords, I thank the Minister and I thank the noble and learned Lord, Lord Mackay, for his intervention, which posed the question more succinctly than I did. The Minister has not effectively answered it. He has underlined that the situation in the health service is complex, but saying that the commissioning groups and others are exempt in their monopsonic dimension as buyers does not mean that other entities in the health service are exempt as providers. The aim of the health service is to look after the interests of patients, whereas consumers in most markets are served, with some exceptions, by greater competition. In the vast majority of situations the default position must be that consumers are better off if there is more competition. That is not the case when you need integrated and specialist services, and a whole chain of different services for different conditions in the health service. This is not equivalent to railway companies competing through franchises, or to gas and electricity companies, or even banks, competing; they are covered by the other concurrent regulators.
This situation is different and the report would have to be different. I am not against the CMA and Monitor co-operating but you should not have the CMA, with the kind of approach that it has to competition policy, being a sort of prefect, marking Monitor’s extremely complex task in relation to its competition powers. I know that I shall not persuade the Minister tonight but I ask him to reflect on this, and on how this could look to the public and to the professions in the health service. The Government are adopting an unnecessary rod for their own back and they would be wise to reconsider. However, for the moment, I withdraw my amendment.
Lord Whitty
“( ) the Financial Conduct Authority”
Lord Whitty
My Lords, I beg to move Amendment 46, which also deals with concurrent regulators. There are two aspects to my amendments. Amendments 46 and 64 deal with the opposite issue to the one that I was discussing with Monitor. Amendment 69 deals with general relations between the CMA and concurrent regulators. The Government have also introduced a raft of amendments in this area and, broadly speaking, they are welcome. As they deal to a large extent with Amendment 69, I shall leave that to the end.
The first two amendments deal with the issue of the Financial Conduct Authority, which has just been established by the Financial Services Act. Strictly speaking, this is not quite about concurrent powers, but if we establish a new competition and marketing authority with wide-ranging powers across markets in different sectors, it is odd that the financial sector is not mentioned in this Bill. Some of the biggest consumer, competition and quasi-cartel issues that have arisen in the financial sector, particularly over the past few years, are among the most important issues of market structure and consumer protection. Somehow, the CMA does not seem to have a relationship with that new authority. Indeed, there are two authorities here. There is the Prudential Regulation Authority, which has some impact on the consumer side as well, but let us focus on the FCA.
If they are not to be put together at the end of a list of other concurrent regulators, there ought to be a reference somewhere in the Bill to the role that the CMA plays in relation to the FCA and the financial sector. Its omission is very odd. Maybe the Treasury has seen off BIS in a way that bodies such as DECC, Defra, the DCMS and the Department for Transport cannot in relation to their regulators, but it is wrong. If you talk to the average consumer at the moment, the markets, consumer interests and consumer protection issues are primarily about the financial sector—from the failure of the banks through to debt and insurance issues. To exclude mention of that sector from the Bill is very odd. Simply adding it to this list may not be the correct solution, but I hope that the Minister can tell me why it is not there and how it could be included.
Amendment 69 deals with general relations between the CMA and the sector regulators. That is important because, as it stands, prior to the Government’s new amendments, Clause 46 suggests a relationship rather like that between the hammer and the nail. It actually provides for the Secretary of State to take all the competition powers from the sector regulators and hand them over to the CMA. Stated starkly in that way, it seems wrong. My amendment began from the point that the relationship should be based on co-operation and perhaps reporting systems, and should move only in extremis to the possibility of the CMA taking over those powers. As I read the noble Lord’s Amendment 70 and some other amendments, it goes a long way towards that. I shall listen to what the Minister says but I will withdraw my amendment in favour of his. I beg to move.
Viscount Younger of Leckie
My Lords, the Bill will strengthen the concurrency regime. I have already noted that the CMA will have stronger powers to co-ordinate Competition Act enforcement work and sector regulators will have explicit duties to consider using the Competition Act before taking regulatory enforcement action. We also expect that the CMA will work in close co-operation with the sector regulators in applying their concurrent powers.
Consistent with this approach, the Government also want to send a further signal about the need for strong and effective use of competition powers across the regulated sectors. They have proposed that, if the new concurrency arrangements do not work and if a regulator, other than Monitor, which the Government have excluded from the scope of the power, fails to produce better outcomes, the Secretary of State will have a power to ensure that the OFT and then the CMA take sole responsibility for applying concurrent competition powers in that regulated sector.
There was a debate in Grand Committee about providing a more explicit focus on co-operation between the CMA and regulators, and ensuring that the power is not used without early warning to the regulator. We have considered these points carefully and have therefore proposed Amendments 62, 63, 65, 66, 67, 68 and 70. These amendments require that regulators, the CMA and relevant devolved Administrations be consulted on the potential use of the power prior to the launch of a more public consultation on a proposal to use it. This ensures that there will be early discussions with regulators on any concerns giving rise to a proposed use of the power and allows them an opportunity to respond.
The amendments will also set out a purpose for the power: the promotion of competition within any market or markets in the United Kingdom for the benefit of consumers. This prevents the use of the power for any purpose other than improving the competition regime and ensures the focus of the competition regime remains benefitting consumers.
Lord Whitty
My Lords, I thank the Minister for that very full reply. As I indicated, as far as the general issue of co-operation between the CMA and the sector regulators is concerned, while his amendments do not go quite all the way and omit one or two things from my amendments, they represent a major advance and a clear requirement on the CMA, so when we come to them I certainly will not press my amendments dealing with that area. The one oddity about his reply was that, in terms of assessing whether there was a need for the Secretary of State to intervene, the concurrency report which is required under the earlier section would not be relevant or detailed enough. I would have thought that the whole power to produce a concurrency report was so that it would identify where there were some serious failings that needed to be addressed and might need to be addressed in a fairly draconian way by the Secretary of State handing the power over the CMA, so I find that lack of linkage a bit odd. On the other hand, the totality of what the Minister said about co-operation and the process that you have to go through before you use the powers in Clause 46 is a very positive move, and I thank him for it.
As far as relations with the FCA are concerned, the Minister referred to a memorandum of understanding between the two. My recollection and, I think, that of my noble friend Lady Hayter is that during the passage of the Financial Services Bill the Government, in the form of the Treasury rather than BIS, were deeply resistant to us putting in the requirement that there should be some co-operation between the new FCA and the then competition authorities. There is no reference in this Bill to a memorandum of understanding. The Minister referred to existing powers, but with effect in both directions in terms of handing things from the FCA to the CMA and the CMA coming back to double-check the way in which the FCA is carrying out its powers in relation to the financial sector. I think this omission is significant. I am worried about it, and if anybody out there knew about it, they also would be worried. Whereas this new super-duper competition authority has clear powers and clear relationships with all sorts of markets, the one market where it is not clear that it has a relationship, a power and an ability to second-guess is the financial services area, the one area which everybody has been worried about for at least the past five years. That I find odd. While there may be the odd reference here or in preceding legislation that helps, I think the Government probably need to have another look at this, but tonight I beg leave to withdraw the amendment.
Transport: HS2
(11 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Truscott
To ask Her Majesty’s Government what is their latest assessment of the cost/benefit ratio, and environmental and social impact, of the HS2 scheme.
