House of Commons
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Oral Answers to Questions
(11 years, 8 months ago)
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Claire Perry (Devizes) (Con)
1. What recent assessment he has made of the UK’s business competitiveness.
The Chancellor of the Exchequer (Mr George Osborne)
Under this Government, Britain has moved into the top 10 of the most competitive places in the world to do business, according to the World Economic Forum; our tax system is seen as one of the most pro-business in the world; market interest rates are at record lows; red tape has been cut by almost £850 million in the past two years; and exports to China, India and Brazil are up by almost two thirds since 2009.
Claire Perry
I thank the Chancellor for that reply. Is he aware that, according to accountants KPMG, Britain is now the best place in the world to do business, for the first time ever? That is very welcome news for businesses in my constituency, but what more do we need to do to maintain and consolidate that position?
Mr Osborne
My hon. Friend refers to the remarkable survey by KPMG that found that in the space of three years Britain has gone from having one of the least competitive business tax systems in the world to having the most competitive one; we are ahead of Ireland, the Netherlands and Luxembourg, as well as, of course, the United States, France and Germany. That is because of the hard work we have done on corporation tax and on the controlled foreign companies regime. Of course, we have to go on making this country the most competitive place to do business, so that we can succeed in the global race.
Sheila Gilmore (Edinburgh East) (Lab)
Is it not the truth that demand has been so sucked out of the economy by the Government’s policies that there just is not the growth? Telling us how competitive we are is living in cloud cuckoo land, given that even the Office for Budget Responsibility says that growth is going to be very slow, even in the coming year.
Mr Osborne
To get a lecture from the Labour party on demand! The economy shrank by 6% when the shadow Chancellor was in the Cabinet, and we are picking up the pieces of the mess he and his party left behind. One of those pieces was the deeply uncompetitive business tax system which meant that companies were moving their headquarters out of the United Kingdom. Companies are now moving into the UK because of the changes we have made.
Mr Andrew Tyrie (Chichester) (Con)
It is small businesses in our constituencies that will hold the key to Britain’s economic revival. Does the Chancellor agree that they are simply not getting the support they need from the banks at the moment and that although the funding for lending scheme is good, most of the money is currently going into mortgages rather than businesses? I realise that he will not want to say much now, just before the Budget, but can he at least reassure the House that the needs of small businesses are right at the top of his agenda for this Budget?
Mr Osborne
My hon. Friend has that assurance. The funding for lending scheme, joint with the Bank of England, is now supporting the small and medium-sized business sector as well as the mortgage market, and is repairing the damage to the financial system caused by the financial crisis. He is also right to say that small businesses are the bedrock of our economic revival, which is why we have cut the small companies tax rate, which before the general election the Labour party wanted to put up. We have also carried on the relief for small businesses from business rates, and in the autumn statement we increased tenfold the annual investment allowance, so that small businesses can invest for the future and create jobs. The Government understand that there needs to be a private sector recovery in order not to repeat the mistakes of the past.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Chancellor boasts that all is going well for British business, but terrible figures out this morning show that manufacturing is down by 3% compared with last year’s figure. Business has lost all confidence to invest, so when will he pull his head out of the sand and see that his plan is clearly failing?
Mr Osborne
The manufacturing sector halved as a share of the British economy when Labour was in office and we had the fastest decline in British manufacturing in British history. The steps that we have taken to support manufacturers, to help with investment allowances and to ensure that they have access to fast-growing parts of the world, such as China and India, are all part of rebalancing and rebuilding the British economy. I was in the west midlands a couple of weeks ago, and there are 67,000 new private sector jobs in that region alone; I mention the region because private sector employment fell during the boom years under the previous Labour Government. We must get behind the private sector and we must get behind business: that is exactly what this Government are doing.
Nic Dakin (Scunthorpe) (Lab)
2. What recent assessment he has made of the UK’s credit rating; and if he will make a statement.
The Chancellor of the Exchequer (Mr George Osborne)
As I said to the House last month, the recent Moody’s decision was a stark reminder of the debt problems facing Britain and the clearest possible warning to anyone who thinks we can run away from confronting them. We will not do that.
Nic Dakin
When he was shadow Chancellor in 2009 and Standard & Poor’s put the UK on negative watch, the right hon. Gentleman was unequivocal in calling for a general election. Now that the UK has lost its triple A status on his watch, will he be consistent and urge his right hon. Friend the Prime Minister to go to the palace?
Mr Osborne
The advice from the rating agency could not be clearer: a reduced political commitment to fiscal consolidation would put Britain’s creditworthiness at risk. That reduced political commitment would come from the Opposition, who oppose every single spending cut, who have no credible economic policy and who, despite having promised for two years to produce a deficit reduction plan, still do not have one. We hear that a draft Labour manifesto is coming this July; perhaps then we will see a proper plan to deal with the deficit Labour created.
Mark Garnier (Wyre Forest) (Con)
Does my right hon. Friend agree that the only true measure of creditworthiness is the price paid by the Government to borrow? Gilt yields are still 16 points lower today than before Moody’s downgrade. Does that not reconfirm the international markets’ confidence in this country’s ability to pay its debts and the Chancellor’s programme to tackle Labour’s deficit crisis?
Mr Osborne
My hon. Friend is right that our credibility as a nation is tested every day when we seek to borrow money to pay for the deficit that the Opposition racked up. We can borrow at historically low rates, which means low rates for people’s mortgages and low rates for people’s small business loans. Of course, if we lost that credibility by pursuing the Opposition’s policies, interest rates would rocket, people would be put out of their homes and businesses would go bust. That is exactly what we will avoid.
Chris Leslie (Nottingham East) (Lab/Co-op)
I am sorry; we cannot let the Chancellor wriggle out that easily. Does he remember writing his pre-manifesto paper, “A New Economic Model: Eight Benchmarks for Britain”, just before the last general election? In it, he said that
“for the first time, the British people will have eight clear and transparent benchmarks—Benchmarks for Britain—against which they can judge the success or failure of their Chancellor and their government over the next Parliament. We will be accountable.”
Will he remind the House of his first benchmark test?
Mr Osborne
Our benchmark was to restore the fiscal credibility of this country and that credibility has earned us record low interest rates. The hon. Gentleman talks about wriggling out of things we did in the late period of the last decade, but he ran the leadership election campaign for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—he was the campaign manager—and he should apologise for that disastrous premiership and the chancellorship that preceded it, which put this country in this mess in the first place.
Chris Leslie
We are all deeply moved by the Chancellor’s remorse and contrition, but let me remind him of his first benchmark test:
“We will safeguard Britain’s credit rating”.
He has failed on the other benchmark tests, too: he said that he would ensure greater availability of credit to small and medium-sized enterprises; he has failed on economic growth; he is failing on borrowing and the deficit; and he is failing on living standards. After three years of failure, when will it dawn on the Chancellor that his strategy is not working?
Mr Osborne
We have cut the deficit by a quarter, a million new jobs are being created in the private sector and there is record employment in our economy, as well as record female employment. We are rebalancing the British economy after all the problems of the past. The hon. Gentleman talks about remorse and contrition, but until we hear some remorse and contrition from those on the Labour Front Bench about the economic mistakes they made, no one will pay the slightest attention to what they, and in particular the shadow Chancellor, have to say.
Stephen Williams (Bristol West) (LD)
Given that the UK Government are able to borrow at historically low rates, may I urge my right hon. Friend to take advantage of that position in order to prioritise capital investment, particularly in the housing market, to give a strong fillip to growth?
Mr Osborne
We have increased capital investment from the period of the Labour Government. Capital spending as a percentage of our national income is more than under the Labour Government, and we have increased by £10 billion our spending on capital from the plans they left us. I agree that we should be using the Government’s credibility to do more, which is why the infrastructure guarantees and the housing guarantees are coming on stream. Guarantees are being written and that will help to build the infrastructure that this country needs.
Jim McGovern (Dundee West) (Lab)
3. What progress he has made on supporting victims of interest rate swap mis-selling.
The Financial Secretary to the Treasury (Greg Clark)
On 31 January, the Financial Services Authority published the findings of the pilot review into interest rate swap mis-selling. The full review of 40,000 cases is now under way, and the FSA says it should be completed within six months. Small business organisations played a major role in exposing the scandal, so I can announce to the House that from today bodies representing consumers, including small businesses, will be able to apply to make super-complaints to the Financial Conduct Authority, giving them fast-track access to the regulator. That important power should help to ensure that any future misconduct is detected quickly and put right.
Jim McGovern
I thank the Minister for that answer. My constituent, Mr James Boyle, has a contract with Clydesdale bank, which seems to be excluded from the review. The main banks—RBS, HSBC, Barclays and Lloyds—are all included. Why are the Clydesdale bank, and my constituent, excluded from the review?
Greg Clark
I can confirm that the Clydesdale bank has now become part of the review, as have all the other principal banks. The hon. Gentleman has raised the case of his constituent with me before; even though the product was not within the review’s terms of reference, Clydesdale has agreed to consider it as part of the review.
Andrew Bridgen (North West Leicestershire) (Con)
I have constituents who are concerned that the FSA may come under pressure from the banks to water down its findings and reduce the scope of the redress scheme, to their disadvantage. What can my right hon. Friend say to reassure my constituents about that important issue?
Greg Clark
My hon. Friend raises a very important point. The review is under the auspices of the Financial Services Authority, and each bank has had to appoint independent reviewers who are themselves accountable to the FCA. It is absolutely crucial that the objectivity they bring to bear cannot be compromised, and I have given the FSA clear feedback that it should have that in mind during the review.
Andrew Selous (South West Bedfordshire) (Con)
4. What steps he has taken to increase the amount of (a) lending and (b) equity financing to the real economy.
The Chief Secretary to the Treasury (Danny Alexander)
The funding for lending scheme is aimed at boosting bank lending to the real economy and has already led to some of the cheapest mortgage rates on record. Through the seed enterprise investment scheme, the Government provide generous tax relief for investment in firms with high growth potential, and we will deploy an additional £1 billion through the business bank.
Andrew Selous
Does the Chief Secretary agree that raising share capital is a vital way to help businesses grow, in addition to loan finance? Between 40 and 50 extra initial public offerings in technology companies could come to the UK in the next six months if we get conditions right, so in the forthcoming Budget will the Treasury do all it can to help businesses access share capital?
Danny Alexander
I certainly agree that there is a need to diversify the range of funding sources, including the one my hon. Friend describes, particularly for small businesses and businesses with high growth potential. That is the purpose of the seed enterprise investment scheme. The business bank has a remit to try to diversify the range of sources of finance available for small businesses, because in this country we are too dependent on solely bank finance. I shall certainly consider what my hon. Friend said.
Dr William McCrea (South Antrim) (DUP)
Small and medium-sized businesses are still finding it difficult to get banks to lend them essential finance. What further steps can the Minister take to reconnect banks with the reality of business? Up to now, it seems that banks have been a law unto themselves.
Danny Alexander
The hon. Gentleman makes a very good point. That is the purpose of a number of the schemes I mentioned earlier. The funding for lending scheme is designed to get banks to lend more to small businesses, and a complaints process has been put in place, allowing independent adjudication when cases go wrong. I encourage the hon. Gentleman to refer constituents to the scheme, which has overturned bank decisions in a large number of cases.
Mr Julian Brazier (Canterbury) (Con)
In welcoming the funding for lending scheme and the other measures my right hon. Friend mentioned, may I urge him to break up and sell off as soon as possible the publicly owned banks, so that we have more competition on the high street, and constituents of mine who are unable to borrow on good projects have more to choose from?
Danny Alexander
It is right that we own large chunks of two banks, because that was necessary to clear up the mess of the under-regulated, overheated banking system that was created under the present Opposition when the shadow Chancellor was City Minister. We are working as hard as we can to get those banks in good order and we are making progress in the direction that my hon. Friend suggests.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
The experience of small businesses across the UK does not match the rosy picture painted by the Chancellor earlier or by the Chief Secretary to the Treasury. Last week we learned that, despite the funding for lending scheme, net lending to businesses was down £4.5 billion in the last quarter. Will the Chancellor now act on Labour’s calls to reform the scheme immediately so that small and medium-sized enterprises get the funding that they so urgently need?
Danny Alexander
I am sorry that we did not hear the apology for the mess that was made in the financial system by the Opposition when they were in office. Many of the steps that we are taking are necessary to repair the damage that the hon. Lady and her Front-Bench colleagues did to the financial system and the banking system. She should also have noted that net lending to the real economy increased by £2.5 billion in January 2013. The schemes that we are putting in place are making a difference, but we are facing a continuing very challenging situation and that is why we will continue to look for further things to do to help small businesses.
Mrs Linda Riordan (Halifax) (Lab/Co-op)
5. What recent estimate he has made of unemployment levels in Halifax.
The Chief Secretary to the Treasury (Danny Alexander)
The claimant count in Halifax in December 2012 was 4,328. The UK has a lower rate of unemployment than either the US or the euro area and, as the Chancellor said earlier, we have created more than 1 million jobs in the private sector since 2010.
Mrs Riordan
I thank the Minister for that reply, but in reality the Government’s record on unemployment in Halifax since 2010 is that the number out of work has risen from 7.3% to 9.2%. Halifax cannot sustain those levels of unemployment for much longer. Can the Minister understand how angry people are? What action is he taking on unemployment in Halifax?
Danny Alexander
Of course I recognise what the hon. Lady says and that unemployment is a concern right across our economy. Unemployment rates across the economy have been coming down. She refers to the experience in her constituency. Since 2008-09 the number of apprentices in Halifax doubled, so some of the measures that the Government are taking, such as the investment in apprenticeships and the Work programme, are making a difference to her constituents. The most important thing that we can do to continue to support unemployment moving in the right direction is to maintain the credible fiscal policy that this Government have put in place, and not give up on it, as the Opposition would.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
6. What recent assessment he has made of progress on the Government’s target of public sector net debt falling as a share of GDP in 2015-16.
The Economic Secretary to the Treasury (Sajid Javid)
The independent Office for Budget Responsibility assesses the Government’s performance against the fiscal mandate and supplementary debt target. The OBR’s assessment is that the public sector net debt as a percentage of GDP will be falling by 2016-17.
Tom Blenkinsop
Will the Minister confirm that the Government will have more than doubled the national debt between 2010 and 2015, and that this Government will have increased the national debt by more in five years than it increased in the entire 13 years of the Labour Government?
Sajid Javid
Having brought the country to the brink of bankruptcy and having set the economy ablaze, the Opposition now throw stones at the firefighters. The country will never forget that we had the largest budget deficit when we came to power. We were borrowing £5,000 a second, and that deficit began in 2001, long before the financial crisis. Since then, we have cut it by a quarter, brought back confidence to Britain and created jobs at a record rate.
Mr Peter Bone (Wellingborough) (Con)
I congratulate the Government—the Conservative-led coalition—on reducing the deficit, but of course all that is slowing the rate of growth in the debt. When does the Minister think we will get to a budget that is balanced?
Sajid Javid
My hon. Friend makes a good point about how we must tackle the record national debt that we inherited. It went up threefold during the 13 years of the previous Government’s time in power. When we set out the Budget forecast next week, my hon. Friend will get a good answer.
Geraint Davies (Swansea West) (Lab/Co-op)
Businesses in Swansea are telling me that assessing net debt should include an assessment of net assets, and they have written to me and the Chancellor asking that Swansea be considered for superconnectivity status, namely that the Government invest in our broadband capability. Is that something he is willing to look at positively with the businesses involved?
Mr Speaker
That was very wide of the subject of public sector net debt falling as a share of GDP in 2015-16. The hon. Gentleman needs to do his research and have another go. Go back to the drawing board. We are grateful to him.
Charlie Elphicke (Dover) (Con)
Would it ever be a credible policy to borrow more in order to borrow less, or would it simply increase our debt, damage our credit rating and ensure that the country would be in even greater difficulties than it already is thanks to the Labour party?
Sajid Javid
My hon. Friend makes a good point. If the country were now following the Labour party’s plans, independent assessments show that the country would be borrowing £200 billion more: more debt, more deficit. As we bring the deficit under control we will be able to invest in things such as broadband plans in Swansea and help growth in this country.
Andy McDonald (Middlesbrough) (Lab)
7. What assessment he has made of the effect on child poverty of his changes to the uprating of tax credits and other payments announced in the autumn statement.
Mr David Hanson (Delyn) (Lab)
10. What assessment he has made of the effect on child poverty of his changes to the uprating of tax credits and other payments announced in the autumn statement.
The Economic Secretary to the Treasury (Sajid Javid)
The Government have protected poor and vulnerable groups while undertaking the urgent task of tackling the fiscal deficit. Work remains the best and most immediate way out of poverty, and we have continued to prioritise providing the best possible work incentives for welfare reform and increasing the personal allowance.
Andy McDonald
The Government’s own impact assessment says that 200,000 more children will be pushed into poverty as a result of the cuts to tax credits and benefits next month. The Children’s Society says that 40% of the children in my constituency now live in poverty. Will the Minister provide an assessment of how many more children in Middlesbrough will be in absolute poverty in 2016 as a result of the Chancellor’s failures, with not enough money for their food, warmth and shelter?
Sajid Javid
The hon. Gentleman knows that the official measure for child poverty is flawed. It is based on changes in relative income, which has meant, for example, that under Labour child poverty fell by 300,000 during a recession—clearly a nonsense. This Government are focused on the causes of child poverty, such as unemployment. I would have thought that the hon. Gentleman would welcome the fact that more people are employed in Britain today than at any time in our history.
Mr Hanson
The Institute for Fiscal Studies estimates that the changes that the Government are bringing in will cost a one-earner family with children around £534 from April this year. Will the Minister confirm that figure, and in doing so, will he confirm also that a one-earner family with children where the earner happens to be a millionaire will receive a £40,000 cut in April this year?
Sajid Javid
What I can confirm to the right hon. Gentleman is that this Government are focused on the causes of poverty, which is what he should be concerned about. I am surprised that he raises this question, because he highlights to his constituents that during the last term of the previous Government youth unemployment in his constituency went up 149%. Under this Government it is down 18%.
Mr James Clappison (Hertsmere) (Con)
Is it not a lamentable fact ignored by Opposition Members that for far too long this country has had too many children growing up in workless households, which means bad outcomes for those children over the longer term? Will my right hon. and hon. Friends redouble their efforts to make the tax system as simple as possible and to create incentives for people to work and set a good example for their children?
Sajid Javid
My hon. Friend is absolutely right, and that is why the Government have increased the personal allowance, cutting taxes for the low paid, helping 24 million people in the country. In addition, we are introducing universal credit to create the right incentives to get people back into work.
Neil Carmichael (Stroud) (Con)
On the subject of the personal allowance, does my hon. Friend agree that that has made a huge difference to a large number of people who are less well-off? In my constituency alone, 38,000 people have benefited.
Sajid Javid
My hon. Friend is absolutely right. The previous Government abolished the 10p tax rate. This Government have cut taxes for the lowest paid in this country, 24 million people have benefited and 2 million people have been taken out of taxation altogether.
Fiona Mactaggart (Slough) (Lab)
8. What plans he has to increase corporation tax payments in the UK by large multinational companies; and if he will make a statement.
Tim Loughton (East Worthing and Shoreham) (Con)
13. What steps he is taking to ensure that international companies pay the appropriate levels of tax on revenues earned in the UK.
Jane Ellison (Battersea) (Con)
15. What steps he is taking to improve international co-operation to tackle tax avoidance. [R]
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are determined to ensure that multinational companies pay their fair share of tax. The UK is committed to taking multilateral action through the G20 and the OECD to tackle the issues of profit-shifting by multinationals and erosion of the corporate tax base. The OECD presented its initial report on addressing these issues at the G20 meeting in Moscow last month and will present a comprehensive action plan to tackle them at the G20 in July this year.
Fiona Mactaggart
Even if the OECD produces a decent action plan, nothing will happen before September, yet Britain is responsible for some of the biggest tax havens in the world: Barbados, Bermuda and the British Virgin Islands received more foreign direct investment than Germany and Japan in 2010. When did the Minister last talk to the Foreign Secretary about what he could do about these tax havens?
Mr Gauke
It is worth pointing out that these places are not simply colonies in which we can direct orders; they have a degree of independence. We are working with other countries at the G20 and the G8 and through the OECD to ensure that we have a modernised tax system, which includes addressing jurisdictions where there is a lack of transparency.
Tim Loughton
Does the Minister agree with me on this very simple principle: companies should expect to be liable for appropriate tax in the UK on goods and services paid for and used by people and organisations based in the UK?
Mr Gauke
The point I would make is that we want to have an international tax system under which economic activity is taxed where that economic activity takes place. The fact is that the international rules have not moved with the times, but they need to do so, and I am delighted that the Chancellor of the Exchequer is leading the way in this debate.
Jane Ellison
Many of my constituents—particularly younger constituents and Church groups—are very interested in this agenda and are closely following what the Government are hoping to achieve this year. Is the Minister optimistic that our international partners will respond positively to this agenda and we can make progress on it?
Mr Andrew Love (Edmonton) (Lab/Co-op)
Although I wish the Minister success in achieving the international objectives, does he agree that dismantling the ability of the UK tax authorities to deliver on that international agenda is not the way to go about it, and with 2,000 staff at Her Majesty’s Revenue and Customs already having been sacked, does he not worry that we will be unable to deliver on it?
Duncan Hames (Chippenham) (LD)
9. What recent assessment he has made of the effect of alcohol duty and fuel duty on the cost of living and household budgets.
The Chief Secretary to the Treasury (Danny Alexander)
As a result of Government actions on fuel duty, from April average pump prices will be 13p per litre lower than if we had implemented the previous Government’s plan to squeeze motorists, and will remain at least 10p per litre lower over the remainder of the Parliament, giving real help to millions of families and small businesses.
Duncan Hames
I certainly welcome the efforts that the coalition Government have already made, but with the price of fuel now once again nudging £1.50 per litre in some places, does my right hon. Friend recognise the anxiety that the continuing prospect of rises in fuel duty causes people in rural parts of Wiltshire, as much as in the highlands of Scotland, who find themselves with little alternative to running a car?
Danny Alexander
As my hon. Friend knows, as a fellow rural MP I fully understand the pressures he describes, which is why we have taken the action I set out in my previous answer. He will also know that the pressures on the public finances remain substantial. I would remind him and the House that 25 million working people in this country will see the largest ever increase in their income tax personal allowance, meaning that the income tax cuts delivered by this Government will amount to £50 a month from April.
Albert Owen (Ynys Môn) (Lab)
One of the biggest hits on petrol prices has been the VAT increase. The hon. Member for Chippenham (Duncan Hames) is absolutely right that there are now record prices at the pumps. Will the Minister consider temporarily lowering the VAT rate, to help hard-working families across the country?
Danny Alexander
With all respect to the hon. Gentleman, I am not sure that he has reflected upon the substantial fuel duty escalator that was baked into the public finances when his party was in office. We have dealt with those increases on a case-by-case basis and reduced fuel duty by a penny. I think that is the right action to support motorists, families and small businesses alike.
Alun Cairns (Vale of Glamorgan) (Con)
16. Does my right hon. Friend share my concern that minimum unit pricing for alcohol could hit responsible drinkers from some of the most deprived families?
Danny Alexander
That matter is under consideration, and announcements will be made in due course.
Mr Russell Brown (Dumfries and Galloway) (Lab)
But surely the Minister cannot run away from the fact that the largest single increase in fuel prices at the pumps was the VAT increase. Also, over the past two weeks the weakening pound has driven up prices at the pumps. That needs to be seriously considered.
Danny Alexander
I do not run away from any of the decisions the Government have made, and the hon. Gentleman should not run away from the fact that the ratchet on fuel prices planned by his party in the last Parliament, which was baked into the public finances, would have dwarfed the increase to which he refers.
Greg Mulholland (Leeds North West) (LD)
Turning to the other escalator, the nonsensical beer duty escalator, I can give my right hon. Friend good news: there are now around 1,000 breweries in this country, the highest number for 70 years, because of the explosion in micro-breweries due to fairer and lower beer duty. Now that the Government are rightly going to tackle overcharging by the pub companies, which will allow more access to market for the wonderful micro-breweries, may we also have some joined-up thinking with the abolition in the Budget of the beer duty escalator, which simply does not make sense?
Danny Alexander
I certainly share my hon. Friend’s admiration for micro-breweries: one in my constituency has recently produced a beer called Ginger Rodent, which sold out in its first run. I look forward to more sales when it is in the House of Commons bar in June. As for the rest of his question, I take it as a Budget representation.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
11. What recent estimate he has made of the extent to which the rate of increase of average earnings has kept in line with the rate of consumer price inflation.
The Financial Secretary to the Treasury (Greg Clark)
The average gross weekly earnings of full-time employees rose by 2.8% between the last quarter of 2011 and the last quarter of 2012, while consumer prices rose by 2.7%. As a result of the increases in the personal tax allowance and rising employment, average household disposable income has increased by 2.8% more than inflation.
Chi Onwurah
Clearly the Chancellor has no understanding of what it is like to get by on a low income when increases in prices such as VAT mean debt and hardship for many families. Equally, last week the Office for Budget Responsibility confirmed that the Prime Minister has no understanding of his economic policies either. Is that why the Chancellor is implementing a tax cut for millionaires—because he does not understand real life or economics?
Greg Clark
If the hon. Lady had a grasp of economics, she would understand the need to take people out of taxation, which is what we have done through the increase in the personal allowance. In fact, that increase affects the lowest paid most of all and is equivalent to a pay increase of 4.5% since the general election. A higher personal allowance is a better policy than the shadow Chancellor’s plan to introduce the 10p rate, which the Financial Times described as “a pretty basic howler”.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The shadow Chancellor is a very gracious chap and, I am sure, would wish to commend the Government for taking 25 million people out of tax by the simple measure of increasing the personal allowance. Can my right hon. Friend share with the House what that means for an individual’s annual budget?
Greg Clark
Yes. By next month it will be worth £600 a year for every basic rate taxpayer, which is an enormous increase. For someone on median earnings, it is equivalent to a pay rise of 4.5%. I would have thought that the shadow Chancellor, who professes to be interested in helping the low-paid, would endorse the policy.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
12. What estimate he has made of what the annual value of his planned reduction in the additional rate of income tax to 45% would be to a person earning £1 million a year.
The Exchequer Secretary to the Treasury (Mr David Gauke)
Owing to the significant behavioural responses to changes in marginal tax rates at high levels of income, the annual value of changing the additional rate of tax would not reflect the actual Exchequer impacts of the change. HMRC’s report “The Exchequer effects of the 50 per cent additional rate of income tax”, which was published alongside the 2012 Budget, set out that behavioural response in detail.
Gregg McClymont
Well, that was very clear, Mr Speaker. The answer, of course, is £40,000 a year. Why is a £40,000 a year tax cut for millionaires this Government’s priority?
Gavin Barwell (Croydon Central) (Con)
On the subject of priorities, how much does the Exchequer believe that cutting the higher rate of tax will cost compared with the cost of raising the personal allowance, which has benefited thousands of my constituents and millions of people across the country?
Mr Gauke
The costing for the cutting of the additional rate, according to Her Majesty’s Revenue and Customs and signed off by the Office for Budget Responsibility, was £100 million. The cost of raising the personal allowance is about £9 billion, and that is where our priorities lie.
Diana Johnson (Kingston upon Hull North) (Lab)
17. Instead of spending £3 billion on cutting the 50p rate for the richest, why not put the money towards 100,000 social rented homes of one and two bedrooms to make the coalition Government’s bedroom tax work?
Mr Gauke
This figure of £3 billion that is repeated time and again is simply inaccurate. It makes no assumption for behavioural effects whatsoever, and this was never the position of the Labour party. The fact is that the cost is £100 million, recouped several times over by other measures contained in the last Budget that are getting more money out of the wealthy.
Stephen Phillips (Sleaford and North Hykeham) (Con)
14. What progress his Department has made on ending the abuse of tax avoidance schemes.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are fully committed to tackling tax avoidance, taking all necessary steps to protect the Exchequer. Since 2010, the Government have introduced 26 changes to the law to close loopholes and tighten our legislation against tax avoidance. We are introducing a general anti-abuse rule in this year’s Finance Bill to tackle abusive avoidance schemes, and we will be consulting on measures to address high-risk promoters of avoidance schemes.
Stephen Phillips
I am grateful to my hon. Friend for that answer. One of the drivers of these aggressive tax avoidance schemes has been the cottage industry that has grown up among those who seek, for their own financial gain, to persuade those who want to pay their taxes to enter such schemes. What steps are the Government taking to deal with the promoters of these aggressive tax avoidance schemes?
Mr Gauke
My hon. and learned Friend is absolutely right to raise this issue, which the Government have focused on extensively in recent months. We have consulted on what we can do in this area, and I hope that we will be able to report back on that shortly. We have also strengthened the disclosure of tax avoidance schemes regime, making it increasingly difficult for people to peddle these artificial, contrived schemes that involve people not paying their fair share. We do not think that that is right and we are doing something about it.
Mr George Mudie (Leeds East) (Lab)
Two years ago Christine Lagarde gave the Treasury 6,000 names of UK nationals using Swiss bank HSBC to avoid paying tax. Two years later, one of them has been convicted. Is the case closed on the other 5,999, and if so, why?
Mr Gauke
I am not going to get drawn into individual cases, but I will say that under this Government the number of prosecutions will increase fivefold. We are giving additional resources to HMRC to help to deal with prosecutions, and we have strengthened its offshore team. Our record on dealing with tax evasion—dealing with those who have cheated the system—is one of which we are proud, and it compares very favourably with the record that we inherited.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
Private equity is an important source of investment for expanding businesses, but when they over-leverage it can lead to disasters such as that with Castlebeck. It can also lead to protracted negotiations with the Revenue over the deductability of interest and an erosion of the tax base. Will my hon. Friend consider the German approach of limiting the level of interest that can be deductible in any tax year as a proportion of a company’s profit—the so-called bright line?
Mr Gauke
We did look at interest deductibility when we first came into office. However, in the corporate tax road map that we set out in 2010, we took the view that we were not going to change the rules fundamentally with regard to interest deductibility. What we have done, of course, is favour equity more by cutting corporation tax. My hon. Friend also raises wider issues about private equity and leverage that the Banking Commission is considering.
Nick Smith (Blaenau Gwent) (Lab)
18. What recent progress has been made on implementing the national infrastructure plan.
The Chief Secretary to the Treasury (Danny Alexander)
We have made significant progress in implementing the national infrastructure plan and published an update in December’s autumn statement alongside the latest version of the infrastructure pipeline. A further detailed delivery update on the top 40 infrastructure projects will be published alongside the Budget.
Nick Smith
Why did the Government cut infrastructure investment by £12.8 billion more than the plans they inherited?
Danny Alexander
The hon. Gentleman will know that in the 2010 spending review and the 2011 and 2012 autumn statements, we increased spending on infrastructure compared with the plans for capital spending that we inherited from the previous Government. Consequently, investment in infrastructure in this country is higher as a share of GDP over this Parliament than it was on average during the previous Government’s time in office.
Mr Speaker
No, I was taking the hon. Gentleman on Question 18. Does he wish to come in on Question 18?
Mr Speaker
I am extremely grateful for the hon. Gentleman’s generosity, but I am afraid we are not going to take Question 19. We are moving on. [Hon. Members: “Shame!”] Oh, go on, then. I am not going to ruin the hon. Gentleman’s day.
George Freeman (Mid Norfolk) (Con)
19. What assessment he has made of the effect of measures he announced in the 2010 and 2011 Budgets.
The Exchequer Secretary to the Treasury (Mr David Gauke)
I am delighted to answer Question 19.
The Budget of June 2010 set out the Government’s plans to reduce the deficit and rebuild the economy. The Government’s strategy since then has provided the foundations for recovery. Market interest rates have fallen to near-record lows. The deficit has been reduced by a quarter over two years. Employment is at record highs and exports of goods to China, India and Brazil have increased by about a third.
George Freeman
The Government set out in 2010-11 some key initiatives in the all-important life science sector: the biomedical catalyst fund, the patent box and tax breaks for start-up companies. This week sees the publication of the catalyst fund’s first annual report, showing that more than £1 billion has been raised in five new early stage funds in the UK, with more than 50 innovative medical projects coming to the NHS. Does that not suggest that we are laying the foundations for a sustainable recovery?
Mr Gauke
My hon. Friend makes an excellent point and I am sure that the House is delighted to have heard him do so. I know that he has done some superb work with the biotech industry. I met representatives of the BioIndustry Association a few weeks ago and they recognised that the steps we have taken on the patent box and research and development tax credits have put in place a very favourable environment for that industry.
Mr Speaker
Unfortunately, we certainly do not have time for Question 20 from the hon. Member for North East Somerset (Jacob Rees-Mogg) on article 153(5) of the treaty on the functioning of the European Union, but you never know what topical questions might bring.
Mr Stephen Hepburn (Jarrow) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy. I am pleased to announce that I have decided to reappoint Martin Weale as external member to the Monetary Policy Committee. He is a wise and valued member of the committee and I am delighted he has agreed to continue his service.
The spending review will be published on Wednesday 26 June and its spending envelope will be set in next week’s Budget.
Mr Hepburn
Bankers’ bonuses are up £15 billion, executive boardroom pay is up by 27%, and the richest 1,000 people in this country have increased their wealth by £155 billion, yet there is still a tax cut on the way for the richest 1%. When is the Chancellor going to do something for the other 99% who are paying the bill to subsidise the lifestyle of his privileged chums?
Mr Osborne
We are increasing the personal allowance for 24 million people. Bankers’ bonuses were £15 billion a year when the shadow Chancellor was City Minister, but they have come down to just over £1 billion—a dramatic reduction as we now have a more responsible financial sector.
Mr David Amess (Southend West) (Con)
T5. With the whole of the United Kingdom getting behind Southend’s bid to be city of culture in 2017, will my right hon. Friend tell the House what economic benefits such an award would bring?
Mr Osborne
My Parliamentary Private Secretary, my hon. Friend the Member for Hastings and Rye (Amber Rudd), has just said in my ear that her constituency is also bidding. I will not take sides, but I know that Southend will put in a very strong bid, as will Hastings. The decision will be announced shortly.
Ed Balls (Morley and Outwood) (Lab/Co-op)
The Chancellor has had plenty of advice over the weekend on how to change his failing economic plan, and it has not all come from me. The former Defence Secretary says that he should cut capital gains tax, the Business Secretary wants a £15 billion housing boost, and even the Home Secretary is making speeches calling for a new growth plan. What is going on? Do Cabinet Ministers not realise that the Budget is in just eight days’ time, or have they lost confidence in the Chancellor of the Exchequer?
Mr Osborne
What people realise is that the right hon. Gentleman’s prescription of borrowing more as a solution to Britain’s borrowing problems is exactly the same prescription that got the country into this mess in the first place. He is like the snake oil salesman selling his miracle cures when people remember that his medicine almost killed the patient. We are not going to listen to him again.
Ed Balls
But it is the Chancellor’s plan that is failing. The Business Secretary said on Monday:
“Well we are already borrowing more”—
[Interruption.] Government Members may cheer behind the Chancellor in public, but they are not cheering in private. An e-mail from the right hon. Member for Wokingham (Mr Redwood) has fallen into my hands. It was sent around within half an hour of the Prime Minister’s speech last Thursday to set out alternative ideas for the Budget from Back Benchers, such as income tax cuts and capital gains tax cuts. He says that “one colleague” says that we should do
“more to help people with childcare costs.”
Just one colleague! It concludes that the Chancellor needs
“to stimulate greater confidence, more enterprise, and to relieve some of the squeeze on the private sector.”
Businesses and families are feeling the squeeze, so why will the Chancellor not act to stimulate the economy and why is it only millionaires who are getting a £3 billion tax cut from him? Is not the truth that his plan is failing? That is why all the Government Members are losing confidence.
Mr Osborne
I am tempted to say, “Look behind you.” With a week to go until the Budget, is that the best that the shadow Chancellor can do? He has produced an e-mail from Conservative Back Benchers who are perfectly entitled to ask for things in the Budget. In this party, we are perfectly prepared for people to express an opinion and to listen to the views of our colleagues, unlike him and the operation that he runs. He is the face of Labour’s economic failure. As long as he remains as shadow Chancellor, it is a great thing for my party.
Mr Philip Hollobone (Kettering) (Con)
Given that an improved export performance will be crucial to Britain’s economic success, may I share with the Chancellor the good news that in its fourth quarter economic review, the Northamptonshire chamber of commerce, which after all represents middle England at its best, reported that 41% of its manufacturing members reported increased exports and that 76% of service sector companies reported higher figures?
Mr Osborne
That is excellent news. I congratulate the businesses in my hon. Friend’s constituency and the people who work for them on the hard work that they are putting in. It is essential that Britain connects itself better to the fast-growing parts of our world. It is good news that exports to China, India, Brazil and the like are up by two thirds under this Government, but we still have much more to do in that space. That is why, in December’s autumn statement, we put more money into UK Trade & Investment, which will help the businesses in his constituency to get those export orders.
Steve Reed (Croydon North) (Lab)
T2. Is it not absurd that the Liberal Democrats, who claim that the mansion tax on homes worth more than £2 million is their policy, are poised to vote against a motion that argues for precisely that?
The Chief Secretary to the Treasury (Danny Alexander)
I note that the shadow Chancellor did not refer to his opportunistic motion this afternoon, because we would have had a chance to refer to Labour’s record of welfare for the wealthy during their time in office: a lower rate of corporation tax than for the person who cleans the offices of the private equity fund manager; a lower top rate of tax of 45p during Labour’s 13 years in office; loopholes in the stamp duty system; and the 10p tax rate fiasco. We will take no lessons on tax fairness from the Labour party, and we will vote for our amendment that confirms Liberal Democrat support for a mansion tax.
Andrea Leadsom (South Northamptonshire) (Con)
Will my right hon. Friend update the House on what measures the Government are taking to put right the unbelievably poor regulation by the previous Government, and say what the permanent bank levy will do to improve revenues to the Exchequer, over the bank bonus implemented by the previous Government?
Mr George Osborne
We are raising more in bank taxes every year of this Parliament than the previous Government raised in any one year during their time in office. My hon. Friend is right; those revenues help to support public services and deal with the deficit. We also have a better-regulated banking system, and with the arrival in April of the Bank of England’s new role as prudential regulator, and the Financial Services (Banking Reform) Bill currently before Parliament, we are putting right all that went wrong in the banking system.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
T3. Did the Business Secretary let the cat out of the bag yesterday? When asked on the “Today” programme whether his call for investment in infrastructure to kick-start the recovery would mean more borrowing, he replied:“Well we are already borrowing more”.
Mr Osborne
We are increasing capital spending more than in the plans we inherited from the Labour Government. This Government are spending more on roads than the previous Government did and, of course, the deficit has come down by 25%.
Jacob Rees-Mogg (North East Somerset) (Con)
Although article 153(5) of the treaty on the functioning of the European Union may be esoteric to some, it is rather important because it prohibits the European Union from running an incomes policy. It seems to me that the bonus limit is an incomes policy; it is not a power of the European Union and therefore ought to be resisted by the Government by all possible means. Will the Chancellor take it to the European Court of Justice?
The Financial Secretary to the Treasury (Greg Clark)
I am delighted to answer my hon. Friend’s question. We are looking carefully at the provisions of the treaty and at every aspect of the proposals. We think that this country has a particularly rigorous set of arrangements, and we do not want to see them diluted.
Nia Griffith (Llanelli) (Lab)
T4. Companies are telling me that with demand at rock bottom and infrastructure projects failing to get away from the starting blocks, they see little incentive for investment in UK industry. When drawing up the Budget, will the Chancellor consider expanding the scope of enhanced capital allowances to cover a broader range of investment, and therefore encourage companies to invest in the UK rather than take their money elsewhere?
The Exchequer Secretary to the Treasury (Mr David Gauke)
I shall take that as a Budget representation, but it is worth pointing out that at the last autumn statement the annual investment allowance was increased tenfold.
Stephen Mosley (City of Chester) (Con)
Has my right hon. Friend seen the recent report from Barnardo’s that highlights the reduction in child poverty in some inner-city areas such as inner London? That is because there are significantly more families in work than there were this time last year.
The Economic Secretary to the Treasury (Sajid Javid)
I thank my hon. Friend for that question. Like us, Barnardo’s is interested in reducing child poverty and understands that that is done by creating jobs. The private sector has created 1.2 million jobs over the past two years, which is more than were created during the last 10 years of the previous Government.
Teresa Pearce (Erith and Thamesmead) (Lab)
T6. Owing to the changes to child benefit for families with a higher-rate earner, as from 7 March, 370,000 parents have opted not to receive child benefit. Will the Chancellor say how many of those 370,000 parents are stay-at-home mums who will lose their national insurance credit to their state pension, which is linked to the receipt of child benefit? Were they advised before they made that decision?
Mr Gauke
As far as contributions to the state pension are concerned, the change will have no effect whatsoever on any of those who opt out. The system will not be affected by the change and the hon. Lady can be assured that that is not an issue. I also point out that all households affected by the high income charge on child benefit are in the top 15% to 20% in terms of earnings. It is right for the Government to take some difficult decisions to reduce the deficit.
Mark Reckless (Rochester and Strood) (Con)
House building approvals are up by two thirds. Does that reflect the success of the Government’s funding for lending schemes, the Financial Secretary’s successful planning reforms, or the sustained period of record low interest rates?
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
T7. My weekend surgeries were dominated by constituents facing backdated payment demands from Her Majesty’s Revenue and Customs, despite the fact that they had discharged their responsibilities and had been assured that their tax affairs were in order. Does the Minister think it is right to put people through financial stress and misery because of HMRC mistakes and staff cuts?
Mr Gauke
There was an issue regarding end-of-year reconciliation, which is an errant part of the pay-as-you-earn system. When we came into office, 17 million cases needed to be dealt with. I think that backlog is about to be cleared—we have made great progress. We are reforming the PAYE system so that tax will be collected at the right rate at the right time, and much more accurately than in the past.
James Morris (Halesowen and Rowley Regis) (Con)
Does the Chancellor agree that increasing the personal allowance again will mean that a basic rate taxpayer in my constituency will pay £600 less in tax as a result of the measures taken by the Government?
Mr George Osborne
That is already planned and was announced last year. In April, people will be £600 a year —£50 a month—better off. We have also taken 2 million people out of tax altogether, which is a sign of our commitment to those on low incomes and a sign of our commitment to all those who work hard and want to get on.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T8. As the Chancellor puts the finishing touches to the Budget, may I, on behalf of the potteries of Stoke-on-Trent, make another plea for applying the mineralogical processing exemption in the taxation of energy products? That would be a helpful sign that the Government understand the needs of energy intensive sectors.
Mr George Osborne
I shall take that as a Budget representation. To be fair to the hon. Gentleman, he is always a powerful champion of the ceramics industry in his constituency.
Harriett Baldwin (West Worcestershire) (Con)
My constituents find it much easier to take out a payday loan than to open a savings account. What steps are the Government taking to make it much more difficult for my constituents to fall into that sort of temptation?
Sajid Javid
My hon. Friend will know that the Government commissioned an independent report from Bristol university on the high interest lending industry. That report shows severe consumer detriment and we have already taken action. We announced last week that we will be working on advertising content and placement, and we will be giving extra powers to the Financial Conduct Authority to impose fines and to close down firms in the most significant cases. She may have seen that last week the Office of Fair Trading announced it is investigating a number of firms: it has told a number of payday firms that they have 12 weeks to shape up; otherwise it will take severe action.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
T9. Financing delays are holding up the Government’s new schools rebuilding programme. What steps is the Minister taking, together with colleagues in the Department for Education, to secure financing for this scheme and to support our construction industry, which is under real pressure at the moment?
Danny Alexander
The House will know that the Department for Education has already announced that the first 41 highest priority schools are being funded by direct capital. We will be in a position soon to make a statement about the rest, and we have announced recently additional investment in school places to expand school buildings in areas under pressure. All that adds up to an £18 billion investment programme in schools over the course of this Parliament, which I think is a credit to the Government.
Graham Evans (Weaver Vale) (Con)
Does my right hon. Friend agree that infrastructure projects such as the Mersey Gateway bridge, the northern rail hub and High Speed 2 are good news for my constituents, good news for greater Cheshire, and good news for the north of England as a whole?
Mr George Osborne
I absolutely agree with my constituency neighbour. The Mersey Gateway bridge, which has been talked about for many years, has now got the go-ahead. The northern hub, which MPs from all parties and on both sides of the Pennines have been calling for, is now funded and will be of particular benefit in the Greater Manchester area. High Speed 2 is controversial, but nevertheless will connect the biggest cities of our country and help reduce the north-south divide in our economy. One piece of good news in our economy recently has been the growth of private sector jobs in the north of England.
Ann McKechin (Glasgow North) (Lab)
T10. Has the Chancellor of the Exchequer managed to overcome the militant tendency within the Cabinet to allow him fully to implement the recommendations of the Heseltine review on growth and localism?
Mr George Osborne
We will set out next week our response to the Heseltine review. Michael Heseltine has set out a compelling vision of how we can operate as a more decentralised country and empower our great cities. I was with him in Birmingham just the other day, with the Labour leader of Birmingham council, working on how Birmingham could set out a report and act as a test case for other cities.
Mr Peter Bone (Wellingborough) (Con)
In the past, Chancellors have had to resign if Budgets are leaked. Given what happened last year, will the Chief Secretary tell the House what measures he has put in place to ensure it does not happen again?
Mr Osborne
Of course I want to ensure that the House of Commons is the first to hear the Budget, just as it was the first to hear the appointment of the new Governor of the Bank of England.
Mr Speaker
Order. I am sorry to disappoint colleagues, but demand always exceeds supply at Treasury questions.
Food Banks
Mr Iain McKenzie (Inverclyde) (Lab)
I rise to present a petition signed by hundreds of my constituents, who, like me, are concerned about the increasing number of food banks up and down the country and about the fact that the number of people visiting food banks has increased dramatically since last year. I visited a food bank in my constituency, the i58 project, run by a local church, and was astounded to find out that it had dealt with more than 1,000 people since last September. It assumed that demand for assistance would peak around Christmas, but that has not happened, and the numbers have continued to escalate. It was asked to sign this petition on the ongoing problems facing constituents having to attend food banks to make it through the week on their low incomes or benefits. The petition states:
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of Inverclyde Constituents,
Declares that the Petitioners believe that as a result of the failings of both the Holyrood and Westminster Governments 13 million people live below the poverty line in Britain today; further that the reliance on food banks has dramatically increased in recent years with The Trussell Trust calculating that in 2011–12 food banks fed 128,687 people in the UK, an increase of over 100 per cent on the previous year. Excellent work is being undertaken throughout the country by national and local food bank providers to fill the void left by the failings of the Holyrood and Westminster Governments; however as one of the world's wealthiest countries we believe UK Citizens should not find themselves in this position.
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.]
[P001161]
Gordon Banks (Ochil and South Perthshire) (Lab)
This petition has arisen as a result of the growing number of food banks in the UK and the growing number of people in the UK in the 21st century having to resort to them to feed themselves and their families. I pay tribute to the organisations that run food banks, such as the Trussell Trust, but particularly to the Gate, which operates a food bank in Alloa, and to Activ8 and WISH—women in sport and health—which do likewise in Sauchie, both in my constituency, and for which I am running the Alloa half-marathon on Sunday. Two weeks ago at Prime Minister’s questions I asked the Prime Minister to sign the petition, but despite his agreement to look at it and two e-mails to No. 10 since, I am still waiting.
More than 200 of my Ochil and South Perthshire constituents have signed the petition, which states:
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of Ochil and South Perthshire,
Declares that the Petitioners believe that as a result of the failings of both the Holyrood and Westminster Governments 13 million people live below the poverty line in Britain today; further that the reliance on food banks has dramatically increased in recent years with The Trussell Trust calculating that in 2011–12 food banks fed 128,687 people in the UK, an increase of over 100 per cent on the previous year. Excellent work is being undertaken throughout the country by national and local food bank providers to fill the void left by the failings of the Holyrood and Westminster Governments; however as one of the world’s wealthiest countries we believe UK Citizens should not find themselves in this position.
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.]
[P001163]
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I, too, wish to present a petition on food banks on behalf of my constituents. The signatures were collected in the centre of Leith, a part of my constituency where, according to the latest figures, up to 30% of the population are income deprived and below the poverty line. Unsurprisingly, it is also where Edinburgh’s latest food bank is being set up. I pay tribute to those in the community who are helping to set it up and deal with the growing crisis of hunger that is affecting so many of our citizens, particularly families with children. Those setting up the food bank, like those who signed the petition, also want the UK and Scottish Governments to take action to ensure that no families go hungry.
The petition states:
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of Edinburgh North and Leith Constituents,
Declares that the Petitioners believe that as a result of the failings of both the Holyrood and Westminster Governments 13 million people live below the poverty line in Britain today; further that the reliance on food banks has dramatically increased in recent years with The Trussell Trust calculating that in 2011–12 food banks fed 128,687 people in the UK, an increase of over 100 per cent on the previous year. Excellent work is being undertaken throughout the country by national and local food bank providers to fill the void left by the failings of the Holyrood and Westminster Governments; however as one of the world’s wealthiest countries we believe UK Citizens should not find themselves in this position.
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.]
[P001162]
National Commonwealth Military Day
Graham Evans (Weaver Vale) (Con)
I beg to move,
That leave be given to bring in a Bill to introduce a national day to raise awareness of the contribution of Commonwealth countries in military action of Great Britain and the Overseas Territories; and for connected purposes.
Thank you, Mr Speaker, for giving me this opportunity to raise an important issue for many Members of the House. I am grateful for the support I have received and hope to gain more support as I push this project forward.
Britain owes a debt of gratitude to the Commonwealth countries and those who have contributed to its military history. For centuries, that contribution by men and women, young and old, has shaped the nature of the British armed forces and their achievements. Of course, I am moving this motion on Commonwealth week, and I am delighted to note all the hard work that goes into this celebration, but I would like to push it forward with the formation of a new day. Sometimes unwittingly, these achievements, and the debt that the nation owes, are forgotten. History is written by the victors, they say, yet many acts of bravery have disappeared from our country’s consciousness, which, I believe, does a disservice to the memories of those who have served and protected our island nation.
The Government need to take more active steps to ensure that we recognise and reward those contributions, just as we honour those who are born on these shores. That is why I propose to create a day to commemorate contributions made by members of the Commonwealth in military action. It would be a day to consider not just the contribution to the world wars, but to look further back, a day for schools to encourage and teach alternative accounts of war and a chance for us to draw together communities whose families fought for Britain and countries across the globe that still contribute to our military and civilian life.
This national Commonwealth military day should include three distinct commitments. First, I hope for a ceremony to commemorate these contributions, although we should not limit our recognition to the two world wars. Secondly, I would like to encourage schools to take a view of these alternative historical viewpoints and to take the time to reposition an understanding of how modern Britain has come to take the shape it has. Thirdly, I would like the Ministry of Defence to review cases where heroism has been overlooked in a manner not befitting the contributions made. To demonstrate the importance of this issue, I shall draw the House’s attention to examples of bravery and valour that are, sadly, less known than they should be.
The first figure, who now lies in St Mary’s cemetery in Kensal Green, was not a soldier or sailor, did not fight with musket or blade and was not a military strategist or a straight shooter, but her contribution to the Crimean war came from a compulsion to aid the wounded and sick in the face of discrimination. Mary Seacole is often known as “the other Florence Nightingale”, but her dogged determination to care for British troops overcame the prejudice ingrained in our society at the time. Rebuffed in her attempts to join the nursing unit that had travelled to the Crimea—now part of Ukraine—and to gain charity funds, she travelled to the battlefields and financed her project herself. Her dedication to saving lives gained her prominence in contemporary London, but she was never formally recognised for her contribution and has only found recognition in recent years. The Mary Seacole award is an NHS award fund for specific health care projects that aim to improve the health outcomes of people from black and minority ethnic communities, but her story is less known outside health care professionals.
The second example concerns the battle of Saragarhi in 1897. This is a relevant example of a contribution made and swiftly forgotten. On 12 September, 21 members of the 36th Sikhs regiment were guarding the signalling post of Saragarhi between Fort Gulistan and Fort Lockhart when they were besieged by some 10,000 Afghan tribesmen. Saragarhi is recognised by military historians as one of the great last stands, with all 21 men choosing to fight to the death. When news of the battle reached this House, so extraordinary was the tale and so valiant the actions that the Members in this Chamber rose to their feet and gave a standing ovation. All the men were posthumously awarded the Indian Order of Merit, first class, which at the time was the highest gallantry award given to Indian troops. It was not until 1911 that Indian troops qualified for the Victoria Cross.
More than 4 million men and women from Britain’s colonies volunteered in the first and second world wars. For many Members, this is an issue of great pride. Indeed, the grandfather of my hon. Friend the Member for Wolverhampton South West (Paul Uppal), Jawala Singh Khela, fought in the still relevant theatre of Basra, in Mesopotamia, in the first world war.
As many of my hon. Friends will know, some of my main interests include British military history, football, beer and business. It is therefore of great significance to me to bring to the House’s attention the story of Walter Tull. I fully expect his name to come to further prominence this year, as a campaign for recognition of his achievements is taking place. Although he was born in England to an English mother, his father was from Barbados. As a footballer, he suffered considerable prejudice for his heritage, playing for Tottenham Hotspur and Northampton Town, before enlisting in the Army at the outbreak of world war one. Despite the ingrained prejudice that dictated that a man could become an officer only if he was of entirely European descent, Walter Tull became just that.
Walter Tull fought and died on the western front in 1918, during the last German offensive. He was recommended for the military cross for his gallantry and coolness under fire, but the medal was never awarded. Ninety-five years on from his death, he has become the unlikely subject of a new play by Michael Morpurgo, author of “War Horse”, and there is a petition for him to be finally awarded the recognition he deserves. To make the argument to review Walter Tull’s case all the more compelling, there is now even an ale brewed in his name by a Northampton brewery.
My initial interest in this issue came many years ago, when I visited the largely forgotten western front battlefields of 1915 at Loos and Neuve-Chapelle with the late, great military historian Professor Richard Holmes. Prime Minister Harold Macmillan fought and was wounded in the arm at the battle of Loos. Neuve-Chapelle was one of the first organised attacks, in which the Indian Army played a significant part. Today there stands the magnificent and imposing Indian memorial, dedicated to the 4,500 men killed in action and the hundreds of prisoners of war who ended their days in German prisoner of war camps, down coal mines a long way from home. Although the Commonwealth War Graves Commission does a great job maintaining the Indian memorial, it receives very few visitors, which is a great shame.
These are just a few examples of the phenomenal contributions made to the Britain Isles. I sincerely hope that these lesser known stories will allow us to reflect on the histories that are less well remembered. To better remember how we became the nation we are today, it is essential to look at the nation we once were. That is why I believe we should have a day to commemorate the contribution of Commonwealth countries to British military campaigns.
Question put and agreed to.
Ordered,
That Graham Evans, Paul Uppal, Rebecca Harris, Richard Harrington, Andrew Rosindell, Julian Smith, Keith Vaz, Seema Malhotra, Valerie Vaz, Mr Pat McFadden, Mr Virendra Sharma and Christopher Pincher present the Bill.
Graham Evans accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 26 April, and to be printed (Bill 147).
Opposition Day
Tax Fairness
(11 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:58 - The House divided: - Ayes: 241 / Noes: 304 - Question accordingly negatived.
16:12 - The House divided: - Ayes: 301 / Noes: 246 - Question accordingly agreed to.
Mr Speaker
I inform the House that I have selected the amendment in the name of the Prime Minister.
Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move,
That this House believes that a mansion tax on properties worth over £2 million, to fund a tax cut for millions of people on middle and low incomes, should be part of a fair tax system; and calls on the Government to bring forward proposals for such a tax at the earliest opportunity.
Let us consider the contrast that now exists as a result of Government decisions. Those who are on low and middle incomes—that is, the vast majority of the British public—have seen their tax credits cut, their child benefits squeezed, their cost of living rise as a result of higher VAT and their wages fall in real terms. However, the richest 1%, including the lucky few who earn £1 million a year, will see an average tax cut of £100,000 in four weeks’ time, and banking executives will not have to pay that annoying bonus tax, all thanks to the Chancellor’s generosity. This is a tale of two societies, with hard-working earners on low and middle incomes paying for the Government’s failure to get the economy growing while the richest elite are being rewarded by the Chancellor with a tax cut worth nearly four times the average annual salary.
Mark Reckless (Rochester and Strood) (Con)
Is it not also a tale of two sides of the House? Will the hon. Gentleman explain why his speech today has proved so popular with Labour Members?
Chris Leslie
The hon. Gentleman really needs to focus on the issue at hand. If he is standing up for the millionaires’ tax cut, he should simply say so. It will take effect in about three weeks’ time, and a number of his constituents will be absolutely astonished that he has voted for an average £100,000 tax cut for millionaires while they have lost their tax credits, found themselves paying more and seen a decline in the quality of public services.
Harriett Baldwin (West Worcestershire) (Con)
I am sure that the massed ranks of the shadow Minister’s colleagues behind him today would like to know whether he will pledge to increase the top rate of tax to 50p in his manifesto.
Chris Leslie
We certainly voted against the tax cut, and if we were in government now, we would not be cutting that 50p rate to 45p in April. Heaven only knows what other horrors the Government have in store over the next two years. We do not know what kind of situation we are going to inherit in regard to the deficit and to borrowing, so it is impossible to predict the tax situation that we will be faced with, if and when we inherit that position at the next general election.
Chris Leslie
I want to make some progress. I will give way in a moment.
The divide between the richest and the least well off is getting broader, not narrower, and the situation is getting worse. The Government are cutting taxes for one group this year—the very richest in society—with 13,000 people earning £1 million a year getting a tax cut. That is astonishing. Could any other policy better typify the twisted logic of trickle-down economics than that one?
Caroline Lucas (Brighton, Pavilion) (Green)
I welcome the mansion tax as a step towards equality, but why will the Opposition not go further and tackle the absurdity of our council tax rates still being based on 1991 rates? A house valued at £1 million in 1991 pays only 0.3% of its worth, while a house valued at £40,000 pays 2.4%, which is eight times more. Does the hon. Gentleman agree that that is unfair and should be tackled?
Chris Leslie
It is important to listen to the Liberal Democrats’ proposal for a mansion tax. They believe that £2 billion could be raised in that way from properties worth £2 million or more to help those on low and middle incomes. In our view, any such revenue should fund the reintroduction of a 10p starting rate of income tax.
I would say to hon. Members, and particularly to Conservative Members who are struggling with the state of the current economic policy, that there are independent authorities and budget watchdogs to correct them when they wrongly assert that growth will not be affected by the cuts and the tax rises and that they are paying down the national debt, but they cannot pull the wool over the eyes of the public, who know what fairness is and who know that the choices made so far have been deeply unfair.
Mr Jim Cunningham (Coventry South) (Lab)
Does my hon. Friend recall that it was the Labour Government who introduced the 10p tax? Does he also think that it would help those in poverty, as well as motorists and the building industry, if there were a cut in VAT?
Chris Leslie
That is our view. We want to do more to help those on lower and middle incomes, and to ask those privileged and wealthy individuals in society—particularly if they have a property worth £2 million or more—to make a fair contribution. The debate today presents an opportunity and a challenge to Government Members to do the right thing and to back what some of them profess to believe in.
Let me remind Members what our motion says. It asks the House to resolve
“that a mansion tax on properties worth over £2 million, to fund a tax cut for millions of people on middle and low incomes, should be part of a fair tax system; and calls on the Government to bring forward proposals for such a tax at the earliest opportunity.”
That is the extent of the motion. It is very simple and straightforward. Liberal Democrats who are in the Chamber today—for some are actually present—have repeatedly claimed to back a mansion tax. After going along with the Chancellor’s tax cut for millionaires, a failing economic plan, a VAT rise and a trebling of tuition fees, they finally have a chance to vote for something that was in their manifesto.
Chris Leslie
I shall put to one side the fact that the Liberal Democrats said one thing in opposition—about, for example, tuition fees—and have done completely the opposite in government. The hon. Gentleman should know that circumstances are now getting worse, especially given the millionaires’ tax cut which will take effect in April. We must do something to revive the fairness of the tax system, and that is why I think it important for the Liberal Democrats to stick to their 2010 manifesto pledge to introduce
“a Mansion Tax at a rate of 1 per cent on properties worth over £2 million, paid on the value of the property above that level.”
Jane Ellison (Battersea) (Con)
The hon. Gentleman speaks of fairness. The mansion tax that he proposes would be profoundly unfair on a great many of my constituents who have done nothing more than live in the same house for several decades in an area which, in terms of its property prices, has changed unrecognisably. That applies to many parts of London. I am amazed that London Labour Members do not make similar points. What the hon. Gentleman proposes is akin to a tax on living in London.
Chris Leslie
If the hon. Lady thinks that everyone in London lives in a £2 million property, she must be almost as out of touch as her party’s Chancellor of the Exchequer. Of course there are ways of introducing a mansion tax that could take account of the specific circumstances in which people are asset-rich and cash-poor, but there would probably be very few such cases. The Liberal Democrats have thought very carefully about that particular proposition.
Gloria De Piero (Ashfield) (Lab)
The public constantly tell us that they hate the infantile, Punch and Judy nature of politics. However, I read in today’s briefing paper from the Liberal Democrats that they will not back us because we have copied them. Is that not exactly the kind of behaviour that turns the public off politics?
Chris Leslie
My hon. Friend is entirely right. We cannot win. When we oppose the policies advocated by the Liberal Democrats, we are attacked, and when we support those policies, they still attack us. It is difficult to know what to do—but I do know that honour and integrity matter to the Liberal Democrats, which is why I still think that they should join us in the Aye Lobby in a few hours’ time. After all, on 17 February, when asked whether the Liberal Democrats would support this proposition, the Business Secretary said:
“It depends entirely how they phrase it. If it is purely a statement of support for the principle of a mansion tax, I’m sure my colleagues would want to support it.”
We look forward to seeing them in the Lobby.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
I am waiting to hear the shadow Minister mention that this Government have taken £2.2 million of the lowest earners out of tax altogether. Does Labour’s support for a mansion tax signal its return to high-tax policies, and a end to the new Labour project so admirably led by Tony Blair and Peter Mandelson, which transformed Labour into an electable party? Are we now seeing signs of a return to the hard left, high-taxing Labour party of the past?
Chris Leslie
No. The hon. Gentleman is in a coalition with partners, whom he no doubt does not regard as hard lefties, who are advocating the very policy that we recommend in our motion. We took the advice of the Business Secretary, a Liberal Democrat, who said “Table a very simple motion, and we will support it.” According to any objective measure, even the hon. Gentleman can see that we have held back from party-political rhetoric. The motion is very plain and simple, as requested. We have tried to find some common ground. If those 57 Members of Parliament—and perhaps even some Conservatives; who knows?—were to join us in the Lobby tonight, that would make the mansion tax a reality.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
We are minded to support wealth taxes, and we therefore welcome the motion, but it is a bit thin on detail. Can the shadow Minister reassure me that farmers will not be dragged into the new tax because of the value of their land, and not necessarily because of the value of their property?
Chris Leslie
That is an important point. I am glad that we have the hon. Gentleman’s support on this issue. Obviously there is a difference between residential and corporate arrangements, but our motion says that we want the Treasury to bring forward proposals at the earliest possible opportunity. We have seen the proposition set out by the Liberal Democrats and used it as the basis for our motion, but let us see what further options can be drawn together. We think that it would be a good idea, for example, for the Chancellor to commission the Office for Budget Responsibility to present detailed suggestions of ways in which the arrangements might work.
Neil Carmichael
Will the shadow Minister remind the House exactly what the top rate of income tax was throughout most of the last Labour Government, and give us some insight into why it was at that level?
Chris Leslie
After the global financial crisis, we decided to introduce a 50p top rate of income tax so that those earning £150,000 and above would make a fairer contribution to society as a whole. Those people are the wealthiest 1% in society. How astonishing—how absolutely breathtaking—that in last year’s omnishambles of a Budget, the present Chancellor of the Exchequer decided to go for the right-wing trickle-down approach and cut the 50p rate to 45p. I hope that that decision will be reversed in the forthcoming Budget, in respect of which I take it that the hon. Gentleman’s intervention constituted a representation to the Chancellor.
Dame Angela Watkinson (Hornchurch and Upminster) (Con)
Will the shadow Minister remind the House how much was lost to the Treasury during the period of the 50p tax rate, and does he accept that 100% of 45% is more than 50% of 50%?
Chris Leslie
I am not sure about the hon. Lady’s maths, but we are still within the period of the 50p rate. Of course we want to see the details of what has been happening. However, while the Conservatives have the notion that for those who are very wealthy, the higher tax rates are a deterrent and create avoidance, they do not say the same about the poorest and the middle-income families in the rest of the country. They can pay VAT at 20%; they can pay higher taxes. The hon. Lady takes a view that is taken by so many Conservatives. There is one law for those who are very wealthy, but everyone else must suffer because of the Conservatives’ failure on revenue and borrowing.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Does my hon. Friend not find it strange that the Government do not seem to understand that taxes are an element of economic policy that can be adjusted in line with economic circumstances? During the first period of the Labour Government, the prevailing circumstances meant that there was no case or need for taxes to be increased, by means of a mansion tax or by any other means. When the need appeared after the economic collapse, compounded by the financial crisis, it became clear that we had to do something, and of course the Government did. The trouble with this Government is that they think policies need not to be adjusted in line with circumstances, but they do need adjusting. Does my hon. Friend not agree with that?
Chris Leslie
I agree. It is instructive to observe the different choices that the different parties are making on this issue. The Conservatives choose to cut taxes for the richest—the millionaires in society—and to increase everyone else’s taxes. The Liberal Democrats have said that they believe in a mansion tax. Indeed, a fortnight ago the Liberal Democrat leader, the Deputy Prime Minister, said:
“Victor Hugo observed that it is near impossible to resist an idea once its time has come. Last week, he was again proved right as calls for a mansion tax, first proposed by the Liberal Democrats in 2009, gathered new momentum…I offer certainty: the mansion tax, or a version of it, will happen…The Conservatives and opponents of fairer taxes have a choice. They can dig their heels in and remain stuck in the past. Or they can join with the Liberal Democrats and the chorus of voices seeking to make our tax system fair.”
Well, here we are today. What more can we do? The issue is on the table, ready for that momentum to make it happen, so how can the Liberal Democrats resist that idea whose time has come?
Ian Swales (Redcar) (LD)
Is the shadow Minister going to acknowledge measures such as the raising of the tax threshold, the huge cut in pension tax relief and the huge rise in capital gains tax which have taken place under this Government? In a debate entitled “Tax Fairness” is his proposal really the only measure that his party could come up with?
Chris Leslie
The mansion tax is not our only measure, but is an important one and we think it is necessary. I had thought that the hon. Gentleman supported a mansion tax. It is there on the table and it cannot be put in simpler terms—it is a one-line motion.
Mr David Winnick (Walsall North) (Lab)
Is there not a contrast between the opposition of the Tories, in particular, to a mansion tax and their wholehearted enthusiasm for a bedroom tax? Does that not show the class divide on their side?
Chris Leslie
Absolutely, and I think that the contrast between the political parties is becoming clear. Let us contrast the Government’s approach where they feel they can get away with levying higher and more punitive costs—the bedroom tax being a classic example—with the enormous windfall that those earning £1 million a year will be getting from the cut to the top rate of income tax in only a few weeks’ time. It is grotesque.
Ms Karen Buck (Westminster North) (Lab)
My hon. Friend may be aware of current estimates that 60% of high-value properties in central London go to overseas buyers, and Conservative MPs, when they are being thoughtful, recognise that that is a serious problem. So he is right to look at the issue of high-value property taxes and getting a balance. Does he agree that there is scope to ensure that the small minority of people who have lived for a long time in areas with escalating property values and who are asset-rich but income-poor can be completely protected within a scheme such as he outlines?
Chris Leslie
It is entirely possible to design this scheme in a way that deals with those exceptional circumstances—the Liberal Democrats have said so. It is an important question that has to be addressed, and the Deputy Prime Minister answered it in his “Call Clegg” radio slot on London’s Biggest Conversation, which I know is becoming a popular, regular and welcome fixture in the media diary. He said that individuals in such circumstances might be able to defer payments until the house was sold or to “leverage” the value of the property by remortgaging. I am not sure that that strategy provides the complete solution to the conundrum, but I do think that those in the Treasury should turn their minds to how to tackle these rare circumstances. That is why our motion calls on the Government to bring forward proposals for us to consider in more detail.
Mr Rob Wilson (Reading East) (Con)
I have been listening carefully to what the hon. Gentleman has said so far. He seems to have two tax policies that are not yet full commitments, one of which comes from a failed previous Government who brought us to the edge of economic collapse and the other of which comes from the Liberal Democrats. Is that really a great recipe for success on economic policy?
Chris Leslie
I do not think the hon. Gentleman should be so partisan; he should look at the issues on their merits, as we have tried to do in our motion. We have stripped out all that party political rhetoric and put clearly on the table the proposition, “This House supports the principle of a mansion tax.”
Chris Leslie
We urge all Members, including the hon. Gentleman to whom I am about to give way, to support that proposition.
Chris Leslie
That was one of the solutions that the Deputy Prime Minister suggested. I think it is entirely possible to find solutions to deal with those rare circumstances. However, I ask the hon. Gentleman: what is he saying to all of his constituents who, like mine, face having to move out of their properties because of the bedroom tax that his Government are introducing in a few weeks’ time? Many of those people are probably still not aware what charge is going to hit them when the change to housing benefit comes in. He is expecting great upheaval—people having to move house—at one end of the spectrum but when the Deputy Prime Minister comes up with a particular solution his response is, “Oh no, that is entirely unworkable.” We need to get the Treasury and the Office for Budget Responsibility to think about these things in a detailed way.
We had hoped that Government Members would support the motion, but what does the Government amendment say? I urge hon. Members to pick up their Order Paper, turn to the relevant page and just look at the Government amendment—this pantomime amendment, whose logic is contorted. It proposes to delete the whole proposition of a mansion tax and replace it with a pleading defence of the different views held by different parts of the coalition. It would remove the resolve to back a mansion tax and retreat into a messy fudge as a means—I mix my metaphors—of brushing the whole issue under the carpet. It is an amendment that seeks to face both ways yet go nowhere. It is a push-me, pull-you amendment, and the Government should be deeply embarrassed at the drafting, which of course descends, as we can see, into a general attack on the Opposition.
Liberal Democrats need to grow some courage and stand up for themselves, for once. This measure is not just a bygone pledge from their now notorious 2010 manifesto; the Deputy Prime Minister made it the centrepiece of his leadership in the past few weeks. Kicking off the Eastleigh by-election last month, he called for
“taxes on mansions, tax cuts for millions”.
That is what is in our motion. He said:
“The mansion tax is an idea whose time has come.”
He said that opponents of it should
“join with the Liberal Democrats…seeking to make our tax system fair.”
Indeed, others have joined in that chorus.
On this Sunday’s “The Andrew Marr Show” Lord Ashdown said it would be “weird” if the Liberal Democrats did not vote in favour of the tax. The “Sunday Politics” had an interview with the Lib Dem president, the hon. Member for Westmorland and Lonsdale (Tim Farron), in which an interesting exchange took place. Andrew Neil said:
“It’s a simple motion. Will you vote for it?”
The hon. Gentleman said:
“Well, let’s say, I mean, when all’s said and done, that is pretty much Liberal Democrat policy”.
Andrew Neil then asked:
“Well, what part of that motion do you disagree with?”
The hon. Gentleman said, “None of it.”
Nic Dakin (Scunthorpe) (Lab)
Does my hon. Friend agree that the Liberal Democrats are in danger of being highly consistent? Having been against tuition fees they voted for them; having been against a bombshell VAT increase they voted for it; and now they appear to be for a mansion tax but are going to vote against it.
Chris Leslie
I hope that my hon. Friend is not accusing the Liberal Democrats of consistency in their inconsistency—that would be a step too far.
Caroline Lucas
The hon. Gentleman is talking about courage, so I wonder how far the official Opposition’s courage will go. Some £4.5 trillion is kept by the top 10% of wealthiest households, so the £2 billion that would be raised by a mansion tax, although welcome, is a tiny amount and would hardly bridge the chasm between the super-rich and the poorest. Given that, would the official Opposition support a genuine wealth tax?
Chris Leslie
I would be very interested to see the hon. Lady’s proposition, but I do not think it is necessary to go for that general approach that she takes. I say that because there are targeted ways in which we could try to build consensus on a property tax for high-value properties over £2 million and then use the revenue to help the vast majority of lower-income and middle-income families. That is the proposition before us today.
Mr Dennis Skinner (Bolsover) (Lab)
It was interesting to hear the remark by the Green Member of Parliament about the wealth tax and being brave. I looked at the list of candidates who stood at Eastleigh, where I thought it would be wide open for a Green to find a way through, and found that the party did not even put up a candidate—what courage!
Chris Leslie
We digress slightly, but that is an interesting observation. I did not realise that the Green party had fled from that Eastleigh by-election.
Mr Robinson
Before we leave the subject of the hapless Liberals and consistency, does my hon. Friend agree that they do show consistency in their inconsistency and in their insincerity—that is the only consistency we can identify?
Chris Leslie
There is time for those sinners to repent, and I hope that in three hours’ time they will re-examine the motion, seriously consider the outrageous stretch in the amendment, stick with their principles and support the motion. I accept that there is a need to flesh out the details of how the mansion tax arrangement would be designed. We need to commission the Treasury and the OBR to work on those particular details.
Some have suggested building on existing property tax systems, although that is not wholly straightforward. In New York City, apparently, a £2 million property owner can pay about £22,000 of property tax, but Lord Oakeshott, who, as we know, is a leading light in the Liberal Democrat firmament, argues against council tax banding as one way of approaching the question. He says:
“If you just put on one or two council tax bands, you can't make the superrich pay their fair share”.
Some Conservative Members, such as the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), complain that a mansion tax is impractical, that it cannot be done and that it would be an administrative nightmare, but I simply refer them to their own Front Benchers. Unbeknown to most Government Members, Her Majesty’s Treasury is, with very little fanfare, actively talking about the viability of an annual charge on high-value residential properties and launched a consultation document last May entitled, “Ensuring the fair taxation of residential property transactions”. It contains a whole chapter about introducing an annual charge, as the Treasury calls it, as part of the regime to tackle the avoidance of tax on high-value residential properties, albeit for properties enveloped in non-natural person terms—in other words, those owned by a company or by partnerships or investment vehicles.
Let me draw the attention of the House to some sections of that Treasury publication, because it suggests that a mansion tax is entirely feasible. On page 8, it states:
“The aim of the new annual charge is both to deter avoidance and to ensure the owners of high value residential property pay their fair share of tax…The annual charge will be introduced in Finance Bill 2013.”
So, the measure is coming in the forthcoming Finance Bill at the other side of the Budget. The document states:
“The interest to which the charge will apply will be the freehold or leasehold interest”
and that the annual charge will be
“applied separately to the freehold (if valued over £2 million) and the leasehold (if valued over £2 million…)”.
It goes on to state that the value of the property interest is proposed to be the value determined on 1 April 2012 and, interestingly—let us remember that the document comes from the Treasury—states:
“Property valuations for the annual charge will be self-assessed by the persons liable to the charge and submitted to HMRC as part of their annual charge tax return. HMRC will have powers to enquire into returns and also to make assessments so that non-compliance can be effectively challenged… Properties will be re-valued every five years…The valuation required will be an assessment of the ‘market value’”.
It even goes on to give a helpful list of four bands of annual charge on properties worth more than £2 million. The Treasury knows in its heart of hearts—I do not know whether it has shared this with hon. Members—that the concept of a mansion tax has some feasibility.
Huw Irranca-Davies (Ogmore) (Lab)
That is tremendously welcome news, because clearly neither of the Government parties will vote for the amendment. I understand that the amendment suggests that the Liberal Democrats are in favour of the mansion tax but will vote against the motion, whereas the Conservatives are definitely against it so will on no account be voting for it. If they are both in favour of the tax, they can just support our motion.
Chris Leslie
I hope that the scales will fall from their eyes and they will see the light, but I do not know whether they will.
Chris Leslie
Perhaps the hon. Gentleman is changing his mind because of the weight of my argument.
Mr Wilson
The hon. Gentleman is being very generous and I thank him for giving way a second time. He might not remember that the Liberal Democrat proposals for a council tax were at one stage for properties worth over £1 million, not £2 million. Is not the concern that a Labour Government, desperate to raise tax, would row back to £1.5 million or £1 million? Can he give a cast-iron guarantee that there would be no rowing backwards from a figure of £2 million?
Chris Leslie
Absolutely. That is not our proposal, as we think that it is possible to develop a mansion tax proposition for properties worth £2 million and above. We could develop and build on the Treasury’s suggestions for how it might work and we hope also to build on the carefully thought through calculations made by the Liberal Democrats.
Andrew Miller (Ellesmere Port and Neston) (Lab)
Would my hon. Friend like to speculate on why the Government chose not to refer to the Treasury document in their amendment?
Chris Leslie
Let us be realistic: the amendment was getting rather long-winded, as it is about four or five times the length of the motion. In fact, it looks like a bit of a trashing exercise and does not add to the substance of policy choices before the House. Our view is that the circumstances are very simple.
Mr Jim Cunningham
My hon. Friend has been very generous in giving way. Does he think that now the Liberal Democrats have been exposed, they will probably hold off from voting against our proposals tonight but that when the Government bring forward their proposals, the Liberal Democrats will be in the Lobby with them?
Chris Leslie
Yes—especially on issues such as the bedroom tax, tax credit cuts and increase in VAT. Of course, let us not forget the tuition fee decisions that the Liberal Democrats have made. That is a matter for them, however. They must account to the electorate and they must go back and explain how they have voted today.
Let me say a little about how we would use the money raised from the mansion tax. Our view is that a fair tax system should include a 10p starting rate of income tax. We support the increases in the personal allowance, but a 10p band would mean a different tax rate for those on middle and lower incomes from that for those on higher incomes, helping the move towards a fairer tax system. Some argue that the 20p rate is adequate, but I believe that a steadier incline moving from zero tax to 10p and from 10p to 20p could be the bedrock of a more progressive tax system, sending out an important signal that tax cuts for working people are a priority.
The 10p starting rate would provide a tax incentive to enter work, especially for those on lower wages. It was a mistake to remove the 10p rate in 2007, even though it enabled the then 22p basic rate to be reduced to 20p, where it stands today. Reintroducing a 10p rate would be the right thing to do and, if the Liberal Democrats are correct that the mansion tax could raise £2 billion, the Chancellor could make that change next week in the Budget.
Just as there is support for a mansion tax from Members on the Government Benches, there is ample support for the return of a 10p starting rate for income tax, although strangely some of those Members have chosen not to take their place in the Chamber today. The hon. Member for Harlow (Robert Halfon) spoke about the 10p rate idea in his recent Adjournment debate, arguing that
“restoring the 10p rate would help the coalition to counter the war cry of its political opponents that it is only interested in cutting taxes for millionaires. It would prove to the public that ‘lower taxes for lower earners’ is not just a soundbite but that it can be a reality…the policy would be popular…it would be a symbol of the Government’s economic mission and…it would help to tackle the desperate stagnation in incomes that Britain has suffered”.—[Official Report, 22 January 2013; Vol. 557, c. 34-38WH.]
That argument was made by a Conservative Member.
Duncan Hames (Chippenham) (LD)
The hon. Gentleman is right that the previous Government were mistaken to scrap the 10p rate, but under this Government the income that would previously have been charged at the 10p rate is now charged at a 0p rate. If he supports the increases in the personal allowance, why is support for those increases totally absent from his motion in a debate on tax fairness?
Chris Leslie
We wanted to focus on the mansion tax proposition, because the hon. Gentleman’s Business Secretary suggested that we keep the motion simple and that if we did so, the Liberal Democrats would support it. That is what the Business Secretary said. We support the changes to the personal allowance, but in our view it is important to have that graduated step up. People go from the zero rate to the 20p rate and it is important to consider introducing a more graduated step as a work incentive, which is something we ought to have in the system.
Duncan Hames
Why does the hon. Gentleman think that a 10p tax rate is a greater incentive to go into work than a 0p tax rate?
Chris Leslie
The hon. Gentleman seems to think it is all or nothing, but we think that a progressive tax system argument needs to be developed. If people move from paying zero tax straight to 20p, there is a cliff edge. We think it is important to consider smoothing the transition to work and making work pay more effectively. That is not part of the motion; it is our preference for what we would do with the revenues from the mansion tax.
Chris Leslie
I will give way to the hon. Gentleman once more, if he wants to say whether he agrees with the text of our motion—not the flim-flam about the amendment. Does he agree with the text of our motion?
Duncan Hames
I will be voting for the amendment; it states Liberal Democrat policy, which I support. The hon. Gentleman has accepted that he wants to do something very different from us with his mansion tax, and on that basis I am not happy to support him.
Chris Leslie
What more can I say? I thought the hon. Gentleman supported the proposition in our motion, but clearly he does not. However cynical and defensive he may feel, Liberal Democrats should at least acknowledge that a principle of fair taxation is at stake today, and that it ought to transcend party differences as we try to create a more just society.
Geraint Davies (Swansea West) (Lab/Co-op)
Does my hon. Friend share my fear that the Liberal Democrats may become an endangered political species? Before 2010, they were very popular in Swansea but following the tuition fees, VAT and deep cuts turnaround, they lost the council. If they do not support the mansion tax, which was part of their manifesto, does he not think there is a real danger that we will never see them again in the political sphere?
Chris Leslie
It would be a great loss for the House to lose some of the skills and contributions of Liberal Democrat Members. Perhaps at our next Opposition day debate a Liberal Democrat protection order should be on the agenda. They may cling on in a number of ways in different places.
I am surprised that the Liberal Democrats do not support the mansion tax proposition. It is hardly surprising that Conservatives do not support the idea. After all, half of them are in politics to defend the wealth of the wealthiest, and the other half will probably need to declare an interest before they speak on the issue.
Let us consider the mansion tax in relation to the other tax benefits that the richest 1% receive. If the Lib Dem design for a mansion tax were to be enacted, it would just recoup a mere fraction of the money being given away to high net worth individuals in the millionaires’ tax cut from April—the first of too many examples of unfairness. In the last Budget, the Chancellor took the decision to hit pensioners with the so-called granny tax, which is more accurately described as a freeze on the old age personal allowance and has caused widespread disgust, especially because the Government chose to use the money to fund a cut in the higher rate of income tax. That is not fair and it is not right, and it certainly should not be part of the society we want to build. Even Liberal Democrats must know that it is deeply resented across the country, yet the Government continue to clobber lower and middle-income families, whether by freezing the maternity pay of new parents, taking child benefit away in a fiendishly complex tax assessment process or reducing the value of the tax credits on which so many working people rely. They cannot even ensure that the money men pay their fair share, with a bank levy that for two years running has undershot the supposed target of £2.5 billion that the Chancellor claimed it would collect.
On maternity pay, the bedroom tax and the cuts to tax credits, the Government have their priorities all wrong. They are handing a tax cut to millionaires when millions of hard-working families pay more. Voting for the motion is an opportunity, especially for the Liberal Democrats, to tell the Government that they need to rebalance their priorities.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for introducing an admirable motion. Does he agree that it is not just about tax cuts for millions of people on middle and low incomes, but that it could also be an incentive for first-time buyers to get on to the first rung of the ladder? They do not want to buy a mansion, just a first house. Should the money be used for that too?
Chris Leslie
The hon. Gentleman makes an important point about finding ways to help those who aspire to own their home. I am certainly interested in discussing options for how that might be achieved, because it is important. It is becoming very difficult for people in those circumstances. They are the home owners that we really need to focus on. It is amazing that so many Government Members want to defend the massive super-wealth of those with properties of £2 million and above. All we want is that they pay their fair share, as the motion states in plain and simple terms. We are giving a timely pre-Budget opportunity for the House to express support for or opposition to a mansion tax as
“part of a fair tax system.”
It could not be more straightforward. The country is crying out for a tax system that focuses on helping the majority of the public and ensures that the wealthiest 1% pay their fair share.
First and foremost, Government Members have a duty to their constituents, who will be astonished if their MP flunks this opportunity to make real change because they are suppressing their principles in a bid to cling on to power.
Mr Speaker
I do not think the hon. Member for Nottingham East is giving way; he has completed his speech. I call Mr David Gauke.
The Exchequer Secretary to the Treasury (Mr David Gauke)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
‘notes that this Coalition Government has cut income tax for 25 million people, taking over 2.2 million low income individuals out of income tax altogether, while at the same time increasing taxes on the wealthy, including raising stamp duty on expensive properties and restricting tax reliefs; further notes that both parts of the Coalition continue to support tax cuts for people on low and middle incomes; notes that the part of the Coalition led by the Deputy Prime Minister also advocates a mansion tax on properties worth more than £2 million, as set out in his party’s manifesto, and the part of the Coalition led by the Prime Minister does not advocate a mansion tax; and further notes that the top rate of income tax will be higher under this Government than under any year of the previous administration and that the rich are now paying a higher percentage of income tax than at any time under the previous administration, demonstrating that it presided over an unfair tax system where the rich paid less and the poor paid more in tax than now, meaning nobody will trust the Opposition’s promises on tax fairness.’.
After listening to the speech of the hon. Member for Nottingham East (Chris Leslie), we might have thought that it was the last Labour Government who increased stamp duty land tax to 7% on residential properties costing £2 million or more. We might have thought it was Labour that introduced a 15% rate of stamp duty for properties owned through a corporate vehicle. We might have thought that it was the last Government who imposed a cap on reliefs, limiting the extent to which the wealthy can drive down their tax rate, and we might have thought it was the last Government who deployed more resources to Her Majesty’s Revenue and Customs to tackle evasion and avoidance, and closed down loopholes such as disguised remuneration that cost the Exchequer nearly £1 billion a year.
We might also have thought that the Labour Government had introduced the 50p rate of income tax in their first Budget, not their 13th. We might have thought it was the Labour Government who had taken more than 2 million low-paid earners out of income tax by raising the personal allowance.
Whatever the differences that may exist on the Government Benches, and there are differences on this matter, one thing is very clear: the Opposition are in no position to lecture the two parties on the Government Benches about how to put in place a fair tax system that provides support to working people and taxes the wealthy effectively.
Alex Cunningham (Stockton North) (Lab)
At Treasury questions, one of the Minister’s colleagues said that the Government are focused on the causes of poverty. Can the Minister tell me how many of his millionaire friends getting a huge tax cut this year are actually pleading poverty?
Mr Gauke
In the last Budget package we increased taxes on the wealthy—higher rates of stamp duty, closing loopholes and putting a cap on reliefs. That is getting far more money from the wealthiest than a 50p rate that failed to do what income tax is supposed to do, which is raise funds to pay for public services. It did not do that.
Stewart Hosie (Dundee East) (SNP)
One of the reliefs that has been reduced is on 40p tax, which went down from £37,000 to £34,000 and then to £32,000 this year. The Minister has squeezed the genuine middle class—the people earning just over £40,000—not the £400,000 a year middle class. That bit of cynicism will never be forgotten by those people.
Mr Gauke
I am afraid the hon. Gentleman is wrong. People earning just over £40,000 have seen tax cuts and a reduction in the total amount of income tax they pay, because the personal allowance has increased to more than compensate them. The higher-rate threshold has not increased as it might have done, because higher-rate taxpayers would gain more from the personal allowance than basic rate tax payers. Someone on between £40,000 and £44,000 a year is paying less income tax as a consequence of the Government’s policies than they would have done otherwise.
Geraint Davies
Will the Minister take this opportunity to confess that the reason why the Treasury predicts less will be generated by the 50p rate in the one year of its operation than the 45p rate is that he knows, as I do, that millionaires can move their money between tax years? As the rate only runs for one year, they will move their money to the lower tax year. He would raise more money if he kept the 50p going. It is a con for his mates.
Mr Gauke
There are two points. It is correct that the wealthy are often able to move income from one year to another, but the conclusion that HMRC and the Office for Budget Responsibility reached is that even taking into account the forestalling effect, the behavioural consequences of the 50p rate were so significant that it barely raised any revenue. That is the reality. It even takes into account the hon. Gentleman’s point about forestalling. That approach has been confirmed by the OBR. The 50p rate failed.
Anas Sarwar (Glasgow Central) (Lab)
The message that the Government have repeated over and over again is that we are all in this together. Take the example of families in my constituency who live just one mile apart. One has been handed a tax cut as a result of the scrapping of the 50p tax rate. One mile in the other direction families will be handed a food parcel. Does the Minister think that is fair?
Mr Gauke
Let us look at what was in the last Budget in respect of stamp duty and the cap on reliefs. We could also look at what we have done with regard to capital gains tax. The independent Institute for Fiscal Studies has made it clear that the top 20% are affected most by the fiscal consolidation policies that have been pursued in this Parliament. Those with broadest shoulders are bearing the greatest burden. However, we have an enormous deficit that we have to get down—a deficit that we inherited from the Opposition.
Mel Stride (Central Devon) (Con)
Will my hon. Friend confirm that the highest rate of income tax currently under this Government is higher than was the case in the previous Government’s 13 years, all bar the last couple of weeks?
Mr Gauke
My hon. Friend is right. The Labour Government were in office for 4,758 days. For all but 36 of those days, the highest rate of income tax was at 40p. Then it moved to 50p. There is a good question to ask the Opposition about why they kept it at 40p for so long. Why did they leave it until the fag-end of their Government, when it was clear that they would not be in government any more? The reason is that the 50p rate, predictably enough, did not do what it was supposed to do. It did not raise revenue, and an income tax that does not raise revenue is not something that a sensible Government would persevere with.
I turn to the mansion tax.
Mr Gauke
No. I shall make a little progress, devastating though the hon. Gentleman’s interventions so often are.
We have always been quite clear that the proposed mansion tax is an issue on which the two parties in the coalition have differing views. Our Liberal Democrat colleagues have supported the principle for some time. I am sure that the Under-Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bath (Mr Foster) will make that clear when he winds up the debate. In contrast, Conservative Ministers have very real concerns over such a proposal. We have concerns that a third of the properties in London worth more than £2 million have been in the same ownership for over 10 years, and that a mansion tax could hit asset-rich but potentially income-poor households, a point made by my hon. Friend the Member for Battersea (Jane Ellison).
Dame Angela Watkinson
My hon. Friend will know that £2 million does not buy a mansion in London, and certainly not in outer London, where I have a number of constituents who moved out from inner London decades ago. Their homes have increased in value beyond their wildest dreams over a very long period, but they are in fact cash-poor, quite often living on a modest pension. The thought of paying very large amounts of tax every year for the privilege of owning a home that they have had for many years would be extremely frightening. Can the Minister think of any practical way that an elderly person in that position could possibly pay that tax?
Mr Gauke
I noticed that that very point was one that the hon. Member for Nottingham East seemed to struggling with. He seemed to suggest that there were ways in which the Opposition would address that. I am not sure whether that was included in the costings they have produced. There is an issue for the asset-rich, cash-poor which would need to be addressed in the design and would obviously have an impact on the costing.
Sheila Gilmore (Edinburgh East) (Lab)
Would the Minister suggest to people in those circumstances that they might want to take a lodger, just as it has been suggested to my 60-year-old constituent that the answer to the bedroom tax is to take a lodger?
Mr Gauke
I am not going to debate at length the spare-room subsidy, which is an area of public spending constraint that we need to engage in. There is a genuine issue in respect of the asset-rich, cash-poor that the hon. Member for Nottingham East appeared to recognise and which would have to be addressed.
The mansion tax would be administratively burdensome for HMRC to operate, not to mention intrusive for the person having their home inspected. We would have concerns that in Labour’s hands, the starting level for such a tax would not stay at £2 million for very long. What began as a mansion tax would soon become a homes tax. To coin a phrase, it would become a tax for the many, not for the few.
Chris Leslie
I am surprised the Minister thinks that “the many” own properties worth £2 million and above. I wanted to ask him about the Treasury’s own proposition that residential properties of £2 million and above, albeit owned by a company, should have an annual charge based on a self-assessed valuation, with a banding process. Is he saying that his own policy is administratively burdensome?
Mr Gauke
Let us be clear. One of the weaknesses in the tax system that we inherited was the fact that people were able to walk around the paying of stamp duty. On very valuable properties, it was all too easy for people to arrange their affairs thorough corporate vehicles and not pay stamp duty. In the last Budget this Government introduced measures that will deal with that enveloping and deal with one of the unfairnesses in our tax system. One of the ways in which we are going to do that, as well as a high stamp duty charge for properties held in corporate vehicles, is to bring in an annual residential property tax. That is focused only on properties worth more than £2 million held by a corporate vehicle. It would apply to only 6,000 properties, we estimate. It is a very narrowly focused policy that will enable us to deal with an area of avoidance that was allowed to carry on for far too long under Labour.
Caroline Lucas
As a tax that is much harder to evade or avoid, there is the land value tax. That is supported by one half of the coalition and by the OECD and the IMF. The IFS has said that the case for a land value tax is overwhelming because it is much fairer. Given that that is the case, can the Minister explain why his Government will not even do some basic research into it, as my private Member’s Bill requested?
Mr Gauke
We are left with the same issues of complexity of valuation across the board, and the issues of the asset-rich, cash poor. That is why my part of the coalition is not keen to proceed with that matter, but it is worth pointing out that we are raising more money from property. There is a stamp duty land tax of 7% on residential properties costing £2 million or more, a policy that is easy to administer and will not impact on existing home owners.
On the mansion tax, we have made no secret of the fact that the two parties disagree. If we did not disagree on some things, we would be one party, not two. But in the circumstances that we are in, it has been perfectly possible for two parties to work together in a sensible and mature way and to reach agreement on a host of measures that have made our tax system fairer, easier to understand and competitive. We heard much from the hon. Member for Nottingham East to the effect that we should do more to help low-income workers. May I just remind him and the House of the progress that we have made in raising the personal allowance? In 2010, someone on £6,500 was paying income tax at 20%. From next month, someone has to earn £9,440 before paying any income tax at all. Our measures on the personal allowance have provided a huge tax cut for millions of people and will take more than 2.2 million of the lowest earners out of income tax altogether. In fact, over the course of this Parliament, someone working full time on the national minimum wage will have seen their income tax bill cut in half.
Let us contrast our record with that of our predecessors. Let us remember that when the right hon. and absent Member for Kirkcaldy and Cowdenbeath (Mr Brown) did his last Budget, rather than cut taxes for the working poor, he increased them. People talk about the scrapping of the 10p rate, but Labour did not scrap it, they doubled it. They turned it into a 20p rate. For example, someone earning £9,000 a year in 2007 would have heard a Labour Chancellor stand up and announce that a Labour Government were going to increase their income tax bill by more than £200. Last year, someone on £9,000 a year would have heard a Conservative Chancellor stand up and announce that a coalition Government were going to take them out of income tax altogether. Our constituents on £9,000 a year will soon be paying no income tax at all, saving more than £500 since the coalition came to power. Labour turned a 10p rate of income tax into a 20p rate. This coalition has turned a 20p rate into a 0p rate.
Mr Russell Brown (Dumfries and Galloway) (Lab)
Will the Minister remind the House what he did with the personal allowance for pensioners? Am I not correct in saying that he froze that?
Mr Gauke
There is no particularly sensible reason why there should be a different personal allowance for someone who is 64, compared with 65 or 75. It is clearly a simpler and, I believe, fairer system that one personal allowance should apply to everybody. That was never an option available to the Labour party because the main personal allowance for someone under the age of 65 was so low. We have been able to increase it substantially so that one personal allowance can apply to everybody. That is a simpler and fairer way to deal with that issue. At the same time, we have increased pensions, thanks to the triple lock guarantee, by much more than we would have done if we had stuck with the plans that we inherited. Last year, pensioners saw their biggest increase in the state pension.
Mr Gibb
While my hon. Friend is on the subject of the last Labour Government, he will recall that in 2009-10, the last financial year of the last Labour Government, expenditure exceeded income by £159 billion, equal to 11% of the whole country’s income. Since he has been a Minister at the Treasury, have civil servants explained to him why that was allowed to happen, virtually bankrupting this country?
Mr Gauke
My hon. Friend makes a very good point. There is no explanation that civil servants can give for that. An explanation and an apology are due from the Opposition, but we await either of those. I think that they persist in the view that there was no structural deficit even before the crash—
Chris Leslie
There was certainly a global financial crisis. But can the Minister confirm that under the current Chancellor of the Exchequer, national debt has risen from £811 billion to £1.111 trillion? Has debt risen by that much—yes or no?
Mr Gauke
Debt is the accumulation of deficits. We inherited the largest deficit in our peacetime history, and every measure that we have taken to reduce that deficit the Opposition have opposed, and then they complain that debt is rising. That is the most absurd position. We are criticised for not borrowing enough, and then we are criticised for our debt going up. There is no consistency or credibility in the Opposition’s position, just as there was no credibility or consistency in their treatment of low-paid workers. In government, they raised the rate of income tax; in opposition, they make promises that they will cut it. When we remember the reality, why should those on low incomes ever trust Labour again?
Mr Alan Reid (Argyll and Bute) (LD)
In fairness of taxation, another area where this Government have done a great job is on fuel duty. The fuel duty is now 10p a litre lower on the mainland and 15p a litre lower on islands than it would have been if the Labour party had still been in power. I hope that my hon. Friend will continue that good work and that in the Budget there will be an announcement that the September fuel duty increase inherited from Labour will not go ahead.
Mr Gauke
I will take that as a Budget representation. It is perhaps worth pointing out that there was a measure that the previous Labour Government had to reduce the deficit, which was substantial increases in fuel duty over the course of this Parliament. That is a measure that we have been able to stop, and quite right too.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the Minister explain why four out of five people feel that austerity is not working? Is it related to the downgrading of the economy yet again for 2013? Is it the shrinking of the economy in the last quarter of last year by 0.9%? Or is it that the OBR had to call the Prime Minister to task and give him an economics lesson?
Mr Gauke
This is a difficult time for all major economies, and the UK is no exception, but matters would be much worse if we were to abandon our desire to bring some control to the public finances. We must ensure that there is the political will to deal with the public finances, and that is what this Government will continue to demonstrate. The approach of ignoring the deficit, believing that this is all an issue that can be addressed at some future time, is economically irresponsible and unfair on future generations who will face the bill that they will have to pick up because we failed to address those problems now.
Geraint Davies
Is this not also about fairness? For instance, while the threshold changes that he has mentioned of £3,000, which deliver a saving of £11.50 a week to taxpayers, cost £9 billion, he will save half a billion pounds from inflicting that £11.50 on people for the empty bedroom tax. With a small amount of the money used to raise the tax threshold, he could have alleviated that for the very poorest. Is not this about values and not inflicting the most hardship on the most poor while giving a bung to the voters?