Lord Truscott
My Lords, I thank the Government Whips’ Office for its assistance in tabling this short debate. I also thank noble Lords and the Minister in advance for their participation. Your Lordships’ House last debated the high-speed rail scheme, HS2, last July and I will not repeat all the excellent points made then by the noble Viscount, Lord Astor, and other noble Lords.
I have been following this debate with interest for some time and I have read all the contributions made in your Lordships’ House and the other place, together with all the relevant documents. I came to the subject with no axe to grind. The noble Lord, Lord Adonis, who I see in his place this evening, said in the debate last July that he was not biased in his pro-HS2 decision as Secretary of State for Transport. That is quite right and neither am I biased in my views. Since I gave my S-class Mercedes to my plumber last summer, making him the happiest plumber on earth, I have become totally dependent on public transport, in particular the marvellous Great Western Railway to reach my home in Bath.
As a neo-Keynesian, I also believe in supporting large infrastructure projects when they are in the national interest. They can create jobs and boost the economy. In my former role as UK Energy Minister, I understood well enough that large projects, badly needed by society as a whole, can have an adverse environmental impact. We are a densely populated island. Demographic pressures are growing, yet we all want to see improvements in our standard of living and quality of life. Yet, my Lords, I fear that with HS2 we are in danger of developing a huge and costly white elephant, with an ill-thought-out business case, social disruption and a catastrophic environmental impact.
As I said, we are a small island; we are not even the size of France, Germany, Japan or China, all of which have high-speed rail networks. Carbon neutral at best, HS2 will do nothing to enable our country to meet its carbon reduction obligations. Since the 1930s the UK has lost 50% of its ancient woodland which now accounts for just over 2% of total woodland. When our ancient woods are gone, they are gone for ever and we cannot afford to lose any more. Future generations will not thank us for such wanton destruction for the sake of 30 minutes less travelling time to Birmingham. As the Independent on Sunday pointed out, HS2 threatens 350 unique habitats, 50 irreplaceable ancient woods, 30 river corridors, 24 sites of special scientific interest and hundreds of other important areas. Threatened species include the stag beetle, purple hairstreak butterfly, great crested newt—where is Ken Livingstone when you need him?—slow worm, black redstart, long-eared owl, Daubenton’s bat and the badger.
We are told that the HS2 business case is sound—it will deliver much needed capacity, including freight, connectivity at record speed and it is in the national interest. That is wrong, wrong and wrong again. The business case is evaporating before our eyes. Instead of a benefit to cost ratio of £2 for every £1 invested, when you strip out the Department for Transport’s dodgy calculations, it is just 40p for every £1 invested, and it will cost every household in the country over £1,000. The Department for Transport’s record in accurate forecasting is poor—witness the west coast main line franchise fiasco or HS1, the Channel Tunnel Rail Link, where again its forecasts were wildly inaccurate.
Improvements to the existing infrastructure, such as working on pinch points within current transport corridors, would be a fraction of the cost—some £2 billion compared with £33 billion and rising—without the widespread disruption predicted by a scaremongering Department for Transport. Alternative proposals to upgrade existing lines provide a benefit to cost ratio of over 5:1. This can be achieved by rolling stock reconfiguration, operation of longer trains and targeted infrastructure investment to clear selected bottlenecks, enabling increased frequency.
I can see why some northern cities welcome HS2 as the best deal on offer. However, the fact is that HS2 will benefit London and connectivity between northern cities can be better improved by east-west connections over the Pennines and other inter-city improvements, rather than focusing on a north-south line to London. Most jobs and benefits will flow to London, as has been the case with Paris and Madrid with their high-speed rail networks. If I am not misquoting him, the noble Lord, Lord Jones of Birmingham, has rightly said that HS2 will turn Birmingham into a dormitory town for London. Meanwhile, hard-pressed commuters in the Home Counties, the south-east, south-west and East Anglia despite severe overcrowding will have all the costs but none of the benefits of HS2.
Nor do I think that Manchester, Leeds and Sheffield will be so keen when they are asked to cough up some of the £26 billion subsidy that HS2 requires or to pay the premium fares demanded of their citizens. Besides, has anyone told the Department for Transport that the north does not stop at Manchester? Liverpool and Newcastle have clearly been sidelined, let alone Scotland. Incidentally, I am grateful to the Minister for his prompt and timely replies to my Written Questions on HS2. The responses revealed that the Department for Transport has no idea how much the line would cost to expand to Scotland; nor does it have any contingency plans for Heathrow should another airport take its place as the UK’s hub.
Compensation is another issue. The Secretary of State for Transport in the other place said on 28 January last that he understood that HS2 would be “inconvenient” for some people. It can be argued that being unable to sell one’s house is more than a trifle inconvenient, quite apart from the noise and other impact of HS2 for up to 500 metres either side of the line for hundreds of miles, which will involve clearing thousands of acres of land and property. HS2 estimates that for every 100 metres of track it needs around 2.5 acres, yet just 2% of those affected will be compensated.
I hope that in his response the Minister will flesh out how the Government will keep their oft-quoted promise to compensate properly those affected. I can see the attraction for the Government of announcing a massive infrastructure programme, unparalleled in peacetime, which will not involve significant expenditure until 2017-18 and not be implemented for 20 years, when Ministers will have long moved on. It has all the benefits of giving the impression of action, while doing nothing to alleviate current problems and bottlenecks on the railway network, let alone boost the economy. If the Government really want to spend such an absurd amount of money, there are other projects which they may want to consider; for example, sorting out the nation’s airport capacity.
Finally, I know the noble Earl, Lord Attlee, will be concerned that the house of his late grandfather, Clement Attlee, in Prestwood, near Great Missenden, is imperilled by HS2. Will he do us all a favour, have a change of heart on HS2 and save the old family home?
Baroness Northover
I remind noble Lords that this is a time-limited debate and when the clock reaches three, noble Lords have had their three minutes.
Lord Freeman
My Lords, I am sure your Lordships are grateful to the noble Lord, Lord Truscott, for the opportunity to debate briefly the merits of high-speed rail. I am a strong supporter of high-speed rail and a strong supporter of HS2. My brief contribution this evening is based on my experience as Railways Minister between 1990 and 1994—it seems like an awfully long time ago—when I was responsible for dealing with HS1 and also on lessons learnt from that initiative which are relevant to HS2.
I want to make four brief points. First, the understandable concerns about noise and physical intrusion expressed by the people who may be affected by the construction of the line and its operation can, and must, be rationally and generously allayed in a planned and sensible financial compensation scheme. When I was responsible for the work on the line, the Government spent a lot of time listening to complaints from Members, from this House and the other place, and I hope met many of their concerns. After initial concerns on HS1, I believe that the final route was generally accepted. I know that present Transport Ministers will follow that example.
Secondly, the original HS1 route was changed to terminate at St Pancras rather than Waterloo. There was a strong argument in favour of that from my noble friend Lord Heseltine. The two main reasons were to revitalise parts of east London and to provide a link directly through to the Midlands and the north. That is provided for in a link for some trains to join HS2 from HS1, just north of St Pancras.
Finally, high-speed services will be popular, particularly with the business community; it is easier to work and discuss with other colleagues on high-speed trains because of the nature of their design. It is also easier than flying in many ways because of the congestion and difficulties in getting landing slots for short-haul flights. There should therefore be more capacity left for freight on the railways. I commend support for HS2 to this House.
Lord Adonis
My Lords, the benefit/cost ratio for HS2 is strong, and stronger still once the high-speed lines extend north from Birmingham to Manchester, Sheffield and Leeds, with high-speed trains proceeding on conventional tracks through to Liverpool, Newcastle, Glasgow and Edinburgh. The proposed “Y” network—London to Birmingham, then north-west to Manchester and north-east to Leeds—encompasses much of the economic heart of England in one integrated high-speed network of 330 route miles.
I obviously appreciate that some who live on or near the 330 route miles are opposed to HS2. The golden rule of high-speed rail is that everyone wants the stations but no one wants the line. However, the business case is robust and the Government are right to proceed.
There have been claims that the benefit/cost ratio is too optimistic. Actually, for transport infrastructure such as HS2, connecting densely networked population and economic centres, BCRs tend to be too pessimistic because they have difficulty in capturing wider economic benefits. The Jubilee line extension to Canary Wharf and Stratford was approved with a BCR of just 0.95, less than half that of HS2. Traffic forecasts for the M25, when planned in the 1970s, grossly underestimated usage; it was dubbed the “road to nowhere”—famous last words.
In assessing the case for HS2, it is vital to understand that the status quo is not an option. Critics talk as if the choice were £33 billion for HS2 or a few billion for upgrading existing infrastructure. Sadly, this is false. Patching and mending a 200 year-old railway, working at capacity, is hugely expensive and disruptive. There is no need to gaze into the crystal ball. The last upgrade of the west coast main line, completed five years ago, cost £10 billion. It entailed a decade of constant disruption to passengers and freight, and it delivered only a fraction of the capacity and connectivity of HS2.
Capacity is the key issue. To provide just two-thirds of the extra capacity of HS2 from London to Birmingham by further upgrading the west coast and Chiltern lines, would cost more in straight cash terms than building HS2. For starters, with or without HS2, Euston needs to be rebuilt. It was built in the 1960s for barely half of today’s traffic levels and is falling down. Furthermore, extending HS2 to Manchester, Sheffield and Leeds relieves all three main lines from London to the north, all three of which would otherwise have to undergo massive—and massively disruptive—upgrades over the next 25 years.
There is no free lunch here. The choice is this: invest billions in a patch-and-mend of the Victorian railway, or invest a similar sum in 21st century high-speed rail technology, with far greater social and economic benefits, like pretty well every other developed nation in the world. We should invest in the future, not the past.
Lord Bradshaw
My Lords, I agree entirely with what the noble Lord, Lord Adonis, has just said. The existing railway lines to the north—there are in fact four—are full. When a line is 85% full, it is impossible to run a reliable service because you get degradation with every incident.
Demand is bound to increase. There will be population growth in areas around London, Essex, Kent, Buckinghamshire and Bedfordshire. The very heavy extra freight which will come from the new port in London and from Felixstowe needs the railway. Of course, there are expanding markets. Without this, the railway is already expanding. Goodness knows what it would reach by the time we have HS2.
You cannot have incremental enhancement to existing lines. This would be very expensive and disruptive, as the noble Lord, Lord Adonis, has said. Such demand as there is for travel could be met by a new four-lane motorway, probably all the way from somewhere in Kent right through, around London and up to the north. However, that would be colossally expensive and disruptive. Or we could have a lot more flying. The only real choice is to have a new railway.
I was working for the railways when HS1 was built. I endorse entirely what my noble friend Lord Freeman has said. There was an enormous uproar in Kent, similar to that which we now have in the Chilterns. I asked a Labour MP whose constituency straddles HS1 how many complaints he got about noise and disruption. He said, “None at all. I get lots about gay marriage but I do not get anything about that”.
The other thing we must think of is that we need a link through London. I urge the Minister to address this significantly. The present link is very constricted. It will convey very little and offer nothing to people in Kent and Essex, huge areas of population growth, who want access to HS2 as well as Heathrow. A business case is difficult to make so far in advance. There are all sorts of external benefits which are almost impossible to measure.
The scheme will be much modified. Objectors will have their say. Rushing to judicial review in advance of the parliamentary process is premature and a waste of effort.
Baroness Campbell of Surbiton
My Lords, transport is not my area. However, I was pressed to find out more about the HS2 project after receiving worrying letters from disabled people, who will disproportionately suffer under the current proposals.
I shall seek to explain quickly. On reading the various government reports on HS2 and campaign literature on the issue, I was struck by the lack of detail regarding social impacts. I searched for the equality impact assessment and, again, failed to find anything that reflects any serious thinking. I came across only a short document that looks purely at passenger numbers by equality group.
For a £33 billion project, this seems grossly insufficient. A proper impact assessment, for example, would look at the population profile and pick up cultural groups or disabled people who may be forced to move away from the support of family or community. The voluntary purchase scheme applies only to properties within an arbitrary 120 metres of the line. It does not apply at all in urban areas. An elderly woman, now in residential care, is attempting to sell her home to fund that care. She was thrilled to find a couple who wanted to buy. Imagine her distress when they were turned down for a mortgage because HS2 meant the house had no value. No value—yet, at 400 metres away, she is not entitled to any compensation.
None of the schemes for compulsory or voluntary purchase, or the long-term hardship scheme, addresses the additional costs that disabled people may face because of the need to adapt new properties. This can include widening doorways or installing accessible kitchens and bathrooms. These are substantial costs that a disabled person would face if they had to move as a result of HS2.
I heard from a family where both parents are disabled. They are raising a two year-old daughter. The father is a wheelchair user and has respiratory difficulties. The dust and mud during construction would undoubtedly worsen his condition. It has taken many years for them to earn enough to adapt their home in order to have a child. As the father says:
“It is the one place in the world where I don’t feel disabled; where we can raise our child independently”.
They are just outside the arbitrary 120 metres from the planned line itself. HS2 is destroying the future they have so painstakingly put in place. I can hardly bear to think about it.
The Minister may say there is a hardship scheme, whereby if someone meets very exacting criteria, they might just about get the value of their property, but nothing more. When I looked further, however, I found reports of people being turned down for this scheme. One family was turned down despite the likely distress that the construction would cause to their autistic son. To allay their concerns, I would be grateful if the Minister would clarify whether there has been a full equality impact assessment of the project as a whole.
In conclusion, would the Minister be prepared to meet the family I mentioned? If he listens to their concerns, I am sure that he would want an opportune and appropriate equality impact assessment. It is their story that inspired me to investigate an initiative that would normally pass me by. I found it very wanting and I am glad to be able to share my concerns with noble Lords this evening. I would not be here after 7 pm otherwise.
The Lord Bishop of Liverpool
My Lords, yesterday I was at the launch of the International Festival for Business 2014, which will be held in the United Kingdom. The host city will be Liverpool. The Prime Minister was in the city in January, promoting the festival. He said:
“The United Kingdom is in a global race with a fight to win contracts around the world”.
If that is true of the UK, it is also true of Liverpool.