Mr Gauke
I take it from what the hon. Gentleman says that rather than raise the personal allowance, he would prefer us to spend more on the welfare bill. If that is the hon. Gentleman’s position, fair enough, but I do not agree. Raising the personal allowance, taking people out of income tax, and making sure that work pays, are all things that a sensible Government should do, and I am delighted that this coalition Government are able to do that.
I come now to the taxation of those on highest incomes, on which we have already touched. The top 1% of taxpayers, those with incomes of over £150,000 a year, will pay more than a quarter of all income tax, while the top 5% of taxpayers, those with income of £68,000 or more, will pay nearly half of income tax. We agree that it is important that we create a tax system that ensures that those who earn the most contribute the most, but it is also important that we create a tax system that works. Among other things, that means a tax system that does not damage our economy by undermining our international competitiveness.
The Government inherited a top rate of tax at 50p, a rate that our predecessors, who this afternoon have painted themselves as the party of taxing the rich more, had put in place for just 36 of their 4,758 days in power. The rate that they left us with was the highest top rate among major economies. The last Labour Chancellor had made it clear that it was temporary. It was also very clear that it was having an immediate impact on our competitiveness.
Let me say something that I hope is not controversial: the principal purpose of income tax is to raise revenue. So we commissioned HMRC to analyse just how effective the 50p rate was in raising revenue.
That HMRC report, laid before the House, set out thorough and compelling evidence on the impact of the 50p rate. It showed that the rate was uncompetitive, distortive and inefficient. Not only did it not raise much revenue, but it could even have cost the Exchequer money when the indirect impacts on other taxes were taken into account. This Government were not prepared to maintain a rate of income tax that was both ineffective at raising money and that left us with the highest statutory rate of income tax in the G20, so we acted, in the interests of the country, and the top rate of tax will fall to 45p from April this year. This will see our top rate of tax drop below that of Australia, Germany, Japan and Canada, which will send a signal to businesses taking decisions on investment and location that the UK is a competitive environment.
Rehman Chishti (Gillingham and Rainham) (Con)
Has the Minister seen the KPMG report that states that Britain’s competitiveness is better than that of Switzerland and the United States and that that is a consequence of the measures taken by the Government?
Mr Gauke
My hon. Friend is absolutely right to raise that point in the context of the changes we have made to our corporate tax system. In 2009 KPMG commissioned a survey of tax professionals, asking them to name the three most competitive countries. The UK was nominated by just 16% of respondents. In 2012 KPMG undertook the same survey and the UK was nominated by 72% of respondents. That is a dramatic change, which we are proud of, and it will help our economy grow. We have also had the courage to reduce the 50p rate, which will help our competitiveness, too.
Andrew George (St Ives) (LD)
One thing we do know is that mansions cannot emigrate if the tax rate goes up. Earlier my hon. Friend the Minister said that the problem with the mansion tax is that it becomes a home tax. Does he agree that the council tax is also a home tax, and may I understand from what he has been saying that the Conservatives are coming round to the Liberal Democrat view that we should consider introducing a local income tax as an alternative for financing local authorities?
Mr Gauke
No, I think my hon. Friend would be wrong to reach that conclusion from what I have said. There is an interesting debate on the balance between property and income taxes, however, and I note his suggestion in that context.
May I now return to the topic of the 50p rate, as I know the hon. Member for Nottingham East likes to focus on it? The Opposition may think that in this day and age 50p is the least the wealthy should pay in income tax. I want to put to them the question raised earlier by my hon. Friend the Member for West Worcestershire (Harriett Baldwin). In less than four weeks the 50p rate will have gone. The additional rate will be 45p. Will Labour seek to reverse that? I am happy to take an intervention on this point. Will Labour seek to reverse that after the next election?
Chris Leslie
The Minister is asking the Opposition what is going to happen in two years’ time, but can he tell us what will happen in next week’s Budget?
Mr Gauke
That is very amusing, but of course I am not going to do so. I am fairly confident, however, that at the next general election the Conservative party will not be advocating a 50p rate of income tax. The hon. Gentleman is calling for a 50p rate of income tax, however. He will not tell us why. He is now saying, “Well, we don’t know what the economic circumstances will be.” That is fair enough, but does he think that his party will make a manifesto commitment at the next general election to introduce a mansions tax? Is that a commitment? I am happy to give way again.
Chris Leslie
It is very simple: now, in 2013, we can see the deficit rising and getting worse and we can see borrowing increasing, growth flat-lining and living standards falling, and the Minister is asking us to predict what we are going to do in two years’ time. How on earth do we know what other horrors are in next week’s Budget box or, heaven forfend, in the spending review of 26 June? Can he tell us what is in that spending review?
Mr Gauke
This is starting to get interesting, because we have now learned that the Labour party has moved a motion trying to persuade Liberal Democrats to vote in support of a mansion tax, yet Labour will not confirm whether it thinks a mansion tax is a sensible policy for the next Parliament. The position of the Liberal Democrats is clear and the position of the Conservatives is clear; what is not clear is whether the Labour party, after all, supports a mansion tax. Will it be in its manifesto? That is a perfectly clear question.
Debbie Abrahams
The Minister is being very generous in giving way, but I want to ask him what his Government are doing. I tabled a written parliamentary question to his Department asking about the average tax rates for different groups of people, and he may be astounded to know—as I am sure many of my constituents in Oldham will be—that 6% of people on incomes over £10 million pay under 10% income tax. What is he doing to address that inequity?
Mr Gauke
That is exactly why in the last Budget this Government brought in a cap on reliefs preventing the wealthy from driving down their tax rate to such levels—something the Labour party never did in 13 years in government. I note, however, that I get no answers to my question.
Let us be clear: we hear lots of complaints about the 50p rate being reduced to 45p, but we get no indication as to whether the Labour party would or would not reverse that if it were to win the next election. I can only assume that that is because deep down it knows that campaigning on 50p might look good on a leaflet but is lousy for the economy; after all, that seemed to be Labour’s approach when it was in government. We have also learned this afternoon that the Labour party is not committed to a mansion tax in the next Parliament, after all. So what do we have? We have opportunism on the 50p rate and opportunism on the mansion tax.
Mr Gauke
I am going to press on.
This is what we have seen from the Labour party, therefore: we have a party that increases the tax rates on the low-paid and then lectures a Government who take the low-paid out of income tax; we have a party that is in uproar at our reducing the additional rate of income tax to 45p but that will not promise to reverse it; and we have a party that did little, or nothing, to tax expensive properties more now being converted to a mansion tax for the purposes of this afternoon’s vote for transparently political reasons, but refusing to confirm that it will be their policy at the next election. That is pathetic. It is insincere, it lacks any semblance of credibility, and it deserves to be defeated. I urge my hon. Friends to defeat the motion and support the amendment.
Mr Deputy Speaker (Mr Nigel Evans)
Order. There is to be a 10-minute limit on Back-Bench contributions with the usual injury time for two interventions.
Geraint Davies (Swansea West) (Lab/Co-op)
What a load of codswallop we have been listening to since the Minister got up on his hind legs! Obviously, this motion is setting out a direction of travel. We are saying that those with the broadest shoulders should take the biggest load and the poorest should not pay the cost of the bankers’ recklessness.
The myth that is habitually recited by Government Members is “What a fine mess you’ve left us in,” so it is important to remind people of the facts. I recently met people from the Bank of England, and I have in my hand a graph showing that our growth rate rose continuously between 1998 and 2008, but then dipped when there was the financial tsunami. The GDP growth under Labour was 37% before that dip. We then had the fiscal stimulus thanks to our friend Mr Obama and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), which got us back to some fragile growth moving into 2010, but then the Tories came to power.
I also have a graph showing that two thirds of the deficit—the green bit—is from the bankers and the other third is the Government spending above their earnings in order to pump-prime, to avoid a depression and deliver a mild recession and a prosperous future for Britain. What happened? Obviously, George Osborne came along, announced that half a million people would be sacked but he did not say who they were, so public servants stopped spending—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Please refer to the Chancellor by his title, not his name.
Geraint Davies
Exactly. The Chancellor, no less, decided to announce that half a million people would be sacked but did not say who they were, so people stopped spending and started saving, consumer confidence fell and the economy has been flatlining ever since.
Mel Stride
The hon. Gentleman refers to employment. Does he recognise the fact that there are 1 million new private sector jobs net, unemployment is falling and the level of employment, which is currently about 30 million, is the highest on record?
Geraint Davies
I am grateful to the hon. Gentleman for that intervention. If 1 million more people are in work but there is zero growth—in other words, there has been no overall increase in production—that implies that people who had been in full-time jobs are now in part-time jobs and that aggregate production has not increased, which is a complete failure. It is symptomatic of Tory Britain, with people scratching around for anything they can find in difficult times.
There has been some discussion of the 50p rate of tax. As I have mentioned, the reason the Treasury thinks it would not make any money from a 50p rate is that it knows that millionaires can move money between tax years, which is precisely what they have done. They knew that their Tory mates would reduce the top rate of tax the next year and so simply shifted their income to that year. The point that I had wanted to make in another intervention—I appreciate that two were taken—relates to the idea that the 50p rate does not work and is therefore dead. However, people earning between £32,000 and £42,000 already pay 52% marginal tax—12% for national insurance and 40% for income tax—but of course no one talks about that. How does that change their behaviour, and why is it fair that they pay the higher rate while people on £150,000 do not because they have accountants? It is ridiculous.
Geraint Davies
Does the hon. Gentleman want to intervene? Perhaps he earns £150,000; I do not know.
Mark Reckless
I want to develop the hon. Gentleman’s point. We currently have a tax band between £100,000 and £115,000 in which people face a marginal tax rate of 62%, with the personal allowance and national insurance. Is he suggesting that that is somehow justifiable, or more justifiable than the top rate tax he is suggesting for those earning more than £150,000?
Geraint Davies
I am simply saying that those with the broadest shoulders should take the greatest weight, that there is a strong case for a 50p rate of tax and that some people already pay the 50p rate. I am not saying that they should pay that. Our tax system is not very fair, and I will move on to that later.
The problem we face is that there is no growth in our economy because there is no consumer demand, and although the deficit—the rate at which the debt is increasing —has gone down by 25%, as we are constantly reminded, the overall debt continues to rise to unprecedented levels. We are almost back to a pre-1997 situation in which we are paying people to stay on the dole and, at the same time, cutting services. That is the old Tory vicious cycle. We want to get back to Labour’s virtuous cycle, with people in jobs and paying tax and with unprecedented growth.
The other point that is always made is that the banks were unregulated and that is why everything went wrong. The reality is that the Financial Services Authority—I know that it has had a bad name—was introduced in the teeth of opposition from the Tories, who said that there was too much regulation already. Then, when the banks started going bust, the Labour Government said that we had better nationalise them so that people could still get money out at the hole in the wall. The Tories said, “No, let them fall.” That would have been a complete catastrophe. So in other words, the previous Labour Government did a very good job. We now have a situation in which, instead of confronting the deficit, which is what we should be doing, the Government have the wrong balance between growth and cuts, and within the cuts there is the wrong balance—80% cuts and 20% tax.
As for the claim that we are all in this together, we are now in a situation in which the poor are paying the most. I mentioned in a brief intervention—I also raised this in Prime Minister’s questions—a man who came to see me who had £20 a week, after utility bills, for food and clothing. He now faces a further hit of about £7 a week for having an empty bedroom. How will he survive on £2 a day? Allegedly, that change will save the Government about half a billion pounds, but of course it will not, because obviously people will move to the private sector, where rents are higher, and there will be empty houses in the public sector because councils will be forced to evict people. It makes no economic sense at all. However, if it did raise half a billion pounds, which is about one twentieth of what the Chancellor is investing in the tax thresholds, the hit to the very poorest will be similar to the gain to a very large number of people, and that will cost a great deal of money.
The point I am trying to make is that what will probably result in no savings will inflict enormous hardship on the most vulnerable, which is unnecessary and wrong. Those people, because they are very poor, have no option but to spend all their money locally, which helps to boost growth. If that money is redistributed from the very poorest to the squeezed middle, which is obviously good for votes—a callous and cynical manoeuvre in difficult economic times—then clearly that is not in favour of growth either. In so far as it will push money right up the income scale to the millionaires who live in mansions—the people we have been talking about—what will they do with the extra money the Government will have bunged to them? The threshold has gone up, so those at the top will also gain as a result. They will hide it away offshore.
There are therefore difficult issues to confront. We need to invest in our productive economy, but what is a fair way to do that in a—dare I say it—one nation way? Britain wants a one nation future that works and a future that cares, and the question for us all in difficult times must be how we deliver that. How do we invest, as I mentioned during Treasury questions, in super-connectivity for the city of Swansea? We do it on the back of investment in universities, electrified rail and communications and by marketing city regions, and indeed Britain, for inward investment. Those are all important. The Minister mentioned some of the issues about marginal corporate taxation, but the research tends to show that the major inward investment drivers are around research and development skills and access to markets, and we are well positioned on that.
On corporate taxation, there is a lot to be said—to be fair to the Minister, he mentioned this—for the idea of taxing economic activity where it occurs, whether we are talking about Google, Amazon or other companies. Amazon is local to my constituency and provides valuable jobs, but it needs to be fair and there needs to be a level playing field. If people are buying on Amazon rather than at a local shop, it is important that the local shop knows that they are all playing the same game.
Let us take the example of Apple phones and all the technology in the phone I am holding in my hand. The internet was invented here, and the other stuff, such as touch-screen and voice-activated technology, was invented in the national institute of science in California. So Apple is being taken to court by California for $26 billion because it does not pay any tax. Apple has taken innovation from the public sector, repackaged it, branded it, manufactured it overseas and got it taxed somewhere else. A big issue is that global conglomerates need to be brought to account and to pay their contribution to the public services where people are consuming their products.
Some of these people obviously live in mansions. The issue about the mansion tax, of course, is that it is part of a more general review of council tax, as other Members have mentioned, which has not been uprated. There needs to be a progressive system of taxation. Obviously the mansion tax, which is a Liberal Democrat proposal, had not been completely thought out in all its intricacies, but it is a direction of travel. If someone lives in a £2 million house, it is not that difficult to find ways of getting income out of it. It can be rented out and, with the rental income, the owner could have a palatial place in south Wales and a profit, so they could sit by the sea and enjoy themselves. For those people who are stuck in £2 million cupboards in London, allegedly, and we feel sorry for them, there are ways of releasing equity, as they could be rented out and people will pay the market rate.
Gordon Birtwistle (Burnley) (LD)
I am listening to the hon. Gentleman make some progress on the mansion tax. Obviously it is a Liberal Democrat policy, and I am really looking forward perhaps to voting for it later. Can he explain to me—I am keen to know—whether it will be in the Labour party manifesto at the next election?
Geraint Davies
Sadly, I cannot confirm that at the moment because I am not quite in a position to be writing the party’s manifesto, although I have ambition.
In difficult times we should focus on growth and ensure that those with the broadest shoulders take the weight and that we do not just squeeze the poor for the bankers’ mistakes. This proposal is part of a tapestry of opportunity to move forward on that, and we call on the Liberal Democrats to support us on what is, after all, their idea. Locally in Swansea the Liberal Democrats have been a very strong party with control of the council. Since 2010, they have been in a woeful state because people are worried about their broken promises on tuition fees and so on. This is their chance to redeem themselves so that there can be some glimmer of belief in a future for the Liberal party. If they do not vote for their own policy, what hope is there? Very little, I am afraid.
Stephen Williams (Bristol West) (LD)
Thank you, Mr Deputy Speaker—indeed, a man from Swansea.
It is a pleasure to speak in favour of the Government amendment tabled by the Deputy Prime Minister and the Prime Minister, because it reflects the realities of coalition Government. The amendment is completely frank about the fact that there are two parties in coalition and that one of them—my party, the Liberal Democrats—supports a mansion tax while the other, the Conservative party, does not. When we conducted our coalition negotiations back in May 2010, the Liberal Democrats were successful in getting many of our policies into the coalition agreement that is now being implemented by the Government, but the mansion tax was resisted by the Conservative party, and that is why the Chancellor has not, thus far, put it forward in his Budgets. We accept that position. Our amendment reflects the realities of the coalition.
Anas Sarwar
Will the hon. Gentleman tell us what part of the Opposition motion he cannot support?
Stephen Williams
I will come to that, if the hon. Gentleman is patient.
The key sentences in the Opposition motion and in the coalition Government amendment are those which refer to our support for tax cuts for people on low and middle incomes; we have that in common. However, it rather depends on what one means by that. We know what we mean by it. At the last general election, the Liberal Democrats said that the most effective way to cut taxes for people on low and middle incomes was to raise the income tax threshold to £10,000. That policy was accepted by our coalition partners and it has now been delivered by the coalition Government. I listened carefully to what the Leader of the Opposition said in his speech just a month ago when, lo and behold, Labour was converted to a mansion tax. The purpose of that conversion was specifically to right the wrong that the hon. Member for Nottingham East (Chris Leslie) acknowledged was done in 2007—in other words, to reintroduce the 10p rate. That is what Labour’s policy is. The motion is not entirely clear about that, but we have heard the words of the Leader of the Opposition. We know that, yes, they are now in favour of a mansion tax, but specifically to fund a 10p tax rate, which we think will be completely ineffective.
Stephen Williams
Yes, it was. I said it on “Westminster Hour”, on Radio 5, on the “Daily Politics” show, and on other programmes as well. Indeed I could have written it myself. However, I know precisely what I mean by a mansion tax, but we have not heard spelled out in any detail what Labour Members think it should be. I know what I mean by a tax cut for low and middle-income earners, because that is what this Government are doing while we are in office. I am entirely clear what I mean by the text of the motion; the trouble is that it has not been exactly clear what Labour Members mean by their words.
Chris Leslie
We support the proposition that the hon. Gentleman has elucidated about a mansion tax, so, okay, we are clear about what we mean by a mansion tax. When the Business Secretary said that if the motion were
“purely a statement of support for the principle of a mansion tax, I’m sure my colleagues would want to support it”,
was he wrong?
Stephen Williams
The Business Secretary is never wrong; he is a very wise man. I do not see any great difference between what he said and what I said on the record several times yesterday and over the weekend. We know what we mean by a tax for low and middle-income earners. We know what Labour Members mean as well—a reintroduction of the 10p tax rate, and that is why we disagree with them.
Stephen Williams
I cannot give way again because I have now lost all my concessions.
The reason the Business Secretary—our shadow Chancellor, as he then was—proposed a mansion tax towards the end of 2009 was that property wealth in our country is woefully under-taxed. Our only property tax is council tax. In England, the top council tax band, band H, is twice the rate of the broadest band, band D, and three times that of the basic band, band A. That means, in effect, that in our only property tax the rate for a £10 million mansion is only three times the rate for a bedsit. That is clearly a ludicrous way to tax property. The band H top rate is only £320,000. Let us take as an example the royal London borough of Kensington and Chelsea, just along from where we are now. A £90 million mansion—I can see no other way to describe a £90 million house—in Kensington Palace gardens pays council tax of £2,151. That is the top rate of council tax that can possibly be paid in the London borough of Kensington and Chelsea—exactly the same as the rate for a small flat in that borough. That is a nonsensical property tax. That is why my party, the Liberal Democrats, backs the introduction of a mansion tax on properties with a value of over £2 million, with an annual levy of 1% on the excess over £2 million. That means that someone who had a £2.1 million mansion would pay mansion tax of £1,000 tax a year, while someone with a £3 million mansion would pay mansion tax of £10,000 a year.
The Minister and several other Members have asked what would happen to people who are asset-rich but income-poor. We have always had a very simple answer to that. In those cases, the tax would be rolled up and would crystallise once the property was sold and then be met from the sale price. That is a very simple concept for a very simple tax. We have also said that it should be a national tax, not a local tax. We have not hypothecated it to any particular tax measure, and we have not tied it to the reintroduction of a 10p tax rate as the Opposition have, which is why we do not support their motion. However, it could take us to the final milestone of getting to the £10,000 income tax-free threshold that I am reasonably confident will be announced very shortly. It could certainly contribute to getting the Liberal Democrats to where we wish to go next—that is, to making sure that every adult on the national minimum wage, which is currently £12,071, should not be caught in the income tax net. We may be able to make progress towards that in the latter days of this coalition, but it will certainly be in the Liberal Democrat manifesto in 2015; we are completely clear about that.
Labour Members have linked their mansion tax proposal—at least the concept, as they have not fleshed out what it really is—to the reintroduction of the 10p tax rate. I think it is fair to have a little look at Labour’s record on the 10p tax rate. I love Budget debates, and I have been in the House for all of them in the eight years that I have been an MP. In March 2007, I was sitting just where the hon. Member for Stockton North (Alex Cunningham) is sat on the Opposition Benches as I listened to last Budget speech of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in which he announced the abolition of the 10p tax rate. That was met on the then Government Benches with wild cheers and waving of Order Papers because it was to finance a cut in the basic rate of tax from 22% to 20%. Why was that being done? What was so crucial about its timing? As we know, the then Chancellor was heir apparent to the then Prime Minister, Tony Blair. He thought that there was going to be an autumn 2007 general election and that an income tax cut for better-off people in society, financed by the poorest, whom he assumed would always vote Labour, seemed like a good piece of populist politics—but it backfired and blew up in his face. Six years on, we are asked to believe that Labour wants to make good for that mistake.
There was another tax change in 2007 that does not get much attention. A lot of Labour Members here today were not Members of the House at that time, so I will forgive them for not remembering, but perhaps someone else on the Labour Benches wants to remind us of the other tax change that the former Prime Minister introduced in 2007. I see that there are no volunteers, so I will tell the House, because I can see that Members are now in suspense: it was a doubling of the inheritance tax threshold from £325,000 to £650,000 in a double-income household. That is Labour’s record in government: tax cuts for the wealthy. We know that they were completely discombobulated by the then shadow Chancellor’s announcement to the Conservative party conference of a cut in inheritance tax and were keen to match it.
I am sure that Labour Members love reading Polly Toynbee’s column every week and that it is compulsory reading at the breakfast table in Labour households and in the Tea Room. In her column in The Guardian this morning dear Polly said:
“Labour barely dared breathe on the riches that soared upwards on their watch.”
I could not agree more. At the time of its abolition, the 10p tax rate taxed incomes under £7,455 at 10%, but since taking office we have taken such incomes out of tax altogether. Surely it is better to be taxed at 0% than at 10%, so the coalition has been much fairer to people on low incomes.
That is not all that the coalition has done. We have restricted pension tax relief. Up to May 2010 under Labour someone could put more than £250,000 a year into their pension pot, whereas this year under the coalition the figure is only £40,000. We raised capital gains tax from 18% to 28% and stamp duty on properties worth more than £2 million to 7%. We might not have been able to persuade our coalition partners on an annual mansion tax, but we have persuaded them on a mansion duty when properties of that value are acquired.
We have done more to tackle avoidance. We set up an affluence unit in Her Majesty’s Revenue and Customs, which will examine in detail the affairs of 500,000 of the most wealthy people, and placed a 15% charge on domestic properties bought via a company—a classic example of avoidance that the previous Government did little to block, just as they did not block and, indeed, voted against disguised remuneration when we proposed to tackle it in one of our first Finance Bills.
We have been through many Opposition days, both in government and in opposition. When the votes are counted at 10 past 4, very little will have changed. What are the origins of this motion? We know that it is based on a policy stolen from the Liberal Democrats. I understand the right hon. Member for South Shields (David Miliband) also proposed it in his leadership bid, so one brother steals from the other as well as from the Liberal Democrats. This is pantomime politics, but nobody is laughing.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I apologise for the fact that, as I indicated to you, Mr Deputy Speaker, I shall need to leave the Chamber at about 2.30 pm, although I shall return, so thank you for calling me now.
I support the motion, the fundamentals of which simply call
“on the Government to bring forward proposals for”
a mansion tax “at the earliest opportunity”. It is a proposal—nothing more, nothing less—that I should have thought the junior coalition partner supported.
I should like to remind the House, especially the Liberal Democrats, of a speech on tax and fairness delivered last month by the Deputy Prime Minister, in which he said:
“I continue to believe we should ask for what would be a modest contribution from the very wealthy, either in the form of a Mansion tax—a 1% levy on properties worth more than £2m—applied just to the value over and above £2m; my preferred option. Or, alternatively, we could introduce new council tax bands at the top end, again, affecting properties worth over £2m. . . Nothing could do more to demonstrate a commitment to greater fairness in our tax system. I will continue to make this argument, in this Coalition and beyond. My approach is simple: taxes on mansions; tax cuts for millions.”
Only time will tell whether there is the slightest hint of sincerity in those words.
We are debating the issue today only because our nation’s economic uncertainty and problems mean it is right that we do so. What is the current problem? It is squeezed living standards and a flatlining economy. Families are working harder for longer and for less, yet almost daily they witness prices going up and up. The talents of millions of our young people are being wasted and small businesses, which will drive our economy, are being held back by banks and a Government who are not on their side.
Yesterday evening I met representatives of a number of small and medium-sized enterprises based in the London area. They told me and other Labour Members that banks need to work for them and not against them, which has been their experience of the past two or three years: banks are not lending to the most entrepreneurial businesses, and in their eyes everything is going backwards. The economy is not growing and has flatlined over the past two years, and the deficit is going up. Government borrowing is increasing as a result of economic failure. Those of us who watched closely in the ’80s and early ’90s saw what economic failure did to the nation. We are witnessing nothing short of trickle-down economics: the middle is being squeezed and almost daily there is a race to the bottom.
The Government’s economic vision is of a race to the bottom in wages and skills, rewarding only those at the very top and leaving everyone else squeezed as never before. Next week taxes will be cut by an average of £100,000 for 13,000 people earning more than £1 million, yet millions of working families will be asked to pay more as their tax credits are cut.
The Government refuse to stand up to the energy and train companies that are squeezing family budgets. Debates have been held in the House over a prolonged period, but nothing has been done to protect some of our poorest families and communities.
Andrew Gwynne (Denton and Reddish) (Lab)
From listening to everything said by Members on the Government Benches one would think that everything in the garden was rosy, but my hon. Friend makes a point that has been echoed by research from the Institute for Fiscal Studies: that under the measures in the Government’s autumn statement the poorest 40% in society are losing much more than the richest tenth.
Mr Brown
My hon. Friend is correct: the figures given by the IFS are there for all to see and cannot be disputed. We are seeing real pain and suffering, hard as never before, in many communities. I am sure that constituents of hon. Members on both sides of the House are looking to their MPs for guidance and support. I fear in particular for young families. Those of us who are slightly more senior in years know what it is like to be told that we have to tighten our belts, but younger families find it difficult to cope with such comments.
Over the past two years the Government’s approach has been shown to be not working, but Labour Members know that it can never work. Prosperity will be achieved only when everyone plays their part in building the economy—a recovery made by many, not just a few at the top who believe they are aiding some recovery. That is the lesson of history. In the industrial revolution, which I know was way back, it was those who went down the mines, spun the cotton, built ships and constructed bridges who drove the economy forward. The nation is crying out for a fairer tax system, which we will put at the heart of our new priorities. As well as cancelling the millionaires’ tax cut and the changes to tax credits this April, a Labour Budget would tax houses worth more than £2 million and use the money gathered to cut taxes for working people. A fairer tax system would send a message about how Britain will succeed in the years ahead that says: “When you play your part and make your contribution to the economy, you will be rewarded.”
The Labour party would tackle vested interests. We need to act when working people are paying more than they should. We have said that we would break the stranglehold of the big six energy companies, stop the price rip-offs of the train companies on the most popular routes and cap the interest on payday loans.
Our country has to change. We must end the culture that says that university is always best and that vocational education is second class. That simply is not true. We see the need to create a new technical baccalaureate to complement A-levels. We see the need to give employers, for the first time ever, control of the money for training. We see the demand for Britain’s employers to step up and offer real apprenticeships and proper training.
Today, we are increasingly two nations with high-skilled, high-paid jobs for those at the very top, but low-skilled, low-paid jobs that involve long hours for too many people. A one nation economy needs to support businesses that create sustainable middle-income jobs by introducing a modern industrial policy.
Mr Deputy Speaker (Mr Nigel Evans)
Order. I hope that the hon. Gentleman’s question will be about the mansion tax, because it seems as though the speech is going somewhat wider.
Stewart Hosie
I very much agree with the tenor of what the hon. Gentleman is saying, particularly in relation to fair taxation. However, I remind him that barely any of the sensible things that he wants to do were achieved in the 13 years of the Labour Government. Some of what he says is therefore rather galling to listen to.
Mr Brown
The hon. Gentleman and others in this House have complained long and hard over many years about the investment that was made in this country by the Labour Government and the work that they did to stabilise and take forward the economy. There is a reluctance to remember what had to be done at the time of the crisis when the banks failed. We had to support the economy of this country by supporting those banks.
To conclude, I will return to the point that I made at the beginning of my speech. All we are asking is that the Government bring forward proposals for a mansion tax at the earliest opportunity. We are not asking that a mansion tax be introduced, but we need to engage in the debate. I would go further and say that what our nation needs and deserves above all else is an open discussion about taxation and what it means to our country. What can taxation deliver for the people of our nation? Our European neighbours have such discussions.
I hear what Liberal Democrat Members say, but any sincerity that they have must be shown in the Division later this afternoon.
Mark Reckless (Rochester and Strood) (Con)
It is a pleasure to follow the hon. Member for Dumfries and Galloway (Mr Brown), who ingeniously addressed the topics of both of this afternoon’s debates and some even broader topics.
I will confine my remarks to the taxation of high-value property. The motion refers to a mansion tax on properties worth more than £2 million. A serious problem with the motion is that the Government have already brought in a range of measures to increase the incidence of tax on the owners of properties worth more than £2 million. No definition of “mansion tax” per se is provided in the motion.
The Leader of the Opposition hypothecated the revenues that would purportedly be raised by the mansion tax to reintroduce the 10% rate of tax, which was abolished by the previous Government. The cost of that would be some £7.3 billion. Research that was published recently shows that to raise that amount of money, a so-called mansion tax would have to be introduced not on properties worth more than £2 million, but on properties worth more than £415,000. It may be that the Opposition wish to tax people in that class of income more. Perhaps they think that they are rich, are benefiting too much and need to pay more to the Government. I look forward to their fighting the next election on that basis.
Meanwhile, our coalition partners have said that there should be a mansion tax that applies only to residential property worth more than £2 million. However, we have also heard from the Liberal Democrats—I am not sure whether it came from the federal policy committee or quite how they develop these policies—that it would apply not just to mansions above £2 million, but to property generally above £2 million. It is therefore just as important for somebody who has 10 flats worth £200,000 each to pay the extra tax as somebody who has a so-called mansion worth £2 million. Apparently, they are going to go further and inspect the contents of jewellery boxes and levy taxes on those as well.
Stephen Williams
My hon. Friend is setting various hares flying across the field. Of course, I am not in favour of hunting, but those hares need to be stopped from running. The jewellery tax is complete nonsense. As I have said many times on the record, we are not in favour of a net wealth tax that allows HMRC to look beyond people’s front doors. On the property portfolio, if somebody owned 10 flats, the nine that they did not live in would probably be attracting rental income and so would already be taxed. A mansion tax would apply to somebody’s principal residence if it was worth more than £2 million.
Mark Reckless
I am grateful to my hon. Friend. He speaks about a person’s “principal residence”, so I assume that he would allow them to remain exempt from capital gains tax, notwithstanding the £2 million-plus property that they live in.
Mr Charles Walker (Broxbourne) (Con)
If it is somebody’s principal residence that will be taxed if it is worth more than £2 million, does my hon. Friend think that the threshold will be £4 million for husbands and wives who are living together in a home?
Mark Reckless
Who can tell with these things? My hon. Friend the Member for Bristol West (Stephen Williams) has given assurances, but the policy proposals that I cited have been submitted to the federal policy committee of his party. It is difficult as an outsider to judge how formal and important that is, but there are clearly Liberal Democrats who are talking about a broader tax on wealth and capital, including on jewellery. I think that would be a mistake.
It is unfortunate that the Opposition with this motion and our friends on the Liberal Democrat Benches have become so focused on the arbitrary sum of £2 million. The Government are doing very good things in raising tax from people who own high-value properties but have not been paying their fair share of tax. The Opposition and the Liberal Democrats seem to want to confine their efforts to rein in tax avoidance to those who own houses worth more than £2 million. I and my Conservative colleagues do not understand why we should be concerned about tax avoidance just when a person’s house is worth more than £2 million.
It is hugely welcome that the Government are bringing in the anti-avoidance measure of a 15% tax when homes that are worth more than £2 million are enveloped into a company, which is generally done for the purposes of tax avoidance. However, I am not entirely clear why we are doing that only for homes worth more than £2 million, except for the fact that that is the arbitrary number that has been chosen by the Liberal Democrats for such taxation. [Interruption.] The Opposition are calling out, but they did nothing about this matter for 13 years. It is a huge improvement that this Government are dealing with tax avoidance using properties worth more than £2 million.
Mark Reckless
If I may, I will continue for a while.
There have been consultation papers and draft legislation on how the anti-avoidance measure will be introduced. There will be self-assessment, so there will be no need for the great costs of revaluing properties. I am sure that the Minister is keen to raise more money, so will he say whether there is any hope that the Government will take action against people who avoid the 5% tax on a property that is worth between £1 million and £2 million by putting it into a company?
Perhaps the Minister will assist me on another point. Where people have enveloped houses into a company there will be an annual charge of between 0.3% and 0.7% of the property’s value, which is welcome. Many of the papers have suggested that the purpose of that is to encourage people—or in this case companies—to de-envelope their properties, and the measure will come in only after 1 April 2013. Do the Government expect stamp duty to be paid on those de-enveloping transactions, so that if the property’s value is more than £2 million there will be a 7% charge, or do they expect the sale to be from a controlled company to the person controlling that company, perhaps at a nominal rate that will not attract stamp duty, in order to recoup some of the avoidance they may have made over previous years? I would be interested to hear the Minister’s response to that.
As well as dealing with tax avoidance on properties under £2 million, I would also like non-residents to make a fairer contribution. I was first alerted to the issue by the Chancellor when in opposition. He said that he found the situation extraordinary, and there was a great deal of resentment when he explained how it worked and about the exemption from capital gains tax for non-residents. I do not understand why a resident of this country must pay capital gains tax on the sale of their property—unless it is their principal residence—yet a non-resident is exempt from that tax.
A huge flow of overseas money has come to this country as people fear the break-up of the eurozone and there is a rush to safety, and much of that has gone into property in central London. We say to people who own those homes, “As long as you don’t live there and you stay overseas, we will give you a tax break and you won’t have to pay capital gains tax.” When we go to Mayfair or parts of Belgravia, it sometimes feels as if not many people are about. We are subsidising and giving a tax break to people as long as they do not live in this country, and I have never understood the purpose of that.
Given that the Labour party did nothing about that situation for 13 years, I was pleased that the Budget and Finance Bill contained measures to extend stamp duty to at least some overseas residents. The Government consultation states:
“The Government announced in the Budget that it will extend the Capital Gains Tax (CGT) regime from April 2013 to gains on the disposal of UK residential property by non-resident non-natural persons, such as companies. The measure creates a more equal treatment in the CGT regime between UK residents and non-residents, and brings the UK’s tax policy in line with that of other countries, many of whom already tax non-residents’ gains.”
If we want an equal regime between UK residents and non-residents, why are we extending CGT only to non-resident, non-natural persons—basically companies? Surely we should also extend it to natural persons who are resident overseas. Other countries are doing that; India and China have made moves in that direction, so why not us? Some industrialised countries do not do it, but none of those have such a pool of property that acts as a free piggy bank for overseas residents. We keep their wealth and capital completely secure in central London yet they pay no capital gains tax on it. Could we perhaps consider going further in that area and look at extending capital gains tax to overseas non-residents who are natural persons, rather than concentrating simply on companies?
I welcome what the Government are doing. The Liberal Democrats refer to a mansion tax on properties worth more than £2 million, but the Government are already doing substantial work to obtain a more proper tax take from such properties and we could look at whether that could go further. Obviously, I do not expect answers about what will be in the forthcoming Budget, but in some areas higher tax would be a good thing. I am not generally in favour of that, but where people avoid tax by putting houses into companies, even if they are worth less than £2 million, we should try to get the proper tax. Where overseas residents are doing nicely by securing capital in the UK but paying very little for the privilege, by taxing the capital gains they make on later sales of those houses it would be welcome to see them paying their share and doing a little to help us close the deficit, which, of course, is the great uniting purpose of the coalition.
Sheila Gilmore (Edinburgh East) (Lab)
I am pleased to follow the hon. Member for Rochester and Strood (Mark Reckless) because much of this debate seems to have been spent in an argument between the two coalition partners about how they would define certain types of taxation, and the problem with the amendment is that it has to look two ways at once. The Liberal Democrats have been prepared to break rank on other issues, but this matter is clearly not one of those. Interestingly, it is often on crucial financial or welfare issues that they do not break ranks but keep voting with the Tory-dominated Government, which is regrettable.
These are issues of fairness. We have heard a lot from those on the Government Front Bench and the Liberal Democrats about the increase in the tax threshold, which they suggest is much better than anything else that could have happened—it is better than the 10p tax rate, so we should be satisfied with it. We must remember, however, that for many people that tax threshold was bought at the expense of big losses in things such as tax credits.
For many families, the net effect of such measures means not that they are better off but that they are worse off, and the Liberal Democrats in particular must face up to that. In order to get the tax threshold through —that was clearly part of the coalition agreement—the Liberal Democrats have had to accept some pretty unpalatable things that go with it and, on balance, a lot of low-income households are not particularly grateful for that. The increase in the threshold also has other consequences. It is an expensive way to help the low paid because of the way it goes to everyone, not just the low paid.
Barry Gardiner (Brent North) (Lab)
I am following my hon. Friend closely and she makes a powerful case. Does she agree that many of our constituents feel that the Liberal Democrats are not so much ameliorating the Conservative Government as facilitating it?
Sheila Gilmore
Indeed, and back in the beginning the decision to go into coalition with the Conservatives—rather than, for example, entering into a looser agreement —was to facilitate many of these measures. In crucial votes of the kind I have mentioned, the Liberal Democrats have not broken rank at all. We have heard a lot of warm words, particularly from the Deputy Prime Minister, about things such as the mansion tax, but when we get down to it, they turn out to be only warm words and not something that Liberal Democrat Members are prepared to stand up for in this House and within the coalition.
Fairness is a large part of what we must all be about. Over the past three years, the very poorest people, those on low earnings or those who, for example, are unable to work because of illness and disability, are bearing substantial contributions that we are told cannot be alleviated because our economic recovery will be put at risk. Over the past few weeks we have had heated debates about the bedroom tax. The issue has been raised on numerous occasions and we have been told time and again that it is essential to make those savings to reduce the deficit.
Mel Stride
Given the under-occupancy subsidy—after all, a tax is where one earns money and the state comes and takes it away, but that is not what we are dealing with—does the hon. Lady have no sympathy for the quarter of a million people living in overcrowded accommodation and the 2 million families on the housing waiting list who are desperate for bedrooms that can be freed up through this measure?
Sheila Gilmore
I have great sympathy for people who are overcrowded and for those on the housing waiting list. The majority of people waiting for housing in my city are looking for small houses, so that could also cause certain problems.
Fundamentally, however, this is not a housing issue. If we want to make the issue about housing, we should deal with it as a housing issue and look at ways of encouraging and facilitating moves for people who want them. That is not necessarily happening. People have asked me, “Well, if I did move who would help me pay for this move? Who will reimburse me for the fact that I put my own kitchen into this house? My landlord did not quite get around to it, so when I was working a few years ago I put in that new kitchen. Is somebody now going to reimburse me for that? Are they going to help me with the cost of moving my things? Are they going to help me with the cost of setting up in a new place? I don’t think so.” If a local authority—some do—decided that it wanted to encourage people to move once they had outgrown their homes, it could do so. It might have a cost, but it would have a benefit.
If every single person suffering from the bedroom tax was able to move—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Is this a bedroom tax on mansions? This is an Opposition day motion. I think the hon. Lady is actually holding it in her hands. Has she read it, and, if she has, could she perhaps stick to it?
Sheila Gilmore
The point I was going to make in relation to the matter that was, after all, raised in an intervention is that if everybody moved successfully and reshuffled, there would be no saving, and that is odd because a saving is wanted. It is in that context that people are saying, “What sort of fairness is it that imposes such a great burden of trying to effect economic recovery on those who are least well off? Could we look at other measures to show that we really are all in this together?” That is where the mansion tax comes in.
The mansion tax enables us, in part, to really feel—as a community and as a country—that people are bearing a fair share of the burden. We have heard a lot about tax avoidance and tax evasion. It worries me greatly that the justification given for removing the 50p rate of tax is that people are not paying it. Instead of looking at why people are not paying it, and whether anything could be done to ensure that it was paid, we again hear, “Actually, we’ll just take it away because they aren’t paying it.” That is not a good message to put out.
We have also had reference—in relation to the mansion tax, Mr Deputy Speaker—to not wanting to have such a competitive tax regime that we risk people fleeing our shores. Reference was made to the PricewaterhouseCoopers report about competitive tax rates. There is an interesting coda to that report from some of those who were surveyed. The question then becomes: will the increased competitiveness lead to increased investment in this country, because that is what is really important? Many of the tax people thought it was crucial to turn improved tax relief on capital expenditure into investment in this country, and that it should be the No. 1 priority for the UK. In 2010, the Chancellor abolished capital allowances for investment in his first year in office. Perhaps he would like to look at the whole report, and not just the parts that suit him.
An argument has been made—as it always is with regard to rates and council tax—about people who are asset-rich and income-poor. It is usually raised as a reason for not putting up council tax banding, for example. In the old days, it was used as a reason for not making changes to the rating system. Yes, we can all come up with examples of people who are in that position. Usually, the example is a widow who cannot afford to pay. However, we cannot design our entire system of taxation around that, and there are ways it can be mitigated, as there are with council tax. If someone is genuinely as income poor as has been suggested, they would—at least until the Government decided to change the rules on council tax benefit—have been eligible for assistance with their council tax. There are always ways to help such people.
Earlier, I made what to some people might have seemed an unfair comparison. We were being asked to think about the widow who might struggle with a mansion tax. The 60-year-old widow I referred to is being asked to pay £13 per week out of an income of £71 a week, and the answer is that she should take in a lodger. If we want to be fair to both groups, we have to treat them with equal compassion.
Mr Charles Walker
As the hon. Lady will know, property values vary across the United Kingdom. A £2 million house in London may be the equivalent of a £500,000 or £750,000 house in Edinburgh. For the sake of fairness, does she think that there should be an additional tax on properties worth more than £750,000, so that people really do feel that we are all in it together and that this proposed tax will not just be borne by London and the south-east?
Sheila Gilmore
I am not convinced by that argument. If we were to enter into that, we would have do so in ways that I suspect the hon. Gentleman would not find particularly palatable.
There is nothing inherently wrong in levying a mansion tax. All the arguments made about the 50p tax do not apply to the same extent, because buildings do not disappear and cannot be shuffled around. It is a way of generating income and bringing in more tax revenue so that we can do all the things we want with public services, or, as we suggest, enable low-paid earners to have a 10p tax rate. Just because a mistake was made previously does not mean that we should not again consider a 10p tax.
Alex Cunningham (Stockton North) (Lab)
This is a debate about fairness, as well as a mansion tax. Unemployment in my constituency has been higher every single month compared with the previous year since the coalition Government came to power. There are 4,293 on jobseeker’s allowance, and many more want to work. My local authority, Stockton-on-Tees—we do not have many £2 million mansions—will shed 1,000 jobs before the current massive cuts are fully implemented. Councillors are working hard, but problems persist.
The Cleveland fire authority, which I met on Friday, faces tough decisions that could reduce the number of firefighters in the highest risk area in Europe because of the cuts and a funding formula that does not recognise the risk we face on Teesside. Other hon. Members have mentioned the unfairness of energy prices, train fares and payday loan sharks, and all are unfair, but it is the tax cut for millionaires that sticks in the craw. People see millionaires getting a tax cut at a time when working mothers face a £160 loss in their income. I could go on at much greater length about unfairness.
I hear from a friend of mine up on Tyneside, Ian Wilson, that Champagne Fever won the first race at the Cheltenham festival today. The partner of the horse’s owner earned £44 million in pay and bonuses last year. He is a banker. I am sure he can afford the mansion tax.
Kelvin Hopkins (Luton North) (Lab)
I have some suspicion about anyone who earns £44 million. They may have received £44 million a year, but they did not earn it.
Alex Cunningham
My hon. Friend is much skilled in these debates and I take his point entirely.
Time and again, Government Members have challenged us to make clear what tax changes we would make to rebalance the unfairness in the tax system. I am delighted, therefore, that the Labour Front-Bench team has backed the Lib Dem policy of a mansion tax, while going further by saying that the money could be used to fund a 10p tax rate, which would bring immense benefit to the lowest-paid in our communities. It would be a tremendous boost to many of the lowest-paid people across Teesside and the rest of the country, including all the people who have landed one of these low-paid, part-time jobs that the Government gleefully boast about. Those people are to be praised and helped. Their pay is derisory, yet they want to work hard and be in a job, so we should do something to help them. They already face the prospect of a cut in income from the changes to tax credits from the end of this month, and today the Lib Dems, and others, could join us in helping to correct that unfair tax change and in recognising their commitment to hard work.
We need action to tackle the unfairness in the system, to sort out the big six energy companies, to stop the rip-off rail fares condoned by the Government and to stop the poorest people—the most vulnerable in our society—being ripped off by payday loan companies and loan sharks. Let more of those with the assets, rather than those with none, pay the taxes. There is real poverty in our communities. One illustration is the increasing number of food banks. I will be opening another one on Monday at the New Life church in Billingham in my constituency. We should not have to be doing such things. We should not need food banks. I know that their use increased even when we were in government, but they should not be necessary.If we had a fair income tax system, we would not need food banks.
The mansion tax might mean £5 a week for some families. That would not buy a small glass of wine in a Canary Wharf bar, but it could make a huge difference to the people at the bottom of the earning scales. It would buy enough bread from Asda for a family of four for several days, yet the Tories—and, more shamefully, the Lib Dems—would miss the opportunity to put bread in the mouths of poor families by failing to send a message to the Chancellor that he should adopt this mansion tax in next week’s Budget. I am sure that people who own property worth more than £2 million could afford the extra charge to help the poor. If not, they can move to a less expensive property and dodge the tax. Like my hon. Friend the Member for Edinburgh East (Sheila Gilmore), I see a parallel with the bedroom tax. Thousands of people in my area are facing a cut in their income. The answer, apparently, is to move to a smaller property. Those with homes valued at more than £2 million but who cannot afford a mansion tax should do what the poor have to do and downsize.
I am one of those who supports higher taxes, particularly when people can afford to pay, so I plead guilty as charged. Earlier today, a Minister said that the Government were focused on the causes of poverty, but all the time cash is being shifted from the poorest to the wealthiest, just as the funds available to local authorities in the north of England are being shifted to the richer areas in the south. I said that unemployment was not falling in my constituency, but in some parts of the south it has fallen, albeit owing to part-time, low-paid jobs. The Government’s austerity measures have devastated local authorities in the north-east, and the contractors who build roads and houses and promote and deliver other services are the losers, being forced to pay off skilled workers who want to work and support their families.
Next Wednesday, the Chancellor will deliver his Budget for 2013-14. It is probably his last chance before the general election in 2015 to come up with a set of policies that could make a real difference to people’s lives. The biggest difference he could make would be to abandon his plan A, under which growth has stagnated, unemployment in areas such as mine has grown and deficit and debt reduction has become even harder, but we know he will not do it. He is tied to his ruinous plan A because he has staked his credibility on it—but there is no credibility in it. The Tories still talk about what will happen if the economy turns around, but if we return to growth, will ordinary people suddenly stop feeling the strain of higher costs and less money in their pockets? I very much doubt it.
This ignores the fact that the Chancellor’s plan has already failed on its own terms. Not only is the national debt far higher than it was when he took office, but he has failed, and failed again, on growth. The reason is that without a good level of growth it is difficult to reduce deficits and debt, and as the Chancellor’s own Office for Budget Responsibility pointed out last week, cutting spending and hiking up taxes for ordinary people has slowed and stopped economic growth. As the ratings agency Moody’s pointed out when it downgraded the UK’s credit rating, the country’s lack of growth has made it nearly impossible for the Government to meet the only real goal they set themselves, which was eradicating the structural deficit.
Although a return to growth would be welcome, only strong growth would be enough to make up for the lost years of economic stagnation under this Government and to keep up with the growing and ageing population. Unless economic growth is above population growth, we are all getting poorer. Add to that the fact that the Government are redistributing from the bottom to the top by cutting the top rate of tax for millionaires while capping welfare, increasing VAT and cutting public services, and the scale of their failure becomes all the more apparent.
In Stockton North, we know all too well the impact of the Government’s policies. Long-term unemployment has more than doubled in the past 12 months and youth unemployment remains stubbornly high. Next Wednesday, the Chancellor has a chance to change course, cut spending less quickly and focus on taxing obscene wealth in order to invest in young people. He is very keen to point to the past and the failures—as he sees it—of the Labour Government, but he has been in his role for nearly three years and has failed abysmally. There will be much for a Labour Government to do in 2015 to address the unfairness built into our country by the Conservative-Lib Dem alliance. I have talked about energy, rail fares and housing, and we are already making clear some of the things we would do. Today, Government Members can help us get our fairness agenda under way by backing a mansion tax and helping to fund lower taxes for those who need them most—I hope they will.
Nic Dakin (Scunthorpe) (Lab)
This debate is about tax fairness, with contributions from both sides having focused on that challenge. The year 2013 is not 2008 or 2001; we are in different times and facing different challenges and, therefore, different choices. We are undoubtedly in tough times, in difficult times; we are in a period of austerity, and, as a result, we have different choices to make.
Individuals also have different choices to make. I am being contacted, as I am sure every other right hon. and hon. Member is, by constituents living through these tough times and finding it difficult to make ends meet, owing to rising prices, fuelled by the hike in VAT, which was one of the very first decisions of this Conservative-led Administration. Despite describing it as a tax bombshell in the general election campaign, the Liberal Democrats sadly supported this most regressive of tax increases. Energy bills, fuel bills, food bills and rail fares are all rising, making it difficult for ordinary people and families to make ends meet.
Prices are rising and incomes are falling. Ordinary people are finding it difficult to make ends meet, because incomes are falling and people are losing their jobs or losing hours they want to work or reducing their pay in order to help businesses through these difficult times and to manage the situation together. That is what businesses in my constituency are doing—managing the situation with their work force—which often means reducing hours and pay, but keeping businesses and households afloat.
These are difficult times, with the squeeze on hard-working families worsened by the reduction in tax credit eligibility and the looming spectre of the bedroom tax, to which several right hon. and hon. Members have referred. People are struggling to make ends meet. They are doing their best to keep their heads above water. As my hon. Friend the Member for Stockton North (Alex Cunningham) said, we see the number of food banks expanding and child poverty rising. In 2013, these are things that none of us would wish to see in the United Kingdom—one of the richest countries in the world—on our collective watch. These are tough times in the real world.
Stephen Williams
Yes, in tough times we have to make tough choices. I recognise that some of them are uncomfortable, but does the hon. Gentleman lament the fact that in 2007, when budget revenues were increasing and the economy was perceived to be booming, the previous Labour Government decided to put up taxes on the very poorest?
Nic Dakin
The hon. Gentleman will be alert to the fact that I came into this House only in 2010. We can all look back with hindsight and be critical of decisions made at different times. One of the issues for us all in these difficult times is whether with hindsight on the decisions we are making today people will say we made the right decisions.
Mr Stewart Jackson (Peterborough) (Con)
Why does the hon. Gentleman think that between 1998 and 2010, in a period of sustained economic growth, the welfare bill under the party he supports went from £53 billion to £111 billion? Does that not speak to a failure to tackle endemic issues of welfare dependency, which this Government are addressing?
Sheila Gilmore
Let me say quickly that changes to demographic factors such as age are important in this respect, and 42% of the welfare budget goes on older people and pensions.
Mel Stride
The hon. Gentleman is being exceedingly generous in giving way. As he has said, he is keen to talk about tax fairness. He referred earlier to the iniquity of reducing the top rate of tax for higher earners from 50p in the pound to 45p, which is coming up this April. Does he therefore not accept that, in his terms, the last Labour Government acted totally unfairly in having a top rate of just 40p in the pound right the way through until the last 36 days of his Government?
Nic Dakin
I thank the hon. Gentleman for his intervention, but I have not yet said that—I am going to say it later, so I will come to his point when that is appropriate.
I was describing the difficult choices that hard-working families are having to make to keep their heads above water. The obligation we face—those of us who govern, as well as those on the Opposition Benches—is to make difficult choices about where revenue is raised. It is therefore right and proper to look at ways of taxing people who have significant wealth, such as people who own properties valued at more than £2 million. Therefore, it is right and proper to look at ways of ensuring that that part of our nation makes a contribution in these difficult times.
We know that people of great wealth are sometimes quite imaginative and inventive when it comes to avoiding taxes. I commend the work of Government over the ages to find ways of tackling tax avoidance—this Government have done a number of things that are to be welcomed. Property is obviously difficult to hide. One of the big advantages of a property tax—a mansion tax, as expounded over the years by the Liberal Democrats in particular—is that it is difficult to avoid paying, because property is visually identifiable. As my hon. Friend the Member for Westminster North (Ms Buck) said earlier—she is no longer in her place—60% of high-value properties in London are owned by people from overseas. Indeed, I note the comments of the hon. Member for Rochester and Strood (Mark Reckless) on this issue. He made an intelligent and helpful contribution to the debate.
I am pleased to see the hon. Member for Eastleigh (Mike Thornton) in his place and I very much welcome him to the House. I am sure he will continue to build on his excellent maiden speech and make good contributions to the work of the House. However, prior to the by-election, the Deputy Prime Minister, writing in The Observer, described the Prime Minister as being “stuck in the past” for opposing the mansion tax. The Observer commented that this came
“amid signs that the Liberal Democrats are ready to challenge the Tories more vigorously over key aspects of economic policy.”
Today’s debate is an ideal opportunity for them to do that. The Deputy Prime Minister attacked the Prime Minister in his article, saying that the Conservatives were instinctively against fairer taxation
“even as people on lower incomes feel the pinch”.
He said that the plan for a mansion tax on properties worth more than £2 million, which was being backed by the Labour party, was an idea “whose time has come”, and said it was a “certainty” that some levy on high-value properties would be introduced soon. He continued:
“The Conservatives and opponents of fairer taxes have a choice. They can dig their heels in and remain stuck in the past. Or they can join with the Liberal Democrats and the chorus of voices seeking to make our tax system fair. Far better, surely, to move with the times.”
I very much welcome the Deputy Prime Minister’s rather prophetic contribution to this debate. It puzzles me that the Liberal Democrats who have spoken so far have indicated that they might not support the motion. However, a number of them have been here for a large part of the debate, so I hope they will be persuaded by the power of argument.
It is worth noting that the motion says:
“That this House believes that a mansion tax on properties worth over £2 million, to fund a tax cut for millions of people on middle and low incomes, should be part of a fair tax system; and calls on the Government to bring forward proposals for such a tax at the earliest opportunity.”
As my hon. Friend the Member for Nottingham East (Chris Leslie) said from the Opposition Front Bench, nothing could be simpler. Indeed, this is the sort of simple motion that the Business Secretary called for and that the Deputy Prime Minister called for before the Eastleigh by-election. Indeed, the hon. Member for Bristol West (Stephen Williams) confirmed today that he could have written it himself, so one wonders why the Liberal Democrats cannot support it. One is helped to understand why they cannot do so by reading the rather entertaining amendment, the middle of which
“notes that the part of the Coalition led by the Deputy Prime Minister…advocates a mansion tax on properties worth more than £2 million, as set out in his party’s manifesto, and the part of the Coalition led by the Prime Minister does not advocate a mansion tax”.
We have a pushmi-pullyu Government, pushing in one way and pulling in the other. We have a real pantomime horse, as my hon. Friend the Member for Nottingham East said, from a pantomime Government, but this is not pantomime time. It is a serious time, and a serious time requires serious politics. The Liberal Democrats have an opportunity to stand by their principles—to stand on the side of honest, hard-working people—by coming into the Lobby this afternoon to support our motion, which could have been written by the hon. Member for Bristol West.
Kelvin Hopkins (Luton North) (Lab)
First, I apologise for arriving late for the debate. I had another commitment that was inescapable, but I want to make a contribution to this important discussion. I also congratulate the hon. Member for Eastleigh (Mike Thornton) on his election victory. I heard his maiden speech yesterday, and a very fine speech it was, too. Unfortunately, he left the Chamber—no doubt for a celebratory drink—before I had a chance to congratulate him, as it was my turn to speak. I remember that, on the day of the election, I was knocking on doors for the Labour party, as he would expect. We were delivering leaflets that said that it was a two-horse race. Sadly, Labour was not one of the two horses, but I was slightly comforted by the fact that the Conservative party was not one of them either.
Tax fairness is the subject of this debate, and I very much welcome the moves that our leadership is making in that direction. The decisions on the mansion tax and the 10p rate are important. They might be straws in the wind, but the wind is blowing in the right direction. The mansion tax is perhaps something of a slogan—an eye-catching, or thought-catching, idea—but I believe that property taxes are appropriate in a civilised society. Property has the advantage that it does not move, so we can always find it. As long as we can also find the owner, we can collect the taxes.
Property taxes, as with all taxes, have to be carefully designed. As the hon. Member for Broxbourne (Mr Walker) said, we have to be careful to ensure that such taxes are equitable. If there is inequity between regions, that should be looked at. The taxes have to be carefully designed to ensure that equity. Personally, I would like to go further and talk about a wealth tax. My party used to talk about that some years ago, and I would like to see a more general tax on wealth in order to do something about the grotesque inequalities in our society. Those inequalities have grown enormously during the time I have been active in politics. Had I been told when I was first active in my party in the late ’50s and early ’60s that we would be in this position now, I would not have believed it. We have moved in this direction, however, and it has been a retrograde step.
No doubt some hon. Members will have read a book entitled “The Spirit Level”, which identifies a strong correlation between income inequality and a whole range of social ills. I want to see a society that is much more equal in income terms, in order to reduce those social ills and because it is right in principle. It is interesting to note that that correlation applies in all societies, whatever the income levels. It does not just apply in rich societies or poor ones. In any society, income inequality correlates with greater social ills. I hope that when my party gets into office at the next election—that is when, not if—we will seriously address that question and try to make Britain a much more equal society again.
Tax has to be progressive. We have to tax the better-off, and we should tax the less well-off either very little or not at all. I have to say that I was disappointed in the previous Government. I was one of a small number of Labour Members—I think there were six of us—who voted against the abolition of the 10p rate, and I am delighted that our leadership has now chosen to reverse that decision and to put us back onside when it comes to looking after the less well-off. That decision is very welcome indeed.
Income tax is the most progressive form of tax. It is adjustable and, in the case of most people, it is collectable. Most of us are on PAYE, so there is no problem with collection. There is a problem, however, with collecting taxes from those who try to evade or avoid paying what is rightly due from them. We have heard from the tax justice movement, and from Richard Murphy in particular, an assessment that the tax gap is something like £120 billion. Some suggest that it could be even more than that. Even the Government accept that the figure is in the tens of billions. Small advances have been made in collecting that tax, but if were really to make inroads in that area, we would not need to look at changes in the tax rate because there would be so much more income to enable us to solve our problems.
Sheila Gilmore
We have heard a lot of the language around dealing with tax avoidance and with high-income earners. Does my hon. Friend not find it disappointing that, at almost the first opportunity to take action, the Chancellor went to Europe to argue against a cap on bonuses?
Kelvin Hopkins
Yes, that was absolutely regrettable. I know that my party will commit to introducing a cap on bonuses in our first few days in power after the next election.
Mr Stewart Jackson
The hon. Gentleman always makes a powerful point. Having served on the Public Accounts Committee and on the ongoing inquiries into tax avoidance, I concur with him. I am a defender not of crony capitalism but of popular capitalism. He might not agree with me on that, being slightly on the left. In order to tackle corporate tax avoidance, we need to look at multilateral, bilateral, international and domestic legislation, but would he acknowledge that the previous Government flunked every opportunity to look at those issues over 13 years?
Kelvin Hopkins
We have seen successive Governments going in for what is called light-touch regulation on all fronts. I have never believed in light-touch regulation; I believe in tough regulation. I believe in employing thousands more tax officers to ensure that we collect the taxes. At the beginning of my time in Parliament, I visited our local VAT office, and the inspectors there told me that if they had more tax inspectors, they could collect billions more in tax. Each of those VAT inspectors collected more than five times their salary. I wrote about this to the Chancellor of the Exchequer at the time, and got a letter back from a civil servant saying that the Treasury was trying to reduce costs by reducing staffing levels. That was a completely illogical non sequitur; it was complete nonsense. Reducing the number of tax officers will reduce income by more than the amount of their salaries.
I have made the point many times—and I shall continue to make it—that we need more tax officers and more rigorous regulation. We need more control over what the corporates and the fat cats get away with. The reality is that ordinary working-class people have to pay tax through PAYE. They cannot escape paying their tax, but the corporates and the fat cats can. So, I have agreed with the hon. Member for Peterborough (Mr Jackson) on one or two issues, and I am pleased about that, although we have different philosophical views when it comes to economics.
I want to talk about the deficit problem, because that is what taxation is about. I do not think that we actually have a deficit problem. We do not even have a spending problem. We have a revenue collection problem. That can be addressed either by collecting tax in the way that we do now, or by changing tax rates, as proposed in today’s motion.
Tax collection is a serious problem, and we could make serious changes there, but I want to look back to a time when taxes were more progressive. During the previous Parliament, I made suggestions in this Chamber about the kind of tax changes that I wanted to see. I went beyond what our leadership is now suggesting, although I welcome its proposals. I think we should go further, however. In the 1970s, Denis Healey was Chancellor of the Exchequer. He said that he wanted to
“tax the rich until the pips squeak”.
I cheered him for that, and we did not lose any votes because of his statement. In fact, a lot ordinary working-class people said, “Quite right too! We want those who can afford to pay more to do so. Those who can only afford to pay less should pay less.”
Mel Stride
Was Denis Healey the same Chancellor who had to go cap in hand to the International Monetary Fund in the 1970s because this country was bankrupt?
Kelvin Hopkins
He did indeed go to the IMF, but I think it has now been recognised that that was unnecessary. We did not need to kowtow to the IMF or to impose those strictures. In fact, remarkably, the economy survived quite well during that time, although a mistake was made at the end. I shall not go into that now, Mr Deputy Speaker, because you would call me to order if I did, but it was the reason why things went wrong in 1979. Nevertheless, we survived the 1970s, although the oil price rose by five times in a very short period, which affected the whole world including Britain.
At that time, I was working for the Trades Union Congress and then in the trade union movement. I was an economist, and was lobbying the Government. I was at the TUC General Council when the £6 pay policy was agreed to. That was an historic moment. I thought it amazing that the trade unions had agreed to a cap on pay increases for everyone, but the reason they agreed to it was that it was fair. Everyone would receive a £6 pay rise. For someone with a low income that was a big rise, while for someone with a high income it was not very much, but it was fair, and was seen to be fair across the board.
Other Members are too young to remember this, but in those days the top rate of tax was 83p in the pound, and there was also a 15% surcharge on unearned income. Some of those whose income was entirely unearned, perhaps in property, were paying a 98% rate on the top part of their income. I thought that was pretty fair, but of course we cannot go back to those days.
Sheila Gilmore
My hon. Friend has been revisiting the 1970s. A remarkable statistic is that in 1979, the inequality gap in this country was at its narrowest since the second world war. Perhaps, if we think that reducing inequality is a good thing, something was right at that time.
Kelvin Hopkins
Absolutely. I remember writing papers about the massive increase in inequality that occurred subsequently, during the 1980s, when there were big tax cuts for the rich along with rapidly rising unemployment. That resulted in the inequality for which we have not really been compensated since.
Mark Reckless
The hon. Gentleman has spoken of persuading Labour Front Benchers to adopt his policy on the 10p tax rate. Does he have similar hopes in respect of the 98% rate?
Kelvin Hopkins
No, no. I live in the real world, and I suspect that even my hon. Friends on the Front Bench will not start considering 98% marginal tax rates.
George Bernard Shaw, a witty man but a socialist, who was paying 98%, said, “I consider myself to be a tax collector for the Government, in return for which I receive a 2% premium.” I thought that that was one way of putting it. Shaw was, as I said, a socialist, who no doubt accepted that wealthy people such as himself should pay substantially more than the poor.
I realise that we will not return to that rate, but I will say that during a Budget debate in the last Parliament, on a cold Thursday afternoon when it was raining and there were about six people in the Chamber, I suggested that we could consider a 50% rate for those on £60,000 a year—this was then!—a 60% rate for those on £100,000, and a 70% rate for those on £200,000. That would have taken us nowhere near where we had been in the 1970s, but it would have been a substantial change from where we were then.
I did not get much of a reaction in the Chamber, but the Deputy Speaker spoke to me privately afterwards. I am giving away no secrets, because she is no longer a Member of Parliament. She said, “I do so agree with you. Why do the Government not just do as you say?” Well, if only; but I had said what I thought, and I thought that would be a reasonable move. I suggested the 50% rate for those on £60,000 because at least it would mean Members of Parliament paying a tiny bit extra on the top part of their income. I thought that was right then, and I still think it is right.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I fear that the hon. Gentleman has run out of time. Much as I was enjoying his speech, I must now call Catherine McKinnell.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
It is a pleasure to follow my hon. Friend the Member for Luton North (Kelvin Hopkins)
This has been a good debate on what is really quite a simple premise—that our taxation system should be based on fairness and equity—but there have been some disappointing, although I would also say unsurprising, contributions from Government Members. The Minister’s speech in particular seemed to confirm that the Government have their head in the sand when it comes to their disastrous economic policies and performance. Manufacturing has fallen by 3% since last year, business confidence and investment are plummeting, growth is flatlining, and the economy desperately needs some emergency care. Borrowing is going up, not down, and it is rising to pay the price of the Government’s failure. My hon. Friend the Member for Swansea West (Geraint Davies) described the position very passionately.
The hon. Member for Bristol West (Stephen Williams) complained bitterly that the Opposition had been stealing the Liberal Democrats’ policy. He now admits that it is his policy. In fact, he could have written it himself. I therefore still hope that the Liberal Democrats will go through the Lobbies with us today to support what will be a very measured step towards ensuring that the cost of deficit reduction is borne by those with the broadest shoulders as well as by those who can bear it least but who are, at present, bearing the brunt.
Mel Stride
The hon. Lady referred to the hon. Member for Bristol West (Stephen Williams), who asked a simple question of her Front-Bench team: will a mansion tax be in the next Labour party manifesto, yes or no?
Catherine McKinnell
We gave a simple response to that question—[Interruption.] First, we challenged the Minister to say what would be in the Government’s Budget next week. He will not specify that, so we are not able to announce at this stage what will be in our manifesto in two years’ time. If it is appropriate and a mansion tax will seek to deal with the mess that we anticipate this Government are going to leave this country’s finance in, it is certainly something we will consider.
Mel Stride
Is the hon. Lady seriously suggesting that just because a Minister will not make a serious breach of parliamentary protocol by leaking a Budget in advance she will not inform the House whether her party will have a mansion tax in its next manifesto?
Catherine McKinnell
No. That illustrates why the Government were not giving away what they are going to do in next week’s Budget, but we have said clearly that if we were in government now, we would not be cutting taxes for millionaires. We would be looking to put in place a mansion tax, which the Liberal Democrats would support, and we would be using that to take a measured approach to deficit reduction. Unfortunately, we are not in government. The Chancellor is presiding over a flatlining economy, so we are suggesting a way for him to try to get some growth back into the economy —we hope that the Liberal Democrats will support us today and proposals will come forward.
Jonathan Ashworth (Leicester South) (Lab)
My hon. Friend should take no lessons from Conservative Members, because when they were in opposition they refused to specify—apart from supporting Labour’s spending plans—any of the policies that would be in their 2010 manifesto.
Catherine McKinnell
I thank my hon. Friend for his impassioned slap-down of the hon. Member for Central Devon (Mel Stride). What is clear from today’s contributions is the gap between what Labour Members—and, we hope, Liberal Democrat Members—believe to be the fair and right thing to do, and what many Conservative Members believe.
As I said, the Opposition motion is based on a simple premise: a mansion tax on properties worth more than £2 million should be part of a fair taxation system and used to fund a tax cut for millions of people on middle and low incomes. Let us be honest—I know that Government Members cannot stay in denial of this any longer—those people are finding that their household budgets are seriously squeezed. An increasing number of hard-working families up and down the country are reaching breaking point. A number of hon. Members gave heartfelt accounts of the difficulties that many of their constituents are facing: the rise in the use of food banks; the VAT increase; rising energy and fuel bills, rail fares; and other household budget difficulties.
Catherine McKinnell
I will give way to the hon. Gentleman because he has been mentioned twice.
Stephen Williams
The hon. Lady again mentioned the tax cut for millions of people on middle and low incomes, which is in the Labour motion and indeed the coalition Government’s alternative. Will she confirm that the tax cut in the Labour motion matches up with what the Labour leader said last month when endorsing our policy of a mansion tax and that the tax cut that Labour is talking about is reintroducing the 10p tax rate?
Catherine McKinnell
We have made Labour’s approach clear. We have said that we would like to fund a 10p tax rate for the lowest earners. We have not specified that that is what the Government should do with this; we have said that it should be used to fund a tax cut for those on low and middle incomes. So if the Liberal Democrats want to support us in the Lobby, they can then pressure the Government to use that money in any way they see fit.
So let me remind the House of the context of today’s debate. Many of our constituents are struggling to make ends meet, due to a combination of under-employment, stagnating wages, rising food, fuel and child care costs, and of course the Government’s hike on VAT. Our constituents will be further hit by a £6.7 billion cut in working-age benefits and tax credits over the next four years. [Interruption.] The Under-Secretary of State for Communities and Local Government, the right hon. Member for Bath (Mr Foster)—the Liberal Democrat Minister—is groaning but that is the reality for many families up and down the country. At the same time, we read of hundreds of bankers at different financial institutions, including one owned by the state, earning more than £1 million per year. We have a Chancellor seeking but failing to use his ever-diminishing influence in Europe to fight against proposals to limit bankers’ bonuses to “just a year’s salary”. We have a coalition Government who will give the 13,000 people in this country earning more than £1 million a year a tax cut of £100,000 next month. No wonder people are angry and no wonder our economy is not growing when ordinary people cannot afford to spend and invest. We—or, more accurately, the Prime Minister—heard only last week from the OBR that fiscal consolidation measures have reduced economic growth over the past couple of years.
Stewart Hosie
The hon. Lady is absolutely right that the tax cut for millionaires is dreadfully unfair, but can she explain why, when the Labour party had the chance, it failed to oppose the tax cut for millionaires?
Catherine McKinnell
These arguments have been rehearsed many times and we have made clear our absolute opposition to cutting the top rate of tax at this time while slapping charges on the poorest in society. No wonder the hon. Member for Harlow (Robert Halfon) has spoken of the Government’s need to neutralise claims that they cut taxes for the rich.
Let us look at the Opposition motion, because I think the Liberal Democrats are dancing on the head of a pin when they say that they cannot support it. It calls for the introduction of a charge on properties worth more than £2 million, a mansion tax that the Liberal Democrats have estimated would raise £2 billion. We say that it could be used to fund a 10p tax band of up to £1,000, benefiting 25 million basic rate taxpayers to the tune of £100. We believe that Liberal Democrat Members should put aside their loyalty to the Conservatives and vote in favour of a principle—the principle of tax fairness at a time when so little of it is in evidence from this Government.
How could the Liberal Democrats do otherwise? Only last month, they made the introduction of a mansion tax the centrepiece of their Eastleigh by-election campaign. Recent media appearances have certainly suggested that they will support the principle, with the Business Secretary declaring that if the Opposition motion
“is purely a statement of support for the principle of a mansion tax I’m sure my colleagues would want to support it.”
Asked again at the weekend which part of the Opposition motion he disagreed with, the Liberal Democrat president, the hon. Member for Westmorland and Lonsdale (Tim Farron), replied, “None of it.” The former leader, the right hon. Lord Ashdown, declared that it would be “weird” if the Liberal Democrats voted against it. He is not the first person to call Liberal Democrats weird, but they have the opportunity to put that right today and to get on the road to normality by supporting their own policy.
Only yesterday, the hon. Member for Bristol West—I shall mention him one last time—said of the Opposition motion,
“I could have written it myself”,
yet today he complains that we have stolen his party’s policy. If such childishness gets in the way of the Liberal Democrats supporting their own policy in the Lobby, members of the public will be baffled and extremely disappointed.
Catherine McKinnell
I would give way, but I am running out of time.
We think that the Opposition motion presents those of us who believe in a fair and equitable taxation system with the opportunity to demonstrate that fact by voting in favour of it today. Will this be yet another example of the Liberal Democrats saying one thing to the electorate and doing something very different in government? What about their partners in crime—I am sorry, Mr Deputy Speaker, I mean partners in government—the Conservatives? We know that an increasing number of Conservative Members fear that they appear out of touch and that some, most notably the hon. Members for Harlow, for Camborne and Redruth (George Eustice), for Aberconwy (Guto Bebb) and for Cleethorpes (Martin Vickers), all of whom are noticeably absent from the Chamber, have argued that a way to counter that impression would be to reintroduce a 10p tax rate.
I have argued before that the best way to neutralise the impression that the Government are out of touch and only cut taxes for the rich is to stop cutting taxes for the rich, such as the millionaires’ tax cut that will take effect from April. I also acknowledge that it was a mistake to get rid of the 10p rate in 2007, although it enabled the 22p rate to be reduced to the 20p rate that is still in place today.
We believe that the best way to fund a new 10p tax band is through the mansion tax. Many right hon. and hon. Members have expressed concerns about how the mansion tax would work in practice, about how properties would be valued and about how people who live in £2 million properties but are apparently cash poor would pay. We have also heard, however, that the Treasury is drawing up detailed proposals for an annual charge on high-value residential properties owned by companies, partnerships or investment vehicles. It demonstrates that our plans—Liberal Democrat and Labour plans—for a mansion tax, an annual charge on high-value residential properties owned by private individuals, are entirely feasible, entirely realistic and entirely possible.
Our motion calls on the Government to bring forward proposals for a mansion tax, so that they can be considered in more detail by the House. The Opposition motion is simply expressed; it responds to Liberal Democrat concerns, and we still hope they will support us by voting for it. It calls for a tax on individuals fortunate enough to live in a high-value residential property, to support a tax cut for millions of hard-working low and middle-income families up and down the country at a time when they desperately need our support to put money back into household pockets and demand back into the economy. The motion provides all Members with the opportunity to demonstrate their support for a tax system based on fairness and equity, and I commend it to the House.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
I begin by thanking those Members who gave a welcome to my hon. Friend the Member for Eastleigh (Mike Thornton). I join them by adding my own welcome.
The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) is absolutely right. The debate may have been robust, but it was genuinely thoughtful. It is thus a great disappointment that when she closed the debate and the hon. Member for Nottingham East (Chris Leslie) opened it, they did not take the opportunity to apologise to the country for the Labour Government’s role in creating the economic difficulties in which we find ourselves. The hon. Member for Swansea West (Geraint Davies) was right too. On the Government Benches and in the country at large, we say “What a fine mess you’ve left us.”
I congratulate the Opposition on their proposal, because one good thing happened today: after three years of opposing our revenue-raising policies, three years of opposing our cuts and three years of failing to propose a single solution for the economic mess they left us, I am glad that in the Chamber today they have at last put forward an actual concrete policy. As we heard, it is a Liberal Democrat policy, but I am delighted that Labour Members now support our mansion tax. I shall be even more delighted when it takes pride of place in my party’s election manifesto in 2015—something I can say but they apparently cannot.
Mr Foster
Let me make a little progress and I will happily give way.
We have been perfectly up front: this is a matter on which the two parties in the coalition disagree. As my hon. Friend the Member for Bristol West (Stephen Williams) made clear in an excellent speech, the Conservatives have always been vocal in their opposition to such a scheme and Liberal Democrats have always been vocal in our support for it.
Catherine McKinnell
May I put a suggestion to the Minister? If Liberal Democrat Members support the motion and the Government bring forward proposals, they would not need to include the scheme in their next manifesto.
Mr Foster
I may return to the hon. Lady’s comments in a second.
We are supportive of the motion because we agree with Adam Smith, the father of free market economics. He supported higher taxes on property to reduce taxes on more industrious endeavours. We think it unfair that the richest people in the country pay the same council tax on their multi-million pound palaces as a family in a three-bedroom house in the suburbs. We agree on that.
Both parties in the coalition have been open about our disagreement, but the Opposition’s attempt to drive a wedge between us is infantile. Both parties know where we stand, and the public are clear about it too. The hon. Lady has to remember that all coalition tax policy is made by agreement between the Conservatives and the Liberal Democrats, and the mansion tax is an issue on which we simply could not agree. However much Liberal Democrats want a mansion tax, we know that the country’s economic future would be in severe jeopardy if the coalition fell apart on this issue. The country’s future is far too important for us to engage in the Opposition’s petty political games.
Chris Leslie
On the point about putting the coalition first, to save us a great deal of time and effort, can the Minister tell us if there is any circumstance in which he envisages that he could ever support any motion tabled by the Opposition?
Mr Foster
As I said, this is the first time in three years that we have had any positive proposal from the Opposition in the Chamber. If the hon. Gentleman comes forward with further proposals to help deal with the economic mess that his Government left us, we will seriously consider them.
Mr Foster
No, I will not give way to the hon. Lady.
It is worth reminding ourselves that although we as Liberal Democrats accept that a mansion tax would be a further step in creating greater fairness, by being part of the coalition with our Conservative colleagues we have made huge strides towards building a fairer society and a stronger economy. I agree with the hon. Members for Edinburgh East (Sheila Gilmore) and for Scunthorpe (Nic Dakin), who said that creating fairness is vital. Our achievements in doing so are in marked contrast to those of the Labour Government.
Mr Foster
No.
The previous Government introduced the fuel duty escalator, hitting the pockets of families and businesses, whereas we have taken steps that will make pump prices 13p per litre lower than they would have been under Labour. They abolished the 10p tax rate, hitting 800,000 single earners, whereas we are taking 2.2 million people out of paying tax altogether. Whereas in 2000 they gave pensioners a miserable 75p a week pension increase, last year we gave the biggest ever increase of £5.30 a week.
Mr Dave Watts (St Helens North) (Lab)
Will the Minister explain why he thinks it is fair that at the same time as they introduce the bedroom tax, the Government find money to give the richest people in the country a tax break?
Mr Foster
We are not here to discuss the under-occupancy arrangements. Let me remind the hon. Gentleman, who has breezed into the Chamber, that we have had discussions on many occasions about this. I am aware of 300,000-odd families with two or more spare bedrooms and 250,000 families who are overcrowded, so it is right and proper that we take action to try to help them out, and that is what we are doing. I am more than happy to talk about this Government’s record on fairness.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Davies, you have spoken. It is up to the Minister when he gives way. It is not for you to keep reminding him, saying that he should give way.
Mr Foster
Thank you, Mr Deputy Speaker.
It is worth repeating yet again that the Opposition put the 50p tax rate in place for a whopping 36 out of their 4,758 days in power. As my hon. Friend the Exchequer Secretary made clear, a recent review showed that the additional rate is a distortive and economically inefficient way of raising revenue. So we have decided—sensibly, in my view—that it is neither efficient nor fair to maintain a tax rate that is not effective at raising revenue from high earners and risks damaging growth. That is why we have introduced a top rate of 45p, which will be higher than the top rate that existed under Labour for all but 36 days of their 13 years in office.
It is not true to suggest, as some have done, that the Government are not requiring the wealthiest to pay more. We have continually increased the tax contribution of the richest since the election. The 2010 Budget introduced a higher rate of capital gains tax; the 2011 Budget tackled avoidance through disguised remuneration; and the 2012 Budget increased stamp duty land tax to 7% on residential properties costing £2 million or more. We are also the Government who took action in the autumn statement to reduce the cost of pensions tax relief, and we introduced a 15% rate of stamp duty for properties owned through a corporate vehicle. I am grateful to my hon. Friend the Member for Rochester and Strood (Mark Reckless) for a number of suggestions of further measures that we can take in this area, which we will certainly consider, but I can confirm that if a property is taken out of a corporate envelope, SDLT will be paid in full.
As a result of the Government’s actions, the richest pay more tax on capital gains, more stamp duty on their homes, more tax on their pension contributions, and more on income tax. As the Institute for Fiscal Studies has confirmed, the rich are now paying a higher percentage of income tax than at any time under the previous Administration. Given our measures to boost compliance, more of the tax owed will be collected. I thank the hon. Member for Scunthorpe for his praise for our work in this area.
As well as making the wealthiest in society pay more, we are asking less of the poorest in this country. As the hon. Gentleman said, we are helping the hard-working families in this country. From April 2013, the income tax personal allowance will increase yet again by £1,335 in cash terms to £9,440. This change will benefit 24 million individuals, lift an additional 1.1 million out of income tax altogether, and provide a real-terms gain of £223 a year to basic rate taxpayers.
In total, the coalition’s actions since we came into office mean that 2.2 million people under the age of 65 will have moved out of paying income tax altogether, and there is a tax cut of £600 for more than 20 million people. We are proud of the way in which we are putting fairness firmly on the agenda. As the Secretary of State for Business, Innovation and Skills said earlier today, parties should be judged on what they deliver on fairer taxes, not on what they say about them. It is deeds not words.
The Labour party when in office failed to back our mansion tax proposals, and now we are not even clear whether it is willing to include a mansion tax in its 2015 manifesto. The Liberal Democrats have made it clear that we are in favour of such a scheme, but I urge my colleagues to support the Government’s amendment, which reiterates our party’s support for the mansion tax without putting the coalition Government at risk. It is the country’s economy and people that need a strong, co-operative and working Government, which this coalition Government are providing. The do not need a Labour party playing the exact kind of cynical political games that the public so revile. The hon. Member for Ashfield (Gloria De Piero) said that the public disliked infantile Punch and Judy politics. So do I, and that is why I urge the House to support the amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
On a point of order, Mr Deputy Speaker. I wonder whether you have had any indication from the Government on whether they plan to make an oral statement on the subject of the bedroom tax. Yesterday, in questions to the Department for Work and Pensions, Ministers assured us that the scheme was running smoothly, yet this afternoon we have another rushed U-turn that offers no money and no protection for disabled children. Right hon. and hon. Members would have welcomed the opportunity to put those points directly to the Secretary of State, and expose today’s announcement for the shallow nonsense that it is.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I can tell the right hon. Gentleman that the Chair has received no notification that there will be a statement before the House. I am sure that those on the Treasury Bench and other Secretaries of State will have heard the comments that have been made, and the right hon. Gentleman is well aware that there are other avenues he may wish to pursue.
Apprenticeships
(11 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 237 / Noes: 292 - Question accordingly negatived.
Mr Gordon Marsden (Blackpool South) (Lab)
I beg to move,
That this House notes National Apprenticeship Week, established by the previous Government, and held from 11 to 15 March 2013, which celebrates the value of apprenticeships, particularly in providing opportunities and developing skills; further notes the need to increase apprenticeship places; and therefore resolves that the Government uses the billions of pounds committed to public procurement to boost apprenticeships by requiring firms winning public contracts worth over £1 million to offer apprenticeship opportunities, implementing the recommendation of the Fifth Report of the Business, Innovation and Skills Committee, HC 83, on Apprenticeships.
It is a pleasure and honour for me as shadow Minister responsible for apprenticeships to open this debate in national apprenticeship week. Back in 2008, my right hon. Friend the Member for Southampton, Itchen (Mr Denham), then the Secretary of State for Innovation, Universities and Skills, launched apprenticeship week as a vehicle to promote the real and valuable opportunities that apprenticeships offer. It is a tribute to him that national apprenticeship week has since become a central part of the employment and skills calendar.
This is a week in which excellence and aspiration in learning, and acquiring skills and trades in areas as diverse as engineering, construction, the hospitality industry, joinery, accountancy, and health and social care, are showcased and celebrated. To see so many MPs from all sides of the House getting involved and celebrating apprenticeship achievements in their constituencies is a great thing. We must remember, however, that apprenticeships did not emerge from a blank canvas in 2010, as some Government Members have occasionally implied.
When Labour came to government in 1997 the apprenticeship programme was floundering. We resurrected that historic badge of excellence and made it fit for purpose in the 21st century. Under the previous Labour Government, the number of apprenticeships more than quadrupled. National apprenticeship week was launched to give expanded life chances and skills a focus for recognition and celebration, and the Labour Government also set up the National Apprenticeship Service to drive the project all year round.
Mr Stewart Jackson (Peterborough) (Con)
If it was all going so swimmingly under the previous Government, why in a period of continued economic growth did youth unemployment double and the number of those not in education, employment or training increase year on year?
Mr Marsden
The hon. Gentleman was obviously not listening to what I said because the Labour Government quadrupled the number of apprenticeships in that period. Let us be mature and grown-up about this: no Government of any persuasion have an exact monopoly of success or failure in any particular area. What matters are the intentions that are brought to the party, and our intentions were very strong and solid.
Mark Tami (Alyn and Deeside) (Lab)
Does my hon. Friend agree that we can all learn a lot from companies such as Airbus, which has trained thousands of apprentices over 30 years at both Broughton and Filton? Importantly, it has trained people in bad economic years as well as good. We need a consistent approach to apprenticeships, not the stop-start approach that we have seen over many years.
Mr Marsden
I entirely agree with my hon. Friend. Indeed, I would go further and say that a number of large companies—BAE Systems, for example, where I was last Thursday—have led the way on this issue including with their supply chain. It remains to be seen whether the Government take that message across a broader palette.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
My hon. Friend and I worked together on skills and apprenticeships for many years and, like me, he will know that the tragedy of our economy is that only about 10% of employers take on apprentices. If we could get the other 90% to take on an apprentice, we could really do something for young people in this country.
Mr Marsden
I had the enormous pleasure of serving under my hon. Friend when he was the Chair of the Children, Schools and Families Committee, and he has probably taught me as much as anyone in this House on this subject. He is absolutely right and he hits the nail on the head: a step-change in the number of apprenticeships is central. It is the focus of our motion.
We resurrected that historic badge of excellence, but this is not a matter for party politics. When the hon. Member for South Holland and The Deepings (Mr Hayes) was the Minister with responsibility for apprenticeships, he spoke movingly about what he had learned about the value of the skills of hand and eye from his father. I, too, saw those skills through the working life of my father as an engineer. When he was apprenticed at the age of 14 to the engineering company Crossley Brothers in Manchester just before the second world war, my grandfather told him, “Now Crossleys has taken you on, you will have a job for life.”
Today’s apprentices often face very different challenges and prospects, because many young people can expect to go through half a dozen job or career changes in their lifetime, some probably not even thought of when they start their apprenticeship. That means it is critical to get the mix of bespoke and portable skills right at the apprenticeship stage; and that the range, content and quality remain relevant to the businesses and local economies in which they are embedded. These are challenging issues that demand a co-ordinated and hands-on approach from government, as well as from businesses and educators.
Helen Goodman (Bishop Auckland) (Lab)
On what can be done at a local level to celebrate apprenticeships week, I am having a jobs and apprenticeships fair in Bishop Auckland on Friday. I expect 100 jobs and apprenticeships to be available to young people. Does my hon. Friend agree that the background need is to get the economy moving? Unemployment in my constituency is still rising, and seven people are looking at every vacancy.
Mr Marsden
My hon. Friend is absolutely right. Jobs and skills fairs give a sense of buzz and direction, but we need to look at the position of regional economies. That is a particular problem in the north-east, not least since the excellent lead given by One North East is no longer available.
Mr Marsden
I will make a bit more progress and then let the hon. Gentleman come in if he wishes.
As MPs, we rightly celebrate the individual successes we observe. I have seen it myself in the development of the 19-year-old women whom I took on in my office as an apprentice. She has come from the excellent Blackpool and Fylde college and is doing an NVQ3. I know that sense of engagement is shared by other parliamentary colleagues who have taken on apprentices, or who are in the process of doing so.
In my work inside and outside Westminster in the past year, I have seen the strength of diversity and quality in apprenticeships in the skillset schemes at the BBC’s MediaCity site and the food and hospitality apprentice achievements that People 1st celebrated here. Last week, I visited Hackney community college to hear about the new apprenticeship opportunities it is creating as a result of the Tech City developments, and in Lancashire, as I said, I talked to apprentices at BAE Systems’s engineering school, and at the defence company MBDA just outside Bolton. This Thursday, I will be handing out apprenticeships awards at—what better place? —Blackpool tower. Those experiences have reinforced—for me and, I think, for all of us—the need for a broad range of apprenticeship pathways that cover not just traditional manufacturing sectors, but professional and service sectors. The common denominator has to be quality.
Despite that good work—and that of other initiatives; we welcome the extra apprenticeships that Barclays has just announced—it cannot be the substitute for systematic broader government action. The take-up of apprenticeships remains challenging and, in some categories, dire. We have already seen the number of 16-to18-year-old apprenticeship starts fall by 9,200 in the first three months between August and October 2012, in comparison with the same period in 2011.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Is my hon. Friend as shocked as I am to discover that the Department for Business, Innovation and Skills, with a staff of approximately 2,500, appears to employ only one apprentice under the age of 19? Would today not be a good day for the Minister to make an announcement that he will put that right, put his own house in order and set an example for everybody else?
Mr Marsden
We should never tempt providence, but I am sure the Minister has heard my hon. Friend’s remark, which I shall return to later.
The final figures for 2011-12 also show that the number of 16-to-18 apprenticeships has dropped in four of England’s nine regions, including by more than 2,000 in my own north-west region. The growth figures for other age groups—not least 19 to 24-year-olds, which is a crucial age when many, for whatever reason, have missed out first time around—are modest.
Mr Sheerman
I take a bipartisan approach to these things, but is not one worry the fact that it is difficult for people promoting apprenticeships to get into schools, many of which resist apprenticeships because they want to keep bums on seats in return for the financial reward? That is very common.
Mr Marsden
Like my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe), my hon. Friend the Member for Huddersfield (Mr Sheerman) is telepathic, because I shall be returning to that point later.
The Government are fond of saying that they have created more than 500,000 apprenticeships, but less fond of saying that in axing Train to Gain they also axed more than 500,000 training places. Many of these additional apprenticeships are merely relabelled and transferred in-work provision from Train to Gain, as Doug Richard, the entrepreneur behind the Government’s commissioned report, confirmed last week and as has been shown by detailed analysis from the sector publication, FE Week, which the Skills Minister and I read with great relish every week.
Government statistics in the Richard review have borne that out. The proportion of apprenticeships that are in-work apprenticeships rose to 70% in 2012 in comparison with 48% in 2007, so the Government’s figure of 500,000 hangs entirely on the huge growth in post-25 apprenticeships. If significant numbers of these fall away as a result of an adverse reaction to the Government’s controversial FE loans system, the fragility of their much-trumpeted figure of 500,000 will be rapidly exposed.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
Will my hon. Friend join me in congratulating Willmott Dixon, a developer and construction company in my constituency, on having just invested £1 million in a new apprenticeships college? It has already had the privilege of being visited by the shadow Secretary of State, who has seen the good work it does. Will he support that?
Mr Marsden
I will indeed support what my hon. Friend has said, and would add that Willmott Dixon, among other companies, has had some interesting things to say about the role that social value can play in apprenticeships and procurement.
Addressing not just fall-out at post-24, but the ability to fall in at 16 to 18 and 19 to 24 should be a crucial part of any Government apprenticeships strategy. That means exposing them to the world of work and work experience at a much earlier age; giving space and dedicated funding in the curriculum for independent, face-to-face career guidance on apprenticeships; and making space for vital work-related learning skills, as the Federation of Small Businesses said in its publication, “The Apprenticeship Journey”.
The Prime Minister said yesterday in Buckinghamshire that he wanted to make apprenticeships a first-choice career move, so perhaps he could have a word with the Secretary of State for Education, who appropriately is in his place, but who has studiously ignored and devalued the arguments for vocational careers advice made by business groups and, indeed, by his own small and medium-sized enterprises apprenticeships adviser, Jason Holt, in his report last August.
No wonder businesses are dismayed. When the Government removed compulsory work-related learning from the key stage 4 curriculum in 2012, the FSB said:
“We remain deeply concerned that without it many schools may fail to teach these vital skills.”
The Prime Minister also said yesterday rather airily that he wanted Britain to be more like Germany in its attitude to apprenticeships, so perhaps he, too, should listen to Ofsted’s chief inspector, Sir Michael Wilshaw, who has come back from looking at Germany’s apprenticeships system and told FE Week this week that Germany’s “very effective” apprenticeships system is supported
“with a greater focus on vocational training”
in schools “earlier on.” If we want the broadest spectrum of young people, including those not in education, employment or training, to be able to take up apprenticeships, we must give them a fair chance to get there. We and others have been urging for months the need for a proper pre-training route.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
My hon. Friend is making a strong speech. Perhaps the Prime Minister could take some lessons from Wales. I am proud to have ACT Training in my constituency, which is one of Wales’s largest apprenticeship training providers, training 5,000 apprentices last year, with a 90% completion rate. Will he join me in welcoming the announcement this afternoon by the Deputy Minister for Skills in the Welsh Labour Government? He has announced an additional £22 million of support over the next two years for apprenticeships, which is quite a contrast to the approach of the Government in this place.
Mr Marsden
That support is entirely welcome. Indeed, there might be more occasions when the current Government should look at examples from the devolved nations.
Ever since the Government admitted the need to guarantee that quality apprenticeships would have to be 12 months or longer, we have been pushing these points. That is the only way to ensure that social mobility and apprenticeship expansion can go hand in hand. However, the Government have dithered and dallied, and precious opportunities have been squandered for many young people. The traineeship consultation, which is welcome, was launched only at the beginning of this year, but now the Government have to spell out in detail how they will avoid it becoming a rerun of the youth training scheme of the 1980s, which merely recycled young people off the jobless figures.
The Labour party recognises, therefore, that we need a step change to expand apprenticeship opportunities for young people and to support smaller businesses to take part. That is why, this time last year in Blackpool, I laid out a series of apprenticeship initiatives from our Front-Bench team to do just that. They include Government expansion and encouragement of group training associations to aid smaller businesses and the promotion of best practice in buddying, with larger companies working with smaller ones in their supply chains to create apprenticeships, as well as a larger direct role for business and industry in creating and setting apprenticeship frameworks and direct involvement in careers advice and guidance.
Andrew Percy
I will not plug my jobs fair—which is taking place at 9.30 this Friday at the Vale of Ancholme school in Brigg—but one thing the shadow Minister has not mentioned is the important role of local government in supporting apprenticeships. I wonder whether he has had the opportunity to look at Conservative-run North Lincolnshire council, which created 60 apprenticeships last year and has this year put aside £250,000 to support local businesses in employing 120 apprentices.
Mr Marsden
I am glad that the hon. Gentleman has made what is not just a detailed point, but an important general point: that these things cannot simply be delivered and micro-managed in Whitehall. They need to be taken forward at the local and sub-regional level. He gave an example, and I welcome apprenticeships coming from councils of whatever political persuasion. I shall have a little more to say about that later.
Mr Marsden
I will take one more intervention from my hon. Friend and then I must make progress.
Mr Sheerman
Again, I am not trying to make party political points, but have we not all found that if we are to have apprenticeship champions, we have to locate them somewhere? Whether they are in local enterprise partnerships, chambers of commerce, local authorities, colleges or anywhere else, we have to have champions if we are to get the number of apprenticeships this country deserves.
Mr Marsden
My hon. Friend is quite right. When different places choose different champions in different sectors, the secret is getting them to co-operate with each other.
Last year we laid out all the measures I have set out in this debate, but the centrepiece is something that the Government could move to tomorrow if they wanted to: using the tens or even hundreds of billions of pounds of public procurement that come from Government contracts to create apprenticeships. That is the core of today’s motion. As far back as August 2011, we set out our stall, when the then shadow Business Secretary, my right hon. Friend the Member for Southampton, Itchen, announced that we would require all companies bidding for Government contracts above £1 million to put in place a scheme to create apprenticeships before they could get them. That is an initiative to do much of the heavy lifting that we need to provide the step change, the exponential shift, in the sheer volume of apprenticeship numbers. Since then, his successor, my hon. Friend the Member for Streatham (Mr Umunna), has taken that proposal forward on every possible occasion, not only on the ground of the economic necessity for growth but as an ethical imperative. That is why, last week at the EEF, he outlined our position, which is that it is simply unacceptable that two thirds of larger employers are still not offering apprenticeships.
It was my right hon. Friend the Member for Southampton, Itchen who laid out the direction of travel for this initiative when we were in government. Along with my hon. Friend the Member for Wallasey (Ms Eagle), he launched the official Office of Government Commerce guidance encouraging this approach. That Labour Government then proceeded with major projects such as the Kickstart housing scheme, launched by my right hon. Friend the Member for Wentworth and Dearne (John Healey), and Building Schools for the Future, as well as working with the contractors on the Olympic park, which resulted in the creation of thousands of new apprenticeship opportunities.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is making an important point. We have learned this week that young people in areas such as Tameside are now among those with the fewest opportunities to access the jobs market, yet it was Labour-controlled Tameside council, working with a Labour Government, that ensured that the contractors for schemes such as Building Schools for the Future took on apprenticeships as part of the Tameside Works First initiative.
Mr Marsden
My hon. Friend is absolutely right. As a native Mancunian, I am well aware that over the past 20 to 25 years, the local councils in the Greater Manchester area have done splendid work in this respect.
I was talking about Building Schools for the Future and the contractors on the Olympic park. It is also sometimes forgotten that it was our party, in government, that ensured that skills and apprenticeships would be an integral part of the Crossrail project that we had announced. It was our party that put in place the tunnelling academy and laid the framework for a procurement strategy based on taking apprentices from the local London boroughs.
That is what we believe, but more than that, it is what a raft of other bodies believe as well. Most recently and significantly, the cross-party Business, Innovation and Skills Committee ended its 11-month inquiry into apprenticeships and, in its recent report, called on the Government to adopt such a scheme. The Committee argued that the Government should aim for the benchmark used by many leading businesses in the construction sector, including Kier, Wilmott Dixon and Laing, whereby for every £1 million spent by Government Departments and their agencies on public procurement, at least one new apprenticeship place should be created.
That sensible approach has already attracted many supporters. The Union of Construction, Allied Trades and Technicians, the Association of Colleges, the National Union of Students, the North-East Federation of Small Businesses, the North-East chamber of commerce and many others endorsed the approach when it was set out by my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) in her excellent private Member’s Bill last year. During the Select Committee sessions, organisations such as JTL and unionlearn also backed the procurement concept.
Despite all that, this Government continue to refuse to act. Their response to the Select Committee report cited rather vague unintended negative consequences as their excuse for ducking the issue. They said that they were
“currently working on guidance to encourage best practice amongst local authorities in relation to Apprenticeship conditions in construction contracts”.
Why has it taken them more than two and a half years to get to this point? After all, does not such a starting point already exist in the form of the OGC guidance that I referred to earlier? Why are the Government reinventing the wheel?
It has also been suggested that civil servants fear that they could fall foul of EU procurement rules. The Minister’s illustrious predecessor, the hon. Member for South Holland and The Deepings, ruefully admitted to the Select Committee last May that he felt that the Government could be more creative in their use of procurement. That position has also been confirmed by the House of Commons Library, which points out that the European Commission has a guidance note entitled “Buying Social: a Guide to Taking Account of Social Considerations in Public Procurement.” That guidance suggests that promoting “employment opportunities”, “decent work” and access to training can be taken into account. Those guidelines are surely compatible with promoting apprenticeships.
Rehman Chishti
Will the shadow Minister join me in paying tribute to Medway council, which has managed to obtain money from Europe to fund up to 500 apprenticeships under the success scheme?
Mr Marsden
I am delighted to do so. That is another indication that Conservatives down in Kent seem to do things rather differently from Conservatives in Government.
As I was saying, could it be—perish the thought—that some Ministers are simply using European Union law as a convenient smokescreen to disguise their reluctance to support this kind of active, intelligent Government initiative? If that is the case, what do they think that our French or German counterparts would do? Do they think that they would allow arcane, untested notions of EU law to prevent them from expanding apprenticeships, given the dire unemployment rates among young people that exist under this Government? Why, if that is the case, does one of the Government’s own Departments claim to be following an approach much like ours?
Since July 2011, the Department for Work and Pensions has been operating its apprenticeships and skills requirement contract schedule, which requires:
“The Contractor shall and shall procure that its Sub-contractors shall take all reasonable steps to ensure that 5% of their employees are on a formal apprenticeship programme.”
The apprenticeships Minister himself praised the DWP initiative in a recent House of Commons response. That is all well and good, but if the initiative is such a good idea, why have the Government not extended it to other Departments? Why has the Department for Business, Innovation and Skills, as the lead Department for apprenticeships, not taken matters any further in the 20 months since the launch of that initiative? Why have the Cabinet Office, the Deputy Prime Minister, and even the occupants of No. 10—who waxed eloquent yesterday about the value of apprenticeships being the new norm—done nothing? That is not exactly the equivalent of Churchill’s “action this day”. Are this Government so supine, so conflicted and so hung up that they prefer taking away people’s employment rights to creating career opportunities for them? Does it not boil down to the resistance of many, if not all, in the Tory-led coalition to any active, intelligent role for Government which would require them to strain every sinew to promote economic growth and expand young people’s life chances?
The Government cannot and should not micro-manage, but they must expand apprenticeship places more vigorously and systematically than they are at present. That is central to what we need to achieve as a country so that we can compete and thrive in the 21st-century world. It is no wonder that my right hon. Friend the Leader of the Opposition made the expansion of apprenticeships with employers and other stakeholders, and the introduction of the “tech bacc”, the central focus in his speech to the Labour party conference last year. He has also spelt out the way in which a future Labour Government could apply the same criterion to major infrastructure projects such as High Speed 2, with the objective of creating at least 33,000 additional apprenticeships.
We can see how the same formula could be applied directly elsewhere, and in other Departments beside the DWP. For example, there are four existing road projects announced by the Department for Transport—work on the A160 and A180 in Immingham, on the M6 in the west midlands, on the M3 in Surrey, and on the M275 in Portsmouth—with a combined contract value of more than £400 million, from which hundreds of apprenticeship places could be created. If the Government really want to expand apprenticeships, why will they not practise what they preach and implement these sensible proposals? After all, what better spur can there be for the two thirds of businesses that still do not offer apprenticeships than the knowledge that they are crucial to the Government, and also crucial to their working with the Government?
As Members have said, we need to see Government Departments themselves opening up and offering more apprenticeships. The most recent data available to us on BIS are those mentioned earlier by my hon. Friend the Member for Birmingham, Selly Oak. Spurred by the cogent arguments advanced repeatedly over the past year by my colleague in the other place, Lord Adonis, the Government should be introducing an apprenticeship fast stream for the civil service. Ministers have now announced belatedly that they will be running such a scheme, but we are still waiting to hear—and it would be interesting if we could hear today—just how committed to it individual Departments will be. The Cabinet Office, for example, was far from forthcoming when I asked parliamentary questions about this earlier this year. My right hon. Friend the Leader of the Opposition summed the position up perfectly in an article at the end of January in which he said:
“Whitehall takes 500 of the brightest graduates from our top universities every year and fast-tracks their careers on good salaries. Let’s give the same opportunities to youngsters who are ready to knuckle down and learn on the job, in tough apprenticeship schemes. It should start in the offices of ministers in the Government.”
We believe that any new apprenticeships created via this procurement route need to be high quality, a point echoed by the Doug Richard review recommendations.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
My hon. Friend is making a powerful speech. I am thinking in particular about the 16 to 18-year-olds in Oldham who are not in education, employment or training; the level there is more than 8.6%, which is well above the regional average. We have seen so many Government U-turns in the past few weeks, so is he hoping that they might do a U-turn on this issue, too?
Mr Marsden
We wait with bated breath to see what might occur in the Budget, and I hope that the Skills Minister might use his good offices with the Chancellor in that respect.
Labour Members believe that this apprenticeship route has to be a high-quality one. We have to have that because we have had problems in the past with the duration of apprenticeships, and it took some time for the Government to move on that. These issues of quality are being addressed by our Labour skills taskforce. It is taking forward details of our proposals, which the Leader of the Opposition announced last autumn, drawing on the practical experience of business, the further education sector and elsewhere. That is why we are seeking not only to boost the number of apprenticeship places available, but to address the situation pre-18 by introducing a new technical baccalaureate.
While the Government have been dithering nationally about how to expand apprenticeships and ignoring procurement policies, Labour local authorities have been leading the way. A number of Labour-run authorities are going ahead with public procurement to create new apprenticeships for young local people eager for those opportunities. For example, Sheffield city council has identified 233 additional apprenticeships that it can create via public procurement where it has set its requirements at £100,000. Sandwell’s council has done something similar, aiming to create just under 200 apprenticeships through public procurement in the next three years. Other councils, such as my local authority in Blackpool, are boosting numbers in other innovative ways. It already has 48 apprentices on the books, but my local council is working with other local public sector bodies, such as the police force and the NHS, to create shared apprenticeships across those bodies. One could add to that other Labour councils such as those in Reading and Plymouth that are actively engaging with local businesses to boost apprenticeship opportunities across their boroughs, as well as the city skills hubs of Manchester and Leeds.
What is telling about that story of activity in local government is that, as we have heard, even Conservative-run local authorities realise the merits of that approach. For example, Kent county council has put in place criteria whose details closely mirror ours: procurement for all contracts worth more than £1 million should create at least one additional apprenticeship place. Northamptonshire county council has also put in place mandatory requirements on all contracts over the value of £2 million. In addition, there are those in the Prime Minister’s own parliamentary party who have argued that something has to be done, with perhaps the sharpest example being the hon. Member for Harlow (Robert Halfon). Last year, that redoubtable Member made similar suggestions that government should be using public procurement to boost apprenticeships.
That shows the range of consensus on the need to act now. It is a consensus that has been built by a determination to do something to kick-start us out of a dire, flatlining economic situation, which has the potential to put thousands of young people at risk. The Opposition are advocating a useful change that has the potential to transform the life chances of thousands of young people. It offers them the opportunities they are crying out for, and sends a clear message to business that apprenticeships matter and add real value to a firm. If we will the ends, we must will the means. It is time for the Government to stop tying themselves in tortuous knots when they are put on the spot by the wise words of the Select Committee.
The Skills Minister has repeatedly said that apprenticeships are at the heart of the Government’s skills strategy. As many of his Tory colleagues in local government agree with our approach, why does he not take this modest proposal forward? He has the opportunity. We have a Department for Business, Innovation and Skills that already has a Minister with two brains and a Secretary of State in two minds about ring-fenced funding and economic growth. Now I wait with bated breath to see whether the Under-Secretary of State for Skills will be able to say the right thing for his two Departments this afternoon.
Abraham Lincoln—or perhaps it was Daniel Day-Lewis—famously said that when
“the occasion is piled high with difficulty”
we must rise to it, and
“As our case is new, so we must think anew, and act anew.”
That is our proposal today. When our economy and this Government’s strategy are flatlining, we must act anew. A public procurement policy for apprenticeships would start to transform the numbers and the life chances of tens of thousands of young people. It makes economic sense, but it is also the right thing to do. We believe in a one nation Britain with not only social cohesion and fairness but economic cohesion, in which apprenticeships have a firm stake. That is why we have put the proposal centre stage today and that is why I am proud to move the motion.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I warn hon. Members that it looks like there will be a five-minute limit on speeches due to the length of the opening speeches.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I can join the hon. Member for Blackpool South (Mr Marsden) in making one point: we are all in the Chamber today to celebrate apprenticeships on the second day of national apprenticeship week. I was privileged this morning to meet Jenny Westworth, the apprentice of the year, who is an aeronautical engineer at BAE Systems near Preston.
Apprenticeships offer a huge amount. They work for the economy, they work for employers and they work for apprentices. In short, apprenticeships deliver. For the economy, apprenticeships improve productivity. For employers, apprenticeships increase morale and retention, not to mention the skills that employers need. They also work for the apprentices themselves and evidence published by the Centre for Economic and Business Research shows that the average higher apprentice increases his or her lifetime earnings by about £150,000, about as much as if he or she had gone to university.
Apprenticeships deliver and that is why over the past two years the number of apprentices starting has increased so sharply. In 2010, the coalition promised 50,000 more apprentices every year. I confirm to the House today that we have already not only delivered on that promise but exceeded it. We have all but doubled the number of apprentices starting each year, with more than 1 million starts under this Government.
Michael Fallon
I shall give way in a moment.
Apprenticeships deliver and we can now set out a more stretching goal, that is, the vision that on leaving school it will become the new norm to go either into an apprenticeship or to university. Gone are the days when a Prime Minister could set an arbitrary target for how many children should go to university, forcing some down a route that did not suit them and ignoring the rest. Gone are the days of Labour’s forgotten 50%. Gone are the days of youth unemployment rising even in the boom years. Gone are the days of uncontrolled immigration as the only answer to skill shortages, of dumbing down, of worklessness, of welfare and of the race to the bottom. Instead, the Government aspire that all the young people of this great nation should reach their personal best and that they should all succeed and fulfil their potential.
Of course, such a change is an economic imperative, as we cannot afford the drag anchor of the welfare bill in this global race, but there is also a moral imperative to support everyone in reaching their potential—for the many, not the few. How will we do that? Of course, the sharp increase in the quantity of apprentices is important, but alone it is not enough; despite unemployment falling, we still, shockingly, find both youth unemployment and skills shortages together in many towns in Britain. That points to a skills system that for too long has failed. For too long, the Government directed centrally the training that should be provided, at what level and where. The result was too much poor-quality training in skills employers did not need, and not enough high-quality training in skills employers do need.
The lodestars in reforming the apprenticeship system will be rigour and responsiveness: rigour to stretch, challenge and raise the expectations of apprentices and responsiveness to the needs of employers, public or private, large or small. The Richard review, which we published in the autumn, sets out a clear and specific guide to delivering those reforms, and we shall publish our formal response shortly.
What of Labour’s response today? I certainly welcome the Opposition’s general support for apprenticeships. I welcome their specific support for more employer ownership of skills, which has support across the spectrum, from trade unions, employers and the third sector alike. However, I am disappointed by the rather negative and carping tone that we heard from the hon. Member for Blackpool South. I turn to some of his specific points.
Michael Fallon
No. The hon. Gentleman has already made three interventions.
Michael Fallon
Others need to get into the debate.
The hon. Member for Blackpool South referred to an article written by the Leader of the Opposition. I grant that it was an unusual article; it actually set out some policies—on apprenticeships. I read it to find out exactly what was there. The first policy was to introduce a national application system for apprenticeships, rather like UCAS for universities. That is a good idea. It is such a good idea that we have already brought it in and linked it to UCAS. It is called the apprenticeship vacancy service; it is run by the National Apprenticeship Service and it was used by more than 1 million applicants last year—evidently none of them from the Labour party research department.
Mr Graham Stuart (Beverley and Holderness) (Con)
Will my right hon. Friend give way?
Mr Stuart
The hon. Gentleman is clearly wrong. My right hon. Friend is prepared to give way and I congratulate him. He may not know that my constituency has the highest number of adult apprenticeship starts, and overall has one of the highest numbers in the country. I congratulate him and his colleagues on increasing the number of apprenticeships and ensuring quality. Does he share my surprise that the hon. Member for Streatham (Mr Umunna) does not mention the tripling of apprenticeships that has occurred in his constituency since Labour left power?
Michael Fallon
My hon. Friend does the House a service by drawing attention to that rather revealing statistic.
I turn to the second policy we discovered in the Labour leader’s article. He said:
“Let’s respond to employers who say they can’t hire young people with the right skills, and put them in charge of how training money is spent.”
That is a good idea, but the Prime Minister launched the employer ownership pilot in November 2011. There are now some 26 of those pilot schemes. Only this morning another one was launched, for digital marketing. The support of the Opposition—a bit late—is very welcome.
Thirdly, let us turn to the idea of apprentices in Whitehall. I agree. In 2010, we found hardly any apprentices in Ministers’ offices. There are now 1,800 across Whitehall. We announced a fast-stream apprentice scheme that will take 500 apprentices—the same number as the graduate fast stream. Other of the Leader of the Opposition’s colleagues mentioned the number of apprentices in my Department. They were wrong; there are 79 apprentices in the Department for Business, Innovation and Skills and its Executive agencies, hired despite the broader hiring freeze. [Interruption.] Other than apprentices, the Department employs no one at all aged under 19.
Fourthly, we come to the policy on procurement. The Opposition say we should put apprentices into the procurement contracts for High Speed 2. Of course, HS2 has yet to go through the House so its contracts are yet to be signed, but the Department for Transport has already made it clear that it will ensure that any procurement for the construction of HS2 meets our wider Government commitments to deliver apprenticeships and training. In the case of Crossrail, the largest construction project in Europe, the contracts signed by this Government require apprentices. I think we now know where the Opposition got the idea for all these Labour policies—they looked up what we are doing and they are playing catch-up.
Andrea Leadsom (South Northamptonshire) (Con)
I am sure my right hon. Friend is aware how delighted the parliamentary apprentices are to have been invited to meet the Prime Minister tomorrow to celebrate apprenticeship week. There are a number of apprentices, including Daisy Peck in my office, who is the former head girl of Northampton school for boys—it takes girls in the sixth form—and she is thrilled to be invited by our Prime Minister to celebrate apprenticeship week at No. 10 tomorrow morning.
Michael Fallon
I am delighted to hear that. I understand that the apprentices will also attend Prime Minister’s Question Time tomorrow, so we must all be on our best behaviour.
Michael Fallon
No. The hon. Gentleman has had four—or is it five—goes.
On the motion, we are clear that we support the principle of apprenticeships within procurement, where they deliver value for money, and we are delivering apprenticeships within procurement, but I am sorry to point out that there is a problem with the Opposition motion. First, it requires the Government to put apprenticeship contracts into all public sector contracts. That would mean all local government contracts and all devolved Government contracts, and I am not sure that the hon. Member for Blackpool South or the Opposition intended that. In addition, the motion makes no mention of value for money. For Government Members value for money in procurement is essential. Of course the evidence shows that apprenticeships normally drive up value for money, but the motion would be a rather heavy-handed approach.
I ask the Opposition, as we jointly celebrate apprenticeship week, to accept the reassurances that we have given about the importance of procurement in national contracts, to understand that their motion is technically defective, not to push it to a vote, and instead to support the Government in their drive to increase apprenticeship numbers.
I urge the whole House to get behind the wider reforms that we are putting in place for apprenticeships. Following the Richard review, which was widely welcomed, we are setting out those reform plans so that as well as the welcome increase in quantity, we increase the quality, putting employers at the heart of apprenticeships and making the system more rigorous and more responsive to skills needs. We have published regulations to increase the level to which apprenticeships can be studied, introducing for the first time apprenticeships that can lead to the same exams to qualify as a solicitor, accountant or insurance professional. By putting employers in the driving seat, we are reshaping apprenticeships to fit the modern economy—a highly skilled, highly motivated work force where each and every one can aspire to fulfil their potential. That is what our reforms will do, and I commend apprenticeships to the House.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I have decided to introduce a six-minute limit to make sure that everybody who wishes to speak gets in.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I will try to summarise my 11-month Business, Innovation and Skills Committee report and its recommendations within that time frame. I welcome this debate in national apprenticeship week. Notwithstanding the political differences that we may have between the parties, it is important that we take the opportunity to demonstrate and recommend to young people the advantages that come from an apprenticeship.
Recent figures show that it is anticipated that there will be about £3.4 billion-worth of additional growth per year in 2022 if we adopt a certain target for apprenticeships. Similarly, apprentices can expect to earn about £150,000 extra during a lifetime. Those are key figures that the House should be highlighting in order to underpin the Government’s drive to get more apprentices.
However, the Government have to recognise that there is also a perception problem. Fewer than one in five 16 to 19-year-olds think that apprenticeships offer the best career option for them, and the great majority still think that GCSEs and university do so. Fewer than one in 10 parents support apprenticeships. They still prefer the higher education route and still think of apprentices as being blue collar workers, whereas in fact the great majority are white collar workers.
Notwithstanding the obvious economic benefit and the drive and support from all parties in the Chamber, there is obviously a problem that has to be addressed in fulfilling the potential that is offered by this career route. With great respect to the Minister, I do not think that he did justice to some of the recommendations made by the Opposition and the Business, Innovation and Skills Committee to achieve that. I stress that the Select Committee has a Government majority and all its recommendations were passed unanimously.
The solution lies, first, in not just trying to drive up the number of apprenticeships, but in looking at our education system. The Prime Minister talked yesterday about an alternative career option. If we are to get young people to take it up, we must have some sort of parity of esteem between higher education and the apprenticeship route. The most depressing thing that the Committee heard was when an apprentice in Sheffield told us that he had the option to go to university, but when he told his school he wanted to take an apprenticeship, it ignored him and did not even invite him to its awards ceremony. That is symptomatic of a culture within our schools and education system that must be addressed if we are to change.
David Simpson (Upper Bann) (DUP)
There has been a system through the years where there has not been that close working relationship between educationists and industry, and educationists need to provide the courses that are relevant to today’s industry.
Mr Bailey
I agree entirely with the hon. Gentleman, and if I have time I will come to that very point.
One of the Select Committee’s recommendations was that the Ofsted assessment criteria should include the number of students that a school puts into vocational and further education. It is only by changing school targets that teachers will change the culture of schools to overcome this discrimination between higher education and the vocational route. Unfortunately, the Government declined to take up that invitation.
I pay tribute to the hon. Member for Beverley and Holderness (Mr Stuart) for a very good Select Committee report that highlighted the problems of the careers service. By delegating careers advice to schools, the existing bias within the education system to encourage students to take the higher education route rather than the vocational route is being reinforced. We need careers advisers who are aware of apprenticeships, aware of the benefits of vocational education, and prepared to advise students in schools that that is the best possible route for their particular range of aptitude.
Mr Graham Stuart
The point that the hon. Gentleman makes about careers advice is absolutely right. Does he agree that one of the Government’s successful initiatives has been the National Careers Service, and there could be a role for that service, working with schools, to ensure that they fulfil the duty that they have been given? All too often the institutional interest of the school and the individual interest of the young person are not the same, and that is why we need some kind of arbitration to make sure that the interests of the child are put first.
Mr Bailey
I read the recommendation of the hon. Gentleman’s Committee on that, and in the current situation I think it is probably the best option. I await the Government’s response to it with interest.
Work experience is another topic that has been raised. Removing the obligation on schools to have their students involved in work experience removes from those students an experience that potentially will enthuse them to pursue an apprenticeship. In my area, many of the apprentices in the foundries went there as a result of work experience they undertook. Removing this obligation undermines the overall thrust of the policy, which is to get young people into vocational education.
The hon. Member for Upper Bann (David Simpson) raised the issue of business involvement. That is another crucial element in developing a strategy that works. I believe that, first, there must be a vocational qualification, and the BTEC, as outlined by my hon. Friend the Member for Blackpool South (Mr Marsden), should provide that. I support the Government’s employer ownership scheme as I believe that our vocational qualifications must be determined, monitored and assessed by business, in conjunction with the education service. I also believe more group training associations and apprenticeship training associations should be developed so we can reach the smaller small and medium-sized enterprises, which are the hardest to reach and which otherwise would be unable to provide the resources for apprenticeship training.
I am not going to repeat my hon. Friend’s arguments in support of the Business, Innovation and Skills Committee recommendations, but I will emphasise that my local authority of Sandwell is pioneering in this area, and has so far obtained 250 apprentices, is playing a brokering role for students with local businesses, and has taken 300 people off the unemployment register by giving them work experience in a pre-apprenticeship scheme.
If local government can do this, why cannot the Government? The half-hearted response of the Government is to be lamented, and I hope we will get something more positive in future.
Mr Robin Walker (Worcester) (Con)
It is a pleasure to follow the Chair of the Business, Innovation and Skills Committee, the hon. Member for West Bromwich West (Mr Bailey), who made an excellent speech.
Apprenticeships are working for business and more young people are taking up apprenticeships in Worcestershire than ever before. In that context, I warmly welcome the start of another national apprenticeship week. Like many other MPs, I have employed an apprentice to work with me in my constituency office, and I will be meeting local employers in my constituency this week to discuss how we can strengthen the roll-out of apprenticeships, widen participation by businesses in supporting them, and continue to drive up quality for employers and apprentices alike.
Justin Tomlinson (North Swindon) (Con)
I know that my hon. Friend is a real advocate of apprenticeships. One of the ideas I hope he will push in that forum and with Ministers is to use the mailing of business rates. We already pay for those to go to every business every year. Simply inserting a leaflet setting out the benefits of apprenticeships would provide a real boost, and would serve to open the window for many other businesses and future apprentices.
Mr Walker
My hon. Friend comes up with an intriguing, and very creative, suggestion, and I am sure Ministers will respond to it in due course.
Although I welcome the fact that the Opposition have chosen apprenticeships as the topic for this debate, and I particularly welcome their support for the excellent report from the BIS Committee, which I was proud to join shortly after its inquiry into apprenticeships, I am afraid that their motion is very narrow and self-congratulatory and misses most of the important recommendations of that report, as the Committee Chair eloquently explained in his excellent speech.
As a proud member of the all-party group on apprenticeships, I have met a wide range of employers who want to take on apprentices and who value the opportunity to have people earn while they learn. I have also met some enormously impressive young people from all over the country who are undertaking apprenticeships and who recognise the huge opportunity they offer. It is very easy for a debate such as this to be dominated by statistics, and I am sure other Members will introduce plenty of them into the debate, but the overall story is undoubtedly one of strong growth under the coalition Government. A big rise in the number of apprenticeships in Worcester helps to explain the sharp fall in youth unemployment, which today is around 18% lower than it was at the time of the general election, and down more than a quarter since its peak under Labour.
However, I want to focus on quality, not just quantity, and on people, not just numbers. Suffice it to say, I welcome the fact that the numbers keep rising, which is testament to the Government’s commitment on apprenticeships. Apprenticeships are often seen as the first step in a career, but it is important to recognise where they can lead. We should see them not just as a route into the lower end of the jobs market, which they have sometimes been misrepresented as in the past.
When I look at local manufacturers in my constituency, I see that many of the bosses are former apprentices. Both the current and previous managing directors at Worcester Bosch, the biggest private sector employer in Worcester, started out as apprentices. In smaller local engineering firms, one reason why the bosses and owner-managers are so passionate about making today’s apprenticeships work is that they started their careers in old-fashioned apprenticeships.
We should not see apprenticeships as an end in themselves, but as a conduit into learning about work, good careers and wider opportunities. For many young people, staying in school or college until 18 or going to university are not necessarily enticing prospects. Some of the brightest young people can be disengaged from classroom study by the time they reach 16 and many would relish the challenge of being able to learn in the workplace.
In the past, apprenticeships served generations well as a means of entry into work, particularly in the manufacturing sector, but with the number of apprenticeships increasing across the advanced manufacturing, cyber, computer and service industries, I believe that they can serve the current generation of school leavers even better. Many young people are better suited to learning in the workplace, rather than the classroom, and will thrive best given the opportunity to succeed, work hard and learn in a working environment. I am glad that apprenticeships now offer a progression that can take people right up to degree level and provide an alternative route to that valuable level of qualification.
I was pleased to hear the Prime Minister say that apprenticeships should be seen as the “new normal”. In order for that to remain the case in the long term, however, we need to make some changes. We need to get the message through, as the Select Committee Chair has shown strongly, to all those in our education system who provide careers advice that apprenticeships are here to stay. I was shocked to hear from apprentices at BAE Systems that many of them, who had achieved that gold-standard apprenticeship, had been actively discouraged from applying for it by their teachers. My hon. Friend the Member for Burnley (Gordon Birtwistle), who unfortunately is not in the Chamber, has previously given the appalling example of one candidate whose teacher tore up their application for an apprenticeship with that fantastic employer because they did not want to see them “wasted there.” I have seen some of the outstanding facilities available to those apprentices.
Mr Bailey
I thank the hon. Gentleman for his kind words. Does he agree that because we have a system in which teachers are judged on their ability to get pupils into higher education, rather than into apprenticeships, we cannot really blame the teachers or the system for doing so? It is the Government who need to change the system. That is not a party political point, because it existed under the previous Government as well.
David Simpson
Does the hon. Gentleman also agree that one of the difficulties is that some industries have had a culture of employing agency workers, who are easy to employ and to dispose of, which means there is no investment, and that that culture has to change?
Mr Walker
I agree with that as well. I think there is the opportunity to show businesses the benefits of investing in skills and that that can be achieved through apprenticeships. Some of the strongest recommendations in the Select Committee’s report relate to the need to strengthen the brand of apprenticeships and the focus on them in careers advice. It also points out the need to increase engagement between the National Apprenticeship Service and schools. Disappointingly, the motion makes no mention of those issues at all.
I would go further than the Committee’s report. We need businesses to engage more closely with schools, to put their managers on to the governing bodies of schools at both primary and secondary levels, and to champion the advantages and opportunities of apprenticeships and work-based learning, just as university-educated teachers will always champion the benefits of going to university.
In my constituency, I have been pleased to see Yamazaki Mazak take an active role in supporting the Bishop Perowne Church of England academy, placing its managers on the governing bodies of the school and its primary feeders and proactively engaging with school children in order to advocate the benefits of vocational education. I am glad to see Worcester Bosch playing an active role in inspiring pupils at the Tudor Grange academy and was delighted to hold an apprenticeships and enterprise fair, sponsored by both companies, to bring schools, employers and apprenticeship providers together with young people to talk about apprenticeships in Worcester.
The Select Committee’s report made powerful representations about the need to engage small and medium-sized enterprises in the apprenticeship agenda and pointed out that 80% of apprentices are employed in the SME sector. Again, the motion is silent on this point. In Worcester, a proactive, Conservative-led city council has engaged with this agenda to support SMEs with extra grants so that when they take on apprenticeships they get double the support that is available from the Government. I was delighted that at my most recent business event a number of small companies present had already taken on apprentices and they valued the support they were offered. I have also been very pleased with the consistent support for this agenda from the local media, particularly the Worcester News, which has run the 100 in 100 apprenticeships campaign.
It is of course right that the Government consider public procurement as a way of encouraging apprenticeships, and I was pleased to hear the Minister reiterate their commitment to using it in that way. It is right that the Select Committee drew Ministers’ attention to this important area, as it did on pages 52 and 53 of its 90-page report. However, it is also right that the Government should have regard to the cost that making procurement conditional on apprenticeships might have for the public purse and private enterprise. The report says,
“we concede that some flexibility is required”,
and, with regard to the suggestion of looking for at least one apprenticeship per £1 million awarded,
“we have been told by the TUC that this is current policy in some construction procurement arrangements.”
It is notable that the recommendation on procurement did not form even one of the sub-headings in the conclusions and recommendations of the report.
I passionately support apprenticeships. I welcome the fact that we are celebrating national apprenticeship week and welcome the very important work of the BIS Committee, of which I am proud to be a member.
Richard Burden (Birmingham, Northfield) (Lab)
Like other hon. Members here today, I welcome national apprenticeship week. Last night I was pleased to be able to attend an event organised jointly by the Society of Motor Manufacturers and Traders and Semta on apprenticeships in the motor industry, where I met Carolyn Lee and James Doughty, two new apprentices working for Jaguar Land Rover. If anybody ever doubted the value of apprenticeships and what they can do to raise aspirations among young people, they just need to listen to the kind of things they were saying to me.
As chair of the all-party motor group, I have regular discussions with motor manufacturers and others in the motor industry. It is a sector where apprenticeships are taken very seriously and where a great deal is being done. The automotive sector is one of the largest providers of apprenticeships in our country. People in the sector certainly welcome a number of the initiatives that have taken place, but last night they told me something that it is important for us to bear in mind: we must not think that rhetoric about apprenticeships is exactly the same as reality, because they are different. We can support some of the things that are being done and still recognise that.
I am sorry that the Minister did not seek to engage with Labour Members on the issues that they wanted to raise with him. My first point about rhetoric not always matching reality is that people involved in the automotive sector and elsewhere are saying that small and medium-sized firms, in particular, have genuine concerns about how they can engage with the system: how they access apprenticeships, what they mean for them, and whether it is too difficult for them to get involved. The system is not joining up in the way that it should, and it is important that the Government listen to what those in industry are saying. They are not making political points; they are talking about the health of their businesses and the opportunities that should be available to young people.
My second point on the rhetoric is that it is okay for the Government to talk about the expansion in the number of apprenticeships that has occurred over the past few years, but often those apprenticeships are not tackling the issue of youth unemployment, even in terms of numbers. In the last academic year, the number of 16 to 18-year-old apprentices fell in four of England’s nine regions, including my own, the west midlands. Youth unemployment has sky-rocketed in my constituency; 1,260 young people are currently without a job and long-term youth unemployment has more than doubled. If we overlay that with access to apprenticeships, it does not make good reading. The Prince’s Trust has highlighted the fact that in some cases just 14% of apprenticeships were obtained by unemployed young people.
There are examples of good practice. I welcome the work of Birmingham city council. Last year it established a commission on youth unemployment, which produced pretty staggering and disturbing results: we are one of the youngest cities in Europe but we have 15,000 unemployed young people, 3,000 of whom have been unemployed for more than a year. The council and its partners set up a youth jobs fund to target funding on tackling long-term youth unemployment. There are issues involved in targeting funding: should it be targeted on young people, on the areas in which they live or on the areas in which employers operate, which form the catchment area for the young people? I have written to the council and I hope soon to receive replies to my questions.
We need more initiatives that bridge the gap between boosting apprenticeships and ensuring that they tackle long-term youth unemployment, and in that context I wholly endorse the comments made by my hon. Friend the Member for West Bromwich West (Mr Bailey) on behalf of the Select Committee. If we are to join up the system it is vital that our education system links with the necessary skills training and opportunities for young people.
The long-held perception in this country that the academic route is superior to the vocational route must end. I hope that Ministers will think a little about the messages they send young people. The rhetoric of the Secretary of State for Education over the past few years has pointed young people in a direction that has not encouraged them to believe that apprenticeships enjoy parity of esteem, whereas we must ensure not only that opportunities are available but that young people feel they can contribute the skills necessary if our country is going to be as competitive as it should be in future.
Mr David Ward (Bradford East) (LD)
The average unemployed person, especially young people who are seriously looking for employment, will not give a jot who should claim credit for rejuvenating apprenticeships. All parties should pat themselves on the back for trying to rejuvenate apprenticeships, which had almost disappeared. Wherever credit should lie, the fact that this initiative is being developed at pace is welcome.
Where did we go wrong? Over the past 20 or 30 years we failed to deal with huge structural issues in the labour market. Immigration played some part, especially in communities with rising young populations, but many businesses tell me they would have gone bust without immigrants, particularly over the past 10 years. Structural change to the labour market is important in a place such as Bradford. In the good years, 1998 to 2008, we lost 40%—15,000—of our manufacturing jobs. Hon. Members need only think what opportunities could have been offered for apprenticeships.
We are all aware of the tale of educational under-attainment from which we have suffered for many years. I worked in a university for about 20 years and always felt that the 50% target was absurd. It was not matched by an equivalent increase in funding, and the unit cost dropped. It became too easy to go to university, and when I started work in the 1980s there was no one in the class who did not want to be there, but by the time I left many young people were there simply because they did not know where else to be—it was a deferred decision. The most difficult thing I faced in dealing with admissions in the summer was my awareness of the huge attrition rate in the autumn as students drifted into other things and did not stay on the course. Those changes required fundamental changes to be made to the apprenticeships programme and they are now being made.
The briefing of the Association of Colleges to the Education Committee’s inquiry into careers guidance, which has been referred to by other Members, contained the statistic that
“only 7% of pupils are able to name apprenticeships as a post-GCSE qualification.”
That is simply not good enough. The report proposes changes.
The proportion of students who stayed on to the sixth form and went on to university became a means of comparing secondary schools. Bradford only has sixth forms; there are no sixth-form colleges. Schools wanted to have a very high proportion of young people who stayed on into the sixth form and went on to university and were in no mood to advise them to go down another route.
Ralf Dahrendorf’s book on life chances, which was published in the 1970s, had a profound impact on my views. It spoke of the need to create alternatives and possibilities for young people so that they could lead a fulfilled life. Apprenticeships offer something other than the route that young people are told is the only route that they should pursue. As we have said many times before, we reached the position where somebody who did not go to university was regarded as a failure. We cannot have that culture and it desperately needs to change.
There are many things that we need to do. The expansion of apprenticeship places has happened at such a pace that problems with quality are inevitable. That was identified by the Business, Innovation and Skills Committee. However, we are on a journey and are not there yet.
Clear evidence has been produced by organisations such as the Prince’s Trust of inequality in the apprenticeship places that are offered. Young people are disproportionately disadvantaged, as has been mentioned, as are those from black and minority ethnic communities. That is shown clearly in the statistics.
The growth of apprenticeships has been very well received in Bradford. I have one of the most deprived constituencies with one of the highest levels of youth unemployment. However, we are managing to get more than 1,000 people in my constituency and 5,000 people across the Bradford district into apprenticeships each year. That is extremely good news.
We are not there by a long way, but we are heading in the right direction—a direction that has been desperately needed for a long time.
Mr David Lammy (Tottenham) (Lab)
In contributing to this debate, I think back to 2008 when I launched national apprenticeship week as Minister for Skills. I recall debates in the Department at that time about why anything that we said about higher education would run right across the national newspapers and broadcasters, whereas it was very hard to get journalists to write even a small story about the importance of apprenticeships. That is largely because people in that sector, as is now the case with many politicians, have not experienced apprenticeships themselves. It has also been the case that many middle-class people in this country have not considered apprenticeships to be a preferred option for their children. For that reason, apprenticeships have languished behind.
I therefore welcome the cross-party nature of at least part of this debate, despite its being an Opposition day debate. I congratulate the Government on continuing to hold national apprenticeship week and on maintaining the National Apprenticeship Service, which I launched. It is important that the minimum length for an apprenticeship has been set at a year. All that progress is welcome.
It is important to introduce some fundamentals to this debate—otherwise, many young people searching for apprenticeships in our country might think that we have gone mad, and parents who are concerned about apprenticeships might feel that we are out of touch. At the heart of our system is the understanding that we must be there not only for our own children but for others. In a sense, we act in loco parentis, and navigating young people through a journey into work is important and necessary. For so many—indeed most—young people, going on such a journey alongside studying is essential.
We must remember that teachers spend time working and studying, just as I did when I was a young barrister. Across many job areas, the apprenticeship—an idea as old as the human being—is necessary. Why do we still have a fundamental problem? Largely, it goes back to the central debates of our times: what is growth; what is the industrial policy in this country; and where are our jobs to come from? I think we have some problems with those issues.
We should be concerned that when we talk about apprenticeships, a significant bulk of what we mean are level 2 apprenticeships—GSCE level. If we are serious about giving people the necessary life chances, and replicating what we see in countries such as Germany, Sweden and elsewhere, we need to do considerably better and have more apprenticeships at level 3 and beyond. Are we in this House content that when we look at growth over the past years, 100,000 of the new apprenticeships are in administration, more than 60,000 are in retail and fewer than one sixth are in engineering and construction? What does that say about the underlying problems in our economy? Many of those listening to this debate want to know that when we talk about apprenticeships, we are serious about what they are.
Given that 55% of young black men in this country are languishing as unemployed, we should be hugely concerned about the ethnic minority profile within apprenticeships and—when people do get apprenticeships —about where they tend to be. Given levels of unemployment among young people, we should be concerned that so much of the growth—75%—is among those older than 25. All parties can be guilty of playing politics, but I was Skills Minister with responsibility for Train to Gain, Unionlearn and Skilling up, and 70% of these new apprenticeships are taken by those who were already employed, and that is not progress. Those people already had jobs and—let us be serious—rebadging those jobs as apprenticeships is not actually progress. It is of huge concern that we are now using the term “apprenticeship”, when we are talking about the Train to Gain programme.
Jenny Chapman (Darlington) (Lab)
My right hon. Friend is making a superb speech and indicating that early decisions made by young people and supported by their parents and teachers are not going in the right direction for our economy. Is one main problem the lack of decent advice that young people receive?
Mr Lammy
My hon. Friend is absolutely right and we will not sort out that issue unless we get to grips with a serious problem in careers, information, advice and guidance. We struggled with that in government; we had the Connexions service but we got rid of it. I think it worked in certain parts of the country but not in others, and it was certainly good for more vulnerable young people. The situation now is that many schools with responsibility in that area are totally out of touch with the sectors into which we need young people to go if we are to be serious about apprenticeships.
The indication of decline is also significant. When Labour left office, my Department was spending about £2,400 in direct payments for each apprenticeship start.
That figure has now fallen to £1,600, and is part of the dressing up of what constitutes an apprenticeship.
I hope we will begin to get serious about what an apprenticeship is, and recognise that young people are concerned that they will just go round and round in circles and not end up with a proper job. A proper job is where we need to get to, and we should keep a close eye on both completion rates and success rates. If we go back in time, the legacy of a former Government was an apprenticeship that one did not finish, and one did not get a job at the end of it.
Gavin Williamson (South Staffordshire) (Con)
One great positive that we can take out of the debate so far is that many Members are very positive about apprenticeships. I accept that there will be disagreements, but what we can all take away from it is that we want apprenticeships to succeed and to work.
In my constituency in the past year, 1,070 apprenticeship places have been created—a vast 88% increase from 2010. That is ahead of the national average by 86%, but unfortunately it lags slightly behind the west midlands average of 91%. We should feel a great sense of pride at what has been achieved and we can do more. Apprenticeships have a vital role to play in driving down unemployment and getting young people into work.
In South Staffordshire, we are blessed not to have an exceptionally high rate of unemployment, but that is down to the fact that we are proactive in driving down unemployment. Since 2010, South Staffordshire district council has been running job clubs right across the constituency. South Staffordshire does not have a jobcentre and it is often difficult for people to access their services, so we have been running job clubs in Wombourne, Kinver, Codsall, Bilbrook, Great Wyrley and many other villages right across my constituency to help people both young and old to access employment. They are not just about guiding and encouraging people, telling them how to make their CVs better and giving them the confidence to go out and get a job; they bring employers to them. It is with great pride that, working with my district council, we will have a jobs fair at Perton civic centre on 26 April. Already, many major local employers have committed to attend, bringing jobs and employment opportunities to all in South Staffordshire. I hope it will be a great success, and I know that many Opposition Members have been doing similar things in their own constituencies.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Will the hon. Gentleman give some recognition to the efforts in north Staffordshire, where, to encourage more apprentices, on Thursday evening KMF Engineering from Newcastle-under-Lyme is hosting its young engineer of the year awards at the Britannia stadium in Stoke-on-Trent? The following day, with the national apprenticeship scheme, Newcastle borough council and Newcastle-under-Lyme college, we are launching the latest 100 in 100 campaign to recruit apprentices to local businesses.
Gavin Williamson
My fellow Staffordshire MP demonstrates how enthusiastic Staffordshire MPs are to encourage apprenticeships and bring employment to our constituencies regardless of our political colour. All such schemes make a genuine difference.
We have talked about public procurement. One of the biggest creators of apprenticeships in South Staffordshire is G4S, which has recently won the bid to run Oakwood prison near the village of Featherstone. As part of its winning bid, 190 offender management apprenticeship places have been created. That should be welcomed. The private sector is being highly proactive in looking at how we get more employment, more apprenticeships and how we start to give young people and older people the opportunity to get into work.
As I am sure other Members have found, far too often when we speak to local schools or colleges, either here in Parliament or in our constituencies, and ask them, “Who wants to go to university?” 90% or 95% of hands go up, but if we ask them, “Who wants to get an apprenticeship?” very few people put up their hand. We have to ensure that people understand that apprenticeships are as good, if not better than going to university.
The Engineering Employers Federation recently raised the depressing statistic that fewer than 50% of schoolteachers encourage people to go into manufacturing and engineering, and almost one quarter positively discourage them. Apprenticeships have an incredibly important role to play in encouraging and inspiring young people to enter the manufacturing sector, like I did when I left university in 1997. We need to encourage more people to enter manufacturing and engineering, not just when they leave university, but when they are at school or finishing college. That is the opportunity.
People often see an apprenticeship as second rate. I was recently looking at job adverts—not for me, I hope—and perusing the internet. Jaguar Land Rover, which is spending £500 million in my constituency building a new engine plant, will be employing more than 1,400 people and apprentices of different ages. It will be an enormous boost not just to South Staffordshire, but to the whole west midlands. I was looking at its higher apprenticeships programme and the qualifications needed: a minimum of five GCSEs at grade C or above, including in maths, English and a core science subject; an A-level at grade C or above in a mathematical subject; an A-level at grade C or above in a science, technology or an engineering-related subject.
I am afraid that most people in the Chamber would probably be precluded from applying. These are not second-rate jobs and apprenticeships are not second-rate careers; they are our future. It is all about encouraging employment in engineering and manufacturing. The Government have made massive strides, not just in South Staffordshire, but in the west midlands, where the number of apprenticeships has increased by 91%. I encourage the Minister to keep driving forward towards more advanced apprenticeships, because it will make the country grow and prosper.
Mr Speaker
Order. Eleven right hon. and hon. Members are still seeking to catch my eye. The Front-Bench winding-up speeches must begin at, or very close to, 6.40. To accommodate remaining colleagues, I am reducing the time limit on Back-Bench speeches, with immediate effect, to five minutes, though if Members can be briefer, that would help one and all.
Mrs Mary Glindon (North Tyneside) (Lab)
I was going to thank the last Labour Government for initiating national apprenticeship week, but I have now learned that more specifically I need to thank my right hon. Friend the Member for Tottenham (Mr Lammy), who was the Minister who brought in this wonderful celebration of apprentices, businesses and our economy. I am pleased to say that it is being celebrated in my constituency, culminating in North Tyneside’s showcase event on Saturday, “Get up and Go”, where young people, parents and carers can learn about local apprenticeship opportunities and what it is like to earn and learn across a spectrum of jobs.
This year, the borough’s apprentice employer of the year—for businesses employing more than 250 people—was insurethebox, a company based at Quorum business park at Longbenton in my constituency. It is a relatively new company that now employs 290 people from across the whole region. Its staff proactively enter schools and colleges in the area, teaching students about the world of work and offering work experience, with the aim of increasing the company’s apprenticeship work force to achieve a ratio of 1:10. Since 2011, the company has taken on 31 apprentices between the ages of 16 and 24, six of whom are now fully qualified. Once they are recruited by insurethebox, which accounts for two thirds of the UK telematics market, the apprentices get the opportunity to develop their careers, moving into areas such as human resources, claims handling and underwriting. I was happy to learn that this modern, forward-looking company wants to increase its apprenticeships even further as part of its recruitment drive.
As part of national apprenticeship week, I visited Fabricon Offshore Services, which is another company based at the Quorum business park. The company is a leading provider of brownfield engineering, procurement, construction and project management services to the offshore oil and gas industry, through a range of technical services and solutions. I was there to shadow one of the six first-year engineering apprentices, 18-year-old Darius Bahrami from Sunderland. Darius had studied A-levels at school, but unlike many of his friends he had decided to take up an engineering apprenticeship, as opposed to going to university. He told me that a number of his friends wished that they, too, had taken up an apprenticeship, as opposed to following a university career. Apart from experiencing how software is used in engineering, I attended a “Lesson learnt” presentation with Darius and other first-year apprentices, which was given by one of Fabricon’s now qualified apprentices, Carl Blewitt, who explained the process of going from being an apprentice to becoming a junior mechanical engineer. He is now at university. I saw in him a very good role model for his first-year colleagues.
Those apprentices are fortunate to be working at a fast-growing company such as Fabricon. They enjoy the best training possible and are up to scratch. As well as gaining sought-after experience, they receive HNC qualifications. However, Fabricon, like other companies in the industry, is fighting to fill a skills gap. One third of its staff are over 55. That is because businesses in the oil and gas industry cut back on the number of trainees and apprentices they took on in the ’80s and ’90s. Given the rapidly diminishing window to recruit people quickly enough to replace the ageing work force while still “downloading” skills and experience from people currently in post, companies such as Fabricon are battling. Because of the skills gap and its commitment to skills and development, Fabricon has launched its own dedicated offshore services academy, which is providing full training for apprentices and working with the universities in the area.
Another thing I would like to highlight is the fact that the Government now require those over 24 to apply for a 24+ advanced learning loan, which my local TyneMet college has said will be a barrier to people becoming mature apprentices. I have highlighted the fact that there are two fantastic things happening in North Tyneside—
Jackie Doyle-Price (Thurrock) (Con)
It is a pleasure to participate in this debate, which has been characterised by positive and constructive contributions from all parts of the House. That shows just how much support there is for more and better apprenticeships.
I am proud to represent a constituency with a strong manufacturing base and a strong and vibrant logistics industry. Apprenticeships have always been a feature of these industries. When I meet the wealth creators in Thurrock, without exception they are people who have learned their skills in the workplace. That fact needs to be understood. For many people, choosing an apprenticeship will be the most effective route to their personal advancement. I would like to highlight some successful local programmes and, in doing so, highlight some areas where the Government could do more to encourage better apprenticeships.
The port of Tilbury has always offered a number of apprenticeships each year, placing a high emphasis on skills and even establishing its own logistics academy to provide bespoke training that suits its business. This year the port has developed a new apprenticeship in health and safety, which is central to its business, as ports are hazardous places. The port has advised me, however, that the apprenticeship framework can often prove inflexible for the kind of training that it wishes to offer. I suggest to the Minister that we need to ensure that the framework focuses on equipping workers with the intended skill, rather than just ticking boxes.
In addition to the established industries, Thurrock also has an emerging centre of excellence in the creative industries. My hon. Friend the Minister saw this for himself only last week, when he visited the new Backstage Centre, which will provide a great deal of training through putting on live musical and theatrical events. The creative industries are a growing sector, but it is also a sector that is characterised by self-employment and small and medium-sized enterprises. That is another area in which the Government really need to do more work. It can be daunting for a sole trader to take on the onus and responsibility of managing an apprentice, but the National Skills Academy for Creative & Cultural has provided a collective framework to enable a number of SMEs and sole traders to come together and offer training to young people. There is a need to pass on those skills to other people if we are going to make the most of that growing industry, in which Britain leads the world.
I want to highlight the example of a particular individual who is currently going through his apprenticeship with the Royal Opera House. Not all Members will know this, but the Royal Opera House’s production park is in my constituency of Thurrock. Everything that those Members who enjoy going to the opera see on stage has been made in Thurrock—and very proud of that we are, too.
The Royal Opera House’s current apprentice is a young man named Jamie Ashwell. He decided to take up the offer of an apprenticeship rather than doing a stage management degree at university. For Jamie, the choice was simple. He is working for a world-leading arts organisation, getting experience of real projects and working with leading practitioners in the industry—and he is being paid, to boot. I envisage that, in the future, some of the strongest apprenticeship places will be as hotly contested as some of our most prestigious university places.
The apprenticeship route also suits the Royal Opera House. It needs people with real practical skills in the type of work that it does. People with arts degrees who apply for jobs in its costume or make-up departments, for example, do not necessarily have the required technical skills. By offering apprenticeships, the Royal Opera House can train people up in areas such as bespoke tailoring and wig-making—true crafts that are not available to those studying for degrees.
Fiona Mactaggart (Slough) (Lab)
I have had the privilege of visiting the set-up at Thurrock, but there was one thing that I really missed. Under the former future jobs fund, the Royal Opera House created a programme that went wider than the apprenticeships as a way of bringing in young people to learn the skills that the hon. Lady is describing. It had a wonderful group of young people studying there as a result of that scheme but, sadly, it is no longer available to young people who would like to learn about working at the Royal Opera House.
Jackie Doyle-Price
The hon. Lady makes a good point, but the Royal Opera House continues to engage in a really big outreach programme involving local schools. She makes an important point, however, because one of the ways of attracting young people and demonstrating the opportunities afforded by apprenticeships is to open their eyes. It has been pointed out that schools often place an emphasis on universities, but we really need to ensure that they take advantage of every opportunity to open young people’s eyes to what is on offer.
I encourage the Minister to look at what more can be done to support the efforts of smaller firms and, in particular, sole traders to offer apprenticeships. We need to unlock and encourage the entrepreneurism in those growing industries, and to look at the apprenticeship framework, but I think that all Members on both sides of the House can congratulate themselves on the renewed emphasis that we have placed on this important way of providing our young people with the skills that they need to make the best of themselves.
Mr Speaker
Order. I am sorry, but the time limit needs to be reduced to four minutes, as my exhortations to brevity have so far fallen on deaf ears.
Mr Iain McKenzie (Inverclyde) (Lab)
As we have heard today from Members on both sides of the House, the debate is extremely welcome in what is currently a tough economic climate, especially for young people. I shall refer not only to this apprenticeship week but to the apprenticeship week that we shall celebrate in Scotland in May, so I shall get two bites at the cherry.
I served a formal indentured apprenticeship. That meant that I was tied to my employer for the first five years of my working life, for which I received an extra £5 a week. I am therefore well aware of the value of an apprenticeship, and I believe that it means more than just learning a skill or trade. Like many other Members, I have been working with companies in the constituency, encouraging them to consider taking on more apprentices and starting apprenticeship programmes themselves. It has been successful to a degree, and it is one of the reasons why we in Inverclyde have so far escaped the worst ravages of youth unemployment. That, however, is not the case in Scotland overall or, as we have heard, in the United Kingdom as a whole, where youth unemployment has never been higher. The country’s youth continue to bear the brunt of the lack of jobs in the UK. We desperately need to get our young people into training and apprenticeships. They must be given every possible opportunity to improve and hone the skills that they require in order to obtain jobs in the future.
As we have heard, the Business, Innovation and Skills Committee, in a report published in the autumn of 2012, gave its backing to public procurement to boost apprenticeships. That would create tens of thousands of jobs, and would help to alleviate some of the vast youth unemployment that is currently rife throughout the UK. I implemented a procurement policy in 2007, when I was leader of my council in Inverclyde, and that may be where the Government got the idea. When we were renewing our school estates, we saw the need not just to have new schools but to secure jobs and apprenticeships for the pupils, and we wrote that into our terms and conditions. It was very successful, which is one of the other reasons why youth unemployment is being kept low in Inverclyde. It fell then by over 20%. We asked firms not only to take on apprentices, but to commit themselves to a percentage of local labour.
In the private sector, I have been supporting technology, most recently the 4G network. This week our local mobile phone company, Everything Everywhere, announced the launch of 13 modern apprenticeships. It is committed to continuing to employ young people, and to introducing an apprenticeship programme that we hope will run for many years and give them long-term jobs.
Another initiative that has been extremely successful in Inverclyde is our award-winning Recruit programme. As we have heard from many Members today, schools need more than just brief career advice from industry. We brought schools and industry together, and young people gave up their time to participate in what was probably the longest interview that they would ever have. The initiative has been running for more than five years and has been extremely successful, putting tens of young people into jobs and giving them the best possible start in life. It has been replicated by some neighbouring authorities, and has been seen across Scotland as a trail blazer.
Mike Crockart (Edinburgh West) (LD)
Thank you, Mr. Speaker. It is entirely apt that you are in the Chair, given your interest in this issue.
In some sectors, apprenticeships are not a new development, but have been around for a long time. For many years plumbers, construction workers and electricians have undertaken apprenticeships, whether centrally led or employer-led. Their industries have long acknowledged that learning on the job, building up knowledge and skills, gaining qualifications and earning money, all at the same time, is valuable and appealing to many young people.
Other sectors have been much slower to cotton on. Some remain entirely in the dark. It has been argued that companies are not taking on trainees because of the difficulty of offering places when there is no set qualification to work towards, but that has not actually been the case. I checked the National Apprenticeship Service website today. The “types of apprenticeships” are broken down into 10 categories covering everything from agriculture to the arts and from leisure to law. There are now hundreds, if not thousands, of different apprenticeships, which rather prompts the question to the companies “What is missing?”
I did find “Building Energy Management Systems”. Let me go off at a tangent for a moment in order to demonstrate that it is not just up to the Government to tackle this problem.
I recently met Scottish entrepreneur Sir William Haughey at an event in my constituency. He was wearing a gold “H” lapel pin, and I presumed, correctly, that that was not just because it was one of his initials, but because it related to his Youth with Hope scheme, which I am happy to support today by wearing a similar pin. Sir William is known for his straightforward ways; in his words, “2.9 million publicly listed companies. 1.3 million unemployed youths. You do the maths.” He seeks to motivate and inspire organisations of all capacities to play their part in addressing the needs and aspirations of the young. One flagship idea that he has launched is that of “green champions”, whereby young people are employed by large companies to promote sustainable building management, and energy and resource efficiency practices. Given that 40% of the UK’s carbon emissions are down to the way in which our buildings are lit, heated and run, it is easy to see how the green champions could soon pay their own way. In 2009, the audit of Government buildings—264 of them—found that they had an average F rating, with only two Departments managing a rating of D or above. So I hope I can tell the Youth with Hope team to expect a call from the Minister.
In a lot of industries, including competitive ones such as public relations, advertising, marketing and third sector fundraising, young people have been encouraged to work with companies to gain experience—it is just that they have expected the youngster to work for free. Indeed, many in this Chamber have been guilty of offering similar places—the opportunity to gain experience in a competitive field, with the incentive being a possible job at the end of it—and some possibly still do that. I am not claiming to be whiter than white; I offered a couple of short unpaid internships in my first year in the House. I was uneasy with that and I quickly moved to using the Speaker’s parliamentary placement scheme and the New Deal of the Mind’s parliamentary academy.
One of my apprentices, Alice Hannam, has given me a quote that states the benefits far better than I can:
“Being an apprentice has completely transformed me. It has given me a real boost in confidence. I have felt empowered to take on challenges which I would not have thought possible—such as a degree and securing a job in Parliament.
I really cannot stress enough how great it has been to receive on the job training whilst being paid to do a job I enjoy and receive a qualification at the end of it.”
May I finish by urging all hon. Members, both those in the Chamber, and those who are not here, to find out about these schemes, which give opportunities to people who, because of their background, would not normally be able to take up unpaid positions? I urge hon. Members to promote such schemes, not only in their own constituencies, but much closer to home. Until we put our own house in order, it is far more difficult to urge others to do the same.
Mr Jamie Reed (Copeland) (Lab)
We should see apprenticeships as one of the hallmarks of a good society. It is all well and good—probably in a stereotypical fashion—to consider apprenticeships to be the domain of blue-collar families. It is true that decades ago securing a good apprenticeship with good employment prospects was the pinnacle of achievement for many working-class families. De-industrialisation changed the dynamic, as did the rise in the number of students from working-class families attending university, but the situation is changing again. Where we used to describe young people from working-class families and communities as “blue collar”, admittedly using an American political affectation, we should now see them not as blue collar workers but as blue scholar workers from blue scholar families. They understand the need to learn constantly, to innovate and to change in order to keep themselves, their families, their communities, and our country and its economy among the world’s leaders. If we do not seek to provide opportunities for these young people, their communities and their families—families like my own—we will fail them, our economy and the nation.
When we talk about rebalancing our economy, we must acknowledge the national need for successful apprenticeships. We do not simply need a series of apprenticeship schemes; we need an apprenticeship culture, which should be embedded among our public and private sectors, and we should be able to interchange between the two. Looking to the future, we have to recognise that planning for economic growth and planning for economic success is not the same as having a planned economy. The energy sector will command billions of pounds of public money over a very long period, and it is only right that private companies in that sector and others like it, which are in receipt of public investment, should reciprocate with effective apprenticeship programmes.
In terms of effective corporate social responsibility, there are few better ways of leaving a lasting legacy, contributing towards the betterment of society and securing a loyal, committed and productive work force than by investing in continuous personal development. Apprenticeships are potentially the best way in which any company in any sector can do that. If the Government are as committed in practice as they claim to be in their rhetoric, surely they will demand that those undertaking large public contracts should have apprenticeship places for younger people written into those contracts. I urge this Government to do that, as I would the next Labour Government.
This issue is of particular importance to my constituency, which is home to the Sellafield nuclear facility, where £1.6 billion of public money is spent each year. The site is publicly owned by the Nuclear Decommissioning Authority and is operated privately by Nuclear Management Partners, the parent company of Sellafield Ltd. Sellafield Ltd takes on an average of 70 apprentices a year, one of the highest intakes in the country, and 18% of its engineering apprentices are young women compared with a national average of about 3%. Although that is nowhere near enough, credit should be given where it is due and I want to commend Sellafield Ltd on that achievement.
I mentioned Nuclear Management Partners, which holds one of the most important and lucrative public sector contracts in the UK and is currently in the throes of a contract renegotiation with the NDA. The Chair of the Public Accounts Committee has made a withering assessment of the fees earned from the public purse by NMP, which were £54 million in the last year alone. She points out:
“Public money to the tune of £1.6 billion is being spent at Sellafield each year. This is an area of considerable deprivation with high unemployment. We are looking for there to be clearer ambition that spending on this huge scale contributes to creating jobs and supports sustainable growth in the region and the UK.”
That is an accurate and succinct analysis of what needs to be done. Apprenticeships, job creation and significant capital investments are all part of the contribution identified by the Public Accounts Committee as being necessary from NMP. On the day the Government admit that they do not have the money they need to build the schools they have promised, it requires only a fairly simple exercise in joining the dots for NMP to understand one of the principal areas where its new contribution must be made.
I hope that Ministers, with and through the Nuclear Decommissioning Authority and as part of the ongoing contractual negotiation, will help to deliver a better, more constructive and equitable settlement for my community, for this country and for the taxpayer.
Stephen Lloyd (Eastbourne) (LD)
I have really enjoyed the debate, which has been constructive on both sides of the House. The challenge with such debates is always the shortage of time and, like many other Members, I could talk about apprenticeships for a long time. I shall keep my speech brief, however.
For me, this subject is all about jobs. I was planning an apprenticeship initiative well before I was elected and I am pleased that I was elected as it meant that I could implement it. I was one of the first Members to do a 100 apprenticeship in 100 days campaign and in Eastbourne we achieved 181 apprenticeships, which was superb for the town. That momentum continued strongly and, according to the latest figures, since the general election Eastbourne has recruited more than 2,100 new apprentices, more than any other town across the whole of the south-east and more than the constituencies in Brighton. It works.
A lot of that success is down to the partnership working between local businesses, training organisations and Sussex Downs college and to the focus on making apprenticeships work. That goes back to the jobs agenda. In Eastbourne, we are running at a conversion rate of about 90%, which is stunning. That means that 90% of people involved are in full-time work after their apprenticeships.
Irrespective of the party political disagreements, I think that Members are, broadly speaking, united in recognising modern apprenticeships. I pay tribute to the right hon. Member for Tottenham (Mr Lammy), who, along with the Labour Government, began to promote apprenticeships. I hope he agrees that we have carried that work on.
Let me flag up three issues that I urge the Government to consider closely, as we have the Minister here. We have talked about schools and I am sure he knows that unless there is a clear rationale for schools to tick a box to show that they are doing something, they will not do it. I work very closely with the secondary schools in Eastbourne, which are very pro-apprenticeships, but they say, bluntly, “Stephen, there is not a lot of point in our selling apprenticeships because we don’t get any bonus for getting 100 apprenticeships.” I urge the Minister to discuss that with the Secretary of State for Education; let us do some creative thinking.
The second issue is quality, particularly when expansion is so rapid, and everybody recognises that we must keep an eye on that. I ask the Minister to keep focusing on quality. In seven or eight years, if we keep up our commitment to apprenticeships, they will have the same gravitas as apprenticeships in Germany. We should not forget, however, that some young people do not have the most academic education or background, and we do not want to set the lower rung for apprenticeships so high that they cannot get on to it. We must keep a close eye on that.
The subsidy for small and medium-sized enterprises is a strong idea, and within nine months of the general election I was urging it on the Business Secretary. I am delighted that after consideration, the Government moved down that road. I think it involves 40,000 SMEs a year. Despite the challenges in the economic envelope, I urge the Government to keep expanding the scheme over the next few years. Many SMEs have taken on apprentices—about 10%—and if more can do so it would be utterly transformational.
Julie Hilling (Bolton West) (Lab)
Today I had the honour and privilege of spending a couple of hours with an amazing group of young people—some of the apprentices from MBDA, an advanced manufacturing company in my constituency. They are sitting in the Public Gallery listening to our debate.
Anyone visiting the apprentices at Lostock is blown away by their quality and competence, as well as by MBDA’s commitment to them, led by Bernie Waldron, the managing director of manufacturing, and Gareth Humphreys, the human resources adviser on education, both of whom started as apprentices at the company. MBDA does not just teach apprentices skills for the workplace, but concentrates on growing the whole person. Personal development is just as important as formal qualifications.
The young people are entered into competitions such as World Skills. The view that young people are diamonds in the rough that just need polishing shines through everything they do. They are currently taking part in the second year of the Brathay challenge; the aim of the regional stage is to raise the profile of apprenticeships and complete a community project. I wish all the competitors well, but I am keeping my fingers crossed that the apprentices from Lostock will be victorious, although I should like to persuade the organisers to change the final event to one of skill, not just strength, which militates against companies that ensure they have mixed-gender teams.
MBDA has 62 apprentices: 35 young women and 28 young men. It is a great achievement for an engineering company. MBDA runs a four-year programme, and the apprentices complete ONC, HNC, HND and NVQ level 4. Business apprentices complete a business management degree, NVQ 4 and the City and Guilds senior award. It is a fantastic programme, growing the next generation of employees.
MBDA apprentices go into schools to promote apprenticeships in engineering. It is a bit of a shock to pupils when beautifully turned-out young women tell them that they are engineers, but sadly, many schools still see apprenticeships as a choice for their less able students, not for their high flyers.
Jade told me about her experience. Following a visit to her college from MBDA apprentices, she decided to apply for an apprenticeship. Her electronics tutor supported her, but he was the only one. Other tutors said: “What are you doing an apprenticeship for when you could be going to university?”, “You’re too clever to do an apprenticeship”, and “You show too much potential. You need to go to university if you want to progress in a career.”
Some of those people changed their minds, but recently a teacher told a family friend of Jade’s:
“I always thought Jade would do better, would have gone to university and achieved good grades.”
Hurtfully, the teacher went on to say that they always knew that Jade would just float along in something easy and stick to what she knew, although she had the potential to do so much more.
As Jade says, her apprenticeship is far from easy:
“I am currently studying for my HNC, working three and a half days a week, training two nights for my rugby team.”
I forgot to say that she is in the England student team and plays at the weekend. She says that she is
“finding time for my friends and boyfriend. It takes a lot of hard work and I have to make sacrifices but the rewards all come at the end.”
Jade’s view is shared by Beth Sherbourne who recently won the higher apprentice of the year award. Beth said:
“Instead of a £40,000 debt I’ve got a first class honours degree, four years work experience, a well paid job and a Mini Cooper.”
The apprentices at MBDA show what can be achieved by young people. We need to do far more to encourage young people to undertake apprenticeships. Today I asked them if they had any regrets about going for an apprenticeship. Unanimously they said that they had no regrets at all.
Mr Speaker
Order. I am now reducing the time limit to three minutes to try to accommodate the remaining four would-be contributors.
Gordon Birtwistle (Burnley) (LD)
We all support apprenticeships and think they are a good idea, and we all congratulate the young people and the companies involved.
I have some questions about the motion. First, because there is so much support for apprenticeships, will the Opposition withdraw it so that we do not need to vote on it? Secondly, if there is to be a vote, will the Minister confirm its legality? As I understand the motion—I am not a legal expert—it commits not only the Government, but local authorities and others using public money to put the requirement to offer apprenticeships into contracts, and I am not sure whether we are allowed to do that. Will the Minister clarify whether that is a legal issue that we need to be concerned about before we vote? I am happy to support the trend of the motion but I would not like to vote for something that cannot be delivered for legal reasons. I am sure the Minister can take advice before he winds up and clarify whether we are able to commit local authorities, for example, to the requirement in the motion. I also question whether we would fall foul of value for money contracts by insisting on companies meeting the requirement. I would like clearance on that before I vote.
It is great that we have apprenticeships in progress. We already do what the motion calls for, apart from committing other authorities to the requirement to offer apprenticeship opportunities. The major companies that we deal with already do so and I support that, but I would like clarity from the Minister that we would be voting on a motion that could legally be implemented.
Jim Shannon (Strangford) (DUP)
I support the motion and thank the hon. Member for Blackpool South (Mr Marsden) for bringing it before the House. The House always excels when it debates a subject on which everyone agrees, and here we have a subject matter on which everyone can agree.
Apprenticeships are essential to give young people a start. In my constituency, many businesses have offered apprenticeships, whether in Bombardier Aerospace, Huddleston Engineering or even through the local technical college. As this is a devolved matter, in Northern Ireland £8 million has been allocated to Steps to Work and £5.8 million to a return to work programme. These are just two examples of good schemes that deliver.
On Monday I had the opportunity to visit the jobcentre in my constituency and I did so in order to hear what it was doing and to hear about the programmes it offers and the success it has achieved. It bases its success on job outcomes. It has a clear target which it aims to achieve. Whether through Steps to Work or Pathways to Work, young people are getting jobs, and that is important. Like other Members in their constituencies, we have issued challenges to businesses in our communities to take young people on. In my constituency, there is an opportunity for everyone in pharmaceuticals, food processing, light engineering and agri-food, which is a growth industry. Businesses and companies must step up to the bar and be prepared to take people on.
I hope that when the Minister replies he will give some indication of the incentives that the Government can offer businesses to encourage them to offer apprenticeships. If they do so, the young men and women of tomorrow can have jobs. Like other Members, I took on a young man as an apprentice in my office here. After he had spent three years on a course, I offered him a job because of the qualifications that he obviously had, but also because he had the ability and an interest in it, and he needed that opportunity.
The Prince’s Trust is one of the great organisations that we all know and love, and we all recognise the good work it does. The hon. Member for Vale of Clwyd (Chris Ruane) spoke some time ago about depression among young people. Among those who are not in work, 70% are depressed, and of those who are in work, 50% are depressed. It is a big problem that has not been touched on, but perhaps we can have an indication of what can be done about it.
In my constituency, 750 young people of 24 and under are unemployed. They need the opportunity offered by apprenticeships. The big employers are in agri-food, tourism, engineering and pharmaceuticals. If we can encourage each business to take someone on, that would help. We need to increase basic skill levels in literacy, numeracy and mechanics to help people fill in the forms to get a job. As parliamentarians we have a responsibility to help young people who are struggling. If we can deliver a vibrant and rigorous apprenticeship system, that will make a real difference to young people, to businesses and, in the long term, to the economy as a whole.
Chris Evans (Islwyn) (Lab/Co-op)
It is always a pleasure to follow the hon. Member for Strangford (Jim Shannon) and to hear his Irish accent. The Celtic fringe is present in force today in this debate.
I begin with the good news that apprenticeship week is being celebrated in Wales with £40 million being given by the Labour-led Welsh Assembly for expanding apprenticeships. Has the Minister had the chance to read the statement by the Welsh Assembly Minister announcing a one-off payment of £500 to small and micro-businesses to overcome the barriers to employing apprentices? I hope that he will think about introducing something similar throughout the country.
The idea of apprentices always conjures up romantic images from the ’50s and ’60s of the draughtsman, the plumber and the electrician taking a five-year apprenticeship. As much as I welcome apprentices and apprenticeship week, I am concerned that a number of people believe that they are following an apprenticeship when they are doing nothing of the sort. It is not the regeneration of apprenticeships, but the rebadging of apprenticeships. I think of Morrisons as the largest employer of apprentices in this country. One in 10 apprentices work at Morrisons, but what are they apprenticed to do? What profession will they come out with? Is it a meat cutter, a green grocer or a fishmonger? I do not know, and I hope that we will look into that.
Apprenticeships that last only a matter of weeks or months devalue great apprenticeship schemes such as those at Pensord Press in Pontllanfraith in my constituency and in Jaguar Land Rover in the constituency of the hon. Member for Stafford (Jeremy Lefroy). The Richard report bears that out. He noted two things that I have seen myself: the quality and the quantity of apprenticeships. I was hoping to develop this point further, but I have only a minute. At the moment we have box-ticking, and many companies do not appreciate the worth of apprenticeships. I hope that the Minister will look at the example of Germany, where apprentices take an exam at the end of their apprenticeship, like a driving test. There is a qualification standard for each and every sector, so that employers know exactly what they are getting.
Unless we grasp the nettle now and unless we bring about real quality apprenticeships, we risk falling even further behind India and China, and that is the worst thing that we could do for our young people.
Sarah Champion (Rotherham) (Lab)
Not every young person wants to go to university, or indeed can afford to. From a young age, we should be promoting the range of options available post-school, but the Government have seen fit to scrap work experience at key stage 4 and career guidance. Insufficient apprenticeships are available for those who want one, particularly for 16 and 17-year-olds. Rotherham college of arts and technology faces a cut in its funding that means that it will lose 280 places for this age group, despite 14.7% of young people in Rotherham being unemployed—twice the national average.
In Rotherham, we are particularly short of apprenticeship places for engineering, even though we have the advance manufacturing park in the area. The main obstacle employers cite when looking to take on an apprentice aged under 21 is the perceived bureaucracy involved. However, this week, Tata Steel in Rotherham has announced 29 apprenticeships, and other organisations there are also proactively looking to increase the number of apprentices they support. I understand that some employers are nervous about the investment that they will need to make in a young person before seeing any return. However, my experience is that this initial investment pays off tenfold, as employers have a worker who understands their systems and is keen to demonstrate commitment.
I urge the Government to use public procurement to boost apprenticeship numbers. For a company bidding for a public sector contract worth more than £1 million, part of its contractual obligation should be to provide apprenticeships. This recommendation was supported by the cross-party Business, Innovation and Skills Committee, but to date has not been acted on. I mentioned the lack of placements for engineering apprentices in Rotherham. If the Government adopted this policy in public procurement, High Speed 2, which will come through Rotherham, would create 33,000 new apprenticeships throughout the country, immediately making obsolete the problem of the lack of engineering places.
For me, the only way out of a recession is to work our way out. I urge the Government to support apprenticeships more fully to enable our young people to do that. Because of that, I support the motion.
Ms Karen Buck (Westminster North) (Lab)
We have two tasks to fulfil today and I believe that we have fulfilled them. The first, arguably the most important, was to celebrate national apprenticeship week and apprentices. We have had speeches from Members on both sides of the House doing exactly that. From the Opposition Benches we had strong speeches from my hon. Friends the Members for North Tyneside (Mrs Glindon), for Inverclyde (Mr McKenzie), and for Bolton West (Julie Hilling). They spoke of their constituency experiences and praised those involved in delivering apprenticeships, whether SMEs, large employers, training agencies, and colleges.
Further education colleges do not get the attention and praise they deserve in this House. They are central to the delivery of the skills agenda in respect of apprenticeships. Apprenticeships deliver £3.4 billion of value to the economy, so they are not only good for the people undertaking them; they are also good for the wider economy. We have given them the praise that they deserve today, and I hope people will pay attention to the fact that there is cross-party consensus on the value of apprenticeships.
Our second task, however, is to draw attention to what more needs to be done and to what we can do better—and there is a great deal that we can do better. The BIS Select Committee Chair, my hon. Friend the Member for West Bromwich West (Mr Bailey), mapped out the Committee’s important recommendations and drew attention to the core tasks we all face in raising the status of apprenticeships: the task of acquiring parity of esteem for people going through the apprenticeship pathway; and the importance of increasing capacity and the role procurement can play in that. Some Members may remember the Monty Python sketch involving a summary of Proust. My hon. Friend managed to summarise his Select Committee’s recommendations even more quickly, as I think Monty Python allowed a little longer than six minutes.
Opposition Members have critiqued the Government in a variety of ways, including by drawing attention to the worrying fall in the number of places for young people, especially those aged between 16 and 18. We have talked about the growth in apprenticeship numbers—there has been significant growth, which started well before 2010—but they include places that were rebadged, such as adult training schemes originally provided under Train to Gain. The abolition of Train to Gain may have led to the loss of as many as half a million training places, and included in the quarter of a million increase in the number of apprenticeships are a substantial number of adult apprenticeships that would previously have been classified as adult training. Adult training is important and valuable, but it is not the same as apprenticeships, as the Richard report makes clear.
We have a long way to go to deliver the quality and range of apprenticeships, particularly for young people, that the Richard review recommended. The Association of Colleges says:
“Currently there are insufficient apprenticeships available for those who want one, particularly for 16 and 17 year olds. Despite incentive programmes such as the Youth Contract, employers remain reluctant to employ ‘untested’ young people, preferring those with more experience.”
The National Apprenticeship Service has also drawn attention to the fact that there are 10 applications for every apprenticeship, so the level of unmet need is clearly significant.
We also need to take a careful look at the balance of available apprenticeships across sectors. That point was made in powerful speeches by my right hon. Friend the Member for Tottenham (Mr Lammy) and my hon. Friends the Members for Islwyn (Chris Evans) and for Birmingham, Northfield (Richard Burden). Welcome though apprenticeships may be in the fields of office work and administration, health and public services and retail and commercial enterprises, they account for 71% of all 19 to 24-year-old apprenticeship growth. There has been a recent fall in the number of construction apprenticeships and relatively modest growth in areas such as engineering. We will need greater growth in those vital sectors if we are going to help young men as well as young women and address some of the crises in youth unemployment and unemployment among black and minority ethnic communities.
There are other anxieties as well. Why in 2011-12 did achievement rates fall across all groups for the first time? The Minister must address that. How effective is the new careers advice and guidance regime in ensuring that the apprenticeship pathway is seen as a valued option for young people? The Association of Colleges says:
“As a flagship Government policy, apprenticeships must be effectively promoted. The general lack of awareness and understanding of apprenticeships amongst young people and the wider public is a serious issue.”
Several speakers on both sides of the House have mentioned the survey that found that just 7% of young people are able to name apprenticeships as a post-GCSE option. The Government must urgently address that.
Labour has a clear vision for vocational education and apprenticeships. We will introduce a technical baccalaureate at 18—a gold standard in vocational education, held in high esteem, that will command the confidence of business, parents and pupils. Through the measures outlined today we will confront head on the shortage of high-quality apprenticeships for young people. We will put business in the driving seat on skills and apprenticeships. Our taskforce, led by Professor Chris Husbands, will bring forward recommendations on apprenticeships and skills for 14 to 19-year-olds, a joined-up approach to the education and skills challenges we face as a country.
We need a stronger voice for business in delivering the skills agenda we need to compete in the global race. We need a system that is more responsive to the needs of local economies and that will drive forward the generation of new opportunities. Government procurement is one means to that end. We are confident that the procurement measures set out in our motion will do exactly what we expect them to do and will not fall foul of European rules or others.
We are looking at how to improve the quality of advice given to young people, following the shake-up of careers advice and guidance, which was heavily criticised by, among others, the Education Committee. We want to review the impact of the removal of the work experience requirement at key stage 4, which a number of Members have mentioned today. I want schools and colleges to provide apprenticeship taster days to teenagers. If pupils can take a few days out of the classroom to visit universities, I do not see why the same principle should not apply to apprenticeships. Young people from age 14 should be able to get the opportunity to visit companies that offer apprenticeships to see what is involved in the programme and understand the training and career opportunities available. That is Labour’s plan for apprenticeships, putting them at the heart of a new vision for vocational education in this country.
In this national apprenticeship week we want to see a commitment to using the powers of Government to boost apprenticeship numbers and, especially, to meet the needs of a young generation facing almost unprecedented challenges in the workplace. It is simply not good enough that just 7% of young people see apprenticeships as a post-GCSE alternative. It is not good enough that two thirds of large companies do not provide an apprenticeship programme. It is not good enough that the message on the ease of delivery of apprenticeships has not got through to nine out of 10 small and medium-sized employers. We must do better at making sure that the barriers in their way are removed.
It is simply not good enough to ignore the potential of the procurement process as an effective lever for opening up opportunities, particularly for young people, and particularly in the skills and trades that most of us recognise as being at the heart of an apprenticeship programme and that will enable us to compete in the modern economy with the developed countries that, in many cases, are providing apprenticeships at three, four or five times the rate available in this country. That is why the Opposition have put forward a motion that praises the culture of apprenticeships, wants to see more of them provided and wants to see equality of status for them. That is why I urge Members to support the motion.
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
It is a great pleasure to be here, in national apprenticeship week, celebrating apprenticeships. We have had an extremely positive debate, with almost all contributions being positive and huge support on both sides of the House for apprenticeships. Success has many fathers. We heard first the claim that apprenticeships really got going in 1997. I had planned to say that they were in fact first mentioned in Chaucer 651 years ago, but then we heard the even greater claim from the right hon. Member for Tottenham (Mr Lammy) that they are as old as human beings.
It has been a great national apprenticeship week so far. At 5.30 this morning I was learning from Morrisons apprentices how to fillet fish, and what brilliant apprentices they are. It is quite a skill they have with knives—I certainly cannot match it. I have only one note of mild disappointment, because the speech we just heard from the Opposition Front Bench was rather disappointing. I thought that the hon. Member for Westminster North (Ms Buck) sounded rather like the sultan of scepticism or the Eeyore of apprenticeships, only seeing the worst and determined to dampen, downgrade and darken the mood. But we will not darken the mood, Mr Deputy Speaker, because apprenticeships are a cause to celebrate, and celebrate them we will.
Let me turn to the many issues raised by Members across the Chamber. First, careers advice is vital, as the Chairman of the Select Committee, the hon. Member for West Bromwich West (Mr Bailey), said, as did the right hon. Member for Tottenham, in a powerful speech, and my hon. Friend the Member for Worcester (Mr Walker) and the hon. Member for Inverclyde (Mr McKenzie). We have introduced a new statutory duty on schools that came into force in September, and Ofsted has said that it is making it a priority to consider that. The new destination data that were brought in this summer not only highlight, as they have in the past, the proportion of pupils going to university but, for the first time, publish for all schools the proportion going into apprenticeships. That is an important step, as Members in all parts of the House will recognise. We look forward to Ofsted’s report in the summer on the implementation of the duty to provide independent and impartial careers advice.
The second issue, which was raised by many Members, is the importance of the link between youth unemployment and apprenticeships. It is a scandal that youth unemployment is as high as it is, falling though it may be, when there are skills shortages in key parts of our economy such as engineering and computing. This shows that the linkage between the education system and the skills system, on the one hand, and employers, on the other, has not been strong enough. As my hon. Friend the Member for Thurrock (Jackie Doyle-Price) so eloquently explained, increasing that employer focus is a vital part of the reforms that we are pursuing. Another part of those reforms is the introduction of traineeships so that as apprenticeships become more rigorous and more high-quality, there is a programme of support, alongside the DWP programmes, to make sure that people get the skills they need, including in English, maths and work preparation, to get a good job and to hold down a job. My hon. Friend the Member for South Staffordshire (Gavin Williamson), and the hon. Members for Newcastle-under-Lyme (Paul Farrelly), for Edinburgh West (Mike Crockart) and for Eastbourne (Stephen Lloyd) also talked about the link between youth unemployment and apprenticeships. Several Members mentioned their local jobs clubs, and I wish them well. I am having a jobs club in Newmarket on Friday and look forward to it very much.
The third issue is how much apprenticeships are valued. The Chair of the Select Committee mentioned the recently published statistic that, on average, a higher apprenticeship increases lifetime earnings by £150,000. Let that figure go out there and let us all present and explain it, because it shows the value of apprenticeships.
Matthew Hancock
I absolutely recognise that there have been increases in the number of apprenticeships over the past two and half years in level 2 and level 3, and we are going to introduce levels 4, 5 and 6. In every age group there have been increases in the number of apprenticeships, and we should celebrate that.
Matthew Hancock
I cannot, I am afraid; I have virtually no time left.
The hon. Members for Birmingham, Northfield (Richard Burden), for Rotherham (Sarah Champion), for Bradford East (Mr Ward), for North Tyneside (Mrs Glindon) and for Copeland (Mr Reed) talked about the value of apprenticeships. In particular, the hon. Member for Copeland spoke powerfully about how apprenticeships now reflect the modern economy and are spreading into relatively new areas of the economy. All this fits the argument made by the Prime Minister yesterday that there should be a new norm in our country whereby school leavers go to university or into an apprenticeship so that we have a high-skilled economy and a high-skilled work force, not only so that every individual can reach their potential—their personal best—but so that our economy can compete in the global race. I am glad to see cross-party consensus on the importance of the global race.
The hon. Member for Bolton West (Julie Hilling) mentioned many things; I was intrigued by her speech. I want to pick out her mention of the world skills competition, which is a brilliant, fascinating and exciting competition that everybody should watch; certainly, I thoroughly enjoyed watching it.
Members have mentioned the need to increase the number of apprenticeships and I can announce that, in addition to the three apprentices in my private offices, the Department for Business, Innovation and Skills will advertise tomorrow for three further apprentices in our communications department. The numbers are going up and up.
As my hon. Friend the Member for Burnley (Gordon Birtwistle) and the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), have said, while we and many local authorities are broadly supportive of and, indeed, leading on procurement apprenticeships, such as those with Crossrail, I am concerned that the motion is defective, because it appears to call on the Government to exceed their legal powers. Given my assurances, I hope that the Opposition will not push for a vote.
Mr Marsden
The motion states that the Government should use
“the billions of pounds committed to public procurement”,
but our interpretation is that that does not automatically mean procurement in local government, although we believe that the Government have an important role to play in promoting that. I do not understand why the Minister thinks that the motion is defective.
Matthew Hancock
The phrase “public procurement” could easily be interpreted as including procurement in local government, national Government and agencies. The motion was tabled only late last night and it would not be advisable for the House of Commons to vote for something that might not be legal. I am afraid that we must resist the motion, but I hope that, given our reassurances, we can all agree on the need for procurement where possible and for it to represent good value for money. I hope there will not be a vote.
Finally, many Members, including the hon. Member for Islwyn (Chris Evans), mentioned the importance of increased quality and employer focus. Members discussed the cross-party desire for parity of esteem among vocational routes, apprenticeships and universities. It is my passionate belief that parity of esteem will come from parity of quality. We need to increase quality throughout the apprenticeship system so that all apprentices can be as good as the very best at MBDA, Morrisons and Rolls-Royce, which have been mentioned by many Members.
We have taken steps to increase quality: we have insisted that people need to continue with English and maths if they do not have a C grade at GCSE, and have said that there needs to be a minimum of a year in almost all circumstances and a job as part of an apprenticeship. The removal of programme-led apprenticeships has taken out 18,000 apprenticeship places, which is a far higher number than that for the decrease in apprenticeships for 16 to 19-year-olds over the past year. Under the previous Government some apprenticeships did not involve a job, so apprentices were training with no prospect of a job, and astonishingly, some apprenticeships involved jobs without training. At their heart, apprenticeships are about earning and learning at the same time. Increasing quality is vital and I will not apologise for that.
We will respond to the Richard review and are in favour of rigorous apprenticeships that are responsive to employers’ needs. We want to ensure a new norm that gives everyone a good opportunity to reach their potential. We should not use a target to push people into university when it may be best for them to go into an apprenticeship. Instead, let us provide the best possible opportunities for young people, through university and apprenticeships, and a ladder of progression from level 2 to levels 3, 4 and beyond to new areas of the economy, including legal services and accountancy, as well as the more traditional areas of engineering and construction. In that way, we can ensure that there is the potential for everybody to succeed.
Mr Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
Business without Debate
Delegated Legislation
Mr Deputy Speaker (Mr Lindsay Hoyle)
With the leave of the House, we shall take motions 7 to 12 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Legal Services
That the draft Damages-Based Agreements Regulations 2013, which were laid before this House on 21 January, be approved.
Pensions
That the draft Armed Forces and Reserve Forces (Compensation Scheme) (Consequential Provisions: Primary Legislation) Order 2013, which was laid before this House on 14 February, be approved.
Legal Aid and Advice
That the draft Civil Legal Aid (Merits Criteria) (Amendment) Regulations 2013, which were laid before this House on 4 February, be approved .
That the draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2013, which was laid before this House on 4 February, be approved.
Social Security
That the draft Guardian’s Allowance Up-rating Order 2013, which was laid before this House on 7 February, be approved.
That the draft Guardian’s Allowance Up-rating (Northern Ireland) Order 2013, which was laid before this House on 7 February, be approved.—(Anne Milton.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Rating and Valuation
That the draft Non-Domestic Rating (Levy and Safety Net) Regulations 2013, which were laid before this House on 14 February, be approved.—(Anne Milton.)
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 13 March (Standing Order No. 41A).
Mr Deputy Speaker (Mr Lindsay Hoyle)
With the leave of the House, we shall take motions 14 to 17 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Contracting Out, Wales
That the draft Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2013, which was laid before this House on 6 February, be approved.
Representation of the People
That the draft Electoral Registration (Disclosure of Electoral Registers) Regulations 2013, which were laid before this House on 25 February, be approved.
That the draft Electoral Registration (Postponement of 2013 Annual Canvass) Order 2013, which was laid before this House on 25 February, be approved.
Immigration
That the draft Immigration and Nationality (Fees) Regulations 2013, which were laid before this House on 25 February, be approved.—(Anne Milton.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Tax Credits
That the draft Tax Credits Up-rating, etc. Regulations 2013, which were laid before this House on 7 February, be approved.—(Anne Milton.)
The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 13 March (Standing Order No. 41A).
Petitions
Mr Iain McKenzie (Inverclyde) (Lab)
I rise to present a petition signed by hundreds of my constituents, who, like me, are concerned about the increasing number of food banks up and down the country and about the fact that the number of people visiting food banks has increased dramatically since last year. I visited a food bank in my constituency, the i58 project, run by a local church, and was astounded to find out that it had dealt with more than 1,000 people since last September. It assumed that demand for assistance would peak around Christmas, but that has not happened, and the numbers have continued to escalate. It was asked to sign this petition on the ongoing problems facing constituents having to attend food banks to make it through the week on their low incomes or benefits. The petition states:
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of Inverclyde Constituents,
Declares that the Petitioners believe that as a result of the failings of both the Holyrood and Westminster Governments 13 million people live below the poverty line in Britain today; further that the reliance on food banks has dramatically increased in recent years with The Trussell Trust calculating that in 2011–12 food banks fed 128,687 people in the UK, an increase of over 100 per cent on the previous year. Excellent work is being undertaken throughout the country by national and local food bank providers to fill the void left by the failings of the Holyrood and Westminster Governments; however as one of the world's wealthiest countries we believe UK Citizens should not find themselves in this position.
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.]
[P001161]
Gordon Banks (Ochil and South Perthshire) (Lab)
This petition has arisen as a result of the growing number of food banks in the UK and the growing number of people in the UK in the 21st century having to resort to them to feed themselves and their families. I pay tribute to the organisations that run food banks, such as the Trussell Trust, but particularly to the Gate, which operates a food bank in Alloa, and to Activ8 and WISH—women in sport and health—which do likewise in Sauchie, both in my constituency, and for which I am running the Alloa half-marathon on Sunday. Two weeks ago at Prime Minister’s questions I asked the Prime Minister to sign the petition, but despite his agreement to look at it and two e-mails to No. 10 since, I am still waiting.
More than 200 of my Ochil and South Perthshire constituents have signed the petition, which states:
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of Ochil and South Perthshire,
Declares that the Petitioners believe that as a result of the failings of both the Holyrood and Westminster Governments 13 million people live below the poverty line in Britain today; further that the reliance on food banks has dramatically increased in recent years with The Trussell Trust calculating that in 2011–12 food banks fed 128,687 people in the UK, an increase of over 100 per cent on the previous year. Excellent work is being undertaken throughout the country by national and local food bank providers to fill the void left by the failings of the Holyrood and Westminster Governments; however as one of the world’s wealthiest countries we believe UK Citizens should not find themselves in this position.
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.]
[P001163]
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I, too, wish to present a petition on food banks on behalf of my constituents. The signatures were collected in the centre of Leith, a part of my constituency where, according to the latest figures, up to 30% of the population are income deprived and below the poverty line. Unsurprisingly, it is also where Edinburgh’s latest food bank is being set up. I pay tribute to those in the community who are helping to set it up and deal with the growing crisis of hunger that is affecting so many of our citizens, particularly families with children. Those setting up the food bank, like those who signed the petition, also want the UK and Scottish Governments to take action to ensure that no families go hungry.
The petition states:
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.
Following is the full text of the petition:
[The Petition of Edinburgh North and Leith Constituents,
Declares that the Petitioners believe that as a result of the failings of both the Holyrood and Westminster Governments 13 million people live below the poverty line in Britain today; further that the reliance on food banks has dramatically increased in recent years with The Trussell Trust calculating that in 2011–12 food banks fed 128,687 people in the UK, an increase of over 100 per cent on the previous year. Excellent work is being undertaken throughout the country by national and local food bank providers to fill the void left by the failings of the Holyrood and Westminster Governments; however as one of the world’s wealthiest countries we believe UK Citizens should not find themselves in this position.
The Petitioners therefore request that the House of Commons urges the Scotland Office and Department for Work and Pensions to work together to ensure there is an accurate count of the number of people using food banks in Scotland and that the Government take action to ensure that no families in the UK go hungry.
And the Petitioners remain, etc.]
[P001162]
Falkland Islands Referendum
(11 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Guy Opperman (Hexham) (Con)
Today the Falkland islanders showed unity over their future, with a referendum in which 99.8% of the votes cast were in favour of remaining British. The referendum asked them:
“Do you wish the Falkland Islands to retain their current political status as an Overseas Territory of the United Kingdom?”
Only three people voted against. Argentina has now been beaten, I would suggest, both on the battlefield and at the ballot box. It is time for Argentina to accept that the islanders have a right to be there. They do not deserve to be bullied, threatened or intimidated by a close neighbour.
Michael Fabricant (Lichfield) (Con)
My hon. Friend makes a powerful point about how the Argentines should behave. Does he agree that now is the time for the United Nations also to accept the will of the Falkland islanders?
Guy Opperman
I entirely endorse my hon. Friend’s point. This process will definitely be watched with great interest by the United Nations when self-determination, which is surely what a referendum is all about, is being considered.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing this matter before the House. The referendum was clear: the Falkland islanders want to stay British. Does he feel that that message should be sent out from this House this evening to the Argentines—that the Falklands are British today, they will be British in 20 years’ time and they will be British for ever, as long as the people there want them to be?
Guy Opperman
I entirely endorse that point.
It is also right to remember those who passed away during the conflict 31 years ago, when 255 British troops died, 650 Argentinean troops passed away and three female islanders were also killed.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Will my hon. Friend pay tribute to those members of the armed forces who gave their lives, especially those members of 3 Commando Brigade, which is based in my constituency and includes Royal Marines and the Royal Navy? They went out to the south Atlantic and did a deeply courageous job, and they should always be credited for all their hard work.
Guy Opperman
I entirely endorse that point.
Able Seaman Derek Armstrong, from the town of Prudhoe in my constituency, died when HMS Ardent was sunk on 22 May 1982. He was only 22 years of age. His memory is still celebrated by the fact that the most important award of the year given by his school, Prudhoe community high school, is the Derek Armstrong memorial award, which is presented each year to the best sportsperson. All troops, on all sides, should be remembered. We should pay particular tribute to those who are serving there and giving up their time to look after the Falkland Islands on an ongoing basis.
Mr Kevan Jones (North Durham) (Lab)
Will the hon. Gentleman also pay tribute to Colonel Tony Davies and to the Falkland Islands veterans association? The association’s Liberty Lodge in Stanley accommodates many of the veterans who return to the Falkland Islands to remember some of the experiences that they went through in 1992.
Guy Opperman
I totally agree. The way in which we look after the Falkland Islands has got better and better, under the previous Government and now under this one. The organisation that the hon. Gentleman mentions does a great job.
It is right to make it clear that the United Kingdom wants nothing more than peace, trade and prosperity with Argentina and the other south American countries. There are so many problems in this world, and it is surely wrong that we are in any way falling out over these islands. While we in this House stand four-square behind the residents of the Falkland Islands and their overwhelming vote in favour of self-determination, we must try to reach out to the Argentine and other south American peoples and stress that this is a matter entirely for the islanders.
Neil Carmichael (Stroud) (Con)
I welcome the overwhelming majority vote in favour of the Falklands remaining a British overseas territory. I suggest to my hon. Friend that that vote was in a way a reaffirmation of our position in Antarctica, and that it further underlines the importance and the peaceful nature of our activities in there.
Guy Opperman
Indeed, the 1959 Antarctic treaty froze all sovereignty claims there. I pay tribute to my hon. Friend, whose private Member’s Bill, the Antarctic Bill, has passed through the House and is now law.
Many Argentines continue to work in the United Kingdom, and many British people work in Argentina. They are able to get along in a positive way. Perhaps the wisest words spoken in the past two weeks were those of one of the international electoral observers, who said:
“The Falkland Islanders are citizens and they have the right to express themselves.”
Those were the words not of a local, but of Senor Jaime Trobo, the Uruguayan electoral observer.
I suggest that now is a good time to evaluate from where the right to self-determination originates. The principle is set out unequivocally in article 1.2 of the charter of the United Nations, which states that one of the purposes of the United Nations is
“To develop friendly relations among nations based on respect for the principle of equal rights and self-determination of peoples”.
Kate Hoey (Vauxhall) (Lab)
I congratulate the hon. Gentleman on securing a debate on such an important subject on such an important day for the Falkland islanders. Does he also think that this is a good time for the United States of America to show that it understands democracy, and for President Obama to come out in support of the rights of the Falklanders, rather than sitting on the fence as he seems to have been doing?
Guy Opperman
While we would all support President Obama, he seems to be acquiring some splinters by sitting on the fence for so long. The United States’ position is surely hypocritical, given that it uses and benefits from bases in British overseas territories such as Cyprus, Diego Garcia, Ascension and Gibraltar when it suits them. Because it does not use the Falkland Islands for those purposes, however, it is not so supportive of, or enthusiastic about, our claims and those of the Falkland islanders.
Henry Smith (Crawley) (Con)
I also congratulate my hon. Friend on securing this timely and important debate. I agree that the United States is being hypocritical in its approach to recognising the Falkland Islands’ sovereignty. However, we also need to pay tribute to Washington for recently refusing to agree to any more International Monetary Fund or World Bank loans to Buenos Aires—as have the British Government—because of the way in which Argentina has massively defaulted on previous loans.
Guy Opperman
The status of the World Bank loans and the international aid that was or was not going to Argentina over the last few years is indeed a matter of great regret and concern.
Mr Charles Walker (Broxbourne) (Con)
Is not the Argentine President playing a cruel trick on her electorate by trying to divert attention from her own failings? There is not a chance in hell that the Falkland Islands will return to Argentina during her presidency, or any other presidency.
Guy Opperman
That was the problem in 1982, was it not? A President struggling to maintain domestic order was trying to divert attention from the realities of problems at home by attracting it to matters abroad. One is nervous about the potential for that to happen again.
Oliver Colvile
Is my hon. Friend aware that Ewen Southby-Tailyour, who was very much a member of 3 Commando Brigade, did all the mapping around the Falklands in 1978, and that it could then be used by the troops when we went in? It was a very good job that he ended up doing.
Guy Opperman
Preparation is essential to all future military endeavour, as my hon. Friend rightly makes clear.
Under United Nations resolution 2065, which is linked with UN resolution 1514, it is crucial that the interests of the population of the Falkland Islands are observed. That has to be the most important consideration. Resolution 1514 states:
“All peoples have the right to self-determination; by virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development…All armed action or repressive measures of all kinds directed against dependent peoples shall cease...and the integrity of their national territory shall be respected.”
Andrea Leadsom (South Northamptonshire) (Con)
My hon. Friend is making an extremely powerful speech about a very important subject. Does he agree that it is vital to the interests of the economic development of the Falkland Islands for there to be certainty about the sovereignty of those territories, so that businesses, including those in the fishing waters around the islands and those conducting oil exploration, can operate honestly for the foreseeable future in an atmosphere of security and good will?
Guy Opperman
The Foreign Secretary made the same point last year, when he wrote:
“There are many areas on which we”—
the two countries—
“can co-operate: on joint management of fish stocks, on hydrocarbon exploration and on strengthening air and sea links between the Falklands and South America. We used to do this in the 1990s and ought to be able to do it again.”
I am sure that the Falkland Islands Government want more trade links and a greater expansion of trade with their nearest neighbour.
Sir Gerald Howarth (Aldershot) (Con)
I congratulate my hon. Friend on securing the debate. There could be no more emphatic expression of the will of the Falkland Islands people than they have enunciated in the last 24 hours, and there can therefore be no doubt in the Argentine Government of the islanders’ determination to remain British. Does my hon. Friend agree, however, that we should now be seeking to appeal to the reasonable Argentines—many of whom have long-standing connections with this country, not least with the principality of Wales—and forging an alliance with them over the heads of the ridiculous Government of Argentina?
Guy Opperman
My hon. Friend makes his point most eloquently. I could not possibly improve on it. I will point out, however, that barely two weeks ago, before the referendum, Argentina’s Foreign Minister was saying that this was a
“British attempt to manipulate the Question of the Malvinas Islands through a vote by the population implanted by the United Kingdom”.