Business leaders in the Liverpool city region are very supportive of the Government’s HS2 scheme. However, they strongly urge the Government to include Liverpool in their plans. There is genuine anxiety that, without an HS2 spur, Liverpool will lose out to other northern cities. The chair of the local enterprise partnership, Robert Hough, has said:
“It is a question of the competitiveness of the city region. It is critical. Our case … has to be properly argued. It is an investment that will endure many decades. If we are disadvantaged now, it becomes a virtually permanent state”.
Without an HS2 spur to Liverpool, it is difficult to imagine how Liverpool will in future be able to bid successfully for such national and international business. I would be grateful, therefore, if the Minister, when he responds, could say whether the Government would reconsider an HS2 spur into Liverpool; without it, we fear a downgrading of the city with impacts on inward investment and regeneration.
Lord Cormack
My Lords, it is not just Liverpool that will suffer under the present plans. Nottingham, Leicester, Derby and other cities will be bypassed. I do not want to follow the right reverend Prelate, because I do not support HS2 and I never have. Now, of course, it threatens the county that I had the privilege to represent in the other place for some 40 years; I am receiving letters. “Staffordshire’s pain will not be Staffordshire’s gain” sums up the messages that I am receiving both by telephone and in the post.
We have to consider that this is a finite country. Our glorious, beautiful landscape is finite. The noble Lord, Lord Truscott—we are all in his debt this evening—talked about the vaster spaces in France and Spain, our continental neighbours. A thing of beauty is a joy for ever until it is destroyed; we will be destroying some of the finest and most beautiful countryside that this country has, in the Chilterns, the Midlands and beyond. To what point and to what purpose are we destroying it? The people who come to Liverpool and elsewhere come to this country not just to do business, although we hope they will come in increasing numbers. They do not come to enjoy our weather; they come, increasingly perhaps, to enjoy our cuisine; but most of all they come to enjoy our built heritage—our historic towns, villages and cities, and our cathedral cities in particular—and they come to enjoy the truly breathtaking countryside that we are privileged to have. It is our duty to pass that on to future generations.
There are so many other things that could be done with this money. I have the privilege of living in the glorious cathedral city of Lincoln. Lincoln does not have regular services to London. There is one train a day from Lincoln to London and one from London to Lincoln. A Lincoln man or woman can have a day in London, but somebody in London cannot have a day in Lincoln. As we approach the octocentenary of Magna Carta, we are going to have great celebrations in Lincoln. It is essential that we have better rail communications. People from London could have a day in Lincoln as they can so easily have a day in York. I am grateful to the Secretary of State for Transport for the personal interest he is taking in this matter. He is a man for whom I have the highest possible regard, as I do for my noble friend who will respond to this debate.
I think we have our priorities misplaced. We should be spending this money on upgrading and perhaps on reinstating some of the lines that were so ill-advisedly taken up in the wake of Beeching. My time is up; this country’s time will be up scenically and in many parts of its beautiful landscape if HS2 goes ahead. I hope and pray that it will not.
Lord Stevenson of Balmacara
I thank the noble Lord, Lord Truscott, for securing this debate. I declare an interest, as my home is in Little Missenden, which is close to the current preferred route for phase 1. Of course, being a nimby may encourage some others to devalue my comments, but without that close connection, I would probably not have studied the Government’s proposals in the way I have.
I want to make two points. I support investment in our national rail network and I am in favour of introducing a high-speed network for the UK, although I would start in a different place, both literally and metaphorically. I would start in the places that actually need high-speed connectivity, such as the south-west, Wales, the north-west of Scotland, and Scotland more generally—a contribution, perhaps, to a united kingdom.
I would insist on interconnectivity with other transport systems. Why on earth does HS2 no longer stop at Heathrow? Why does it not connect properly with HS1, through Stratford and thence to the continent? I would follow existing major transport corridors, such as the M40 from Heathrow to Birmingham, or the M1 through Milton Keynes. I would pay proper regard to areas of ancient woodland and precious areas of natural beauty, even if it means that journey times are slightly extended. I would consult properly on all the possible alternatives so that the best choice is made and I would certainly have a much better compensation scheme.
My second point is about the route through the Chilterns. The presentation of HS2 Ltd of the case for the “Y” route north of Birmingham trumpeted that it,
“avoids national parks, Areas of Outstanding Natural Beauty and registered parks and gardens”.
I welcome this, but it throws into stark relief the fact that the Chilterns is now the only AONB along the entire HS2 route that is adversely affected by the proposed scheme. My local campaign groups, Conserve the Chilterns and Countryside and the Chiltern Ridges HS2 Action Group have suggested a tunnel through the entire Chiltern AONB, which I support. However, HS2 Ltd clearly wants nothing to do with it. It claims it will increase costs by some 10 times the amount that we calculated it would cost but, of course, it will not publish its calculations to prove that.
A continuous full tunnel through the Chiltern AONB would not be necessary if HS2 was routed from Heathrow, up the M40, or through the M1 travel corridor to Milton Keynes. If the Government are intransigent on this, however, the continuous full tunnel would enhance the current phase 1 route because it better protects existing natural assets, meets local concerns, reduces the total phase 1 construction time and saves landscape-related costs of more than £65 million.
The Government should re-consult on the HS2 phase 1 route to allow proper and effective consideration of all alternative options, including those relating to the Chiltern AONB. They should ensure that the Chilterns tunnel proposals are included in the forthcoming environmental impact assessment, or else adopt the Labour Party’s proposals for hubs at Heathrow and Stratford.
Lord Shipley
My Lords, I am a long-standing supporter of high-speed rail. I served for several years on the Northern Way Transport Compact and we did a lot of work establishing the case for high-speed rail and setting out the positive cost-benefit ratio that could be achieved for the north of England. My contribution this evening comes from that northern perspective, where connectivity for business and growth matters profoundly, for both the speedy movement of people and the movement and export of freight in an increasingly competitive world.
As several noble Lords have pointed out, we have existing capacity problems, the product of both rising demand and underinvestment. When exploratory work was being done on the case for HS2, my great fear was that debate would become dominated by the route to be chosen between London and Birmingham to the detriment of the production of a wider rail investment plan and the wider benefits to the UK as a whole, which would be glossed over. Therefore, I am glad that the Government have understood the case for HS2, which I think is vital to our country’s economic future. It is not just a matter for the south-east and the Midlands because it will help to rebalance our economy away from overdependence on London and the south-east for tax revenues. That means building an infrastructure which helps Scotland, the north and the Midlands to grow. London currently provides 28% of non-domestic rates income in England with only 15% of our population. That is an unhealthy situation and one that requires a better transport infrastructure to put right.
Critically, HS2 will link northern cities with each other, not just with London and Scotland. The Leeds to Birmingham journey time will be just under one hour versus two hours now, and the journey from Leeds to London will take 82 minutes versus two hours and 12 minutes today. Newcastle will not be connected to the high-speed track in the next phase but when HS2 joins the east coast main line north of Leeds, the journey time from Newcastle to London will be two hours and 18 minutes, as against just under three hours now. There will also be an hour’s saving on the journey time to Birmingham. As a consequence of HS2, there will be greater freight capacity on the system as a whole.