It is ridiculous to suggest that these people, some of whom have been there for nine generations, have been “implanted”. They are men and women who were born on the Falklands and have lived there for generations, had children, and made their lives together. Like the populations of most countries in Latin America, including Argentina, the Falklands population has grown through a flow of migration. The Falkland Islands constitutes a nation of immigrants who have developed a distinctive culture and identity. For Argentina to deny them the right to self-determination is for it to question the Argentines’ own claim to the rights that they take so seriously.
Michael Ellis (Northampton North) (Con)
Is it not the case that Argentina, sadly, does not have a particularly happy history on respecting the freedoms of its own people and democracy there? Will my hon. Friend join me in criticising Argentina for its actions against cruise lines and the predilection it appears to have developed in recent months for obstructing the free passage of civilian passenger vessels that happen to have any business or trade with the Falkland Islands?
Guy Opperman
The reality is that a blockade of protectionism and intimidation is taking place around the Falkland Islands. We have seen actions ranging from preventing the use of the Falkland Islands flag and disrupting shipping, as my hon. Friend made clear, to ongoing organisational protectionism. Do we really, in 2013, have large countries blocking free trade in that way?
Henry Smith
Does my hon. Friend also agree that it is anathema that Argentina is a member of the G20?
Guy Opperman
Given the state of Argentina’s finances and the insanity of its current financial situation, with inflation in excess of 25%, Argentina is hardly sending out any great lessons of financial propriety.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I just suggest that we have to be careful, as this debate is about the referendum and we are being dragged over other different subjects? I know that Mr Opperman wants to keep to the subject of the debate, so I ask hon. Members not to distract him—that would be helpful.
Mark Menzies
My hon. Friend is making a powerful point in this debate. The people of the Falkland Islands have spoken and we must respect that. They should not feel intimidated, but if they do feel intimidated, the RAF, flying Typhoon aircraft built in west Lancashire, is more than capable of looking after their security.
Guy Opperman
Those aircraft will doubtless be backed up by some Sea King helicopters, a garrison of 1,200 soldiers, HMS Clyde and many other items under the water, not least a few submarines.
Let me deal with Europe and its role in determining this matter. I did not believe that the Lisbon treaty was good for much, but I was interested to read that it was good in that the European Union recognised the Falkland Islands as a “full associated territory”, like our other associated overseas territories, within part 4 of the treaty on the functioning of the European Union. Apparently the Argentines are upset with something from Europe—I think they can join a large club, but I knew that the Lisbon treaty was good for something.
The Argentines continue to dispute this matter on an ongoing basis, but I suggest that they must now take into account the interests and desires of the Falkland Islands’ inhabitants. What has happened is applicable not only to the Falkland Islands, as it has due relevance to the other British overseas territories, including the 293,000 people who reside on a permanent basis in the 14 British overseas territories, all of whom will take great heart from what we have seen in the Falkland Islands today.
Relations with Argentina were not always so bad. In 1995, the Argentine and British Governments issued a joint statement when a deal was signed that identified a discrete area for hydrocarbon and other exploration, and work together. That agreement was scrapped in 2007 by the Argentine Government, which was a great shame. However, the facts are these: the inhabitants of the Falklands overwhelmingly want to remain a British overseas territory; it is not up to Great Britain to give the Falklands away; and it is the Falklands islanders’ own right to decide where their sovereignty lies.
Andrew Rosindell (Romford) (Con)
My hon. Friend is absolutely right to say that it is the right of the people of the Falklands to determine their own destiny, but does he agree that other countries around the world should now accept that the decision that has been made is the freely chosen wish of the people of those islands? I am talking about not just the United States of America, but all those countries that have sat on the fence and have failed to support the Falklanders’ desires to determine their own future.
Guy Opperman
I am happy to pay tribute to my hon. Friend, who has ploughed a strong but lonely furrow as the champion of the British overseas territories, all of which pay due credit to his work.
It is right that we are investing in the islands, moving positively forward and attempting to ensure that, building on the referendum, there is a celebration of the culture of the Falkland Islands and promotion of the fantastic opportunities there. The south American countries are our friends, as we would like Argentina to be.
Sir Gerald Howarth
In the year of the 31st anniversary of the campaign, surely we should recall the 255 men of Her Majesty’s armed forces who gave their lives for the security of the people of the Falkland Islands, including so many members of the Parachute Regiment based in my constituency of Aldershot.
Guy Opperman
We all remember those who passed away on all sides. For example, the Argentine troops were gentlemen led by lambs. They were chronically under-equipped and very poorly trained for the job their country asked them to do.
The people have spoken and the decision is now made. Gone are the days when colonial possessions could be disposed of by giving away power and territory regardless of the view of inhabitants. Let us instead celebrate the unique history and culture of a small island people who choose to remain British—and so they shall. That position and their choice in the matter are non-negotiable.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
This has been a timely and useful debate and I congratulate my hon. Friend the Member for Hexham (Guy Opperman) on obtaining it and on his considered opening speech. I also thank hon. Members on both sides of the House for their contributions.
The Falkland islanders enjoy the support and friendship of Members from across the political divide in the British House of Commons. They will receive that message loud and clear as we debate this momentous day for the people of the Falkland Islands.
The referendum on the future of the Falkland Islands has been an event of momentous significance for that small community in the south Atlantic. An overwhelming majority, 99.8% of those voting, have chosen to retain the islands’ status as a British overseas territory, with an astonishingly high turnout—at which we can only look with jealousy, envy, amazement and, when it comes to our elections, incredulity—of 92%. Just three no votes were cast.
More than 50 international journalists have descended on Stanley. Those hon. Members who have visited Stanley, sometimes more than once, will know what pressure that has put on that place. They have been joined by academics, electoral experts and a formal observer mission made up of members from Latin America, the United States, Canada and New Zealand, who have confirmed that the poll was
“free and fair, reflecting the democratic will of the voters of the Falkland Islands.”
Mr Kevan Jones
Does the Minister agree that that is a very important point? The Falkland islanders can now argue not only that the election was free and fair but that the result shows the will of the people.
Mr Swire
My hon. Friend—I am sorry, Mr Deputy Speaker, I should say the hon. Gentleman, although he is also my friend—has visited the Falklands and what he says is absolutely the case. The world was watching, the Falkland islanders spoke and the world should therefore react accordingly. These were free and fair elections, observed by the international community, and the result is stronger because of that.
Not for the first time, the Falkland islanders find themselves the focus of intense political and media attention. Most will now understandably want life to return to normal, but they can do so secure in the knowledge that they have shown the world in no uncertain terms what political status they want for their home. The result of course reflected what the Falkland islanders have always asserted: their overwhelming wish is to maintain the islands’ status as a British overseas territory. The referendum was not some crude public relations stunt, as the Argentine Government sought to portray it. The islanders organised it not to indulge themselves in establishing the obvious, but to send the clearest possible message to those who either do not know or do not care about what future they want. Today’s absolutely decisive result undoubtedly achieved that and once again I congratulate the Falkland Islands people on their definitive act of self-determination.
The British Government backed the referendum from the outset. Support for the Falkland islanders is absolute, and the Prime Minister made that very clear in his statement earlier today welcoming the result. The Government would have respected whatever result emerged from Stanley but, as is reinforced by the interventions this evening, we are delighted by the overwhelming support for a continuing partnership with the United Kingdom, based on our shared values and mutual respect. For as long as the people of the Falklands wish their homeland to remain an overseas territory of the United Kingdom, we will stand by them.
Derek Twigg (Halton) (Lab)
Like everybody else in the House tonight, I am delighted with the result. It is not unexpected, but it sends a clear message. But for the sacrifices of our armed forces, the referendum could not have been held. Even today, many individuals still suffer from their physical and mental injuries. I am sure the Minister will give due praise to our armed forces for what they did, and to our armed forces serving there now.
Mr Swire
As a former Armed Forces Minister, the hon. Gentleman is right to make that point, which was also raised by my hon. Friend the Member for Aldershot (Sir Gerald Howarth). This is a time to remember all those who lost their life in the conflict, but particularly the British lives lost in re-securing freedom for the islanders.
It would be wrong not to acknowledge that the main factor that led the Falkland islanders to hold the referendum was the increasingly antagonistic behaviour of the Government of Argentina over recent months and years. In many ways President Kirchner herself inspired the referendum. Her aggressive policies motivated the Falkland islanders to stand up so proudly for who they are and what they want.
Like my hon. Friend the Member for Northampton North (Michael Ellis), I deeply regret the direction of Argentina’s policy. From harassing the Falklands fishing fleet, to threatening air links with the islands and issuing hostile letters to companies operating on the Falklands, it seems that the Argentine Government believe that the Falkland islanders can be bullied into submission, and that the British Government will eventually decide to negotiate away their rights. That is never going to happen.
Mr Kevan Jones
Does the Minister agree that when relatives of Argentines killed in the Falklands visit the islands, they receive a very warm and respectful welcome from the people of the islands?
Michael Ellis
Does my hon. Friend agree that the behaviour of Argentina that he has just particularised shows the arrogant colonial power that the Argentines attribute to others?
Mr Swire
My hon. Friend makes his point extremely well. Even better is the comment of the Argentine columnist Andrés Oppenheimer, who wrote recently:
“Argentina’s latest offensive against the islanders may go down in history as a text-book example of diplomatic incompetence.”
The clarity with which the Falkland islanders have voiced their wishes compels Argentina to cease its destructive and counter-productive behaviour. It is simply not credible in the 21st century to pretend that the people living on the Falklands can be ignored, or that they do not exist, as Hector Timerman, the Argentine Foreign Minister, outrageously claimed on his recent trip to London. So I say to the Argentine Government, “Listen to what the islanders have said and put an end to your campaign of intimidation and bullying.”
My hon. Friend the Member for Romford (Andrew Rosindell), who is a stalwart champion of many things, but particularly of the British overseas territories, was right. As well as sending the clearest possible message to Argentina, the result of the referendum sends a message to the rest of the world. Neither the British Government nor the Falkland Islands Government wish to draw other countries into this issue. We respect those countries who express no opinion or who have honest disagreements with us on the matter, but what we cannot accept is other countries being misled into accepting a distorted picture of the Falklands issue.
The Argentine Government have claimed that the islanders do not exist, that the British military is holding them hostage as part of a wider policy to militarise the entire south Atlantic, and that they would be perfectly happy living under Argentine rule. None of these things is true. The islanders have known this all along, but the referendum has taken this message to a worldwide audience and has put the question of their wishes beyond any possible doubt. So we urge all countries who uphold democracy and political rights to respect the wishes of the islanders and to accept the referendum as a clear and valid expression of their views.
Some people will ask whether this referendum will change anything. I believe that it will. No longer will anyone be able to question whether or not the islanders want the Falklands to remain a British territory, and no longer will Argentina be able to distort the facts of the matter, misrepresenting and ignoring what the islanders want. Politicians from the islands will be travelling far and wide in the coming weeks to raise awareness of the result and to dispel myths about their home, and the British Government will be offering them every support and assistance in doing so. But the biggest change of all would be for the Argentine Government to recognise that their bullying tactics have failed—
Westminster Hall
(11 years, 8 months ago)
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Olympic Legacy (Sheffield)
(11 years, 8 months ago)
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Paul Blomfield (Sheffield Central) (Lab)
It is a pleasure to be opening this debate with you in the Chair, Mr Leigh. It means a great deal to those of us from Sheffield to have secured the debate; most of us are here and all plan to speak. My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) regrets that he cannot join us, due to a commitment away from Westminster, and I am sorry that the Deputy Prime Minister, the right hon. Member for Sheffield, Hallam (Mr Clegg), is not present either, although I shall be turning to his contribution to the debate in due course.
The Olympic and Paralympic games were clearly a great moment for Britain, showing the best of our sporting talent, sportsmanship, hospitality and world-class sporting facilities. They were, however, meant to be more than only a moment; they were supposed to provide a legacy for sport, with lasting opportunities for our people, our young people in particular.
In Sheffield, we know all about the benefits of sport. We were the country’s first city of sport and are home to some genuinely world-class facilities, not only the Don Valley stadium, located in the constituency of my hon. Friend the Member for Sheffield South East (Mr Betts), but also the Sheffield Arena, the Ponds Forge international swimming and diving complex and some great community sports facilities. Given their reputations, we have secured more investment over the years, with the establishment of the English Institute of Sport and iceSheffield. Such investment has delivered a huge return. For example, we have beaten the trend nationally in increasing swimming participation and in engagement in other sports. The facilities at Don Valley have inspired a generation of young people, of whom Jessica Ennis is obviously the most successful and best known.
The investment in sport has also demonstrated economic benefits. In the first 12 years of the new facilities, sporting events brought in almost 640,000 visitors to the city and more than £46 million, creating about 990 full-time jobs. For every reason, therefore, it is ironic and deeply disappointing that barely six months after the Olympics and Paralympics, the city council has been put in the position of having no alternative but to close Don Valley stadium.
I am sure that my hon. Friend the Member for Sheffield South East will talk more about Don Valley, but it is worth noting that it was the first completely new national sporting venue built outdoors in Great Britain since Wembley in the early 1920s. It is the second largest athletics stadium in the UK, after the Olympic stadium, with a seating capacity of 25,000. As well as hosting international athletics meetings, it is home to a number of sporting clubs and facilities that are used by the whole community. It is currently used by the City of Sheffield athletic club which provides training, coaching and competition in athletics events, as well as in cross-country and road-running events, and offers coaching for children aged from eight years old.
Jessica Ennis is a member of the City of Sheffield athletic club. She has said that the venue held “great memories”, as it was where she started her athletic career. She has also said of the stadium closure:
“It’s a huge shame. To see it demolished would be a massive, massive disappointment…We’ve achieved so much as a country in the London Olympics, so to lose some great facilities sends out the wrong message, really.”
Her trainer, Toni Minichiello, has worried about the effect of the closure on the children of Sheffield who are engaged in athletics,
“because when Jess started she had the Don Valley stadium where, yes, we could train outdoors but there was also a smaller indoor area which we could use that made us fairly weatherproof”.
He also made the point that the closure reflects
“a series of systemic errors in government policy that are affecting a whole generation of kids who want to be involved in sport. It’s about neglecting basic joined-up thinking on health, education and sport...It is about failing to learn lessons from past mistakes, lessons we’ve had years to get right.”
Perhaps more surprising among those expressing regret about the closure of the Don Valley stadium was the Sports Minister, the Minister of State, Department for Culture, Media and Sport, the right hon. Member for Faversham and Mid Kent (Hugh Robertson); I am sorry that he has been unable to join us for today’s debate. In an interview on Radio 4’s “You and Yours” programme on 1 March, he said:
“I don’t want to see any facilities close”,
in particular one as “emblematic” as Don Valley. In full, he said:
“I very, very much hope that the local council, when they consider this, this afternoon, realise that London 2012 has created a unique opportunity for sport in this county, and I know it’s tough, and I know it’s difficult, and I know there are no easy answers, but it would be a huge, huge shame—it’s such an emblematic facility that means so much to so many local people…to close at such a time.”
We need to be clear, however, that the responsibility for the closure lies not with the city council but with the Government, who have given it no alternative. The stadium costs the council £700,000 a year to run. It is a national asset and, as the Sports Minister said, “ an emblematic facility”, but its costs are borne by one council. When the council is being forced to take £1.6 million out of libraries and £3.5 million out of early years, there are no easy options. Over the past two years Sheffield city council has been forced to make £140 million of cuts due to Government policy, with a further £50 million in both this year and next.
The cuts are unfairly targeted at cities such as Sheffield. That is why the Bishops of Sheffield and of Hallam, together with other faith leaders and community and voluntary sector leaders, have launched the campaign for “A Fair Deal for Sheffield”. In 2011-12 alone, Sheffield council’s revenue spending power reduced by £47.5 million or 8.15%, while Richmond upon Thames, which by any measure is a much wealthier part of the country, had a cut of a mere £1 million or 0.61%. If the Sports Minister were present, he might find it hard to appreciate the impact that that level of cuts can have. His constituency covers parts of the boroughs of Swale and Maidstone. Their cuts per person between 2010-11 and 2014-15 are £73 and £51, respectively, far less than the £200 cut per person imposed on Sheffield council.
Cuts of that severity mean that Sheffield city council and many other local authorities are no longer in a position to keep facilities such as Don Valley open. Notwithstanding the comments I quoted earlier, even the Sports Minister had to acknowledge that when he was asked on “You and Yours”:
“There is a direct causal link, isn’t there, it can’t be avoided, between the almost 30% cuts in local authority support and closing this stadium?”
He replied:
“Yes, there is a direct causal link, you’re entirely right”.
Nevertheless, he went on to blame the council for failing to maintain the stadium properly and indicated that that was one of the reasons for its closure:
“The Don Valley stadium hasn’t suddenly declined in the last six months. This is presumably an ageing process that has been going on for most of the past 20 years because successive councils haven’t invested money in it on a yearly basis that keeps it going and keeps it to a stage where it doesn’t suddenly require a huge bill at the end of the road, and this probably points to a lack of investment over a prolonged period.”
I take strong exception to that further attempt to shift the blame, personally and on behalf of the city council.
I was chair of Sheffield City Trust for the 11 years up to 2008. The trust is the charity that runs Don Valley and our other major facilities on behalf of the council through our operating subsidiary, Sheffield International Venues. As a trust and a city, we maintained Don Valley to the highest standards. There is absolutely no lack of investment, and there has been no decline over 20 years. I have the capital and maintenance budgets for the last five years, which show that £1.6 million was invested in keeping it as a top international stadium. There is a capital requirement in forward costs, not because of under-investment, but simply because it is sensible to anticipate future need.
It was not just the Sports Minister who weighed into the debate; the Deputy Prime Minister also did so, calling on the council to keep the stadium open. It is perhaps reassuring to know that the Liberal Democrats are consistent in a perverse sort of way. They are now against closing it, but they were opposed to opening it in the first place. The Deputy Prime Minister’s arithmetic does not stack up. He argued that one-off closure costs could be offset against running costs simply to delay the closure, leaving no money to deal with it when it happened a few months down the line.
The Deputy Prime Minister has form on these issues. Less than two weeks ago, the city council’s chief executive wrote to correct him on “inaccuracies and misrepresentations” in his comments when opposing cuts in council services. The Deputy Prime Minister cannot have it both ways. He supported and implemented massive and disproportionate cuts on Sheffield council and then stood outside local libraries in his constituency collecting signatures opposing their closure. The same applies to Don Valley.
The impact on Sheffield sport goes well beyond the stadium. There will be an impact on community sports facilities, which I am sure that my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith) will speak about, and on school sport, on which my hon. Friend the Member for Sheffield, Heeley (Meg Munn) will want to make a contribution. There will also be an impact on Activity Sheffield, the Youth Service and the voluntary and community sector, all of which engage the young and the old in the sports activities that are so important to their well-being. Yet when councils in our big cities are facing a struggle to maintain services, it is increasingly difficult for them to support and sustain facilities such as Don Valley. We need a national strategic plan for sports facilities and for the Government to work with councils to keep facilities such as Don Valley open and genuinely to help to deliver an Olympic legacy. The Government must play a role with the councils to ensure that we have stadiums where events can inspire the next generation.
The Government have given the council no alternative to the existing use of Don Valley, but the council is looking at alternatives to provide a sporting legacy. It has made a commitment to the refurbishment of the nearby Woodbourn Road athletics track to provide good-quality outdoor facilities in partnership with local athletics clubs at a much lower cost. It invited my predecessor, Richard Caborn, who is also one of the Sports Minister’s predecessors, to look at alternatives for the site. He has been in discussion with the two universities, Sheffield college, Sheffield Teaching Hospitals NHS Foundation Trust, Sheffield city region local enterprise partnership, the Baker Dearing Trust and Sport England to explore the creation of a new advanced sports and well-being park to provide comprehensive delivery of the Olympic legacy through a facility providing rugby, basketball and gymnastics, by adding an indoor straight at Woodbourn road to the facilities that the council is planning, and by linking to a medical devices advanced manufacturing research centre and a life sciences university technical college. This morning, at a press conference at the English Institute of Sport, he shared that proposal publicly. It has the backing of the city region local enterprise partnership and the other partners I mentioned as a project deserving consideration. Indeed, it also has the backing of Lord Coe.
I hope that the Minister will, on behalf of the Sports Minister, agree to meet those involved in the project to discuss how the Government can, instead of crying crocodile tears, offer practical support to an initiative that might provide an Olympic legacy for our city.
Mr Clive Betts (Sheffield South East) (Lab)
It is a pleasure, Mr Leigh, to serve under your chairmanship. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this important debate. I am pleased to see my fellow Sheffield MPs, my hon. Friends the Members for Sheffield, Heeley (Meg Munn) and for Penistone and Stocksbridge (Angela Smith). My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) would have wanted to be here because he has a long-standing interest in the World student games and the legacy of sporting facilities in the city. The Sheffield approach is united, with perhaps the one exception that my hon. Friend the Member for Sheffield Central mentioned.
I have apologised to you, Mr Leigh, because I must leave early, but I did not have a chance to apologise to the Minister in advance. I have a plane to catch, and the timetable is too tight to allow me to stay to the end of the debate, but I will read with interest the Minister’s commitment of support at the end of the debate.
I was at the opening of the World student games in 1991 when the Don Valley stadium had its finest among many fine moments. I was leader of the council and proud to welcome more than 6,000 young people from all over the world to our city to see the magnificent sporting facilities that we had built and which are still a benefit to the people of Sheffield today. As my hon. Friend the Member for Sheffield Central said, it is not just the Don Valley stadium. The Arena is used regularly and attracts events from all around the world, bringing in an audience from the wider region. Ponds Forge international sports centre is visited by more than 1 million people a year and there are the Hillsborough leisure centre and the Graves tennis and leisure facility in Heeley. The Lyceum theatre in the city centre was also magnificently restored as part of the cultural events for the games. Some £147 million was spent not just on a one-off occasion, but for the people of Sheffield to enjoy, which they have done for the last 22 years. They have done so as spectators and participants, and just by looking at the stadium, because its architecture is magnificent.
Don Valley was part of the city’s regeneration, and we must remember where we were at in the late 1980s when we thought about building sporting facilities for the event. Sheffield city had gone through a horrendous time and had lost 40,000 steel engineering jobs in the Don valley alone, and that had a cataclysmic effect on the city, its industrial structure and its social life. Doing something new and showing that new things could be built on the rubble of the old steel works was extremely important in changing the city’s psychology and thinking about moving forward rather than reflecting on what had gone before in our proud history and heritage in steel engineering, although that is still alive with major companies and organisations such as the advanced manufacturing research centre keeping us at the forefront of new technology. Don Valley stadium is about not just sporting events, but physical and psychological regeneration.
Don Valley has seen many great athletic events. It has seen world champions compete, and it has been home to Jessica Ennis, a local Sheffield girl. I was fortunate to be at the Olympics on the first day of her competition and saw what she had achieved, which was great. It was emotional, and when she came to thank the people of Sheffield she made it clear that she had not had to go abroad to access top-quality training facilities because they were available in Sheffield, and that she was proud to have used those facilities. We understand that, and I feel a personal attachment to the Don Valley stadium for a variety of reasons.
Some people ask why we did not think in advance about whether the stadium would ultimately have sufficient use to justify its existence. At the time and before it was built, we talked to Sheffield football clubs about the potential for them to move into it afterwards. That is recorded in minutes that are now in the Sheffield archives. Sheffield Wednesday said from the beginning that it was not interested, but we talked to directors of Sheffield United, who expressed an initial interest, but eventually decided that it was not for them to continue and they wanted to redevelop Bramall Lane. That was entirely the proper decision for the football club to take, but it shows that we did not simply dismiss the possibilities for other uses at some stage in the future. It simply was not going to happen, and all the issues around the future of the athletics stadium in Manchester, and in relation to the Olympic stadium in London, showed that that is not an easy way forward. However, we have had Sheffield Eagles play there and Rotherham United for a period of time, which helped keep the club going, so the stadium has had other uses over the years.
The reality is that it costs £700,000 a year to maintain the stadium, which still provides superb training facilities and a base for many community activities, but no longer gets major national or international events. At a time of real funding cuts for the local council in Sheffield, can we continue to afford a national and international venue, when national and international events do not come there? That is a major question. We have to say to both the Government and the national sporting bodies that if they want a national stadium to hold national and international events, there has to be national support for it. Clearly, there is no sign or evidence that that is the case and that the Government want to come forward with assistance.
Let us make this clear: unlike Manchester and the Commonwealth games, for which the Labour Government at the time provided an awful lot of support, Sheffield funded the World student games itself. All the costs have been borne by the people of Sheffield. Good facilities have been provided for our people, as well as national facilities, so we are truly a national and international sporting city. The £147 million was paid by the people of Sheffield. The only bit of Government support that we got—I gave him credit at the time, and have done since—was from the then Minister, David Trippier, who gave an urban development grant to help renovate the flats that formed the basis of the student village. Those flats are still in use today, but that is the situation that we face.
I will make a passing reference to the situation of the Liberal Democrats, which is even more convoluted than my hon. Friend the Member for Sheffield Central gave them credit for. They voted in favour of the games to begin with. When the facilities, including the Don Valley stadium, were half built, they changed their mind and voted against them—what they were going to do with the half-built stadium I am not quite sure. They have since voted twice to remortgage the facilities and use the money on the remortgage for other things, and then blamed the cost of the games for £650 million of debt, which is nonsense. The games never had £650 million of debt—that includes a roll-up of interest and the two remortgages used for other purposes, not even for the facilities themselves. The Liberal Democrats were then in favour of Government cuts, which is forcing the council into its current financial position, and then they were in favour of keeping the stadium open, without saying what else they would cut instead. That is a pretty consistent position—for the Liberal Democrats—to be in over a period of years.
That is the current situation for the council. The facts are clear: more than £200 million of cuts need to be made. There will be library closures and cuts to advice centres and early years provision. We are on alternate weekly collections for our refuse. I am sure that the Minister will tell us how awful that is—at least reflecting the views of the Secretary of State on matters so dear to his heart. However, the council has to do those things to balance its books.
We all have our examples; I like the one about Windsor. There have been cuts of £200 a head for the people of Sheffield, but £40 a head for the people of Windsor. I know that historically, Windsor has had less grant, but it has also had fewer needs and more resources, which is why northern cities are getting bigger cuts—they have more grant to cut. Why? Historically, they have had greater needs. They still have greater needs and fewer resources, but they are still being penalised. Given the council’s position, it is very difficult to see how we can justify—despite the stadium’s history, the attachment that I feel to it, and all the good things that it has done for Sheffield—keeping the Don Valley stadium. Of course, the rest of the World student games legacy will be there—the Lyceum theatre, the Arena, Ponds Forge, Hillsborough leisure centre, Graves tennis and leisure centre—for the future benefit of the people of Sheffield and the surrounding area, and for people nationally.
It is important that we do not simply stand still. We can have our disagreements with the Minister about Government funding, and we will no doubt continue to. We can all hold our heads in our hands and say, “Woe is me. We can’t do much about it”. However, the fact that Sheffield has a can-do attitude is shown by Richard Caborn, the former Sports Minister, who still is very much my friend, and who is leading a group of people with the support of the council, the local enterprise partnership and the two universities, to look at bold and imaginative potential regeneration, involving rugby and other sports, the college, and a link-up with universities on sports medicine. With those sorts of things, we can really look to the future. It is not merely about combining sports, medicine and education together, but about that acting as another powerful vehicle for regeneration of the area.
Work still needs to be done in this area, which is between the city centre and the much improved area around Meadowhall. There are great opportunities, with possibilities around the canal, where British Waterways has ideas that it was going to go ahead with before the recession in 2008. I pay tribute in passing to David Slater, a local businessman, who has been really active and keen, and who wants to see the area regenerated. The ending of Don Valley stadium will offer the opportunity to have that space. It is important that we use it constructively and keep the links with sport. We probably cannot do that without Government help.
I know that the Minister cannot give a commitment this morning, but he should look at the regional growth fund and other potential sources, and recognise that this is a real opportunity for the council, with the Government, to take the area forward. We can say, “Don Valley, you have performed a great service for our people in Sheffield. You have been a magnificent institution.” We now have to look to the future and see how improvements can be made on the site when the stadium is finally cleared.
Angela Smith (Penistone and Stocksbridge) (Lab)
It is a pleasure to serve under your chairmanship, Mr Leigh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate and on outlining so clearly some of the issues relating to sports facilities in Sheffield. I also pay tribute to my hon. Friend the Member for Sheffield South East (Mr Betts). Don Valley stadium is in his constituency, as he said, and more than any of us, he understands the issues relating to the role played by the facilities in Sheffield in regenerating the city and in particular, the lower Don valley, as well as what we need to see going forward.
I want to direct most of my contribution to two specific areas of sporting provision in Sheffield: local leisure facilities and sporting provisions in schools, both of which are key elements of sports provision not only in the city but across the country, especially for young people. Unfortunately, both are under attack, because of the self-defeating scale of the austerity being implemented by the coalition Government. However, before I venture into discussing those areas, I would like to briefly reiterate some points made by my Sheffield colleagues.
In my hon. Friend the Member for Sheffield South East, we have, as he said, a former leader of Sheffield city council. Although he would not say so himself, more than anyone else, he and Councillor Peter Price, who was deputy leader of the council at the time, are responsible not only for making Sheffield the country’s first city of sport, but for the construction of the original three facilities—Ponds Forge, Don Valley stadium and Sheffield Arena. As my hon. Friend mentioned, there were also other facilities, such as Hillsborough leisure centre. All were built for the World student games in 1991.
Whatever people’s opinions of the staging of those games—I have always been consistent in supporting them, the investment that they brought with them and what they have achieved—I want to pay tribute to both my hon. Friend and Councillor Peter Price for the foresight and leadership that they showed, not only in taking the city of Sheffield through some very difficult times, but in developing a new future for it as a major sporting city. Anyone who remembers the lower Don valley at it was when the steelworks had gone can only agree that it was a major achievement to put in place Don Valley stadium and all the other infrastructure that has developed on a major scale around it. In later years, and thanks to the investment put in place by the Labour Government, Sheffield added the English Institute of Sport and iceSheffield to its portfolio. Of course, iceSheffield and the EIS are in effect next door to Don Valley. We now have an impressive array of facilities in the city. Because of that, as my hon. Friend the Member for Sheffield South East said, we have managed to stage national and international events, from grand prix athletics—Kelly Holmes made her last ever appearance at the Don Valley stadium; I was there on the day—to world swimming events. The national junior swimming championships were held at Ponds Forge only the weekend before last.
As a result of these investments, Sheffield became the first city of sport in 1995. It has seen rates of participation in sport rise—by almost 6% just in the past three years, 3.5% above the national average. One in seven of Britain’s Olympic athletes for 2012 trained at some point in Sheffield’s facilities. Of course, the pin-up girl for Team GB, Jess Ennis, comes from the city and developed her talent in Sheffield’s facilities. I pay tribute to her for being announced as world sportswoman of the year only last night, and I place on the record our congratulations to Jess on that achievement. Next week, she will rightly be given the freedom of the city of Sheffield. We are all very proud of her, and I look forward to seeing her receive that award.
However, all the developments I have mentioned came at a cost—one that the city and its citizens have borne for many years, as my hon. Friend the Member for Sheffield Central pointed out. We are still bearing the cost, but the cuts being made now to Sheffield’s local government budget makes it all but impossible to keep all the facilities open. In that context, the decision to close Don Valley stadium is inevitable. That is something that Lord Coe sympathised with yesterday. He made it clear that he entirely understood the reasons why the council has taken the decision that it has.
However, even if the Government’s funding decisions are so careless of the legacy made possible by Sheffield’s investment and by the investment in elite sport put in place by the previous, Labour Government, it is clear that Sheffield is not, hence the alternative proposal now being shaped and taken forward by Richard Caborn, an ex-Sports Minister with a record second to none. I therefore echo the challenges laid down by my hon. Friends; we need to see the Government supporting Sheffield as it attempts to secure its future as a provider of opportunities for elite sport. I look forward to hearing the Minister’s response on that point.
The summer of 2012 was probably the greatest summer of sport that this country has ever witnessed, but Team GB’s success in both sets of games—the Paralympic games and the ordinary, if I can call them that, Olympic games—was not built in a day, a week or a year. To develop and nurture the talent that blossomed so beautifully last August and September takes many years. Often—in fact, nearly always—future Olympians start their sport as youngsters, taking up their interest at local facilities and in local schools. It is the cuts in funding for those local opportunities that lead many of us to fear that 2012 might have been a false dawn—a high watermark for British achievement, rather than the first stage in a long-term renaissance of British sport.
We are hearing of local authorities closing leisure facilities throughout the country. For many, the choice is unenviable—close a leisure facility or cut back on adult care or another statutory service. A significant number of local authorities are seeing 30% reductions in budgets. Sheffield has already seen £100 million taken out of its budget. Next year’s budget, as from April of this year, will see another £50 million cut as the council attempts to balance the books and, in common with what is happening in many other local authority areas, it is leisure and sports facilities that are finding themselves in the firing line.
One example is Stocksbridge leisure centre, in my constituency. The centre was paid for by public subscription by local people and opened in 1970. It was a genuine case of local people clubbing together to provide their own facilities—the big society, if you like. However, the local council, because of the financial pressures that it finds itself under, has decided that it will no longer fund the subsidy required to keep the facility open. That is a not inconsiderable sum; it is about £400,000 a year. People will agree that the centre is expensive to run, but most will agree that it still provides a critically important service to the local community. That point was agreed by Sport England itself only yesterday. Sport England has produced a report on sports facilities in the town and has made it clear that there is a need for a facility along the lines of what is already in place in that community. The reasons are clear—they are fairly obvious.
For those who do not know the area, Stocksbridge is a small town some 12 miles from the centre of Sheffield. It is—still—a steel town. It is semi-rural in nature and completely surrounded by fairly intensely rural hamlets and villages. It is isolated in many ways from the urban centre to which it is attached in a local government context.
With good reason, local people have been concerned—indeed, very angry—about the proposal to close the leisure centre. An impressive working group, led by a very capable and dedicated local businesswoman, has opened negotiations with the council on an alternative way forward. I remain hopeful that the council can find a way of keeping the current facility open for a period long enough for the development of a sustainable plan for the future of sports provision in the town. However, that will not be easy, given the scale of the cuts faced by the local authority.
I therefore pay tribute to people such as Emma Gregory and Fay Howard, who have stepped forward—again, it is women who just roll their sleeves up and get on with the job—and shown what they are made of. They are fighting for their community even in the midst of the worst funding settlement for local government in our lifetimes. They are the big society writ large. It is not only the local authority that owes them, but the Government. They are doing that not just because they understand the importance of sport for the health of their children or because they understand that children should be given the opportunity to learn to swim. They are also doing it because they know that youngsters living in their community may well have the potential to compete in future Olympic Games.
Already, the area surrounding Stocksbridge is home to the world downhill biking champion. Already, it has strengths in key areas such as rock climbing, mountain biking and cycling more generally. But, who knows, perhaps the real tragedy will be that if this facility closes, the country loses the next Rebecca Adlington or Sharron Davies. That may happen if the community loses the facility. The council and the community need to find a way forward, and these transitions are never cost-free. Whether or not the way forward is a refurbishment of the current facility or the building of a brand-new facility that is cheaper to run and managed on a community trust basis, which is the most likely way forward, there is a need to invest time and money in establishing a positive resolution to the issue.
I therefore issue a challenge to the Minister. It is entirely in line with Government thinking on finding alternative ways forward in the context of their cuts. We are doing exactly what you are telling us to do—what the Government are telling us to do. I apologise, Mr Leigh.
Mr Edward Leigh (in the Chair)
It is not my Government; I am purely the Chairman.
Angela Smith
I am aware that legacy funds have been made available and that NHS moneys are available to invest, but those funds do not address the scale of the threats facing sports facilities created by funding cuts. There is clearly a problem relating to small, isolated communities such as Stocksbridge. Although the trend towards creating fewer and larger facilities to cover any given area may well be fine for densely populated areas, for rural or semi-rural communities the model falls short of what is needed.
I am therefore adding to the requests that we are making today of the Minister. After all, if we are asking for Government support to find a way forward on Don Valley, clearly it is also imperative that we ask for effective Government support for communities such as Stocksbridge. Will the Minister recognise that point, and will he commit today to looking at the issue and to trying to establish the transitional funds necessary to enable communities and local authorities, working together, to remould their current sports provision in order to develop sustainable solutions to the funding challenges building up in rural and semi-rural areas? It is often forgotten that south Yorkshire is broadly rural. Sheffield is to a large extent rural; one third of the city is in the national park. This is not only an issue for the south of England—Sussex or Kent—it matters as much to south Yorkshire as anywhere else. We may be metropolitan, but we are in some aspects fundamentally rural.
Sport England itself agrees. Its report, issued only yesterday, on the sports facilities in Stocksbridge makes it clear that while it is important to deal with the current situation by developing new district sports centres—there is a clear idea in Sheffield about what those centres might look like—areas such as Stocksbridge need local, albeit small, facilities due to their isolation.
I shall conclude with one more point. The funding problems faced by sports facilities in areas such as Sheffield are being made a whole lot worse because of the coalition Government’s decision to cut funding for school sport partnerships. The £162 million cut to the school sport partnership programme, alongside cuts to specialist sports colleges, was a devastating blow to sport in schools. It means that 60% less time is now being spent on organising school sport than was once the case. Almost half of local authorities have recorded a decrease in the number of school sport partnerships operating, with a staggering one-third of local authorities having no school sport partnerships in operation. Under the previous Government, record investment in school sport saw huge increases in participation, in both competitive and non-competitive sport. The last school sport survey, in 2009-10, found that 78% of pupils took part in intra-school competitive activities, up from 58% in 2006-07. Unfortunately, the current Government do not see sport in the same way, but I would be pleased to hear the Minister prove me wrong on that. They have even axed the two-hour participation target, claiming that it was just a box-ticking exercise.
London 2012 was a glorious achievement. It built on the success we enjoyed in Beijing. It did not, however, happen by accident. It happened first and foremost because of the impressive performances turned in by a talented generation of athletes, but they could not and would not have achieved that success without funding from Government and political will from the Government of the day to achieve great things. However, sport is not solely about winning medals; it is about competing, a healthy lifestyle and having fun. When we, as a nation, should be investing in physical activity to alleviate the obesity crisis, the Government are instead doing the opposite. Cuts to local authorities will inevitably fall disproportionately on our sports facilities—Sheffield is not an isolated case. The Local Government Association has produced a report that says that there is evidence of more participation, but the worst of the funding cuts have yet to come, and if the facilities are not there, participation levels will decrease. Sheffield’s participation rates will almost certainly decrease if both facilities—Don Valley and Stocksbridge—close. Cuts to sporting bodies and Sport England will affect elite and non-elite sport. The cumulative impact of the cuts will, I fear, mean that instead of the London Olympics being the springboard for greater things, they will be seen merely as the high water mark, with a steep decline in performance on the international scene to follow.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing the debate. It is a pleasure to be alongside my good friends to argue our case.
In the summer, I had two amazing weeks in London, and being a proper Yorkshire person, that is not something I say lightly. The first amazing week was at the beginning of August, when I was privileged to be there on super Saturday to see athletes win three gold medals, including Sheffield’s very own Jessica Ennis. A month later, I had tickets to the Paralympics, and I was there on thriller Thursday to see another great Yorkshire woman, Hannah Cockroft, and two other brilliant athletes win golds. We know that the wonderful stadium in which I spent much of my amazing time in London is struggling to continue and cannot continue only as an athletics stadium. The facts of life mean that athletics stadiums are very difficult to support, and yet Don Valley has kept going through the will of the people of Sheffield for more than 20 years, but that involves a subsidy of £700,000 a year, which is no longer sustainable.
Don Valley opened in 1991. I did not live in Sheffield at the time; I had a brief period working out that Yorkshire really is the best place to live and hurried back only a couple of years later. I took time off from my job in social services and, rather than go on holiday, I went to Sheffield to spend time at the World student games. It was a phenomenal event. Over the years, I have visited Don Valley regularly, turning up to many of the great events held there. I have seen World records; I was there, at the same time as my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), for the last appearance of Kelly Holmes; and I have even been on the track, having completed a race for life there.
As my hon. Friend the Member for Sheffield Central said, although the stadium is in Sheffield, it is a national asset. The previous Government and the current Government were both clear and determined that the legacy of 2012 should not just be a legacy for London. In many areas of life—transport, communication, media or whatever—the majority of money is spent in the region we are in now. If we want to be one nation— dare I say it?—money should be available and spent in the north.
I have done a lot of work looking at tennis facilities, in my role in the all-party tennis group. For a long time, we have looked at developing tennis facilities at the Graves leisure area in my constituency, which my hon. Friend the Member for Sheffield South East (Mr Betts) kindly mentioned earlier. One reason for that is that talented young people in any sport do better if they can train near home. We are talking about youngsters; young people who need to go to school and need their family’s support. Without local facilities, we will not get a range of people with a range of ability from around the country. Of course, we cannot have facilities of that calibre everywhere, but what a tragedy if we were to lose this facility, which is in the north, has delivered a world champion and, we feel, can go on supporting many young people in the future if only the finance is there.
My hon. Friends the Members for Penistone and Stocksbridge and for Eltham (Clive Efford) have often spoken about school sport partnerships, because legacy is not only about facilities, but about our investment in young people. For a couple of minutes I want to focus on the effect of the cut to school sport partnerships funding to Sheffield. Prior to the cuts, Sheffield had four thriving partnerships, each working closely with their schools, providing training, development, resources, curriculum support, coaching, competition and participation events for them. A key feature of the work was the network that supported it: the profile of PE and sport in school was raised and time was given to release a member of primary staff to assist the process, to enable valuable development work to take place. We now understand, more than ever, that getting children active from primary is key to keeping them active through life.
Since the removal of funding, partnerships have been forced to set up as private enterprises, which means that they are no longer directly funded. Schools have had to make tough decisions, when their budgets are under pressure, on whether they can afford to buy in the service for their children.
Not only did the funding end in 2011, but so did the PE and sports strategy for young people, which supported the partnerships’ work. As part of the strategy, partnerships undertook a full audit annually to monitor the engagement of their schools in PE and sporting activity. It is a bit disingenuous of the Government, while we are trying to encourage participation, to say, “As part of our cuts to paperwork, partnerships will no longer have to monitor that.” Some of us might think that that is just a way of covering up the fact that, as we know, participation will decrease.
During the school sports partnerships era, schools that were previously unengaged became more engaged, as they had dedicated funding to do so. As soon as the funding went, along with the network, the engaged schools continued to be involved at some level, but less-interested schools started to become unengaged once more. That impacts most greatly on families in which PE and sports are not common parts of their daily life and on families that are financially constrained.
An important part of the partnerships was that there were clear links between schools and clubs in the community. I know from my constituency that although clubs were available—some are not that expensive, such as the Beauchief tennis club—families were not used to going there, so the link was not made. The school sports partnership identified children who were interested and keen and helped them into the local clubs. The removal of the funding has therefore been a huge blow. In some areas of Sheffield, provision has started to disappear. As my hon. Friends have already asked, what future champions are we now missing?
There was a big issue at the Olympics about the proportion of our elite athletes who come from a private or public schooling background rather than from ordinary schools in ordinary communities. Jessica Ennis came from an ordinary school in an ordinary community, and yet she achieved the highest possible level she could. We all felt wonderful about that, but how many others will not get that chance if we do not cast the net wide and get talented young people, who can come from any background and from anywhere, into sport?
A report by Ofsted into schools’ sport provision was published just last month. It looked at what had happened in those four years. The report supported the work of the partnerships and encouraged the Department for Education to consider developing a new national strategy. The report stated:
“Ofsted recommends that the Department for Education considers devising a new national strategy for PE and school sport that builds on the successes of school sport partnerships and enables schools to make a major contribution to the sporting legacy left by the 2012 Olympic Games…The impact of school sport partnerships in maximising participation and increasing regular competition was clearly evident in the vast majority of schools visited.”
We need national facilities and a national strategic plan. Sport England is doing a good job. I have with me a list of projects that shows all sorts of work going on. I am excited about the investment into the Graves sports facilities in my constituency, which will, importantly, look at the link between health and sport and enable people with disabilities and long-term conditions to look at how sport can help them improve. There is a lot going on, but surely the investment should not just be about new facilities all the time; surely we must look to support facilities that have delivered for us in the past.
The Government promised a legacy. They must redouble their efforts to make it happen.
Clive Efford (Eltham) (Lab)
It is a pleasure to participate in this debate under your chairmanship, Mr Leigh. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate, and my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith), for Sheffield South East (Mr Betts) and for Sheffield, Heeley (Meg Munn) on the way in which they have represented their constituencies in this important debate.
This debate is important because Sheffield is synonymous with sport in this country; it has made itself so over a long time. This debate is about fairness, consistency and planning. There is discussion about legacy in one section of Government—that we must deliver and build the legacy—but in another section of the Government— the Department for Communities and Local Government —we see a complete failure to have any strategy whatever and to plan ahead for sports facilities, in order to ensure that the enthusiasm inspired by 2012 can be met by the capacity to provide sports services for people.
This debate highlights the Government’s reckless approach towards local authorities and sport services. We consistently find that the Government have no coherent plan when it comes to sport. Local government has an essential role to play in encouraging participation in sport and physical recreation, but what we see from the Government are consistent attacks on local government and precious little evidence of working in partnership with it.
Research by the Local Government Association, published last Friday, shows that demand is growing in local authority areas post-2012, but with the cuts imposed by this Government, we are moving in the opposite direction from the one in which we should be moving. The lack of any strategy from the Government is highlighted by the comments of Toni Minichiello, Jessica Ennis’s coach, with regard to Don Valley. He asked why the Secretary of State for Education
“twice had to delay announcements on sport in primary schools? Why have school sports partnerships been cut? Why are athletics tracks up and down the country—not just in Sheffield—having to close? All of these errors could have been foreseen. That is the point of legacy—investment and planning.”
Across the whole sporting community, we consistently hear the same comment: this Government have no coherent sport strategy to deliver the legacy. There is a lack of cross-departmental, joined-up thinking, threatening the 2012 legacy.
Sheffield has become a centre of excellence for sport. It hosted the student games in 1991 and laid the foundations for a sporting legacy in that city. If we look back to the 1980s, when I was in local government and my hon. Friend the Member for Sheffield South East was on Sheffield city council, Sheffield was showing the way for planning for sport for a generation. We have all celebrated what has gone on in Sheffield over the past year, but it did not come either cheaply or at a moment’s notice. It started back in the 1980s, when Sheffield planned for the World student games. It has built on that legacy, showing an innovative way of approaching sports development—years ahead of other local authorities. It planned to have not just a centre of excellence for sport, but a place where major entertainment events could take place and to use the income generated from that to cross-subsidise a state-of-the-art sports facility.
Sadly, time has caught up with that; competition from other venues has meant that it has not been possible to sustain that business plan over many years. However, if the people of Sheffield look back, they will see that they have been extremely well served by the forward thinking of the people who planned the student games and the facilities back then. Last year showed what that sort of long-term planning can deliver. The Olympics were a great event not only for London, but for places such as Sheffield, which have been providing state-of-the-art facilities for our best athletes to train in so that they could compete at the top of their sport and bring an enormous amount of national pride to the United Kingdom. We all owe a debt of gratitude to the pioneers back in the 1980s who planned for the student games and delivered a legacy for us last year. That is why it is important that we support their endeavours in Sheffield.
I am not suggesting that anyone can provide £700,000 a year to sustain the Don Valley stadium; no one is asking for that. The current financial situation in Sheffield has forced it to make the decision, but changes in the business plan for the stadium would probably in any case have forced a decision about its future.
Even in the light of what is taking place, Sheffield has still shown a commitment to the provision of state-of-the-art sports facilities. It is still prepared to put £150 million of capital into the refurbishment of the Woodbourn facility to bring it up to standard, so that it can remain an athletics training facility, to put £70,000 a year of revenue into it and to hand it over to local athletics clubs for them to run, so that it continues to provide sports facilities, particularly for athletics. Even at this time of severe cuts, Sheffield is prepared to support state-of-the-art sports facilities for future generations.
Many people have queued to have their picture taken with the athletes who have benefited from the facilities provided in Sheffield—particularly with the likes of Jess Ennis. I have to say, however, that some of the people at the front of that queue have not entirely supported Sheffield’s investment in sports facilities over the years. My hon. Friends have highlighted some of the double dealing of local politicians in Sheffield over the financial package for Don Valley—criticising it at one time, while defending it and saying that they want the stadium kept open at another time.
In Sheffield, only Labour politicians have shown a consistent commitment over a generation to investing in sports facilities, for which they are to be commended. Sheffield did not become a centre of excellence in sport by accident; it had to show a commitment over many years to deliver the legacy of 2012, and we must provide the support in kind that it requires. The Government should be an honest broker and bring together all the parties to work out a plan of action for not only the Don Valley site, but Woodbourn. We are not talking about the Government committing huge resources, but using their good offices to ensure that Sheffield gets the support that it needs.
Up and down the country, local authorities are making decisions about vital sports facilities. They are having to ensure that such facilities—many are being outsourced to outside organisations—are financially viable and sustainable. I want to hear from the Minister what he is doing to ensure that people are not being excluded from sports facilities because of cost. The more local government finance is squeezed, the greater the need to raise income from fees and charges and the more that people on low incomes—the very people we must encourage to participate more, as all the research shows—are excluded from services. What exactly is he doing to ensure that we do not exclude people on the basis of cost from participating in local government sports facilities in these times of austerity?
The Government need to work with local authorities to ensure that they do all they can to have the capacity to meet the demands highlighted by the Local Government Association research. What discussions has the Minister had with the Department for Culture, Media and Sport about the future of sports facilities? If there is a cross-Government approach to sport, I am sure that he will have had meetings with that Department to assess the impact of cuts on local government services. Exactly what discussions have taken place, and what can he tell us about their outcome for protecting the sporting legacy in local government services?
The Government’s own councillors are criticising their approach to austerity in local government services. The Local Government Association has declared Tory- led West Somerset council to be “not viable” over the longer term. The Tory former LGA chair Baroness Eaton has said that the understanding of the Secretary of State for Communities and Local Government about the impact of the cuts on local government is
“detached from the reality councils are dealing with”.
Merrick Cockell has suggested that the cuts are unsustainable in future.
Labour authorities across the country are working hard to protect community sports facilities. Research by my office has found that Tory authorities are, on average, making greater cuts to sport development and facilities expenditure than Labour authorities, so the idea that any of the cuts are politically motivated is ridiculous. No one is saying that there should be no cuts—I am sure that the Minister will say that there is no money, an argument we have heard before—but the unfair cuts are forcing the loss of so many facilities in areas of high deprivation.
Local government is hitting the poorest hardest. The spending power of the 10 most deprived local authorities is being cut by eight times that of the 10 least deprived local authorities. Taking the cuts per head of population, 43 of the top 50 are Labour, three are Conservative and the rest have no overall control; none is Liberal Democrat. Sheffield is 39th in that list, and is being forced to cut £139.57 per head. The Prime Minister’s area is losing only £34 per head.
Government cuts to Sheffield’s funding, rising prices and increasing demand mean that Sheffield has to find £50 million of savings next year, on top of the £140 million of savings already made over the past two years. The Government have said that the cuts will continue until 2018, which leaves Sheffield in the desperate situation of having no choice but to make such decisions as the one about Don Valley.
Despite that cut, Labour councils are playing their part. Although the hardest cuts to sports expenditure are being imposed on Labour authorities across the country, Labour authorities are cutting 6% of sports spend, Tory authorities are cutting 11% and Liberal Democrat authorities are cutting 17%. Even in these times of austerity, Labour authorities, which are at the top of the list for cuts to local spending capacity, are showing the way in protecting sports services and facilities.
I want to hear exactly what the Minister will do in relation to Sheffield. I am not for a minute suggesting that he can rush in and spend a whole load of Government money, but I want to know what, if anything, anyone in the Government has done to liaise with the local authority, UK Athletics and any of the parties interested in the Don Valley site to ensure that we sustain state-of-the-art sports facilities in Sheffield and that the Don Valley site is developed for the benefit of the local community.
We have heard about the consortium led by the former Minister for Sport Dick Caborn. That scheme is worthy of great consideration and has been given initial backing by Lord Coe, who is the Government’s adviser on the Olympic legacy. What do the Government intend to do in relation to that scheme and what part will they play in examining its viability and, if necessary, in ensuring that the scheme moves forward? The scheme has the potential to regenerate a major site in the city and to create nearly 1,000 jobs. It is innovative in how it approaches the whole well-being issue of health, sports and recreation; and it could be unique and a beacon for other areas to follow. The Government have a lot to gain by examining such a scheme, which was proposed by Dick Caborn this morning.
Sheffield has become synonymous with sport in this country and with sporting success. That success has been a long time in creation, which shows that a legacy is something that is developed over many years. We can all learn from that as we try to build on the 2012 legacy. Sheffield has laid down a challenge for the Government—what will they do to help regenerate the site and to ensure that Sheffield continues to play its part as a major sporting centre of excellence for the next generation?
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
It is a pleasure to serve under your chairmanship, Mr Leigh. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate, and other hon. Members on showing their support for Sheffield and the stadium.
Hon. Members will no doubt be aware that the Department for Culture, Media and Sport sets the policy framework for sport funding decisions, but that the day-to-day decision making on the funding for local sports facilities lies with the local authority, with Sport England providing advice, guidance and, in some cases, funding. I know that my right hon. Friend the Minister of State, Department for Culture, Media and Sport would have liked to have been here this morning, but unfortunately he had to attend a Bill Committee sitting. Let me deal with some of the issues that have been raised about the local government finance settlement before talking a bit about the Olympic legacy and the situation in Sheffield.
A couple of hon. Members questioned whether the local government finance settlement was fair. They might have been present in the Chamber when that matter was debated, and when we were able to outline, as a House of Commons Library report confirms, that the settlement was fair to north and south, east and west, urban and rural. Some of the comparisons that are used, and we have heard some this morning from the hon. Members for Eltham (Clive Efford) and for Sheffield South East (Mr Betts), are—I choose my words carefully—not appropriate. It is difficult to make a fair comparison between some of the metropolitan city councils in the north that get a per dwelling spend of around £3,500 to £3,700 with a council such as the one in the Prime Minister’s west Oxfordshire constituency, which has a per dwelling spend of £1,800, or even to a council in a constituency such as mine, which has a couple of the most deprived wards in the country, and has one of the highest per dwelling spends in Norfolk, but is still only at £2,200. It is wholly inappropriate to compare such authorities, and the changes in their expenditure, to authorities that get substantially more in the first place because their baseline is much higher.
The problem for West Somerset, which was mentioned by the hon. Member for Eltham, is not related to the percentage of its funding—it actually had an increase this year—but to the fact that it has 35,000 residents across a big rural area, leaving the council with a critical mass issue to deal with. In fact, I have a meeting with Somerset MPs this morning about that very issue.
I am tempted to take literally the words of the hon. Gentleman, who seemed to suggest that we should go back to central control of local government and to dictate from the centre what councils must do, but I must remind him that with the Localism Act 2011, the Government have made it clear that we believe in localism. Local determination should decide how councils spend their money; they are best placed to consider what their local community needs and to service it. We are working with local authorities, as is the LGA, to ensure that we see more innovative and efficient ways of working, whether that is through shared services, shared management or outsourcing. We are looking at how they work and facilitate to ensure that they spend their money on important front-line services for residents, not on bureaucracy, red tape and back-office management costs. They can still go further on that, but ultimately it is for those authorities to make their local decisions.
As hon. Members have said, the Olympic games last summer were truly magnificent and a great boost to the whole country, both psychologically and in a sporting sense, showcasing the very best of what we as a country have to offer. Specifically for this debate, we must recognise the great talent of Jessica Ennis. Like the hon. Member for Sheffield South East, I was fortunate enough to be in the stadium on her first day of competition. It was fantastic to see what she achieved and the inspiration that she and other athletes have given to those who might follow in their footsteps. If we are to repeat the success in 2016, we must ensure that our athletes have the best possible conditions in which to train, which is something on which we can all agree.
Let me make a few general points about what the Government are doing to secure a lasting sporting legacy to the games before addressing the specifics of what is happening in Sheffield. In December, UK Sport and Sport England, the public bodies responsible for the delivery of elite and grass-roots sport, announced the funding they will be providing over the next four years. UK Sport will invest £347 million in elite sport and Sport England will provide £493 million to the national governing bodies of sport for community sport.
In addition, more than £100 million of lottery and public funding is being invested in school games over the next three years; and £500,000 is being invested in youth sport over the next five years through the youth sport strategy, with £150 million being invested through the Places People Play programme to upgrade 1,000 local sports venues. Some 15.5 million people aged 16 and over are now playing sport at least once a week, which is 750,000 more than a year ago and 1.57 million more than when London won the Olympic and Paralympic bid. In the current economic climate that is a significant investment in sport. I can reassure hon. Members that both UK Sport and Sport England have record levels of funding thanks to this Government’s decision to restore the lottery shares to the original good causes, including sport.
UK Sport is investing almost £500,000 to ensure that our athletes can build on the success of last year and do even better in Rio in 2016. Over the next four years, Sport England is investing more than £1 billion in youth and community sport, which includes more than 1,000 local sports facilities.
The Government are fully committed to providing high-quality sport in schools as well as in communities. Our new schools games programme introduces competitive sport in schools, between schools and at county, regional and national level. We have invested more than £100 million in the programme, and well over half of all schools are taking part. Indeed, the national finals are being held in Sheffield this year. The programme is getting young people to play sport regularly and not creating bureaucratic, top-down networks. However, we must not be complacent. We share the desire to inspire a generation to take up and enjoy sport throughout their lives. I can confidently say that an innovative and exciting announcement on school sport will be made shortly.
Additionally, let me draw hon. Members’ attention to the Government’s 10-point sports action plan, which sets out how much is being done to deliver a real legacy from the London games. With those announcements down the line, I hope that hon. Members will be pleased with the Government’s direction of travel.
On the specifics of Government spending and the legacy for Sheffield, naturally nobody wants to see a sports facility close, but local authorities need to make tough decisions to ensure that they are providing the best possible services to all their communities, and that includes strategic management of the public estate at a cost that is affordable within their budget constraints. The hon. Member for Eltham alluded to how much money is out there, but the reality is we are having to deal with the previous Government’s atrocious legacy of deficit and debt, so we must start to live within our means. Local government accounts for around a quarter of public expenditure, so it has its part to play in this process. That is why councils must make decisions about what they are doing and how best they provide facilities for local people. I suspect that is also why Lord Coe himself has said, in support of the decisions that Sheffield city council has to make, that he understands why a local authority must look at these situations and make decisions.
As has been said, Don Valley stadium is 23 years old and costs about £700,000 a year to operate. It also has an estimated repair bill of more than £1.5 million and there is another stadium, less than a mile away, which costs £70,000 a year to operate. Therefore, it is for Sheffield city council to make the decision about which of these facilities they can afford and to justify that decision to their people locally, without central Government dictating whether it is a right or wrong decision.
I am informed that the council has given clear assurances that local people will still have access to first-class outdoor athletics facilities; indeed, Sheffield is extremely well served in that respect. The council is also talking to local athletics groups about how they can become involved in the management of those facilities, and I will come back to that point in a moment. Sport England has agreed to work with the council to ensure that Woodbourn becomes a first-class, sustainable venue for community and elite athlete training, and for regional competition.
Of course, Sheffield also has a first-class indoor facility in the form of the English Institute of Sport, which is where Jessica Ennis herself does much of her UK training. I was also heartened to hear that Sheffield has been the recipient of a number of grants for facilities, both large and small, including a grant in 2011 of almost £5 million for the English Institute of Sport. As I have already said, Sheffield will also host the national finals of the school games in September 2013.
I welcome the imaginative proposal unveiled this morning by the former Sports Minister, and I can confirm that my right hon. Friend the Minister of State, Department for Culture, Media and Sport, will be pleased to meet those involved in developing that proposal. I also encourage them to meet Sport England, to discuss how they might apply for funding under the sports legacy iconic facilities programme.
None of this activity means that either central or local government can or should be complacent; we simply cannot afford to be. We all want to build on the success that we saw in 2012. However, just providing the facilities will not guarantee a lasting legacy, which is why my right hon. Friend the Minister of State, Department for Culture, Media and Sport, laid out the 10-point plan to ensure a sporting legacy, including school sport, getting more children involved in competitive sport, specific disability sports programmes, talent development and elite sport, attracting and delivering major coaching and volunteer programmes, and world-class facilities.
Brandon Lewis
We have made it quite clear that we are trying to move away from asking local authorities and local areas to report back lots and lots of information; that is part of helping them to reduce their costs. We also trust local authorities. Unlike Labour, we trust local authorities and local people to make the right decisions for their local communities. That is what local elections and local democracy are about, and that is obviously where the difference lies between central and local control.
Angela Smith
The Minister has said a great deal about trusting local councils and local people. He talked earlier about the importance of all that—indeed, he has referred to it twice—but as yet he has said nothing about the leisure facility in my constituency, even though I asked that he give a response to the argument that the Government could do more to support the council and the community in finding a future for sports in that area.
Brandon Lewis
Actually, I think that I have directly addressed that point in my comments. It is for local authorities to look at what they need for their local community and how they spend their money in the interests of servicing their local community. As I have always said, if any local council has a particular issue that they wish to come to discuss with me, I am very happy for them to do that; indeed, I am very happy for the hon. Lady to do that too.
The combination of all the things that I mentioned earlier is exactly what made the Olympic games last year such a success, and it is that combination—not one thing alone, but a combination of things—that will provide a legacy to 2012, a legacy that I hope Sheffield continues to help to deliver, through the inspiration of Jessica Ennis and others like her, as well as through the local communities who support their local facilities.
Reburial of King Richard III
(11 years, 8 months ago)
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Mr Edward Leigh (in the Chair)
We now come to a most interesting debate on the licensing of the reburial of King Richard III. I am sure that hon. Members will not be guilty of lèse-majesté in their comments.
Hugh Bayley (York Central) (Lab)
An interesting debate indeed.
I pay tribute to Richard Buckley, from university of Leicester archaeological services, who led the dig in the car park in Leicester which found the remains of King Richard III. It was a pleasure to talk to him last week, when preparing for this debate. I also pay tribute to the Yorkist Richard III Society, which proposed the dig to Leicester university and made some funding available to enable it to take place.
It is 527 and a half years since the end of the wars of the roses, a nasty, bloody civil war that tore our country apart. Although people think of it as a war between the white rose of York and the red rose of Lancaster, it was in fact a war between the north and the south and it was as horrible as any of the more recent civil wars of the 20th and 21st centuries. In this debate I do not want to set York against Leicester. Rather, I want to use the stupendous discovery of King Richard’s remains to bring our cities closer together, perhaps as a metaphor for the one-nation politics that all our parties nowadays stand for.
I do not hide the fact that I believe that King Richard III’s mortal remains should be buried in York. However, that is not the purpose of today’s debate. I want the Government to create a fair, independent process for arbitrating between the claims of York and Leicester, and other places, such as Westminster abbey, just across the road, where Anne Neville, King Richard’s wife, is buried. I want the Government, having created such a process, to come to decisions in a dignified way, based on historical advice, and after considering the views of all interested parties. It is the responsibility of the state to decide where, how and when King Richard, former King and head of state for our country, is buried. It is not a decision that should be delegated to a group of academics at Leicester university, as is currently specified in the licence for the dig, issued by the Ministry of Justice.
Hugh Bayley
How could I not give way to the hon. Member for Bosworth (David Tredinnick) on such an occasion?
David Tredinnick
I am deeply grateful to the hon. Gentleman, whom I called my hon. Friend in a slip of the tongue. I have known him for many years. The overwhelming opinion in the county of Leicestershire is that King Richard III should be buried close to where he has lain for more than 500 years. I hope that, in the end, he finds himself at peace in Leicester cathedral.
Hugh Bayley
I do not for a minute disbelieve that that is the sentiment in Leicester. Indeed, an e-petition with 7,500 signatures supports the proposition that the King’s remains should be laid to rest in Leicester cathedral. There is also an e-petition with 24,000 signatures supporting the proposition that the mortal remains should be buried in York minster, which is where Richard, during his life, gave notice that he would like to be buried. The Government must find some fair, independent process for arbitrating between parties on this question.
Nigel Adams (Selby and Ainsty) (Con)
I appreciate that the hon. Gentleman believes that this should be a decision for the state—that is, in some ways, correct—but does he not think that there should be some consideration and weight given to the views of the late King’s family and descendants?
Hugh Bayley
The late King’s descendants—17 of them—published a statement recently supporting the proposition that their ancestor should be buried in York minster. Their voices ought most certainly to be heard in the process that I propose, as should those of the royal family, the Church of England and the Catholic Church, which I mention in deference to a question asked by the hon. Member for Gainsborough (Mr Leigh), who is chairing our proceedings, on the Floor of the House last week. The voices of many people with interests should be considered before a final decision is made.
In preparing for this debate, I consulted a number of people. I have mentioned Richard Buckley, but I also consulted Dr Sebastian Payne, former chief scientist for English Heritage, who is a member of the advisory panel on the archaeology of burials in England. I spoke to Simon Mays, the scientist responsible for human remains at English Heritage; to Wendy Moorhen, deputy chairman of the Richard III Society; to Paul Toy, curator of the Richard III museum in York; to Vivienne Faull, Dean of York minster, and to others.
The licence issued by the Ministry of Justice to Leicester archaeological services unit to excavate the car park permitted
“the removal of the remains of persons unknown”.
Richard Buckley told me that the prospects for finding King Richard were remote and that that was known by the Ministry of Justice when the licence was issued. Indeed, the licence application contained the phrase,
“in the unlikely event of finding the remains of Richard”,
so it is no surprise that the decision was taken in relation to persons unknown, rather than in relation to a former king.
Jonathan Ashworth (Leicester South) (Lab)
I congratulate my hon. Friend on securing this debate. He mentions the licence granted by the Ministry of Justice, which I would argue was granted in the fair and independent way that he has been calling for, but the application for the licence was explicit about Richard. It said that a licence was wanted for an
“excavation to investigate the remains of Leicester’s Franciscan Friary and also potentially locate the burial place of Richard III, whose remains were interred here in 1485”.
The application explicitly asked for a licence to find Richard III. The licence was clear that any remains should be deposited at the Jewry Wall museum in Leicester or else reinterred at St Martin’s cathedral in Leicester. The reason for that, presumably, is that it is archaeological good practice that remains are reinterred at the nearest consecrated ground, which is Leicester cathedral.
Hugh Bayley
I am advised by various people, whose opinions and good advice I sought before this debate, that each case must be considered on its merits. There are many archaeological investigations in my constituency. The licence issued to the Leicester archaeologists contained broadly the same terms as a licence that would normally be issued to any archaeological society or group with a decent reason to dig. It mentioned “persons unknown”. If a mediaeval tailor had been found, it might have been appropriate to keep his remains in the county archaeological museum in Leicester or to rebury them nearby. In the case of a king’s remains, reburial is absolutely necessary. The remains should not be kept in a museum in Leicester or anywhere else. The state has a decision to make about what is the appropriate way to deal with the remains of a former king.
Hugh Bayley
I will give way to the hon. Gentleman and then I will try to make some progress with my argument.
Chris Skidmore
I want to declare my interest. I am a member of the Richard III Society and I have written a book on the battle of Bosworth. My standpoint is neutral, being a Member of Parliament for Bristol, neither from Leicestershire nor Yorkshire. I am interested in the hon. Gentleman’s discussion about an independent solution. Would he consider my compromise, whereby even if Richard is buried in Leicester his body might lie in state at York for a week? However, regardless of where Richard is buried—perhaps the Minister could respond to this point—the Richard III Society has raised £30,000 for a tomb for him to be encased in. I am keen to see whether there is support in the House for an appropriate burial in such a tomb, whether it is in Leicester or York. I am also keen for that to be privately financed so that it is not a great cost to the taxpayer.
Hugh Bayley
Once again, I pay tribute to the role the Richard III Society has played in this whole event. It proposed the investigation based on its own research, and the excavations were expertly carried out by the archaeologists from the university of Leicester. It is too early to agree the compromise solution the hon. Gentleman suggests, but it is a constructive idea, and it is entirely consistent with my view that we should look at ways to bring together people from York and Leicester, rather than set them against each other. The idea has been considered by the Church, and the Dean of York mentioned it to me last week. It is the sort of proposition that could be considered under the process I am asking the Government to set in train.
As I say, the licence refers to persons unknown. Now that the identity of the remains has been established, it is right to reconsider the terms of the licence. Indeed, Sebastian Payne, the former chief scientist at English Heritage, described the discovery to me as a game changer. He is a member of the Advisory Panel on the Archaeology of Burials in England. The panel has representatives from the Church of England, English Heritage and the Ministry of Justice. It met last Friday, and I asked Dr Payne to seek its advice on this case. Yesterday, I received a reply from Professor Holger Schutkowski, the chair of the panel. He wrote to me, saying that
“since the exhumation was carried out under Ministry of Justice licence, it is APABE’s understanding that the final decision on re-interment rests with the MoJ and that it is open to the MoJ to vary the terms of the licence. Therefore, APABE advises that your detailed questions should be addressed to them. APABE has no views about where the remains should be re-interred or how the place of burial should be marked. APABE recommends, however, that the views of those that have justifiable close links with the deceased, be they historical, cultural or religions, require balanced consideration as, for instance, set out in recent DCMS Guidance. Consideration should also be given to the rights, Canon Law and responsibilities of the Church of England as the legal successor of the Church into whose keeping the body was given at burial.”
The Government have the power to amend the licence; indeed, they frequently amend licences. Back in the 1980s, when the York Archaeological Trust was excavating at Jewbury, in York, the plans were changed as a result of representations from orthodox Jews, who took the view that the Jewish skeletons that were discovered should be reburied quickly, in line with Jewish practice. Four years ago, the Ministry, under the previous Administration, issued advice that, generally speaking, human remains should be reburied quickly. However, that has been found to be impractical in some cases, because it impedes archaeologists’ scientific examination of the remains. The Ministry has therefore amended quite a few licences in recent years to permit scientific examinations.
I have two proposals for the Minister. First, he should appoint an independent committee of experts to examine the historical record; the scientific analysis arising out of the dig; good archaeological practice; and the ethical and religious issues. The committee should advise him on where, how and when reburial takes place. Secondly, he and his Department should give the university of Leicester notice that it may be necessary, having taken advice from independent experts, for the Government to amend the licence and that preparations for reburial should therefore temporarily cease.
There are two other issues I would like to mention. First, the scientific tests to establish the identity of the remains are not yet complete, and archaeologists have not yet published their findings from the dig in peer-reviewed journals. In its letter to me yesterday, the advisory committee said:
“APABE understands that there is evidence ascertained through various scientific approaches that the human remains exhumed from the site of the former Leicester Greyfriars may be those of the late King Richard III. Due to the potential significance suggested by recent media presentation of preliminary scientific results, APABE believes it is in the national interest that decisions about the future deposition of these remains should await completion and peer review of the scientific results.”
I am emotionally inclined to believe the remains are those of King Richard, but the Government would clearly be foolish to set in train arrangements for the burial of the remains of a king—a head of state—if it is not certain that that is what has been found.
Richard Buckley is, of course, certain that he is right, but he has a vested interest in being certain: his reputation and legacy as an archaeologist depend on the identification being accepted. If he is right, he will go down in history, like Howard Carter, who found Tutankhamun, although Carter had the advantage that Tutankhamun was found in a casket that had Egyptian hieroglyphics on the side saying, “This is the body of Pharaoh Tutankhamun.” Unfortunately, King Richard—buried in haste after the battle, naked and with his hands tied by his captors—was found in neither a coffin nor even a shroud, and no evidence was found of coffin nails or of the pins that would have pinned a shroud together.
I mentioned that public opinion is split, with thousands of people supporting Leicester, and three times as many supporting burial in York. I have received many letters and e-mails from members of the public supporting burial in York. Most are thoughtful, well argued and based on scientific facts, but some are, frankly, inflammatory. I talked to the Dean of York yesterday, and some of the letters she has received at the minster are so extreme that she has referred the correspondence to the police. I would say to everybody: calm down. Let us all respect the memory of a former king of our country, and let us discuss, in a dignified and sober way, where his remains should finally be put to rest; we do not want to reignite the wars of the roses.
I provoked some laughter in the main Chamber in October when I said that King Richard is still well regarded in York. His reputation was trashed by that pesky playwright from Stratford-upon-Avon. History is always written by the victor, and the Tudor dynasty had a vested interest in undermining King Richard’s reputation. Of course, Shakespeare would not have got a licence from the Government of the day to perform his plays if he had told the truth about good King Richard. Long may the BBC remain free from Government licensing!
I do not have time to make the case for Richard’s burial in York, except to say it was what he requested in his lifetime. Weighed against that is the case for burying him where his remains were found, which was made by my hon. Friend the Member for Leicester South (Jonathan Ashworth). However, the decision should be taken on independent national advice, not delegated to archaeologists from Leicester, who clearly support the Leicester cause, and who would have found it outrageous if the decision had been delegated to a group of people from York. We need this decision to be taken nationally, in the national interests and by people who are independent of the vested interests of York or Leicester. I hope the Minister will agree.
If I may, Mr Leigh, I will now give the Floor to the hon. Member for York Outer (Julian Sturdy).
Mr Edward Leigh (in the Chair)
Order. It is my job to arbitrate this modern war of the roses. We must give the Minister a decent amount of time, and I would be grateful if the hon. Member for York Outer (Julian Sturdy) kept his remarks brief.
Julian Sturdy (York Outer) (Con)
I will certainly try to keep my remarks brief. It is a pleasure to serve under your chairmanship, Mr Leigh. I congratulate the hon. Member for York Central (Hugh Bayley) on securing an undoubtedly important debate, not only for hon. Members here from the great county of Yorkshire, but for those from across the country as well.
The controversy surrounding the decision to bury Richard III at Leicester cathedral, as the hon. Member for York Central said, stems from the fact that there has been little public consultation on the issue. The people of York are profoundly grateful to the university of Leicester and its archaeologists for their efforts in recovering and identifying the body of Richard III, but they remain frustrated that they were not able to put forward their views on where he should be interred.
What is even more frustrating for them is that Richard III’s own views have not been consulted either. Historians widely believe that while he was alive he expressed a desire to be buried in York. Indeed, he spent the best part of his childhood at Middleham castle in the Yorkshire dales. Richard also spent some of the best years of his life as his elder brother’s lieutenant in Yorkshire, and he clearly identified himself with the city of York and its minster. He drew much of his support and power base from York and Yorkshire. In return, York clearly held a very special position in his heart, and that was reflected in his plans for a chantry of 100 priests in York minster, where he wished to be buried.
Jonathan Ashworth
I will be brief, Mr Leigh. It is certainly true that Richard planned the extension to York minster that the hon. Gentleman referred to, but there is no evidence that he said he wanted to be buried there, is there?
Julian Sturdy
The evidence comes from the city of York and Richard’s living descendants, who were mentioned by the hon. Member for Selby and Ainsty (Nigel Adams). The call is strong from the great county of Yorkshire that Richard III wanted to be buried where he was loved and supported.
The decision to allow the university of Leicester to have a free rein over King Richard’s final resting place flies in the face of the wishes of tens of thousands of people who have added their support to the campaign for him to be buried in York, as well as those of his remaining descendants, as I have said. It is true that Westminster abbey, Leicester cathedral and York minster all have claims as suitable locations to bury Richard III—I do not doubt that at all—but instead of allowing campaigners on all three sides to debate this issue in a democratic fashion, the Government and the university of Leicester have hashed out an important decision behind closed doors and concluded a finders and keepers agreement. I will finish on this point: I entirely back the call from the hon. Member for York Central for an independent body to make the final decision over the resting place of Richard III.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
I congratulate the hon. Member for York Central (Hugh Bayley) on securing this debate on licensing for the reburial of King Richard III. I also thank my hon. Friend the Member for York Outer (Julian Sturdy) for his remarks. I thank both of them not just for what they have said, but for how they said it. I entirely agree with the hon. Member for York Central that it is appropriate that we conduct this debate with the dignity that the subject matter deserves.
I am well aware—if I was not before, I certainly am now—of the level of interest in Yorkshire and Leicestershire, as well as the general public interest across the whole country, about what should happen. The project that we are discussing and the identification of the king’s remains have created a sense of national pride and excitement and have generated renewed interest in English history and archaeology. I am sure we can all agree that that is very welcome.
It is only right that I should start, as the hon. Member for York Central did, by congratulating the university of Leicester, the city of Leicester and the Richard III Society on an outstanding research project that has brought history alive to so many. I note that the archaeology journal Current Archaeology has hailed the search for Richard III as its archaeological project of the year. I therefore congratulate all those who have been directly or indirectly involved in the project on the remarkable results that their work has achieved.
The debate has concentrated on the licence. By way of background, the Ministry of Justice has responsibility for burial law and policy. The law is old and well established. Under section 25 of the Burial Act 1857, exhumation of human remains is permitted only with a licence from the Secretary of State. In this case the project was a joint venture between the university of Leicester, Leicester city council and the Richard III Society and all three parties contributed towards the excavation. All have, as I understand it, been involved in the application for the licence. The director of the university of Leicester archaeological services applied for a licence on 31 August last year and it was granted on 3 September. I emphasise that the application was treated in the same way as any other archaeological application would be. Such applications do not require the consent of the next of kin as they are invariably for unnamed remains buried a long time ago. The Secretary of State has a broad discretion to issue exhumation licences and may attach any conditions considered appropriate. Those invariably include conditions on where the remains should be reinterred, as well as that the remains should be treated with due care and attention to decency. In this case, as the hon. Member for York Central made clear, the licence gave permission to exhume up to six sets of remains, one of which could be those of King Richard III.
A project of this nature clearly required a significant degree of contingency planning. The director of the project thought that it was unlikely that the king’s remains would be found. Nevertheless, the application carefully considered the various possibilities and what would happen in the unlikely event that the remains were uncovered. It therefore indicated various options for reburial, which were dependent on what was eventually found.
The hon. Member for York Central made reference to the tests that were carried out. On 4 February, the announcement was made that the remains were indeed those of King Richard III, as it was put beyond reasonable doubt. In its application to the Secretary of State, the university indicated that it intended to reinter the remains in Leicester cathedral, which is one of the possible locations the licence mentions. The licence actually states that the remains are to be deposited
“at Jewry Wall Museum or else be reinterred at St Martins Cathedral or in a burial ground in which interments may legally take place”.
The conditions attached to the licence were therefore very broad, envisaging both that the remains might be those of Richard III but also, as was thought last summer, that they might not be. Now that the exhumation has been completed, it is the university of Leicester’s responsibility as holder of the licence to decide where the remains are finally laid to rest. That is the law.
Much has been made, not least today, of the fact that the people of York want Richard III’s remains to be buried in York, and I understand the strength of feeling in York and in Yorkshire more widely. However, I should make it clear that York minster has openly supported the reinterment of the remains in Leicester cathedral. It is also right to point out that the default position of the Church of England—the hon. Member for Leicester South (Jonathan Ashworth) made this point—is that the remains should be interred at the nearest Christian church, which in this case is Leicester cathedral.
As I have said, the conditions of the licence were widely drawn. They gave a wide discretion on where the remains could be reinterred. The licence stated that
“the remains shall be reinterred in a burial ground in which interments may legally take place”.
Conditions of a licence can be amended, but that is unusual. The university of Leicester could apply to vary the terms of the licence if it wanted to. However, the broad terms of the licence allow it to reinter the remains effectively where it wants, with due regard to decency and the dignity of the deceased. It is right that the state has an interest in that, but our interest must surely be that there is a suitable location for the remains. I do not think that the hon. Member for York Central is arguing that Leicester cathedral would be unsuitable. He is simply arguing that there may be a preferable site, which I entirely understand.
The key point is that Leicester university has made it clear that it is happy to receive representations on this issue. Many of the hon. Gentleman’s points deserve further consideration, and I hope and expect that those at Leicester university with that responsibility will take into account what he has said. We would be happy to facilitate a meeting between the people he identifies and the university to enable that to happen. I am sure that we would all agree that wherever the king’s remains are finally laid to rest, they will belong not only to the location, but to the whole nation.
Mr Edward Leigh (in the Chair)
Order. It seems that poor Richard III is as controversial in death as in life. I thank hon. Members for the dignified way they have dealt with this difficult subject.
Forced Conversion of Schools to Academies
(11 years, 8 months ago)
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John Pugh (Southport) (LD)
It is a pleasure to serve under your chairmanship, Mrs Main.
I do not know whether those present have ever had the privilege of reading Evelyn Waugh’s “Decline and Fall,” but it starts with the main character, Paul Pennyfeather, being debagged by something he refers to as the “Bollinger club” and having to leave Oxford in shameful circumstances after being caught running across the quad without his trousers. He subsequently takes up a career as a school teacher after going to an agency—a thinly disguised version of what used to be called Gabbitas-Thring—that tries to interest him in going to a school somewhere in Wales that is recommended to him as follows:
“We class schools, you see, into four grades: Leading School, First Rate School, Good School, and School. Frankly”—
says the man at the agency—
“School is pretty bad.”
We may be reaching a point where to confess to being a school, rather than an academy, might be seen as a sign of failure.
I am relaxed about school types. On a personal note, I was educated in grammar schools. I taught for a short period in a secondary modern school, and for much longer periods I taught in an inner-city comprehensive school and a top-flight independent school, so I think I know a fair amount about school diversity.
The result of my experience is that I am not particularly impressed by the labels that schools bear, and I am fairly agnostic about their structures. However, I differ in that respect from most Ministers, of whatever political persuasion, who seem preoccupied by structures, which interest me far less. The reason for that may be because structures are, as far as the passing occupants of the Department for Education are concerned, quite easy things to change. Frankly, on a wet Thursday afternoon in an inner-city school, or in a rural school for that matter, with a class of difficult adolescents, the name on the board outside the school, or the school’s governance structure, makes precious little difference to the reality inside the classroom.
What does appear to make a difference is good school leadership, committed staff, a relevant and inspiring curriculum, a sound ethos and above all—this has been proved to be the principal determiner of educational success—parental involvement and interest. Those ingredients are independent of governance structure. They are not necessarily present in an academy, although I am prepared to acknowledge that some academies exemplify those ingredients, and they are not necessarily absent in other sorts of schools that happen not to be academies. My conclusion is that the best thing we can do with a school that has all those characteristics is to support it and, so far as possible, not to tinker with it.
There are some, quite a few of whom are around at the moment, who recommend academisation as a solution to all educational ills—it is rather like the old medics prescribing leeches for everything—arguing that it is a sure-fire way of improving educational results. In fact, the evidence is mixed and clearly debatable, particularly when taking into account things such as changes in admission policies, pupil profiles and so on. We can believe the likes of Professor Gorard at the university of Birmingham, who sees no benefit from the academy programme; or we can believe the DFE, which has quite a different view; or we can believe neither. However we cut it, the mooted effects of academisation appear not to be exactly game changing.
Mr Andrew Turner (Isle of Wight) (Con)
Will my hon. Friend tell me how academies that were good schools are coping with the opportunity for more freedom and independence? At the same time, there are frankly awful academies that were forced into becoming academies after being run by the local authority.
John Pugh
There is a lot to be said for letting schools elect the structures they genuinely prefer and with which they can work. My hon. Friend may be illustrating in advance some of the possible dangers of forcing schools to make a choice they simply do not want to make.
My point is simpler. Academisation itself is not obviously fundamental to solving our biggest education problem in this country, which is the tale of boys from poorer backgrounds losing interest before their education concludes—the not in education, employment or training phenomenon. I do not intend to pursue the debate on academy outcomes, real or alleged, or, for that matter, the difference between converter and sponsored academies, which have chosen to be academies, and those academies that simply found themselves becoming academies, possibly against their will.
Instead, I simply want to point out the self-evident truth that I do not think anyone sane would dispute. Academies are not the only way to improve results, and they are not necessarily the most efficient way to improve results in this cash-constrained world. That also applies to the Labour programme, which later in this debate might be distinguished from the current Government’s programme.
I clearly do not need to say much about the slush funds the Government have found in surprisingly tough times to support the academy programme—I see that £1 billion has been found from somewhere or other—but I would like to draw attention to the National Audit Office report on the Labour academy programme, which produced bright, shiny, new and very impressive buildings and institutions. The NAO compared the Labour academy programme with its predecessor, which was called excellence in cities, and it found that, although there were improvements under the Labour programme, the improvements were not significantly better than those achieved by excellence in cities at a much lesser cost.
We must accept that none of us comes to this debate without in-built convictions and biases, so I will get some of mine out of the way by fessing up to them. I must acknowledge that I have a principled and ideological instinct against assets funded over many years by local taxpayers being alienated or removed from the direct control of local taxpayers. I have also never been sure how the lack of any local strategic oversight can be part of a proper, efficient funding model for education in any area, which bothers me. And I have never been able to understand why the remedy for constant interference by central Government, about which schools commonly complain, should be independence from local government, given that local government’s powers in respect of schools have declined dramatically over my lifetime. I do not grasp why Government should impose less on those schools for which it has sole charge than on those schools left under the umbrella of the local education authority. I feel that the rationale eludes all but the most brilliant among us.
There is a strongly held view, which I accept—I accept it of the Government; I do not accept it as the best view—that being an academy is a good thing. But even if we accept that view, there is still one more unexplained puzzle: if the Government are confident of their case, and they are clearly unafraid of big-scale change, as we have seen, why do they not just make all schools academies and make the case for abolishing LEAs, thereby ending the division, disruption and death by a thousand cuts?
I have pondered that, and the only answer I can give is the answer the Government normally give, which is that they want schools to choose whether to be autonomous. I understand that is the rhetoric surrounding the programme, but as the programme has rolled out that particular answer has come to seem odder and odder. First, choosing has been confined to a limited group of people. Parents and staff were excluded by the Academies Act 2010, and during its passage I moved an amendment on the Floor of the House that sought to allow parents some sort of voice, but the amendment was not supported. So we moved from a position where parents decided to one where only a limited number of people decide.
Secondly, the choice is constrained by the fact that opting for autonomous independence is linked to another choice about funding, because the funding packages are not the same and depend on whether the school chooses to stay a local education authority school or become an academy. Thirdly, the choice to be an academy is being linked with a choice to be inspected less and have less bureaucracy and prescription from Whitehall. What is actually involved in the choice argument is a skewed choice, vested in those who have the most to gain from making that choice in terms either of power, in the case of the governors, or of remuneration, in the case of the head teacher. Unsurprisingly, the choice to become an academy has gathered some momentum. That is the current state of play as we can best understand it.
However, the Secretary of State has gone one step further and, with gifts bordering on the prophetic, has told us that by a certain date, a fixed number of academies will be in place, with primary schools firmly within that range. Primary schools are normally not big enough to provide all the administration and back-up that independence entails, so it is a puzzle to me how the Secretary of State could possibly know how many schools will choose of their own free will to become academies.
Mr Andrew Turner
The hon. Gentleman is concerned about the size of primary schools. I draw his attention to a school in Cheshire that had 12 pupils at the time when it became a grant-maintained school. When grant-maintained schools were abolished, it had about 36 pupils. Size did not prevent schools from becoming grant-maintained schools; why should it prevent them from becoming academies?
John Pugh
I do not think it will prevent them from becoming academies; I am just making the simple point that primary schools have less instinct to become academies, simply because the administrative overheads of providing all the services customarily provided by the local authority bear more heavily on their budgets, which in these modern times are already significantly constrained.
I was trying to determine the basis for the psychic gifts that enabled the Secretary of State to anticipate how many schools will become academies by a certain date. I concluded that he probably does not have psychic gifts; he has a gift for irony, as the matter will probably not be left to choice anyway. Throughout the land, brokers are appearing in schools when the opportunity arises to hasten things on and ensure that the targets are met. They show up when a school suffers even a temporary decline in standards. A recent article in The Guardian by George Monbiot—not a man I ordinarily agree or see eye to eye with—compared them to mediaeval tax collectors. I happen to think that mediaeval tax collectors performed an important social function; I do not necessarily feel the same way about brokers.
Brokers appear to come to governing bodies with threats and an academy contract in hand. The threats are, “Sign the contract, or you, the governors, and possibly the head teacher, will be replaced”, or “Choose a sponsor, or if you don’t we’ll choose one for you, which we may do anyway.”
Bill Esterson (Sefton Central) (Lab)
To add to the hon. Gentleman’s examples, a Department for Education adviser said to a school in my constituency, “You lost your autonomy when you went into an Ofsted category. Either you sign the papers to become an academy, or we will put in another interim executive board to do it for you.” I wonder whether he has had similar experiences.
John Pugh
I have had very similar experiences, but they are not just my experiences. Reports are coming in from up and down the land, and there is a kind of similarity that makes them wholly plausible.
There is a hurry to get on with things. Schools are basically told, “Get on with academisation now, or we will do it for you anyway.” They are also told—this surprises me—“Don’t tell the parents or the staff until it actually happens. Consult with them afterwards.” To sweeten the pill, cash is sometimes promised, in the form of a changeover fund to accommodate change. Relief from inspection or the school’s current status is also promised: whatever pressure Ofsted or the LEA apply will disappear when academy status is established. More worryingly, I have evidence that sponsors have been recommended, particularly school chains, with whom individual brokers have prior connections.
Richard Burden (Birmingham, Northfield) (Lab)
Can I take the hon. Gentleman back to what he said before? I have had a number of schools that have received not only that suggestion, but the message, “Don’t talk to the parents before everything is signed, sealed and delivered.” Is it not also strange that ministerial policy is that Members of Parliament should be told about academisation only after the funding agreement has been signed, thereby removing any chance for democratically elected Members of Parliament to advise, consult with the school or have any say in what is about to happen?
John Pugh
Yes, that is distressing. The hon. Gentleman is a witness to the fact that we have moved from a situation in which parents were allowed a vote to one in which parents do not have a voice.
I would like to draw attention to the well documented fact that some of the brokers’ behaviour is markedly aggressive. One governor of fairly robust temperament described a broker as “seriously scary”. I find the process appalling. Regardless of what one feels about the academy programme, I find it distressing that people who have the interests of children and their schools at heart feel that they have been put in that situation. It strikes me that it is bullying. The intention is to close the contract and sign it there and then, which is the worst kind of sharp salesmanship, if I can put it like that. It is obviously wide open to corruption; it is about making offers that people cannot refuse, straight out of the Vito Corleone textbook. I see absolutely no reason why we who wish to stop bullying in schools allow the bullying of schools.
Kevin Brennan (Cardiff West) (Lab)
Fortunately, we have the Minister with responsibility for bullying here, so she can deal with any accusations of bullying.
Surely the hon. Gentleman is being completely unfair to the Government. Did he read the article by Warwick Mansell in The Guardian yesterday? It quoted Tim Crumpton, a councillor in Dudley, who said that after he made accusations of bullying, he received a letter from the Department saying:
“We carried out a thorough investigation and found no basis in the claims.”
Does that satisfy the hon. Gentleman?
John Pugh
I am sure that the Department took the broker’s word for it. What I am describing has been told to me by people I have known for some time, who have no axe to grind and whom I trust.
I feel particularly aggrieved about my area. Under previous regimes, not a single school in Sefton ever opted out. We had two ballots, both of which were lost. There were good reasons. Sefton was one of the first LEAs to give schools true financial independence to pioneer; in fact, I was on the local authority at the time. It has kept its central costs low. It has always prioritised education and schools. It stands favourable comparison with other LEAs. Its schools are good and, better still, there are good relations between the LEA and the schools, which themselves cluster together harmoniously and supportively. There is a genuine communitarian spirit, accompanied by good results. To make things more acutely painful, Sefton has a good record, praised by the Schools Minister, for improving its schools; it is in the top five of LEAs.
Bill Esterson
I am glad that the hon. Gentleman made the point about how good Sefton is, because we both represent constituencies in the borough. I, too, have experience of how good the schools are. Does he agree that when people have such a good education authority, it should be allowed to support its own schools to improve, rather than having this forced academisation?
John Pugh
That is clearly an option, because we in Sefton are not overly impressed by academies. The first school to be awarded academy status—coincidentally, one that tried to opt out before but failed to secure parental support—was subsequently inspected by Ofsted; our first academy was put into special measures and the head teacher and chairman of governors have now gone. The brokers are now in Sefton and, having failed to tempt the more prestigious schools, are pouncing like vultures not necessarily on the weakest but on those temporarily weakened.
I understand that there is a rationale for that, and I do not want to be unkind to Government policy. Schools must be in certain categories, failing or failing to improve, and in such circumstances arguably someone must intervene. The categories, however, have in practice been extended beyond the permanent sink schools or those that are sinking. In one case in Sefton, an otherwise good school had four heads in six years, which caused temporary instability over a short period, but the school and the authority could deal with that. In another case, to which the hon. Gentleman alluded earlier, in the school I attended as a child, there was a temporary and wholly uncharacteristic blip and a firm expectation that the school would improve with or without academy status. None of the bullied schools, for that is what they feel they are, has a poor record over time. Even if they had, what is the case for cutting the umbilical cord with a local authority that has a clear record of improving its schools? What is the case for encouraging the schools, as was done, to seek sponsors some appreciable distance away? A school in the northern part of Sefton was asked to look at a sponsor in Chester or in Bolton, or to consider a chain.
I run out of any coherent educational rationale when encountering arguments to suggest that a change in leadership will help a school whose main problem is that it has had too many changes in leadership; that is when my brain starts to hurt. What appears to have happened is that academies have become ends in themselves, not a means to an end. Instead of academies being a means to school improvement, success is measured by the number of academies, not their products. Can the Minister confirm whether new secondary schools converting will not only be paid for attracting pupils—for success—but be given an under-occupancy payment of £18,000 for three years for failing to attract pupils? In the old days, I am not sure what the Audit Commission which taxed us about surplus places would have had to say about that; fortunately, we have taken the precaution of abolishing it.
The Government can go further; if they want, they can lower the threshold for intervention, they can extend and widen the categories, or they can put pressure—heaven forbid—on Ofsted to toughen up the regime, or make it more partial or timed to suit the academy bounty hunters. There is a real worry that the neutrality of Ofsted might be under pressure and, equally, there is a worry about Ofsted’s reliability. If it delivered a rogue inspection, as it occasionally will, given the nature of things, that could have significant consequences for any school that is the victim of such an inspection. The broker who came to Sefton was asked by a head teacher what would happen if an academy chosen to sponsor a school was failed by Ofsted. The broker said that that will not happen. I do not know how the broker could know that it would not happen but clearly, if so, that seems to indicate that Ofsted is more shackled than we believe or hope it is.
I cannot explain this whole situation educationally any more, although I have sincerely tried. I have run out of any educational rationale that makes sense to me. I can explain it only sociologically. I hazard a guess—it might be right—that Ministers neither like nor understand and do not empathise with councils; they simply think that the sort of people you get on councils should not manage or interfere with the nation’s schools. That is a possible view, if slightly prejudiced, but it is not wholly incomprehensible if you look at some of the more eccentric London boroughs. It is understandable that if you have achieved a good education in an independent school, and contrast that with those with a less fortunate or privileged outcome, you might think—
Mrs Anne Main (in the Chair)
Order. I have been quite tolerant with the hon. Gentleman, but he keeps accusing me of doing so many things, in particular in London boroughs, that I would appreciate it if he spoke through the Chair.
John Pugh
I am sorry; I was talking about any individual, not you in particular, Mrs Main. I will express myself in whatever way you find appropriate.
One—I think that is all right—might suppose that what is crucial to the success of education is the independence of the school. That is an understandable view. It is a simplistic and probably wrong view, but I can understand people taking it and it providing them with the motive for feeling that academies are an all-sufficient solution.
Another interpretation might be that there is an unstated plot to reorganise schools into private chains rather than in LEAs; if so, we could legitimately debate that at some point. It is likely that many primary schools, if they become academies, will form part of chains. There is nothing particularly wrong with chains, and there have been great ones in the past: Blue Coat schools, Merchant Taylors’ schools, the Woodard foundation, Haberdashers’ Aske’s schools and so on; and, in the state system, organisations such as the Christian Brothers, or the Salesian or Notre Dame schools. There is nothing intrinsically wrong with chains; they are often founded for the poor but usually end up serving the rich. The model is particularly in favour with the Minister responsible for academies, Lord Nash, who I understand supports a chain of some sorts himself.
In the past, however, huge gains to the educational system were not achieved by virtue of the state handing people 125-year leases; normally, it was done by philanthropists digging deep into their pockets. If there is a real agenda, and such motivations are genuinely behind the strange set of phenomena we are seeing at the moment, I am happy to debate that. Let us not, however, have this forced choice, with underhand persuasion and inducement.
In my years as a teacher, the worst sort of bullying was not the stuff that one saw and could stop but the stuff that was not seen and took place away from view. If nothing else, through this debate I hope to bring the bullying of schools, rather than in schools, to people’s attention.
Mrs Anne Main (in the Chair)
Before I call other hon. Members to speak, I inform Members that I will be calling the wind-ups at 3.40 pm. I ask Members to keep interventions brief please. I call Guy Opperman.
Guy Opperman (Hexham) (Con)
Thank you, Mrs Main. I congratulate my hon. Friend the Member for Southport (John Pugh) on securing this debate. I have to confess that the problem in Northumberland is not that the county councils are being bullied by the Government but, rather, that the county councils are bullying the schools.
The reality of the situation is that Northumberland has few academies; my constituency does not have a single one. We must ask why. All of us, of course, want our children to receive the best possible education, whether at an academy or a maintained school. The great William Yeats described education as the lighting of a fire, and the question that follows is how best to achieve that.
In Northumberland, we have a three-tier system, of which I am an unadulterated supporter, particularly in a rural context, but at the heart of the issue for Northumberland is a middle school. The Minister is a small hero of Hexham middle school, which I visited two weeks ago to meet Mrs Parker and her three star pupils, Elizabeth Nixon, Amy Hawke and Anisha Bannister, all of whom wrote to the Minister requesting a change of mathematical calculation, from chunking to long division. They are deeply pleased that she listened to their pleas and are looking forward to meeting her when I bring them and their teacher to the House in the near future.
I welcome the chance to debate academies today. Surely it cannot be a bad thing that they can set pay and conditions, deviate if necessary from the national curriculum, change the length of terms and school days, reduce classroom sizes, introduce new disciplinary techniques, target resources to the most appropriate areas, and allow the school to be run by head teachers and governors rather than by a local authority, which, in my case, is some 50 or 60 miles away. That is my opinion, but I could give my hon. Friend the Member for Southport ample examples, including the Harris Federation, the schools in Newcastle, and ARK Schools, which runs more than 18 separate academies throughout the country. Since they took over those schools, grades have gone up by more than 200%, and the standard and quality of education have improved immeasurably. Local people are voting with their feet and deluging those schools with applications.