I commend the British Chambers of Commerce, which says that HS2 will create confidence, jobs and prosperity. We cannot go on just patching the system. We need to plan for a full national UK network and, pending that, we need to ensure that we maximise speed north of Leeds and Manchester. The cost, at £33 billion plus rolling stock at £8 billion, should be seen as a 20-year investment. Discussions about cost did not stand in the way of Eurostar or Crossrail. I agree entirely with the comments about the Heathrow connection, but the Government’s vision is right. We can debate the detail of routes, and it is right that we do so, but HS2 remains central to our potential for growth and competitiveness.
Baroness Wilkins
My Lords, I declare an interest as I was brought up in Amersham and have family and friends living there and in other areas being blighted by this scheme. They are not nimbys but are among the thousands of people throughout the country who have examined the arguments for HS2 and find them utterly unconvincing.
The Government claim that HS2 is in the national interest and that it will serve to bridge the north-south divide. Yet, according to public policy expert, Professor Mike Geddes, that claim has no factual basis, with the likely movement of money and people being towards London rather than back to the north. International studies show that it will just strengthen London’s dominance. HS2 Ltd itself admits that seven out of 10 of the jobs created for phase 1 will be in London. Far from increasing connectivity between our cities, as the Government claim, some UK cities will have a worse service than at present. The Government are pressing ahead with this project despite the fact that it is based on flawed assumptions and calculations about its costs and benefits. The Public Accounts Committee in the other place has today pointed to the basic errors made by the DfT on the west coast franchising fiasco, which wasted at least £50 million of taxpayers’ money.
One of the most glaring flaws is that more than half the benefit claimed to derive from the shorter journey time—55%—is based on the fallacy that time spent on the train is all wasted. We are in the 21st century, with iPads, mobile phones and the internet. Will the Minister explain why his department ignores the extensive research, let alone the evidence of its own eyes, which shows that business travellers work on the train? Why is his department using out-of-date, 11 year-old data and incorrect assumptions on the value of time? Will he also explain why an outdated forecasting model is being used to project demand? I understand that the old model significantly overstated the growth forecast of long-distance trips, and so inflated the growth in demand for HS2.
I am nearly out of time, but any fair cost-benefit analysis would factor in the cost to the thousands of people whose homes have been blighted by this route, the farms that have been cut in two and the businesses ruined, yet the proposed compensation arrangements are derisory. Overall, less than 2% of blighted homes can hope for compensation. Thousands are trapped, unable to move, or can do so only by accepting large losses. As we have heard, one mortgage provider has valued a property 500 metres from HS2 at nil. I do not deny that the country needs infrastructure building, but it needs to spend £33 billion on houses—and on houses built now to draw a halt to the misery being caused by inflated rents, rocketing house prices and the iniquitous cuts to the housing benefit system. It does not need to blight existing houses, and it does not need HS2.
Lord Faulkner of Worcester
My Lords, this is a very high-speed debate and I am pleased to have the opportunity to repeat my wholehearted support for High Speed 2. I, too, am going to make just two points.
First, we are not in uncharted territory. HS1 has given us experience of the environmental and social impact of high-speed railways. Noble Lords have recalled the furore that greeted British Rail’s proposals to build the high-speed line across Kent in 1987. Protest groups were formed and scare stories circulated, so why do we not hear more about the environmental and social intrusion of HS1 today? Kent lives happily with its high-speed line, and for the county council and local businesses it is a major asset as it encourages inward investment and visitors. The reason is that the line was engineered carefully to minimise environmental intrusion, as the noble Lord, Lord Freeman, said. The use of tunnels, cuttings and noise barriers all help to reduce the sound, which is low anyway because the new track is laid on deep ballast, and the new trains minimise noise that would otherwise be created at the point of contact between wheel and rail. It is far less than that created by motorway traffic, which is intrusive 24 hours a day. Today, the Kent transport network could not function effectively without the high-speed line.
My second point is about how high-speed rail changes the way Britain does business. We tend not to be very good at assessing the benefits of new rail schemes. A cost-benefit approach has been adopted to satisfy the requirement for analysis where public policy or public money is involved. However, cost-benefit appraisals for rail schemes have consistently underestimated the benefits that they bring. The growth in passenger numbers is often achieved much earlier than forecast. Total passenger numbers in 2012 were higher than at any time in our country since 1922, and parts of the railway are already full.
Cost-benefit ratios are only part of the story. The railway will transform the way we do business in Britain. It will offer benefits that we are only beginning to understand, just as it has for high-speed lines in countries all over the world. Its speed will link the south-east economy with other parts of Great Britain and help to encourage economic development in every part that it touches—a point made by the heads of the chambers of commerce in their briefing to us yesterday. It will attract significant numbers of people from road and air, just as Eurostar has between London, Paris and Brussels, and as high-speed rail has in continental Europe. It will release capacity on the classic rail network, which can be used to provide more trains to towns not well served currently, and, in particular, carry more freight.
I congratulate the Government on their commitment to stick to, and indeed expand, what my noble friend Lord Adonis set in train when Secretary of State for Transport, and I hope that they succeed in accelerating the legislative timetable. I want HS2 built in my lifetime, and I want my grandchildren to benefit from the new railway age of the 21st century.
Lord Rosser
My Lords, I thank the noble Lord, Lord Truscott, for securing this debate, which provides an opportunity to discuss where we are with HS2 and to reiterate the point that, with the continuing growth in passenger and freight traffic, even during a recession, a new route is needed to address the inevitable and imminent line capacity problems, such as those on the west coast main line, where service frequencies are already well in excess of what they were a relatively few years ago.
We fully support the HS2 project, but we are concerned about its progress in the current Parliament. No legislation has been published, and the recent Command Paper suggested that Royal Assent for the Government’s first hybrid Bill would not be achieved until some point in 2015, and not by the time of the next election, as was previously intended. On top of that, the outcome of a judicial review is awaited. Perhaps the Minister could say when the Government expect to receive a judgment, and what impact a ruling against the Government would have on the timescale for the implementation of the HS2 project.
We have also expressed our concerns about the lack of a dedicated purpose-built link between HS1 and HS2, which would provide the proper links to enable HS2 to serve areas of the continent directly. Concerns have also been expressed that the Government do not propose to connect HS2 with our major city centres in some instances. There is also the issue of how HS2 will connect to Heathrow, which the Government have decided to park on one side pending the outcome of the Davies commission on aviation capacity, which will not report back before 2015. Our preference was to take HS2 directly via Heathrow. Now even the Government’s compromise position of a spur to provide a direct link to Heathrow has been taken off the table, at least for now.
The reality is that this Government are acquiring a reputation for dither and delay when it comes to major transport projects. A decision on airport capacity in the south-east has been put back until after the next general election. Now it looks as though there may be dither and delay over decision-making on HS2, not only as far as links to Heathrow are concerned but also because of apparent uncertainty over whether the Government still intend to pass the necessary legislation for even the first phase of HS2 through Parliament by the time of the general election. If the Government’s commitment to pass legislation in this Parliament still stands, can the Minister say what statutory issues in relation to HS2 that legislation will address?
The Minister owes it to everyone, whether they are supportive of HS2 or not, to clarify the Government’s intended actions with respect to the HS2 project between now and the general election in 2015. I hope that the Minister will respond to these points.
Earl Attlee
My Lords, I thank the noble Lord, Lord Truscott, for securing this evening’s debate, and I thank other noble Lords for their contributions, some in support and some expressing concern. A project as significant to Britain as HS2 deserves time to debate, and I am happy to try to address questions this evening.
My right honourable friend the Secretary of State for Transport recently set out his initial preferences for the route and station options for phase 2 of the scheme, extending the route north of Birmingham to Manchester and Leeds. This is an important step forward in the project’s development, a step closer to the high-speed rail network that will address the key challenges that Britain will face in rebalancing and rebuilding our economy.
I have previously expressed to this House that I believe passionately in a successful Britain, and HS2 provides a rare opportunity to secure a step change in Britain’s competitiveness. HS2 will generate jobs and rebalance the country’s economy, acting as a catalyst for Britain’s future prosperity. Benefits will accrue right across the UK, leaving a lasting legacy for generations to come. This is a transformational project that will enhance rail capacity, connectivity and reliability, helping to underpin economic growth. HS2 will provide the foundation for a truly national network and connect seamlessly to the existing network, serving destinations not directly on the high-speed line such as Liverpool, releasing capacity on the existing main north-south lines to enable additional commuter, regional and, most importantly, freight services to use the line, and creating more space on some existing trains. HS2 will be woven into the transport fabric of the nation. It will be accessible to all and not be just for rich business travellers. The recently proposed routes north of Birmingham offer a great starting point for the consultation process to follow.
The Government are determined to make this an environmentally responsible scheme and have gone to great lengths to listen to those concerned about the environmental effects. While I believe HS2 to be in the national interest, we know that it is not possible to build a railway without any effect on the environment. When designing the route, important considerations such as wildlife habitats must be carefully weighed against other concerns such as protecting as many people’s homes as possible. The Government must make sure that any environmental effects are kept to a minimum and also look for opportunities to benefit the environment along the way, such as the commitment already made to plant 4 million new trees as part of the HS2 project.
Following an environmental impact assessment, the Government will be best placed to understand the effects on the environment and bring forward proposals to make sure that it is protected as far as possible. The initial preferred scheme for phase 2 has been designed to avoid or minimise impacts to important sites, and avoid any national parks or areas of outstanding natural beauty. HS2 Ltd has worked closely with Natural England and the Environment Agency in choosing options and preparing designs that would have no impacts on sites of internationally recognised importance.
Where it is not possible completely to avoid certain areas, mitigating the effects of the line is important. This has been demonstrated through the proposals for the Chilterns area of outstanding natural beauty. Of the 13 miles of route through this area, less than two miles will be at or above the surface. This is more than a 50% increase in tunnel or green tunnel than proposed in the route originally consulted on. Noble Lords have mentioned the charming villages of Little Missenden and Prestwood. I would merely point out that my subsidiary title is Viscount Prestwood.
While a decision on this scale will be made on the basis of the long-term national interest, the economic case for HS2 remains strong. The latest analysis, published in August 2012, shows an estimated £2 of benefits for every £1 spent. As with any assessment of this kind, the economic case will continue to be reviewed and updated through the life of the project. However, the benefit-cost ratio can only ever form one part of the decision-making process for a project of this scale. Wider strategic considerations such as enhancing connectivity and regenerating cities to underpin the rebalancing of the economic geography of this country are clearly compelling cases.
The noble Lord, Lord Rosser, asked about the judicial review case. He will not expect me to say any more than that we expect the judgment shortly. He also challenged me about the progress on the necessary hybrid Bill. He will understand that to design the necessary powers, every piece of land needed has to be specified in the Bill. The process has to be done properly and will just have to take its time.
The noble Lord, Lord Truscott, pressed me hard on the issue of compensating those affected, and he was not the only noble Lord to do so. The Government are conscious that no major infrastructure project on the scale of HS2 can be built without an impact on local communities, as well as the disabled. However, just as the Government are committed to mitigating the environmental impacts, I should like to reassure noble Lords that the Government are equally committed to addressing the impacts on local communities affected by the route. For this reason, for phase 1, the package of measures that have been consulted on goes significantly beyond what is provided for in law, including, for example, a promise to buy all owner-occupied homes in a corridor that in rural areas is 240 metres wide. The responses to this consultation are being carefully considered, and the Government expect the final package to be in operation in the spring. Meanwhile, the exceptional hardship scheme for phase 1 remains operational, and offers have been made to buy more than 100 homes at their full unblighted value.
The Government are currently consulting on an exceptional hardship scheme for phase 2—a consultation that closes on 29 April—and will later consult on a full package of compensation measures for phase 2. Furthermore, the Government are determined to compensate for disruption and effects caused by the new railway, and have been working for years with community groups, local businesses and wildlife charities.
The noble Lord, Lord Truscott, talked about the problem of ancient woodlands. They are very important to our natural heritage; however, the Government have to strike a balance between a range of important considerations for HS2, such as the location of people’s homes as well as other environmental and heritage sites. We are doing everything possible to minimise the impact on ancient woodlands, but where this is unavoidable we will provide suitable mitigation and compensation, following the best practice recommended by ecologists. However, I fully understand the special status of an ancient woodland. As part of the HS2 project, the Government have already committed to planting 4 million new trees and we will also be looking at opportunities to enhance existing, or create new, woodland areas and wildlife habitats.
The noble Baroness, Lady Campbell of Surbiton, made important points about the impact of the construction project on disabled people. I understand her points. During the passage through the House under the hybrid Bill procedure, the noble Baroness will have a greater opportunity to raise her concerns. However, I gently point out that hers was an argument against any large-scale transport project, and not just against HS2.
Many noble Lords who spoke against the project claimed that there was no economic case for HS2. I disagree. The latest analysis, published in August 2012, shows a continued, strong economic case for proceeding with this strategically important scheme. It shows an estimated benefit-cost ratio for the Y network of around 2.5, including wider economic impacts. However, the economic case can form only one part of the decision-making process for a project of this scale, as its benefits go well beyond narrow transport economics. The Government remain convinced that HS2 is the best means of avoiding gridlock on our railways, and delivering the required step-changing capacity and performance of Britain’s intercity rail network to support economic prosperity over the long term. It will cost us more in the long term if we do not make the right decision now.
The noble Lord, Lord Truscott, pointed out that there are potential improvement schemes that have a BCR of 5:1. I do not deny this. However, one can run these schemes but at the end of the day still run out of capacity on the west coast main line. The noble Lord, Lord Adonis, made much the same point. He also made a very important point about the pessimism of the BCR and the difficulty of capturing the full benefit. I am very grateful for his wise comments, and I agree with everything that he said.
My noble friend Lord Freeman raised the issue of HS1. There are advantages to integrating the two high-speed rail lines. There is a strong strategic case for ensuring that a high-speed network in this country connects directly into the many thousands of miles of network in operation across Europe. I welcome the recognition by my noble friend Lord Freeman of the benefits that providing links with international gateways, such as HS1, can bring. My noble friend Lord Bradshaw also touched on HS1-HS2 connectivity.
The noble Lord, Lord Stevenson, raised the issue of why HS2 no longer stops at Heathrow. The spur has not been cancelled; it has been paused, and it is too early to predict the outcome of the airport’s commissioned work or of any decisions taken following that. There are no plans to slow down progress on phase 1, and we need to press on quickly with it so that we can deliver the wider economic benefits that high-speed rail can bring. The noble Lord, Lord Stevenson, also asked a question about where to build a high-speed railway. The main driver of where to build a new railway is the business case, and this is heavily influenced by the capacity constraints on the classic railway network. It is important to point out that eight of 10 UK cities will be connected by high-speed rail.