That is why I deem it unfortunate that, contrary to my hon. Friend’s assertions, Northumberland schools are not being forced to convert to academies. They are being prevented from converting. I will give three specific examples. Allendale middle school was a failing school, and the council chose to close it instead of converting it to a sponsored academy. It will close in the autumn, notwithstanding the assurance from the former Under-Secretary of State for Education, Lord Hill, who said that
“there is substantial evidence that sponsored Academy status is the best way to transform such underperforming schools and make sure that we achieve a lasting solution to underperformance”.
Similarly, Haltwhistle middle school has chosen to go down the path towards academy status, but it is being prevented from doing so by the county council’s approach on pensions. That is what I want to address in my last few minutes today. In Northumberland, the county council is requiring an extra pension contribution from an academy, of between 12% and 26%, whereas for a standard maintained school in the UK the average pension fund contribution for teachers earning less than £75,000 is approximately 8%. There is no financial justification for the measure, and no other county in the country is following that course of action. Either the council’s pension fund panel is driving that unfair proposal forward to prevent schools from becoming academies, or the council is fundamentally opposed to academy status. There can be no other reason, except that it would like to obtain greater sums from a would-be academy than from a maintained school.
The position is set out in a communication between the Secretary of State for Communities and Local Government and the Secretary for State for Education in December 2011, which stated that
“the overall costs for the Academy as a participant in the Scheme should not increase”
and they
“should not be treated in the LGPS less favourably than maintained schools.”
Given that advice from the two Secretaries of State, I tabled a parliamentary question to which the Minister for Schools, my right hon. Friend the Member for Yeovil (Mr Laws) replied:
“my right hon. Friends the Secretaries of State for Education and for Communities and Local Government made it clear that no academy should pay unjustifiably higher employer pension contributions than maintained schools in their area”.—[Official Report, 29 October 2012; Vol. 552, c. 15.]
With several head teachers and governors from Northumberland, I then met the Minister and a Minister from the Department for Communities and Local Government on 17 December. As yet, nothing has changed. Some schools that want to become academies or are budgeting for the year ahead are facing larger pension contributions than those of their competitors and than those which they themselves previously enjoyed. In those circumstances, either there is an impact on their financial calculations because they are paying larger contributions, or they are refusing to become academies when that is what head teachers, governors and local parents want, because they are worried about the larger contributions.
One Northumberland school governor said:
“We are being drained of funds by this issue, and it is draining away the optimism we had when we converted to an Academy”.
That is a crying shame. Academies are a fantastic opportunity to help to turn poorly performing schools around, but the failure to resolve the issue is holding back schools in Northumberland.
Rosie Cooper (West Lancashire) (Lab)
It is a pleasure, Mrs Main, to serve under your chairmanship this afternoon. I congratulate the hon. Member for Southport (John Pugh), my neighbouring MP, on securing this important and crucial debate.
The ideological crusade that the Secretary of State for Education seems to be on with his academies programme is deeply concerning, and offensive to the education profession. I do not believe that it has the best interests of our children’s education at its core. I am not idealistically opposed to academies. I believe that for some schools the academy option is in their best interests, but I do not believe that it is the only option for school provision in the country, and schools should not be intimidated and bullied into being academies.
Today, I want to speak up for schools in west Lancashire and throughout the county, which has become an enclave of resistance against the Secretary of State’s absolutism on academies. Throughout Lancashire, head teachers, governors, teacher unions, Members of Parliament and even the Conservative-controlled county council have been steadfast in their opposition to the deplorable antics of the Department for Education, and in their rejection of academies for academies’ sake, and I support them in that.
In recent weeks, there has been significant media comment about the conduct and behaviour of the Department for Education in its promotion of the academies programme, and it seems that the experience in Lancashire is being replicated throughout the country following a certain pattern. It starts with creating a myth about failing schools in an area, irrespective of the truth behind the headlines. Then come the threats that underperforming schools will have to become academies. When that fails, the bribes start.
It seems that the same approach is being taken in Lancashire as in one of the areas that is continuing to resist all attempts by Whitehall to foist academies on them. In the middle of last year, threats were dished out, and in July 2012, the county received a visit from Dr Liz Stillwell. Ahead of the visit, a press release was issued that stated boldly and aggressively that
“weaker schools across”
Lancashire
“should aspire to the success”
of the academy she was visiting that day, and that poor standards of primary education in Lancashire would no longer be tolerated. That press release listed the schools that the Department deemed were underperforming, and four primary schools in west Lancashire were on the hit list. I spoke to each of the head teachers, who were surprised—even astonished—to be on that list. They accepted there had been a blip, but both the LEA and the Department accepted that the performance of the schools was improving. Therefore, against the Department’s measures, the schools were not failing.
The schools commissioner travels around the county, peddling the Education Secretary’s ideological wares as if she was some kind of snake oil saleswoman. With her half-truths and misinformation, she leaves fear and instability in her wake among communities. Surely, she should be absolutely committed to supporting all types of school to improve their standards and performance. She should not be forcing schools down a path that may not be in the best interests of their children.
Mr Andrew Turner
One problem is what we mean by a blip. How long were the blips? Were they one year, two years or five years? Five years is a lifetime for a child.
Rosie Cooper
I can assure the hon. Gentleman that it is nothing like five years. I would be happy to supply him with the detail. There are four schools involved, and each is different.
The situation in areas such as Lancashire has been manufactured under the pretext of improving underperforming schools. That raises the question why the National Audit Office report stated:
“most converters…have been outstanding and good schools”.
In a letter to me on 31 January, the chief executive of Conservative-controlled Lancashire county council wrote:
“we do not understand why some rapidly improving schools are being targeted for academy conversion.”
We are back to the myth-creating: everyone is told a school is failing, when the truth is that it had a blip and its performance is improving. We are then told to make it an academy, and, in a couple of years, it is claimed that the success is the result of academisation. We are encouraged to ignore the good work and the fact that the improvement would probably have happened anyway.
From the safety of Westminster, the Education Secretary has called Conservative-controlled Lancashire county council a “failing education authority”. That makes me wonder on what basis he claims that it is failure. I am sure he would say it is performance. However, he is probably referring to the academy conversion rate.
Let us look at performance. Some 69% of schools in Lancashire have improved, compared with the national average of 29%, and that is to be commended. However, according to the Secretary of State, the academy conversion rate in Lancashire is just 3%, compared with the national average of 9%. Is that the source of his frustration? Just four out of 484 Lancashire primary schools have chosen to become academies, while three others are in the process of being forced to become academies.
In November, the Education Secretary wrote to MPs to ask them to do his bidding by getting our schools to become academies. I doubt whether he will be welcomed with open arms by Conservative candidates campaigning in the forthcoming county council elections in Lancashire.
Let me be clear: failure and unacceptable performance in our schools cannot and should not be tolerated. By the same token, however, the sustained and cynical denigration of the hard work of our schools and schoolchildren should not be tolerated, simply because those schools are not academies. Perhaps the Department for Education, to refer to comments made earlier, should apply its anti-bullying policies to itself and its agents.
All the evidence points to a Department that is ideologically wedded to the promotion of academies for all, rather than the best education for all. In our education system, only 10% of all state schools are academies and free schools, and the figure for primary schools is only 5.3%. Yet one third of Department for Education staff are assigned to the academies and free schools programme, which accounts for 18% of the Department’s revenue and capital budget—a level completely disproportionate to the size of the programme. Then we come to the £1 billion overspend. No doubt that money is being taken from the budgets for non-academy schools, many of which most need that investment.
The whole situation is compounded by the Gove army of brokers. Given that they earn up to £700 a day, some might suggest they are more like mercenaries. I would suggest they are conflicted mercenaries, because many are alleged to have connections to academy chains. These conflicted mercenaries—these brokers—are running round the country offering inducements of £40,000, plus £25,000 for legal costs. That approach to academisation is deplorable, and it is all being done because of the ideological war being waged by the Education Secretary.
Our ambition and aspiration should always be to ensure that our children have access to the best possible standards of education from the start to the end of their school life. Simply forcing schools to become academies is not the solution. We know that one-size-fits-all policy making does not work. In our schools, we need good, strong leadership from the head teacher and governing bodies, with investment in schools buildings and school resources, irrespective of whether the school is LEA controlled or an academy. There should be a consensus among parents, teachers, governors and the community about the type of school they want; that decision should not be forced on the community.
I agree that we need to ensure that all schools reach the required standards. However, we should do so based on the needs of the individual school and its children, not on the imposition of a one-size-fits-all model driven by ideology. I am sure the Minister has come here today replete with the usual lines about school improvement, education for the 21st century and investment, but I remind her that we are talking about the forced conversion of schools into academies.
My message to the Minister is this: nobody believes you. As each day passes, fewer and fewer people believe you.
Mrs Anne Main (in the Chair)
Order. I am sure the hon. Lady does not mean to imply that nobody believes me; I think she means that nobody believes the Minister, although she may wish to say that in the most parliamentary way possible.
Rosie Cooper
My apologies. It is certainly catching today.
My message to the Minister is that nobody believes her. As each day passes, fewer and fewer people believe her. For most schools—certainly in Lancashire—the answer to her academies is still a resounding no. I implore you: please stop bullying, stop the bribery and get back to supporting all schools and all children.
Mrs Anne Main (in the Chair)
I call Mr David Ward, who I am sure is not accusing me of bullying or bribing anyone.
Mr David Ward (Bradford East) (LD)
Thank you for calling me to speak, Mrs Main. I thank my hon. Friend the Member for Southport (John Pugh) for initiating the debate.
It is not too much of a secret, certainly in some quarters, that I am not a great fan of academies. I opposed them under the previous Government, and I oppose the academy regime under this Government. Within a few months of coming into the House of Commons, I voted against the Academies Bill. That was for a couple of reasons. First, many supporters of academies, who want to push for academy status, are seeking to control admissions. For them, it is about who goes into the school, not what goes on in the school.
In a private meeting with the Secretary of State, I said, “You should be far more radical and make every school an academy in terms of some of the freedoms that are proposed.” However, for those who support academies, and who are pushing for them, that would not really work, because the secret of academies is that some schools are academies and some are not. Alongside freedoms in relation to conditions of service and so on, there would need to be some control over admissions, which would defeat the purpose of going to academy status for many sponsors, and the same applies to free schools.
I am opposed to the academies also because there is an overemphasis on the impact that the structure will have on raising achievement and attainment in schools. It is interesting that many of the new academies have not taken up some of the new freedoms: they have taken the money and stayed, rather than taking the money and running with the new freedoms. Another reason for my opposition is that I always want, as Stephen Covey said, to
“Begin with the end in mind.”
If something works, generally speaking it is okay. I do not feel that there are too many strong, politically different issues or matters of principle. Most of them are about what works in a situation, with some fundamental underpinning of values. I am not clear where the evidence is for academies. In a sitting of the Education Committee a few weeks ago, I asked the Secretary of State whether he believed in evidence-based policy and he said that he very much does, but I do not see any evidence for that.
The success of the academies project seems—my hon. Friend the Member for Southport referred to this—to be judged by how many academies there are. That has almost become an end in itself. There has been much talk about needing to convert. A school is in a particular situation, and the idea of need is always introduced; but it does not mean the school will benefit from a conversion. The evidence base is not there. The idea is that the school needs to convert because it meets the criteria; but it is the Secretary of State who sets the criteria. It is like saying, “I will decide when it is raining, and I will decide what to wear in the rain.” He is doing the same, because he is saying, “I will decide the criteria and whether they have been met.” That is the same idea as, “There is a need to put on a coat when it is raining; it is raining so we need to put a coat on.” The false logic behind the whole academies programme is: “An intervention is needed and an academy is an intervention, so you need an academy.” It is all false logic. Using a coat when it rains is an intervention, but it is not the only form of intervention and there is no evidence that that intervention is the one that would work.
There are all sorts of interventions, which could include setting up an academy—but where is the evidence? Local authority support would be a possibility: many authorities are not, as has been suggested, dreadful, and are effective at providing support. The intervention may be a new head for the existing school. It may be an integrated post-inspection plan, or an interim executive board to turn the school around. There is evidence to show that all those interventions work in certain circumstances. They all have an evidence base, but there is no evidence that the academy structure works. It is false logic.
In my constituency in Bradford, there are two schools that are going through intervention academy conversions. My two sons went to one of those schools many years ago. If someone went to a local estate agency 10 or 15 years ago, the window would have adverts stating that properties were close to the school. The school was one of the largest and most successful in the Bradford district and it was why people moved into that area, but it has had a difficult time. It was not so long ago that the head teacher of that school, before retirement, was the executive head of another school that was failing and has now become successful. I was chair of governors at a school that was in special measures, and it became the first secondary school in Bradford to be rated as outstanding. All that was done without academy status and on the basis of interventions by an extremely good head teacher, who was able, through a new management team, to turn the school around.
In Bradford, a secondary partnership has been established. The whole principle behind it has been to offer support to other schools and negate the need for academy conversions. The partnership was formed about 18 months ago and all 28 secondary schools from the district are involved and pay an annual subscription to join. It involves developing a rigorous system of performance review. It will provide effective school-to-school support and deliver school-led professional development. Those schools do not need to be academies. There are other ways forward that do not require a change to a school’s structure.
Ideology has been mentioned a few times, but I do not think that is the issue. It is about ego. All schools can be improved, but it takes time and requires hard work. It is not glamorous and a slog is involved. It takes 18 months to two years to get the right people in place to turn a school around, but where is the glamour in that for a Secretary of State who needs to be seen to do dramatic things? Where is the glamour in that hard graft that happens day in, day out up and down the country in turning around schools that need to improve?
The problem is that that egocentric project comes with a cost. The House of Commons Library briefing shows the actual cost involved in investing in the schools and bribing them to take up academy status, as well as the opportunity cost of the money that is not available for other schools. It is frankly sickening to see schools in Bradford unable to afford basic repairs while a bottomless pit of money appears to be available to support the free schools and academies programme. That programme is a costly distraction—devoid of evidence—from the principal concern of an authority, which is to raise educational achievement and attainment through the well-established methods that already exist for turning schools around and providing the quality education that pupils need and deserve.
Mr Andy Slaughter (Hammersmith) (Lab)
It is a pleasure, Mrs Main, to be under your chairmanship this afternoon. I think I agree with some of what everyone has said, but not all that anyone has said, which makes for an interesting debate. I am grateful to the hon. Member for Southport (John Pugh) for securing it. One point on which I agree with him is that there is a danger of the academies programme being seen as an end in itself, rather than as a means to an end. It is that point on intended and unintended consequences that I wanted to address.
I will explain where I am coming from on the issue by reference to my constituency. I had a quick tot up and I have nine secondary schools in my constituency, including one that is 100 yards outside. They range from leading independent schools, such as Latymer Upper school and St Paul’s girls’ school, to leading Catholic schools, such as Sacred Heart high school and London Oratory, which former Prime Ministers and current party leaders seem keen to send their children to. There is also the West London free school, which was set up Toby Young, and two academies that were part of the Labour Government’s academies programme: Burlington Danes academy, which is a new build, and Hammersmith academy. There are two outstanding—I should say that all those that are subject to Ofsted inspection are outstanding—community schools: William Morris school, which is a sixth-form school that I helped set up 20 years ago and am a governor of, and Phoenix high school, which is run by Sir William Atkinson, who is a famous head teacher, known across the country.
The reason I mentioned those is because there is a vast range of schools, and I do not discriminate between any of them. I go to them all, invite their pupils here and I am very proud to have every single one of them in my constituency. I am particularly proud of the two academies and indeed, I helped to set them up, under the previous Labour Government. It is a shame that the £50 million that went into those was not replicated by the Building Schools for the Future programme being continued, so that community schools could also have benefited.
What I find surprising is the attitude of—I have to call them this—the ideologues in the Department for Education and in some Conservative local councils, including my own. They take it to be their mission to ensure that there is academisation wherever possible, without regard to the reasons why they are doing it. I hope that from what I have said it is clear that I have no particular beef about whether a school is an academy or not. All those schools are doing well in their own way.
I can best illustrate that by reference to ARK Schools, which is a well known academy chain, and is the governing foundation for Burlington Danes academy, which, historically, has been a grammar school, a successful comprehensive school, and a Church of England school. It is now an ARK academy and I was part of ensuring that that happened. On the back of that, west London is now populated by a dozen-plus new ARK schools, and again, I have no particular objection to that. I was at one of the primary schools last week—ARK Conway primary academy—opening the new library.
What I have difficulty with, however, is the attitude of Conservative local authorities, who, whenever they see a possibility in relation to an existing community school, pressurise that school into becoming an ARK academy. We had an early example of that with Kenmont primary school in my constituency. The head left, which is a perfectly normal thing to happen. The local authority then said that it could not afford to employ a new head and that the school would therefore have to become an ARK academy. It was only because the parents and governors objected—in the end, a new head was recruited —that that did not happen, and it is now, once again, a very successful community primary school.
Other schools have been pressurised; indeed, one is being pressurised at the moment, and I use the phrase advisedly. There are primary schools in my constituency that have effectively been told that their only option is to become an academy. I feel that in some cases, those schools are set up to fail, and they are not given the requisite support. Perhaps a head teacher leaves, there is a temporary head for a year or two, and the school is allowed to drift into special measures. I am not going to name particular schools—I do not want to name schools that are having difficulties—but I see that pattern repeated, and it is not what a local authority should be doing. It should be supporting all its schools, including those for which it is not directly responsible.
We had a £33 million investment programme—at the moment, that is quite a big programme—over two years for primary schools, yet all that money was directed to voluntary-aided schools, free schools or academies, for new build, refurbishment, conversion or expansion as may be, despite the fact that very successful community schools also wish to expand and see investment put into them. I object to those double standards and to not having a level playing field. I have to ask who the ideologues are in this case, and I am afraid that they are particularly centred around the Secretary of State for Education.
None of that would matter if there were no adverse consequences, but let me explain some of the consequences. First, there will be a perception—it may be a reality, but it is certainly a perception—that we are creating a two-tier system in education, in which academies are the preferred type of schools. Parents will therefore gravitate, reasonably and understandably, towards those schools, because they believe that the schools will be preferred—with money, resources or simply the attention that they receive from local education authorities and the DFE. That then leads to a form of separate development. A number of academies are now for pupils aged three to 18, and they therefore monopolise children within an area. Equally, I have noticed a trend whereby secondary academies will select—particularly if they are in the same group—from their primary feeder schools, so it may be that there is no longer an interchange between primary schools in that way. I am beginning to get a lot of complaints from parents of children in community primary schools who might want to send their children to secondary academies, and they find that they are refused or are a long way down the waiting list.
I also fear that there is a possibility of politicisation of the academy system down the road. There is a strong association between the academy system and not only Conservative local authorities, but Conservative funders, peers and so on. Lord Nash has been mentioned. Lord Fink, who I think is still the Tory party treasurer, was the chairman of ARK, and he is the chairman of one of the schools in my constituency. Both of those gentlemen are very substantial funders of the Conservative party. One of them, Lord Nash—or rather, his wife, Lady Nash—was the principal funder of my opponent at the last election. It is a free country. Anyone can do as they wish, but the association of particular schools, chains of schools and individuals with a particular political party is not healthy in education. I see that as another branch of the politicisation and there is the real prospect of our moving—with every pronouncement that comes out of Government or those close to Government—to profit-making schools. If another Conservative Government were elected, we would see that trend continue, and I think that would be extremely regrettable.
This is not an easy issue to deal with; it is not black and white in any way. As I hope I made very clear at the beginning, I support every school in my constituency. I have a good relationship with ARK. I find it slightly troubling that soon it will be almost the size of a local education authority, spread across some west London boroughs, because it does not have the same democratic accountability as LEAs. However, I do not blame ARK. It may be a willing recipient of the Government’s largesse, but I place the blame squarely where it lies: in the tram-line attitude and the “Go for academies at all costs” policy that infects the DFE at the moment. With hindsight, in years to come, I think that that will be seen as a very retrograde, ideological and divisive step.
Whether individual schools are achieving for individual pupils is clearly important, but as Members of Parliament, we have to look after the interests and welfare of all the schools in our constituencies, and that certainly ought to be the role played by LEAs and the DFE as well. I do not see that happening—I do not see the even-handed approach that will embrace and encourage community schools, in the same way that I see that when those in the preferred or favoured categories are dealt with.
Guy Opperman
With the hon. Gentleman’s experience of ARK, does he not accept that in even his own constituency—I do not extend the point to all other ARK schools around the country—when ARK has gone in and schools have become academies, they have transformed the education? Without knowing his constituency, I suggest that all the schools ARK has gone into have had a successful outcome. Surely that is the point.
Mr Slaughter
I make it clear that I am absolutely not criticising ARK as an educational institution. The answer is that it has had some remarkable successes and some partial successes. Some successes have not been quite so big, and in some cases, it is too early to say. That is true—it is exactly why I started with a slightly self-indulgent tour round my constituency—and I could say the same thing about many other schools and different types of schools there. That is not the point I am making. The point that I thought I was making—I will make it slightly more clearly—is that the concentration and fixation on a particular type of school and giving schools of that type a privileged status will undoubtedly have an unbalancing effect on education across the piece. That is the mistake that the Government are making.
Kevin Brennan (Cardiff West) (Lab)
I congratulate the hon. Member for Southport (John Pugh) on securing the debate. He gave us a thoughtful and philosophical discourse, as ever, on forced academisation. Interestingly, he described what he saw as bullying going on within the system. I will come back to that. He also introduced us to the interesting concept of an under-occupancy subsidy for some types of school that the Government are currently promoting. I am sure that we will hear more about that in the future.
I also congratulate the hon. Member for Hexham (Guy Opperman) on his speech. He managed to turn it into a bit of a debate about pensions, which might be a separate issue from what we are discussing today, but he did show his erudition by quoting Yeats. I, too, will quote some Yeats:
“Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world”.
In some of what is going on with the forced academisation debate, there is a problem with the falconer not knowing what the falcon is getting up to out and about in the field. I will also come back to that point.
My hon. Friend the Member for West Lancashire (Rosie Cooper) described what she called snake-oil salesmen in relation to forced academisation. The hon. Member for Bradford East (Mr Ward) said that this policy was not so much ideological as egotistical on the part of the Secretary of State for Education and that he needed to be seen to be doing something dramatic, which explained his actions. It reminds me a bit of the goalkeeper’s dilemma during a penalty shoot-out. Statistically it is proven that, very often, to stand still is the best thing to do during a penalty shoot-out, but if the goalkeeper does that and the opposition scores, they are roundly criticised. If, however, the goalkeeper dives in completely the wrong direction and the opposition scores, they are praised for at least having a go. Perhaps that explains the phenomenon that the hon. Gentleman described.
My hon. Friend the Member for Hammersmith (Mr Slaughter) told us about his own experience, including helping to set up academies in his constituency, and about his fear of politicisation and of profit-making schools. I recently met colleagues from Sweden, who described to me the utter disaster of profit-making schools—free schools—in Sweden. The impact has been to lower standards because of the race to the bottom that profit-making schools entail. Also, Sweden has had to reinstate a requirement for teachers to be properly qualified in free schools, because of that race to the bottom for low-paid staff and maximising profit. That has happened in free schools in Sweden, so there is a lesson for us there as well.
This debate is about forced academisation. Let me say at the outset that I am a supporter of academies and have been throughout my 12 years in the House of Commons. Of course, the genesis for the academies programme under the previous, Labour Government was to launch a direct assault on the double disadvantage of social and economic deprivation. Our concern about the current Government’s academies programme is not about the freedoms that can be granted—that come along with academy status—but about the loss of focus on under-performing schools in areas of high social and economic deprivation and the fact that that might result in the positive impact of the academies programme being diluted. I worry that the principal foundations for the success of the early academies—collaboration and partnership—have been replaced by what other hon. Members have talked about here today, a fixation on the numbers game. That is what we are seeing at the moment. It explains why we are having this debate on forced academisation today. It is all about numbers, rather than standards.
I am not wedded to any particular model for the way in which schools should be run. As a former teacher myself, I agree with the hon. Member for Southport that the structure makes very little difference. We know what makes a good school; we know what factors are involved in that, and there is plenty of research to show it. I do not think that there are many people, either—there may be some here—who think that local authorities should directly run all state-funded schools these days. A lot of us agree that local authorities did not always do a particularly good job of running local schools in many cases in the past, but just because a job was not always done well does not mean that there is not a job that needs to be done. There is a job that needs to be done at local level in relation to our schools, and that focus is being lost by the current Government with this numbers game that they are fixated on.
I welcome the Minister who will reply to the debate. It is a shame that the Minister for Schools is not replying to it. I know that responsibility for this subject lies in the House of Lords, but it would be good to have the Schools Minister here to reply to the debate, because he could then explain why he supports the current policy when he said in his manifesto at the last election that he wanted to
“replace Academies with our own model of ‘Sponsor-Managed Schools’. These schools will be commissioned by and accountable to local authorities and not Whitehall”.
That was his policy previously, which perhaps explains why he never fronts up on this subject as Schools Minister and turns up to debate it. I would welcome his doing that in the future.
However, I am glad that we have the hon. Lady here to answer on behalf of the Government about the worrying reports that we are receiving from around the country. Despite my intervention earlier about yesterday’s article by Warwick Mansell in The Guardian, there seems to be a growing number of reports from around the country about bullying behaviour by the individuals who are being sent round by the Department for Education to bring about forced academisation of schools.
Last year I visited a group of schools that had formed an education improvement partnership. One of the primary school head teachers in it was desperate to tell me about her experience with what some people locally have described as gauleiters being sent out by the Department for Education. What she told me made my jaw drop. She told me that when the adviser from the Department turned up, she was told that she had to meet them and that no one else was to be present. When she objected to that, she was told that perhaps at a stretch she might be allowed to have the chair of governors present with her for part of the meeting. She wanted to have, and in the end she insisted on having, the head teacher of the local secondary school, which was part of the education improvement partnership, with her for the debate, but she told me several stories about how she was leaned on—that is the only way it can be described—and told that there was no alternative to her school becoming an academy, despite the fact that the governors did not want that, the parents did not want it and it was clearly an improving school. In the end, having taken legal advice, they were able to fend off the adviser who had come from the Government, using those bullying tactics, but I am told that as she left she said, “I’ll be back”, Arnold Schwarzenegger-style—no doubt after further efforts have been made to undermine the efforts being made by the school to operate as part of an education improvement partnership to raise standards in the school. That is happening around the country. I have also been told that in the same area, one head teacher has seen a gagging clause put into their contract, having been forced out of a school as part of this process.
It is all very well, under the cloak of standards, to go around to schools and offer them an opportunity to consider academisation—the sponsored academy approach. That can be entirely appropriate on many occasions, but the bullying behaviour—we are hearing, and I am receiving, more and more accounts of it—is very worrying. I therefore want the Minister to answer a few questions about that. How many schools does she know of that have successfully resisted forced academisation procedures? How are the academy advisers recruited? How are they rewarded? Is it true that they are on a payment-by-results regime? I hope that the Minister will answer this question particularly. Is there any code of conduct for those people as to how they should behave? As the Minister with responsibility for the issue of bullying, will she give us an absolute assurance that if there is one, she will publish it, and that if there is not one currently, she will ensure that one is available? I ask that because some of the behaviour that is being described—
Kevin Brennan
I do not have time to give way I am afraid. I would otherwise, but I want the Minister to be able to answer.
Given the behaviour that is being described, if there is a code of conduct, it is obviously not being adhered to in any acceptable way. Is it acceptable to insist on meeting heads alone, not allowing them to have other people with them? Do the advisers have targets? To whom are they accountable? What evidence is there that forced academisation raises standards? We do not have much time and I want to give the Minister the chance to answer the questions. Why has the Department backed down in the face of a legal challenge from Coventry council about forced academisation? Will she undertake to ban gagging orders on heads who are forced out of their jobs and introduce transparency into the process?
The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)
I congratulate my hon. Friend the Member for Southport (John Pugh) on securing the debate. We have had an interesting discussion this afternoon on the evidence behind the academies programme and some of the issues with underperforming schools. He outlined the elements of a good school. I agree with him, and think everyone in this House would agree, that good leadership, a good ethos and parental involvement are all things we recognise about good schools. He also suggested that those attributes were completely independent of academies, and that is where I cannot agree with him.
Strong evidence across the OECD links school autonomy with improved performance and, where there is a strong accountability system—also important—strong leadership in the school and improved results. It is notable that many of the countries that have successfully improved their educational performance—Germany over the past 10 years, for example—have done so by increasing the amount of autonomy that schools have, setting strong standards and a strong accountability regime. Germany has seen a marked improvement, relative to other countries. The OECD used evidence from PISA 2006 to show that science results for 15-year-olds had improved in countries that gave more autonomy to schools. That evidence is generally recognised, and was recognised by the previous Government when they established and promoted the academies programme. There is a link between autonomy and accountability and improved performance.
Elizabeth Truss
The German system is rather more complex because each Land has its own education system. I am happy to discuss it with my hon. Friend in more detail in due course, but there has been a general move across the country to have fewer decisions made by the Government and more decisions made by school leaders. That is my general point. The point about process he raised is a slightly different issue.
My hon. Friend mentioned that our other school policies and what happens in schools are important. He is right. The academies programme is part of what the Government are doing to address educational standards. We are also giving significant funding for disadvantaged pupils through the pupil premium, which is £2.5 billion a year. We are also improving the quality of teaching in our schools, by increasing the number of high-quality applicants to the profession and developing existing teachers. We are reforming the national curriculum to make it more rigorous and more focused, so that teachers have the freedom to design lessons that inspire and motivate their pupils.
Some freedoms that have hitherto been held mainly by academies are being extended to all schools. All schools are being given more freedom in how they design their curriculums. We are encouraging schools to collaborate and share best practice, so that strong schools can help weaker schools to improve. We are increasing the rigour of the accountability framework, including introducing the English baccalaureate and our new floor standard measure for key stage 4. Ofsted’s inspection framework is raising the bar on inspections, so “satisfactory” is no longer good enough. The policies have to be looked at in the round. The academies programme is accompanied by other policies, in areas such as accountability, to ensure that school leaders are accountable for what they do.
Elizabeth Truss
I am afraid that I will not because I have a lot of questions to answer in a short time. Many interesting issues have been raised during the debate that I have not yet answered and want to move on to.
We are encouraging all schools to convert to academy status, so that good and outstanding schools can use the autonomy that the status provides to drive up standards. Where schools are underperforming and leadership and management need improvement, however, we cannot just stand by and allow that to continue. The cases that hon. Members have raised in the debate are about schools in which performance is not good enough. We are not talking about schools in which performance is already good. There are good schools under local authority auspices and there are good academies, but we are talking about underperforming schools. We look for two indicators of underperformance to determine which schools we should approach and work with to deliver sustained improvement: low achievement over time and whether the school is in Ofsted category 4.
Many schools agree to become sponsored academies, because they know that academies are achieving dramatic improvements in results, particularly where new sponsors have taken on formerly underperforming schools, as I have seen in my county of Norfolk. Sponsors bring outside influence and a wealth of experience. They challenge traditional thinking and have no truck with a culture of low expectations.
Hon. Members asked about the evidence. It shows that sponsored academies are improving at a faster rate than other state-funded schools. In fact, on average, the longer they are open, the better they do. Between 2011 and 2012 the proportion of pupils achieving five good GCSEs, including English and maths, in sponsored secondary academies increased by 3.1%, which compares with 0.6% across all state-funded schools, so there is a differential rate of performance.
There are some dramatic case studies. Students and staff at the Accrington academy in Lancashire, for example, celebrated a huge improvement in results. In 2012, 60% of students achieved five or more A* to C grades at GCSE, including English and maths. That was up 13 percentage points from 47% in 2011 and up an incredible 42 percentage points from just 18% at the predecessor school in 2008. The school is supported by its sponsor, United Learning. Given the opportunities, I can understand why my hon. Friend the Member for Hexham (Guy Opperman) is keen for more schools to be able to convert to academy status in his area. I am discussing that with the Minister for Schools, who is in turn discussing it with the Treasury and the Department for Communities and Local Government. We hope to come back to my hon. Friend very soon.
Elizabeth Truss
I will not give way because I want to answer the questions that have been raised.
Mr Slaughter
On a point of order, Mrs Main, the Minister is not giving way because she wishes to answer the questions, but she is not addressing the subject of the debate at all.
Elizabeth Truss
My hon. Friend the Member for Hexham also outlined academies’ freedoms over term times, the school day and pay and conditions. We have heard positive reports about ARK academies and the fact that they have a longer school day. E-ACT has supported the Blakely academy to set higher teacher pay to bring in top-quality teachers.
We should bear it in mind that intervention takes place where schools are underperforming—where there is a problem. At meetings with governing bodies, where schools are in Ofsted categories of concern, a broker discusses sponsorship options and aims to agree a schedule of actions. As is necessarily the case in an underperforming school, that can sometimes appear challenging—of course, it can. We are saying that what is happening at that school is not delivering for the children. It is important that they receive the best possible education.
Elizabeth Truss
As I mentioned before the short break in proceedings, the schools that we seek to intervene in and that are suited to a sponsored academy solution are those that are underperforming. There have been some questions about the make-up of the departmental brokers that we employ to carry out that work. As the schools are underperforming, the conversations are often about challenging them to perform better. The departmental brokers have contracts with the Department that state their terms and conditions. They are not paid on results, and they are subject to the civil service code of conduct. The hon. Member for Cardiff West (Kevin Brennan) asked about the code of conduct procedure. He also referred to it in a letter when there was a complaint, and that was addressed by the Department for Education.
The chief inspector of schools, Sir Michael Wilshaw, made it clear in his most recent report that more children than ever before are in good schools. That is fantastic news. He has been clear that there are areas of the country where almost all schools are excellent or good, which, again, is fantastic news. None the less, progress and performance are not uniform across the country. Sir Michael has been equally clear that there are areas of the country where only a minority of schools are good enough, which is unacceptable. According to Ofsted, 2 million children are in schools that are not good enough, and no one should be willing to accept that.
What we have to bear in mind is that when we broker sponsored academies in cases of underperforming schools, the children are not receiving the quality of education that they deserve.
Robert Powell
(11 years, 8 months ago)
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Jonathan Evans (Cardiff North) (Con)
It is a great pleasure, Mrs Main, to address the Chamber under your chairmanship. Robert Darren Powell was born on 29 December 1979 at Glanamman hospital near Ammanford. Robbie and his parents lived in the Upper Swansea valley in the town of Ystradgynlais. The community is part of the Brecon and Radnorshire constituency, which I represented in Parliament between 1992 and 1997. Although I am no longer the Member of Parliament for the family, my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) has kindly agreed to let me lead this debate as many of the matters that I intend to raise are ones that arose when I served either as the family’s MP or as the Member of the European Parliament for Wales.
Robbie Powell was just 10 years and four months old when he died. A post-mortem examination took place and the cause of death was recorded as Addison's disease, which is a rare disease that affects one in 10,000 people. It can, however, be effectively diagnosed by the ACTH— adrenocorticotropic hormone—test. If that had taken place in Robbie’s case, he would be alive today and living a full and normal life.
The case of Robbie Powell has become notorious as an example of the failure of multiple individuals and agencies. The satirical magazine Private Eye has described it as one of the most shocking and astonishing stories in the history of the NHS. The multiple failures even affected how the case was dealt with by Welsh Office officials, which led to two Cabinet Ministers, my right hon. Friends the Members for Wokingham (Mr Redwood) and for Richmond (Yorks) (Mr Hague) giving parliamentary answers that later proved to be untrue. For the purposes of today’s debate, however, I wish to focus on the role of the prosecuting authorities in considering the issue of whether a criminal prosecution should have been authorised in this case.
Robbie died on 17 April 1990. He had been unwell for more than a fortnight and his parents had requested no fewer than seven consultations with five local GPs over that period as they became increasingly concerned about his condition. Robbie had excessive weight loss and was so weak in the last four days of his life that he could not walk. If Robbie had been referred immediately for hospital treatment it is likely that his life would have been saved, but a number of general practitioners who dealt with him did not refer him to hospital for an investigation. On the final day of his short life, his father had to take him by car to Morriston hospital, after being refused an ambulance at the second GP consultation of the day. Robbie stopped breathing on arrival at the hospital and never regained consciousness.
All of the evidence shows that the father had been pleading with GPs to refer Robbie to Morriston hospital. What Mr Powell could not have known at that time is that four months earlier, a hospital consultant had recommended that Robbie should be tested for Addison’s disease. It later emerged that a letter to that effect had been sent to the GP practice. It said that Robbie needed the ACTH test and should be immediately re-referred if there was any recurrence of his symptoms. Clearly, after Robbie had died one would have expected that all of the background circumstances and failures would have come to light. However, the reality is that virtually all the organisations that had the responsibility for establishing the facts operated in ways that blocked, impeded or even falsified the evidence.
Roger Williams (Brecon and Radnorshire) (LD)
I pay tribute to my hon. Friend for the skill with which he has pursued this case. However, I am sure that he would also like to put on the record the tenacity with which Robbie’s father has pursued the case. Without his tenacity, we would not be where we are today.
Jonathan Evans
I am certainly very happy to acknowledge that tenacity, as I will elaborate on later in my remarks, and as I said earlier I thank my hon. Friend for his support for my raising this matter today.
My own concerns as the then MP for the Powell family became so great that they led me to request the then Secretary of State for Wales, my right hon. Friend the Member for Wokingham, to authorise a full public inquiry to get at the facts, a request that was framed in joint terms with the then spokesman for Her Majesty’s Opposition and later First Secretary of Wales, Rhodri Morgan. My right hon. Friend the Member for Wokingham wrote to me on 8 May 1994 indicating that he had given the issue of whether to hold a public inquiry very careful consideration but did not think that he would be justified in holding one. However, we now know that at that time the Welsh Office officials were providing him with false information about the case.
However, my right hon. Friend offered to set up a non-statutory inquiry under an independent chairman if my constituents—the Powell family—felt that such an inquiry would help to get to the bottom of the issue. Although the family wanted a full public inquiry, they accepted this course of action but received a notification six months later that the family’s general practitioners had refused to co-operate. Furthermore, at one point the medical notes in the case, which were crucial in terms of the request for the Addison’s disease test, went missing. Questions were asked in Parliament. In June 1995, that led my right hon. Friend to assert that he had been advised that no package containing those documents had ever been received by his Department.
However, after further investigations that were undertaken by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs when he became Welsh Secretary, it was established that the information that had been provided to Parliament was completely untrue and as a result my right hon. Friend—who was then the new Welsh Secretary—was obliged to set up an independent investigation into the management of papers by the Welsh Office. Needless to say, the fact that MPs and Cabinet Ministers had been provided with false information on such matters by civil servants did nothing to improve the Powell family’s confidence that the true facts of the case would ever come to light.
I set out these issues as the context of this debate, because responsibilities in relation to health are now clearly within the remit of the Welsh Assembly. More recently, the First Minister, Carwyn Jones, ordered an independent review of the case, which reported last year. In advance of ordering that review, however, the First Minister had asked the Attorney-General whether he would join the Welsh Assembly Government in establishing a full public inquiry into the case, as the matters of concern that I intend to raise in this debate are not wholly within the remit of the Welsh Assembly Government but relate specifically to the manner in which the prosecuting authorities had considered the matter.
It was about that issue that I wrote on 4 April 1996 to the then chief crown prosecutor for Swansea expressing concern about the case and pointing out that it might be necessary to require a full and detailed investigation of the actions—or should I say the inactivity?—of the prosecuting authorities. The response that I received was directly from the then Director of Public Prosecutions in London, the late Dame Barbara Mills QC, who set out—I am bound to say in rather simplistic fashion—the “realistic prospect of conviction” test. Dame Barbara indicated that the Crown Prosecution Service had first been consulted about the case in November 1994 and had given preliminary advice to the police, before offering additional advice to the police in December 1994. In December 1995, following what was described by Dame Barbara as an “extensive” inquiry, the Dyfed Powys police submitted a further file to the CPS seeking advice, and the case again received detailed consideration with advice being given to the police on 5 January 1996. Dame Barbara set out in that letter that she had advised that the evidence available at that stage was insufficient to support a prosecution, but she indicated that she would be happy to consider any further evidence. She reiterated this stance in a letter to me on 26 July 1996.
At a later stage, and following complaints made by Mr Powell to the then chief constable of Dyfed Powys police and the Police Complaints Authority, it was decided that Dyfed Powys police’s handling of the case would be independently reviewed by another police force. Detective Chief Inspector Poole of West Midlands police was appointed and his November 2000 review made 25 recommendations. The Avon and Somerset police force was instructed to undertake a disciplinary investigation, and in fact a detective chief superintendent and a superintendent from Dyfed Powys police were both formally issued with discipline notices. However, as was sadly becoming rather familiar, both senior officers were then permitted to retire and the investigation went no further.
That investigation was called Operation Reboant, and it focused on the handling of the investigation itself. Although Dame Barbara had spoken about the detail of the Dyfed Powys police investigation, the conclusion of the Avon and Somerset police force on this matter was shockingly different. It concluded that Dyfed Powys police had been institutionally incompetent in respect of the police investigation into the circumstances surrounding the death of Robbie Powell. The manner in which employees of Dyfed Powys police had dealt with Robbie’s father was also criticised. The inquiry concluded that, as an organisation, Dyfed Powys police had failed to investigate professionally, efficiently or effectively the circumstances surrounding and subsequent to the death of Robert Powell at Morriston hospital, and that the criminal investigations were badly managed by senior detectives. However, the inquiry did not authorise prosecution for misconduct in public office as Dyfed Powys police was neither a body corporate nor a person for prosecution purposes. Furthermore, it should be noted that the GPs who were under investigation were, at the material time, actually employed by Dyfed Powys police as police surgeons, and that this conflict of interest was not disclosed.
The second investigation was entitled Operation Radiance and it was an investigation into whether any criminal offences had been committed by the general practitioners, whose role had been to provide health care to the Powell family. This investigation was undertaken by DCI Poole, who concluded that there was the potential for up to 35 individual criminal offences to be considered in the case, ranging from manslaughter to the falsification of documents, perverting the course of justice and conspiracy to pervert the course of justice. Core to those charges was the revelation that a secretary in the GP practice constructed a referral letter after Robbie had died requesting that Robbie should be tested for Addison’s disease in response to the original referral on that issue, which had taken place months earlier. The letter was then backdated to the time that Robbie was still alive and placed in his file of papers. Two persons in the GP practice accepted that they had been involved in this exercise, the clear purpose of which was to mislead the investigations that were taking place into the circumstances that led to Robbie’s death. Another GP confessed that she had watched a television investigative report into the scandal that had been broadcast in Wales, and following that broadcast she had constructed a series of notes, backdated them to a date when Robbie was alive and then placed them in his notes. Again, it seems clear that this action was contrived in order to give a misleading impression regarding the medical care that was being offered.
The conclusions of Operation Radiance were delivered to the CPS and led to a meeting between the CPS and their advising counsel on 2 April 2003, the effect of which was to inform the parents that no prosecution would be undertaken in relation to any of the issues arising from the treatment of their son. I have rarely read a more self-serving document than that six-page letter, but the essence of the viewpoint conveyed by the CPS is that it would no longer be justifiable to resurrect the offences as any case brought against the doctors for forgery or for perverting the course of justice would inevitably be stopped as “an abuse of process”.
It is difficult to understand why the prosecution of conduct of the sort to which I have referred could be regarded as “an abuse of process”. However, the first sentence of the final page of that letter gives a hint, when the CPS says that
“the important considerations are the passage of time and the earlier CPS decisions”.
I cannot imagine for one moment that an argument of that sort would cut much ice in the considerations that Parliament has given to the issues surrounding the deaths at Hillsborough in 1989, more than a year before the death of Robert Powell. Accordingly, the passage of time in itself surely should never be relied upon by the prosecuting authorities as a reason why no prosecution should be taken forward, and I can imagine the outcry if such a claim were to be made in the Hillsborough case.
However, it is the remaining words of that sentence that give a hint as to why the prosecuting authorities had concluded that no action would be taken over these shocking events. The words are
“and the earlier CPS decisions”.
In my correspondence with Dame Barbara Mills in 1996, she made it clear that the Crown Prosecution Service was still open to considering further evidence in the case, but on the final page of the six-page letter of 17 April 2003, crown prosecutor Mr Andrew Penhale says these extraordinary words:
“for a variety of reasons, the important evidential points were missed and the doctors were given an unqualified assurance that they would not be prosecuted.”
It seems, in that context, that the prosecuting authorities conclude that the initiation of criminal proceedings, at the very least for forgery and perverting the course of justice, might be regarded as an abuse of process. Two serious issues arise from this. Although the use of evidence that arises following a declaration that no prosecution would be forthcoming might make that evidence inadmissible, is it really the opinion of the Attorney-General that such a statement would preclude any further prosecution of such an individual? This proposition requires clarification. If the granting by the prosecuting authorities of what effectively amounts to an immunity from prosecution is regarded by the Attorney-General as effective, does that not set out even more starkly the need for a full and thorough public inquiry, to establish quite how such an appalling situation has arisen?
I am aware that the Attorney-General does not feel a public inquiry is necessary, as all the facts are now known, albeit they have been dragged into the public spotlight after years of lies and obfuscation. However, I do not know why the GPs were given immunity from prosecution in respect of serious offences of forgery and perverting the course of justice. The Powell family and I would be interested in hearing an answer to that.
As my hon. Friend the Member for Brecon and Radnorshire said, I pay credit to Mr and Mrs Powell, who have fought relentlessly for justice for their son since his untimely death, very often in the face of obstruction, lies, forgery and abuse. Mr and Mrs Powell are not seeking vindictive retribution against those who failed their son and then wilfully obstructed the investigation of the circumstances. The Attorney-General declined to participate in a public inquiry as he feels that the facts are known, but he should acknowledge that it has only been the relentless challenge of Mr Powell that has brought the appalling truth to light in this case.
Back in 2001, the Bristol inquiry concluded that when things go wrong, hospitals and health care professionals owe a duty of candour and that they should be open and honest. The Robbie Powell case in May 2000 highlighted the absence of any duty of candour for health care professionals. A judgment in the European Court of Human Rights states:
“Whilst it is arguable that doctors had a duty not to falsify medical records under the common law…there was no binding decision of the courts as to the existence of such a duty. As the law stands now”,
in this country,
“doctors have no duty to give parents of a child who died as a result of their negligence a truthful account of the circumstances of the death, nor even to refrain from deliberately falsifying records.”
The Health Committee has proposed twice that this duty should be established in statute and it remains the family’s aim to see that achieved. The recent Francis report, of the Mid Staffordshire NHS Foundation Trust public inquiry, has also recommended implementing this duty of candour, as has the former chief medical officer for England, Sir Liam Donaldson. Hon. Members will not be surprised that those people who have campaigned to establish such a duty wish to call it Robbie’s law, in acknowledgment of the appalling failures in the case that I have outlined.
The Attorney-General (Mr Dominic Grieve)
It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate my hon. Friend the Member for Cardiff North (Jonathan Evans) on securing this debate.
My hon. Friend outlined the sad and unhappy history of this matter. At the outset, I acknowledge that it is clear that Mr Powell and his family feel, with justification, very let down by how this matter has been handled.
My hon. Friend’s concerns appear to fall into two categories. The first relates to the decision of the Crown Prosecution Service not to bring any criminal proceedings arising from the circumstances of Robbie Powell’s death. The second is whether, in light of the Crown Prosecution Service’s conduct of this matter, there should be a full public inquiry.
First, on the decision not to prosecute, it is right that Parliament holds public services to account, including the Crown Prosecution Service, for which I am ministerially accountable here. However, I have to preface my remarks with a note of caution. This debate cannot be the place to determine the guilt or innocence of those suspected of criminal activity, and it is not the place where I can engage in detailed analysis of the complex issues that this case involves. I must also be realistic about what I can achieve in the short time available to me in this debate. I do not make those remarks lightly or to brush the matters aside. I know that this is a case where there have been allegations of record falsification and cover up, and it would only fuel those concerns if I were to refuse to engage with them. So I will engage with them, to the extent that I can and that it is possible to do so in this Chamber.
The CPS reviews of evidence in the 1990s were in relation to evidence gathered during a criminal investigation by Dyfed-Powys police, which was later found, as my hon. Friend said, to be institutionally incompetent. It is hardly surprising that decisions made by the CPS on the strength of evidence gathered by an institutionally incompetent criminal investigation may be open to criticism. I will therefore focus on the review of the evidence conducted by CPS in 2003, which was based on police investigations conducted by an independent team supervised by the Police Complaints Authority.
The 2003 evidential review considered whether any of the medical professionals involved in the case could be prosecuted for gross negligence manslaughter. It also considered, in relation to the amended medical records and a backdated referral letter, whether proceedings could or should be brought for forgery and/or perverting the course of justice. That review encompassed a lengthy consideration of papers over a number of months and meetings with officers, initiating further inquiries and consulting the various medical and forensic experts in the case. A senior and eminent Queen’s counsel was instructed by the CPS throughout.
The decision at the end was that no prosecution could be brought. That decision was taken on 14 March 2003. The family were informed by letter, which explained that the CPS intended to meet them to explain the background to the decision. Ahead of that meeting, the CPS and Dyfed-Powys police met the General Medical Council to determine what might be required to initiate a GMC inquiry.
The meeting with the family took place in early April 2003. It was explained at the meeting that this was an extremely difficult decision, based on a complicated set of facts, involving myriad differing medical opinions. The decision had to consider the impact of the earlier CPS decisions not to prosecute and the impact of the passage of time on the fairness of the prosecution, including matters such as the availability of evidence for both the prosecution and defence.
The letter of 17 April 2003, to which my hon. Friend refers, was sent to explain that decision in writing, following the meeting with the Powell family. I am afraid that I do not agree with the description of the letter as “a self-serving document”. Its purpose was to assist the Powell family in understanding the decision making in an extremely complicated case and to set out fairly the Crown Prosecution Service’s evaluation of what was and was not possible.
In 2004, an inquest was finally held in this case, after the then Attorney-General, Lord Goldsmith, consented to an application being made to the High Court for an order that it should take place. Following the inquest, Mr Powell complained that a number of the doctors had committed perjury during the inquest. That was again considered by the same reviewing lawyer and senior Queen’s counsel. In respect of one of the doctors, such a prosecution would have met the same problems as had been highlighted in 2003; in respect of the other doctor, the case was significantly weakened by the medical evidence heard during the inquest. The CPS decision not to prosecute for perjury and the reasons behind it were also explained to the family, in a letter dated 8 December 2005. It was, of course, open to the Powell family to ask for the CPS decisions not to prosecute in 2003 and 2005 to be reviewed within the CPS, or to institute judicial review proceedings.
It remains the case that such a review would still be available. I emphasise that I am not, in saying that, suggesting that the review could possibly come to any different conclusion, because I have no grounds for making that suggestion. I hope my hon. Friend will forgive me for saying that that is all I can say on that aspect of the matter in this context.
Jonathan Evans
Before the Attorney-General moves away from the 2003 letter, will he respond to my points on the aspect of the letter dealing with unqualified assurances that there would be no prosecution? It is one thing to tell someone that, on the basis of the current evidence, there will not be a prosecution; it is quite another for the Crown Prosecution Service to explain a decision not to prosecute on the basis of previous unqualified assurances that no prosecution would ever take place.
The Attorney-General
I totally understand my hon. Friend’s point. My difficulty is that I am not in a position in this debate to analyse the assurances that were given, their exact terms or their effect. The CPS will have to consider that. What I can say is that, generally speaking, although it is true that there may be exceptional circumstances in which an assurance that a prosecution will not be brought can subsequently be ignored and overridden, and would survive an abuse of process application if a trial were ever to take place, such an assurance will be a powerful argument if someone wishes to argue that there would be an abuse of process if a prosecution were to be brought.
In any event, the abuse of process issue in respect of assurances that no prosecution would take place is only one element in the equation, as I hope I have been able to explain. It is not the sole argument; there are also evidential issues, and I do not think such things can be considered separately. I am afraid that is the best explanation I can give in the time available.
I know my hon. Friend has previously raised with me instances in which earlier decisions not to prosecute have been ignored with prosecutions being brought later, which I accept. I emphasise that such assurances are not an insuperable or absolute bar, but they are without doubt a major obstacle if any further prosecution is to take place.
Jonathan Evans
My final point is that it is one thing to say that, back in 1996, an unqualified assurance was given and that it was sufficiently important for it to appear in that letter, but in 1996 a letter was sent to a Member of Parliament saying that the CPS remained open to further evidence. Does my right hon. and learned Friend agree that that should at least be considered?
The Attorney-General
I have no reason to disagree, but, equally, I have no reason to disagree with the position that the CPS adopted in 2003. That really is as far as I can go on the matter. I have explained that the issue can be reviewed further, but, for the reasons I have already given, I have no reason to think that it will necessarily be a productive avenue. If that is something the family want, it is something they can ask for.
I am conscious that I have very little time, so I will explain the Law Officers’ approach to the public inquiry. The question was most recently considered by the former Solicitor-General, my hon. and learned Friend the Member for Harborough (Sir Edward Garnier), in the summer of 2010. Prior to that, it was considered by Lord Goldsmith in early 2007.
The starting point for those Law Officers who have previously considered the case is that a public inquiry is unnecessary, not because the matter is not serious—the matter is undoubtedly extremely serious—but because issues surrounding the circumstances of Robbie’s death have already been the subject of intense scrutiny. In 2003, there was an inquiry into Dyfed-Powys police’s handling of the case by Avon and Somerset constabulary. In 2007-08, the Independent Police Complaints Commission conducted two further investigations into complaints relating to Dyfed-Powys police. Additionally, the Welsh Assembly Government commissioned their own report, published in February 2012, into the handling of the care and treatment received by Robbie Powell. It is difficult to see that a public inquiry would uncover anything that has not already been uncovered or would identify lessons to be learned that have not already been identified.
Although it was the view of Lord Goldsmith and my hon. and learned Friend the Member for Harborough that a public inquiry is unnecessary, they both agreed that, if the Welsh First Minister maintained that such an inquiry needed to be established, they would not stand in his way provided that any inquiry encompassed the actions of both the police and the CPS. The main concern was that a public inquiry would be seriously impeded if it were not able to consider the actions of all those involved. It would serve no purpose for some participants in the Powell case to be within the scope of the inquiry only for others to be left out.
The Home Office took the view, however, that a public inquiry into the activities of the police was not necessary given the number of existing inquiries into the police arising from the case. The Home Office accordingly now takes the view that any new inquiry into the actions of the police is unlikely to produce any fresh information about the role of the police in this tragic case. For that reason, the Home Office is not convinced that there is a need for a joint inquiry. The decision is for the Home Office, but from the information available to me as a Law Officer, I have no reason to dispute the Home Office’s view.
Had the Home Office agreed to an inquiry, it would have been a further condition of the Law Officers’ consent that the inquiry did not extend to question the correctness or otherwise of a prosecutorial decision. That is because it is a fundamental constitutional principle that decisions by prosecutors are taken independently of the Executive and are free from political influence. If such decisions are reviewed anywhere, they have to be reviewed in a court of law. Any other approach risks the perception that the Government are holding the threat of an inquiry over the head of prosecutors to push them into making prosecutorial decisions in a way more to the Government’s liking.
Of course, the Home Office is right: this very tragic case has been the subject of a large number of reviews that have undoubtedly identified areas where things could have been done much better. It is important that the recommendations of those reviews are implemented.
Robbie Powell’s death was almost 23 years ago, and the passage of time continues to run. The concerns expressed by Lord Goldsmith and my hon. and learned Friend the Member for Harborough about whether a public inquiry could ever be appropriate in this case perhaps apply with greater force today than they did in 2010.
I can conclude only by expressing my sympathy for the family.
Coventry City Football Club
(11 years, 8 months ago)
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Mr Bob Ainsworth (Coventry North East) (Lab)
Thank you, Mrs Main, for presiding over this debate, which gives us an opportunity to discuss an issue of such concern to the city of Coventry, to local people and, most particularly, to Sky Blue fans.
Coventry City football club has been in deep financial difficulty for many years. Five years ago, when it had lost its ground, Highfield Road, and most of its assets, the club was sold to the hedge fund Sisu 20 minutes before the administrators were due to take over. Sisu specialises in acquiring distressed assets, and under Sisu the club’s ownership is multilayered, opaque and partly offshore in the Cayman Islands. It is claimed that Sisu has lost £43 million over the period, but nobody can be sure as substantial management fees of millions of pounds are passed between the layers of ownership and debentures seem to protect unknown investors.
A bitter battle has waged for the past year over the rent and ownership of the Ricoh arena, where the club play. The club’s owners have been on a rent strike. They say they are fighting for a more realistic settlement for a league one club, although Arena Coventry Ltd, which is jointly owned by Coventry city council and the Alan Edward Higgs Charity, believes the agenda has been to destabilise the company and thereby gain control at a fire-sale price. A much lowered rent has been offered, but the dispute continues.
Meanwhile, the fans and the people of Coventry despair as the club’s owners threaten to liquidate the business or move the club out of the city. I am grateful to the Football League, which yesterday, ahead of this debate, issued a statement reiterating its position:
“Any application to move the club to a stadium outside the city would need to be considered by the Board of the Football League. In doing so, the Board would require the club to demonstrate that it had a clear plan for returning to Coventry within a prescribed timeframe.”
I hope the Football League’s rules will therefore not allow Sisu to do anything like what was done to Wimbledon football club.
The Football League has a reform of governance programme under way, on which I would like the Minister to comment. However, the Football League, which is within the democratic control of the clubs themselves, can only do so much. Do the Government believe that will be adequate to address the challenges faced by Coventry City football club and the game?
Although the dispute between the parties over the rent level has been in the public domain for many months, and much innuendo and allegation inevitably surround such disputes, one key aspect has not had any public exposure. If we are to go forward, it must be flushed out. The football club’s owners are seeking to challenge the validity of the original rental agreement made back in 2002, and are using that challenge in an attempt to discredit the city council’s motives for paying £14 million to Yorkshire bank in December for the stadium’s debts. I cannot see what right the club owners have to issue threats on that front as they bought the club more than five years later. They had the opportunity for due diligence, and I would hope that the principle of caveat emptor meant something in that case. If the hedge fund is allowed to reopen the issue, it will be a blatant attempt to profit at the expense of those who built and paid for the stadium: in part, the people of Coventry.
Mr Jim Cunningham (Coventry South) (Lab)
My right hon. Friend has obviously done considerable investigation into the matter. I have the impression that the parent company, Sisu, bought the football club to acquire the stadium; that is my view, although I have not gone into it in depth. Has he considered a way forward? Is it worth while exploring arbitration? He will know better than I do; he has dealt with the matter a lot more than I have.
Mr Ainsworth
I will come to exactly that point later in my speech. It is a potential way forward that has been put to the club owners in the past few days.
To return to the issue of whether the owners will be allowed to reopen the agreements that existed long before they arrived in the city and took over the club, Martin Reeves and Chris West of the city council and Arena Coventry Ltd dismissed the threats as “desperate stuff”. However, in my view, the club owners must be prepared to justify their threats and allegations publicly or drop the issue if we are to find a way forward. I challenge them to do so.
The Sky Blue Trust, which represents fans, now has more than 800 members, an indication of the growing amount of alarm among fans. I thank the trust for helping and supporting me to prepare for this debate and for all the work that it has done over the past few years. The club has made a proposal that I put to the club owners yesterday: binding arbitration conducted by a well-qualified local man, Dr John Beech, who has a PhD in business strategy from Cranfield university and more than five years’ experience examining football finance.
Board member Mark Labovitch indicated his enthusiasm for that course of action. However, the response that I received today demonstrates how difficult it is to deal with Joy Seppala and her team. It seeks to turn the proposal of binding arbitration into an opportunity to investigate Arena Coventry’s finances and set the agenda for the arbiters. Of course, there is no suggestion that the football club’s finances or ownership structure should be subjected to investigation.
Mark Pawsey (Rugby) (Con)
I congratulate the right hon. Gentleman on raising this important matter. The fortunes of top sporting clubs are key in any community, and the fortunes of Coventry City are important to my constituents in Rugby, as Coventry City is their closest league club. In Rugby, where some of us play a game with a slightly differently shaped ball, we had an issue with the administration of our top rugby club, the Rugby Lions, and it took some time for the sport’s administrative body to get involved. Does he believe that the football authorities are currently sufficiently involved?
Mr Ainsworth
I accept what the hon. Gentleman says. I will raise the general issue of the need for new governance in football, which I think applies to other businesses, and certainly to other sporting businesses. We will have to see what the Minister says, and whether he can give us any comfort with regard to pressure that the Department might be putting on the authorities or discussions that they might be having with them to ensure that the arrangements are sufficient to the task in hand.
Before I leave the issue of arbitration, I find it astonishing that Mr Labovitch, a member of the football board, should have sent me this e-mail a few minutes ago about the offer to arbitrate:
“Bob, I forgot to mention one (hopefully obvious) point: arbitration should all be conducted in public, no hiding behind claims of ‘commercially sensitive’”.
This from a company deliberately structured to prevent anybody from seeing what its business is, where the money is moved and who the eventual beneficiaries are. It is cheeky beyond belief.
The Sky Blue Trust has campaigned for fans to be given a stake in the club. In the past, club owners have said that they will do so, but when asked to make a firm offer, they have come up with 5% to 10% at a discount at some undefined future date, with no representation on the main board. The trust feels that such an offer is of absolutely no value, as it will not provide the transparency necessary for good governance.
I am also grateful to the enormously impressive Supporters Direct, which points out to anybody who will listen—this goes right to the point made by the hon. Member for Rugby (Mark Pawsey)—that this country’s record of football governance is not good. Some 92 clubs have gone into receivership in the past 20 years. In Germany, where fan ownership is the norm, not one Bundesliga club has experienced insolvency since the league’s creation in 1963. Are the Government happy with English football’s governance? Banking regulation has failed us spectacularly. Are not the same issues—lack of accountability, greed and lack of transparency—a problem in football too?
The Ricoh arena has massive potential to benefit the most economically deprived part of Coventry. It is directly connected to the motorway network and will soon be connected to the railway. Many in the city have worked hard to bring what used to be a derelict, contaminated site back into economic use, and the city is open to plans that will bring more benefit.
Many of us accept the need for a realistic approach to the lease and management issues if the stadium is to reach its full potential. Changes would be supported with the right partner at the right time. But Sisu is not entitled to bully its way into control of an asset that it did not provide, build or pay for. It must prove that it is not simply a predator with greed running through its DNA before it can expect such treatment.
The football club is a valuable part of our city’s life. In an age when communities struggle for relevance, it has the capacity to motivate people and give them collective spirit. This dispute has gone on for far too long and needs to be brought to a conclusion. I fear that Sisu, despite its words and slick presentations, has no interest in such things.
Jason McCartney (Colne Valley) (Con)
I am a Huddersfield Town fan, and my club is very much at the heart of my community, raising hundreds of thousands of pounds for the Yorkshire ambulances. Mark Robins has recently moved to Huddersfield Town as manager, so us fans feel a close kinship with Coventry City, and we went through our own financial problems in the previous decade. Also, only on Friday night, I spent the evening at a charity dinner with Brian Kilcline, who lifted the FA cup for Coventry City in 1987; I told him about this debate and he, too, sent his best wishes to all Sky Blue fans. Good luck with the quest to save the club for the community.
Mr Ainsworth
I thank the hon. Gentleman. For Coventry, 1987 was the pinnacle so far of what can be achieved by a football club on behalf of a city, and it was the entire city; whether football fans, rugby fans or whatever, they were lifted for such a long time by that magnificent occasion, and we want to see many more of them. We all fear, however, that we will not see such occasions unless there is a new settlement, a new realism and a new acceptance of community responsibility by the owners of the club, with a constructive approach to settling the dispute that they appear to have deliberately prolonged. They are not stupid—we are dealing with clever people—so one has to assume that their motives are not good for the community, the city or the club and its fans.
Will the Minister respond to the need for the reform of governance and for transparency in our national game? Has he looked at the reform programme of the Football League, and does he believe it adequate to the challenge faced by the game? My reading is that it would not have helped us to any great extent with the existing problems in Coventry, but if the Minister can say otherwise I will be pleased to hear it. Have the Government looked at the licensing proposals of Supporters Direct? Could those proposals provide sustainability and accountability for what is overwhelmingly our biggest national sporting game?
To the club, I say that there has been a reduced rent offer. If the owners want to be taken seriously, the time is long past for them to respond clearly by accepting or putting a definite counter-proposal, rather than the deliberate obfuscation and delay, for whatever motives, that has gone on for month after month. A reasonable response to the proposition for binding arbitration, which my hon. Friend the Member for Coventry South (Mr Cunningham) mentioned, would have been an opportunity for the club to win trust. If it had accepted the proposition, it would have seen the supporters’ trust, me and I do not know how many others prepared to join it and say that that was a reasonable way forward; my hon. Friend raised the issue independently today, so he would have been minded to get behind such action. In its response, however, the club has failed absolutely to grasp the opportunity to get with the parts of the community that care so much about the football club and economic development in the city. Instead of all the deliberate talk, innuendo and attempts to destroy reputations that have gone on, the club should come clean about its threats over the 2002 rental agreement. If we had some kind of straight response from the owners, even at this late stage, some good will would rally to their cause. They must start to examine the behaviour that we have seen for far too long.
The Minister of State, Department for Culture, Media and Sport (Hugh Robertson)
I thank the right hon. Member for Coventry North East (Mr Ainsworth) for securing the debate and for his contribution. As I hope he knows, he is well respected both as a Member of the House and in the Ministry of Defence, where he served with much distinction at the end of the previous Government. That is evident in how he presented his case today. May I also record a small apology for some confusion over who was to respond to him in the debate today? I was due to be in a Bill Committee all afternoon but, fortunately, it wound down a little early, so I am sorry if that caused any confusion.
The right hon. Gentleman put his case extremely well. I entirely agree with him on almost everything he said. I place on record my sympathy for the fans of Coventry City football club for the position in which they have been put and for the way in which it came about. No one who cares about football clubs or sport in general can find the series of events that he has outlined today in any way satisfactory. In fact, almost everyone would conclude that that is a disastrous way in which to run a sports club, in anyone’s judgment. The tragedy, in a sense, is that the situation he outlined is not unique to his club. At some stage over the past 10 years, more than half of the Football League’s 72 clubs have been insolvent, which is clearly not satisfactory.
Rather than read through my prepared speaking notes, if the right hon. Gentleman is happy, I will try to answer the various questions that he posed to Government. First, do the Government believe that the Football League’s approach is sufficient? It is fair to say that under the leadership of Greg Clarke, the Football League has made considerable strides and, as I would expect, the right hon. Gentleman fairly alluded to that in his remarks. The tightening up of many of the financial fair play rules that have happened on the current chairman’s watch are welcome, necessary and a step in the right direction. Indeed, when Greg Clarke was interviewed by the Culture, Media and Sport Committee as part of its inquiry into football governance, he straightforwardly said that debt is
“the single biggest problem for football”.
That was entirely mirrored in what the right hon. Gentleman said today. He also asked if I thought that the reform programme would in itself be sufficient. The honest answer is, no, I do not. There is a great deal more ground to be covered. I will come on to some of the ways in which we are trying to cover that in a moment.
The second area touched on by the right hon. Gentleman was the legal dispute between the club owners and the city council. I hope that he does not think that I am ducking the question completely if I say that without precise knowledge, it is difficult to comment in any detail. From what he said, it certainly sounds as if it is at least an unsatisfactory situation. Clearly, if it will lead to legal action, I must be a little careful.
Mr Geoffrey Robinson (Coventry North West) (Lab)
I have an interest in the club to declare, which I do so willingly.
Before the Minister moves on to the general considerations, could he find any way in which he might facilitate mediation? The two sides are locked in what seems to be a deeply held, personal, embittered struggle, and someone needs to find a way to help them out of it. I know that he cannot appoint a mediator, but is there anyone in the Department who could use the enormous influence of his office to facilitate such an event? It is difficult but if he could be positive it would help.
Hugh Robertson
I have no statutory power as a Minister to intervene. The hon. Gentleman, however, is not asking for that; he is asking if I could use my good offices to effect a solution. As long as my powers and the limitations on what a Minister can achieve are clearly known, I have enough respect for the Opposition Members present, in particular the right hon. Member for Coventry North East whom I have dealt with over many years, to say simply that if there is a stage at which my intervention might be helpful, I am happy to do so. The danger is that that card, once played, might be the final card, so it might be better to try some other avenues first.
Mr Ainsworth
I would be wary of asking the Minister to become involved in mediation, because the proposal has been made by the club, and there are grave worries that it may be just part of the prevarication that has gone on for some time, whatever the motive.
Hugh Robertson
I thank the right hon. Gentleman for that helpful intervention. I leave the matter with him, but if he thinks I can do something to help, I am happy to do so. I suspect that a more obvious target might be the chairman of the Football League, who is supposed to be independent in these matters.
Mr Robinson
The problem is exemplified by my right hon. Friend’s intervention. Assuming that it is impossible—the people involved are bitter, and are at it like that all the time—someone should go in with a cool head, look at both sides without taking a prejudiced position, and try to bring them together. That would be the role to take, but I appreciate that the Minister has no statutory power.
Hugh Robertson
The hon. Gentleman puts the issue well. That is the role that should be carried out by the Football League in the first instance, but if for any reason that proves impossible, I will be happy to look at any sensible proposal.
The right hon. Member for Coventry North East asked about supporter representation on the board. I will come to the bigger ticket way that that is being dealt with in a moment. I have worried about this, having looked at it during most of my three years as a Minister, and it can become a bit of an Aunt Sally. It is not much use having one supporter on a board, if there are 10 others who can vote him or her down on each and every occasion. It is about the message it sends out. The drift from the Government and the Select Committee on Culture, Media and Sport is that this is an area that needs to be addressed, and that until now supporters have been under-represented in and under-consulted on the running of football clubs, and their views on how football clubs are run have not been sufficiently taken into account.
The football authorities—I will come to the process in a moment—have been invited to make proposals. It remains to be seen precisely where they get to. If this area were working well, different solutions would probably work for different clubs, depending on their ownership structure and the history of their involvement with supporters. If that does not happen, the Government will have to take action, and I will come to that.
The fourth question, which wraps all this up, is whether the Government are happy with football governance. The honest answer is no. That leads to a question about what we have done about it. There has been some progress over the last couple of years. All 92 professional clubs are adopting the financial fair play proposals—I will come to the Culture, Media and Sport Committee’s process in a moment—and the Football Association has finally set up a regulatory authority that will have power to determine applications under FA and Football League licences and directors’ criteria, and to look after moves.
Soon after I became a Minister, I turned up for a Wednesday morning debate in Westminster Hall to find the best part of 60 Members of Parliament wanting to speak, and it is clear that football governance is an area that is causing concern throughout the House. To try to maintain a cross-party position, we asked the Culture, Media and Sport Committee to look at it. In the middle of 2011, it produced a report, which I am sure the right hon. Gentleman has seen, with a series of recommendations for the football authorities. They were challenged to go away and work together, which was something they had not done very successfully until then. There is often friction between the Football League, the Premier League and the Football Association. They have worked much more constructively together in this instance, and produced an interim response to the Committee. They agreed that there was a need to change, and that they would bring forward new regulations by August. With our encouragement, the Select Committee invited them back to review progress at the end of last year or the beginning of this year, and produced a report that basically said that some progress had been made, but not quickly enough. It contained a straightforward recommendation to the Government that if further progress was not achieved by the middle of this year, the Government should not hesitate in legislating.
Those of us who have been in government would be properly wary of that move, but if it is the only to achieve proper progress, we are prepared to do it, albeit that I would want it done on a cross-party basis. There would be little point otherwise because if the Government changed, the regulations might move about. An absolutely key part of any legislation would be the regulations on supporters’ involvement in their football clubs.
Those were the questions the right hon. Gentleman asked me. Time is running out, so I will not read my script. If he is happy with that and does not want to ask me anything else, I will simply finish where I started and thank him for the debate. I wish him and his local MPs well with Coventry football club. It is a great club, and it does not deserve to have got into its present position. I wish him and others every success in their efforts to bring about a brighter future for it.
Question put and agreed to.
Written Ministerial Statements
(11 years, 8 months ago)
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Contingencies Fund Advance
(11 years, 8 months ago)
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The Secretary of State for Business, Innovation and Skills (Vince Cable)
The Department for Business, Innovation and Skills wishes to recruit five non-executive directors and three executive directors to the proposed Competition and Markets Authority (CMA) before Royal Assent has been received for the Enterprise and Regulatory Reform Bill which will create the CMA, a new non-ministerial department later this year.
The new board together with Lord Currie CMA chair designate and Alex Chisholm CEO designate will play a critical role in driving forward the creation of the CMA. To ensure a smooth transition process the board will need to take early decisions on key areas such as, operation structure and governance. When making these decisions, they will need to consider how the CMA will achieve greater coherence in competition practice, deliver a more streamlined approach to case handling and decision making, and create an effective, high-impact, competition regime, in order that the CMA fully delivers the benefits envisaged by Government.
Parliamentary approval for resource cover of £30,000 for this new service will be sought in an estimate for the Department for Business, Innovation and Skills. Pending that approval, urgent expenditure estimated at £30,000 will be met by repayable cash advances from the Contingencies Fund.
Translation into Foreign Languages
(11 years, 8 months ago)
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The Secretary of State for Communities and Local Government (Mr Eric Pickles)
In February 2012, I published my Department’s approach to integration, “Creating the Conditions for Integration” and in December 2012, I published “50 ways to save: examples of sensible savings in local government”. The latter recommends:
“Stop translating documents into foreign languages: Only publish documents in English. Translation undermines community cohesion by encouraging segregation. Similarly, do not give community grants to organisations which promote segregation or division in society”.”
I would like to reaffirm my Department’s approach to the use of translation and interpretation services for foreign languages by local authorities.
Some local authorities translate a range of documents and other materials into languages spoken by their residents, and provide interpretation services. While there may be rare occasions in which this is entirely necessary—for instance in emergency situations—I am concerned that such services are in many cases being provided unnecessarily because of a misinterpretation of equality or human rights legislation. Such translation services have an unintentional, adverse impact on integration by reducing the incentive for some migrant communities to learn English and are wasteful where many members of these communities already speak or understand English.
They are also very expensive and a poor use of taxpayers’ money. Independent research has suggested that local authorities alone spend nearly £20 million a year translating a variety of documents. Across the wider public sector, it has been estimated that translation and interpretation costs reached over £100 million in 2006.
Of course, local authorities must comply with the duties set out in the Equalities Act 2010, including the duty not to discriminate and the public sector equality duty. But this is not a legal duty to translate documents into foreign languages. Even if publishing only in English could put some people at a particular disadvantage, such a policy may be justified if local authorities can demonstrate that the integration and cost concerns pursue a legitimate aim and outweigh any disadvantage. The equality duty does not require a particular outcome, merely that public authorities consider all the relevant factors.
Obviously, there are broader challenges with communication with groups who may have poor levels of literacy or learning difficulties. But this can be addressed by use of plain English, easy read versions of documents and using pictures instead of translation. My Department will be practising what we preach in the materials we are producing as part of our Fire Kills fire safety education campaign.
Stopping the automatic use of translation and interpretation services into foreign languages will provide further incentive for all migrant communities to learn English, which is the basis for an individual’s ability to progress in British society. It will promote cohesion and better community relations. And it will help councils make sensible savings, at a time when every bit of the public sector needs to do its bit to pay off the deficit left by the last Administration.
For the avoidance of doubt, this statement effectively replaces the Department’s “Guidance for Local Authorities on Translation of Publications” published under the last Administration in 2007.
Carriers' Liability Consultation
(11 years, 8 months ago)
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The Minister for Immigration (Mr Mark Harper)
Border security is vital for the UK. While it is right that the Government are in the lead on this, carriers and the transport sector as a whole have an important role to play. We are therefore strengthening our partnership with this sector on a broad range of border security issues. We are today launching a consultation on a package of proposals around the liability of carriers for bringing undocumented passengers to the UK. This consultation is an important part of this partnership process.
The cost to the UK of undocumented passengers can be high as many go on to claim asylum. There can also be a security risk as individuals wishing to come here for organised crime or terrorism purposes may view this as a potential method of entry. The policy objective of the proposals is to reduce the number of passengers arriving in the UK without proper documentation, and to do this by working in partnership with carriers.
The consultation document includes two key proposals. The first is to increase the level of the carriers’ liability charge from £2,000 per undocumented passenger to £7,000. While this is a significant increase, the charge level has been at £2,000 for more than 20 years and no longer reflects the costs and risks involved. The second is to introduce a new approved route incentives scheme for carriers. This includes a number of charge waivers if the carrier is engaging effectively with us on border security issues, including document checking and data submission.
The consultation will last for four weeks and is targeted at airline and ferry companies, industry representative bodies and passenger groups. The consultation document is available on the Home Office website and we have also placed copies in the Library of the House.
HMIC Review (Jimmy Savile)
(11 years, 8 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
On 7 November 2012 I formally commissioned Her Majesty’s Inspectorate of Constabulary (HMIC) to conduct a review to assess police knowledge of and response to the historical allegations made against Jimmy Savile and related individuals, and potentially into similar allegations against other individuals.
In particular, I asked that the review establish clearly which forces received reports or allegations in respect of Savile and related individuals prior to the launch of Operation Yewtree on 5 October 2012. For each of those forces, I asked HMIC to review the extent to which the allegations were robustly investigated and whether there were any police failings in doing so. HMIC has concluded its review and today published its report. A copy will be placed in the House Library.
HMIC conducted enquiries in all 43 police forces in England and Wales, and liaised with HMIC Scotland and the States of Jersey Police. Its review finds that, as far as police records disclose, five allegations of child sexual assault were made against Savile to the police between 1958 and 2009. In addition to these recorded allegations, the Metropolitan Police Service (MPS) has traced two historical intelligence entries relating to Savile.
HMIC’s report makes it clear that failures by police forces, particularly in respect to the quality of investigations and the sharing of intelligence, enabled Savile to act with impunity for over five decades. It is also clear from the report that Savile could and should have been apprehended earlier and that there is more to do to ensure that the police have a fully effective and victim-centred approach to tackling child abuse. HMIC raises the possibility that such failures could be repeated. It calls for preventative action, and the report makes a number of specific recommendations which fall largely to police forces and the College of Policing.
I remain committed to taking forward the lessons learned from both this report and from the wider reviews which are ongoing in relation to historic child abuse. We need to ensure the law enforcement response to these terrible crimes is as good as it can be, to protect victims and deliver justice. As I have previously made clear in this House, the safeguarding of victims must be placed at the heart of our approach. If someone has been the victim of abuse and makes a report to the police, those in a position of authority and responsibility must not shirk in their duty to protect.
I am committed to ensuring that we also learn the lessons from this work to ensure that these mistakes could not be repeated today. HMIC will soon commence a further review into child sexual abuse and sexual exploitation which will focus on the adequacy of current processes and practices in police forces. The Director of Public Prosecutions has outlined further measures to overhaul the way our criminal justice system responds to victims of child sexual abuse. And I have asked my officials to conduct a thorough review of Home Office policies to ensure a robust and strengthened longer-term approach to delivering child protection within the Department and the police. This urgent work will ensure that the interests of victims are prioritised and the specific vulnerabilities of children are recognised and addressed.
National Assembly for Wales (Electoral Arrangements)
(11 years, 8 months ago)
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The Secretary of State for Wales (Mr David Jones)
In May 2012, the Wales Office published “A Green Paper on future electoral arrangements for the National Assembly for Wales” (Cm 8357). It sought views on four issues: whether the link between parliamentary constituencies and constituencies for elections to the National Assembly for Wales, a link broken as a result of the Parliamentary Voting System and Constituencies Act 2011, should be reinstated; whether the length of an Assembly term should be moved from four to five years; whether the prohibition on a candidate at an Assembly election standing in both a constituency and a region should end; and whether Assembly Members should not also be able to sit in Parliament.
A three-month consultation on these proposals ended in August 2012, and the Wales Office published a summary of consultation responses in November. I am today announcing how the Government intend to proceed in light of the consultation response.
As a result of the Electoral Registration and Administration Act 2013, the four UK boundary commissions will now report in 2018 on their recommendations for new parliamentary constituencies. The boundaries of parliamentary and Assembly constituencies will remain the same until then, and there is no longer an immediate need to re-establish the link between the two sets of constituencies. The Government do not therefore intend to proceed with the changes to Assembly constituencies proposed in the Green Paper.
We do, however, intend to take forward the three other proposals in the Green Paper. First, we will move the Assembly from four to five-year fixed terms. The term of the current Assembly is, exceptionally, five years, but the Assembly is set to revert to four-year terms after the next Assembly elections in 2016. A permanent move to five-year terms would make a coincidence between parliamentary and Assembly elections in 2020 (and every 20 years thereafter) less likely.
Secondly, we will end the prohibition on candidates at Assembly elections standing in both a constituency and a region at the same time. The Government believe that, in principle, candidates should not be barred from standing in a constituency and a region, and the current prohibition impacts disproportionally on smaller parties.
Thirdly, we will prohibit Assembly Members from simultaneously sitting as Members of the House of Commons. The Government do not believe that one person can adequately serve two sets of constituents. This prohibition would not apply to Members of the House of Lords.
The Government will bring forward legislation to effect these changes at the earliest opportunity.
Housing Benefit Reform
(11 years, 8 months ago)
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
I am pleased to announce that we intend to lay amending regulations to clarify the size criteria rules for two specific groups of housing benefit recipient, foster carers and armed forces personnel.
People who are approved foster carers will be allowed an additional room, whether or not a child has been placed with them or they are between placements, so long as they have fostered a child, or become an approved foster carer in the last 12 months.
Adult children who are in the armed forces but who continue to live with parents will be treated as continuing to live at home, even when deployed on operations. This means that the size criteria rules will not be applied to the room normally occupied by the member of the armed forces if they intend to return home. In addition housing benefit recipients will not be subject to a non-dependent deduction, that is, the amount that those who are working are expected to contribute to the household expenses, until an adult child returns home.
The intent of the policy was that by using discretionary housing payments, the estimated 5,000 foster carers and rather fewer armed forces personnel groups would be protected. We have agreed with local authority organisations improved arrangements through these regulations that puts these protections beyond doubt.
The changes will apply to tenants in both the social and private rented sectors.
I am also issuing guidance to local authorities emphasising that discretionary housing payments remain available for other priority groups including the needs of people whose homes have had significant disability adaptations and those with long-term medical conditions that create difficulties in sharing a bedroom.
Going forward I will continue to closely monitor and adjust the implementation of the policy, including an independent evaluation by Ipsos MORI, the Cambridge centre for housing and planning research and the Institute For Fiscal Studies to ensure that the needs of these groups are effectively addressed in the longer term.
This ensures this policy focuses on the key aim of bringing housing benefit expenditure under control. Under the previous Government, housing benefit almost doubled in 10 years to £20 billion, with households living in homes that are too big for them, while there are 2 million households in England on waiting lists, and 250,000 families living in overcrowded accommodation.
Reserves Call-Out Order
(11 years, 8 months ago)
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The Minister for the Armed Forces (Mr Andrew Robathan)
A new call-out order has been made under section 56(l)(a) of the Reserve Forces Act 1996 to enable reservists to be called out into service as part of the UK’s contribution to operations in support of UN Security Council Resolution (UNSCR) 2085, the EU training mission and specific French requests for support in Mali.
We anticipate the call-out of a small number of reservists with very specialised skills. At the moment this will affect three reservists being mobilised to deploy to Mali and three reservists being mobilised for service within the United Kingdom. The mobilisation will allow them to have the protection provided by the Reserve Forces Act 1996.
The call-out order is effective until 10 March 2014.
Grand Committee
The Deputy Chairman of Committees (Baroness Harris of Richmond)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Representation of the People (Election Expenses Exclusion) Order 2013
(11 years, 8 months ago)
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Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Representation of the People (Election Expenses Exclusion) Order 2013.
Relevant documents: 19th Report from the Joint Committee on Statutory Instruments
Lord Wallace of Saltaire
My Lords, the Representation of the People Act 1983 lists a number of exclusions from election expenses, which this order seeks to amend. The order adds a further exclusion whereby payments made to disabled candidates from the Access to Elected Office for Disabled People Fund are also exempted. This means that recipients of the new fund will not be penalised for accepting grants that are intended to increase their electoral participation. Fund payments will not therefore be considered for the purposes of candidates’ spending limits.
There are more than 11 million people with a limiting long-term illness, impairment or disability in Great Britain, and they are substantially underrepresented in Parliament and other elected bodies. The Government strongly believe that elected bodies should be more representative of the people they serve.
To address this, the Access to Elected Office Strategy was launched in July last year to provide disabled people with training, paid parliamentary internships and grants through the Access to Elected Office for Disabled People Fund. The fund was established because one of the principal reasons disabled people are underrepresented in elected bodies is the fact that they face additional costs when standing for elected office—for instance, extra transport costs or the hire of sign language interpreters. These additional costs create an extra barrier to elected office for disabled people—one that other, non-disabled, candidates do not face. The fund therefore seeks to help disabled candidates to overcome these financial hurdles by covering the cost of their disability-related items or services, whatever they may be.
The fund provides grants to all disabled candidates, whether they are independent or represent political parties, provided that they are standing at UK parliamentary, English local authority, Greater London Authority, English mayoral or police and crime commissioner elections or by-elections. By offering specific disability-related financial assistance, the fund will place disabled candidates on an equal footing with the other candidates.
Unfortunately, under current electoral rules, grant payments awarded by the fund will count towards candidates’ election spending limits. This is not an issue for parliamentary, Greater London Authority or police and crime commissioner elections, where disability-related costs are likely to be treated as personal expenses and are therefore exempt under Section 76(5) of the Representation of the People Act 1983—a provision that I am sure Members of the Committee know off by heart—but for local authority and English mayoral elections, the rules place disabled candidates who are awarded funding from the Government in the extraordinary position of being penalised for accepting it. Of course, in local authority elections, the overall limit for spending is much lower and there is therefore potentially a much higher barrier. This is because any fund spending will reduce the amount that disabled candidates can spend on the usual election expenses, while unfunded candidates will have the entire election expenses limit at their disposal.
The situation is further affected by the fact that there are a number of high-cost needs for which many disabled candidates will seek funding, such as British sign language interpreters who can cost as much as £350 a day. In some circumstances, the fund could entirely consume a disabled candidate’s election expenses limit, which is on average just £1,000 for local authority elections. This order therefore seeks to remove these unintended effects of the fund by excluding grants provided by the Access to Elected Office for Disabled People Fund from candidate spending limits. Using an existing order-making power contained within Schedule 4A to the Representation of the People Act 1983 to amend the Act itself, a new tightly drawn exception to the definition of election expenses is thus being created. This exception will provide that any item or service financed by the fund would not amount to an election expense, and would not therefore count towards a candidate’s spending limit.
A three-part test must be met in order for the exemption the order provides to apply. First, a candidate must have incurred spending specifically in order to remove or mitigate barriers to seeking elected office—barriers which must be associated with his or her disability. Secondly, that spending must also have been incurred through the means of a grant awarded under the fund’s terms and conditions. Lastly, the spending must then be defrayed or reimbursed by the fund. The fund is intended to cover all the additional costs that disabled candidates face as a result of their disability. That can therefore include extra costs that arise from campaigning activity. For example, campaigning leaflets would not normally be considered for funding, but where a blind candidate might require Braille leaflets for proof-reading purposes, the extra cost of producing those leaflets in Braille will be met by the fund.
The order is also drafted with a sunset clause so that it exactly aligns with the short and temporary operating period of the fund. The fund has been set up as a pilot exercise only until June 2014, so its effectiveness can be assessed before the Government take a view on whether to introduce it on a permanent basis. If the resolution is passed, the Representation of the People (Election Expenses Exclusion) Order will be made to ensure that it comes into force by 26 March, the start of the regulated period for the next local authority elections. I hope noble Lords agree that the fund provides essential support to disabled people seeking to participate in elections and democratic processes, and that this order helps very considerably to enable that. I beg to move.
Lord Low of Dalston
My Lords, as we have heard, the additional costs faced by disabled people in contesting elections—for example, the cost of sign language interpreters—can make running for elected office prohibitively expensive for them. Therefore, the Government’s decision to implement the recommendations of the Speaker’s Conference on parliamentary representation through the setting up of the access to elected office fund is very welcome and much to be commended. This will go a long way to removing the financial barriers and ensuring that aspiring disabled candidates who have higher costs are not penalised, and should improve access to elected office for disabled people. Avoiding spending limits deterring disabled people applying for support from the fund would, as we have heard, require a change in the law to establish an exemption as to how the candidate’s expenses related to disability are treated. Therefore, I support the draft order which seeks to amend current election limit rules which pose problems for the operation of the fund.
It is important that we pass this order before the start of the regulated period for the forthcoming local elections in May this year. Given the breadth of the extra costs which could be faced by prospective disabled candidates, the fund does not provide an exhaustive list of expenses that would be covered and provides only an indication of the most common expenses that are likely to occur and would be eligible for funding. In fact, it would not be possible to provide an exhaustive list.
The Electoral Commission has, however, voiced concerns that the exemption which the order creates to the current limits on candidates’ spending is not sufficiently clearly defined. Following further discussion with the Government and the fund, it proposes the following actions to make the risks associated with this order manageable for the 2013 local elections. First, it proposes that the fund should ensure that all candidates accessing funding are referred to the Electoral Commission for individual advice on how their funding will be treated under the spending rules; and secondly, it proposes that the fund and the Government should set out a clear policy to clarify the operation and scope of the fund to reduce the uncertainty around interpretation of the order.
Scope, which has done a lot of work on the accessibility of elections for disabled people, believes that the exemption needs to be broad enough to allow for any potential expense that occurs because of an individual’s disability. It takes the view that the proposed drafting, which states that in order to benefit from an exemption, the expenditure must be designed to remove or mitigate barriers to seeking elected office, should be sufficiently mindful of this to achieve the desired purpose. In view of the high level of scrutiny that takes place around election expenses, the proposed exemption would need to be applied carefully and transparently to militate against the prospect of a subsequent legal challenge; for example, if another candidate made an allegation of overspending. Such allegations would be extremely detrimental to the future of the fund and would risk undermining the progress being made in improving access to elected office for disabled people. Accordingly, Scope has recognised that mechanisms need to be put in place to ensure transparency about how the exemption is operated in order to maintain trust that the fund is not being misused for political gain. It therefore supports the Electoral Commission’s suggestion of providing advice to disabled people to disclose expenses paid for by the fund on a voluntary basis on their spending return.
With these safeguards, which have been suggested by the Electoral Commission, I think that the risks can be sufficiently managed for the local elections that are to take place in a couple of months’ time. Work will continue after those elections to make sure that the exemption is working satisfactorily, and there is a sunset clause, as the Minister explained. With those safeguards, I support the order and urge the Committee to agree to it.
Baroness Brinton
My Lords, together with some noble Lords present in Grand Committee today, I was present at the launch of this fund last year. Those of us who were there celebrating the work of the coalition Government, the Speaker’s Conference and, especially, my noble friend Lynne Featherstone MP, who led the work up to the launch of the fund, were horrified to discover that there might be a loophole whereby other candidates might be able to challenge any grant made by this fund as part of election expenses. That was certainly never intended, not least because the representation of disabled people is very low in elected office, whether at Westminster, on councils, in devolved Administrations or any other elected office—although I was glad to hear my noble friend saying that it did not apply for individual elections, such as those for police commissioners and, I presume, elected mayors.
I shall not repeat the points that the noble Lord, Lord Low, made, but my real anxiety is about the Electoral Commission’s concern about the phrase,
“barriers to seeking elected office”,
being wide and novel wording. It has to be, given how wide and novel varying disabilities are. We cannot legislate at this stage for every dot and comma of what is necessary. The point has already been made about Braille leaflets for checking before an ordinary leaflet is printed; about the need for British Sign Language interpreters; about having a palantypist at a conference where someone who may or may not be reliant on BSL but may be reliant on lip reading cannot keep turning around to see contributions from the back of a conference room. One young candidate whom I talked to a couple of weeks ago said that he had had to get a very expensive modification to his wheelchair. The first time when he stood for Parliament, he was invisible because his head was always too low; now he can come right up to shoulder height and have conversations with people. Suddenly, he has become visible. I am not suggesting that he would have made an application to the fund, but the fund needs to be able to think as flexibly as possible to overcome the barriers, and in this young man’s case a very physical barrier to having a dialogue with his electorate.
The other reason for the fund is that because candidates are not employed there is no other recourse to public funds for any costs associated with their disability. Just as an aside—this does not relate to this order—there is a problem for Members of the House of Lords with disabilities, because they, too, are not employed and there is no access to public funds for them if they need adaptations in their workplace here.
I end by saying that the Liberal Democrats have taken the issue of the under-representation of disabled candidates very seriously. We have launched a leadership programme for candidates from a range of under-represented groups, with 10% of places on the scheme reserved for those with disabilities. In the first 40 recruited, five have disabilities, some visible and some invisible. We hope that by the time we get to the other side of the general election, we will have some more disabled MPs in place to represent the wider country. In particular, I am looking forward to the first BSL first language MP, or, frankly, even Peer, to be able to work alongside us in creating legislation. It is a real disappointment that there has not been one to date.
I have two questions for the Minister. Given the Electoral Commission’s concerns about challenge and that some grants have already been awarded, will the order be retrospective? Secondly, Scope has raised an issue about the expenses repayment; the 35-day deadline may be very tight in some circumstances, particularly in relation to the short campaign of a general election, where deadlines are actually very important, and they may suddenly find that they have it. Is there any scope—I am sorry to use that word—to make it slightly more lenient or generous?
Finally, I hope that on the sunset clause of June 2014 the Government will ensure that there is no gap if they decide to move ahead. At that point, most candidates in key seats will have been selected and will be fighting the long campaign for election in the general election of 2015. It would be absolutely appalling if there were a gap in their ability to apply for grants.
Baroness Hayter of Kentish Town
My Lords, in responding to points from the noble Lord, Lord Low, and the noble Baroness, Lady Brinton, we hope that they are very successful in selecting their candidates. Noble Lords will not be surprised, however, if I do not necessarily wish them success in being elected. But it is a challenge to my party to make sure that we can similarly find some candidates. It will also come as no surprise to the Committee that we broadly and warmly welcome this draft order which, as the Minister says, will enable disabled candidates to apply for and use the fund specifically created to encourage them to be candidates by excluding those moneys from the schedule of election expenses. It is clearly a shame that it was not thought of when the fund was established, but we are pleased, as the noble Lord, Lord Low, said, that it will be done by 26 March, in time for this year’s election. Unsurprisingly, the charities representing people with disabilities, most notably Scope, are also supportive of the thrust of the measure.
The Minister will have read the discussions of the House of Commons committee on this. Perhaps it is a bit late to regret, along with it, that the fund does not cover parish council elections. Indeed, for many people, that is their first attempt at the ballot box, and it might have encouraged more disabled people to make that same first attempt. However, this is a pilot, and we hope that if it is successful it will be rolled out in a comprehensive way.
My questions, therefore, are not about what might have been but about this specific order, which allows the fund expenditure to be excluded. Will the Minister confirm that anything that the fund agrees to finance will then automatically be covered by the exclusion? In other words, there will be no additional formality to be gone through? We do not want the fund saying that it is covered and then being told afterwards that it is not. There needs to be just one lot of decision-takers, and I assume that it will be the fund decision-takers. It would be useful to have that confirmed.
What is being done to promote awareness of the fund? In preparation for today, I did the usual thing and tried to find out about it. I found it impossible to locate the fund through the Electoral Commission’s less-than-helpful website. Google was rather more helpful and got me on to the relevant site. Given that the Electoral Commission wants to be involved in this, I would have thought that it would do more to make knowledge of the fund better known, rather than simply being able to find out about this specific order, which is not of interest to disabled people once it is done.
Information on the fund itself was not brilliant. I could not get hold of the application form from the website although it has now been sent to me. It also was not clear how quickly a decision would be made, which I should have thought was also quite important for candidates to decide whether to go ahead. They need to know that before they start spending too much of their own money. Although we are keen for the Electoral Commission to be involved in encouraging and helping disabled people to be candidates, we hope that it will smarten up its own access via the web in time to do this.
We very much support the exclusion of fund expenditure but rather like the noble Baroness, Lady Brinton, we wonder whether this leaves a transparency gap. It would be useful to know what disclosure of such funds and their use will be made. Mention was made of a voluntary system, and I wonder whether that is sufficient or whether the fund should itself be transparent. It would be useful to know the Government’s thinking on that. Finally, can the Government assure us that if this pilot proves a success, it will be rolled out fully and with money following intent? As we know, the groups who will benefit from this are highly underrepresented at the moment. Indeed, I cannot believe that this Government would have so undermined the lives of so many disabled people as they have done both under the Welfare Reform Act and now the Welfare Benefits Up-rating Bill had we had more people as MPs, or indeed Peers, but especially MPs, from those particularly affected groups. We very much want this fund to be a success and we hope that its administrators, the Electoral Commission and the Government will play a very full part in helping disabled people to find out about the fund and then stand for and be elected to public office. I am sorry, but I hope that they will all be Labour if they get elected.
Lord Wallace of Saltaire
My Lords, I thank those who have spoken for their general welcome for this order. I stress that this is a pilot and an experiment in some ways. I also stress that it is absolutely an all-party initiative. We very much hope, as the noble Baroness has suggested, that all parties will want to take this up and make use of it, and that part of the way in which information will spread out is that all parties will wish to inform their local associations to look more actively for potential candidates for whom this would make the crucial difference.
In the disability world, the communications strategy is already a good deal better known than in the general outside world. I had not heard of it until a few weeks ago but I am told that the Government have a comprehensive communications strategy in place. There have been a number of news stories in the press, and in tweets, blogs and the like, targeted very much at the disability community. This will continue as the pilot rolls on.
As for the question of what happens in August 2014, this is a pilot over which we will want to consult as we go along, as well as seeing how many people come forward. Once the SI ends, we will ensure that there is a smooth transition to the new regime, if by then a decision is made that the fund is seen as worthwhile and is to be extended. So far there have been about 30 applications for the fund, and the average per application is between £4,000 and £6,000. We are not talking about enormous amounts. Noble Lords will recall that there is a £20,000 maximum per application under the fund at the moment. However, we hope that this will be shown to make a crucial difference in making it easier for people with different disabilities to put themselves forward for election.
In the pilot we decided not to include parish councils. A great many parish councils do not have elections. At my party’s spring conference, I talked to a local activist from West Yorkshire. He told me how deeply unpopular he has made himself with a number of other politicians in his ward, because he keeps insisting that there should be elections for the parish council. Others think that elections are an unnecessary expense and that co-option is much to be preferred, this being a predominantly Conservative parish council. Perhaps one of the questions that we will investigate and discuss further, and come to a different decision on as we move forwards from the pilot, is whether we include parish council elections, in which many people first cut their electoral teeth, as the noble Baroness rightly says.
The noble Baroness, Lady Brinton, asks whether it will be retrospective. The answer is that it will not, but those who have already approached the fund for support for this coming May’s elections will be able to roll their applications in and it will not go back further than that.
Baroness Brinton
I thank the Minister for giving way. I am concerned that some people who have applied to the fund for grants have not yet stood for office but clearly intend to be candidates. I would not want them to be compromised in that position because they had had an early grant. It would be useful if some reassurance could be sought to protect them.
Lord Wallace of Saltaire
I will need to investigate exactly what the position is there and will write to the noble Baroness. I understand that those who are not yet in the election campaign for this May but who have had grants already to help them in their campaigning will come under this order once it has been passed. I will check whether that counts as a degree of retrospection and return to her.
I have already answered the question about whether the Government will ensure that there is no gap on the expiry of the pilot. My very clear understanding is that any spending covered by the fund will automatically be under scrutiny. That is the purpose of the order. Certainly, my reading of it suggests that that is absolutely one on one and that no difference is allowed in that regard. I was asked how quickly decisions will be made. They will be made as quickly as possible. Our concern in all this is to make a significant difference to the decisions that disabled people may make on whether they can manage to stand for election, and to encourage others to work with them by recognising that they have the ability to cope with all the strains of elections.
The noble Lord, Lord Low of Dalston, asked me how clear the policy was. As he will know, the fund administrator, Convey, will manage this on behalf of the Government and it will clearly set out on the fund website its policy approach to funding decisions, explaining the principles used to assess an applicant’s disability needs. This will also be reflected in the guidance document and updated, if necessary, on a quarterly basis. For fund applications over a certain limit, an advisory council will offer more expert advice. Convey has agreed drafting with the Electoral Commission and will introduce these proposed changes on the fund website before this SI comes into force.
On the question of spending returns and transparency, Convey has agreed to amend the fund’s guidance to encourage successful applicants voluntarily to disclose any fund awards on their election spending returns at all elections. A suitable form of wording to this effect has been agreed with the commission, so we are working very closely with the Electoral Commission on all this. Every effort is being made to take decisions as quickly as we can. We want to make sure, as far as possible, that this pilot is seen to be a success, that it does make a significant difference, and that after we have seen the impact on this year’s elections and the impact it may have on the selection of parliamentary candidates for the next set of elections, we will be able to agree that the pilot fund should be converted into a longer-term fund, perhaps with a number of tweaks and amendments, which we hope all parties and all those interested in democratic politics with diverse representation will wish to accept. I commend the order.
Public Bodies (The Office of Fair Trading Transfer of Consumer Advice Scheme Function and Modification of Enforcement Functions) Order 2013
Viscount Younger of Leckie
That the Grand Committee do report to the House that it has considered the Public Bodies (The Office of Fair Trading Transfer of Consumer Advice Scheme Function and Modification of Enforcement Functions) Order 2013
Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, 24th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, the purpose of this order is, first, to finalise the transfer of the consumer education and advice function, including Consumer Direct, from the Office of Fair Trading to the Citizens Advice service, and to transfer the relevant industry levy arrangements; and, secondly, to ensure that consumer enforcement is allocated appropriately between trading standards and the OFT by amending consumer legislation.
The Government are committed to promoting growth in the UK economy and empowering and protecting consumers is a vital element of our approach. The current landscape of bodies responsible for these tasks is confusing, duplicative and therefore inefficient, leaving consumers uncertain as to whom to turn to for help and advice when things go wrong. We recognise that there are many good things about the individual organisations but, taken together, they form a complex landscape that can be difficult for consumers to understand. For example, when someone has bought a faulty second-hand car they do not know whether to seek advice from the Office of Fair Trading, Consumer Focus, Citizens Advice or Trading Standards.
This complexity and the lack of clarity about divisions of responsibilities have led to gaps in enforcement. The National Audit Office’s 2011 report, Protecting Consumers – the System for Enforcing Consumer Law, found that consumer detriment occurs at national and regional level, but the incentives for enforcement officers are weighted towards tackling issues within their local authority boundaries. Similarly, the University of East Anglia’s 2002 report, which sought to benchmark the UK’s consumer empowerment regime, identified uneven enforcement as a key weakness.
The OFT estimated the cost to those consumers affected and the wider economy of rogue practices, such as intellectual property crime which occurs across local authority boundaries, to be at least £6.6 billion annually. Any gap in enforcement has, therefore, significant impact on members of the public and the wider economy. In response to the Government’s 2011 consultation Empowering and Protecting Consumers, there was widespread agreement that the current landscape of information and advice bodies is confusing and should be simplified.
This order will, first, confirm the premier position of the Citizens Advice services as the publicly funded bodies in England, Scotland and Wales providing information and advice to consumers. Citizens Advice will draw from consumer intelligence gathered by local bureaux and the telephone advice line to support the enforcement community as it prioritises its efforts to maximise outcomes for consumers.
At a national level, enforcement responsibility is currently split between trading standards and the Office of Fair Trading. Historically, the Government have provided support for national and cross-boundary schemes. These included projects to combat illegal money lending, enforcement against internet scams and a fighting fund for large and expensive cases which local trading standards might not otherwise have been able to take on. In light of the strong support for these proposals in the consultation, a decision was taken to create immediately the National Trading Standards Board, giving the trading standards profession greater responsibility for the funding and co-ordination of large national and cross-local authority cases. Our vision is for the majority of consumer law enforcement to be undertaken by Trading Standards with the support of the NTSB and the consumer enforcement bodies in Scotland.
Additionally, this order makes changes to the enforcement provisions of the OFT and Trading Standards, clarifying the responsibility of Trading Standards to tackle cross-boundary threats and cases of national significance. Let me be clear: this is not about adding to the powers of the enforcement agencies, but about clarifying their relative roles within the landscape so they can take up cases that more appropriately fall to them. Except in relation to unfair terms, Trading Standards will retain a duty to enforce consumer legislation while the OFT will have powers. This means that Trading Standards will take the lead, but the OFT will be able to step in to enforce, where appropriate. In relation to unfair contract terms, the OFT and, in the future, the CMA will retain primary expertise so they can take enforcement action in cases where there are structural market failures; for example, where there is evidence of market-wide problems on tie-in contracts.
Let me now turn to compliance with the Public Bodies Act. Section 8(1) of the Public Bodies Act provides that Ministers may make an order only where they consider that it serves the purpose of improving the exercise of public functions. Such orders must have regard to efficiency, effectiveness, economy and securing appropriate accountability to Ministers. I would like to address these points in some detail. The order is focused on improving the effectiveness and efficiency of the consumer landscape. As I explained earlier, a variety of publicly funded bodies are involved in consumer advice and representation. The proposed changes will create a simplified and easily accessible and nationally consistent advice service for consumers.
The transfer of Consumer Direct from the OFT to the Citizens Advice services in April 2012 consolidated its position as the principal source of government-funded consumer advice. Citizens Advice has implemented a more efficient delivery model, increasing capacity to provide advice within existing budgets. The industry-paid levy to fund those consumer contacts in relation to the regulated gas, electricity and postal services industries will continue and will pass to Citizens Advice through this order. Empowering Trading Standards to take on more cases of national significance will ensure that national activity is linked to local intelligence. For example, there may be several reports of a rogue online trader from consumers across the country. The NTSB will be able to link these complaints and build a strong case for enforcement, which will have a national impact. This clarification of functions and improved co-ordination of enforcement will ensure better use of limited resources through more effective leadership and integration of effort at a national level. National funding for enforcement activities will facilitate a more integrated approach to national and cross local authority boundary threats. This activity will be more effectively co-ordinated at national level by chief Trading Standards officers. This will ensure that enforcement gaps do not arise and that activity overall is targeted to achieve better outcomes for consumers.
I turn to accountability. The work of Citizens Advice and the National Trading Standards Board will be accountable to the Consumer Minister through grant arrangements set up by the Department for Business, Innovation and Skills. These grant arrangements will set out challenging performance targets, which will be closely monitored by the department. The bodies will be collectively accountable through the Consumer Protection Partnership, which will also report to the Minister for Consumer Affairs on a six-monthly basis to ensure there are no gaps or duplication in enforcement within the reformed landscape.
These reforms focus on increased efficiency and effectiveness, rather than economic benefits. For this reason, the department took the decision not to provide detailed analysis around the economy test in the explanatory document. These changes are not predicated on economic savings, but on a need to deliver increased efficiency and improved service levels in the most economic way.
As your Lordships will know, members of the Secondary Legislation Scrutiny Committee asked for a fuller articulation of the economy considerations set out in the explanatory document which supports this order. The Consumer Minister wrote with additional details. When making its report on the order, the Secondary Legislation Scrutiny Committee noted that the Minister’s letter did not expunge the omission in the explanatory document and decided to exercise the enhanced affirmative process for consideration of the order as set out in the Public Bodies Act. The Consumer Minister and I took full and due regard of the committee’s decision, noting in particular that it saw no reason to dissent from the view that the draft order meets the Act’s requirement to improve the exercise of public functions. The Government also conclude that the order meets the requirements of the Act and consider that it should be made.
For the benefit of the Committee, I should like briefly to set out those economic benefits in the remaining few minutes. The enforcement proposals were estimated to have a cost of £3.2 million. The value of the benefits proved impossible to quantify, but included improved leadership and co-ordination of Trading Standards enforcement through the creation of the NTSB. There will also be better co-ordination of enforcement between Trading Standards and OFT/CMA, managed by the Consumer Protection Partnership. The transfer of consumer information, advice and education functions to Citizens Advice was assessed as delivering benefits of £6.3 million. This proposal will strengthen frontline consumer protection by forging a stronger link between the activities of Citizens Advice and provision of information, advice and education. Citizens Advice is highly regarded and respected by all, and its brand is much better known to consumers than Consumer Direct. As a result, Citizens Advice expects the volume of calls to increase over time compared to Consumer Direct. This proposal will also reduce the complexity of the consumer landscape and create opportunities for substantial synergies in data and IT infrastructure.
Let me remind the Committee of the key benefits of this order. First, it will finalise the transfer of the consumer education and advice functions to the Citizens Advice service, making the trusted brand of Citizens Advice the first port of call for consumers with a problem to solve. Secondly, it will enable a more appropriate allocation of consumer enforcement cases, enabling Trading Standards to take on more cases of national significance and ensuring that national activity is linked to local intelligence. I commend the order to the Committee and I beg to move.
Lord Borrie
I thank the Minister for his very clear explanation of what is in front of us. I did not find it quite as straightforward as the suggestion that complexity is avoided because quite a number of complexities will remain. There will be not only the Trading Standards offices of local authorities but a National Trading Standards Board as well; the Office of Fair Trading will retain some powers; Citizens Advice will have—I agree with the Minister on this—a helpful addition to its services which is, as he rightly said, well appreciated; and there will be the Consumer Protection Partnership, which I do not fully understand yet. So there are lot of different people involved and a lot of different lines to be drawn as to their responsibilities.
However, I would ask the noble Viscount about one or two particular matters. My text, as it were, for this part of what I want to say is, first, the Explanatory Note on the back of the order and what is called the explanatory document—the rather longer paper concerned with public bodies.
In the Explanatory Note on the order, the sixth paragraph—the paragraphs are not numbered—refers to Article 9. It is concerned with enforcers, who will no longer have to consult with the OFT; they will, instead, merely be required to notify the OFT. That, presumably, is in accordance with the Government’s wish to take away the responsibilities of the OFT in overall consumer protection. The Government are not arguing that they are not doing this and the OFT is losing its supervisory role.
What is most important is that in transferring enforcement, particularly to Trading Standards officers, there is to be set up—I should say it has already been set up—the National Trading Standards Board. Paragraph 7.7 of the rather large explanatory document states:
“The NTSB consists of members of Trading Standards officers”.
It means—perhaps it is a matter of semantics—a number of Trading Standards officers representing some local authorities. How they are to be chosen and so on, I do not know but, anyway, the NTSB is certainly to have a national role.
I asked at some stage of the Bill, but did not get an answer, whether that included not only Trading Standards officers—chosen I do not know how—but representative members of local authorities who, at the moment, have a role in relation to Trading Standards officers because Trading Standards officers in each local authority are accountable to councillors. So I am not sure about that.
Paragraph 4.9 of the explanatory document states:
“The Order also makes an amendment … to provide that the OFT will no longer need to consult with enforcers … Instead enforcers will simply be required to notify the OFT”.
As far as I can see, something has gone wrong with the semantics there as to what is intended. Perhaps what is intended is simply that enforcers—meaning Trading Standards officers—will simply be required to notify rather than be required to consult and listen to what the OFT has to say. If you consult, you are supposed to listen to whoever you are consulting. If you do away with consulting and have simply notification, there is no longer any need to take any notice of what you are advised. Is that what is intended? If it is, then, of course, the reduction or removal of the OFT’s supervisory role is much more deep and profound.
The only other matter I wish to mention is that in the Explanatory Note to the order. After dealing with Article 9, on which I have just been concentrating, there is a reference to Articles 10 to 13 amending the Unfair Terms in Consumer Contracts Regulations 1999. It provides that the OFT will simply have a power rather than a duty to enforce those regulations. That means, again, a considerable reduction in the OFT’s role. I am not sure whether the Government intended that because I thought they wanted the OFT to have a particular responsibility with regard to these unfair trading regulations. I may have got that wrong.
What we have today fills out the broad statements in the Bill and one needs to get the phrases right and to understand them. I will be glad if the noble Viscount will answer some of the points that I have made.
Lord Whitty
My Lords, I thank the Minister for setting out this order in some detail. It is, of course, as he said, part of a wider strategy towards the transformation of the consumer landscape. Attached to the explanatory document is a paper which set out nearly two years ago the way in which the Government approached that matter. One or two things have changed in the interim, and there are one or two things with which I agree and one or two things with which I disagree. However, this is only part of a bigger jigsaw. As the Minister said, the order deals with the transfer of Consumer Direct to Citizens Advice and the OFT enforcement functions to the Trading Standards services of local authorities.
In principle, I strongly support the first of these. We of course referred to it in the process of the Enterprise and Regulatory Reform Bill, so there is some overlap in the discussions we have already had here and in the Chamber. Some of it—although I suspect the Minister is not allowed to say so—may come post 8 May in a new consumer Bill, which I know his department is considering either for the next Session or the Session after. So we cannot expect everything to be resolved by this order. Nevertheless, there are some issues which I think should have been, but are not yet, resolved.
Given the last encounter between myself and the noble Viscount, I should thank him for at least trying to follow the procedure under the Public Bodies Bill on this order, as distinct from the Agricultural Wages Bill. The order and the explanatory document answer a lot of questions. However, as he has recognised, the Secondary Legislation Scrutiny Committee has not been entirely impressed by the way he or his colleagues have dealt with the issue of economy and have therefore recommended the enhanced affirmative procedure. I shall come back to this aspect because it largely relates to the transfer of enforcement powers and I want to deal with the transfer of the consumer advice powers first.
As I say, I welcome the transfer to Citizens Advice, particularly given the general direction of the Government’s intent on the consumer landscape. Even without that, I would have regarded it as sensible to transfer Consumer Direct to Citizens Advice. However, I have a few questions. First, Article 2(3) states boldly that the OFT’s role in this respect is abolished, except to a limited degree in Northern Ireland, which I shall come back to. Does that mean that in this area the OFT has no oversight role? There is no quality assessment of how well Citizens Advice performs, and it will continue to be partly a directly publicly funded function and partly a function based on mandatory levies on various industries. I assume those levies are simply the levies that are currently raised for Consumer Direct purposes rather than the wider levies that go via Consumer Focus.
It seems somewhat odd that the oversight role in this area is abolished completely. My noble friend Lord Borrie was complaining that the oversight role in relation to enforcement is greatly diminished, but at least there is a role there. In this area, it seems that there is no potential intervention by a statutory body. This is important because Citizens Advice, for all its great wealth of experience and expertise and the great respect in which it is held in the consumer movement and more widely, is a non-statutory body, and we are giving what was previously an administrative body supported by legislative powers responsibility for activity that was previously run by a statutory body. That presents a number of problems. In real life, they are probably resolvable, but it is odd to resolve them by abolishing the body that has ultimate, fail-safe oversight and by abolishing the new body’s responsibilities in that respect so that the CMA will have no responsibility in the area of consumer advice, as I read the effects of this order.
It is also interesting that the order does not mention consumer education, which is also being transferred to Citizens Advice. The OFT conducts quite a significant amount of activity on consumer education, and that does not seem to be explicitly covered here. Can the Minister assure me that it is subsumed in this? From the wording, it does not look as though it is, although I understand that the transfer has already been made.
The lack of a residual oversight role is important, but it also leaves Citizens Advice somewhat exposed. Articles 7 and 8 of the order and paragraph 4.6 of the explanatory document refer to Citizens Advice and Citizens Advice Scotland now being subject to the Freedom of Information Act. I can see why that has happened, but it makes Citizens Advice somewhat vulnerable. If it is subject to the Freedom of Information Act, there is the question of other powers in this area that were the responsibility of Consumer Focus under the Consumers, Estate Agents and Redress Act 2006, in particular Section 24 of that Act, based on previous powers that existed for Energywatch, which provided that Consumer Focus had pretty strong statutory powers to demand information from any company providing any good or service. Previously that power applied only to energy companies and to the Royal Mail, but it was generalised in that Act. Those powers were very effective, and were rarely explicitly used because the threat of doing so usually got you the information that you wanted.
Viscount Younger of Leckie
My Lords, I thank noble Lords for their valuable, if somewhat caveated, comments during this debate. I will do my best to answer the lengthy questions that were raised by the noble Lords, Lord Borrie and Lord Whitty. There is some crossover in the questions. Generally, most of them focused on further clarification of the responsibilities and roles of the different bodies. I will do my best to answer the questions today rather than having to write.
This order focuses on the better delivery of consumer advice and education and will lead to enhanced levels of protection through better enforcement. As I said earlier, it is not about cuts. It is about working more efficiently and effectively for the taxpayer. The order will finalise the transfer of the consumer education and advice functions to Citizens Advice, making that trusted brand the first port of call for consumers with a problem to solve. The noble Lord, Lord Whitty, expressed concerns about the Freedom of Information Act being applied to Citizens Advice. That extension will be limited to provisions relating to the function that is transferred under the order. Citizens Advice has, under the terms of the Public Bodies Act, given its consent to the inclusion of the FOI Act.
The noble Lord also raised concerns about the interim period and whether information-gathering powers will be transferred. I can reassure him that it is the ultimate intention to transfer the information-gathering powers to Citizens Advice. In the interim, Citizens Advice will work closely with Consumer Focus to ensure that consumer welfare is preserved.
Lord Borrie
The Minister is leaving the NTSB, but I still have not had an answer to the question about whether local councillors, members of the authority elected to it, will have any role in the NTSB.
Viscount Younger of Leckie
I hope I can answer the noble Lord’s question. Trading standards play a critical role in protecting consumers and business in their local authority areas, in particular from rogue traders, but the responsibility was split between local authority trading standards services and the OFT creating an enforcement gap. While BIS provided some support for regional and national enforcement schemes, the NTSB has been formed specifically to tackle cross-boundary and national threats.
The noble Lord, Lord Borrie, asked whether members of the local authority are members of the NTSB, which goes a little further in answering his original question. The answer is no. Heads of local authority trading standards comprise the NTSB. There is a political oversight group made up of representatives of local government and the LGA which connects local decision-making with national enforcement.
The noble Lord, Lord Borrie, was concerned that the OFT will not oversee enforcement supervision. In this case, the OFT, Trading Standards and other enforcers will share a power to enforce. This will ensure that while the OFT will be able to continue to use its expertise in this area, other enforcers, including Trading Standards, will take up cases that more appropriately fall to them. Trading Standards will act as the lead enforcers of this legislation and will retain a duty to enforce the regulations, except in the case of the Unfair Terms in Consumer Contracts Regulations 1999. That is complex, but I hope it explains that slightly more clearly.
The noble Lord, Lord Whitty, asked how Citizens Advice will be accountable for Consumer Direct and consumer education. The work of the Citizens Advice service on Consumer Direct will be accountable to the Consumer Minister through grant arrangements set up by the Department for Business, Innovation and Skills. These grant arrangements will set out challenging performance targets which will be closely monitored by the department. I can reassure the noble Lord, Lord Whitty, that Citizens Advice will take on the role of consumer education.
The noble Lord, Lord Whitty, also asked whether Citizens Advice could be subject to a judicial review. There is a low risk that Citizens Advice may be subject to a judicial review in relation to the function transferred. However, it is more likely that other legal claims will be brought, such as negligence. The Citizens Advice services have taken their own advice on this risk and have given their consent to the transfer of the consumer advice functions on that basis.
The noble Lord, Lord Whitty, wanted to clarify who SMEs will receive advice from. Most business-facing advice and education will transfer from the OFT to the Trading Standards Institute from 1 April 2014, but businesses seeking advice as consumers will be able to access Consumer Direct as before.
The noble Lord, Lord Whitty, also asked for clarification on whether the NTSB will quality control Trading Standards. The NTSB itself, and the teams that it sponsors, are subject to tight funding terms and conditions to ensure that they deliver against business priorities. Local trading standards are subject to local government procedures. The noble Lord also raised concerns about cuts to local trading standards services. The provision of local trading standards services is a matter for individual local authorities, and even in the current climate, they will continue to take local and pan-local cases.
The intention is that there will be specific funding for enforcement against national threats separate from the budget for local issues. There are plenty of examples of cases where local officers have dealt with complex cases successfully. The NTSB will ensure that resources are allocated to large cases as and when appropriate. In addition, local officers often have a culture of working with business to resolve problems. I believe that trading standards services have already demonstrated their ability and professionalism over many years, and I hope that the noble Lord would agree with that.
Lord Whitty
Can the Minister say how much of what had been the OFT budget for dealing with these national, cross-boundary and complex issues will be fed down to the NTSB and trading standards services?
Viscount Younger of Leckie
I have that information somewhere, but I will certainly revert to the noble Lord with a particular reply.
The final question I have here, although there may be others on which I shall write to the noble Lords, Lord Whitty and Lord Borrie, was raised by the noble Lord, Lord Whitty, about the resources to support the transition of functions. We believe that Trading Standards will be better resourced to take on this new, enhanced role. Increased central government funding for national leadership and co-ordination of enforcement activity is being provided to the National Trading Standards Board, which has responsibility for co-ordinating the delivery of significant national and geographic region cases that cut across local authority boundaries. For example, the so-called scam buster teams already work across local authority boundaries to target the worst rogue and misleading trading practices and fraudulent activities that may be beyond the capacity of individual local authorities.
The Consumer Minister and I have given due regard to the Secondary Legislation Scrutiny Committee’s decision and comments, and the Government conclude that the order meets the requirement of the Act. I commend the order to the Committee.
Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2013
(11 years, 8 months ago)
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Baroness Randerson
That the Grand Committee do report to the House that it has considered the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) (Amendment) (Wales) Order 2013
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson)
My Lords, this order will allow local authorities in Wales to make arrangements for an external provider to undertake some of the new administrative functions created by the introduction of council tax reduction schemes from 1 April when council tax benefit is abolished. These changes are part of the Government’s wider policy of decentralisation.
I will provide a little more detail on the contracting out order. It will amend the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) Order 1996. Currently under the 1996 order, local authorities in Wales can contract out functions connected with the administration and collection of council tax—for example, the calculation of an individual’s council tax liability or the serving of demand notices. Local authorities in Wales can also currently contract out the operation of the council tax benefit system under the Contracting Out (Functions of Local Authorities: Income-Related Benefits Order) 2002 if they choose to do so—arrangements that will cease once council tax benefit is abolished.
While some of the new administrative functions related to the introduction of council tax reduction schemes are already covered by the 1996 contracting out order, such as the processing of applications, some are not. To ensure that local authorities in Wales have the freedom to contract out all the new administrative functions, this order amends the 1996 contracting out order for Wales to add the following new administrative functions: first, the issuing of council tax reduction decision letters; secondly, the payment of a reduction amount under certain circumstances where the billing authority is of the opinion that it would be appropriate; thirdly, the serving of a penalty notice in connection with an offence committed with a reduction; and, fourthly, the repayment of amount paid in connection with a penalty under a local scheme—a penalty that has been subsequently quashed.
Because the abolition of council tax benefit also means that local authorities in Wales will no longer be able to rely on their current investigatory and enforcement powers for social security benefits, Welsh Ministers are making regulations to provide local authorities with replacement powers to tackle fraud in relation to council tax reduction schemes. These regulations will introduce new penalties, the collection of which has also been included as a function that could be contracted out under the 2013 order. Local authorities that choose to contract out functions will be expected to monitor the services delivered by their contractors. We expect the decisions taken by the contractor to be of the same standard as that of a local authority officer and subject to the same levels of confidentiality and data protection.
Local taxpayers’ rights will not be affected by this legislation. The same rights of appeal to the local authority and to the Valuation Tribunal for Wales will remain. While this order does not expand on the current provisions for the administration of council tax reduction schemes, it will carry out an essential function by enabling local authorities in Wales to choose how to deliver their local schemes, whether by using internal resources, external providers or a mixture of both. It is important that we provide local authorities with the tools they need to deliver a cost-effective council tax system. I commend this order to the Committee.
Lord Wigley
Perhaps I may ask for clarification on a couple of points by the noble Baroness. First, am I right in saying that the interpretation of this order is the provision of greater powers of privatisation for local authorities if they choose to use them? Is that the implication—services that would otherwise be in-house in local authorities can be undertaken by private companies on their behalf?
Secondly, I refer to Article 2 on,
“Amendment of the Local Authorities (Contracting Out of Tax, Billing, Collection and Enforcement Functions) Order 1996”.
In subsection (2), there is reference to,
“the Detection of Fraud Regulations”.
Are these regulations that have already been made? Are they made by the Assembly or here? Is there already a statutory instrument in effect on that, or are we awaiting something to be confirmed?
Lord Rowlands
I wish to ask two questions. First, how much contracting out has been carried out since the 1996 order was introduced? What percentage of local authorities have already contracted out in this field? The Minister referred to my next point. One should perhaps be concerned that we are handing over information on the personal financial matters of individuals and families to a variety of different organisations which might have potential conflicts of interest as opposed to a local authority, which will not, because it is a statutory body. The Minister talked about safeguards and data protection but if you diversify and decentralise in the manner in which this order hopes and expects, how will the individual be safe in the knowledge that his or her finances cannot be abused in any way? At least when the local authority has this information, it is a statutory body and therefore is obviously accountable in every sense of the word. How will that accountability be enforced across a range of other organisations or companies that will be delivering these services?
Baroness Gale
My Lords, I thank the Minister for placing this order before us today. As she has outlined, its purpose is to amend the Local Authorities (Contracting Out of Tax Billing, Collection and Enforcement Functions) Order 1996. From April 2013, council tax benefit will be abolished and council tax reduction schemes will be introduced in Wales under the Local Government Finance Act 2012. In future, instead of receiving council tax benefit, low-income families will receive a reduction in their council tax. Currently, local authorities can contract out of administering the collection of council tax. The order we are debating is required to ensure that the new administrative functions are part of the council tax reduction scheme and can also be contracted out if local councils wish to do so. Those functions include such things as sending out decision letters and serving penalty notices. The noble Lord, Lord Wigley, and my noble friend Lord Rowlands asked some very interesting questions on those issues and I look forward to the Minister’s reply to them.
The drafting of the order is relatively uncontroversial but it is unfortunate that we have it at all. It comes about as a result of the Government’s decision to abolish council tax benefit. They are scrapping the national benefit and passing responsibility for it to local authorities in England and to the Welsh and Scottish Governments, and cutting funding by 10%. We accept that the Welsh Government have responsibility for the details of any schemes and are fully involved in setting up these details. The principle of getting rid of council tax benefit dismays us very much. In England, we see people on low incomes being asked to pay sums of money that they simply cannot afford. Most councils have had no option but to pass on some of the cuts. As a result, many low-income households currently exempt from council tax will have to pay it for the first time. Typically, they will have to pay between £96 and £225 a year. In Wales, a 10% cut would amount to an annual cut of some £74 per council tax benefit claimant. I wonder whether the Government fully understand the impact this will have on low-income families. Government Ministers have praised the freeze on council tax, which may, indeed, be welcomed by those on modest and high incomes. However, the removal of council tax benefit from those on the lowest incomes means an increase in what they will have to pay.
The Government say that pensioners must be protected from the cuts, which means that others face larger cuts, depending on the number of pensioners in a local authority. If councils also try to protect other vulnerable groups, such as disabled people or carers, the cuts enforced on working families will be even more severe. Because of the number of pensioners the average reduction across local authorities will work out at some 16%. In January the Welsh Minister for Social Justice and Local Government, Carl Sergeant, announced a £22 million support package to continue offering the full council tax discounts in Wales, and under prudent financial management the Welsh Government have been able to fund their proposals out of their reserves.
It has been a difficult time for the Welsh Government. They have had to balance an enormous number of cuts and manage them while facing a difficult budgetary situation. Towards the end of the winter they were able to see the effects on households of other welfare benefit cuts. They knew that they were perhaps not going to have so many payments for such things as severe winter weather. They were in a position to use that money for council tax discount. However, that prompts the question as to whether it can continue to be used in the future. It will certainly not be easy and councils are aware of the pressures on them.
Given that the Government are going ahead with the change, the Welsh Government and Welsh local authorities need the regulations in place as soon as possible. We will not oppose these regulations tonight.
Baroness Randerson
My Lords, I thank noble Lords for their questions and remarks this afternoon. In principle this order does not change the way that councils deal with council tax. To deal with the first point of the noble Lord, Lord Wigley, it has always been possible for councils to contract out billing, collection and enforcement. Councils have been able to appoint an external provider to undertake some administrative functions. This order simply enables this to continue under the new arrangements from 1 April when council tax benefit will no longer exist.
As always I will try my best to answer the questions that noble Lords have asked. The noble Lord, Lord Wigley, asked whether this would mean greater privatisation. This order does not extend the powers that the local authorities already have to contract out their administrative functions in relation to council tax. As I have said, it allows them to apply them to the new council tax reduction schemes that are no longer part of the social security benefit system.
Lord Wigley
The Explanatory Note says that the order provides additional functions by way of authorising contractors. In other words, it goes beyond what was there before. Otherwise, presumably, we would not need it.
Baroness Randerson
I could attempt to look at the Explanatory Notes as I stand here but I think that it is better if I write to the noble Lord on that point. It is not practical for me to read the Explanatory Notes at the same time as trying to answer.
The noble Lord, Lord Wigley, has also asked about the detection of fraud regulations. These are the responsibility of the Assembly and that might be to what the noble Lord is referring in his question. Those regulations have been debated today in the Assembly, and Welsh Ministers will have made those regulations. We could not here, in the House of Lords, deal with this order until the detection of fraud regulations had been dealt with in the Welsh Assembly. I hope that that makes the responsibilities clear.
Lord Wigley
I do not want to go on unduly about this but, as I understand it, the legislation that we are dealing with today, here, was not scrutinised in the Assembly because it did not fall within the Assembly’s powers. If I understand correctly what the noble Baroness is saying, part of it—the part dealing with the fraud—does fall within the Assembly’s powers. The only point that I would make is that this underlines the need to simplify all this; matters are either devolved or they are not. That would make life very much simpler for everybody.
Baroness Randerson
The noble Lord makes an interesting point. It is something that we have come across on a fairly regular basis, that responsibilities are split in a way that is sometimes not obvious and sometimes surprising.
I move on now to the points made by the noble Lord, Lord Rowlands, who asked if there is more contracting-out now. I simply point out that this has always happened—for example, currently only three of the 22 local authorities in Wales have in-house bailiffs. Contracting-out on billing and bailiff services is very common. But a great deal of work has been done by the Welsh Government and by individual local authorities to have codes of conduct and best practice examples to ensure that bailiff services are run by improving standards over the years. A great deal of progress has been made on those issues.
Lord Rowlands
I apologise for interrupting the Minister again. I can understand the situation with bailiffs, but my feeling would be that a bailiff would not receive detailed personal information of the individual’s financial circumstances in the same way as some of the other services that are contracted out. That would give the external provider direct access to people’s personal finances, in a way that a bailiff probably would not have.
Baroness Randerson
I believe that external services will have no more access than they have had in the past, but they will continue to have an obligation to treat that material as confidential and deal with it in a responsible manner. Local authorities will continue to have—this is not new—a responsibility to ensure that any organisation or individual whom they appoint as a contractor to work on their behalf operates to the highest standards, and maintains confidentiality of personal data. To address here the remarks of the noble Baroness, Lady Gale, as a very keen advocate of local authorities and someone who believes fervently in local government—and I am very proud of our local government system throughout Britain—I believe that councils are raising council tax, which is the tax that funds a lot of their spending. It is right that they have responsibility for the whole of the functions associated with the raising of that tax. It is important that we have confidence to delegate power to local authorities throughout Britain in order to enable them to raise tax and spend it as efficiently and practically as possible.
Finally, I turn to the remarks made by the noble Baroness, Lady Gale.
Lord Rowlands
If some of these services are contracted out to an external provider and an individual feels that he or she has a grievance at the way that services are being administered, to whom does the individual appeal? If the local authority were doing it, it would be the Local Government Ombudsman. If, for example, an external provider committed a potential act of maladministration, could the individual go to the local ombudsman for redress of the grievance against the external provider?
Baroness Randerson
They will continue to appeal in the normal manner, the way in which they have been appealing since the establishment of council tax. The appeal will be to the valuation tribunal in the normal manner.
The noble Baroness, Lady Gale, expressed concern about the ending of council tax benefit. I do not believe it is an issue of concern in principle that council tax reductions will be done by councils rather than through the benefits system. I think it is very sensible to unite the reductions in council tax for those of limited means with the organisation that levies the tax in the first place. It is part of the Government’s policies of decentralisation and trusting local authorities. In this case, the Welsh Government have made a central scheme, and there are certain limited exceptions that local authorities can make decisions upon, but there is a largely standard scheme throughout Wales.
The concern that the noble Baroness expressed related to people who she believes will not receive the council tax reduction in future. I assure her that throughout Wales, if you are entitled to council tax benefit now, you will be entitled to a council tax reduction in future because the Welsh Government chose to supplement the funding being provided.
I hope that I have addressed all the points that noble Lords have raised. I am now in a position to answer the question asked by the noble Lord, Lord Wigley, about the Explanatory Memorandum. This order adds new administrative functions to the 1996 order which relate to council tax reduction schemes, but under the Contracting Out (Functions of Local Authorities: Income-Related Benefits) Order 2002 local authorities could in the past have carried out those functions for council tax benefit.
It may be useful if I review the record and check that I have answered all questions fully. I will pay particular attention to the point raised by the noble Lord, Lord Wigley, about additional functions. I commend the order to the Committee.
Criminal Justice Act 2003 (Conditional Cautions: Code of Practice) Order 2013
(11 years, 8 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Criminal Justice Act 2003 (Conditional Cautions: Code of Practice) Order 2013
Relevant documents: 16th Report from the Joint Committee on Statutory Instruments
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the order implements the revised Code of Practice on Adult Conditional Cautions, which provides the framework in which conditional cautions operate and will come into force the day after the order comes into force.
Conditional cautioning for adults currently operates under a code of practice approved by Parliament in 2009. Amendments have been made to the Criminal Justice Act 2003, which requires the code to be updated by this order. Part 3 of the Criminal Justice Act 2003 as amended allows an authorised person, usually a police officer, or a relevant prosecutor, usually the Crown Prosecution Service, to offer a conditional caution to an adult offender aged 18 or over. Before the conditional caution can be offered to an offender, he or she must admit to committing the offence and agree to accept the conditional caution and the conditions attached. The police or prosecutor must be satisfied that there is sufficient evidence to prosecute and that it is in the public interest to offer a conditional caution. If, once the conditional caution has been administered, the offender fails to comply with the conditions, he or she may be prosecuted for the original offence. Conditional cautions cannot be imposed on an offender, and the code of practice makes this clear. In every case, the offender must agree to accept the conditional caution and the conditions that are proposed. He or she may, for any reason, choose to decline the offer of a conditional caution and opt instead to be prosecuted.
The Legal Aid, Sentencing and Punishment of Offenders Act 2012 made two amendments to the conditional caution framework as set out in the Criminal Justice Act 2003. First, it enabled the police to offer a conditional caution and to set and vary conditions by removing the requirement for a prosecutor to authorise such decisions. Secondly, the 2012 Act introduced two new conditions that can be attached to a conditional caution and offered to relevant foreign offenders—that is, those offenders who do not have permission to be in the UK. These new conditions have the objectives of bringing about the departure of foreign offenders from the United Kingdom and ensuring that they do not return to the UK for a period of time.
Alongside these amendments to the code of practice arising from the legislative changes, we took the opportunity to look at the existing guidance within the code and made further amendments to clarify and strengthen it. We have, for example, strengthened what is said on selecting appropriate conditions and on offering a conditional caution to offenders with mental health issues and making sure that they understand the implications of accepting it.
The Criminal Justice Act 2003 sets out the procedure for revising the code of practice. First, the Justice Secretary must agree a draft for publication with the Attorney-General. The Justice Secretary is then required to publish that draft code of practice and consider any representations made by respondents. A public consultation took place on the draft code from 4 October 2012 to 1 November 2012. The consultation was sent to criminal justice practitioners, such as police and prosecutors, as well as to stakeholder groups, such as the Magistrates’ Association and the Law Society, and third-sector groups, such as Mencap. In total, 37 responses were received—on the whole positive responses which welcomed the guidance—which we considered, and some further revisions to the draft code were then made. The revised code has been approved by the Attorney-General and the Justice Secretary and a copy of it and the Government’s response to the consultation were placed in the Library of this House as well as on the Ministry of Justice website. The draft order and the code of practice were laid before Parliament in January this year.
In addition to the code of practice, the Director of Public Prosecutions issues operational guidance on the approach for police and prosecutors to take when considering whether a conditional caution may be an appropriate response to an individual offence. The DPP is revising his guidance following the legislative changes and the changes made to this code of practice. This order brings into force the code of practice which will provide the framework in which police and prosecutors make decisions on whether a conditional caution is an appropriate response to a criminal offence. It will allow conditional cautions to be used to provide the opportunity for offenders to make swift reparation to victims and communities and for offenders to be directed into rehabilitative services to tackle the causes of their offending behaviour. Conditional cautions will also allow the removal from the UK at the earliest opportunity of those foreign offenders with no permission to be here who have committed a crime. We believe that this is a useful tool and are working with the UK Border Agency to ensure that the conditions are implemented and enforced robustly to ensure that public protection is maintained.
If the order implementing the revised code of practice is approved by Parliament, it will be implemented across England and Wales from 8 April 2013 alongside the commencement of the amendments to the Criminal Justice Act 2003 made by the Legal Aid, Sentencing and Punishment of Offenders Act 2012. I commend the draft order to the Committee, and I beg to move.
Lord Beecham
My Lords, yesterday in this Committee we debated a report from the noble Lord, Lord Goodlad, in relation to the Government’s procedures for consultation. Considerable concern was expressed by the committee that he chairs, shared by those of us who spoke in the debate, who were either members of the committee or, as in my case and that of the noble Earl, Lord Lytton, not members of the committee, that the period for consultation had been arbitrarily changed by the Government last year. Quite apart from the merits of today’s statutory instrument, today’s business confirms the criticisms that were made about the consultation period. As the Minister has pointed out, consultation on these changes took place in only a four-week period, beginning towards the end of October, before the newly elected police commissioners, for example, were even elected. So all 43 of them have had no opportunity of commenting on these changes in an area in which it might be thought that they have a significant interest. It clearly crossed nobody’s mind—and I am not blaming the Minister for this—
The Deputy Chairman of Committees (Lord Geddes)
My Lords, there is a Division in the Chamber. The Grand Committee stands adjourned for 10 minutes to recommence at 5.44 pm.
The Deputy Chairman of Committees
It is now 17.44. His Lordship was in full flow, and perhaps he would like to continue.
Lord Beecham
My Lords, I will. I was making the point that this case exemplified the arguments that are being made about the Government’s defective consultation procedure, but that is a preliminary point and does not go to the substance of the matter, and I do not expect the Minister to accept any responsibility for what seems a flawed process. I suspect that it is not a matter to which he would have given any material consideration.
On the other hand, the Minister will be aware that there is considerable concern about the number of cautions now being offered in lieu of possible prosecution and a feeling that this is to some extent being used by some police forces as a device to, shall we say, depress the level of recorded crime. There is at least that concern. Whether it is justified is another matter, and I would not for a moment suggest that all police forces are succumbing to that temptation, but there is a feeling that there is an issue, and one has to bear that in mind as we look at extending the system in the way that these proposals do. A cynic might indeed wonder whether this might be another way of reducing the criminal legal aid bill, about which the Minister and his colleagues are so exercised, but heaven forfend that I should be susceptible to such a cynical standpoint.
However, there are a number of points to be raised about these proposals. In terms of conditional cautions, they shift the responsibility entirely on to police officers, at least if they chose to exercise the power given to them. Will the Minister indicate what follow up there will be in terms of consultation about the way the new system is working? Now that we have elected police commissioners—which is not something that I or my party have ever favoured—presumably they will be involved in any consultations, as chief constables would be. Will the Minister indicate whether it is intended to set up a process to monitor the way the new powers are being used and how frequently those consultations will be carried out?
There is also a question about the guidance which the Director of Public Prosecutions is to issue. Once again, we have secondary legislation without the accompanying guidance on how matters are to be used. That is a most unfortunate defect in the procedure. The potential problem is that this new system will be carried out in different ways in different areas. Surely there ought to be a degree of consistency, which, no doubt, the guidance would seek to promote, between what happens in different police authority areas. Again, the question arises of what steps the Government will take to ensure as far as possible that there is a degree of consistency.
On foreign defendants—of course, they will not be defendants because there will not be a prosecution, so let us call them foreign offenders for the purposes of the debate—I invite the Minister to respond to the possible doubt that this may be a convenient way of dealing with foreign offenders without the expense of a trial, but possibly at the expense of visible justice so far as victims are concerned. Will the guidance indicate the level of offence that it would not be deemed appropriate to be the subject of a conditional caution, with the condition of deportation attached to it? Deportation may well be desirable, but it may also be desirable for an offence to be dealt with through the courts in the normal way.
We do not oppose the principle of the order. It is certainly worth pursuing the option of conditional cautions but, as the Minister recognised, we have some reservations about how the system might work in practice. It is new, and I hope that we can have an assurance that there will be a proper review of progress, perhaps in a year or two, to see how the system is working in practice and, in particular—I repeat—whether there is consistency in practice across the country which one would think would be desirable, if only to retain public confidence in the new process. I reiterate the request that in future guidance that will be crucial to the operation should be available for consideration before the secondary legislation goes through your Lordships’ House and the other place.
Lord McNally
My Lords, I am grateful to the noble Lord, Lord Beecham. As usual, he is constructive in his questioning and I will try to be equally constructive in my responses. I am informed by my noble friend Lord Wallace that there was indeed a good and robust debate about consultation in this Room yesterday. Where I cannot follow the noble Lord, Lord Beecham, is in his description of consultation in this case as being either defective or flawed. It was short but effective. We were working against a pretty tight timetable to deliver the LASPO reforms in place and on time.
I take the point that there was not perfect synergy between the coming into office of the new police commissioners and our consultation, but it was interesting that more than half the responses to the consultation came from police forces or ACPO. As I indicated, the overwhelming response to the consultation was favourable to what we are trying to do. The noble Lord, Lord Beecham, was right to raise the question of consistency in the application of these proposals. That is part of a broader approach that we are undertaking at the MoJ to try to make sure that statistics about policing and courts are more widely known so that we can see the effectiveness of any such measures and any variety in their implementation.
We are supporting the Association of Chief Police Officers in its work to develop local scrutiny arrangements for out-of-court disposals. These will consist of a retrospective look by a range of criminal justice professionals at how an area uses these disposals, and it will look at individual cases to see whether they raise any training needs. We are working with the senior judiciary to establish how we harness the unique knowledge and experience of magistrates in these arrangements.
The noble Lord, Lord Beecham, also asked whether there was a kind of inflation in the use of out-of-court disposals. It is true that there was a significant increase after 2007, but that was not at the expense of convictions, the figures for which have remained broadly stable. Part of the reason for the increase was targets imposed by the previous Government that created an incentive for criminal justice agencies to criminalise low-level offending by administering cautions where otherwise they may have taken no further action. After those targets were replaced, the number of out-of-court disposals since 2007 has declined by about 43%.
The noble Lord asked for which offences conditions for foreign offenders will be available. The foreign offender conditions will be available for the same offences as the other types of conditions. However, it is right to make these conditions available for more serious offenders—for example, where the likely sentence, if prosecuted, would be a period of imprisonment. We believe that for foreign offenders who have no right to remain in the UK and admit to committing certain offences, the public interest is better served by administering a caution and promptly removing the offenders from the UK, rather than prosecuting and potentially imprisoning them at the taxpayer’s expense, only to remove them from the country once the sentence is completed. Where the public interest requires it, serious offences committed by foreign nationals will, of course, continue to be prosecuted.
The noble Lord raised the question of the DPP guidance. This will set out the circumstances when the police can offer a conditional caution and when they should refer the matter to the CPS. The police will be able to offer a conditional caution for a summary-only or triable-either-way offence but the decision in an indictable-only offence should be authorised by a prosecutor. In a case of whatever seriousness, the police can seek advice from the CPS on the appropriate disposal decision. This brings conditional cautions into line with the current situation on simple cautions.
On the question of the timing of the DPP guidance, I agree with the noble Lord. It is unsatisfactory. If I was in his place, I would grumble. Parliament is right when it says that it has not been given the whole picture on these things. I am asked to assure him that one of the advantages of delaying is that we will be able to take this debate into account as we put the guidance forward. I can already see how convinced the noble Lord, Lord Beecham, is by that bit of sophistry; I sense waves of a feeling of treachery from behind me. As a parliamentary practitioner, I think that it is far better when Parliament gets the whole picture when making a decision. I also appreciate the pressure that we are putting our officials under.
Returning to the matter of foreign offenders, we will, of course, also take into account the views of victims. However, I think there is a general feeling that a sensible way of dealing with these offenders will be to get them out of the country and not put the taxpayer through the cost of prosecuting and possibly incarcerating them. We will keep these matters under review. The aim is to provide a consistent system, based on a clear framework of guidance, while giving flexibility to the police to make common-sense decisions. I hope that we will have an opportunity to gather together the results of the ACPO research, to which I referred, and perhaps at some stage publish it to promote further discussion. As the consultations indicated, there has been a broadly favourable approach to it. The points about ensuring consistency and proportionality, raised by the noble Lord, Lord Beecham, are well taken, but I still have no hesitation in recommending the order to the Committee.
Lord Beecham
Will the Minister confirm that the review will provide information not only on the number of orders made but on the number in respect of which breaches have occurred? In fact, it might be helpful to have a picture of what is happening in terms of breaches of the existing conditional order system, not, obviously, immediately but as part of that review process. Will he agree to ensure that that takes place?
Lord McNally
Yes, I readily agree to that. As I said before, one of the things that are very central to MoJ policy is the gathering of relevant statistics. The noble Lord talked about breaches. That is a very relevant statistic in terms of seeing how effective this measure is. We want to make use of the ACPO research and the information that the MoJ is gathering to analyse the measure’s effectiveness. As I say, I readily agree to that.
Amendments to Schedule 6 to the Tribunals, Courts and Enforcement Act 2007 Order 2013
(11 years, 8 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Amendments to Schedule 6 to the Tribunals, Courts and Enforcement Act 2007 Order 2013.
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the Committee is considering the two draft orders: the Amendments to Schedule 6 to the Tribunals, Courts and Enforcement Act Order 2013, which I will refer to as the amendments order, and the Transfer of Tribunal Functions Order 2013, which I will refer to as the transfer order.
The orders before us today are part of a series that facilitate the transfer of the functions of a range of tribunals into the First-tier and Upper Tribunals. These orders will enable us to establish a new chamber in the First-tier Tribunal, which will be known as the Property Chamber and will transfer the functions of a range of tribunals into the unified tribunal structure. The Property Chamber will deal with land registration, residential and leasehold property, rent and housing matters and in relation to park—that is, mobile—homes. Subject to parliamentary approval, it will be launched on 1 July 2013.
The purpose of the draft amendments order is to add the rent assessment committees and the agricultural land tribunals to the relevant parts of Schedule 6 to the Tribunals, Courts and Enforcement Act 2007. That schedule lists the tribunals that can be transferred into the unified tribunal structure; in this instance, into the First-tier Tribunal and the Upper Tribunal. It is the addition of these tribunals into the appropriate parts of the schedule that activates the powers of the Lord Chancellor to transfer their functions into the tribunals.
Transferring the functions is the purpose of the second draft order, the transfer order. It will transfer to the Property Chamber of the First-tier Tribunal the functions of residential property tribunals, leasehold valuation tribunals, rent tribunals and rent assessment committees—which are composed from the members of rent assessment panels—in England; the agricultural land tribunal in England; and the Adjudicator to Her Majesty’s Land Registry in England and Wales.
It might be worth me going into some detail about why the Government are taking this action and why it is necessary. I think it would be helpful to give some background to tribunals in general and the Property Chamber in particular. Over the past few decades, a number of tribunals have been created to bring together specialist knowledge and expertise to resolve disputes, but they were first recognised as part of the justice system of the United Kingdom in the Franks report of 1957. From then until the turn of this century, a network of tribunals evolved, each with different rules of procedure, with varying powers and different sponsoring government departments.
It was apparent that this haphazard approach to creating tribunals was neither efficient nor economical. In 2004, the Government, through the Lord Chancellor, invited Sir Andrew Leggatt, a former Lord Justice of Appeal,
“to review the delivery of justice through Tribunals”
in England and Wales. The Leggatt report was the result of the review. The report recommended extensive reforms and set out a programme for developing a unified tribunals system. Following the report, the Tribunals, Courts and Enforcement Act 2007 was passed to implement its recommendations. This Act established a two-tier tribunal system, independent from decision-making government bodies, with a First-tier Tribunal and an Upper Tribunal. The Act also provided a number of powers to effect the transfer of existing tribunals or direct new appeal rights into this system.
A system of chambers was established within the two-tier structure, which enabled specialist tribunals with related jurisdictions to be brought together. This arrangement brings a number of benefits by providing cohesion and consistency within the system and allows judges and panel members to be deployed across jurisdictions as appropriate. From November 2008, the Upper Tribunal and the First-tier Tribunal took over the jurisdictions of a number of existing tribunals. Since then, further tribunals have been brought into the new system.
We are now at the stage where a unified tribunals system is almost completed. There are now are six chambers in the First-tier Tribunal and four chambers in the Upper Tribunal. In 2011-12, almost 740,000 applications or claims were received by tribunals. In the same year, more than 730,000 cases were disposed of. The matters dealt with by tribunals are wide-ranging, and cases range from those that can be determined on paper to those that are complex and involved and take a number of days to hear the issues.
When the Property Chamber is launched in July it will be the seventh chamber in the First–tier Tribunal and will bring together jurisdictions concerned with property and lands. These are residential property tribunals, leasehold valuation tribunals, rent tribunals and rent assessment committees—all which are composed from the members of rent assessment panels—the agricultural land tribunals and the Adjudicator to HM Land Registry.
What will happen to these three tribunals when the Property Chamber is launched? In short, they will cease to have any functions in England, although they will continue as before in Wales. Their jurisdictions will be transferred into the new tribunal. All the judicial office holders and panel members in post at the point of the transfer will become a transferred-in judge or member of the new tribunal. These jurisdictions deal with a wide and diverse range of issues, some of which are technical and complex. They include cases concerning residential property, including rent, park homes and leasehold disputes, issues over agricultural land and disputes about registered land in England and Wales, most of which will be referred to it by the Land Registry.
Why is the Property Chamber being created? Currently, the three jurisdictions that will transfer into the chamber operate independently of each other. They have their own sets of procedural rules, different terms and conditions for office holders and administrative staff, various locations and diverse practices. The benefits of creating the chamber are clear: it will be the centre of expertise for matters relating to land, property and housing; it will bring greater consistency in decision-making and effective case management, with one set of rules for all the jurisdictions; there will be administrative efficiency leading to a reduction in costs; it will enable good practice to be spread across the jurisdictions, also leading to greater efficiency; it will allow more flexible and efficient judicial deployment; and it will deliver administrative efficiency, leading to a reduction in costs.
There is no doubt that the creation of the Property Chamber in the First-tier Tribunal and the transfer of the jurisdictions into the chamber will mark a significant milestone in the achievement of the long-held vision of a unified Tribunals Service. It will signify a further step in delivering the chamber structure within the First-tier Tribunal, as envisaged by the Tribunals, Courts and Enforcement Act 2007. I therefore commend these draft orders to the Committee, and I beg to move.
Baroness Gardner of Parkes
My Lords, I wish to speak on this because I feel that the statements that are being put forward are not necessarily as good as they sound. My interest in property is in the register, but I state again that I have a personal interest. However, my interest is much wider than that; it is also about other people. I have asked the noble Lord, Lord McNally, Questions on the Leasehold Valuation Tribunal in particular. He replied by letter and it was very interesting. I was concerned because at the moment the applicant cannot be asked to pay more than £500. Under the new proposals, the amount will vary from £65 to considerably more—over £500—but no one quite knows where they will come in that scale. If there is a hearing, you might be asked to pay another £190 for it. That is the minutiae of the answer, which I think is worth putting on record. Over the years, the amount has never varied. Although when we established the Leasehold Valuation Tribunal in 1996, we had hoped that the amount would never vary, we cannot expect prices to remain static for ever. That is an incidental point.
I am concerned about the whole structure of the Leasehold Valuation Tribunal going into the Property Chamber. I was particularly concerned when I read the Explanatory Memorandum supplied with the order. At paragraph 3.1 it refers to Paragraph 22 of Schedule 1 to the Tribunals, Courts and Enforcement Act 2007 which,
“alters the type of power used for prescribing one particular fee … and inserts a negative resolution procedure”.
That is considerably weaker than the affirmative procedure but, nevertheless, I am just pointing out that that is what is proposed.
I am more concerned by paragraph 3.3 of the document, which states:
“The Upper Tribunal already hears unlimited onward appeals from residential property tribunals”.
That was always envisaged. It was always envisaged that the first stage would be within the means of ordinary people. There is a separate argument here which I shall bring up on the Enterprise and Regulatory Reform Bill, on which I propose to table amendments on a number of issues. I am sorry to say that on some issues I have been told that the difficulty is to get the Ministry of Justice to co-operate sufficiently to get important changes through on housing issues. That is not good enough. I draw that to the Minister’s attention. Those amendments will be coming up at Third Reading on 20 March, and I hope that the Ministry of Justice will have looked at things a bit thoroughly by that time and got things going because it is important to realise that this is a very dramatic change.
The suggestion in the Explanatory Notes that they will all be expert people is quite frightening because a separate matter in the housing issue that we have been talking about is that the management, who are not supposed to be putting up big legal people in round one, which was for the ordinary person to bring their case, are now bringing in very expensive legal people and, what is worse, the cost of that, win or lose, is charged back to the people who brought the application for £500 because it is claimed to be a legitimate management expense to provide the most expensive lawyers. Going back to 1996, when this Act went through, it was always acknowledged that when it came to the upper-level tribunal major experts and huge fees would be involved and everyone realised that at that point the large property owner or the person or company who had multimillions of pounds would be at a huge advantage because they could afford to employ such people, but the lower level was always meant to help the ordinary person and give them a fair go. I am concerned about whether that is going to continue. I am being quite tough about this because it is not often that I get the opportunity to have this word in the ear of the people who come from the Ministry of Justice, whereas poor old housing suffers from me all the time.
Then we get to the residential property tribunals and the three that will be changed over. I have no views on the agricultural side because I know nothing about that and I would not attempt to mention it. However, the leasehold valuations, the rent tribunals and the rent assessment committees are all property issues. Another major issue with property, which again is a justice situation, is why do we not have one decent housing Act? Is it not time to consolidate housing? When I tabled a Question on this issue, I was told by the former Lord Chancellor, the noble and learned Lord, Lord Mackay, exactly what wording to put in so that the justice department would answer it. Instead, it was answered by the communities department again. The Ministry of Justice did not answer it at all. I thought that was rather a tragedy because the noble and learned Lord had told me that with that wording it could not be replied to by anyone other than the Ministry of Justice. There is something wrong with the system if things are not getting through. It could be that we are not getting any response because the justice department is not even aware of what we are asking.
Lord Beecham
My Lords, I am sure that the Minister would join me in congratulating the noble Baroness on using her professional expertise to fill the gap in the Tribunals Service for so long, consistent with her other cavity filling over the years. She raised an interesting topic—that of costs. Given that we now have a range of tribunals being brought together, could the Minister indicate whether there will be a uniform charge or whether it will be differentiated between the different categories with which the new property tribunal would deal? As she implies, that could potentially be quite a significant issue. It also raises in my mind a question about legal aid, which of course is now not available for First-tier Tribunals. Could the Minister give an assurance that nothing in these orders will diminish access to legal aid or advice over and above that which, as we know, would affect other categories of case, which we have discussed at some length and may do so again in some not so distant future, around aspects of welfare law?
In that context, I ask about one passage in the Explanatory Memorandum to which the noble Baroness referred, at paragraph 3.3.5. It says:
“Section 11 of the 2007 Act imposes a requirement of permission to appeal from the First-tier Tribunal to the Upper Tribunal”.
Of course at the time that that Act was passed legal aid would have been available. I understand that it will no longer be available for the purpose of obtaining that permission. I regret that position, which we have already debated at some length in the Chamber. The paragraph goes on:
“Amendments provide for this requirement to apply to the entire breadth of the onward appeal, even where the right of appeal from the First-tier Tribunal decision goes wider than a point of law”.
I am not sure what is implied by that paragraph, either in relation to its substance or to the availability of legal advice and assistance for those who might be otherwise financially entitled to it.
Another question that I have is whether valuation tribunals—that is, ordinary valuation tribunals—as opposed to leasehold valuation tribunals are to be brought within the scope of the property tribunal. For example, if by some remarkable parliamentary arithmetic the Minister’s party’s policy and my party’s policy on a mansion tax were to be carried tonight presumably there would be some sort of valuation system required. Even without that there may at some point be a valuation of domestic properties in particular.
There is a system for dealing with commercial properties and business rates with a cumbersome appeal mechanism. Is it envisaged that the property tribunal will take those issues into account? I hope that it might. The current procedure, particularly on the commercial property side, is leading to inordinate delays going back nearly a decade for determination. If it were to be brought within the scope of this new tribunal, I hope that it is a matter that could be dealt with, and a better service could be offered to the potential taxpayer and those organisations, notably local authorities, that clearly will have an increased interest in the local business rates yield of those properties. Perhaps the Minister could indicate, if not now then subsequently, whether this is to be brought within the scope of the new tribunal, either now, or possibly in the future.
With that said we do not object in principle to the proposal. It makes sense to bring things together. I hope that, subject to the observations made by me and the noble Baroness, we can approve these orders and look to a more efficient system applying, drawing as it will on a range of expertise. It is important that that range is reflected adequately in the appointments made to the new tribunal; and that should assist materially in the delivery of a better service to those who seek its decisions.
Lord McNally
My Lords, I thank the noble Baroness, Lady Gardner, and the noble Lord, Lord Beecham, for their interventions. As I mentioned in my opening remarks these orders almost complete the work set out by the Leggatt report. In spite of the points raised by the noble Baroness most people agree that the creation of a Property Chamber is a positive step that will bring benefits to users and consistency in this area of the law. Nevertheless, the questions raised are pertinent. As the noble Baroness, Lady Gardner, has acknowledged, I have a wonderful team behind me, which I hope has been taking note of her comments. She is probably right that at some stage there will be a strong case for a consolidated housing Act. When that will find its way into the parliamentary timetable, I do not know. However, the points that she raised illustrate the fact that we are talking about an area that cuts across a number of departments and pieces of legislation. Nevertheless, I hope these measures illustrate that we have made progress in terms of consistency and efficiency.
Lord Beecham
On that point, the Explanatory Memorandum talks about the right of appeal going wider than a point of law. I appreciate that it may apply to a point of law, but what if the matter goes wider than that? On the face of it, the right of appeal does not appear to be available. I am not asking for a reply now.
Lord McNally
I had better not guess. I would assume that it is not available but I will write to clarify. On the specific issue of legal aid, we do not consider that changes to legal aid will increase inequality in this area. One of the fundamental principles of the legal aid reform has been to discourage unnecessary and adversarial litigation at public expense. Tribunals are designed to be simple to enable parties to make or respond to a claim without the need for representation or access to legal aid advice. While we recognise that clients find advice in preparation for a case useful, we do not consider that this is a matter for the group of clients who are generally likely to be vulnerable.
I appreciate the interventions of the two noble Lords who I know have long experience in this area. I know that my colleagues will have valued their interventions, and we will consider carefully the points that they have made. I return to my concluding remarks when moving and speaking to the orders; in putting these final pieces of the Leggatt reforms into place, we have a better and more efficient Tribunals Service that will be to the benefit of citizens.
Lord Beecham
Before the Minister concludes, while it may not be for this evening, I specifically mentioned the point about valuation tribunals. I leave aside the mansion tax element for the moment.
Lord McNally
I apologise. Transferring the Valuation Tribunal for England and the Valuation Tribunal Service into Her Majesty’s Courts and Tribunals Service remains part of our administrative justice and tribunals works programme. There is considerable support from the Senior President of Tribunals and the wider judiciary for this transfer. MoJ officials will continue to negotiate with colleagues in DCLG and the Cabinet Office to identify how best to transfer VTE in the most cost-effective way. The short answer to the noble Lord is: that is work in progress.
Transfer of Tribunal Functions Order 2013
(11 years, 8 months ago)
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Lord McNally
That the Grand Committee do report to the House that it has considered the Transfer of Tribunal Functions Order 2013
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments
House of Lords
Crime: Stalking
(11 years, 8 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what action they are taking to ensure effective implementation of the stalking offences under the Protection of Freedoms Act 2012.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the new stalking offences have been in force for just over three months. On implementation, the Home Office published a circular providing advice on the interpretation of the new offences. Before then, and subsequently, we have worked with the police and the Crown Prosecution Service to update their training and guidance. We continue to engage with partners to ensure that the offences are being used effectively.
Lord Kennedy of Southwark
My Lords, 10 months ago, legislation was enacted which, for the first time, made stalking a specific criminal offence. The two new stalking offences have been in force for almost four months and yet we hear from campaigners and victims of stalking that the Government have done next to nothing to ensure that the criminal justice system, police and victim support services are properly trained in the use of these new offences, that the training varies from police force to police force and that many officers are not even aware that the stalking offences exist. Will the Minister tell me what mandatory training the Government have introduced for police officers and criminal justice professionals in relation to the new stalking offences and what input victims and stalking charities have had in its development?
Lord Taylor of Holbeach
My Lords, I am sorry that the noble Lord clearly was not listening to my initial Answer because, as I have explained, the Government are in continuous engagement with both police forces and the Crown Prosecution Service on the effectiveness of the new offences. On 8 March, we published a new, updated action plan to deliver our strategy to end violence against women and girls. The plan includes specific new actions on stalking, which provide commitments to raise awareness of stalking and to monitor the implementation of these new stalking offences. Data on these new offences will be published in May 2012, which will help inform further action.
Baroness Brinton
My Lords, does the Minister agree that there is a serious concern about those stalkers who have continually breached restraining orders—that is, no-contact orders—but have time and time again not received custodial sentences? Many have breached restraining orders on many occasions, but the police and courts have not taken this into account in the suffering of the victims who continue to be stalked between these court appearances. Will the Government ensure that the law changes so that there is an assumption that when restraining orders are repeatedly violated, the sentencing should start with custody?
Lord Taylor of Holbeach
I do not want to move on to the question of sentencing policy, but I want to emphasise that the Government take the offence of stalking seriously; so does my noble friend, who I know is a member of the Justice Unions’ Parliamentary Group, which published a very helpful report on the subject. I note what she said, but I ask her to remember that the Home Office is in continual dialogue with the Crown Prosecution Service on the way these new offences are being implemented.
Lord Foulkes of Cumnock
My Lords, the Minister said that a lot of talking was taking place but he did not indicate what action was taking place. Did he answer the question of how many prosecutions there have been to date under this new law regarding stalking offences? If he did not, why not?
Lord Taylor of Holbeach
I am sorry, but they are not collected and compiled until some time after the incidents have occurred. As I have said, the data will be available in May 2012—
Lord Taylor of Holbeach
I am sorry, 2013—as a result of the collation of the data for the first six months of implementation.
Baroness O'Cathain
My noble friend has been very informative about what has happened. After all, nothing was done—there is no point in the noble Lord, Lord Foulkes, shaking his head—by the previous Government. Does my noble friend have any idea whether any advice is given to girls, particularly in the last stages of their schooling, about what could happen and what advantages there are in learning how to avoid stalking?
Lord Taylor of Holbeach
This is part of a fuller education strategy in sexual health and education involving both young men and girls, which I hope is being practised by schools across the country.
Baroness Howe of Idlicote
My Lords, will the Government reassure us that they will be paying particular attention to the use by stalkers of the internet, where the stalker can reinvent themselves as a victim and cause even greater misery and upset to the entire families of those being persecuted in this way?
Lord Taylor of Holbeach
The noble Baroness is also a member of the justice unions group, and I am grateful for the work that that group did. Cyber offences are explicitly included in the new offences and are designed to recognise that stalking can take many different forms. It is a form of harassment that this Government will not tolerate.
Lord Mackenzie of Framwellgate
My Lords, does the Minister agree that emphasis should always be put on the fact that stalking, like domestic violence, has male victims as well as female?
Lord Taylor of Holbeach
Yes. It is quite interesting that in the Crime Survey for England and Wales, 4.2% of females complained of being stalked and 2.7% of men also complained of being victims. It affects people regardless of gender.
The Earl of Courtown
My Lords, I seem to remember that prior to 1997 Lord McIntosh of Haringey, a friend of the whole House, had a Private Member’s Bill that was supported by Her Majesty’s Government and Lady Blatch. What was the effect of that Bill on the offence relating to stalking?
Lord Taylor of Holbeach
Until the existing offences came in in November, prosecutions had to rely on the Protection from Harassment Act 1997, which shows how long ago it is that this specific crime was legislated for. We now have some new offences. I have tried to reassure the House that by May we will know what the impact of these new offences will be on prosecutions, and I hope that we will see this particular crime being stamped out in the way that it should be.
Baroness Royall of Blaisdon
My Lords, can the Minister explain why victims of stalking are not eligible for basic protections available to victims of domestic violence? He might wish to write to me with answers. Apparently domestic violence protective measures such as TecSOS phones, sanctuary schemes and installation of CCTV cameras, which are made available automatically to victims of domestic violence, are not made available to the victims of stalking. It is right and proper that they should have the same protection.
Lord Taylor of Holbeach
I can certainly research that for the noble Baroness. The Home Office already provides funds to support victims of stalking through the national stalking helpline, which provides help and guidance. Indeed, the independent domestic violence advisers who are also funded by the Government, and the independent sexual violence advisers, have involvement in stalking cases also. It is a very short step between violence and the stalking offence. The Government recognise that and I think noble Lords will too.
Regional Development
(11 years, 8 months ago)
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Lord Wigley
To ask Her Majesty’s Government how they will reduce the geographic disparity in Gross Value Added per head within the United Kingdom.
Lord Newby
My Lords, the Government are committed to supporting sustained economic growth across the UK. Economic development is a devolved responsibility in Wales, Scotland and Northern Ireland. In England we are promoting growth across the regions by creating local enterprise partnerships, giving cities the powers they need to drive economic growth via the city deals, and directly investing in and growing enterprises via the regional growth fund, which has now allocated some £2.4 billion.
Lord Wigley
My Lords, is the Minister aware of the figures for the inner London west area that show a GVA per head of over £111,000 compared with a figure of £11,000 or £12,000 for Anglesey, the Gwent Valleys, the Wirral and Durham? Is this not a gross disparity and should the Government not give much greater priority to overcoming this?
Lord Newby
My Lords, it is a very great disparity—and a disparity, as the noble Lord knows, of very long standing. The good news in terms of Wales is that in 2010 and 2011 GVA grew faster per head than in either England or Scotland, so there is a bit of progress. However, changing and reversing those regional disparities is going to be a long job and it will take a large number of measures to achieve it.
Lord Peston
My Lords, my noble friend asked the Minister a very good economics examination question, to which I am glad to see the Minister tried gallantly to find an answer. It is a very difficult question. Is he aware that most economists would argue in favour of the so-called convergence theory that free markets would lead to the right outcome and there would be convergence of the different regions? The only trouble with that marvellous theory, like so much economic theory, is that it is totally refuted by the facts. What the facts show—and this is a problem for any Government—is that once a region is ahead, it stays ahead. It is rather like the fact that very few teams win the Premier League, even though everybody could play marvellous football just by copying the best teams. Does that not mean that while the Government should intervene, particularly with infrastructure investment biased in favour of the relevant regions, they must proceed with the utmost caution in interfering with the way the markets are working?
Lord Newby
My Lords, as the noble Lord will be aware, we have had active regional policies to a greater or lesser extent in the United Kingdom since the 1960s. When I studied this at university, the figures were very much in my mind. The reason it is such a difficult issue to deal with is that, for example, in the north-east the proportion of people employed in the basic industries—mining, steel, shipbuilding and engineering—fell from something like 33% to well under 10% in a couple of decades. The challenge for government in trying to reduce regional disparities is how to put in place the kinds of long-term policies, such as infrastructure apprenticeships, that can begin to redress these wider economic forces. However, I do not think that government can reverse them, certainly not in the short term.
Lord Bates
My Lords, I welcome my noble friend’s recollection of the north-east of England and some of the history there. Did he have an opportunity to see the recent study in the Economist magazine about the north-south divide, which looked at the data between 1997 and 2010, pointing out that during that time in the north-east of England GVA grew by 41% and yet in the south-east of England it grew by 187%? Is that not part of the origin of the divide and is it not part of the correction to get good, well paid jobs in the private sector? If so, will he welcome the fact that employment in the north-east of England is at record levels, as are exports?
Lord Newby
My Lords, I very much welcome that, but I revert to my earlier answer. The north-east has in effect had to reinvent itself in terms of the balance of employment, which it has done reasonably well. However, it has been comparing itself, as my noble friend did, with the City, which has had an existing strength in financial services—one which grew almost exponentially during the period that he is talking about.
Lord Elystan-Morgan
My Lords, would the Minister not agree that, given the parlous condition of the Welsh economy, there would seem to be an unanswerable case for a reappraisal of the Barnett formula in the light of its incapacity to serve the acute needs of the land and nation of Wales?
Lord Newby
My Lords, as the noble Lord knows, the Barnett formula is much discussed. The Government are not planning to change the Barnett formula during the course of this Parliament. We are trying to find a more constructive way forward. The Secretary of State for Wales is working very closely with the First Minister of Wales, looking at a raft of specific measures—whether it is possible new borrowing powers for Wales or the business case for electrification of the north Wales railway—to bring about specific changes which, it is hoped, will boost growth in the medium to long term in Wales.
Lord Barnett
My Lords, the Barnett formula, which, sadly, bears my name, should have been changed a long time ago, as a powerful Select Committee of this House, chaired by my noble friend Lord Richard, and many other senior Members of the House have recommended. When is that recommendation going to be put into effect by the Government?
Education: Languages
Baroness Coussins
To ask Her Majesty’s Government what is their response to the conclusion of the British Academy’s report Languages: The State of the Nation, published in February, that the United Kingdom will be unable to meet its aspirations for growth and global influence unless action is taken by them, businesses and in education to remedy the deficit in foreign language skills.
Baroness Coussins
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare an interest as chair of the All-Party Parliamentary Group on Modern Languages.
Baroness Garden of Frognal
My Lords, the Government welcome the report and are committed to the teaching of languages. The national curriculum, to be statutory from September 2014, includes a foreign language at key stage 2 for the first time. In higher education, we have supported the continued availability of language study through HEFCE’s strategically important and vulnerable subject funding. There is an increase in the number of students opting to study abroad. We will reflect on the report’s recommendations to ensure that we are doing all that we can to support growth.
Baroness Coussins
That is a positive reply, but I am not sure that it is quite enough to deal with the perhaps surprising finding of this report, which is the need for language skills at all levels of the labour market, not just for an internationally mobile elite. In 2011, 27% of admin and clerical vacancies went unfilled because of a lack of foreign language skills. Can the Minister say how the Government can work with employers to encourage them to be more proactive in managing their language needs for the sake of their own competitiveness, and for the employability of UK citizens?
Baroness Garden of Frognal
My reading of the figures from the UK Commission for Employment and Skills survey is that it reports a lack of skills in admin and clerical roles, but not quite to the extent that the noble Baroness has indicated. We share the concern about skills at all levels, from professional fluency right through to a basic knowledge of language, which can make a welcoming introduction to somebody coming in and can be a valuable ice-breaker.
In response to the Wilson review, the Government have announced set-up funding for the establishment of a national centre for universities and business. That will cover all aspects of HE business collaboration, which will of course include languages.
Lord Harrison
My Lords, will the Minister look again at the discontinuation of the Asset Languages exams, which have so well helped to mobilise the rich range of languages that our schoolchildren have and point them into the way of employability or further academic work?
Baroness Garden of Frognal
My Lords, the Asset Languages programme was indeed valuable. However, we are introducing a range of other language provisions, from school through to university, to ensure that our language skills increase over the years.
Lord Storey
My Lords, my noble friend the Minister may not be aware that the Select Committee report, Roads to Success: SME Exports, was published on Friday. One of its recommendations was about the importance of foreign languages, particular those not traditionally taught in schools: for example, Portuguese, Russian and Chinese. Has the Ministry thought about how we can develop these languages, which are crucial to our exports? A thought might be Saturday schools.
Baroness Garden of Frognal
My noble friend makes an interesting point. Many schools up and down the land have after-school clubs in languages, and some have Saturday schools as well. There are also supplementary schools that meet at the weekend. These are largely set up by specific ethnic communities and are where children who go to a state school during the week learn their heritage language: for instance, Arabic, Polish or Greek. However, I agree that there is more that we can do, and Saturday clubs might provide a way through.
Lord Morgan
My Lords, is it not ironic, in view of what we have heard, that modern languages are a particular casualty of the disastrous changes in the Government’s funding regime in universities? Does this not completely contradict what the Minister has been saying?
Baroness Garden of Frognal
No, that is not entirely true. Modern languages are categorised as one of the strategically important and vulnerable subject areas, so increased funding is going to universities to try to ensure that language provision remains.
Baroness O'Neill of Bengarve
My Lords, these initiatives are very welcome, but we have now had nearly 15 years of reports congruent with that of the British Academy and we need a remedy that is not piecemeal and not based on initiatives or on the thought that Saturday morning clubs can do a lot. This is really harming our economy at all levels. Does the Minister have a strategic reply to offer?
Baroness Garden of Frognal
My Lords, we are reversing the trend that came from the previous Government of languages ceasing to be strategically important in schools. We are already seeing an increase in the take-up of languages. By making them statutory at key stages 2 and 3, but with a statutory entitlement at key stage 4, we hope to put pressure on schools to make sure that the language provision is there. We have funded a £5 million British Academy programme, which of course led to this report. There is therefore funding behind these various initiatives, but we share with the noble Baroness a belief in the importance of language learning.
Lord Eden of Winton
My Lords, will my noble friend refute the widely held view that very young children cannot cope with learning a second language? Will she ensure that the very best quality of language teaching takes place at a child’s first school?
Baroness Garden of Frognal
Indeed, and I repeat what I said before: the new national curriculum at key stage 2 will mean that for the first time primary schools will have to teach French, Spanish, German, Italian, Mandarin, Latin or ancient Greek.
Baroness Howe of Idlicote
My Lords, in addition to the British Academy’s conclusion that language tuition should be combined with vocational and STEM subjects, does the Minister agree that a sensible approach might also be to include a compulsory foreign language with all university degree courses?
Baroness Garden of Frognal
The noble Baroness makes a very valuable point. Indeed, many universities are already doing this. We know, for example, that UCL, Aston University and the University of York already have a language provision for all students in their first year. Other universities are combining a language with a science, say, or with another discipline. However, we must encourage them to do more. As to making it compulsory, that is a step that we will probably not be taking.
Lord West of Spithead
My Lords, does the Minister not agree that one of the reasons why we punch above our weight in global influence is our wonderfully disciplined defence forces? Does she also agree that successive cuts have put that influence severely at risk?
Baroness Garden of Frognal
The noble Lord takes us slightly away from the Question. However, I would say that it is very encouraging to see that the MoD has always had a language provision, and, indeed, that the Foreign Office provision in languages has been resurrected by this Government after being cut by his Government. It is therefore encouraging to see that the MoD and the Foreign Office are collaborating on the provision of modern languages for their people.
Payday Loans
Lord Mitchell
To ask Her Majesty’s Government what assessment they have made of the findings of the Office of Fair Trading’s report on payday loans.
Lord Popat
My Lords, the Government are deeply concerned by the OFT’s evidence of irresponsible lending to people who cannot afford it, and by its findings of fundamental problems with the way the payday lending market works. The Government have worked with the regulators, including the OFT, to announce a strong action plan. Tough enforcement today, combined with the move to a new regulatory regime, equipped to deliver robust consumer protections in the future, will tackle concerns in this market.
Lord Mitchell
I thank the Minister for that reply. The report from the OFT is indeed a hard-hitting document. It says that payday lenders are guilty of widespread non-compliance with the law—not a few of them but most of them. However, I am left with two concerns. The first is that the Government seem to be indicating that they are reluctant to place caps on the interest rates charged. Is this true? Secondly, are payday lenders now sidestepping regulation by going offshore? What are the Government doing to plug this loophole?
Lord Popat
My Lords, that is why last week’s announcement was about the Government and regulators taking strong action together, both to address current problems quickly and to ensure that a more effective regime will be in place next year. A cap is not recommended by the Bristol University report; a cap will reduce access to credit and will mean fewer lenders. As for lenders going offshore, I do not believe that this is the case yet, but if we bring a cap into place there is a good chance that lenders would rather lend from abroad than from this country to avoid the cap regulation.
Lord Forsyth of Drumlean
My Lords, is not the problem with payday loans that people take them out and then take out another loan to pay off that payday loan, so that the loans become larger and larger and the interest rate burden unaffordable? Is that not very similar to the Opposition’s economic policy?
Lord Popat
My noble friend makes a very valuable point. That is why the Government are now clamping down on these payday lenders, particularly through our Office of Fair Trading. Unfortunately, the noble Lord is right about the rollover of interest costs, which are quite astronomical to borrowers. That is why enforcement action is being taken as quickly as possible.
Lord Martin of Springburn
My Lords, what steps are being taken to encourage more credit unions throughout the United Kingdom so that people in the poorest communities in our land do not have to turn to payday loans and illegal moneylenders?
Lord Popat
I thank the noble Lord for that question. Yes, we are expanding credit unions, which offer affordable credit and real help for people who might otherwise borrow money from high-cost lenders such as the payday lenders. The British Bankers’ Association is also looking into this to see what bankers can do to help people with a short-term overdraft or a temporary loan when they are in a difficult situation.
Lord Richard
My Lords, many years ago, when I was a young law student, I learnt about the moneylenders Acts, which, as far as I can remember, meant that if you charged an excessive amount of interest you could not recover your money. Does that still apply and, if so, is the way to deal with these payday loans and the excessive interest charged on them to have one or two good civil cases in which the borrower refuses to pay and is taken to court, with the judge then declaring recovery illegal under moneylenders Acts?
Lord Popat
My Lords, the consumers—borrowers from payday lenders—are of many different types. A large number of them borrow money from payday lenders as a short-term loan or in an emergency. Some use the payday lending system rather than a credit card; quite often a credit card is very expensive, and they have more control over borrowing from payday lenders than they would have over credit cards. Quite often there are customers who borrow money from payday lenders because the banks, for reasons of liquidity, are often not very keen to give short-term overdrafts.
Lord Elystan-Morgan
My Lords, the noble Lord, Lord Richard, is absolutely correct, is he not? For some years now, judges in our civil courts have had wide powers to cancel unconscionably unfair contracts and to rewrite the contract where the court considers that it is fair and just to do so. The powers are there; why are they not used?
Lord Popat
My Lords, the Consumer Credit Act requires lenders to be licensed by the Office of Fair Trading and we are passing these powers on to the new regime of the FCA in 2014. The noble Lord is right: quite often with heavy debt of this nature, the court tends to impose on the consumer a credit embargo or a county court judgment, and the consumer will often find it difficult to borrow money in the future.
Baroness Kramer
My Lords, during the passage of the Financial Services Act, the noble Lord, Lord Mitchell, together with the then Minister, the noble Lord, Lord Sassoon, and, I believe, the most reverend Primate the Archbishop of Canterbury, introduced clauses that gave the new regulator the power to cap the interest rates, fees and other charges of payday lenders. For clarity, will the Minister confirm that these powers are in the legislation and that, when the regulator comes into force laterthis year, we will, as I hope, all press it to make use of them?
Lord Popat
The noble Baroness makes a very important point. Under the current circumstances, capping by the OFT would cause problems for access to credit, but we are happy to give powers to the FCA, the new regulator. It will have power to cap credit in the future if appropriate, but at present the OFT does not.
Electronic Commerce Directive (Trafficking People for Exploitation) Regulations 2013
(11 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Taylor of Holbeach
That the draft Regulations laid before the House on 28 January be approved.
Relevant documents: 18th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 6 March.
Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2013
(11 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Newby
That the draft Order laid before the House on 30 January be approved.
Relevant documents: 19th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 March.
Growth and Infrastructure Bill
17:34 - Division on Amendment 39B. - Ayes: 176 / Noes: 241 - Amendment 39B disagreed.
Baroness Whitaker
“( ) Any changes to the electronic communications code shall relate only to broadband infrastructure.”
Baroness Whitaker
My Lords, I declare my interest as president of the South Downs Society. Amendment 35A is in my name and that of the noble Lord, Lord Renton, who very much regrets that he is not able to get away from snowy Sussex today. The amendment would ensure that the stated intention of Clause 8, to facilitate the rollout of broadband in the national parks, does only that. Mobile phone masts would not be allowed; nor would any different economic purpose of any future Secretary of State be permitted. The Minister has explained, in a very helpful meeting held with her officials, that it is difficult to put this restriction in the Bill and that regulations will make it quite clear that only broadband is in mind. However, I think we need to debate this openly and see the text of the regulations before we accept the very wide power that is on the face of the Bill to install equipment in some of our most cherished and beautiful landscapes. Who knows what some future Secretary of State might want to do?
In Committee, we debated very thoroughly the danger to our national parks, briefed then, as now, by a wide range of organisations representing planning and the countryside, as well as by the Sunday Telegraph a couple of days ago. I do not propose to rehearse the arguments again, but I remind noble Lords that those concerns were shared all round your Lordships’ House. Nobody disputes the importance of broadband in rural areas or wants to impede it in any way. Equally, nobody was able to produce any evidence of difficulty which broadband operators had with any national park, and there were several examples of successful co-operation. Nor was any evidence of or anticipation of trouble given by BT when representatives kindly came to talk to us recently.
In short, there is no need for extensive powers, and the narrower the power, the better. We should be very careful about any precedent-setting power which could imperil the landscapes which parliamentarians before us fought to defend in the National Parks and Access to the Countryside Act 1949. Those landscapes are unique and they are vulnerable. I beg to move.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, as the noble Baroness has explained, the amendment has been tabled to prevent Clause 8 from being used to relax planning requirements for mobile masts. We discussed it extensively in Committee. If that is the intention of the amendment, I fear that it does not have the desired effect; nor would any amendment along these lines. I shall explain why.
At every stage of the Bill’s passage, we have made it clear that Clause 8 was brought forward to enable us to make changes to secondary legislation in relation to fixed broadband infrastructure, not mobile. Further to those reassurances in both Houses of Parliament, as noble Lords will be aware, we published a consultation on 29 January on the proposed changes to secondary legislation that Clause 8 will enable. That consultation also made it clear that the changes in Clause 8 relate only to fixed broadband infrastructure—cabinets and poles. As has been made clear previously in this House and in the other place, it is not possible to limit the scope of the clause to a particular infrastructure or technology. Clause 8 can make no distinction between fixed or mobile infrastructure, because Article 8(1) of the framework directive 2002/21/EC requires technology neutrality.
That is not to say that different technologies or infrastructures all have to be treated the same. They can be treated differently where it is objectively justifiable and proportionate, but that is done at the level of secondary rather than primary legislation. For example, the relative visual impact of different types of communications apparatus is sufficient to justify a differing treatment in planning terms.
As I mentioned, the amendment does not achieve the desired effect. Use of the term “broadband infrastructure” could equally apply to mobile infrastructure, such as mobile masts which provide 3G or 4G mobile services. They would also qualify as broadband infrastructure.
We could not limit the scope of any changes to broadband infrastructure, as that would prevent changes being made to narrowband infrastructure, which might impact on the delivery of narrowband voice services, which would include the 999 service. I am sure that the noble Baroness would not want that.
I can only reiterate that the distinction between fixed and mobile will be delivered through secondary legislation, through regulations which I think are already out to consultation. This measure will be introduced to provide certainty and will be an additional deployment option to enable superfast broadband to be rolled out in the more commercially challenging parts of the UK. As the noble Baroness said, these areas have people’s hearts in them and they do not like to think that they will be changed. I hope the noble Baroness will understand that there is no intention to try to prevaricate in any way or to try to introduce mobile by this clause. It is limited by the secondary legislation but because of the necessity under the EU regulations we have to do it this way. I hope that the noble Baroness will feel able to withdraw her amendment.
Lord Adonis
My Lords, I thank the noble Baroness for the very great care and attention she has taken in meeting representatives of the national parks and other interested parties and also meeting noble Lords to discuss this issue. It is a model of how a Minister should handle these conversations and I compliment her. In the notes that the noble Baroness circulated to us of the meeting with the national parks representatives, the record of the meeting says that the Minister from the DCMS, Ed Vaizey, gave an undertaking that the drafting of the code of practice would be a collaborative exercise. Can she put on record for the benefit of those who wish to collaborate that the Government will indeed be consulting them, intensively and extensively, as this code of practice is drawn up?
Baroness Hanham
My Lords, I am sure the noble Lord has seen from the other amendments that are coming up that we will be discussing the code of practice on probably the next amendment or the one after. At that stage I believe that I will be able to give the noble Lord the assurances he seeks.
Baroness Whitaker
My Lords, I echo the thanks of my noble friend Lord Adonis for the very detailed explanation by the noble Baroness, who was very helpful to the many organisations which share my concerns. I am also grateful for her specific explanation of the role of the framework directive as this will now be in Hansard and will be official. That also will be helpful. Her remarks on the consultation on the regulations are reassuring and, if I may, I will have another look at the Government’s text. In the mean time I beg leave to withdraw the amendment.
Baroness Parminter
Baroness Parminter
My Lords, Clause 8 as it stood would have set an extremely damaging precedent, removing key protections from our most cherished landscapes. My Amendment 36 sought to address that issue, enabling changes in secondary legislation to speed up the delivery of broadband in rural areas but not removing key protections against changing the long-standing duties in national parks and areas of outstanding natural beauty.
As I made clear in Committee, I can see the argument for adding a further consideration to the Communications Act 2003 for the Secretary of State to have regard to promoting economic growth at the same time as other existing duties, which is what Clause 8(1) proposes. However, the disapplication of the duty to have regard to conserving beauty in other pieces of legislation would be a very disproportionate approach. Clearly the Government do not feel that my amendment gave quite the certainty that they thought they needed, while not undermining key protections for those landscapes. They have therefore drafted their own amendment, which in this group, and with the leave of the House I should like to make a few comments on it.
The Government’s Amendment 36A equates the “have regard” duty to proposed Section 109(2B) of the Communications Act 2003, so that the Secretary of State will be treated as automatically having complied with the “have regard” duties if they have complied with Section 109(2B). It means that the primary legislation in place since 1949 protecting our iconic landscapes remains unchanged. I am extremely grateful to the Government and in particular to the Minister, who has gone well beyond the bounds of the usual standards to listen to Members of this House and to meet with us and hear the seriously held concerns that we championed in Committee about the wider impacts of the clause as drafted. Their willingness to respond to our concerns sends a powerful signal that while the Government are committed to bringing broadband to the greatest number of people they are not intent on nibbling away at essential protection policies for our most valued landscapes. I beg to move.
Lord Judd
My Lords, I am very glad to support this amendment. It seems that what we are dealing with here in this whole clause, as we argued in Committee, is not only the policy inherent in the clause now but the threat that it offers for the future. Since the Second World War, Governments of all persuasions have consistently adhered to the principle that there is something so special in this asset of these unique areas of countryside in our country—which are enjoyed by our people and have this incalculable value as a place for physical and spiritual regeneration—that there must be absolutely no doubt whatever that the protection of what they are about and of their scenic uniqueness takes precedence over everything. The trouble is that, once the door is pushed open and left, after discussion and argument, just a little ajar, there is this danger of still further erosion.
I support my noble friend on the Front Bench, who has paid a warm tribute to the Minister. She has been outstanding in her commitment and courtesy to the House and to the Committee. I have always thought that she was a decent, civilised person, and the way in which she has responded to the criticisms that have been made have left me in absolutely no doubt about that whatever. I would like her to accept that we are trying to uphold her in those values which she so obviously embraces. I was having a private word with her at one point and unfortunately—although I understand it—by the time that legislation is on the Order Paper and being debated there has been an awful lot of intellectual and policy input and people are very committed to the position which they have put forward and on which they have worked in a dedicated way to try to get the draft as true as possible. Sometimes there comes a moment when the logical thing to do is to stop trying to perfect something that is not really right and just to say, “That one was interesting but it is not going to be in the Bill in the future”. However, it is a very difficult thing for all those who have been involved to accept that sort of provision. I hardly dare say, and I do not mean this in any aggressive or patronising way whatever, but in all of us—not least myself sometimes—face is a very important issue, and sometimes it becomes so in the legislative process.
The logical thing for this House to do is to adopt the amendments that have been put so clearly by the noble Baroness, Lady Parminter. I hope that the House will endorse her position.
Lord Marlesford
I will just say a word in support of my noble friend’s amendment, which I have put my name to. First, I join in what has been said about my noble friend the Minister. In the years that I have been here, one has often had Ministers who, one feels, are mere parrots for the civil servants. That is not the case with my noble friend. She has taken a real interest and is really concerned to get the right answer. What is the right answer? I think there are three points.
First, as has been said, the protection and cherishing of these very special landscapes, particularly the national parks and the areas of outstanding natural beauty, is crucial for our very small island. The way in which we have retained them since 1949 is amazing. It must be remembered that we were 50 years after the Americans in inventing national parks, but a wonderful job has been done with them. We therefore have to make absolutely sure that we do not legislate for a short-term apparent problem. Nobody denies that the whole broadband thing is important, and we are united on the need for it, but we should not legislate on a short-term basis for that with any risk of undermining the very long-term principle of preserving these landscapes for generations to come. That is my first point, and I know that my noble friend is attempting to meet that in the amendment that she has put forward.
The second point is what could actually happen to the landscape as a result of what is going to happen in the way of installation of broadband. I had the advantage of going to a meeting with British Telecom—which my noble friend the Minister chaired, sponsored and arranged—and I found it, in a sense, quite helpful. There were one or two things that particularly struck me. First, although we questioned BT very closely, it was not able to produce a single example from the past or the predictable future of why this clause is needed. It is all very theoretical. The second point is that they showed us the various bits of hardware which are involved in broadband—one, of course, is the cabinets, which do the switching. They are quite big, about twice the size of filing cabinet, and they have to be scattered around; it is a little unclear how close they have to be to the service that they are trying to provide. They take the fibre optic cable and then transfer it to the copper cable, which is what most of the broadband ends up reaching the final premises in, unless it is a new premises in which case, they put the fibre optic straight in. The cabinets are quite big and could be very intrusive. It ought, in my view, to be quite easy to conceal them, and make sure that they are carefully sited.
The thing that worries me much more is the wires—the fibre optic cables that carry the signal. Wires that are strewn across open countryside can be very intrusive and damaging to the landscape and one simply does not want them. In the past, much care has been taken to ensure that that does not happen. British Telecom told us that where there are underground wires already, it will use the ducts in which those wires go to put the new fibre optics in. Where the services are already over ground, it will probably put the fibre optic cable on the poles that already exist. That is probably acceptable.
However, there is another point. BT is not the only organisation that will be putting in broadband in these rural areas. Another big company, the Japanese company Fujitsu, is keen to come in. We know that the ownership of existing methods of transferring wires is largely in the hands of BT. In theory it would be just as possible for the incoming company to take exactly the same care and trouble for its wires and cables as BT does. However, the fact is that this is something that belongs to BT and so it will have a commercial right to expect some money in exchange for using it.
The world of telecommunications—and the world as a whole—is highly competitive, and companies are trying to cut their costs to get the orders and the business. The point that I raised, which I hope that my noble friend may be able to comment on, is: to what extent—when we have finished with the Bill as it now looks with the amendments from my noble friend—will we be able to ensure that a third company, as it were, that comes in to install broadband in these sensitive areas is not able to cut a few cents of the cost by putting overhead lines where underground wires exist, or by putting up new poles where other people’s poles exist?
That is a really important consideration, which brings me to the third point about the importance of this debate. We know now, and have known for years, ever since various constitutional changes, that what is said in Parliament and can be read in Hansard is of value in the real world in years to come. Therefore, I am very anxious that, in expressing our concerns and wishes, we all spell out the problems and the Minister seeks to spell out the answers, so that when cases arise in which there are controversies and conflicts, at least Hansard will be able to be quoted and the intention and wish of Parliament can be interpreted.
Lord Adonis
My Lords, because the noble Baroness has a very important amendment in this group, perhaps I might speak after her rather than before.
Baroness Hanham
My Lords, I would be delighted to speak to Amendment 36A. I will just find it in my notes. In essence, Amendment 36A ensures that the duty that already exists under Section 109 of the Communications Act 2003 for the Secretary of State to have regard for the environment and beauty of the countryside will be deemed to meet the “have regard” duties set out in protected areas legislation, when the Secretary of State comes to make regulations under Section 109.
Subsections (2), (3), (4), (6) and (7) of Clause 8 caused concern because they disapplied the express “have regard” duty imposed on the Secretary of State when making regulations. As the noble Lord knows, and the noble Baroness, Lady Parminter, has been kind enough to indicate, we have listened to concerns and have removed those express disapplications.
The drafting approach could not be replicated in exactly the same way in relation to the “have regard” duty referred to in Clause 8(5) because that is not a duty of the Secretary of State but is specific to a statutory undertaker within the relevant Norfolk and Suffolk Broads Act 1988. However, by using a similar approach, the definition of statutory undertaker within that Act, for the limited period of five years, has been aligned with the policy so as to avoid the express disapplication of the “have regard” duty.
I hope that the amendment reassures the House that our intention was only to ensure that the right legal framework was put in place and that we had no wish to unpick the distinct and settled legislative framework that applies to the national parks. I emphasise that the purpose of our reforms is to ensure that fixed broadband deployment is not held back in the small minority of cases where local planning authorities and communications providers are not able to agree the best siting. The Government remain convinced that the natural environment and landscape are of crucial importance, which is why there will be a number of important safeguards. I could move on to other aspects, but I think that was the bit the noble Lord asked me to speak to.
Lord Adonis
My Lords, I am very grateful to the Minister, and to the noble Baroness, Lady Parminter, who has pursued this issue throughout the passage of the Bill and has achieved a very significant step forward on the part of the Government.
What we need to be clear about is when the Secretary of State will continue to be under a duty to have regard to,
“the need to protect the environment and, in particular, to conserve the natural beauty and amenity of the countryside”,
as required by Section 109(2)(b) of the Communications Act 2003. It is absolutely critical, in the desire that we all share to see the extension of broadband to the national parks and other areas of outstanding natural beauty, that a real obligation with a statutory foundation will continue to be placed on the Secretary of State to have regard to the need to conserve and enhance their natural beauty.
Baroness Hanham
My Lords, I was remiss in not thanking noble Lords who have thanked me very graciously. I hope we are still in that position when we get to the end of today but for the moment I will accept it with gratitude. It has been my pleasure—and always is—to have discussions with noble Lords and relevant people associated with the Bill. As the noble Lord, Lord Adonis, has said, the noble Baroness, Lady Parminter, has moved and shaken this aspect of the Bill and I am delighted that we have now achieved what she and other noble Lords are happy to accept.
With regard to the point about “having regard to”, the Secretary of State’s responsibility for having regard to is not changed by this legislation. It is just amalgamated into one area so it does not have to wander its way through all sorts of bits of legislation. I hope the noble Lord will be happy to accept that.
The Government have never intended to ride roughshod over the protected areas legislation but to ensure that there was sufficient legal certainty in the primary legislation when bringing forward our proposed changes to secondary legislation. Our policy goal is to simplify the planning regime so that the rollout of fixed superfast broadband—so urgently awaited in many of our rural communities—is not held back unnecessarily in the small minority of cases where planning authorities and communications providers are unable to agree the best siting for equipment. The noble Lord asked me a question and I have answered. He is in a position to wind up for his side. Does he wish to speak again?
Baroness Hanham
In Committee, at the noble Lord’s suggestion, I undertook to meet representatives from the English National Park Authorities Association. We did so, with Ministers from the Department for Culture, Media and Sport and the Department for Environment, Food and Rural Affairs. I met representatives from the English national parks and the National Association for Areas of Outstanding Natural Beauty, who highlighted their overriding concern that the express disapplication of the “have regard” duty would set an unwelcome precedent. Following this meeting, we undertook to consider if we could find an alternative way to ensure legal certainty—and that is a more formal response to the noble Lord—and give the necessary powers to amend regulations. I am delighted that, following further discussions between the officials, we have been able to table this amendment which directly addresses the concerns raised and has been welcomed by the English National Park Authorities Association. Amendment 36A picks up that duty.
The purpose of our reforms is to ensure that fixed broadband deployment is not held back in the small minority of cases where local planning authorities and communications providers are not able to agree the best siting. I hope that, after all we have done, this will not become an issue. Should it be, however, at any stage, this is the way it will be managed by the providers.
The Government remain convinced that the natural environment and landscape are of crucial importance, which is why there will be a number of important safeguards. First, the voluntary code on siting best practice for operators and planning authorities will have input from the national parks as the English National Park Authorities Association is involved in the working group which will draft the code. Secondly, communications providers will remain under a statutory duty to consult the local planning authorities on their proposed deployments.