The right reverend Prelate the Bishop of Liverpool asked if HS2 could go to Liverpool. It is important to understand that trains will be able to run on HS2 and then on the classic network, so that the people of Liverpool will still get the benefits of HS2, as will the people of Scotland; everyone north of London will gain the benefits.
Unfortunately, I have run out of time. Where I have not managed to respond to noble Lords I will of course write. I am also hosting a presentation on HS2 shortly, and I would be delighted to see as many noble Lords as possible attend.
I reassure the House that the Government will continue to listen to those concerned about the impact of the scheme. HS2 is about helping Britain thrive and prosper. Tough decisions have to be taken, but they will be responsible decisions taken in the interest of making Britain better and stronger.
Enterprise and Regulatory Reform Bill
(11 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, the smooth transition from the current competition authorities to the new CMA will be essential to ensure that competition enforcement and consumer protection are not undermined. Amendments 49, 50, 55 and 88 are minor and technical, and seek to assist with that process.
Amendment 49 amends Schedule 4 to make clear that the CMA will not be required to publish certain reports, such as an annual plan or concurrency report in relation to the period before it takes its competition and consumer functions. Amendment 50 makes it clear that when a member of the Competition Commission panel is also appointed to the CMA panel during the transitional period, the period when he or she holds both appointments will not be double counted. The Bill requires that the total length of the two appointments must not exceed eight years.
Amendments 55 and 88 add a new clause which seeks to allow the OFT and Competition Commission to consult on behalf of the CMA on, among other things, new guidance before the CMA becomes fully operational, and make clear that this new clause comes into force on Royal Assent. This is a time-limited provision that seeks to enable full and timely consultation on guidance, rules, statements of policy and other matters relating to competition reforms in the Bill. I beg to move.
Lord Whitty
I certainly have no objection to any of these amendments. The Minister referred to a smooth transition. There is one other aspect necessary for a smooth transition to which we referred earlier: greater clarity about those OFT functions which are going outside of the CMA. Clarity on this is necessary over and above what is provided in the Public Bodies Act orders, which we are about to consider. I would be grateful if the Minister could confirm that there will be a further White Paper on the consumer landscape. I know he cannot confirm that there will be a consumer Bill in the next session—he cannot pre-empt the Queen’s Speech—but I assume that Government policy is moving in that general direction. With those caveats, I am fully in support of the amendments.
Viscount Younger of Leckie
As noble Lords will note, these amendments, while minor and technical, are vital to the smooth transition to creating the CMA, notwithstanding the noble Lord’s comments, and ensuring that competition enforcement and consumer protection remain at the forefront of activity. The Department for Business, Innovation and Skills is working closely with the Competition Commission and the OFT to allow for this smooth transition to the new authority, including the development of guidance for business. These amendments will assist in that process. To conclude, the noble Lord, Lord Whitty, may not be surprised to hear that I cannot commit further to future consumer issues or Bills, but I fully note his comments.
“( ) In paragraph 7, in sub-paragraph (3), for “Competition Commission” substitute “Competition and Markets Authority”.”
“Transitional provision: consultation
(1) This section applies in relation to a provision of this Act under or by virtue of which the CMA has a function of consulting another person in preparing rules, statements of policy, guidance or general advice or information.
(2) At any time before the provision comes into force, the Office of Fair Trading or the Competition Commission or both bodies acting jointly—
(a) may carry out any consultation that the CMA would have power to carry out after the provision comes into force, and(b) for that purpose, may prepare drafts of any documents to which the consultation relates. (3) At any time after the provision comes into force, the CMA may elect to treat any consultation carried out or other thing done under subsection (2) by the Office of Fair Trading or the Competition Commission (or by both bodies acting jointly) as carried out or done by the CMA.
(4) The Secretary of State may direct the Office of Fair Trading or the Competition Commission, or both of them acting jointly, to exercise a power conferred by subsection (2).”
Lord Whitty
Lord Whitty
My Lords, I shall speak also to the other amendments in the group, all of which deal with broadly the same issue: the regime on cartels.
In Clause 41 the Government have made a bold and necessary step, despite criticism from significant sections of business, to make the cartel criteria work. They seek to delete the requirement that for any cartel operation to be an offence under the 2002 Act it has to have been committed dishonestly. That is an unnecessarily high threshold of proof, which has greatly restricted the competition authorities’ ability to use their cartel powers to deal with cartels. The issue should be whether a cartel has been established that restricts competition and is to the detriment of consumers, not whether lies, fraud and deceit can be proved. Scrapping those dishonesty criteria in the first three subsections of Clause 41 is very welcome.
However, there is a “but” coming. The rest of Clause 41 rather spoils and undermines it. Subsections (4) and (5) limit the occasions when an offence can be committed and provide an absolute defence. New Section 188A in subsection (5) states that an offence has not been committed if, despite a cartel-like arrangement, customers are told; or, in the bid-rigging situation, the assessors of the bidders, the clients, have been told; or the arrangements have been published; or that they are made in order to comply with another legal requirement. I fully accept the last defence—it makes sense—but the rest do not make sense. A damaging cartel arrangement can exist whether or not customers are told; a damaging cartel arrangement on contracting bids can be damaging to consumers and can exclude new entrants—small business mainly—whether or not the client has been told; and consumers and small business can suffer detriment whether or not such arrangements are published.
The purport of the notion about publication seems to go back to the old days when registered cartels were recognised and protected. It goes back two or three turns of the competition law provisions and is not sensible in this day and age. It is out of kilter with the rest of the Bill.
Unfortunately, it goes further than that. Even when an offence has been committed, new Section 188B in subsection (6) provides in absolute terms that it is a defence if there was no intention to conceal the cartel arrangement; or, extraordinarily, that it was disclosed to legal advisers. Again, cartels can damage consumers and potential small business new entrants whether or not concealment was intentional and whether or not my learned friend has been informed. The effect of the cartel is therefore the issue, not the motivation and not the way in which it has been communicated.
My amendments would delete all reference in subsection (5) to no offence being committed under new Section 188A(1). That is, the only context in which an offence could be deemed absolutely not committed would be where it is to fulfil another legal requirement. The rest of the amendments would delete all references to a defence and replace it with a relevant mitigation. I recognise that there is some mitigation if you have told the customers or the client, but it is not an absolute defence. It needs to be taken into account by the court, but it does not prevent the court reaching a “guilty” verdict. Otherwise, if you do not adopt those two deletions, the positive move by the Government in the first couple of subsections of Clause 41 will be seriously undermined. I therefore hope that the Minister will recognise the sense of that and understand that the very positive consensus on the main issue in relation to this clause will be undermined unless we modify it broadly speaking according to this group of amendments. I beg to move.
Viscount Younger of Leckie
My Lords, there is wide agreement in both Houses that having to prove “dishonesty” makes the criminal cartel offence unnecessarily hard to prosecute, so it is right that Clause 41 removes the dishonesty requirement. However, in the Government’s view one cannot simply remove that requirement and leave the offence otherwise unchanged. Rather, we have had to think through the implications. In place of the dishonesty requirement, the clause provides that the offence is not committed if customers are notified of relevant information or if that information is published in a prescribed manner. These are the provisions which Amendments 56 and 57 would remove.