The noble Lord, Lord Marlesford, asked me whether anybody other than BT would be committed by these clauses and amendments. We recognise that there will be other communications providers as well as BT. All providers will be involved in drafting the code and will be committed to complying with it. I have not been given the answer to the question of whether other providers would be able to use BT’s infrastructure, but I hope to know it before I come to the end of my speech.
First, as I said, the voluntary code on siting best practice for operators and planning authorities will have input and secondly, communications providers will remain under a statutory duty to consult local planning authorities. Thirdly, “environmental sustainability” is a requirement of the Broadband Delivery UK contracts in the areas to which they apply, meaning that local authorities are able to specify particular requirements in their Broadband Delivery UK contracts if they wish to do so.
The noble Lord, Lord Adonis, who has expressed support for the amendment—for which I am grateful—presented figures in Committee regarding planning approvals in national parks and suggested that the proposed relaxation of planning controls was unnecessary. I have written to colleagues and responded to the noble Lord’s points. Only a small proportion of those figures which the noble Lord quoted relate specifically to the installation of superfast broadband, which is, as he knows, still in its very early stages in these areas, while the larger proportion will be for voice services for the most part. While the figures show a high percentage of approvals, there has been no indication of the time taken for the decisions to be made. Our proposals are about ensuring certainty across all areas to aid investment decisions and ensure that resources can be deployed efficiently.
We have listened carefully to the concerns and have brought forward Amendment 36A to address them. Crucially, it has the support of the English National Park Authorities Association and the valuable support of my noble friend Lady Parminter. I hope that the House will support it.
The amendment will ensure that the duty that already exists under Section 109 of the Communications Act 2003 for the Secretary of State to have regard to the environment and beauty of the countryside will be deemed to meet the “have regard” duties set out in protected areas legislation when the Secretary of State comes to make regulations under Section 109.
I hope that I have dealt with questions that I have been asked. I shall therefore move Amendment 36A and hope that, with the explanations that I have given, my noble friend Lady Parminter will be willing to withdraw Amendment 36.
Lord Adonis
My Lords, the Minister’s explanation was clear and the position that she has taken is extremely important in preserving the requirement to enhance and conserve the natural beauty of the national parks. We therefore welcome her concessions in the amendment.
Perhaps I may put on the record the conclusions of the meeting which the Minister held with the representatives of the national parks, because they are quite important for how we proceed hereafter—as the noble Lord, Lord Marlesford, so rightly said, what is said in this House forms a benchmark for what happens afterwards. At the conclusion of the meeting, the Minister for Culture, Ed Vaizey, emphasised that the clause is not about stigmatising national parks and areas of outstanding natural beauty as obstacles. Representatives of the national parks and the areas of outstanding natural beauty reiterated their belief that there was no evidence that they cause issues with deployments and said that they do a lot of work on the issue. Ed Vaizey agreed that national parks and areas of outstanding natural beauty do some excellent partnership working. He offered to facilitate regular meetings with representatives of the national parks, areas of outstanding natural beauty and BT to discuss the rollout of superfast broadband in their areas and to ensure that they continue to support deployment and that any issues can be resolved quickly.
Those assurances given to the national parks by the Minister are extremely important. I think it is important to put them on the record and to state very clearly that your Lordships expect that the Government and BT will hold fast to those commitments and will consult intensively and extensively with the representatives of the national parks and the areas of outstanding natural beauty to see that we get the rollout of superfast broadband in the national parks—where there are large numbers of residents and businesses that badly need it—in the most sensitive way possible that conserves and enhances their natural beauty.
Baroness Hanham
My Lords, I know it is not up to me to intervene again but as we come on to the next amendment it may be helpful to say that I will probably be able to give the noble Lord the assurances he seeks on that as well. With the leave of the House, I should like to answer the question of the noble Lord, Lord Marlesford, which was whether any other operators apart from BT will be able to use the BT infrastructure or whether they would have to put in their own. BT is under a regulatory obligation to share its infrastructure.
Baroness Hanham
“( ) In section 109 of the Communications Act 2003 (regulations specifying the restrictions and conditions subject to which the electronic communications code is to apply) after subsection (2) insert—
“(2A) Subsection (2B) applies if—
(a) the Secretary of State has complied with subsection (2)(b) in connection with any particular exercise before 6 April 2018 of the power to make regulations under this section, and(b) the regulations in question are expressed to cease to have effect (other than for transitional purposes) before that date.(2B) The Secretary of State is to be treated as also having complied with any duty imposed in connection with that exercise of that power by any of the following—
section 11A(2) of the National Parks and Access to the Countryside Act 1949;
section 85(1) of the Countryside and Rights of Way Act 2000;
section 17A(1) of the Norfolk and Suffolk Broads Act 1988;
section 14 of the National Parks (Scotland) Act 2000 (asp 10);
Article 4(1) of the Nature Conservation and Amenity Lands (Northern Ireland) Order 1985 (S.I. 1985/170 (N.I. 1)).”
( ) For the purposes of its application to section 17A of the Norfolk and Suffolk Broads Act 1988, the definition of “statutory undertaker” in section 25(1) of that Act is until 6 April 2018 to be read as if paragraph (d) were omitted.”
Baroness Parminter
“( ) The Secretary of State shall by regulation introduce a statutory code of practice specifying how operators of broadband networks to whom the electronic communications code is applied shall consult with local planning authorities.”
Baroness Parminter
My Lords, we all support the deployment of broadband in rural areas, and the key for us is how best we deliver that. I still do not think that the Government have made a conclusive case for the need to change the existing planning regime in terms of proving that existing arrangements are a barrier to delivering broadband. Few cases have been cited outside the national parks, and as my noble friend Lord Marlesford and the noble Baroness, Lady Whitaker, said, the national parks authorities are not inflexible regulators, bystanders or obstacles to broadband rollout.
Equally, I am disappointed that the Government have not published the responses to the latest consultation on their planning proposals prior to Report. Hearing stakeholder views could have helped our deliberations, thus enabling legislation. However, I understand why the Government want to introduce these changes to the planning regime, so we should seek to ensure a strong code of practice that delivers the best outcomes in deploying broadband infrastructure in our most valued landscapes.
I think a statutory code of practice to ensure best practice in siting infrastructure would be best, but I hear the argument that for such a code to be as effective as possible, it needs to be owned by planning authorities and broadband operators. Therefore, I hope that, in responding, the Minister will be able to confirm four things. The first thing is that the code of practice will be clear on mechanisms for dispute resolution between planning authorities and broadband operators when there are disagreements over siting. Given that the proposed changes give operators the final say on siting, it is important to seek agreement to ensure we do not end up with cabinets pepperpotting across our most treasured landscapes, causing detrimental impact to the landscape’s qualities and thus to the tourism industry that underpins economies in rural communities in our most highly visited and iconic landscapes.
The second is that the code will require the sharing of infrastructure where feasible: a critical issue that is not mentioned in the scope and guiding principles that have been drawn up to date. In this, I include pole sharing, where existing poles are available, and introducing processes so that broadband operators can be made aware of the opportunities to piggyback on to the work of energy providers who are undergrounding lines in the area.
The third is that the process for reviewing the success of the code and the trigger mechanism for deciding to make the code statutory is made clear. The final thing is that the anticipated date for the finalisation of the code is stated. Once this code is finalised, adherence to it can be incorporated as a contract requirement into publicly funded broadband deployment projects. As such, it is a key tool to ensuring the best siting of broadband infrastructure, and we need it finalised as soon as possible. I beg to move.
Lord Judd
My Lords, I warmly endorse this amendment and thank the noble Baroness, Lady Parminter, for introducing it. Across the whole history of legislation, I am afraid there is far too much evidence that codes and the like, without statutory authority, become useless in time. We have to remember—and we all pay tribute to the present Minister—that once new legislation is there, we are not necessarily going to be dealing with people like the current Minister. We cannot be certain who we will be dealing with. The current Minister is determined, and I am sure she means every word she says, that these things will be used to ensure what we all treasure about the parks, and so on. However, when she is gone, who will there be? I suggest to her that there are people with whom she must deal at the moment in her own Government who do not see it quite as she does. They have quite different thoughts about what this wonderful land might be used for. It is therefore really important to give the codes statutory authority.
As a vice-president of the Campaign for National Parks and as a patron of the Friends of the Lake District, I might say that the people who are, with their quality and commitment, turning concern into practical reality in all that they do to further the parks and the rest are deeply disturbed at the dangers that are there. They are not questioning the current Minister’s good intent but asking, “Where are the guarantees that these things that are being said in good will will actually be there for all to observe in future?”. Is this going to be another of those occasions on which we satisfy our own public profile by saying, “Well, we have this code”, or do we really mean what the code says? If we really mean it, let us for goodness’ sake make certain that it has the authority of the law behind it. This amendment is very important indeed.
Lord Tyler
My Lords, I strongly support my noble friend Lady Parminter. I should say that in the past I was vice-chair of a national park committee and therefore hold very dearly the responsibilities of the wider public within the national parks for their effective preservation and conservation in the national interest. I would also emphasise that there are many SMEs in national parks that will benefit from the extension of these very important communication facilities. However, there is a real urgency to have real clarity in the new regime to make sure that there is proper co-ordination between those who are going to provide for these new facilities along with the existing undertakings.
From my previous experience of seeing how the statutory undertakings, before they were privatised, never really got to grips with the need for co-ordination, the point that my noble friend made just now—about making sure that those who provide the new facilities are also properly co-ordinated with those who have responsibility, for example, for improving energy supplies—is absolutely critical. Otherwise we would have the ridiculous situation of upheaval and then renewed upheaval as the new undertakings take over. The equal need for greater clarity, to which my noble friend just referred, is extremely important, because otherwise we will have a very confused situation.
There is such urgency for this that I hope my noble friend the Minister will be able to give us an undertaking that preparatory work is well in hand to ensure that all the issues to which my noble friend referred are already being carefully examined. I am sure that all the communities within the national parks, and those who have concerns about the future of the national parks outwith them, will be met in the next few weeks and not be left with many months of consultation and revision before we see a final result.
Lord Marlesford
In supporting this amendment, I underline that we are talking not only about national parks but specifically about areas of outstanding natural beauty. Perhaps I could remind your Lordships that one is not more important than the other in the hierarchy of beauty. The difference between national parks and AONBs is that national parks are wilderness areas, which AONBs are not; they are very often highly cultivated and farmed areas.
I remind your Lordships once again of a phrase that was used and which is central to the whole issue in its broadest context. It is a phrase that was used by Nicholas Ridley while ex cathedra, as one of the best Environment Secretaries there has been since that government department was created. He stated the importance of protecting the countryside for its own sake. That really embraces it, whether the new broadband is being put into a national park, an AONB, a special landscape area or anywhere where there would be or could be gratuitous damage to a precious landscape.
Lord Adonis
My Lords, first, I reinforce the point made by the noble Lord, Lord Tyler, about the importance of seeing that there is a proper communications infrastructure for the national parks, including superfast broadband. He said there were many SMEs. I have been struck by quite how many there are. According to the information that has been supplied to us, there are 22,000 businesses in the national parks, of which over 70% are SMEs. In areas of outstanding natural beauty, there are more than 61,000 businesses, of which 74% are SMEs. There are also 153,000 homes in national parks and over 467,000 in areas of outstanding natural beauty. We are therefore wrestling here with the need to get the balance right. All these businesses and residents want to see modern communications infrastructure, but they want it installed in the most sensitive way possible after proper processes of consultation and collaboration locally. That is what we are seeking to get right.
We have been talking a lot about processes, and a key question is what is going to happen in the rollout of this infrastructure, a point made by the noble Lord, Lord Marlesford. It is clear that big choices will have to be made about how much undergrounding takes place when it comes to overhead wires. That will be a critical issue as this infrastructure is rolled out. There are real causes for concern. It is hard to predict quite what will happen after this legislation is passed and plans come forward. The impact assessment that followed DCMS’s consultation referred to possibly 1,600 kilometres of new overhead wire lines in protected landscapes over the five-year period for which the changes apply. However, it is impossible to gain an accurate understanding of the impact because the document quotes two different figures for the expected annual increase in overhead lines.
However, the Campaign for National Parks points out that there is a good deal of discretion when this work is being planned as to how much is undergrounded. The relevant regulatory bodies make allowances in the control periods for the amounts that can be spent on undergrounding overhead electricity lines. This also applies to decisions that BT will take about undergrounding other telecommunications lines. The sums of money involved are very large. The Campaign for National Parks also points out:
“Given the resources … now being put into undergrounding power lines, it would be more cost-effective to plan for broadband delivery in protected areas in a way that reduces the visual impacts from the outset, even if this results in higher costs initially. Installing broadband infrastructure as quickly and cheaply as possible would be a false economy and a waste of consumers’ and taxpayers’ money if further funding has to be generated at a later date to put these lines underground”.
The national parks make the very sound point there that to go headlong into the cheapest possible means of installing infrastructure only to have to replace it in due course because of a public outcry as a result of the failure to underground where it is needed to protect and enhance the landscape, would be a false economy. Let us be clear about that. Not to plan properly for this and then to have to come back a second time and spend a very large amount of taxpayers’ money in undergrounding lines because it was not planned properly the first time around would be a false economy. We are not very good in this country at planning infrastructure in such a way that we do not have to go back and do it a second time because we did not plan it properly the first time around.
I hope that the noble Baroness, in her concluding remarks, will recognise the problem that we face here: the obvious need to get infrastructure to those in national parks who require it for their livelihoods, but not to do so in a way that will only require us to go back and do it all a second time because we did not get it right the first time.
Baroness Hanham
My Lords, I thank the noble Baroness for moving this amendment, which gives us an opportunity to talk about the code of practice and whether it should be statutory or voluntary. At present, we do not believe that the proposed code of best practice for the siting and appearance of fixed broadband infrastructure needs to be given statutory effect. It is important that the code is agreed collectively by all those concerned and given a chance to work as a voluntary code.
In any case, it would not be possible or necessary to bring forward a statutory code of practice in the way that I think is intended. Rather than a statutory code, the material principles of the code of practice would instead need to be included in amended Electronic Communications Code (Conditions and Restrictions) Regulations. The power to provide for these matters in regulations already exists in Section 109 of the Communications Act 2003.
However, additional regulations are not needed. I am pleased to report that work is progressing well in developing a voluntary code. The working group drafting the code has agreed its scope and some broad principles, which I shared with noble Lords last week. While the final detail is still to be worked through, we anticipate that it will provide a good foundation on which to build for the future of broadband. The code working group is made up of communications providers—that is, over and beyond BT—local planning authorities, Ofcom, the Office of the Telecommunications Adjudicator, English Heritage and the national parks. It is a representative group, which is engaging keenly in bringing the code to fruition.
The key to rolling out broadband quickly will be partnership working between communications providers and planning authorities. We want to see that work, and the voluntary code will be an essential tool in achieving that. I believe that there is real commitment from all sides to addressing the issues around how broadband is delivered, the co-operation and co-ordination necessary and the involvement of those affected in the provision and siting of the infrastructure.
Communications providers have committed to taking forward the drafting, but the scope of the code of best practice that was agreed last week includes the size and appearance of cabinets and new poles; their location, including the proximity to homes and businesses, road junctions and placement in the footway; early engagement with all interested parties including local planning authorities, highways authorities, other infrastructure providers in the area; and, in the case of new poles, engagement with communities through the local authority—that is, consultation between us. The noble Baroness, Lady Parminter, asked whether there would be mechanisms for dealing with disputes. Part of the code that is being worked up at the moment deals with precisely that: there will be mechanisms for dispute resolution, in the event that there is disagreement. The agreed scope also includes ensuring consistency of definitions and how the code relates to the various pieces of legislation that underpin it; and the consistency of application through the supply chain, including contractors.
Consultation with other infrastructure providers probably includes, most specifically, consulting electricity companies because they work in this area. The purpose of this is to ensure that, before deploying any new infrastructure, providers explore opportunities for sharing existing infrastructure, and that would include underground provision as well. Early consultation with the electricity companies provides an opportunity to co-ordinate deployment with any plans to underground electricity cables in the area, so where everyone is linking up, they ought to be able to use the same trenches and ensure that as much is hidden from view as possible. In the meeting that we had with people from BT, they made it clear that this is what they would want to do—where there are opportunities for undergrounding, they will do it. That is something else that would have to be negotiated with the local authority regarding the contracts that those local authorities hold with BDUK.
I reiterate that local authorities that are procuring networks through the Broadband Delivery UK programme still have the opportunity to influence the type of infrastructure that is deployed; they are the procuring authorities, after all. Local authorities can also make adherence to the code of practice a contractual requirement of the Broadband Delivery UK projects for contracts that they enter into themselves.
In addition, bringing forward regulations at this stage would delay implementation of the broadband support package that the Government set out in September last year, particularly if the voluntary code first needs to be produced and agreed to by all parties, which we are confident will be the case. Indeed, we asked about when these regulations in the code will come into effect. We expect the code to be completed and ready to come in at the end of May—so not too long now.
We are anxious to see broadband implemented as quickly as possible. The noble Lord, Lord Adonis, quoted some very interesting figures as regards the number of people who live and work within the national parks. It is not an insignificant number. All of those people, particularly in businesses, need access to fast broadband as soon as they can get it. The difficulty of placing a code on a statutory footing would be getting it in time and at this speed; it could disrupt the productive work that is taking place, which is supported all round.
Having said that, we recognise the concerns that have been expressed again today. We will be monitoring the operation of the code closely for both commercial and publicly funded broadband deployments. The noble Lord, Lord Adonis, also referred to the meeting with Ed Vaizey, the Minister in the other place. Reviewing how the code of practice is working will be undertaken by him; he will include this in his regular meetings, which I gather are taking place once a week with all the communications providers. In the first instance, we would expect communications and planning authorities to report back on any early lessons learnt so that they can be reflected in changes to the code of practice. As I made clear, the opportunities for them to do that are very real and there will continue to be very close monitoring at the other end.
If concerns are raised with the Government on adherence to the code, we will of course need to consider whether those concerns are best resolved through bringing forward additional regulation, so this is not being ruled out. I assure the House that if it is concluded that regulation is needed, the necessary regulations could be brought forward with urgency and it would be our aim to put them in place. That could be done within a matter of months should the need arise and subject, of course, to Parliament agreeing to those regulations.
I hope that I have made clear why we do not support this amendment, which would, particularly at the moment, introduce delay. We believe that there are enough checks and balances in the code itself and from the monitoring that will take place within the Minister’s office and by the local authorities themselves—they have a very real role and interest in this. For the time being, anyway, we do not need a statutory code: we believe that the voluntary code will work. I hope that, with the assurances I have given, the noble Baroness will be able to withdraw her amendment.
Baroness Parminter
My Lords, I am grateful for those reassurances from the Minister and for the Government’s commitment to a strong code of practice. I am also grateful for the clarification that should this voluntary code fail to deliver the outcomes that we in this House wish it to, and to which at this stage both the broadband operators and the planning authorities are committed, the Government will look seriously at bringing forward—at the earliest opportunity, through secondary legislation—opportunities to make this statutory. With that, I seek the leave of the House to withdraw my amendment.
Lord Judd
My Lords, one might ask why I am moving the amendment in the light of the good exchanges we have been having in our deliberations so far. I go back to the basic issue: why is this clause in the Bill at all? If we have had to have this tremendous amount of discussion, this avalanche of reassurances from the Minister, meetings at which reassurances have been given and all the rest of it, why have the clause in the Bill?
That means that it is necessary to look at the motivation for the clause. I suggest that the motivation is not what we have been talking about. It is not about preserving the unique role and position of the parks and areas of outstanding natural beauty. There is a feeling that this could become an obstacle to other priorities in government administration and that, therefore, we need to look again at this absolute commitment and qualify it, whatever reassurances are given.
Like my noble friend, I read with great interest the note on the meeting with the English National Park Authorities Association. Again, it was far from clear to me after reading that why the clause was being proposed unless it was for the reason that I have put to the House. I therefore suggest that, at this stage, we need to hear from the Minister why it is essential to have it in the Bill, with all the qualifications that have now been made. I am sure that, as a reasonable person, the Minister will agree with me that those qualifications are all based on her word. They are not reinforced by the legislation. They are her interpretation, her good will, her undertakings and her reassurances, with a bevy of officials around her to add dignity and, I am sure, a good deal of intellectual input to the occasion.
The clause and its purposes, and why it is there in opposition to the priority we have all had in the past, are the real issue. I seek from the Minister some kind of convincing argument as to why the clause is necessary. I beg to move.
Lord Jenkin of Roding
My Lords, I have not tried to get into the discussion on Report so far. I made my view clear in Committee that this clause was a good thing. I, too, warmly commend my noble friend on the Front Bench for the amount of care and trouble that she has taken. I particularly valued the meeting that she arranged with the representatives of BT. I found it extremely informative, both as to their attitude to all this and as to some of the technology, of which I confess I was not wholly aware. For instance, one does not need a continuous line to take superfast broadband across the country. If you have the right equipment in a cabinet, you can, I think, go up to a kilometre by wireless transmission. That may well be a way in which one can protect a particularly sensitive area from the need for lines.
The other thing that was made absolutely clear, and which we have heard all along from my noble friend, is that for overhead lines we are not talking about anything other than poles. This is not the kind of thing one has for mobile telephones; they are straightforward wooden poles with the wires on top. I recognise what has been said about the need to site these sensitively, because one is talking about sensitive areas.
I totally admire the sincerity of the noble Lord, Lord Judd, on this. He feels very strongly about it. The noble Lord, Lord Adonis, read a bit of a passage from the conclusions of the meeting with the national parks and others, which was held under my noble friend’s chairmanship on 1 March. He quoted the first sentence of the paragraph headed:
“Working together on the deployment of superfast broadband”.
It states:
“Ed Vaizey emphasised that the clause is not about stigmatising National Parks and AONBs as obstacles”.
That is absolutely right. He then went on to the next paragraph, but it is worth reading the words that come between because I think that to some extent they answer the question of the noble Lord, Lord Judd, as to why we have the clause at all. It states that Mr Vaizey said:
“Government recognises the important work that they”—
the national parks—
“already do in encouraging broadband deployment. However, we need to find a way forward to encourage investment in broadband and provide the certainty we need that will ensure the public money being used to support Broadband is not tied up with bureaucracy”.
Lord Judd
I wonder whether the noble Lord, who is a good friend of many years’ standing, might just reconsider the impression he is giving that it is a question of the practical needs of the nation against bureaucracy. I do not believe that that is the situation at all. Of course there are practical needs of the nation, and in this sense I declare an interest, as I have done before in our deliberations: I live in a national park and I want good broadband—of course that is true. Having said that, what we have had in the past is the paramount consideration of the unique role of the past. Regarding what is taking up time—and I again come back to the point which my noble friend has so convincingly made ever since we started deliberation on this Bill—it is precious difficult to find any evidence that there has ever been unnecessary delay or a hold-up of the kind described. In fact, I would suggest that there is no evidence that this is out of kilter with what happens anywhere else.
It seems to me that we want to ensure that, notwithstanding this need to take seriously the issue of broadband for the sake of a strong economy, we do not push to one side this paramount concern that we have had in the past. I do not believe that it is impossible to reconcile the two, but I think that it has to be argued very hard, and on occasion it will need a lot of serious deliberation. I do not think that it is just a straightforward administrative point. From this standpoint, it is not just a bureaucratic delay but a battle of priorities.
Lord Jenkin of Roding
I was happy to give way to the noble Lord and he has confirmed what I have always regarded as one of the most heartening aspects of this whole question: the universal desire to make sure that broadband reaches even the most remote rural areas so that they can participate in the modern economy. That is hugely important. It is absolutely right that it is a function of Parliament, and perhaps of this House in particular, to ensure that there are proper safeguards and controls and that AONBs are properly protected. The noble Lord, Lord Judd, talked about the unique value of these national parks. It is a question of finding a balance between those two.
I believe that this clause is right, and it would be a pity if the noble Lord were to press his amendment—I am not sure whether he will—and if it were carried. We have had a good discussion. The amount of care that my noble friend has taken and the number of meetings that she has convened and chaired herself have been extremely helpful in getting people to understand what is involved in this—and that certainly applies to me. I hope that we will resist the amendment of the noble Lord, Lord Judd, while at the same time recognising his passion for defending his beloved national parks.
Lord Adonis
My Lords, I agree with the very last words of the noble Lord, Lord Jenkin. I have huge admiration for my noble friend Lord Judd, but even he would accept that they are not his national parks but the nation’s parks. That is why the concerns that have been raised this afternoon are so significant. They are held in trust for the nation, and we want to see that their beauty is preserved and enhanced for subsequent generations so that all the good work done by my noble friend is not wasted in the years ahead.
Baroness Hanham
My Lords, nobody in this House would disagree with the last remarks of the noble Lord, Lord Adonis. We all have an interest and are all convinced that we want to keep hold of the beauty of the national parks and preserve them from totally inappropriate infrastructure. The noble Lord, Lord Judd, rather suggested that what I was saying was mere words. I hope that noble Lords will take it a step beyond that. In fact, mere words can be made to translate intention into real life. The scrutiny that this House has given this clause is invaluable because it will be exactly and precisely recorded how the broadband operators are going to work and how everybody is going to co-operate. The reasoning behind the clause will be made clear.
The noble Lord, Lord Judd, kept saying, “Why is this clause necessary at all?”. When we started this afternoon, I gave a rather truncated version of why the clause is necessary. It will make sure that the providers know how long this whole process will take. Everybody wants this completed as soon as possible. If there are problems at any stage that hold that up and that cannot be dealt with by the code of practice, the consultations or the discussions between all the parties, at the end of the day the operators will know that they can proceed—although it will probably be over everybody’s dead body. We believe that that is important. Goodness knows, we all know of many projects that get held up because people disagree and nobody will come to a conclusion, but this will ensure that there is a conclusion and that the process can proceed. Again, I expect there to be a hold-up in a very limited number of cases but, should those cases arise, these provisions will be helpful for carrying on and ensuring that we deliver broadband as quickly as we possibly can.
It may be of interest to noble Lords to know that for the first time Ofcom has published something called the European Broadband Scorecard. I am sure that noble Lords have all lit on this as something which has the lightness of touch that they want to read at night as they go to bed. It is intended to allow the Government to measure progress towards their ambition. The scorecard currently shows that the United Kingdom is performing well among the major European economies. We currently benefit from low prices and a high degree of competition in the broadband market, and so far the UK has the best deals available for consumers across a selection of pricing bundles in the major European economies. On superfast broadband coverage, this country currently ranks in third place behind Germany and Spain. Clause 8 is intended to help to improve on that position by making sure that we achieve our goals by 2015.
We recognise that more rural and remote areas, including protected areas, are where an infrastructure upgrade is needed the most. We also recognise that they are some of the areas in the country where there is most sensitivity. However, we do not want those rural areas to be left behind.
The national parks and areas of outstanding natural beauty have been key partners in the rollout of broadband and we very much welcome their involvement, their commitment to the process and their conclusion that the first amendment I moved, in particular, was satisfactory and solved their particular problems.
Things are already happening. Connecting Cumbria is a partnership which has brought together a range of partners who are already working together and improving the broadband process. When Ed Vaizey, the Minister for Culture, Communications and Creative Industries, and I met with representatives from the national parks and areas of outstanding natural beauty, he confirmed—and I confirm again what I said in relation to the previous amendment—his intention to continue working closely and having regular meetings with them throughout the deployment of superfast broadband.
The Government remain convinced that the natural environment and landscape is of vital importance. That is why the code of best siting practice for operators and planning authorities will have input from the national parks. That is why the duty that we are adding to promote economic growth sits alongside the other duties, including,
“the need to protect the environment and, in particular, to conserve the natural beauty and amenity of the countryside”.
That is why “environmental sustainability” is a condition of the Broadband Delivery UK contracts.
The rollout of superfast broadband is of national importance because of the contribution that it can make to GDP growth, apart from anything else. It is, however, an infrastructure that is built locally. Local authorities know their areas and that is why the Government have given them a central role in all this. They are in charge of the Broadband Delivery UK contracts in their areas and will be able to set their own conditions on those contracts. For example—and here I underline the point made by the noble Lord, Lord Adonis—if they want to, they can specify in the contracts that in certain areas cables must be underground. They can also specify requirements in respect of the visual impact of installations. This can include compliance with the code of best siting practice, when it has been agreed, which it is hoped will be in May.
A number of questions have been raised as to why, given the excellent work under way from the national parks and areas of outstanding natural beauty, this clause is necessary. I hope that I gave the answer to that in my opening response. It is crucial not only that we achieve value for money from the investment that we make but that we get speed broadband developed as quickly as we possibly can.
It is important to make the point that we are not suggesting that without this clause applications for cabinets or poles will be turned down. We recognise that the vast majority of applications for telecoms equipment have been accepted to date and that the national parks and areas of outstanding natural beauty are extremely keen to work with us on broadband coverage. I have given the reasons for this clause twice now, so I will not go through them again.
It is also about providing local authorities with a choice of deployment options. The relaxation of the restriction on new overhead lines does not mean that it will become the default deployment option. Perhaps I may also make it clear, for the avoidance of doubt, that the intention is not to use the Clause 8 power to remove prior approval requirements for mobile masts. This measure is being introduced to provide flexibility and an additional deployment option to enable superfast broadband to be deployed in the more commercially challenging parts of the UK.
We have had an excellent discussion on this clause. We have spent quite a lot of time on it in this House and I do not regret that at all. At the end of the day—and I hope at the end of today—we will all have provided answers to some of the many questions that have been raised. I hope that, as a result of what we have done in the House today and the work that has been undertaken, we can be sure that superfast broadband will be rolled out as quickly as possible. With that, I hope that the noble Lord, Lord Judd, will feel satisfied enough to be able to withdraw his amendment.
Lord Judd
My Lords, I thank all those who have participated in the debate on the amendment, not least the Minister for her characteristically full and sensitive reply. In our deliberations today, she has drawn the attention of the House on more than one occasion to meetings with the English National Park Authorities Association and has sought to reassure the House that its concerns have been met. Of course, the ENPAA is firmly on record that it would like the clause removed. Therefore, the Minister has not met that particular concern. To her credit, she has not attempted to claim that.
This has been an important debate because, listening carefully to the Minister and to the noble Lord, Lord Jenkin of Roding, with his tremendous commitment to the economic success of the British economy and the contribution by an efficient energy sector to that success, it has become clear to me what I have always worried about. In this game, we can have all the reassurances and all the arrangements that we like as to what ideally should happen, but it must be firmly understood that going ahead with projects, in the end, prevails. That is where I get off the bus. I take second place to nobody in wanting a strong economy, not as an end in itself but in the interests and for the well-being of the British people. I am convinced that the parks, the areas of outstanding natural beauty and, indeed, much of our countryside make an unrivalled contribution to the well-being of the British people. I do not want to fudge this. There will be moments when the interests of that wider well-being—measured not just in cash terms, in financial terms, but in the richer enjoyment of life and the fulfilment of potential—will need to take precedence if we want a civilised society in which to live. That is the whole point. The Government do not share that view because they believe that in the end the financial considerations of the economy and the rest must at all costs take precedence. That is probably why I am on this side of the House and the noble Baroness is on that side of the House. That is an honest position. I do not take a totally materialist view of the well-being of the nation.
I have listened to the arguments put by the Minister and others. I have also, because I have been here a long time now, listened to the atmosphere conveyed by words—if you can listen to an atmosphere; I think that noble Lords will know what I mean—and at this stage I have to say that I see a lawyers’ paradise ahead and some very tough battles ahead for those who share my perception of what our civilisation and society should be. Just at this moment, we will have to make good with the assurances that the Minister has given. I genuinely hope—I am not being in any way sarcastic—that she will go to her grave, a long time hence, convinced that all she said is being fulfilled in the spirit and not just the detail. I hope that one day she will come to share my view of what is the well-being of the British people and what hard decisions may be necessary in that context. However, at this stage, I seek leave to withdraw the amendment.
Lord Shipley
“Definition of indebtedness
(1) The Localism Act 2011 is amended as follows.
(2) For section 171 substitute—
“171 Definition of indebtedness
(1) A local authority shall determine and keep under review the amount of housing debt held by that authority.
(2) A determination under this section must have regard to the duty to determine an affordable borrowing limit under section 3 of the Local Government Act 2003 (duty to determine affordable borrowing limit).
(3) A determination under this section must have regard to any guidance issued or approved by the Secretary of State and this may include provision requiring a person making a determination under subsection (1) or (2) to have regard to one or more specified codes of practice, whether issued by the Secretary of State or another.
(4) A local housing authority may not hold debt in contravention of a determination under this section.
(5) In this section “housing debt”, in relation to a local housing authority, means debt—
(a) which is held by the authority in connection with the exercises of its functions relating to houses and other property within its housing revenue account, and(b) interest and other charges in respect of which are required to be carried to the debit of that account.””
Lord Shipley
My Lords, the amendment would help to solve three problems: the urgent need for more social housing; the lack of growth in the economy; and the need to boost the construction industry. It is supported by a number of organisations: the Local Government Association, of which I declare my vice-presidency, Shelter, the Home Builders Federation, the Federation of Master Builders, the Chartered Institute of Housing, the National Housing Federation, London Councils and, crucially, the National Federation of Arms-Length Management Organisations, ALMOs. All urge a relaxation on borrowing by local authorities to enable them to build up to 60,000 more homes over five years.
Last year saw the lowest house completion rate since 1923. The Government urgently need to get more social homes built and there should be absolutely no reluctance to build them. The shortage is now being exacerbated by the underoccupancy or bedroom tax. Many people on low incomes want to move to a council home with fewer bedrooms but too many are unable to do so because the homes do not exist. The numbers on housing waiting lists, the rising demand for temporary accommodation and high rents in the private sector all point to the social and economic benefit of building more homes at below-market levels. This amendment would help to build the homes that people want to move into.
The question is whether it is affordable for local government. Councils have the capacity to build more homes, given that council housing is now self-financing. They could raise £7 billion. This could be done if the Government removed the borrowing cap on housing revenue accounts, relying instead on a prudential borrowing code to guarantee that only sustainable investment gets the go ahead. Many councils have successfully used prudential borrowing and have shown that they can manage such borrowing without risk. The Local Government Act 2003 already empowers the Secretary of State to cap any local authority which undertakes risky borrowing.
I understand the need for the Government to be careful about public borrowing levels. However, relaxing the housing borrowing cap need not be counted as public sector borrowing any longer. The UK uses a much wider measure of public debt than other countries. Council housing is a trading activity and international regulations already permit this to be discounted from government borrowing levels, although unfortunately the UK does not currently adopt such an approach and I remain puzzled as to why it does not. Council housing has been self-financing since April last year, and that is welcomed. The average debt on a home is just over £17,000. There is clearly scope for additional borrowing against the asset represented by the existing housing stock.
This is an opportune time for the Government, with the support and input of partners such as CIPFA and the Local Government Association, to produce a new, additional, prudential borrowing code, focused on borrowing undertaken specifically through the housing revenue account. The prudential code framework is a successful model that has worked well and supported councils to manage their borrowing sensibly. A similar model alongside strong backstop provisions already in legislation—the 2003 Act—would be an effective safeguard on borrowing through the housing revenue account.
I spoke on this matter in Committee and this new clause differs slightly from that tabled in Committee to emphasise that local authorities must have regard to government guidance such as a new prudential borrowing code. Ministers raised concerns in Committee that removing the housing borrowing cap could jeopardise the Government’s deficit reduction programme. This amended new clause, alongside a new, tailored prudential borrowing code, discussed by providers and authorised by HM Treasury, would offer a compromise approach to the Government that could address the concerns of Ministers.
Advice has been received that there would be no adverse reaction from the capital markets. This is because the increase in borrowing would be comparatively low and, in any case, the sums involved fall well below the size of the OBR’s forecasting errors on local government debt. This amendment offers a major opportunity to build more homes, to cut waiting lists, to get builders building and to drive growth. I beg to move.
Lord Jenkin of Roding
My Lords, I support the amendment moved by the noble Lord, Lord Shipley, to which I have added my name. I imagine that my noble friend on the Front Bench will have seen the letter published in the Financial Times this morning under the heading, “Give councils freedom to build homes”. In addition to the list of organisations which the noble Lord, Lord Shipley, quoted at the beginning of his speech, this letter is signed by 13 separate organisations, which one might say cover the whole field of housing all the way from the Home Builders Federation to Shelter, and including, as just mentioned by the noble Lord, Lord Shipley, the National Federation of ALMOs—arm’s-length management organisations. They make this important point in the letter:
“Investing in housing not only helps tackle the housing crisis, which requires us to double the number of national homes and build 249,000 homes in London alone by 2020, but also stimulates economic growth and creates jobs. Building 60,000 homes would add 0.6 per cent to gross domestic product and create 19,200 jobs. For every £1 invested by the public sector in construction, 56p returns to the exchequer”.
I find the arguments in favour of modifying and lifting the housing cap really quite overwhelming. I recognise that my noble friend on the Front Bench has very little option but to defend the existing policy and I do not blame her for that—she is a loyal member of the coalition and that is exactly what one would expect. I therefore address my remarks to the Chancellor of the Exchequer. It will rest with him, in his Budget in a few days’ time, to convince the country that he really has a strategy for growth as well as a strategy for cutting the deficit and, eventually, reducing the debt. I cannot think of any better way for him to convince the country, and large numbers of people who are currently looking for housing of various sorts—not just affordable housing but housing they wish they could find if only it was available—that this strategy actually does mean benefits for the country. It would be something that would considerably lift the spirits of all those who are deeply concerned, as I am, about the level pattern of GDP under the present circumstances. It is a very uncomfortable position for a developed country to be in. One can understand why we have got here but, as well as reducing the deficit, we must attain a proper strategy for growth. I am convinced that my right honourable friend the Chancellor of the Exchequer accepts that.
Many policies—I will not weary the House with reciting them all—have been introduced with the objective of trying to restore growth to the economy, but here is one which evidence shows, really conclusively, could have a really quite dramatic effect on what is a hugely important area of our national life, namely the provision of houses. The building of houses has declined substantially over recent years. Although, as my noble friend has pointed out, council housing is now self-financing, the fact of the matter is that councils have huge resources but are not entitled to borrow against them, even though they would of course be subject to the general restrictions on borrowing that apply to all of the public sector—this is a special restriction that applies to local authorities and housing. I cannot see that it is justified and issue a plea to my right honourable friend at the other end of the Palace to please look at this extremely carefully. It would be a valuable addition to his armoury and would go quite a long way to convincing the country that he is genuine about searching for growth.
Lord Best
My Lords, I rise to give fulsome support to this amendment. It addresses an issue which is high on the priority list of the Local Government Association, and I declare my interest as its president. I congratulate the noble Lord, Lord Jenkin of Roding, on those remarks, which will probably have more weight than anything I say, but perhaps I could add a little elaboration to the excellent points already made.
During the passage of this Growth and Infrastructure Bill, noble Lords from all parts of the House have noted that a key element in the growth agenda is the necessity to reduce the housing deficit—the acute and growing shortage of the homes that we need—and as in all previous recessions, to use housebuilding as a key engine for economic recovery. If we returned to housing output levels of just a few years ago—even then we were not building enough—we would add 1% to GDP. That is enough to lift the country above the threshold for an officially defined recession. That is the reason why the backing in the Financial Times today came not just from the bodies representing housing providers, but the CBI and representatives of British business and industry.
At present, there are few levers to pull to get housebuilding going again. Another part of this Bill is based on the hope that allowing housebuilders to cut back on their obligations to provide affordable housing will persuade them to start work on stalled sites. I hope that that part of the Bill, following our earlier deliberations, and the Minister’s helpful clarification of the Government’s intentions, will prove fit for purpose. However, it seems unlikely to make a huge difference. It is, of course, about less not more affordable housing—fewer homes at prices or rents that the next generation can afford.
This amendment, in the names of the noble Lords, Lord Shipley, Lord Tope, Lord Jenkin of Roding and myself, goes for a bigger prize—a real opportunity to get a lot of homes built for those on more modest incomes, and almost miraculously, without recourse to large amounts of public subsidy. The amendment would allow local authorities, within constraints required by the Secretary of State, to borrow prudentially and to use the security of their housing assets. Thereby, they will make a significant local contribution to meeting housing needs and boosting the output of the construction industry.
Not so very long ago, councils were building 200,000 homes in a single year. By 1990, the annual output was down to 14,000 new homes in 1990. Today, it has dropped to virtually zero. In London, for example, just 80 new homes were built by local authorities in the years 2003 to 2010. The Government’s admirable self-financing housing revenue account reforms should now make possible a programme of an average of 5,000 new homes, from councils, for each of the next five years. This is a good start, but local authorities have the capacity to do far better.
Many councils have sites—plots of vacant land, redundant council buildings and all those unsightly garages on estates that can be demolished. They now need the opportunity to borrow and repay from rental income, and indeed to use cross-subsidy from house sales in mixed tenure developments to boost affordable housing numbers. Very often, they would achieve these results through working in partnership with a housing association or a private sector builder. What they need is the current artificial constraints on their borrowing powers for housing purposes to be lifted.
The Chartered Institute of Housing, with the Local Government Association and others, set out the case in a report Let’s Get Building: The Case for Local Authority Investment in Rented Homes to Help Drive Economic Growth, by John Perry. This shows that another 60,000 homes would be built over the next few years if the lending cap was lifted. This represents an addition of 10% on top of the private sector’s efforts and the important work of housing associations, and that would make a real difference.
Why would the Government not wish to see this modest extension of local freedoms taken forward at a time when there are so very few other ways of stimulating growth and tackling the backlog of unmet housing need? The answer is that the extra borrowing would add to the total UK public sector debt. However, since this borrowing can be comfortably repaid, it does not add to the structural deficit. Also, extra taxes, benefit savings and reduced expenditure on temporary accommodation, et al, would immediately return much of the extra spending. As London Councils and CIPFA have pointed out, the borrowing caps are unnecessary given that councils are not subject to caps on their non-housing borrowing.
Moreover, there is an anomaly here, which the noble Lord, Lord Shipley, has pointed out. In the other countries of Europe, this kind of borrowing by the municipalities is counted as trading and falls outside the definition of public expenditure used by the EU, the IMF and the OECD. By inventing borrowing rules that are unique to the UK, we are tying one hand behind our backs, as Professor Steve Wilcox of York University, the real expert in this field, has been pointing out for many years.
I understand the dilemma facing the Treasury. The problem is that raising the cap or changing the definition used in this country to mirror that elsewhere could send out the wrong signal. Even if it is entirely justified and sensible, the impression could be given that the UK is taking a more relaxed view of borrowing in the public sector. However, the sums involved are small. Council borrowing accounts for just over 6% of the total, and the estimated extra £7 billion that would be borrowed over five years, if this amendment was accepted, is a small part of local government borrowing. Managing the presentation of this change should surely be possible.
Turning to housing associations as the key providers of affordable homes has worked well but has relied on them borrowing heavily as grant levels have been cut back. Many will run out of borrowing capacity in about two years’ time and many of these so-called registered providers will not then be in a position to keep up their current modest but important level of development. We are going to need to bring on stream another source of investment in rented affordable housing. Fortunately, just such a source of investment is at hand.
This is a carefully calibrated amendment that enables the Secretary of State to be cautious in raising the cap for each local authority’s housing investment as he so determines. But it opens up the possibility of a real opportunity to get some significant growth going of the most positive sort, boosting the economy by some £20 billion in return for borrowing £7 billion, without the need for subsidy, raising taxes or burdening the next generation. I believe that the time has come for the benefits that this amendment could undoubtedly achieve.
Lord Tope
My Lords, my name is also on this amendment, which was so ably moved by my noble friend Lord Shipley and spoken to very eloquently and powerfully by the noble Lords, Lord Jenkin of Roding and Lord Best. That leaves little more to be said other than to repeat what has been said, and I shall try to refrain from doing too much of that.
The noble Lord, Lord Jenkin, referred to the letter in the Financial Times today. I have been able to supply the Minister with a copy of that letter during this debate. I think it is noteworthy to list the organisations that have signed that letter. Reference has been made to there being quite a number, but it would be useful to have the signatories on record. They are: London Councils, which represents all 32 London boroughs and the City of London; the British Property Federation; the Chartered Institute of Housing; the Home Builders Federation; the Local Government Association; London First; the Federation of Master Builders; the National Housing Federation; the New Local Government Network; the Royal Town Planning Institute; Shelter; and the Association of Retained Council Housing.
I read that out, deliberately, to get it on record and to show what a wide range of support the amendment has from local government, planning, and the housing sector. It is hard to think immediately of an appropriate organisation that has not signed the letter. There is now overwhelming support for the lifting of the borrowing cap. As the noble Lord, Lord Jenkin, said, there are overwhelming reasons for doing so and it is hard to see why we should still be resisting it. As he and I recognise, the Minister who has the misfortune to have to reply to this debate is not the person who will be in a position to do anything about this. We all recognise that we are addressing our remarks, not to the Minister who will reply in a few minutes, but to the Chancellor of the Exchequer who has a speech to make next week. He must urgently recognise this need. The noble Lord, Lord Best, has referred to the message he is concerned about sending out. The message the Government want to send out, which is shared on all sides of this House, is that there is an urgent need to get building. That is the important message from this debate. The Bill must recognise the need for more housing. It must also recognise the need for growth which is in the title of the Bill and which many of us feel the Bill is not yet doing enough to achieve.
We therefore urge the Chancellor, through the Minister who will reply shortly, seriously to consider lifting the cap or, at the very least, sending a clear and strong message that that is the Government’s intention. Reference has already been made to the international consideration that the United Kingdom is the only country in the EU not to use the internationally recognised rules. If we were to do so, it would have very little effect in terms of the message to which the noble Lord, Lord Best, referred. I understand that, standing on this side of the Chamber, praying in aid of the European Union is not always to my advantage, but on this occasion the Government should give serious consideration to that. I hope the Minister will surprise us all, stand up and say that the Government are now ready and able to accept the amendment and that the cap will be raised in the way suggested. If that does not happen today, I hope we will see a more positive move in a few days’ time in another place. If that cannot happen now—I would need to understand in the next week or two why it cannot happen now—will the Government at least reassess the borrowing ability under the current cap? Will they speed up consideration of the consultation on the use of other means, such as using local government pension funds?
The Government want to send a message that they are serious about housebuilding. They also want building to start happening and to start getting building completions. If that is to be achieved in the period of office of the current Government, it needs to be happening this year. It is urgent. The amendment proposes an internationally recognised way of achieving that. I hope the Minister can give us some indication of support and that next week we will get a better and clearer indication from the other place.
Lord Smith of Leigh
My Lords, I support this amendment and congratulate the four noble Lords who put their names to it on their contribution. I declare an interest as vice-president of the LGA.
It is difficult to find much more to say, but I want to remind noble Lords of what has been said. The noble Lord, Lord Jenkin, made the point that this is important for its economic impact. As it concerns housebuilding, 92p in every £1 is spent within the UK, making it a very effective way of recycling money within the British economy. It has a strong multiplier effect. This goes to the heart of what the Bill is about. The provision would have a great social impact, because, as noble Lords have commented, we have not produced enough social housing in this country for many years now, with great shortages across the country. We need to do more on that. This provision would achieve it.
The financial arguments, too, are strong, because the provision would be almost cost free for the Government. They would not be committing any tax revenue, but it would impact on deficit reduction. Not only would it produce the tax revenue that the noble Lord, Lord Jenkin, mentioned but it would reduce housing benefit payments, because, as people moved into social housing rather than the private sector, housing benefit payments would go down and fewer people would be stuck in temporary accommodation and so on.
The noble Lord, Lord Shipley, mentioned the bedroom tax. He is absolutely right that, in many parts of the country, the mix of housing is not right to meet the problems addressed by the tax. There will be pressure to build one and two-bedroom properties to do that. However, the bedroom tax will have a greater impact than that. It will have a financial impact on the HRAs of many authorities as people choose not to pay. In my own authority, of the 4,500 households which will have problems with the bedroom tax, more than 550 are in properties on which we have spent a considerable amount of money adapting to the needs of some disabilities. If those people have to move, we reckon that it will cost us more than £1.5 million simply to place them in a smaller property that meets the needs of their disability. Within the pressures on housing revenue accounts, the most flexible side will be new capital builds. Rather than building new houses, we might have to spend the money on adapting properties.
If we do not accept the amendment, or something similar, what will happen to social housing during the next few years? The noble Lord, Lord Tope, read out a list of organisations supporting the amendment, but the key thing is not the presence on it of the usual suspects from the local authority world or the housebuilding world, of whom you might say, “Well, they would support this kind of amendment, wouldn’t they?” but the fact that the CBI has recognised that it would be one of the most effective ways of stimulating growth in an economy which really needs it. That should give it a lot more weight.
I hope that the Government will consider this very carefully as a way forward. If they do not, I hope that my noble friends on the Front Bench will adopt it as a really good way of producing growth.
Lord McKenzie of Luton
My Lords, we return to a local authority’s freedom to borrow for the purposes of its housing revenue account, an issue that was spoken to powerfully by the noble Lords, Lord Shipley, Lord Tope and Lord Jenkin of Roding, my noble friend Lord Smith and, of course, the noble Lord, Lord Best.
We have by any measure what we must call a housing crisis in the UK. According to the Government’s own figures, the growth in households in England is expected to mean an additional 232,000 households per year for the next 20 years. Last year, 2011-12, there were just 118,000 completions, which is 31% below the peak under the previous Labour Government. Thus completions are woefully short of coping with new households, let alone the backlog, the pent-up need.
We should acknowledge that the inadequacy of new provision is not confined to this Government, but matters seem to be getting worse. Last year, there was a decrease in the number of affordable homes created compared to the previous year, a pattern replicated in the decrease in the number of affordable homes provided for social rent.
These issues are of special importance at this juncture, because the need for new homes for individuals and families, so that they can have a decent life, is matched by the need to inject some economic stimulus which will give a spur to growth and help employment. As pretty much every noble Lord who has spoken has said, we need more homes, to buy and to rent, we need more jobs, and we certainly need more growth. Rather than imposing the draconian bedroom tax, one way of dealing with underoccupation is, as my noble friend Lord Smith said, to build more homes.
The availability of finance is obviously key. We have seen a plethora of initiatives from this coalition Government but their early decision to chop some £4 billion of funding for affordable homes has undermined their efforts to make progress. Switching to an intermediate rent model at a time when housing benefit support is under attack has not improved the situation. The Chartered Institute of Housing, Shelter and the National Housing Federation provide regular updates on coalition Government progress and their November 2012 report states:
“After two-and-a-half-years, it is extremely worrying that house building remains so low and that the Government’s record warrants no better verdict than ‘no progress’ towards improving the dire state of housing supply”.
We need to look at how this failure can be addressed on a comprehensive basis, and that is what we as a party are engaged upon. Our deliberations and policy conclusions will obviously be announced in due course.
What of the role of local authorities? It is more than 20 years since local authorities were able to make any significant contribution to new build. Where small progress has been made in recent years it is Labour councils which are leading the charge. We should not overlook the very substantial improvement to the quality of local authority housing stock over the past decade. However, if we believe in localism we must believe in the role of local authorities in addressing the housing needs of their areas as enablers and direct providers.
I acknowledge, as have other noble Lords, the role that local authorities have played in being sensible about prudential borrowing arrangements. The CLG Select Committee produced a focused report on the financing of new housing supply in April 2012 which included a chapter on the role of local authorities. This report had a range of recommendations including the lifting of the cap suggested in this amendment. The Government have—in a sense—already facilitated this by completing the reforms to the housing revenue account system promulgated under the previous Government. The report’s other recommendations covered the sharing and pooling of borrowing headroom, a changed role for ALMOs, a change in the classification of debt, looking to the bond markets as an alternative source of funding for the Public Works Loan Board, doing more to release land and ensuring like-for- like replacement of houses under the right-to-buy provision. We should—and are—looking at these issues comprehensively rather than in the piecemeal fashion suggested in this amendment.
Perhaps the Minister could make it clear where the coalition Government now stand on each of those issues raised by the Select Committee. They set out their original position, but given what has happened to the lack of growth, they may have changed their stance. Like other noble Lords, we would happily support the Chancellor whenever he gets up to make his Budget speech if he sees this as a means of getting some growth.
We certainly see the opportunity for an expanded role for local authorities and the benefit of building on the changed arrangements for the housing revenue account which is the thrust of this amendment.
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have taken part in this debate. I can confirm that while certain matters have been addressed to my right honourable friend the Chancellor of the Exchequer in the other place, of course both my noble friend Lady Hanham and I will be consistent in the view which was expressed by the coalition Government that reducing the national deficit remains the priority. From that the Government cannot be deterred. I am sure the Chancellor, as he often does, will be following through Hansard the debates in which noble Lords have expressed their views.
Section 171 of the Localism Act 2011 provides powers to the Secretary of State to set a limit on the amount of housing debt each stock-holding local authority can hold. This was felt necessary because the self-financing settlement, successfully concluded in April 2012, gave local authority landlords direct control over a very large rental income stream and with it the potential to increase levels of borrowing beyond what we as a country can afford—indeed, far beyond what could be accommodated within the prudential code. I remind noble Lords that when the Local Government Act 2003, which introduced the prudential code, was enacted, local authorities did not have access to this extremely large income, which is now provided by self-financing. Several noble Lords, including the noble Lord, Lord Best, mentioned this scheme. This code has worked well but borrowing arising from self-financing must be affordable within national fiscal policies, which the prudential borrowing rules do not address.
Several mentions were made of housebuilding and new homes; the coalition Government remain committed to this objective. Noble Lords and others cite this amendment as a means to increase housebuilding. Let me assure noble Lords that the Government are committed to seeing an increase in housebuilding and have indeed made it easier for local authorities to build. Under self-financing we have given local authorities direct control over their rental income, some of which they may wish to invest in new homes. I remind noble Lords that the vast majority of council landlords—it is 139 out of 167, or more than 80%—have £2.8 billion of collective borrowing capacity within their settlement.
What is more, 157 authorities have taken up our offer to use additional right-to-buy receipts to deliver new homes needed in their areas, either themselves or by working with local housing associations. The noble Lord, Lord McKenzie, alluded to Labour leading the charge, to use his words, in housebuilding up and down the country. It is interesting to reflect on the 26 authorities which are delivering nearly 4,000 new homes with grant funding via the Homes and Communities Agency or the GLA. “Leading the charge” may be a slight exaggeration. If we look at those 26 authorities, three of them are Liberal Democrat and 11 are Conservative, with the remainder being Labour.
However, rather than getting into a political point here, the fact is that housebuilding is occurring. It is taking place within the limits which are being set by authorities of all political colours up and down the country. That remains reflective of the commitment that this Government have given. To put it in the wider context, in addition to that which we will deliver through the reinvigorated right to buy, 170,000 more affordable homes are being delivered between 2011 and 2015 with £19.5 billion of investment, over 75% of which is being provided by the private sector.
Several questions were raised and I will seek to answer at least some of them. Those which I do not answer, we shall of course seek to respond to in writing. Several noble Lords, including my noble friend Lord Shipley and the noble Lord, Lord Best, asked why the Government do not use the general government gross debt instead of the public sector net debt to account for housing debt—a move that would bring us into line with some of our European neighbours, as noble Lords pointed out. I remind noble Lords that the general government gross debt excludes the net debt provision of public corporations, which includes housing debt. The Government use public sector net debt as the key measure of debt because their view is that it is the best principled measure of government indebtedness. One reason for this is because the Government are generally likely to step in if public corporations cannot service their liabilities, so a focus on public sector net debt provides a fuller and more transparent picture of the Government’s total liabilities. If there are not controls over public corporations’ accrual of liabilities, it means that the Government do not have control over their contingent liabilities, which if called upon would impact on the deficit as well as on general government gross debt.
Perhaps I could pick up on a few additional points. I believe it was my noble friend Lord Shipley who referred to the impact on financial markets. The financial markets have a view on this; the Government’s view remains that we are determined to ensure that the housing debt remains affordable. The figure of £30 billion is one which is perceived and we certainly do not wish to see any rise in that figure. The noble Lord, Lord McKenzie, mentioned various schemes and the Select Committee. On the specific points that he made on them, I will respond to him in writing if I can.
Lord Shipley
My Lords, I am grateful for the unity of views across your Lordships’ House. I am very disappointed by the Minister’s response although I am aware that agreeing to this amendment is not actually within his gift today because it is a matter for the Treasury and, specifically, for the Chancellor. I hope, however, that the strength of feeling demonstrated today will be taken seriously by them.
The Minister talked about the importance of reducing the national deficit, and we can agree with that. The point is that housing revenue account borrowing, because it has been ring-fenced since April 2012, need not count as part of the national deficit. I find it strange that the Government can promote sales of owner-occupied housing, where the average debt is £111,000, but with local authority housing, which has an average debt of only £17,000, they deem borrowing against the asset of those houses to be a challenge to the national deficit. There does not seem to be any logic in the Government’s position. I make no apologies for saying so, because housing revenue accounts are now ring-fenced and should not count as public sector debt. If the Government have a concern about the borrowing plans of any local authority, they have the power now, under the Local Government Act 2003, to cap that authority. However, they should not cap an authority which can use the prudential borrowing powers effectively.
I am finding it very hard to understand what the disadvantage is of this amendment, but I am at least grateful to the Minister for having clearly spelt out the Government’s position. I know that discussions are going to continue on this matter outside your Lordships’ House, and I shall continue to press the case—I hope with the support of all sides of your Lordships’ House—for relaxing the housing borrowing cap for local authorities. In the mean time, I beg leave to withdraw the amendment.
“Controlling infrastructure: removal of redundant infrastructure
(1) This section applies to infrastructure on or under land—
(a) in a National Park or under the control of a National Park Authority or the Broads Authority or their successors in title; or(b) designated as an Area of Outstanding Natural Beauty.(2) It shall be the responsibility of the person, undertaking or authority who installed infrastructure to which this section applies to make arrangements for its removal in the event that it becomes redundant.”
Lord Judd
My Lords, I will be brief. We have been debating the importance of these new developments in the countryside in order that the economy will prosper. Technological development is sometimes faster than we believe or anticipate even now, and all sorts of changes can happen. It is entirely feasible that in quite a reasonably short period of time in historical terms, a lot of what we are talking about now will become obsolescent.
Who has the responsibility for putting the countryside back to how it was before we made special arrangements to breach our wider commitments? I hope that the Minister will have an opportunity to put forward how we can have watertight arrangements for ensuring that when projects of this kind are being costed by firms, the cost of removing the unsightly debris is part of their responsibility. One just thinks of the debris from the first industrial revolution, which despoiled vast areas of our countryside and indeed urban areas. Surely we have progressed. I would like to hear what the Minister has to say on this.
Baroness Hanham
My Lords, that was a very straightforward question from the noble Lord, and an understandable one in light of what we have been talking about: the new infrastructure. Perhaps I can give him a couple of very straightforward answers, because that is probably what he is looking for.
There are already provisions covering electronic communications infrastructure under Part 24 in the Town and Country Planning (General Permitted Development) Order. Where equipment has been installed using Part 24 permitted development rights, which I think is what we have been talking about, and the equipment is no longer needed, communications providers are required to remove it and to restore the land to its former condition or a condition acceptable to the local planning authority. Of course, national parks are their own planning authority. Failure to comply with a Part 24 condition would be a breach of planning control, and local planning authorities could use their enforcement powers to have the matter put right.
Where the equipment has been installed on private land, the Electronic Communications Code also provides for landowners to serve notices on communications providers requesting its removal. Paragraph 22 of the code specifically addresses what the noble Lord means by “redundant” equipment:
“where the operator has a right conferred by or in accordance with this code for the statutory purposes to keep electronic communications apparatus installed on, under or over any land, he is not entitled to keep that apparatus so installed if, at a time when the apparatus is not, or is no longer, used for the purposes of the operator’s network, there is no reasonable likelihood that it will be so used”.
In layman’s terms, that means that they are meant to clear it up if they do not need it any more. If the operator refuses to remove the equipment and the equipment is not lawfully on the land, the landowner is entitled to enforce its removal.
In respect of electricity underground cables and buried gas lines, it is generally more efficient and less environmentally damaging to leave any redundant equipment in place, but I presume that one must make sure that the land is returned as it would have been. In respect of overhead power lines, landowners can serve a notice under Schedule 4 to the Electricity Act 1989 to remove the equipment on their land, and the Secretary of State will consider each case on its merits.
I hope that that sufficiently reassures the noble Lord that there are provisions to ensure that what he fears might happen cannot happen and that they can be enforced. I hope that he will feel able to withdraw his amendment.
Lord Judd
My Lords, I thank the Minister for having said what she has said and getting it on the record. We shall need to monitor this extremely carefully. This could well be another of those cases where we just cheerfully hand on to future generations the costs of our immediate priorities. I am not so sure that that is always a very good idea or a very responsible way to behave. I wish that at every point we could bring home to those who are taking steps that inevitably detract from the qualitative value of the countryside that they have real financial responsibilities for putting right what they have put wrong. Perhaps at some stage, when it is clearer how things are developing, we will have to consider specific legislation in this regard. In the mean time, I thank the Minister and beg leave to withdraw the amendment.
Lord McKenzie of Luton
“Extension of economic development powers to Councils
In the Localism Act 2011, after section 16 insert— “16A Duty to report on proposals for the extension of devolved economic development powers to all local councils
(1) Within one year of the second round of bespoke “city deals” being completed, the Secretary of State must lay before Parliament a report setting out the government proposals, policies and timescales for the extension of devolved economic development powers to all local councils.
(2) The report must, in particular, fully set out—
(a) the case for making the “core package” of devolved powers achieved in the second round of bespoke “city deals” available to all councils to help boost growth; and(b) the timescales over which those proposals and policies are expected to take effect.(3) Where the Secretary of State has determined it not appropriate to extend devolutionary powers to all local councils, the report must, in particular, fully set out—
(a) why this has been determined as not appropriate;(b) include a resolution that sets out how the government intends to review this determination; and(c) the review of this determination must be laid before Parliament not later than one year following the laying of the original report.””
Lord McKenzie of Luton
My Lords, we had a short but harmonious debate on an equivalent amendment in Committee, which was moved by the noble Lord, Lord Jenkin of Roding, on behalf of himself and the noble Lord, Lord Tope.
In his response to the debate, the noble Lord, Lord Ahmad of Wimbledon, in expressing his agreement with the thrust of the amendment, said:
“I do not think for a moment that we are where we want to be with the city deals. This is an evolving issue”.—[Official Report, 30/1/13; col.1587.]
Of course, things have evolved further to that discussion with an announcement by the Deputy Prime Minister on 19 February of 20 more cities that were offered city deals.
We fully support the proposals of the city deals, but must express some concern that other areas risk losing out. We do not want to see two-speed regional growth with city deal areas motoring ahead and other regional cities or towns left behind. While we welcome the stated intent that the Government wish to move away from a London-centric approach, we do not want to see that replaced with a “some cities”-centric approach. It is essential that we develop a strategy that works for the whole country, rather than just part of it. We understand that the second wave of deals will enter staggered negotiations on devolved powers and funding, with the aim of these being concluded by the end of 2013. Of course, not everything can be accomplished at once, but there are recorded expressions of disquiet from some county council leaders that the impetus for negotiated deals outside urban areas is not strong.
Little in this Bill is actually focused on growth, but the prospects of greater devolution of power and responsibilities to more local leaders who are best placed to understand the economic opportunities and challenges they face is one means of addressing this omission. Adopting this new clause would require the Government to maintain momentum beyond the identified urban areas. It does not prescribe that all local councils must end up with the some deals, but they should all have the opportunity to be engaged. I beg to move.
Lord Ahmad of Wimbledon
My Lords, we discussed this issue very thoroughly in Committee, as the noble Lord, Lord McKenzie, said. I welcome the general support for the initiative. City deals are about bespoke solutions to unlocking local growth and trialling different and innovative approaches. They offer a real opportunity to drive growth across the country. The first eight cities have estimated that their deals will create 175,000 jobs over the next 20 years and 37,000 new apprenticeships.
Following the success of wave one, we opened up city deals to another 20 areas, to which the noble Lord, Lord McKenzie, has already alluded. They have submitted their initial proposals and we are working closely with these areas. However, it would not be appropriate or effective or represent value for money to roll these out to all local authorities in the same format. I have already said that these are bespoke solutions for each area.
Although city deals are not the solution everywhere, the Government recognise the importance of effective devolution. We have a strong record of commitment to a localist agenda and are working with authorities to provide the powers and support they need. Therefore, where it would make sense to make local models developed in city deals more widely available, as I have previously said, we will certainly do so.
We are giving local authorities much greater control over their own local budgets. An estimated 70% of the income will be raised locally, compared with 56% under the current formula grant system. From next April, councils will retain nearly £11 billion of business rates. This was recently initiated. I know that many noble Lords from across the Chamber have been involved in local government and that this is something for which, through their own experience in local government, they have campaigned long and hard. That is now happening. In addition, the Government intend to devolve a greater proportion of future growth-related spending based on the recommendations in my noble friend Lord Heseltine’s recent review.
Lord Shipley
My Lords, I have a question for the Minister about timing. There are three separate contributors to a policy that the amendment seeks to address. One is the report of my noble friend Lord Heseltine, to which we hope there will be a response quite soon. Separately, there is the request in this amendment that, within one year of the second round of city deals being completed, a report would be produced. That could take us through to the autumn of 2014. Then, quite separately, there was the Deputy Prime Minister’s commitment at the end of October, which I quoted in Committee, when he said of the second wave:
“while it’s too early to talk exactly about what a third Wave might look like, I very much see this as a step in a journey”.
We have all these things. It seems that there might be an opportunity for a round table discussion over the summer once some of the timing of some of these matters is a bit clearer.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply. We agree with the Government about the progress of city deals thus far. However, the amendment is about completing arrangements so that councils that feel left out at the moment can be reassured that a process is under way, a requirement on the Government to report back. It does not require the Government to produce exactly the same solution for every council; it recognises that there will not necessarily be arrangements for absolutely every council in the land. We are trying to ensure that councils that at the moment feel uneasy about the concentration on urban areas, and are feeling left out, are reassured. If the Deputy Prime Minister says that that is a step along the way, that is fine, but why not accept the amendment, which imposes an extra obligation on the Government to make sure that what has happened so far is just a step along the way?
Having heard the Minister’s reply, and not wishing to divide on an issue where we have some fundamental agreement about the core cities programme, I think the Government are unwise not to accept this fairly modest request for a further obligation to look across the piece. Accordingly, I would like to test the opinion of the House.
Baroness Byford
“Registration of town or village green: reduction of period under section 15(3)(c)
(1) Section 15 of the Commons Act 2006 (registration of greens) is amended as follows.
(2) In subsection (3), in paragraph (c), for the words from “the period” to the end of the paragraph substitute “the relevant period”.
(3) After that subsection insert—
“(3A) In subsection (3), “the relevant period” means—
(a) in the case of an application relating to land in England, the period of one year beginning with the cessation mentioned in subsection (3)(b);(b) in the case of an application relating to land in Wales, the period of two years beginning with that cessation.””
Baroness Byford
My Lords, I shall speak also to Amendment 40D standing in my name. I apologise for my voice, which is going. Amendment 40A introduces a new clause which amends the Commons Act 2006, reducing the time period from two years to one in cases where the application relates to land in England—that is, in proposed new subsection (3A)(a)—and, in relation to land in Wales, proposed new subsection (3A)(b) specifies,
“the period of two years beginning with that cessation”.
I remind the House that I am a member of the CLA. In its briefing, it considers that the two years proposed for England is too long a period. The briefing states that where people have genuine concerns—which I am sure they do,
“that they are being denied access to a site which they genuinely believe they are entitled to have registered as a village green or the basis on which they are accessing it has been changed, it need not take more than one year for the community to be galvanised into action, hold a local meeting, gather their evidence and make an application for a claim. A year is really quite a generous period of time”.
The briefing goes on to say:
“The proposal for the new map and statement procedure (clause 13) is going to involve wide publication of such a deposit including notification to parish councils and notification by email to any party having requested the registration authority to inform them of the deposit of such statements. So notification will to all intents be instantaneous”.
In Committee on 30 January this year, the Minister offered reassurance that,
“where a landowner statement is deposited with a commons registration authority, the authority will be required to publicise it”.—[Official Report, 30/1/13; col. 1602.]
My understanding is also that anyone interested in the notification can, if they give their e-mail details, have this information sent to them as soon as the declaration has been registered by the registration authority, with parish councils being notified in the same way. That being so, my amendment reduces the time limit from two years to one.
One difficulty is that if a landlord tries to sell some land to which there has been some element of public access for a period, the purchaser’s solicitors will be filled with trepidation about a potential claim coming for village green status. Generally they will insist on the use being stopped or made permissive, and on waiting two years to see whether a challenge is made before completing the purchase. This is unnecessary in the context of today’s modern communications. With further apologies for my voice, I beg to move.
Lord McKenzie of Luton
My Lords, briefly, we cannot support the amendment moved by the noble Baroness. It is a restriction on the registration of town and village greens, and we think that the balance is already moved in a restrictive direction by this Bill.
Lord Ahmad of Wimbledon
My Lords, I thank my noble friend for tabling the amendment and particularly for taking the time, despite her straining voice, to articulate the reasons behind it. I had hoped that the noble Lord, Lord McKenzie, on the Benches opposite might have shown some sensitivity in accepting her amendment. It now falls to me to reiterate the Government’s position.
The purpose of the amendment tabled by my noble friend is to reduce from two years to one year the “period of grace” within which a town or village green application can be made after the requisite 20 years of recreational use as of right has ceased. Currently Section 15(3) of the Commons Act 2006 allows a two-year period during which a greens application can be made after the end of a 20-year period of recreational use as of right. After such use has been challenged, it takes time for the local community to recognise that challenge and, if it wishes, to put together the information necessary to make an application. The key steps would be to seek out evidence in support of the application, to identify witnesses, to gather testimony and to collate and prepare evidence for submission.
My noble friend made important points about the impact of the current legislation on landowners. Her concerns are valid, and I agree that a period of a year is sufficient for users of land to gather the necessary information to make a greens application. A period of a year provides a better balance between the rights of landowners and those of recreational users of land. Therefore, I accept the amendment and I urge all noble Lords to support it.
The Government think that it is fair that those grace periods which have already started to run before commencement of the new clause should remain at two years, and we intend to include transitional savings provisions to this effect in the relevant commencement order.
Baroness Byford
My Lords, I thank my noble friend on the Front Bench. Clearly I am disappointed that the noble Lord, Lord McKenzie, did not feel able to support the amendment, but I am very grateful for the Minister’s support.
“(6A) Regulations may specify the minimum actions that the commons registration authority must carry out to bring the deposit of a statement under subsection (1) to the attention of persons likely to be affected.”
Lord Tope
My Lords, my noble friend Lord Greaves found today that he was unable to get to London and asked me to move his amendment, which with the leave of the House I rise to do. I shall endeavour to say roughly what my noble friend would have said, although not necessarily in the manner in which he would have said it.
This is an amendment to Clause 13, which inserts new Sections 15A and 15B into the Commons Act 2006. Their effect is to allow the owner of a piece of land that is not already registered as a town or village green to make a statement to the commons registration authority—a unitary or upper-tier council—which brings to an end any period during which persons have indulged as of right in lawful sports and pastimes on the land; that is, informal recreation, openly, without hindrance and without permission.
The result of making such a landowner statement is to bring to an end the right of anyone to make an application for registration of the land as a town or village green under Section 15 of the Commons Act 2006. However, under Section 15(3) of the Commons Act, there is a period of two years before that right comes to an end, in which such an application for registration as a green can still be made.
There was discussion in Committee on the question of how people would know that a landowner had made a statement under this new provision. Amendments were proposed by my noble friend Lord Greaves and the noble Lord, Lord McKenzie of Luton. In Committee, the Minister, the noble Baroness, Lady Hanham, made some very helpful commitments that,
“where a landowner statement is deposited with a commons registration authority, the authority will be required to publicise it”.—[Official Report, 30/1/13; col. 1602.]
The Minister assured the Committee that regulations will include this requirement but that specific publicity requirements are best set out in regulations rather than in the Bill. She added, equally helpfully:
“The regulations will require that commons registration authorities take appropriate steps to ensure that local people and other interested parties are made aware of the fact that a landowner statement has been deposited”.—[Official Report, 30/1/13; col. 1603.]
The purpose of this amendment today is to probe further the Government’s thinking on what are “appropriate steps”. In particular, will there be appropriate publicity in the local media serving the locality in which the land is situated, not just centrally in what might be a far-flung county authority—which might just be Lancashire? Will it include a physical notice on the land itself? Will it include notification of specialist organisations such as the Open Spaces Society and the Ramblers’ Association, as well as organisations representing landowners? I hope that the Minister can give these assurances today. I beg to move.
Lord McKenzie of Luton
My Lords, the noble Lord, Lord Tope, who seems overnight to have inherited the expertise of the noble Lord, Lord Greaves, in this area, pressed the point about assurances that we seek from Ministers. My recollection corresponds with that of the noble Lord—that in Committee we got assurances from the Minister about publicity that would be given to these registrations—and it would be helpful to have some further clarification on the lines proposed.
Lord Ahmad of Wimbledon
My Lords, I thank and of course commend my noble friend for his admirable performance in imitating the noble Lord, Lord Greaves, whose contributions we are missing immensely. I understand that he is snowed in, so our thoughts are with him. I hope that he has not been caught on the motorway.
I turn first to Amendment 40B and the questions asked about publicity arrangements. We have shared a draft of the regulations with the relevant parties, which include the Open Spaces Society and the Association of Commons Registration Authorities, and we are continuing to work with them. We are also grateful for their input to date.
In terms of notice requirements and regulations and the minimum actions required to publicise these particular issues and site notices, the details of notice requirements are currently being worked up with the relevant parties, including the Open Spaces Society and the Association of Commons Registration Authorities. The regulations will require that commons registration authorities take appropriate steps to ensure that local people and other interested parties are made aware of the fact that a landowner statement has been deposited. As a more general point, regarding the issue of the draft regulations being made available to noble Lords, we need to do some further work on them with relevant parties, including the Open Spaces Society and the Association of Commons Registration Authorities. I would prefer that the regulations are worked up further in conjunction with those people, with the relevant expertise, before they are discussed more widely.
Lord Tope
My Lords, I thank the Minister. I reassure the noble Lord, Lord McKenzie, that I most certainly have not acquired the expertise of my noble friend Lord Greaves overnight; indeed, I have not managed to acquire it since I learnt of this at lunchtime. I certainly claim no expertise whatever on the subject. I thank the Minister for his reply. Both I and my noble friend Lord Greaves will read it carefully. In the mean time, I beg leave to withdraw the amendment.
Lord Tope
My Lords, I rise once again to move on behalf of the noble Lord, Lord Greaves, Amendment 40C and to speak to the other amendments standing in his name in this group.
These are amendments to Clause 14 and Schedule 4, which amend the Commons Act 2006 by inserting a new Clause 15C and a new Schedule 1A. Their effect is to restrict the right of persons to apply to register land as a town or village green on the basis that it has been used by persons for at least 20 years as of right for lawful sports and pastimes—that is to say, informal recreation, openly, without hindrance and without permission.
The new provisions end the right to apply for registration if a trigger event occurs. These are basically of two kinds: first, the publication of an application for planning permission on the land, or a similar action such as an application for development consent; or the publication for consultation of a draft development plan document—that is, a document that is proposed to form part of the local development framework or “local plan”—or a draft neighbourhood plan. In this context we welcome government Amendments 42 to 45 on neighbourhood plans, which appear to deal with some of our concerns in relation to those plans.
The trigger events are set out in the schedule. However, new Section 15C(5)(a) gives the Secretary of State powers to, “specify … additional trigger … events” by order. The purpose of Amendment 40C, therefore, is to ask the Minister to specify why the Government think they need these powers and what these further trigger events might be, and what the Government have in mind to use this rather draconian power for.
The other amendments are intended to assist the Government in their stated wish to align the system for registering greens with the planning system in cases where there is a published proposal for development, either as a planning application or as a draft of part of a local plan. Unfortunately, the proposals in the Bill do not do this. The problem is that there are two separate and different systems. The system for registering greens, set out in the Commons Act 2006 and rooted in the common law, is based on the facts of the case—whether the land has been used by persons for at least 20 years as of right for lawful sports and pastimes. It is based on the facts of past use of land.
Decisions in the planning system are a matter of policy and opinion about the future use of land. It is difficult to reconcile the two—to align them—but not impossible. The way this Bill deals with the matter is not to align the two processes, but to suspend one of them—the right to apply to register a green—when a trigger event occurs under the planning system.
We accept that the Government believe that there is a problem of misuse of the system of greens registration by some people in order to try to stop development, and that there is a weight of opinion behind this view. In Committee we moved amendments to probe the extent of this and its necessity. Now we are proposing ways in which both rights can be aligned within one process—the planning process—giving the Government what they want while retaining the effective right of people to put forward a view that a piece of land is a green, and to have that properly considered as part of the planning process. The amendments we have put forward suggest ways of doing this and could be taken individually. They are not necessarily a package.
Amendment 41B is the simplest, and just seeks to incorporate within the system of development management the question of whether a piece of land is a town or village green under the criteria set out in Section 15 of the Commons Act. It simply says that, where such a representation is made as part of the development management process, this question is a material consideration. Of course, like any other such representation it may be accepted or rejected by the relevant decision-making authority. It should not slow down the process of making the decision in any significant way.
The first part of Amendment 45A says that where the trigger event is the publication of a draft development plan document, which includes a proposal for a piece of land that has not previously been in the public domain, the trigger event should not occur until three months following the date of that publication. This may occur, for instance, if a last-minute change is made to a draft development plan document covering land allocation, as a result of representations made as part of a previous round of consultation on that question, such as on a housing land availability study. It would still allow a green registration application to be made. The second part of Amendment 45A will in most cases be covered by the government Amendments 42 to 45, for which I have already thanked the Minister. However, we recognise that this may be a step too far for the Government. So Amendment 45B states that if representations are made to a local planning authority or a neighbourhood planning body, as part of the normal consultations on a local plan or a neighbourhood development plan, that a particular piece of land is a town or village green, the authority must consider them having regard to the criteria set out in Section 15 of the Commons Act.
Although the appropriate authority would not have the power to designate and register the land as a green, applying the same criteria in this way would indeed align the two processes, which is what Ministers promised that they wanted to do, whether or not a trigger event has occurred. If the planning authority considers that the land qualifies as a green it could of course then be referred on to the commons registration authority for it to consider in the normal way. We expect this would be in a small minority of cases. However, the time taken to produce local plans would mean there is time for this process to take place. We emphasise that this procedure would only apply in plan making, which inevitably takes years rather than weeks, and not in the case of planning applications and the like which should be dealt with speedily.
These amendments are put forward in a positive way, in an effort to reconcile—indeed to align—the planning and green registration systems. In the disappointing event that the Minister is unable to accept them today, perhaps he can answer the following questions. There are six. If the intention is to align the system, what consideration can the planning bodies give during the plan-making process to representations that a piece of land qualifies as a town or village green, either as part of the local plan process or a neighbourhood plan? Secondly, if a planning authority or neighbourhood planning body considers a piece of land to be a green on the basis of the criteria in Section 15 of the Commons Act, what action may it take to promote or pursue that view?
Thirdly, what precise action in the submission and consideration of an application for planning permission or development consent will constitute publication, and so constitute a trigger event? Fourthly, in the case of a draft development plan document, would the trigger event be the publication of a report to the local planning authority which included the details of the DPD; would it be the formal publication for consultation of the DPD following a council decision to publish a consultation; or when?
Fifthly, could the publication, for consultation or otherwise, of any prior reports intended to form part of the evidence base for a DPD but not forming a draft DPD as such, be the trigger event for those purposes? Lastly, can the question of whether a piece of land is a town or village green, having regard to the criteria set out in Section 15 of the Commons Act or otherwise, be a material consideration in the case of an application for planning permission or development consent?
I hope that the Minister will at least be able to provide clarity on those detailed but important questions. If he cannot do so today, perhaps we could return briefly to them at Third Reading, to allow him to do so. My noble friend Lord Greaves has promised me that, if that is the case, he will table only a simple amendment enabling those answers to be given. I beg to move.
Lord Best
My Lords, I urge caution about accepting the amendments tabled by the noble Lord, Lord Greaves. Any watering down of the Government’s proposals would be cause for concern. The Government’s propositions are supported by the Local Government Association, the National Housing Federation, Shelter, the Home Builders Federation, the British Property Federation, the Federation of Master Builders and, indeed, the Country Land and Business Association.
I mentioned during Committee the case of the 50-acre site on the east of York which, on the grounds that it had been used, without permission, for dog walking over the past 20 years was the subject of a village green proposal. The intention was simply to prevent, or, rather, to delay—as a 50-acre village green was never a realistic proposition—a much-needed mixed-tenure housing development by the Joseph Rowntree Foundation and its housing trust, of which I declare a past interest as its previous chief executive. The delays that then ensued, the legal fees and the staff time over several months were costly and wasteful. The objectors to the housing scheme—which, I am delighted to say, is now being built, and a wonderful development it is too—were simply taking advantage of well intended legislation that, sadly, lent itself to such abuse.
The Government’s intent, which, I believe, their proposals will achieve, is that false claims are swiftly revealed. It would lead to all genuine registrations receiving fair and robust consideration and maintain the primacy of the democratically elected local plan. I urge caution in accepting the amendments tabled by the noble Lord, Lord Greaves.
Lord McKenzie of Luton
My Lords, first, I say to the noble Lord, Lord Best, that we acknowledge that the system left itself open to abuse. The issue is whether what is before us produces the right balance. I say to the noble Lord, Lord Tope, who seems to be warming to his task in substituting for the noble Lord, Lord Greaves, that we might wish for many repeat performances—do not tell the noble Lord, Lord Greaves, that.
I do not propose to speak to Amendment 41A. Reviewing what we did in Committee on that, I think it was covered. As for Amendment 40C, I think that the noble Lord, Lord Greaves, has an appropriate probe there to understand the circumstances in which additional triggers or terminating events might be promulgated by the Secretary of State, although I note that there is a subsequent government amendment which would have that matter dealt with by the affirmative procedure. The noble Lord, Lord Greaves, has an ingenious formulation in “material consideration”. That is an interesting concept. I am not sure that I want to get into the detail of the six—or was it seven? —questions posed. I look forward to the Minister’s response.
Lord Ahmad of Wimbledon
My Lords, once again, I thank my noble friend for his sterling performance as my noble friend Lord Greaves. My noble friend Lord Tope has articulated eloquently the concerns that my noble friend wished to raise. I also thank the noble Lord, Lord McKenzie, for indicating that he will not press Amendment 41A, and note his comments.
Turning to Amendment 40C, one of four amendments tabled by my noble friend Lord Greaves, we have debated the order-making powers previously, and why they are required, so I will avoid going into too much detail. My noble friend Lady Hanham explained in Committee that the Government propose to bring other planning procedures within the scope of the reforms for registering greens: local development orders, neighbourhood development orders and Transport and Works Act orders. My noble friend also explained that we would consult on our proposals. We have also, as my noble friend said that we would, responded positively to the recommendation of the Delegated Powers and Regulatory Reform Committee that new Section 15C(5) should be subject to the affirmative procedure. Consequently, Parliament will have the opportunity to scrutinise any draft order proposed in the light of public consultation.
Furthermore, my noble friend Lady Hanham pointed out in Committee the need for additional terminating events to ensure that all outcomes in plan making are covered. We want to avoid the situation where an exclusion on applications to register land as a green fails to lift even when there is no longer an active development proposal. That would be contrary to our policy and unfair. Amendment 40C, tabled by my noble friend Lord Greaves, would stop such change from being made without requiring further primary legislation. That cannot be practicable.
I turn to the proposed new clause in Amendment 41B. I appreciate why my noble friend Lord Greaves wants to ensure that the potential value of land as a green will be considered as part of the planning process, but there is no need for the amendment to secure this intention. In considering an application for planning permission or for development consent, the recreational value of the land concerned is already capable of being a material consideration. Material considerations will relate to the development and use of land in the public interest.
I am sure that the House wants to move on, and I will turn specifically to answer at least some, if not all, of the questions raised by my noble friend Lord Tope. One question that he asked was, if a planning authority or neighbourhood planning authority feels that a land should be a green, what should it do? Where that is raised with a planning authority or the neighbourhood planning body, they should bear that in mind when considering a planning application or taking forward their draft plan. If they want the land to be kept open, they should not be supporting development on the land. If there is no development proposal, residents can also apply to register the land as a green.
My noble friend raised a couple of questions about trigger events. First, what would constitute a trigger event? Only the courts can give an authoritative interpretation of statute, but the intention in respect of the applications for planning permission and development consent is that a trigger point takes effect at whatever is the earliest of the required publication steps. The power in Clause 14(1)(3) could, if necessary, be used to make amendments to clarify when any of the trigger or terminating events are to be treated as having occurred. He also asked about trigger points arising in respect of draft development plan documents. For local plans the trigger point is when a draft plan is formally published by the local planning authority for consultation prior to being subject to an independent examination. The local community will then have an opportunity to make representations in support of or in opposition to proposals in the draft plan and to engage in the examination process.
Finally, a question was raised on the publication of any prior reports that are not a draft development plan and whether they could be a trigger event. The short answer is no. The trigger event refers only to the publication of development plan documents. The publication of anything that is not a development plan document would not constitute a trigger event. If there are a couple of areas that perhaps I have not answered in the detail that my noble friend asked for in representing my noble friend Lord Greaves I shall seek to clarify that before the next stage. However, on the basis of the assurances and responses I have given, I hope that my noble friend is prepared to withdraw his amendment.
Lord Tope
My Lords, I thank the Minister for that reply. I reassure the noble Lord, Lord Best, that it is not my noble friend’s wish to water down these provisions, and it is most certainly not my wish to do so. I am content with the provisions as they are. However, I think that my noble friend made clear that his intention was to try to find a way to align two different systems here, and he has gone into characteristic detail on how to try to do that. As he said in what he described as his “more than usually concise speech”, he was suggesting ways in which to achieve this. Both he and I will read with care what the Minister said. I am grateful to him for the answers that he has given thus far. In the mean time, I beg leave to withdraw the amendment.
Baroness Byford
Lord Ahmad of Wimbledon
“( ) In that Act of 2006, in section 59 (orders and regulations)—
(a) after subsection (3) insert—“(3A) A statutory instrument containing an order under section 15C(5) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.”, and(b) in subsection (4), after “subsection (3)” insert “or (3A)”.”
Lord Ahmad of Wimbledon
My Lords, I will speak to Amendments 41 to 45 to Clause 14 and also to Amendments 54 and 56 to 58 to Clause 31. These are government amendments in the name of my noble friend Lady Hanham. I will briefly set out their purpose, if I may.
The power in proposed new Section 15C(5) to be inserted into the Commons Act 2006 allows the Secretary of State to add, amend or omit trigger or terminating events in the new Schedule 1A to the Act. Amendment 41 would make this power subject to affirmative rather than negative procedure. This amendment implements in full a recommendation of the Delegated Powers and Regulatory Reform Committee. It means that Parliament will have the opportunity to debate any draft order, including the proposed order that my noble friend Lady Hanham referred to in Committee and on which we intend to consult.
Amendments 42 to 45 are minor technical amendments, concerning the text in Schedule 4 on the trigger events in relation to neighbourhood plan proposals. The amendments rectify an incorrect statutory reference and make a number of consequential changes to the wording to provide clarification. The intention regarding this trigger event is unchanged and is, as my noble friend Lady Hanham explained in Committee and was previously set out in Committee in the Commons, that the intended trigger point is the formal publication of a neighbourhood plan proposal by the local planning authority. This is an opportunity for the local community to make representations on the proposals that the qualifying body—be it a town or parish council or a neighbourhood forum—wants to have examined.
Amendments 54, 56, 57 and 58 bring forward the commencement of Clause 14 and Schedule 4 so that they would come into force at Royal Assent. Perhaps I may briefly explain why we are making this change. We are reforming the process for registering greens to give confidence that planning decisions being taken to promote growth will not be undermined by an application to register land as a green. This will help local communities and their councils which are encouraging sustainable development in their area, including those promoting affordable homes and new job opportunities. Without this amendment, there would be continuing uncertainty for two additional months. This is not helpful to anybody and this amendment would remove that uncertainty. I therefore beg to move Amendment 41.
Lord Ahmad of Wimbledon
“Development orders: development within the curtilage of a dwelling house
(1) Section 61 of the Town and Country Planning Act 1990 (development orders: supplementary provisions) is amended as follows.
(2) After subsection (3) insert—
“(4) Any development order or amendment to an existing development order made after 1 January 2013 that grants planning permission for development within the curtilage of a dwelling house shall not apply within the jurisdiction of a local planning authority until that authority has resolved that it shall.””
Lord True
My Lords, I will not be moving Amendment 46AA; it represents an attempt to offer a compromise to the Government in discussions on this which, sadly, was spurned.
The effect of Amendment 46 is simple. The Government will still be able to—as they have said they want to—impose a doubling of rights to build without planning permission in back gardens up to 6 metres for terraced houses and 8 metres for detached ones. However, under my proposal, local councils would be able to take a simple, quick decision on whether this change is appropriate for, and beneficial to, their local area. In short, it is a localist idea, which is what we have had commended to us from our Front Bench, quite rightly, for a long time.
It is important that the House understands that this does not stop the Government enabling a general extension of rights. It does not affect any other change in permitted rights that the Government propose, only the issue of controlling large developments in gardens—no more, no less. I serve as an elected council leader and I again declare that interest, so I speak not from some romantic attachment to back gardens, about which I spoke on another day—although I do not actually think that that is an ignoble cause—but on the basis of 20 years’ experience in these matters and with some part in recent discussions on them. In those discussions, like others, I thank my noble friend Lady Hanham on the Front Bench for her readiness to engage and to listen in discussion. She is absolutely exemplary. Sadly, however, I have not found that listening characteristic everywhere and it has to be everywhere for it to mean anything.
I was elected in 2010 on a programme that included a promise to protect local back gardens from overdevelopment. The same promises were given by my Member of Parliament and our Liberal Democrat opponents. Commitments to restrict garden grabbing, as I have said on another occasion, were given in our two parties’ manifestos and also in the coalition agreement. I read those out on another occasion—they were clear and specific. As an elected representative I see it as my duty to try to keep promises that I made when we sought election.
It has been put to me that garden grabbing only meant new development but, in my view, it certainly should embrace the loss of half a back garden and potentially more to big new extensions, which is what the Government’s proposal would enable. The people I represent who wake up to find a 6 or 8-metre extension being shoved up outside their back window and who have lost the chance to have any say in the matter will not be impressed by small-print arguments about what promises meant, nor frankly would many of the people who have supported this. I have been encouraged and heartened by the many people who have written and e-mailed in support of the LGA, supporting the stand first taken by my borough and the borough of Sutton, and I am very grateful to see my noble friend Lord Tope here.
I wonder where exactly this idea of doubling permitted development in back gardens sprang from. As I have demonstrated, it was not in any manifesto—quite the reverse. It certainly did not come from your Lordships’ long debates on planning. It was never mentioned. It has not come from any great public call for action. Indeed, as the LGA has demonstrated comprehensively, most extensions outside permitted development are considered swiftly and most are agreed, but after the normal process of mediation and sometimes modification between neighbours that the planning process deliberately and sensibly allows. This idea just tipped out all of a sudden with a ragbag of other ideas, with no prior notice at all, and a hasty six-week consultation was timed to finish on Christmas Eve. We have seen no formal results from or formal response to that consultation, yet Parliament is expected to opine on planning. I rather suspect that if there had been overwhelming popular backing in the consultation, we would have seen the detailed response long ago. I certainly have not seen it. In short, there is no public call for this change. We have seen no evidence in favour of it and no analysis of the potential effects of making it. I submit that this is no sensible way to make legislation that will affect the home lives of many people in Britain.
Lord Tope
My Lords, I support my noble friend’s amendment. He referred to the fact that he is, in another life, the leader of Richmond Council. For many years, I was the leader of the council in the London Borough of Sutton and, indeed, am still a councillor there. For all those years there has been a usually friendly rivalry and some competition between the two authorities. Certainly within my party, Richmond seems to alternate every election between who is going to run the council; I am pleased to say that the electors of Sutton have remained more consistently true, at least for the past 27 years, as to who would run the council. That competition continued back in the summer, when the Government made their announcement, as to which of our authorities would be the first to condemn it. I think on that occasion the noble Lord, Lord True, won the competition but probably only by hours rather than by days.
We are at one in finding the Government’s proposals incomprehensible and in condemning them roundly. What are they for and what are they seeking to achieve? That condemnation is obviously not confined to two London borough councils but is, as far as I am aware, universal throughout local government, regardless of which party happens to be in control of the council. This is a unified view, across local government, which is very strongly against the Government’s proposals.
That is due first to incomprehension. This is being put forward in the context of growth, but does anyone seriously imagine, as the noble Lord has explained very well, that allowing extensions into back gardens will make a significant difference to the growth of the nation? Of course it will not; it is laughable. What it will bring about a considerable growth in is neighbour disputes. I can think of no single measure more likely—indeed, one might say more designed—to set neighbour against neighbour, particularly when they find that there is actually no court of arbitration. They would expect the local planning authority to be able to hear both sides of the case and to make a judgment, as with the normal planning process. When neighbours find themselves in this position and discover that that power has been taken away from the local planning authority, and with it therefore their right to make representations to anyone, I can think of little better designed to cause neighbour upset and to damage community cohesion, for no purpose whatever. I am very keen to support the noble Lord, Lord True, on this.
The noble Lord made reference to the Government’s explanation that Article 4 directions can deal with this. As he has rightly said, that is a slow, expensive, bureaucratic and cumbersome route, which is unlikely, frankly, to make very much difference at all. He is quite right and I support him wholeheartedly. We had felt until recently that the Government were at least starting to listen—commendably so, and we have said much of that today—to move and to be willing to search for compromise. Therefore, I am very disappointed to learn from the noble Lord, Lord True, as he said when introducing this amendment, that his attempts at compromise—that is what this amendment is; I do not think he or I would pretend it is what we want—have been “spurned”. That was his word. We are very disappointed with that. I hope that when the Minister replies, we can get at least some comfort from him that spurned is too strong a word, the debate and argument are still open and it is not going to be as bad as it presently seems.
However, I certainly have no hesitation in supporting my noble friend and the leader of Richmond Council, knowing that both London borough councils will, for once, be united between the two parties in agreeing with both of us.
The Earl of Lytton
My Lords, I support the thrust of this amendment because my professional work puts me at the sharp end of the fall-out from precisely this type of policy. As the noble Lord, Lord True, has said, we risk in effect a flip-flop from avoiding the regulation of the colour of front doors and replacement windows to no control at all. If ever there was an example of parliamentary process being a blunt instrument, I suspect this is one.
I have problems with this area of government policy in its cumulative effects. We seem almost to have a good cop Government wishing to deregulate, which I can understand and sympathise with, and conferring additional free development rights on householders. However, I am bound to say that I do not see the noble Lord, Lord True, and the LGA in the opposite camp of bad cop either. One of the great virtues of planning policy, among all the things that I, we and clients regularly curse about the intrusiveness of it, is that it has actually protected the built and the semi-natural environment of the urban and rural landscape. It has done so in such a way that our European neighbours come over here to see how we have managed to do it all the years since the post-war era when the first planning Acts came in.
The real possibility here is the increasing urbanisation of domestic back gardens and the materially increased density of that whole built environment. That is not without consequences, as the noble Lord has consistently pointed out on this and previous occasions. I recently attended a number of meetings at the Minister’s old stamping ground, the Royal Borough of Kensington and Chelsea, which has a basements working group. Your Lordships might wonder what basements have to do with all this, but I can tell you that a lot of basements are constructed in back gardens, so the thing is not entirely without its relevance.
A number of things came through there which I think were very interesting and that have to some extent informed my views. First, there is a risk that open space between buildings for light, air and privacy might be compromised, and the only thing that stands between the general rights of permitted development and getting a fair balance between neighbours is some intervention by the local planning authority. It is a matter of scale and proportion, but of course it has visual and amenity consequences. Beyond that, in valuation terms, the mercantile gain for one person who happens to construct their particular scheme might lead to the erosion of the visual appeal and consequential value of neighbours’ property, unless, as I say, they are carefully regulated and kept in fair proportion.
Technically—this is where I pick up the point that the noble Lord, Lord Tope, made—it brings additional pressures on the limits of property ownership, particularly in relation to boundaries. We already have a substantial amount of that in the more expensive parts of inner London boroughs. Property values as an impetus already cause serious friction between neighbours. I know this because a good deal of my professional work relates to neighbour disputes.
That might not matter if we had a land registry title plan that was a precise guide to ownership. Unfortunately, such plans do not provide that. Even in an urban area of 1:1,250 mapping scale, there is an error factor, as set out by the land registry own guidance, of plus or minus 1 metre on the ground either way. On a plan of that scale, that represents 0.8 millimetres thick, plus or minus. It is no idle suggestion, therefore, that this might increase neighbour disputes, because the process of establishing precise ownership is sometimes clear but sometimes very far from clear, and the registered title does not help.
Lord Elton
My Lords, I am really rather appalled by what the Government are proposing and largely reassured by what my noble friend is proposing. I want merely to ask my noble friends on the Front Bench and those in my party and the Liberal Democrat party in government to consider for a moment what a very large number of people live in houses with small narrow gardens bang up against people next door, either on one side or both.
A neighbour has enormous power over the comfort and convenience, and indeed the property value, of the people on either side. Throwing up something that looks into your garden, blocks the light from your flower-beds or makes you feel in some way claustrophobic can actually blight people’s lives. It is essential for the Government to realise that a great number of people— I declare an interest; I am one of them—live in circumstances where we are all in the hands of our neighbours as regards our comfort and the “quiet enjoyment” of our property, as the common law says.
As the noble Earl, Lord Lytton, very eloquently put it, when the air, light and privacy of one’s life are at the disposal of one’s neighbour, there must be some ready course of arbitration or judgment that is in one’s power to initiate, is not cripplingly expensive and does not take for ever. It seems that my noble friend is offering that and the Government are not. Therefore, there is no question who I would support.
Lord Trefgarne
My Lords, I apologise to your Lordships that I was not in my place when my noble friend Lord True opened this debate. I absolutely support what he is proposing in this amendment. I think these proposals are little short of outrageous and, in the area where I live, will result in a change in the control of the local authority.
Lord McKenzie of Luton
My Lords, I have added my name to this amendment and we are wholly supportive of it. We have heard from the noble Lord, Lord True, a devastating critique of the Government’s proposals, strongly supported by the noble Lord, Lord Tope. We have heard the practical and professional considerations from the noble Earl, Lord Lytton, about what they mean in practice. Indeed, the noble Lord, Lord Elton, described a typical garden, and that is exactly the situation in large areas of Luton that were built in the early part of the previous century and sometimes before. The noble Lord is absolutely right that neighbours can impact dramatically on the quality of life, and the Government’s proposal for permitted development rights is actually facilitating that.