The reason for allowing this protection is that a limited number of agreements may technically fall within the terms of the cartel offence once the dishonesty requirement has been removed but are lawful under the anti-cartel provisions of the civil anti-trust regime that governs which agreements businesses may enter into. In such cases, it is right that we allow individuals to ensure they do not commit the cartel offence by checking that under the arrangements customers would be informed or the arrangements would be published as prescribed.
This approach builds coherently on existing provisions of the offence in Section 188 of the Enterprise Act. Subsection 6 provides that,
“arrangements are not bid-rigging arrangements if, under them, the person requesting bids would be informed of them at or before the time when a bid is made”.
All the arrangements caught by the offence involve price fixing, market sharing, output restrictions or bid rigging. These are all potentially damaging. Where such arrangements are put in place, the parties should be prepared to justify their actions. In principle, and in most cases, it is reasonable that they provide notice of the arrangements to those likely to be affected by them, their customers, either directly or through publication as prescribed; and it would be unreasonable to prevent, as these amendments would, individuals entering into perfectly legitimate activities which they are prepared to publicise in one of the specified ways, just as the present offence provides in the case of bid rigging.
In the majority of cases, of course, the types of agreements caught by the offence will be clearly detrimental to consumers, and the participants will know that they are engaged in unlawful conduct. In those cases, the arrangements will not be published but will be kept secret, and quite rightly the individuals involved will be exposed to prosecution and punishment. Our intention is to remove the prosecutorial difficulties with “dishonesty” while ensuring that only conscious participation in hardcore cartels, which ought to be blameworthy, is caught by the offence.
Notwithstanding those provisions, however, businesses and their legal advisers continued to have some concerns that the amended offence would criminalise the participation of individuals in commercial conduct that would otherwise be lawful. I hope that there is widespread support for the view that it is right to crack down on cartels, but that we ought not to chill businessmen from engaging in legitimate business activities that serve and benefit customers.
Concerns were also expressed about the practicality in certain circumstances of disclosure or publication and the protection of commercially confidential information. In a limited number of cases, for example in relation to arrangements for the joint underwriting of certain insurance contracts, prior disclosure of the arrangements might be difficult. In such cases, customers would be aware that such arrangements were common even without notification or publication and would be untroubled by it. In other cases, the information would already be publicly available in an appropriate forum, such as technical standards. To meet these concerns, the Bill was amended in another place, including by providing individuals with a defence where they did not intend to conceal the nature of the arrangements in certain circumstances or they took reasonable steps to disclose them to professional legal advisers for the purpose of obtaining advice. This builds upon the present approach in the Bill of blessing arrangements that have been publicised or notified.
Amendments 56 to 61 would drastically dilute the protections that these provisions afford by removing the circumstances where the offence is not committed and transforming the defences into relevant mitigations. This would not provide protection to those who were engaged in otherwise lawful behaviour but who, for example, had neglected for whatever reason to give the arrangements the appropriate publicity. It would also discourage parties from entering into agreements that are exempt from the anti-trust prohibitions because they bring gains to consumers where prior disclosure would compromise the benefits the company gains from the agreement. Rather, the individuals would have no defence, but they would be able to plead a relevant mitigation in order to reduce their sentence. That is an unattractive prospect that is likely to chill legitimate business activities, contrary to the Opposition’s stated intention.
I thought it might be helpful to address some points that were raised by the noble Lord, Lord Whitty, concerning the Government’s approach. What characterises the kind of hardcore cartel activity that we wish to make it easier to prosecute from legitimate behaviour is that it is clandestine to a high degree. That is where the bar is set. Those responsible meet in secret, use code words and communicate through unofficial channels, thus bypassing a company’s normal procedures. This element is already recognised in the Bill by the provisions that take outside the offence arrangements that are disclosed to customers or publicised. We therefore think it appropriate to give further comfort in relation to the offence by providing individuals with a defence that they did not intend to conceal the nature of the cartel arrangements from customers or prosecutors, or that before making or implementing such arrangements they took reasonable steps to disclose them to professional legal advisers for the purpose of obtaining legal advice. In the light of these explanations, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Whitty
My Lords, I find that reply very difficult to understand. I appreciate that there will be circumstances in which it is sensible for a restrictive practice to be agreed, communicated and, in one sense, registered in order to meet certain other objectives. Those may be legal requirements, quasi-legal requirements, safety requirements or in the broadest sense in terms of people protecting investments and so forth. However, I do not think that it is an absolute defence. It is something that the authorities will need to take into account in terms of motivation and judging whether the companies involved were acting reasonably, but it is not an absolute defence. I find that part of it particularly difficult to understand and particularly undermining of the Government’s general approach on this.
In terms of cartel offences not actually being committed, from the way the Minister has described it, it looks as if, in the bidding arrangements, any restriction would be on the bidders that the client was prepared to consider. It would not depend on their technical ability or their financial viability, but could be purely arbitrary; that is, the old boys’ network. That is effectively what the cartel offence in relation to bidding was attempting to stop. You go to the usual suspects only to bid for a contract and as long as you tell those bidders that you are restricting it to them then there is no problem. It is not even committing an offence. It is not even that there is a justifiable move. It is absolutely the case that an offence is not committed.
(1A) A sectoral regulator order is an order that amends one or more enactments”
“Orders under section 46: procedural requirements
(1) If the Secretary of State proposes to make a sectoral regulator order, the Secretary of State must carry out the first stage consultation.
(2) The first stage consultation is consultation with—
(a) the regulator whose functions would be removed by the order,(b) the Competition and Markets Authority,(c) where the regulator is the Office of Rail Regulation, the Scottish Ministers,(d) where the regulator is the Northern Ireland Authority for Utility Regulation, the Department of Enterprise, Trade and Investment in Northern Ireland and the Department for Regional Development in Northern Ireland, and(e) where the regulator is the Water Services Regulation Authority, the Welsh Ministers.(3) If (following the first stage consultation) the Secretary of State still proposes to make a sectoral regulator order, the Secretary of State must carry out the second stage consultation.
(4) The second stage consultation is consultation with—
(a) the persons consulted at the first stage,(b) any bodies who appear to the Secretary of State to represent the interests of persons in respect of whom the functions that would be removed by the order are exercisable (“regulated providers”),(c) any bodies who appear to the Secretary of State to represent the interests of persons who use the services supplied by regulated providers, and(d) such other persons as the Secretary of State considers appropriate.(5) The Secretary of State must give the following information to each of the persons consulted as part of the first stage or second stage consultation—
(a) an explanation as to whether the Secretary of State is proposing to remove the functions of the regulator mentioned in subsection (2)(a) of section 46, the functions of the regulator mentioned in subsection (2)(b) of that section or both sets of functions;(b) the reasons why the Secretary of State considers it appropriate to make the order.(6) The reference to the Competition and Markets Authority in subsection (2) is to be read, in relation to any time before the commencement of section 20(3), as a reference to the Office of Fair Trading.
(7) In this section, “sectoral regulator order” has the same meaning as in section 46.”