In many ways this is a very modest amendment, more modest than that which my noble friend Lady Donaghy is going to move in a moment. It focuses only on development within the curtilage of a property. It operates from January 2013 and is not proposed to be retrospective to any significant degree, and it is consistent with the principles of localism, which seems to be a core matter.
The noble Lord, Lord True, and others referred to what will undoubtedly again be the Government’s defence on this: Article 4 directions. We will come on to that again when we debate the following amendment. Is it still the position that the Secretary of State’s general approach to making an Article 4 direction, as set out in paragraph 4.23 of planning policy guidance note 15—I am not sure that policy guidance note still exists or what may have replaced it—is that,
“permitted development rights should not be withdrawn without clear justification”,
such as where a real and specific threat of development is being carried out that would damage an interest of acknowledged importance? If those are the criteria by which the Secretary of State acts, that would not be a defence in many situations that have been envisaged. That reference may be slightly out of date, but it would be good to hear something more up to date from the Minister.
At the end of the day this does not prevent anybody who wishes to have an extension in the rear garden from seeking planning permission in the normal way. Perversely, if permitted development rights had been withdrawn by an Article 4 procedure, you could not get fees for that planning application. However, it is perfectly possible that people will go through the normal process, so this is not denying anyone any rights.
It is a pity that we come to this at this hour. I am not sure what the noble Lord is going to do, but it would be well worth testing the opinion of the House when it is full because I think there would be very strong support for the noble Lord. I hope that at the very least we will hear from the Minister that the Government will take away the tenor of this debate and agree to look at the issue before Third Reading.
Baroness Hanham
My Lords, I hear what the noble Lord has said and what my noble friend has said in moving the amendment. I appreciate very much that noble Lords wish to make sure that local authorities are able to adapt national permitted development rights to their own circumstances. Indeed, it is an important element, which we recognise, that national development rights have an effect on different areas, urban and rural. The noble Lord did not speak to Amendment 46AA, which would be the other side of the coin: opt in or opt out. Therefore, I will address only Amendment 46.
There has been some tweaking, with noble Lords saying that I will use Article 4 directions in my response. Not surprisingly, I am going to do so. As the noble Lords, Lord True and Lord Tope, will be well aware, an Article 4 direction can already be introduced to remove specific permitted development rights in a defined area. Those areas can be very small: only a few houses, a conservation area, one street or two blocks of houses. They can be tailored in a way that puts a permitted development into a defined area.
There was a suggestion that if an Article 4 direction was put forward it had to be submitted to the Secretary of State for a decision. It does not have to go to the Secretary of State for approval. The Secretary of State would intervene only where the power was being used unreasonably by the local planning authority. One would hope that that would never take place as the planning authority would have to consult local residents before implementation. It is not sensible just to wipe out the Article 4 directions. It is one of the lines that local authorities can take and we would expect them to do so where necessary.
With regard to the proposed permitted development right and its effect, we would expect neighbours to talk to neighbours about this and to have some interest in what they are going to say. Local authorities are also able to put conditions on permitted development if it is thought to be justified.
Lord Elton
Such conversations very often do happen and they result in almost open warfare. They do not often result in amicable decisions such as “Okay, we will not build a second storey because you do not want it”. The pressures of the benefit to the developer overcome the priorities of good neighbourliness.
Baroness Hanham
My Lords, my noble friend said “benefit to the developer”. The development is limited to the curtilage of the building and the benefit is to the person who owns the property and who wants to extend it, for their own use, to a limited extent—to have a new kitchen or whatever they need. I hear what my noble friend says but, first, the amount is limited to the curtilage and, secondly, it would be expected that consultation would take place.
There are many people who wish to do smallish extensions to their houses. The noble Lord, Lord True, suggests this is “garden-grabbing” but it is their garden and the garden-grabbing we have talked about in the past has been new developments in back gardens which are clearly not just modest extensions to people’s houses. It is probably not very good to deny people the benefits of being able to extend their houses somewhat.
Lord Campbell-Savours
I am sorry, but this is just agony. What are the origins of this proposal? It was not in the coalition manifesto, it was not in the Conservative manifesto, it was not in the Liberal Democrat manifesto. Where has it come from? What are the origins of this nonsense?
Baroness Hanham
My Lords, this policy is being put forward to extend the localism rights that we have been moving towards across neighbourhood plans, community budgets and everything that brings more control and power into the hands of local people. This is just an addition to that to make it more helpful and constructive for local people to manage their own affairs.
Lord Trefgarne
My Lords, I am afraid my noble friend is living in a world of her own. I will show her some correspondence between me and one of my near neighbours relating to a proposed development which ended up in the High Court. In that case, we did not have the amicable conversations which she imagines.
Baroness Hanham
My Lords, I hear what the noble Lord says. Consultation on this matter closed in December. We have had 1,000 responses and these will be available before we get round to secondary legislation which will be in a very few months, presuming that the clause is accepted by both Houses.
Lord McKenzie of Luton
Has there been some analysis of the consultation thus far, and, if so, might we get at least a first cut of it before Third Reading?
Baroness Hanham
My Lords, I think not. I have been told that it will be available before secondary legislation.
Lord Adonis
What is the big problem about analysing 1,000 responses in time to allow your Lordships’ House to see them before we proceed to Third Reading?
Baroness Hanham
My Lords, they will be ready before secondary legislation. If they can be ready at any stage before that I will make sure that they are, but I am advised that it will be at the secondary legislation stage. I rely for my response—
Lord Trefgarne
My Lords, when does my noble friend propose to introduce the secondary legislation?
Lord Ahmad of Wimbledon
I remind noble Lords that we are on Report and there are specific rules which should be borne in mind.
Baroness Hanham
My Lords, I thank my noble friend for that. The consultation will be available within the next few months, probably by May, as will the response and the secondary legislation.
I rely, in my response, on the ability for local authorities to use Article 4 directions. It is perfectly reasonable for them to do so, but it is also reasonable for people who own houses to wish to extend them and to do so without having to go through the procedures of planning applications when the extension is relatively modest. I hope noble Lords will feel able—
Lord Hunt of Chesterton
Is there some limit to the height? In many gardens, the most important things are wind and lighting and you can occlude the sun in your neighbour’s garden. We are hearing an extraordinary speech. A neighbourhood is a set of houses, built and designed in a way that we all understood when we bought those houses. If one person wants to push out, all the other people will push out and it will have an extraordinary effect on neighbourhoods. This will be a social revolution. What survey did the Government do of people around the country? Did they just listen to some bureaucratic process? Have there been social surveys across the country? I do not believe there have been. This is a change to the whole British way of life. I have been a councillor and I have seen these effects.
Lord Ahmad of Wimbledon
My Lords, I have to remind noble Lords that we are on Report, not in Committee. As your Lordships know, we are a self-governing Chamber. As the Companion states, there are specific criteria we need to observe and we owe the Minister that level of respect in allowing her to finish her response. If noble Lords wish to push this to the vote, that is a matter for them. At this time, we are on Report and I would ask noble Lords to respect that.
Baroness Hanham
The answer to the question about the extent is that it is limited to a single storey and within the curtilage of the building.
I have reminded the House that a consultation has taken place and that we will see the results before secondary legislation, that there is the question of Article 4 directions being used and that it is, and should be, the right of citizens to extend their houses if they wish.
Lord McKenzie of Luton
Before the Minister sits down, she has not dealt with the point about the criteria that guide the Secretary of State’s engagement with Article 4 directions, in particular planning policy guidance note 15—or its replacement if it has been updated—which states:
“Permitted development rights should not be withdrawn without clear justification such as where there is a real and specific threat of development being carried out that would damage an interest of acknowledged importance”.
If those are the criteria that guide the Secretary of State in these matters we would want to know about it and certainly know about it before Third Reading.
Baroness Hanham
My Lords, I do not have a response to that. I would need to take advice on it. If I can come back on that aspect before Third Reading I will.
Lord McKenzie of Luton
Will the Minister come back at Third Reading if she is not able to do so beforehand?
Baroness Hanham
My Lords, I am advised that there has not been an update, so I presume that that guidance would be followed. Let us bear in mind, too, that the Secretary of State does not have to approve. He will take an interest only if he wishes to. With those explanations, I hope that the noble Lord will withdraw his amendment.
Lord True
My Lords, I thank all those who have spoken in the debate, which has been a little one-sided perhaps. I thank my noble friend on the Front Bench. It is a difficult task to defend a policy that manifestly, from the body language and from what people have said, has no support from anybody present in this House. I do not hold her responsible for that. The noble Lord, Lord Campbell-Savours, asked where the policy had come from. If he reads earlier discussions on this, he will see that I have expressed a shrewd suspicion as to the answer: some might say the uber-moderniser tendency—indeed, I think that that is self-description.
The noble Lord, Lord McKenzie, for whose support I am grateful, is quite right that people will still be able to build extensions, but, as the noble Lords, Lord Trefgarne and Lord Elton, said, as well as the noble Earl, Lord Lytton, in a striking speech which I hope officials will study carefully, they will simply have to negotiate with neighbours, which is part of neighbourliness and living together in a society. It seems in life that many matters depend on which end of a telescope you look in. The Government are talking about extending rights, but they are taking away, if you look in the other end of the telescope, a major right from those who are neighbours of people who want to build very large extensions. I repeat what I said: in some of the small, terraced communities which I and others represent, those extensions in some cases could be more than half the back garden if you take the curtilage of the front garden into account. This is major stuff.
One of my many eccentricities is that I used to spend a lot of time when I was young reading Livy, the Roman historian. The third decade of his books, about the wars against Hannibal, relate that, after three crushing defeats, the Roman generals, Fabius and Claudius Marcellus, although the latter was a little more vigorous, did not take on the Carthaginian field army until the Romans thought that they had the balance of forces in their favour. Despite the overwhelming opinion in the House being in favour of this position, I do not believe that something analogous is likely to happen at this moment. I want to study particularly carefully the point made by the noble Lord, Lord McKenzie, about Article 4, which is critical. I reserve the right to come back to it at Third Reading, perhaps looking at Amendment 46AA. We need to clarify how local authorities opt out. It is true that the Secretary of State does not have to approve, but the Secretary of State has the power to cancel or modify an Article 4 direction at any point. That is absolutely germane to this, setting aside the other points that I made.
I do not want noble Lords to think that this will be the end of the matter. I have had some experience in the usual channels in this House. There will many opportunities to bring this matter back before your Lordships which I shall explore, including on secondary legislation. I therefore hope that the Government will listen to the mood of your Lordships’ House. What is the point of your Lordships’ House if it does not have the opportunity through its debates as well as its Divisions to express an opinion?
I hope to hear further clarification at Third Reading on how Article 4 will actually work as well as more about the consultation—11 weeks to analyse 1,000 answers is quite a long time in my book. The leader of the council could do that, let alone some of the good people I employ. With the promise that I do not intend to go away on this matter, I beg leave to withdraw the amendment.
Baroness Donaghy
“Planning permission required for development
(1) The Town and Country Planning Act 1990 is amended as follows.
(2) In section 57(3), after “Where by a development order (or a local development order” insert “issued by the local planning authority”.
(3) After section 57(3) insert—
“(4) Where a local planning authority propose to make an order under this section they shall first prepare—
(a) a draft of the order; and(b) a statement of their reasons for making the order.(5) The statement of reasons shall contain—
(a) a description of the development which the order would permit; and(b) a plan or statement identifying the land to which the order would relate.(6) Where a local planning authority have prepared a draft local development order, they shall consult, in accordance with regulations, persons whose interests they consider would be affected by the order.””
Baroness Donaghy
My Lords, in moving Amendment 46A, I make it clear that I am in full support of Amendment 46 moved so eloquently by the noble Lord, Lord True. If the first platoon of True, Tope, Lytton, Elton, Trefgarne and McKenzie came crashing against the citadel, I do not have too many illusions about how my amendment, which is much more radical and not in the least bit modest, might be faced by the Front Bench. Nevertheless, I shall persevere because the issue is of such importance. I have been in the House for only two-and-a-half years, but I have never seen such a measure of frustration in the House as I did on the previous amendment, so I think it is a topic that is worth pursuing.
I am aware that my amendment represents a significant, but perhaps long overdue, change to the planning system. It is clear that it could not be introduced without considerable consultation, and I fully acknowledge that any frameworks for proposed local permitted development could be produced only after thorough consultation at all levels.
The argument used against the proposal in Committee was that it would produce a postcode lottery and that local government already had the tools to restrict or relax nationally set permitted development by using Article 4 directions and local development orders, or LDOs.
The phrase “postcode lottery” implies something completely random, which this need not be. It is quite correct that there would be local differences—that is, after all, what local government is supposed to be about—but there is no reason why non-statutory guidance could not be issued by government giving local authorities recommended criteria when setting out and consulting on a local permitted development framework. When it comes to siting broadband infrastructure, the Government consider non-statutory guidance to be sufficient, so why not here?
Article 4 and LDOs are no longer fit for purpose, as has already been mentioned by several speakers on the previous amendment. Local authorities must give one year’s notice before they can use Article 4 directions to avoid high levels of compensation. They are time-consuming and unnecessarily bureaucratic as well as being expensive. Although this is contested by the Department for Communities and Local Government, these devices are rarely used by local authorities. Indeed, the LGA has indicated that it is not aware of any evidence demonstrating widespread use of Article 4 and LDOs.
Amendment 46A would localise permitted development, allowing planning authorities to tailor individual frameworks for their own local areas so that they supported economic growth in the most appropriate and sustainable way. This could lead to a boost in development overall and would be a localist measure. Democratically elected representatives, accountable at the ballot box, would be given more power. This, if nothing else, would be more of a reflection of the title of this Bill than the discussion that went on earlier. I beg to move.
Lord McKenzie of Luton
My Lords, in the circumstances, I shall speak just briefly and thank my noble friend Lady Donaghy for introducing the amendment and broadening the debate about the importance of localism and why permitted development rights should be qualified or subject to local authorities’ determination.
I want to go back to Article 4, which permeated our discussions on the earlier amendment and will perhaps do so again now and at Third Reading. Article 4 directions can certainly be cumbersome and bureaucratic. There is not just one type of Article 4 direction. As I understand it, there are three types of article for direction: one affects only listed buildings, one affects dwelling houses in conservation areas and the other affects other properties. That latter category has generally been used to cover commercial property in a conservation area and is generally used outside a conservation area for restricting the use of temporary buildings.
If Article 4 is to be prayed in aid in respect of this amendment, as it was—at least in part—in respect of the earlier amendment, I think we need much more detail as to how it operates. I understand that whether it is an Article 4(1) or Article 4(2) direction, the routes and processes that have to be adopted are different. We need to understand that more effectively and we need greater clarity on the role of the Secretary of State and the guidance or principles which should govern how the Secretary of State approaches Article 4, whether using Article 4(1) or Article 4(2) directions. Given the hour, I simply support my noble friend and thank her for moving this broadened amendment.
Baroness Hanham
My Lords, I thank the noble Baroness, Lady Donaghy, and the noble Lord, Lord Tope, who has not spoken to this amendment but whose name has been added to it. It has the admirable aim of giving local authorities the power to decide how to adapt the nationally set permitted development and local development orders.
The noble Lord asked me for details about Article 4. I say straight away that I do not have them on me. If the noble Baroness is not going to press her amendment today, I shall be very happy to see that answers to the questions that have been asked are available before Third Reading in terms of the interpretation of Article 4 and how it can be used by the Secretary of State. I think that might be helpful under the circumstances as I rely again on the fact that local authorities can use Article 4 directions, particularly where the aim is to extend permitted development rights locally. They can be used with local development orders, and local development orders provide a quick and simple way to do this.
It is correct, as the noble Baroness said, that they have not been widely used. They were introduced of course under the last Administration but they are beginning to be used. I have a note here of where a number have been used to bring into control extensive changes of use for ground-floor units, for example, or where local development orders have been granted to extend household and permitted development rights in a village. Therefore, they have their uses and they are certainly beginning to move forward. Local authorities are beginning to recognise their benefits and that they can be put in place through a simple and streamlined procedure.
More than 30 local development orders have now been put in place in enterprise zones, and, as we speak, local development orders are contributing to growth by helping to speed up the delivery of everything from small domestic alterations to major industrial development. They can be used pretty widely across the piece.
The noble Baroness has given an outline, perhaps, of what she wanted to deal with. If she is not going to press the amendment today and is likely to return to this matter at Third Reading—which I think she would be entitled to do—I will make sure that the information about the Article 4 make-up is made available. I hope that the noble Baroness will withdraw her amendment.
Baroness Donaghy
I thank the Minister for her response and my noble friend Lord McKenzie for his support. I will withdraw my amendment. I just wanted to underline the fundamental difference in perception between the Department of Communities and Local Government and the LGA on the usefulness and appropriateness of LDOs and Article 4. It seems to me that the perception is so fundamentally different that there has to be something wrong somewhere. Therefore, I would appreciate a lot more information about the examples the noble Baroness has given about LDOs in that particular area and also a lot more information about why her department feels that Article 4 is flexible and the Local Government Association does not. On the basis of an assurance that we will have that information before the House, I beg leave to withdraw my amendment.
Lord Berkeley
“(4A) In section 150 (removal of consent requirements) subsection (1), for the words “consented to the inclusion of the provision” substitute “been consulted by the applicant about the inclusion of the provision”.”
Lord Berkeley
My Lords, I shall also speak to Amendment 55, which is grouped with Amendment 46B. I asked for these amendments to be degrouped, because I thought that we would have a better discussion that way, but they have not been, so I am happy to plough on with both amendments unless other noble Lords indicate that they would rather debate them separately.
I would like first to express my gratitude to the Minister for probably several meetings that we have had on various issues relating to the amendments that are in my name and that of the noble Lord, Lord Jenkin of Roding. I am also grateful for the letter that she sent us yesterday with a number of attachments. I was able to study some of them but I am sure that there will be other things that we will want to debate further on.
I turn first to Amendment 46B, which is the same one as was moved in Committee. It is another attempt to provide for the NSIP/DCO regime to be the one-stop shop for all construction-related consents that was initially promised in the 2007 White Paper which led to the Planning Act 2008. It was one of the many proposals to try to speed up the process for getting consents for major projects. I think that one could call the present regime a bit of a bazaar. I hope that that is not insulting to those dealing with it. However, Sir Michael Pitt, of PINS, recently referred to the fact that some 40% of all construction-related consents were outside the DCO regime.
It is not intended and never has been intended by this amendment to cover operational consents, such as nuclear site operating licences or nuclear safety and environmental permissions. However, the point that did not come out in Committee is one of principle. How can it ever be right that an outside body such as the Environment Agency or Natural England has a veto on what a Minister can include in a DCO made by him or her? Section 150 of the 2008 Act gives these outside bodies such a veto. It may have been appropriate in the days of the IPC but it is no longer so when the decisions on the proposed DCOs are taken by democratically elected and accountable Ministers. Surely it is a fundamental principle that no one should be able to dictate what goes into a DCO? They can make representations, as this amendment proposes, but I suggest that, ultimately, the decision must be the Minister’s alone with reference to PINS’ recommendations.
The key point here is that the regime needs to be flexible. It needs to allow the promoter in discussion with the regulators to come up with a proposed consents regime that is right for each individual project. That may require some consents to be wrapped up in the DCO, by the DCO disapplying them, and other consents to be retained separately. However, there is a precedent for this, because disapplying consents by orders—and indeed by Acts such as the Crossrail Act 2008 and the Channel Tunnel Rail Link Act 1996—is not the new concept that observers of the debate in Committee might have been led to believe. It is commonplace in the Transport and Works Act and the Harbours Act regimes. In many cases separate consents is disapplied in exchange for protective provisions for the benefit of the regulator concerned being included in the order, such as provisions requiring the regulator to approve detailed plans of the project before construction starts. These protective provisions often then go on to provide for subsequent monitoring and compliance with them to be enforced by the regulator concerned, such as protective provisions in the TWA orders for the benefit of the Environment Agency.
I suggest that the same approach could be adopted in the case of DCOs. A single consenting regime for the construction phase of large projects can deliver real benefits and efficiencies, which I am sure is what the Government are looking for. For example, in 2008 the Department for Transport decided in response to the application for the harbour empowerment order to authorise the London Gateway port—which is now under construction; there were great pictures last week of what I think is one of the biggest cranes in the world being floated into it—that it was appropriate to disapply through the order much of the Environment Agency’s consenting regime, because it was already the case that the Port of London Authority would have to approve detailed plans of the project before construction could start. It did not make any sense to duplicate this, and add to the promoters’ burden, by requiring plans also to be approved by the Environment Agency. In this case, the EA would be able to feed its comments into the PLA before the plans were approved by the PLA, which had a whole host of environmental obligations in addition to its conservation role. It can reasonably assume that the preconstruction approval process would have been even more complex, taken longer and been more expensive had the EA had full plan approval rights. I think that if one were to ask the promoters of the London Gateway port, they would say just how successful this regime has been. It has probably cost them a lot of money but it has happened a lot more quickly than it would otherwise have done.
Lord Jenkin of Roding
My Lords, I added my name to these amendments. The noble Lord, Lord Berkeley, has dealt with them so comprehensively that all I need to say is that I support them.
Lord Ahmad of Wimbledon
My Lords, when we considered this amendment in Committee I indicated that the Government were taking a number of actions to expand and improve the one-stop-shop approach for nationally significant infrastructure consents. Overall, the responses to our recent consultation on proposals to expand and improve the one-stop-shop approach were positive. We are now taking forward a programme of work to deliver rapid implementation of these proposals. In response to the concerns of developers about the challenges of co-ordinating and aligning multiple consent application procedures for nationally significant infrastructure projects, we will be establishing a new consents service unit by April this year. We are also streamlining the list of prescribed consultees set out in legislation, reducing it by up to a third and streamlining the list of non-planning consents which sit outside the development consent process. Regulations implementing these changes have now been laid in Parliament. These changes are in addition to the five separate certificates and consents which are being removed from the Planning Act 2008 through clauses in this Bill.
We think that this approach provides applicants with additional support and service which they are looking for without watering down the protections that currently exist. While we recognise the appetite of some developers for all consents to be dealt with by the Planning Inspectorate, other bodies have highlighted the important role played by bodies such as the Environment Agency and Natural England in ensuring that adequate environmental protections are delivered.
Nationally significant infrastructure projects are by nature complex. We currently consider that the relevant consenting bodies, which hold a wide range of expertise on granting, monitoring and enforcing the various consents that are normally required, are well placed to make a judgment on a case by case basis, having regard to the updated guidance that we have issued about whether their consents should be dealt with as part of the development consent order process. We do not consider that it would be efficient to change that position as part of the current reforms. However, we remain in listening mode; we will review the operation of the current reforms and consider any further improvements to the way multiple consent applications are dealt with as part of a full review of the major infrastructure planning regime in 2014.
The proposals now being taken forward for the one-stop shop will deliver a much more efficient process for developers of infrastructure projects under the Planning Act. Despite the points made by the noble Lord, the Government’s position remains unchanged and at this stage, the Government do not intend to amend or repeal Section 150 of the Planning Act 2008.
I now turn to Amendment 55. I am grateful to the noble Lord for setting out the reasoning behind the amendment, which would provide for immediate commencement of the provisions in Clauses 21, 22 and 23. We have considered carefully the way in which the provisions covering the removal of certain consenting and certification requirements and the provisions on special parliamentary procedures should be introduced. We want to ensure the right balance is struck between the need to deliver infrastructure and the need to ensure that no one is prejudiced or treated unfairly by the changes we are proposing to introduce. Principles of fairness must surely be a prime consideration in any situation where it is proposed to compulsorily acquire land or property.
Unfairness might occur with the introduction of Clauses 21, 22 and 23 if provisions are not made to prevent such unfairness. This is because there will always be a number of applications at different stages in the process leading through to a development consent order under the Planning Act 2008. Some applications will have been submitted before this Bill was even introduced to Parliament for consideration. Some applications will be in the examination phase now. In some cases, the examination process will be complete and recommendations will be in the process of being prepared by the Planning Inspectorate, or a Secretary of State will be considering those recommendations before reaching a decision.
Lord Berkeley
Before the noble Lord sits down, I asked him whether he had any evidence of consultation or anything else on this balance between fairness to the affected people and the need to remove the barriers to growth and the desirability of avoiding delays in respect of nationally significant infrastructure projects. If he has, it would be good for us to have it—if not now, then before Third Reading.
Lord Ahmad of Wimbledon
If I may, I will write to the noble Lord about that.
Lord Berkeley
I am grateful to the Minister for his comprehensive answer. I shall certainly need to read very carefully what he said. I was pleased with some of his comments; the Government have moved a bit on this. Whether they moved enough for what I believe is right, I shall see when I read the debate. I am still surprised that the Environment Agency, in particular, would not be satisfied with a structure that was apparently successfully adopted for the London Gateway. I am grateful to the Minister for his comprehensive response and beg leave to withdraw the amendment.
Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013
Viscount Younger of Leckie
That the draft order laid before the House on 24 January be approved.
Relevant Documents: 18th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)
My Lords, this order amends the rules on collective redundancies. It makes three changes. First, it reduces the current 90-day minimum period for 100 or more redundancies to 45 days. Secondly, it makes an equivalent change to the requirement to notify the Secretary of State in advance of the first dismissal taking effect. This period will also be reduced from 90 to 45 days. Thirdly, the order removes fixed-term contracts that have reached their agreed termination point from the obligation to consult the individuals affected. These changes will be complemented by guidance on how to consult, which is being developed by ACAS.
I shall set out the changes in context by explaining the current rules. The rules are set out in the Trade Union and Labour Relations (Consolidation) Act 1992 and implement a European directive on collective redundancies. The directive aims to protect employees in large-scale redundancies but not to prevent employers from taking necessary steps to restructure. However, UK legislation builds on the provisions in the directive by introducing minimum periods before the first dismissals can take effect. Where the employer is proposing 20 or more redundancies at a single establishment within a period of 90 days or less, no redundancy can occur until at least 30 days after the start of consultation where between 20 and 99 redundancies are proposed, and no redundancy can occur until at least 90 days after the start of the consultation where 100 or more redundancies are proposed. This does not affect individual notice periods. These do not begin until redundancy notices have been issued, which cannot happen until consultation is genuinely complete.
The 90-day minimum period looks long by comparison with other countries. There is no minimum period in the US, Japan, Australia or New Zealand. In addition, the European directive governing collective redundancy law does not mandate a minimum period. As a consequence, the picture across Europe is varied. For example, there is no minimum period in France or Germany. It is 30 days in Spain, Belgium and Ireland, one month in the Netherlands, and 45 days in Italy and Poland.
Collective redundancy obligations have been in place for 40 years and there have been no changes to the 90-day minimum period in that time. However, I doubt that anyone who retired 40 years ago would recognise today’s working environment. Modern communications technology has made consultation easier and faster to carry out. People have easier access to details about employment opportunities, and CVs can be created and sent out in a matter of hours. Although it was once common for people to spend their career in a single firm, nowadays careers are made up of jobs in a variety of organisations.
In 2011, the Government carried out a call for evidence on the collective redundancy regime as part of a wider review of employment law. We then consulted from July to September 2012. The evidence from both exercises identified a number of issues. Employers were concerned that the rules delayed their ability to respond to challenges and opportunities. A business may need to restructure because it is involved in a merger or acquisition, or it may gain a new contract that requires a change of product or process. Of course, a business may also fail. Whatever the reason, the ability to adapt can create a stronger business from which it might expand in future, and that may include the creation of new jobs. Alternatively, restructuring might simply be about assuring survival and salvaging some jobs rather than losing them all.
For employees, a particular issue was the impact on morale and productivity caused by uncertainty about their future. This affected everyone, not just those being consulted. The evidence suggested that concerns about protecting the rights of those who are ultimately made redundant can crowd out the interests of those who are not.
Trade unions were opposed to any change because they believed that it would reduce job protection and make employers more likely to make employees redundant. However, they also wanted to see an improvement in the quality of consultation so that employees were genuinely engaged in the outcome.
As a result, we identified three objectives for reform: first, improving engagement and therefore the quality of consultation; secondly, ensuring that employers can restructure effectively to respond to changing conditions; and, thirdly, balancing the interests of the employees made redundant with those who remain.
On the minimum period and the treatment of fixed-term employees in the order, as I have said our consultation identified a number of problems with the current 90-day period. Employers considered that the 90 days prolonged consultation beyond the point at which it was constructive. Most told us that meaningful consultation usually lasts only 30 to 45 days. Genuinely viable alternatives to employer proposals were either hard to find or quickly identified.
A second major concern was the effect on staff. This was described by one leading trade association as leaving employees in a “state of paralysis” and,
“unmotivated on a day-to-day basis”.
In addition, the prolonged uncertainty hampered the retention of skilled staff. Investors, suppliers, customers and lenders were also affected.
We considered these responses carefully and decided that, 40 years after it was first introduced, it was appropriate to reduce the 90-day minimum to 45 days. This is a statutory minimum, which means that companies are entirely able to extend the period.
I remind the House why employers need to consult. Consultation improves communication and engagement. It ensures that employees feel included in what is happening. It allows them to get used to the idea of change. It allows employees to identify alternative options that the employer might have overlooked. It allows them to ask questions and consider their own personal options. For all these reasons, good employers take employee consultation seriously.
We are not changing the requirement that employers consult on ways of avoiding, reducing or mitigating proposed redundancies, nor are we changing the need to demonstrate that the consultation has been meaningful. The consultation might have to last longer than the minimum period if the employer is to do this, or the employer might decide that a longer period is necessary because it makes sense for them and their workforce. We have also retained the level of punitive penalty that can be made to employees who have not been consulted appropriately. This can be up to 90 days’ pay per affected employee.
The 45-day period, though, will introduce increased flexibility for the employer, who can carry out meaningful consultation quickly. It will also have benefits for the employee. Individuals who have found a new job quickly will be able to accept a job offer and leave with a redundancy payment. Employees who are part of the consultation but who end up being retained get reassurance sooner, and individuals who lose their job can begin to plan for and get help with their future.
On the change relating to fixed-term employees, our consultation identified confusion over whether the ending of a fixed-term contract at the agreed point of expiry triggered an obligation to consult. For example, if an employer had more than 20 fixed-term contracts coming to an end within a 90-day period, employers were not clear whether they needed to consult. This has proved particularly difficult for the higher education sector, where the cycles of academic funding mean the routine use of fixed-term appointments related to the academic year. Universities can end up carrying out multiple consultations about appointments where no one is any doubt that they are limited.
As a result, we have decided to take advantage of the provision in the directive that allows member states to exclude fixed-term contracts that have reached their agreed point of expiry. This would mean that in my earlier example there would be no obligation to consult. Where, however, the employer seeks to terminate the contract early and on grounds of redundancy, consultation is still required if the thresholds are met.
Finally, we have asked the Advisory, Conciliation and Arbitration Service—ACAS—to produce guidance, and ACAS is working with employers and employee representatives to develop its content. When it is complete, it will represent the agreed approach between employers and unions.
I anticipate that noble Lords might want to be apprised of the guidance document. With this in mind, I have already prepared a letter to send out to all your Lordships. This guidance is an important part of the overall package of change. Consultation showed us that statutory solutions were neither desirable nor achievable for all the difficulties arising with the collective redundancy rules. The guidance emphasises the importance of looking after employees. What employers do and how they treat employees in difficult circumstances is crucial to the future success of their businesses. Good practice suggests: first, maintaining a constructive ongoing relationship with employee representatives; secondly, having a plan for restructuring; and, finally, having recognised procedures for handling redundancies.
In the last 40 years we have seen a revolution in the working environment, and as a result our labour market has changed significantly. Modern communications mean that things happen faster and more easily. Individuals move more regularly from one job to another and, to remain competitive in global markets, businesses must respond effectively to commercial pressures.
The changes this order will make—
Lord Lea of Crondall
My Lords, I think the Minister said that this is his final point and that he is about to sit down. Is he really going to sit down before telling us what is clearly in the impact assessment: that policy option 2—the 45 days—means a reduction in output, and costs for employers, through making employees redundant more quickly, of £230 million per annum? For employees, there is,
“the reduction in the amount of time paid by their current employer, and therefore in the pay received. We expect this reduction in pay to total £252m per annum across all affected employees”.
Are the Government trying to get this measure through while hiding that information, or does the Minister think that I have somehow misunderstood that information? Does he not think that that loss of pay of £252 million is mere chicken feed?
Viscount Younger of Leckie
I thank the noble Lord for his intervention. I was just about to finish my opening speech, and there would have been the opportunity for replies. I am, however, very happy indeed to address that concern. The figure that we have is actually higher. It is £300 million, which is the saving that would be made in the reduction to 45 days. Let me try to address and explain where we get that figure from. It is based upon the number of people being made redundant as a result of collective redundancies involving 100 or more people. It is based on UK-specific European Restructuring Monitor data, and 96,000 people were involved. I will not go into the specific details. I am delighted to furnish the noble Lord with the specifics, but if we take the median weekly pay and multiply it up it comes, if I can reassure him, to £300 million. It is purely based upon the amount that is not paid out to employees because of the reduction to 45 days.
The changes—
Lord Lea of Crondall
The clarification is not complete. The Minister is using the figure of £290 million or £300 million. That is classed as a benefit, if you wish. I gave the figures under the section of costs. Under benefits, the benefit to employers is the,
“reduction in wage costs by allowing large scale redundancies to take place more quickly. We currently estimate this to be in the region of £290m per annum”.
I repeat my question: if this is a benefit and the only benefit to employees is a reduction in periods of uncertainty and a possible reduction in stress, is that not rather like saying that if you are on death row for capital punishment it is more motivating to make it quick?
Viscount Younger of Leckie
I would not take that track at all. I was merely making the point that if the consultation period is reduced from 90 to 45 days, there is obviously a reduction in costs in terms of the salaries that are paid out to employees who are made redundant more quickly if that is the case. Equally, another figure could be included, because employees might move on more quickly anyway. The answer is that I am more than happy to give the noble Lord, who clearly understands this exercise by this issue, a full answer in writing and to give the figure in more depth, but the £300 million figure is the one that we have.
Lord Watson of Invergowrie
Further to the point raised by my noble friend Lord Lea, the impact assessment says about benefits, particularly at this stage, that the current estimate of the reduction in wage costs would be £290 million at what is termed Option 2(a)—a reduction to 30 days. It says that a reduction to 45 days would make the impact lower,
“but it is not possible to quantify the difference”.
I ask the Minister why not. If it is possible to calculate a ceiling of £290 million from roughly reducing the period from 90 days to 30, which is two-thirds, why is not possible to say what the effect is of reducing that period from 90 days to 45, which of course is a 50% reduction? It seems to me that if you can do one, you must be able to do the other.
Viscount Younger of Leckie
As I say, I will address this question in much more depth later, but let me give a slightly extended answer to the question on pay. The committee argues that employees are unlikely to be predisposed to viewing the new regime favourably because the impact assessment assesses that the changes would mean a reduction in pay across affected employees of £250 million per annum. This does not mean that the individuals lose out on this money. This is the amount of money that the current employer will not pay to affected employees. In practice, employees will almost certainly move to other employment, which is the point that I made earlier.
The Government acknowledge that the proposed changes could result in a small increase in the number of employees seeking jobseeker’s allowance, but we do not see a direct link between the length of the consultation period and the amount of time an individual will take to find a new job. Each case is different. There are many other factors here, including the point at which an individual starts job hunting. The Government can see a considerable advantage for the employee in the new regime, because it proffers certainty sooner, which is the point that I made earlier, not only for those who end up losing their jobs but for those who remain. It is important to remember that the individuals remaining are typically more significant in number than those who depart.
In conclusion, the changes that this order will make are needed to ensure that the statutory framework remains up to date, so I ask noble Lords to consider this instrument.
Amendment to the Motion
Lord Young of Norwood Green
To move, as an amendment to the above motion, at end to insert “but that this House regrets that the draft Order will have an adverse impact on employees in a situation which will fundamentally affect their livelihood and future career opportunities”.
Lord Young of Norwood Green
My Lords, we regard this as yet another ill-founded government proposal to attack workers’ rights. The Government’s own figures, over which we have had a little exchange, estimate that this change represents a net loss of £252 million—or, on the same page, £290 million; I am a bit baffled by the two different sets of figures on page 2 of the impact assessment. Similarly, page 3 of the impact assessment does not quite seem to grasp the nature of what is happening. It says, first, that there will be a,
“possible short-term increase in employment tribunal claims relating to consultation in redundancy situations”.
I can go along with that. It then says that there will be a,
“possible very small increase in job seeker’s allowance claims”.
Well, I do not know quite how that can be justified. That to me almost seems an anecdotal assessment rather than anything based on evidence. When I listen to the Minister say that in practice employees move to other jobs, I only wish that that were the case in 2013. Of course some will, but for many this is going to be a very challenging and difficult situation, with no guarantee that the employee will move to another job, given the current levels of unemployment, which are running at very high rates in various parts of the country. So I do not believe that that is a fair statement of the situation.
The stated purpose, as we heard the Minister say, is to bring this up to date and create a simple, understandable process that promotes quality consultation and will allow the parties to engage in consultation that is best suited to their circumstances, improve business flexibility to restructure effectively and reduce business burdens. “Flexibility” is the term used by the Government to justify the steady erosion of employee rights. From our perspective, it is part of a “hire and fire at will” philosophy and goes along with the myth that the UK’s employment laws are somehow ossified. However, according to the OECD, which I notice was quoted in the report of the Secondary Legislation Scrutiny Committee, the UK already has one of the most flexible labour markets in the world.
The Government’s aim, they say, is to simplify the system for employers. The Minister told us that the EU minimum requirement is 30 days, so I am unclear how a reduction to 45 days will necessarily simplify the situation or provide greater clarity. My question to the Minister is simple. It is the age-old question of, “What about the workers?”. Many of them have given their working lives to the company. They have served and worked loyally. They surely deserve maximum consideration and consultation. The Minister said that it was about survival of the companies. I take his mind back to the situation in 2008 when we had a lot of companies going on short time. There was a huge amount of co-operation, with workers accepting in that situation that they could move to a three-day week. They made sure that there was training involved and so on. The logic that less consultation will somehow be better eludes me. Workers fully understand the importance of the survival of companies, but they want a fair deal. This change does not give them that.
If there is a high degree of confusion about the current rules, the call for evidence highlighted that the lack of certainty and agreed understanding about the consultation process has driven negative behaviour by both employers and employee representatives. I would say that, given a fair opportunity, employee representatives will respond positively. This implies that there is a need for greater guidance for employers from BIS on the consultation process, not a change in the rules. I was interested to read on page 10 of the impact assessment:
“Some UK employers have argued that the current regime for collective redundancy consultation is harming their competitiveness on a global level. They state that it is much quicker to restructure in other, competitor, nations, both within the EU and beyond. However, further discussion in focus groups with employers suggests this is not a universal view, and that in fact many view the process as easier in the UK than the rest of the EU. Table 2 shows that, compared to the main competitor nations across Europe and globally, the UK has a much higher requirement for minimum periods before large-scale redundancies can take effect. However, the table does not tell the whole story. Some of the competitor nations listed (including France and Germany) rely on strict enforcement and monitoring regimes to ensure minimum standards of consultation where the UK relies on minimum periods before redundancies can take effect”.
That is an interesting and important qualification.
According to the Government, a significant number of respondents to the consultation called for a statutory code of practice in order to clarify the rules, but the Government rejected this out of hand. Why? Because it did not fit with their agenda. Can the Minister answer that question when he responds?
I heard what the Minister said about fixed-term contracts. I have less to quarrel with on that front because there is some genuine need for clarification there.
A further reason for the change given in the impact assessment is to,
“increase the likelihood of agreement between employers and employees’ representatives”,
and to,
“increase employee buy-in to the decision-making process”.
Again, however, the Secondary Legislation Scrutiny Committee is highly sceptical of this argument, stating in its report:
“It is not obvious from the evidence presented by BIS that the changes are likely either to promote agreement between employers and employees’ representatives, or to gain greater employee support for the process”.
It concludes that the change requires special attention from Parliament on the grounds that:
“The evidence provided by BIS does little to inspire confidence that these other objectives will be achieved”.
Baroness Turner of Camden
My Lords, I rise to support my noble friend, who has expressed regret. I, too, regret this decision. I am not surprised that there is trade union opposition to it; I would be surprised if there were not. It seems to me that this decision affects not just individual workers but families as well. If this takes place where 100 employees are involved, this means that we are talking about larger companies. This may very well be in places where there has been substantial unemployment because of the decline of manufacturing industry in many areas—a decline for which we should of course thank previous Conservative Administrations, in particular the Thatcher Administration. There are many places where manufacturing industry provided the local population with jobs over a long period, but this is no longer the case, and individuals who face redundancy in such circumstances need a longer period to adjust to that redundancy and to find alternative work.
The Government say that we have a flexible workforce, as though this is something to be very proud of. I am rather suspicious of that view because it indicates that some of the employment rights that we have worked for over the years are in danger. The Government support the disappearance of some of these rights on the grounds that it makes for a more flexible workforce. I do not support that view at all. It is regrettable that the Government are moving down this path. We shall have to look very carefully at the way it operates, and the Government have said that they will watch to see how it pans out. It is not likely to be welcomed by the workforces when they discover that they suddenly do not have the period to adjust to redundancy that they once had. That is entirely regrettable.
Moreover, we could well be entering a situation in some of these areas where more workers enter into benefits, to the discomfort of the Government, who wanted to get people off benefits but who then of course talk about the taxpayer having to bear the brunt of benefit claimants. What else do they expect if they are making it easier for workers to be dismissed? I regret this decision by the Government, and I hope that my colleagues will also regret it.
Lord Monks
My Lords, I, too, rise to support the regret Motion that has been moved by my noble friend Lord Young. The present rules on the period necessary for consultation are designed, in part at least, to provide an opportunity for employers and unions to explore alternatives to redundancy. These alternatives could be short-time working or transfers to growing parts of the business. They could be used to help those workers who are to be made redundant to find alternative work with another employer.
If the minimum period is to be cut in half, these opportunities are inevitably reduced. Staff will be laid off more quickly. The wages bill of an employer will be cut correspondingly. However, the cost, as has been demonstrated by my noble friend Lord Lea, will be met by those who are being made redundant. The impact assessment makes it absolutely crystal clear that this is a straight transfer from employees to their employer and, as my noble friend Lady Turner has just reminded us, to the state, too, if people go into unemployment more quickly than would otherwise be the case.
This is the latest salami slice of employment rights. I remember that in the 1980s Jim Prior used to refer to a step-by-step approach when he was legislating against trade unions. Now, with Vincent Cable and the coalition Government, we have a slice-by-slice approach going on. The measure before us is justified mainly by anecdotal evidence, and by the cries of some—but by no means all—employers that redundancies in the UK are too expensive. I see that there are also some allegations that the UK has gold-plated the EU directive which underpins this law. In fact, by easing the obligations of employers, one makes UK employees more vulnerable to being fired when multinational companies are cutting their staff. We in the trade union world already feel that British workers are uniquely vulnerable because of our so-called flexible labour market, which, as my noble friend Lord Young has claimed, reminds us that we are the third least regulated labour market in the OECD.
The inconvenient truth is that the consultation arrangements in other European countries as a whole are more extensive than ours. In the Netherlands, for example, the authorities can extend the period of consultation to find alternatives to redundancy above the minimum figures to which the Minister referred. Could we perhaps add that provision to what the Government propose? I note that in Germany, where no agreement is reached in the works council, the issue can be referred to arbitration. Is that something which the Government have actively considered?
I can only come to the conclusion that the Government are intent on weakening the worker hand in difficult situations. This is not the road to building up high productivity and high-quality partnerships at work. It is not the right road to building successful economies—as successful, perhaps, as some of these other economies on the other side of the North Sea to which I have referred and to which the noble Lord, Lord Heseltine, keeps trying to drag the attention of that side of the House when he talks about the need for Britain to emulate some of the practices that apply in those countries that are coming though the recession, and coming along more strongly than we are.
Perhaps I may ask a specific question about the minimum threshold of 20 employees per establishment. This, as the Minister probably knows, led to some anomalies which were exposed in the recent closure of Woolworths stores. Most of the stores did not employ 20 people and, because it was looked at as an establishment issue, rather than the undertaking of Woolworths as a whole, there was no proper opportunity for consultation. That anomaly is crying out to be tackled, and a move should be made from establishment to undertaking.
In conclusion, the Government should stop this slicing away of employee rights. They should start promoting better relations and high productivity, and you do not do that by making firing easier.
Baroness Dean of Thornton-le-Fylde
My Lords, I, too, support the amendment of my noble friend Lord Young of Norwood Green. I would like to ask the Minister how he justifies this change against the background of a repeated government assertion that we are all in this austerity period together. Even in a straightforward redundancy situation, this carves out the salaried or hourly-paid workforce that generally runs the company—we are talking about over 100 employees here. Yet in that same redundancy situation you will probably have managers who have contracts of employment that give them a notice period of six months up to as long as 12 months, which would give them a cushion against unemployment. Here there will also be workers who have nothing like that, and have a far shorter period to become accustomed to what is happening to them.
The Minister has heard that good employers will probably, if they need to, take more than 45 days. However, as in everything else, we need to legislate for the bad employers, because the good employers will usually follow their conscience. The bad employers will take advantage of this. Anyone who has witnessed over 100 workers losing their jobs in one go will know that it takes time and consideration. Certainly this change has nothing at all to do with helping the growth measures that we need in this country. It is about taking away the rights of workers at a time in their working lives when they are the most vulnerable. Their jobs are going and they need support at that time. This measure will do nothing but harm to the workforce and do absolutely nothing at all to help the growth in this country that this Government should be concentrating on at the moment. This measure will do nothing at all to assist that.
Lord Watson of Invergowrie
My Lords, I, too, speak in support of the amendment. I believe that it was Rahm Emanuel, the chief of staff in President Obama’s first term, who said:
“You never want a serious crisis to go to waste. … it’s an opportunity to do things that you think you could not do before”.
I suggest that this is the latest example of this Government not letting a serious crisis go to waste. Purely in employment terms we have already had a reduction in the period for claiming unfair dismissal. Now we are faced with this. In some cases you could describe this as a sledgehammer to crack a nut. I see that there were a total of 160 responses to the Government’s consultation. That hardly suggests that this is a serious problem that needs to be legislated on. Of the 160 who responded—who could be bothered to respond because they thought that it was worth their while to do so—only 100 commented on the need, as they saw it, to reduce the consultation period. The impact assessment tells us that approximately 96,000 people a year come into the category of large-scale redundancies. That is out of a working population of 29 million. Therefore it is not a problem that employers are clamouring for there to be legislation on, and it is not an issue that involves a relatively large number of people, so why do the Government feel the need to move?
We also have figures for other European Union countries. We appear to be better at this stage than any of the countries listed there, so why try to race down to their level? As my noble friend Lord Young said, the OECD says that the UK’s economy is already one of the most flexible in the world, yet it is apparently not flexible enough. Despite the fact that we are ahead of many of our rivals, in an area where there is some protection we seem to be trying to have it whittled away.
Lord Lea of Crondall
My Lords, there is one very good thing I can thank the Minister for: making a party political broadcast on behalf of the Labour Party. There will be many hundreds of thousands of workers who, when this is explained to them, will be determined to make sure that in two years’ time this will be reversed by a Labour Government.
The Minister’s speech raised my blood pressure, probably noticeably so, by hiding, sweeping under the carpet, the huge costs to workers in this change. There is a basic fallacy in saying that we stand in good stead in comparison with Germany and France on this front. Germany and France, and, indeed, Scandinavia, have one thing in common. They all have permanent machinery for consultation with workers through information and consultation bodies, bodies called works councils. We created the whole philosophy and structure of the modern industrial economy in Germany in the British High Commission zone, under Ernest Bevin, in the scheme signed by Field Marshal Montgomery and Marshall Rokossovsky, one of the most interesting footnotes to that period of history. That means that there is no doubt that there is access to the top decision-makers in the company.
Where does the Minister think that those decisions are made? I will try to answer my own question and see whether he has any logical disagreement with it. They are made at top level by the board, or at least by the CEO. As the research done for ACAS by the Warwick Business School demonstrated, the local managers generally know as little about what is going on as do the shop floor. To say that the shop floor representatives can talk to the local managers is a waste of space. Indeed, our system is so second-order to those in the countries I mentioned that redundancy is almost always a fait accompli by the time that it gets announced, whether it is over 90 days or 45. Why is it always a fait accompli? Because there has been no history of knowledge about what are the company's problems.
I have made this point once before. If you have a structure of involvement of the workforce, it cuts out this “us versus them”—much derided in the 1970s. Instead of having the machinery to say, “We are all in this together”, we simply mouth the words and drive the two sides further apart. The workers’ representatives are put together literally overnight with no background knowledge about these matters. Is that a sensible way to run a railroad in the year 2013? Of course not.
This is such a dialogue of the deaf. There is no one on the Conservative Benches, so I could speak all night and it would not make any difference. There are no brains there, there is nothing there. I think that I had better conclude by saying that the development of our alternative thinking on this has been given a big boost tonight. It has given us absolute clarity of the target area where we need to create machinery at board level, workers’ representatives on remuneration committees and throughout the enterprise.
I strongly take the point made by my noble friend Lord Monks that we cannot be the victims of deliberate gerrymandering of constituencies in the company, whereby company X says, “This is the decision-maker”, when we know that the structure of the capitalist company—obviously I am teaching everybody to suck eggs, but please tell me where I am wrong—means that it is at the level of the enterprise as a whole where strategic decisions are taken. It is at that level that we need machinery, as well as, side-by-side with that, a substructure. You do not need to be Einstein to understand, and we are certainly not advocating, that there should be machinery only at the top level with nothing underneath or machinery at local level with nothing on top. There has to be a strategic change in the British economy so that we can look at the real problems why our world export market share is diminishing. As my noble friend Lady Turner pointed out, if you are talking at least about 100 employees, you are not talking generally about SMEs, where I think the cut-off point is 250 in the BIS rules. We are talking about companies here that all need permanent machinery. As has already been stated, that is supposed to be consultation with a view to reaching agreement. That is a joke. We know that that is the way that the world is working at the moment. I strongly support my noble friend. We will get a majority on this because there is no one there to vote against it.
Viscount Younger of Leckie
My Lords, this has been an interesting debate and I thank noble Lords for their contributions. I will start on a point of definition. The noble Lord, Lord Monks, raised the issue of whether “an undertaking” should be exchanged for “establishment”. The test of establishment is used in the European directive, which this legislation stems from. The test of undertaking is not used. Also, the case law dealing with the definition of establishment is still being developed and it would be very difficult and risky to try to define the term in legislation.
The Government believe that the changes in this order are needed to ensure that the legislation remains fit for purpose in today’s commercial environment. I want to start by echoing the words of the noble Lord, Lord Young of Norwood Green, and the noble Baroness, Lady Dean. I, too, acknowledge that job loss is a very serious matter and that every individual who loses their job deserves our sympathy. However, we need to balance the important right of the individual to be consulted with the need for employers to implement change efficiently and quickly to meet market pressures. We need also to address the needs of those employees who do not, in the end, lose their job but have had to live with the possibility that they will. Ultimately, the right of the employee to be consulted is not intended to prevent the employer from making necessary changes. For businesses to remain competitive in the global economy they must be able to respond swiftly to commercial pressures. The 90-day minimum period has been in place for some 40 years and it is right that we now make some changes.
A number of specific points have been raised and I will attempt to answer as many as I can. The noble Lord, Lord Young of Norwood Green, asked, “What about the workers?”. He said that they need a fair deal. I certainly agree with the latter point. Collective redundancy consultation affects a wide pool of employees, many of whom may remain secure in their jobs at the end of the process. The government consultation on the collective redundancy rules showed that concerns about those employees who ended up being made redundant could crowd out the interests of the remaining workforce. The changes to the collective redundancy rules are therefore focused on providing better flexibility so that where consultation can be concluded within 45 days employees gain certainty sooner. I would like to remind the noble Lord, Lord Monks, that, as I mentioned earlier, research shows that the vast majority of decisions between the employee and the employer have been made at between 30 and 45 days. We are not proposing 30 days; we are actually proposing 45 days, which is at the other end of that scale.
Change is also focused on improving the quality of consultation so that during consultation both the employer and employee representatives will be free to concentrate on important issues. These are also issues that have been raised by many noble Lords today and they are valid points.
For employers concerned about losing skilled staff due to uncertainty a shorter minimum period is likely to mean that it will be easier for employees to wait and see if they are personally affected and if so, how. The Government do not believe that the changes will affect how long those made redundant are out of work, or that employers will make different decisions about how many employees to make redundant. Employers do not take lightly the decision to make employees redundant. It has an impact on the morale and productivity of the workforce and means a loss of skills and capability.
Lord Watson of Invergowrie
I thank the Minister for giving way; I will be brief. There was one point I raised in terms of the consultation as a whole, and the rationale behind what the Government are trying to do on this. I have seen what is stated in writing, but when only 160 people or organisations think it fit to respond to a consultation, and only 100 of these make any comment on reducing the period of 90 days, and of those only 19 suggest 45 days, is that not a rather shaky foundation for the Government to proceed on?
Viscount Younger of Leckie
Consultation was just one part of the process, but this policy has been thought out—we believe, and we would say this, wouldn’t we? —extremely carefully. Having taken a lot of conversation wider than this particular consultation, we believe that this is the right way forward. I would remind your Lordships that we have also consulted businesses. In terms of the time, I repeat myself by saying that we have gone from the 90 down to the 45—it is not 90 to 30—because we have actually spoken to businesses and other organisations to get the information that we need.
I would like to conclude by saying that between 50% and 80% of employees subject to collective consultation are not actually made redundant. All are kept in suspense as they wait to find out who stays and who goes. If people do become unemployed, most leave unemployment quickly. Of those making a new jobseeker’s allowance claim, over 50% have left the jobseeker’s allowance within three months, and over 70% have left within six months.
Finally, union respondents did not provide any proof that reducing the minimum period would cause problems. Where anecdotal evidence was provided, it suggested that meaningful consultation can help reduce the number of redundancies, but these are rarely significant in number. I commend the order to the House.
Lord Young of Norwood Green
My Lords, I thank the Minister for his response, even if I did not agree with the tenor of it, or the basis on which they have decided on this legislation. I thank all my noble friends and colleagues who have participated in this debate. They have raised a number of interesting points. As I think my noble friend Lord Monks made clear, this is not going to help industrial partnership or improve productivity. I do not think that the Minister has addressed the problem that the noble Lord, Lord Monks, drew to his attention about the question of establishments and where there is still large-scale redundancy taking place in the organisation as a whole.
My noble friend Lady Dean raised a couple of important points about the fact that the conditions, certainly for senior management, are often vastly different from those for the workforce as a whole. They have a significantly longer period to find alternative employment. As she rightly pointed out, this is taking rights away from workers, and although we heard a lot of talk from the Minister about employers and consultation, he did not really address the point about the bad employers who do not engage in any meaningful consultation.
My noble friend Lord Watson made a point that perhaps I did not stress enough when I pointed out—in response to the Minister, who said that workers would quickly find alternative employment—that we only wish that were the case. I think that he acknowledged in his reply that it would not necessarily be as easy as that. My noble friend Lord Watson pointed out that while they may move to alternative employment, it is often for significantly less pay and inferior conditions. It is not a particularly good climate at the moment to seek alternative employment.
My noble friend Lord Lea has pointed out that the cost of this falls on the workers. It means that their pay for those 45 weeks will be significantly reduced. His point about the importance of the machinery of consultation, which is much more evident in other countries in Europe, is an exceedingly valid one. The Minister talked about the importance of companies acting quickly. I would say to him that it is not about them acting quickly; it is about them having a strategic plan for their business that ensures that it survives. As we have seen so often in recent large-scale redundancies in the high street, they have not actually had a survival plan; HMV is the example that springs to mind. It is not the workers’ fault in these situations; it is not that they have not been prepared to contribute to the company in terms of ideas or loyal working—that is not the cause of the problem.
The Minister says that those made redundant will be a minority, and that crowds out the interests of the remaining workforce. Those who remain in employment are one thing; our sympathies are more with those who will have to look for alternative employment. We do not think it is a question of people being kept in suspense; it is a question of being able to have meaningful consultation and explore the alternatives that my noble friend Lord Monks referred to, whether it is retraining, redeployment or restructuring of the company. When it comes to certainty, there is one thing you gain in these situations: the certainty that significant numbers are going to be made redundant, and the only uncertainty is whether you will be able to get significant alternative employment.
As a number of my noble friends have said, this proposal by the Government is not going to improve the overall situation, in terms of either productivity in companies or stimulating growth of employment. Nevertheless, although I am not by any means satisfied by the Government’s response, and I hope that the Minister is going to reply in detail to some of the questions, I withdraw the amendment.
Growth and Infrastructure Bill
Lord Berkeley
“Planning Act 2008: further reform (pre-application hearings)
In section 51 of the Planning Act 2008 (advice for potential applicants and others), after subsection (4) insert—“(5) Regulations under subsection (3) may also make provision for hearings in relation to a proposed application to be held by a person appointed by the Secretary of State, if requested by the applicant and if the Secretary of State agrees, and in that respect the regulations may require, in particular—
(a) participation in the hearings by the applicant and by any person being consulted on the application; and(b) the payment of fees by the applicant for the cost of the hearings.””
Lord Berkeley
My Lords, in moving Amendment 46C I shall speak also to Amendment 46D, in my name and that of the noble Lord, Lord Jenkin of Roding.
Amendment 46C is another amendment to speed up the process and encourage pre-application discussion between parties. As I said in Committee, this would be welcomed by all promoters of projects, but it appears that PINS has recently withdrawn inspectors from this pre-application work to focus on examinations. That is good for the examinations but it is regrettable because inspectors have a role, because of their seniority, in encouraging promoters to engage fully with the relevant consultees and stakeholders—and maybe knocking heads together.
The amendment would enable inspectors to participate in this pre-application work, if requested by the promoters. Of course, the great thing is that the promoters are prepared to pay the charges for the inspectors, so I would have thought that would be a welcome piece of extra revenue for the inspectorate, enabling it to recruit a few more people. Obviously it would be an entirely open and transparent process but it would speed up and improve the negotiations and relationships that are necessary between the promoter and all the various people they have to consult, as again was said in Committee.
Lord Ahmad of Wimbledon
My Lords, I am grateful to the noble Lord for tabling Amendment 46C and for presenting the case for it and Amendment 46D. In responding to these amendments, I will try not to repeat in detail the arguments that I made against them in Committee but I think it would be helpful if I said a few words about each of them in turn.
The new clause proposed by Amendment 46C sets out a proposal for hearings during the pre-application phase of the infrastructure planning process. As I hope I made clear in Committee, the Planning Inspectorate already offers a pre-application service to developers which can include regular meetings with developers and other interested bodies to discuss the project. I therefore regret that the Government are not convinced by the arguments that formal hearings, even where paid for by developers, are also needed.
I turn now to the question of waivers, as proposed in Amendment 46D. I have noted that the amendment has been somewhat constrained since Committee and now applies specifically to documents that are required to be submitted with an application for development consent. The Government have previously responded to this and, while recognising that this is more focused, we again remain unconvinced that a formal process is needed to achieve what the noble Lord is intending and seeking on behalf of infrastructure developers. Furthermore, the process could potentially undermine the certainty and transparency of the regime. Following changes made to the Planning Act 2008 by the Localism Act 2011, the Secretary of State already has discretion to accept an application that does not fully comply with many of the detailed documentation requirements under the Planning Act, provided that the application is,
“of a standard that the Secretary of State considers satisfactory”.
Based on that explanation, I hope the noble Lord will be minded to withdraw the amendment.
Lord Berkeley
I am grateful to the Minister for that response. I am disappointed in what he said but I shall study his response carefully. In the mean time, I beg leave to withdraw the amendment.
Lord Jenkin of Roding
“Planning Act 2008: further reform (examination fees)
In section 4 of the Planning Act 2008 (fees), after subsection (3) insert—“(3A) The regulations may only require the payment of fees in relation to the examination of an application with reference to those days during the examination period when the application was actually examined by the Examining authority.””
Lord Jenkin of Roding
My Lords, this amendment stands in my name and in the name of the noble Lord, Lord Berkeley. We have discussed how to calculate the fees for applications that are submitted to the Planning Inspectorate under the nationally significant procedure. The difference is really very simple. The regulations as they are drafted at the moment appear quite clearly to require that the fees be paid only for the days on which an application is examined. This has been interpreted in practice as every day between the launch of the application and its final decision. These cannot both be right. The question is: which is right?
The trade association took advice from a very prominent Silk in this area, Michael Humphries QC, who is in no doubt whatever. I quote from his opinion:
“It is apparent from the Explanatory Notes, the Explanatory Memorandum and the Guidance … that the government considers the words ‘relevant day’”—
in the regulations—
“to be synonymous with each ‘working day’ of the examination period … In my opinion, however, that interpretation does not accord with the clear statutory language in Regulations 8 and 9, combined with the definition of the Examining authority in Regulation 2 … Regulation 9(3) is explicit: a relevant day is a day during the examination period on which the Examining authority (i.e. the single appointed person or the Panel) ‘examined the application’. In my view that wording does contemplate ‘relevant days’ as being days on which the Examining authority actually examines the application”.
That seems to be perfectly clear. The Government have recognised that, I think, because we were sent yesterday the draft of some regulations which are intended to correct the position. However, what they are doing in the draft that we have seen is making sure that the regulations now comply with what has been done by PINS, charging fees for every single day between the application and its decision, whether or not the planning application was examined on a particular day.
It is rather disgraceful that the authority has been charging fees on a basis which was clearly inconsistent with the wording of the former regulations, but I am not sure that I can be any kinder about a Government who then say, “Well, we’re going to change the regulation so that it fits our misinterpretation”. That is what has been happening and it is rather unfortunate. The fees can be quite substantial. If you are going to charge fees for an application—I do not quarrel that applicants should pay the cost, or most of the cost, of the process of examining—it should be done consistently and fairly. It is not right to charge by the day or for a day on which their application is not considered.
I have a list of some of the fees that have been charged. I shall not read them all out. The daily rates run between £4,080 a day—for the Hinkley Point reactor, where there are a lot of applicants—to £1,230 a day for projects where there are single applicants. Where there are three inspectors, the rate is £2,680 a day. That runs for five days a week. It does not include the weekends or public holidays but they can amount to very substantial sums. The lists that I have run between £33,000 and £34,000 for the application. It is important to get it right but it must also be fair. I do not think the new draft regulation is fair and I hope the Government will take it back and think again. I beg to move.
Lord Adonis
My Lords, the noble Lord, Lord Jenkin, has made a very powerful argument of principle. He has also pointed out that the sums of money involved are considerable, and it should of course be the Government’s job, if we are promoting growth and development, to see that the costs to businesses are kept at the lowest level possible. That is clearly not being done at the moment. The noble Lord quoted a daily rate, which of course is high for professional people such as these. The National Infrastructure Planning Association estimates that on its conservative assumption of single inspectors examining applications four days out of five, panels of three inspectors examining on nine days out of 10 and panels of five examining on 19 days out of 20, the total overcharging has been of the order of £470,000. The sums of money that we are talking about are considerable.
However, the noble Baroness, Lady Hanham, kindly wrote to me on this issue, because we had a long debate about it in Committee. She made an argument which I think is worthy of consideration but that leaves me wanting to ask her a question. Her argument is that the principle at stake should not be the number of days worked but a reasonable recovery of costs. In her letter to me, she says:
“We do not therefore consider that it is helpful to focus purely on the days worked by Examining Inspectors or the time that they record as there are wider costs involved in the process of examining a nationally significant infrastructure project”.
If that is the defence of the policy—that the relevant consideration is not the number of days worked but the recovery of costs—I think the Minister should feel bound to give the House information about how the costs relate to the charges that have been made. If the noble Lord, Lord Ahmad, is not in a position to give that information to the House this evening, would he please write to us with it afterwards? For my part, and I suspect for the noble Lord, Lord Jenkin, we might wish to return to this on Third Reading.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
I am delighted to return to this matter today. I thank the noble Lord, Lord Jenkin, for the way he has introduced it. It is always worrying when the noble Lord, Lord Jenkin, says something is a disgrace, because it is not usual language. I am sorry; I do not think I am quite in that category. But there we are.
We have discussed this previously, and I did write to the noble Lord, Lord Adonis, as he said. He did not quite finish off what I said in my letter, which was that the way of doing the fees was, as he quoted:
“to focus purely on the days worked by Examining Inspectors or the time they record”.
I went on to say that that,
“was recognised by the previous Government when drawing up the Regulations”.
This is not new. It has not just appeared. I then said:
“The fees therefore cover work carried out both by the Examining authority and persons supporting the Examining authority during the whole of the examination period”.
That is what the fees are for.
This Government, like the previous Government, do not accept that the fees regime for major infrastructure should be structured along the narrow lines suggested by this amendment. One of the policy aims when the regulations were put in place was to,
“introduce a charging scheme that is fair in the sense of charging fees broadly in proportion to the resource cost incurred in processing applications”.
There is a clear indication from this that it is a recovery of costs as much as anything else. That is why we do not believe that it is particularly helpful to focus purely on the days worked by the examiners. As I mentioned in Committee, it is important to recognise that these fees also cover the costs of staff who administer and manage the applications and provide support for the examining authority. It is on that important supporting infrastructure that we are looking to make recovery, as did the previous Government. We are clear that, even now, PINS do not cover their full costs under this regime. It is not exactly a money-spinner.
We are aware that some developers have questioned the interpretation of the 2010 infrastructure fees regulations—
Lord Adonis
If the noble Baroness will forgive me, the issue is not whether PINS at large cover their costs but whether, as the noble Baroness said in her letter to me, the costs associated with the applications themselves are being recovered. Is she in a position to tell me whether, on disaggregating the costs, the costs relating to specific applications are being fully recovered at the moment, if that is the yardstick?
Baroness Hanham
My Lords, they are being fully recovered, as I understand it. No, I think it is right to say that they are not being fully recovered. I should not try to take messages. I will write with that detail to the noble Lord before Third Reading.
We have just laid new regulations, as the noble Lord, Lord Jenkin, said. Broadly speaking they provide that, first, applicants will not be charged for weekends and public holidays unless those days were required for the handling of the application; secondly, applicants will not be charged for days where the examination has been formally suspended; and, thirdly, the Secretary of State may decide not to charge for other days because of sickness or any other circumstances notified to the applicant. It is very clear that what are being charged for are the days on which work is taking place and not weekends. It would probably be a full five days, but not at weekends and not if somebody goes off sick who is important to the hearing. If there are other circumstances, they can be notified. Those regulations have been laid and are therefore there for people to comment upon.
We have tried, as the previous Government did, to ensure that with this regime there is as near a recovery of costs as there could be in a way that is understood and fair. If the noble Lord, Lord Jenkin, was saying that the explanation up until now has not been fair because it has not been understood, I hope noble Lords will think that our regulations, having been laid, provide a good explanation and good support for the fees structure. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Jenkin of Roding
My Lords, I am grateful to my noble friend for that careful explanation. I should say that when I was quoting the figures for the totals, they were of course the overcharge on certain assumptions about how many days the inspectors had worked and the number on which they did not. It still amounts to a very large sum. I think the noble Lord, Lord Adonis, said that it came to more than £460,000 in the calculation that we have been shown. I totally support the noble Lord’s view that it is necessary to have a realistic way of charging that recovers the costs of each application. That seems right to me. I, too, will look forward to getting the letter that my noble friend is going to send to the noble Lord, Lord Adonis. We may not have to return to this on Third Reading, but we will no doubt want to debate the order when it is finally laid and comes before the House. In the mean time, I beg leave to withdraw my amendment.
“(4A) For section 130 of the Planning Act 2008 (National Trust land) substitute—
“130 National Trust land and nationally significant waterways
(1) This section applies to land—
(a) belonging to the National Trust which is held by the Trust inalienably, or(b) held in perpetual trust by Canal & River Trust under the terms of The Waterways Infrastructure Trust.(2) An order granting development consent is subject to special parliamentary procedure, to the extent that the order authorises the compulsory acquisition of land to which this section applies, if the condition in subsection (3) is met.
(3) The condition is that—
(a) a representation has been made by the National Trust or Canal & River Trust about the application for the order granting development consent before the completion of the examination of the application,(b) the representation contains an objection to the compulsory acquisition of the land, and(c) the objection has not been withdrawn.(4) In this section “held inalienably”, in relation to land belonging to the National Trust, means that the land is inalienable under section 21 of the National Trust Act 1907 (c. cxxxvi) or section 8 of the National Trust Act 1939 (c. lxxxvi).
(5) In this section “the National Trust” means the National Trust for Places of Historic Interest or Natural Beauty incorporated by the National Trust Act 1907 (c. cxxxvi).
(6) In this section Canal & River Trust means company number 07807276, a company limited by guarantee formed and registered under the Companies Act 2006 (c. 46), acting in its capacity as trustee of The Waterways Infrastructure Trust.
(7) In this section, The Waterways Infrastructure Trust means the charitable trust of that name, settled by the Secretary of State for Environment, Food and Rural Affairs, and established by the Trust Settlement made by the Secretary of State on 28th June 2012.””
Lord Hodgson of Astley Abbotts
My Lords, I shall also speak to Amendment 48. These two amendments concern the inland waterways of England and Wales and their position under the new planning regime. They are not concerned with the inland waterways of Scotland or Northern Ireland. I need to begin by apologising to the House for not having participated before in the consideration of the Bill. However, this issue came up only late in the day in the proceedings of this House, and long after the Bill had left the House of Commons. The noble Lord, Lord Faulkner of Worcester, raised the issue in outline in Committee on Monday 4 February, reported in col. 51 of Hansard. Subsequently, the Canal & River Trust has been able to address the issue directly in the form of my two amendments. I am extremely grateful to the noble Lord, Lord Faulkner, for having put his name to them. I would also like to put on record my thanks to the Minister and her Bill team for having arranged a meeting in which the CRT was able to explain and discuss the concerns that these two amendments seek to address. With those preliminaries—to horse!
The development of the inland waterways provided a vital link in the progress of the Industrial Revolution in this country. For the first time in those days, before railways and before tarmacadam roads, it became possible to move large quantities of bought material long distances at reasonable cost. It was a truly epochal moment in this country’s history. It is probably not without significance that today we still refer to those who work on the roads with the slang description of “navvies”. We are, in fact, using a phrase that came down from the word “navigators”, the description given to the men who built the canals those many years ago.
This 2,000-mile network of canals—it is said that there are more miles of canal in Birmingham than in Venice—is a fantastic heritage asset. The network contains 2,756 listed structures, 130 scheduled ancient monuments and one world heritage site. After the Church of England and the National Trust, it is the largest owner of listed structures in the country. However, it is much more than just a heritage asset; it is also a huge leisure asset. Thousands of people holiday on canal boats or live on them permanently. Literally millions of our fellow citizens run or cycle along its towpaths. Further, its linear nature, stretching as it does in and through our inner cities, makes it a major environmental asset. Its embankments, culverts and reservoirs provide a habitat for a diverse range of wildlife. Of course there remains some commercial traffic.
Noble Lords will realise from my remarks that the waterways have always had to serve a diverse range of customers and purposes. For many years, the attempts by the British Waterways Board to move forward were affected by another presence: that of Her Majesty’s Treasury. The Treasury kept a beady eye on the British Waterways Board’s assets, seeking wherever possible to collect profits for the Government, or at the very least to ensure that the board was self-funding, including its pension fund liabilities, which, given its long record and historically large workforce, were substantial.
Therefore, the outlook for the waterways was at best mixed when the Government had a flash of inspiration. Beginning under the last Labour Government and completing under the present Administration, the British waterways operations were taken over by a new body: the Canal & River Trust. The heritage assets of the old British Waterways Board—its canals, its towpaths and its associated structures such as bridges and reservoirs—were put into a new charity, the Waterways Infrastructure Trust, which holds them inalienably. Like the assets of the National Trust, they can be sold only with the express permission of the Secretary of State. Any straightforward commercial assets remain outside the charity. In July last year, the holding body, the Canal & River Trust, came into being.
Where, then, is the problem? As we are all aware, water is heavy stuff, so developments close to, alongside or over the canals carry risks. Embankments slip, bridge foundations move and tunnels crack. To date, the waterways’ position has been protected by the British Waterways Board’s status as a statutory body. This gave it access to the special parliamentary procedure of the Planning Act 1947. In the last resort, if an arrangement could not be reached with the developer in question, the board could invoke the SPP procedure, akin to a Private Bill. I know that the noble Lord, Lord Faulkner, has taken part in one of these and can talk far more knowledgably about it than I can. In all the 60 years since 1947, the British Waterways Board never used the SPP procedures, but it was a very useful backstop to ensure that this great national asset was not chipped away at by a series of individual local decisions.
The House will be aware that the statutory bodies protection under the SPP is to disappear under the provisions of this Bill. Further, of course, the new Canal & River Trust is no longer a statutory body, so it is now more vulnerable to attacks on its network. Strangely, while the Government have seen fit to reduce the planning protection for statutory boards and public open spaces, they have continued to provide a special position for the National Trust as laid out in paragraph 96 of the Explanatory Notes to the Bill.
There must be a very strong argument that, given the nature of its operations, the Canal & River Trust can properly be described as a waterways national trust. Indeed, the Waterways Infrastructure Trust was created on terms that explicitly replicate the terms on which the National Trust holds land. It should therefore surely be given the same planning permission as the National Trust: no more, no less. That is what Amendments 47 and 48 aim to achieve.
I end with a few final points. Compared with the National Trust, a higher proportion of the Canal & River Trust assets are in urban areas. The waterways, after all, were built to link our industrial centres. They are linear. Both these factors combine to make them particularly vulnerable to development. Secondly, curiously the National Trust already owns one canal, the Wey and Godalming Navigations. This particular canal will continue to have special protection. Why should the rest of the network not be similarly protected? Thirdly, if my noble friend’s Bill team is encouraging her to resist this amendment on the grounds of creating a precedent, she should not worry. Google away as much as you like: there is no body of similar scale and status to the Canal & River Trust to pop up and say, “What about us?”.
Finally, local interest in canals is intense. Indeed, in the bad old days, most of the work of restoring and maintaining canals was done by volunteers at weekends and the holidays. For those who have an interest in this, there is a great BBC2 documentary on the work that was carried out at that time. The Canal & River Trust is building on this enthusiasm with the establishment of nine local partnerships. This is localism in action. We should protect and encourage it wherever we can.
To conclude, these amendments do not—I repeat not—seek special new privileges for the Canal & River Trust; they merely maintain the existing protections given to the British Waterways Board as a statutory body. These historic assets, which now also provide so many leisure facilities, deserve no less. I beg to move.
Lord Faulkner of Worcester
My Lords, I am delighted to follow the noble Lord, Lord Hodgson. There is not a single word in his speech with which I disagree, and I will do my best to be very brief at this late hour. I will try not to repeat any of the points that he has made. He is generous enough to say that I was able to raise the issue of the Canal & River Trust in Committee, and I got a very encouraging answer from the Minister, the noble Lord, Lord Ahmad. He said in his response to me:
“There is a special status attached to the National Trust because of the extent of the land it owns. Therefore, it occupies a special position, including its benefit in relation to SPP. That said, I hear what the noble Lord has said and it would be useful to arrange to sit down with him and the Canal & River Trust to establish exactly what the issues are and discuss the matter further”.— [Official Report, 4/2/13; col.51.]
The Minister very kindly honoured that commitment. The noble Baroness, Lady Hanham, was the government lead at the meeting on the 5 March. I think that all of us at that meeting came away encouraged that the Government were listening to the points that had been made not just in Committee but with great force by the representatives of the Canal & River Trust, and indeed by the noble Lord, Lord Hodgson. I am therefore a little disappointed that there is not a government amendment alongside that of the noble Lord, Lord Hodgson, on the Marshalled List this evening. Maybe he is going to say that our amendment is of such perfect quality that there is no need for it to be amended and that they will therefore accept it, but it will be matter of very great regret indeed if the Government are not able to accede to the basic principle that the Canal & River Trust’s heritage assets are entitled to the same protection as the National Trust’s. The argument is unanswerable. It will be a matter of great disappointment if the Minister is not able to give that to us. If so, perhaps at a time when the House has more Members in it, we will have to come back to the amendment on Third Reading. As I say, I hope that he can help us, and I look forward to what he has to say.
Lord Adonis
My Lords, at this late hour I am not going to add another speech. I simply say that the arguments which have been set out are very compelling indeed and I hope that the Government are able to make some movement.
Baroness Hanham
My Lords, “he” has become “she”, as I hope noble Lords will notice.
I am very grateful to my noble friend Lord Hodgson and to the noble Lord, Lord Faulkner, who introduced this matter in Committee, for setting out their amendments to Clause 22 on behalf of the Canal & River Trust. I was delighted to have an opportunity to meet and talk with representatives from the trust and to hear what they had to say. I am grateful to them for taking the time to come and tell me how they think the proposed changes to parliamentary procedure will affect the Canal & River Trust.
Of course we understand that the trust carries out a vital role in the preservation of the heritage of our inland waterways. However, I think that I am going to disappoint noble Lords because I will not be able to accept the amendments, and it may be helpful if I set out why.
My noble friend Lord Ahmad spoke in Committee on why the existing provisions for the examination of nationally significant infrastructure projects provide sufficient opportunities to make representations in cases involving the compulsory acquisition of statutory undertaker land. These opportunities will continue to be available to the Canal & River Trust if land it holds as an undertaker is subject to compulsory purchase under provisions in the Planning Act. Most importantly, the trust will still benefit from the provisions in Section 127 of the 2008 Act. This provides that where land was acquired by statutory undertakers—which, of course, British Waterways was—for the purposes of their undertaking and is used or held for those purposes, then it may be acquired only if the Secretary of State is satisfied that there will not be serious detriment to the carrying on of the undertaking, or that the land can be purchased and replaced with other land without any such detriment. This is a significant test. Alongside the need for a compelling case in the public interest for compulsory acquisition, it will be a key factor for the Secretary of State when reaching a decision on whether to authorise compulsory acquisition of statutory undertaker land.
I know from the meeting with the Canal & River Trust that it also has concerns about the changes we are making to special parliamentary procedure where open space is compulsorily acquired. On this, I make the point that the changes we are proposing will require strong tests to be passed before special parliamentary procedure can be disapplied. Where it is decided that special parliamentary procedure should not apply because suitable replacement land is not available, or is available only at prohibitive cost, this will be possible only where it is demonstrated to be strongly in the public interest for the development to start sooner than if it were subject to an SPP.
The provisions in this Bill treat the Canal & River Trust in the same way as any other statutory undertaker. That is inherently different from the position of the National Trust, which has been cited and which has special status in legislation dating back to 1907. In terms of special parliamentary procedure, the National Trust is specifically identified in legislation and given express protection by virtue of its role in the preservation of national heritage; for example, in the Acquisition of Land (Authorisation Procedure) Act 1946, the Acquisition of Land Act 1981, and most recently in the Planning Act 2008. No other organisation with responsibilities for heritage has the same specific named status in respect of legislation covering special parliamentary procedure.
As I said at the outset, we do not believe that the Canal & River Trust should be treated in the same way as the National Trust. I regret that we cannot agree to these amendments, and I appreciate that both the noble Lords and the Canal & River Trust will be disappointed. However, given what I have said about the existing opportunities to allow the trust to make a case against any compulsory acquisition of its land and that these will remain unchanged following the passage of this Bill, I hope that the noble Lord will understand why we cannot accept his amendment and that he will withdraw it.
Lord Hodgson of Astley Abbotts
My Lords, I begin by thanking the noble Lord, Lord Adonis, for his support and the noble Lord, Lord Faulkner, for his powerful remarks and for his description of our meeting, which I agree was encouraging, even if we have had a bucket of cold water poured over us this evening. My noble friend said quite a lot; she said it quite fast and there was quite a lot of technical detail that I would like to have a look at. I did not find the arguments as to why the National Trust is entirely different from the Canal & River Trust completely compelling because, as I understand it, quite a lot of the basis on which the Canal & River Trust holds heritage assets is precisely modelled on the way that the National Trust holds its land and property. However, the hour is late and I should like to read carefully what my noble friend said and think again, having reflected carefully. I thank her for what she told us and I beg leave to withdraw the amendment.
“(7) Subsections (2) and (3) will cease to apply at the end of the period of five years beginning with the date of commencement of this section.”
Lord Faulkner of Worcester
My Lords, I beg to move Amendment 48ZA and will introduce it very briefly. Your Lordships may recall that in Committee I moved that Clauses 22 and 23 should not stand part of the Bill. I defended the principle of SPP at some length, which is one of the reasons why I did not speak or respond to the noble Lord, Lord Hodgson, on the previous amendment. Having served on the Rookery South inquiry, I think that the SPP procedure is important and, for democratic reasons, deserves to exist. I regret that the Government have taken a decision which means that in many respects the SPP will disappear.
Clause 22, in particular, threatens open space. When open space is threatened with a development consent order and compulsory purchase, and where there is no suitable exchange land or the exchange land is deemed to be too expensive, the Secretary of State for Communities and Local Government may himself decide that the DCO need not be subject to special parliamentary procedure. He would also need to be satisfied that it is strongly in the public interest for the development to begin sooner than is likely to be possible if the order is subject to an SPP. I know that Ministers complained at earlier stages of the Bill that the Rookery South SPP took too long. I do not agree. I think that the SPP inquiry which we conducted was thorough and that it was important that it was carried out.
I am not tonight moving that Clause 22 be removed from the Bill. I am effectively inserting a sunset clause so that it would be possible for the Government to demonstrate that it was necessary for the special powers to be withdrawn for up to five years, and it would be necessary at the end of the process for them to win that argument again. I understand that there are pieces of open space that the Government may wish to see acquired compulsorily as part of an urgent planning matter. That is why I am not opposing the existence of Clause 22. However, the safeguard which the insertion of this sunset clause would ensure is worth considering. I beg to move.
Lord Ahmad of Wimbledon
My Lords, I am grateful to the noble Lord, Lord Faulkner, for setting out the reasoning behind his amendment. As he indicated, this would place a sunset clause on some of the provisions in Clause 22 five years after commencement. The Government are, of course, not opposed to such sunsetting clauses in legislation where they are appropriate. In fact, new domestic legislation that imposes a regulatory burden on business is now required to include such a clause. This ensures that the regulation is removed when it is no longer needed, where it is ineffective or where it imposes disproportionate burdens.
However, in the case of Clause 22, I have already made it clear that our aim is to reduce burdens on business by limiting the use of SPP. I remind your Lordships that, if enacted, Clause 22 will mean that SPP will apply in future only to cases involving National Trust land, commons and fuel and field garden allotments, as well as certain cases involving open spaces.
For open spaces, the new provisions being taken forward in Clause 22 will cater for those limited situations where suitable replacement land is not available, or is available only at a disproportionate cost, and where there is a strong public interest in the development proceeding more quickly than would be the case if SPP was required. It will also provide for situations where open space is required only for a temporary purpose.
We are legislating on this now because we consider that it could bring benefits to the development of major infrastructure. It surely makes no sense to assume that such benefits will not be as important in the future and that a burden that had been removed should automatically be put back in place five years from now, or from when this becomes law.
I made it clear in Committee that in most cases our expectation is that developers will continue to provide suitable replacement open space land where such land is acquired, thereby avoiding the need for SPP. At the same time, there may be a small number of occasions, as the noble Lord, Lord Faulkner, indicated, where such replacement land may not be available and development should be able to proceed promptly without going through SPP. This is just as likely to be the case in five or 10 years’ time.
The usual post-legislative review of the provisions within a Bill three to five years after Royal Assent, which will include a preliminary assessment of its effect, will provide the opportunity to review the impacts of Clause 22. I therefore hope that, with this assurance, the noble Lord will be minded to withdraw his amendment.
Lord Faulkner of Worcester
My Lords, I am grateful to the noble Lord, Lord Ahmad, for his response, which is slightly more encouraging than I thought it would be, not least because he referred to the need for a review after three years—I believe he said that. It indicates that there will be an opportunity for us to see what the effect of the limitation of the SPP in future is having, particularly on open space, which is the aspect that worries me the most.
To describe this as a burden is a little exaggerated, bearing in mind that SPP has been invoked on only three occasions since 1947, Rookery South being the most recent. However, having said that, I hope that the Government will take that review seriously, and so I will not press for a sunset clause after five years, and I beg leave to withdraw the amendment.
Lord Adonis
Lord Adonis
My Lords, I shall speak also to Amendments 48ZC, 48ZD and 48AA. These amendments repeat amendments that I moved in Committee. They would exclude quarrying and open-cast mining from the definition of business and commercial developments; require regulations to limit the definition of business and commercial projects in order to exclude areas of special historical or environmental importance from the type of applications that could be permitted to bypass the local authority; require the Secretary of State to publish the reasons for his decision to assume authority to decide the outcome of an application, including the reasons for which he considers the application to be nationally significant; and request that the local plan will have primacy where there is no existing national policy statement of relevance.
I thought it important that even at this late hour we had an opportunity to debate what is quite a significant change brought about by the Bill. There is one specific issue arising from Committee that I would like to clarify with the noble Baroness. I am not sure who to address and I have got it wrong each time so far. The noble Baroness and the noble Lord are confusing us by changing between Committee and Report. They are clearly able to cover the waterfront between them.
The subject of opencast mining is extremely sensitive and controversial in the communities where it takes place. The current issue is whether this will or will not come into the definition of business and commercial development. In Committee, the noble Baroness was vague on this point. She said:
“We therefore consider that some minerals schemes could be capable of being of national significance, but again we wish to consider the consultation responses before we reach final conclusions about the forms of development”.—[Official Report, 4/2/13; col. 62.]
Is she able to say whether that further consideration has been given and what kind of mineral schemes, if any, would in the Government’s view be capable of being of national significance? This is a new issue which was left very much in the air after Committee and I hope that if she is not able to give me a reply today she will be able to write to me afterwards. I beg to move.
Lord Berkeley
My Lords, I shall speak briefly to Amendment 48A, which is grouped with these amendments. This re-examines the situation where there are commercial and business projects with housing. I am grateful to the Minister for her letter yesterday. There is this tension between projects which include housing and which are therefore excluded and those that do not include housing. In her letter the Minister does not say what consultees felt about the moving of housing from the scope of Clause 24, only that there was comment on whether the exclusion of housing from the regime, although widely supported, would limit the number of mixed-use schemes.
This amendment would be a useful way of dealing with projects that are nationally significant commercial or business projects being considered under the Planning Act, but it would also strengthen the “town centres first” approach in the National Planning Policy Framework. Despite what the Minister said in Committee, it does not counter the Government’s line that planning for housing should remain a core responsibility of local authorities, as set out in the NPPF. They do have a role, but it would be useful to hear the Minister’s comments as to when there is a small housing element within a larger development. I look forward to what the Minister has to say in response.
Baroness Hanham
My Lords, I thank both noble Lords for tabling these amendments, which, as the noble Lord, Lord Adonis, said, we discussed and considered quite carefully in Committee. The amendments seek to limit the types of development and development sites which can and cannot be considered nationally significant under Clause 24. As noble Lords are aware, the purpose of Clause 24 is to extend the existing powers within the Planning Act to direct certain forms of proposed development into the Planning Act regime to new forms of business and commercial development if it is of national significance.
Amendments 48ZB and 48ZD would rule out proposed schemes using the regime if they were on sites of special environmental or historic importance or if they involved minerals extraction or quarrying. They would also apply to existing types of infrastructure, such as energy, transport and water, as well as to new forms of business and commercial schemes. When we debated the amendments in Committee, I explained that one effect would be that a potential scheme of national significance, which might otherwise be considered via the Planning Act route, could not be the subject of a direction if part of the site had an environmental designation or was of historic importance. We are fortunate to live in a country that enjoys the benefits of beautiful countryside, about which we heard so much earlier, and a rich and varied historic environment. Although it is unclear what site of environmental or historic importance the noble Lord has in mind, it is worth while reflecting that the National Planning Policy Framework sets out a clear planning framework for development, which might have an impact on areas with a special designation. If a scheme is of national significance and is directed into the regime, the Secretary of State will have to consider all the issues which are both important and relevant, including any impact on the historic or natural environment, before he reaches his decision. We do not believe that it is sensible to exclude from the scheme large parts of the country without proper consideration of the planning merits. That could also discourage developers bringing forward new infrastructure or other forms of development vital to the country.
The noble Lord has also sought to exclude surface mineral extraction or quarrying. Perhaps I may explain our thinking on minerals a little more, as I think that he thought that I was a bit wobbly last time. As we explained and recognised in the National Policy Planning Framework, minerals are essential to support sustainable economic growth and our quality of life. For example, without minerals, our building industry would grind to a halt. It is important that there is a sufficient supply of material to provide the infrastructure, buildings, energy and goods that we need. That is why we sought views on whether some mineral schemes could be capable of using the nationally significant infrastructure regime.
However, I would say again what I said in Committee. We are considering consultation responses and we need to take them into account before we reach a final view on whether mineral schemes should form part of the proposals at all. I remind noble Lords that the accompanying regulations, which are required to prescribe the types of development, will be subject to the affirmative procedure, so we will have an opportunity to discuss them in detail later.
The noble Lord has also spoken again to the amendment which would require the Secretary of State to give reasons when making a direction. We covered that briefly in Committee. Although I do not disagree with the noble Lord on the point of substance, the amendment is unnecessary. The Secretary of State is already required to give reasons for his decision when making a direction under Section 35(10), and that requirement is carried forward in new Section 35ZA(10) in Clause 24. That is why we do not think the amendment is necessary.
Amendment 48AA would then require the Secretary of State to make decisions on development consent orders for business and commercial developments where there is no national policy statement in place to be made in accordance with the relevant local plan. As we set out in our recent consultation document on the new business and commercial category of development, the Government do not think the case for one or more national policy statements is strong for that category of development. Again, we have been considering the responses to consultation. Only about a third of the responses that we received said they thought a national policy statement should be prepared.
I should stress that, unlike nationally significant forms of infrastructure, which are brought automatically into the regime, the clause does not make it mandatory that developers use the major infrastructure regime. They may make a request to the Secretary of State to use the Planning Act regime or they may continue to submit their planning application to the local council. It is entirely a matter for them under the circumstances.
The noble Lords, Lord Jenkin and Lord Berkeley, once again raised the very important issue of housing and how it should be considered through this planning regime. Perhaps I may say again what importance the Government lay on housing development and also why we think it should remain part of local consideration. We recognise that there are many large, mixed-use schemes that will include an element of housing. Some may have a large amount, as the noble Lord said; some may have very few houses. However, there is also a very pressing need for housing and that is why the Government set out in the National Planning Policy Framework how they expect local planning authorities to help boost the supply of housing in the local area. Each local planning authority therefore should have a clear understanding of the housing needs in its area. It should understand the scale and mix of housing it is likely to need over the local plan period and should plan for the different types of housing it will need, such as for older people and families, and affordable housing. The Government therefore see the delivery of housing by local councils as their core responsibility. We have not ignored the views that have been expressed in this House and elsewhere on whether housing should form part of the infrastructure planning regime. We did not consult specifically on whether housing should be a prescribed form of business and commercial development. It was raised by some respondents, with the majority of them supporting the Government’s position, while a few disagreed.
We recognise that, from time to time, major schemes will come forward that may indicate the need for a decision at the national level. Where there are major residential schemes, such as new settlements with larger than local impacts, the Secretary of State has indicated that we would carefully consider the use of call-in. We believe that is the right approach. We have looked further at the issue of housing but it has not changed our view that we should retain our current position as set out in the Bill. We do not therefore propose to allow development that includes housing to use the infrastructure regime. I hope that clarifies what I think is a sensible approach that will enable new forms of nationally significant development to benefit from the planning regime without it necessarily being mandatory. With those explanations, I hope that the noble Lord will be willing to withdraw the amendment.
Lord Adonis
My Lords, I am very grateful to the noble Baroness for that explanation of the Government’s thinking. I feel bound to make two points. I am not going to press the matter at this late hour. I want to contrast the extremely rigid position she has adopted in respect of developments that include any element of housing—where the Government have given an absolutely categoric view that looks to me to be unduly rigid—with the extreme lack of precision which the noble Baroness has offered the House when it comes to a whole range of other projects such as open-cast mining and quarrying. These may or may not be subject to the nationally significant planning routes depending on decisions that the Government will take care of afterwards. It exemplifies the problem we have in this House of making the law. We are very much dependent on the assurances the Government give us as to what they may or may not do, which we are unable to hold them to.
That leads to me to her response on open-cast mining and quarrying where she said that this will be subject to regulations that will come forward under the affirmative procedure. The great problem in this House is that we have to take statutory instruments or leave them. We do not have the capacity to amend the regulations so the whole set of very important criteria for qualification for the nationally significant planning routes, which will be made hereafter, will be presented to the House on a take-it-or-leave-it basis. If we were making the law in a proper and satisfactory way then, after a proper process of consultation with the results firmly laid before the House, it would be in the Committee and the Report stages of the consideration of this Bill that we took the decision as to what was going to be in the definition of business and commercial projects within the Planning Act 2008 regime.
However, I am well aware that I am whistling in the wind at the moment. I am not going to be able to change the whole legislative process at one minute to 10 this evening but I feel bound at least to make that point because one day, I hope, we will turn ourselves into a properly efficient and satisfactory legislature. I beg leave to withdraw the amendment.
Lord Jenkin of Roding
“(4A) In relation to development in the City of London which is or forms part of a business or commercial project (or proposed project) of a description prescribed under subsection (2)(a)(ii), the Secretary of State may only give a direction under subsection (1) if an application for planning permission for the development would, in the opinion of the Secretary of State, fall to be treated as an application of potential strategic importance for the purposes of section 2A of the Town and Country Planning Act 1990.”
Lord Jenkin of Roding
My Lords, I beg to move the amendment standing in my name on the Marshalled List, and I will just interpose a word about the speech that we have just heard from the noble Lord, Lord Adonis—which was made, of course, by the former director of the Institute for Government. I understand what he said, because there is a great deal of dissatisfaction about the way that we make laws in this country, and there needs to be a very thorough examination of it. However, that is not what I am on about here.
I am grateful to my noble friend’s department, which suggested that I group these two amendments together, which I was very glad to do. Their common thread is of course that they have both been suggested to me by the City of London. The first, Amendment 48ZE, revisits a matter which I raised in Committee in relation to development in Greater London and concerns the relationship of the thresholds as to what would be regarded as nationally significant and what, for the purposes of Greater London, are to be regarded as regionally significant. It really is quite absurd that those two numbers should, in a sense, be almost the wrong way round, with a higher figure for London and a lower figure for the national significance. This applies in relation to the whole of Greater London but is of considerable practical significance to the City of London, because the higher threshold, which is provided by the Town And Country Planning (Mayor of London) Order 2008, for the mayor to intervene in the City is much higher than is required for the rest of London—40,000 square feet of floor space for London generally, but 100,000 square feet in the case of the City. I think that everybody can understand why that should be different and why the City should have a much higher figure, as it is an almost exclusively commercial area with a very small residential development. I went into some detail on that in Committee. I think it will be fairly evident to everyone that the sheer volume of the commercial development in London is quite exceptional and will continue to be so in coming years.
The amendment that I am putting forward reflects the idea that, whereas in Greater London as a whole thresholds are already laid down to identify those cases where commercial development might require a wider look than is taken by the local authority alone, these thresholds should not be undermined by the new procedure for nationally significant development. I suggest that it would make little sense—this is the point I made in Committee—to treat a development as nationally significant when it is too small to be treated as strategically important at the regional level.
When my noble friend answered the debate in Committee he made the point that the threshold is only intended as a minimum. I understand that: not every development above the threshold would necessarily be accepted as being nationally significant. The same of course is also true of the threshold laid down for the Mayor of London’s power of intervention—it is only a minimum level, above which the mayor may or may not decide that the application has potentially significant importance. In both cases, the purpose of setting a threshold appears to be the same: to make clear to the developers and local planning authorities alike that applications for planning permission will be dealt with in the ordinary way by the local planning authority in all but a few exceptional cases. To invoke parallel procedures in respect of tasks that are within the local planning authority’s normal sphere of experience and expertise would risk introducing unhelpful uncertainty into the system. That is the basis on which this amendment is being moved.
It seems difficult to justify a significant discrepancy between the two thresholds as is set to occur in the City of London. When my noble friend answered the debate, he agreed that it was hard to envisage. He said—I quote from Hansard—that,
“it is hard to envisage a type of nationally significant scheme that the mayor did not have the ability to consider as being of strategic importance”.—[Official Report, 4/2/13; col. 97.]
That really makes the case. That is exactly the principle that my amendment would seek to establish. I therefore suggest that it would be a simple and convenient way of ensuring consistency between the two regimes. Of course, I am quite ready to listen to what my noble friend on the Front Bench has to say. However, the important point is that it should be quite clear that the new regime should not interfere with the ordinary routine activities of local planning authorities, even in unusual areas such as the City. I hope that my noble friend will be able to see the sense of this, and if he cannot accept this amendment, perhaps he could bring back his own amendment at a later stage.
The other amendment is on quite a different subject that was also raised with me by the City. This is amendment 50A. It is intended to remove what is undoubtedly an uncertainty within the City of London about the setting up of business improvement districts. This depends upon the regulations, and the regulations need some clarification. Business improvement districts are usually described by the acronym BIDs and would normally be set up by companies, industrial companies, or the Government introduced a provision whereby they could be set up by local authorities. The detailed procedures for setting them up are contained in regulations made under the Local Government Act 2003.
Some noble Lords may recollect that I introduced an earlier Bill for the setting up of BIDs and took it all the way through this House, but it never made any progress at the other end of the corridor. However, I have a sort of paternal interest in BIDs. It is where bodies come together with a view to supplementing local services by having a ballot. If the ballot has a majority on getting business rate payers to pay a supplement on top, it serves to be able to finance those extra services. They have proved popular and they are widely used now all over the country. There has to be a majority of at least half of the total rateable value of the premises within the area. If that is met, then a BID can come into being and all businesses are obliged to make a contribution to the cost of the additional facilities.
The BIDs model is now an established mechanism for business engagement. However, the company is not the only way; as I said earlier, they can be introduced by a local authority. This is where the difficulty arises in relation to the City of London. It is maybe a more convenient model. The obvious case where a BID might be operated is in the City because the City of London Corporation already operates under a largely business franchise. The great problem arises over whether its regulations actually recognise this. One could have a sort of philosophical discussion as to whether an authority could give a direction to itself, which would be implied by the regulation if it is not amended in the way that I am suggesting. If there is a company set up for the purpose then it can ask the local authority to do certain things. However, if the local authority itself is going to do it, then the regulations ought to provide that that is possible, in a sense by giving directions to itself.
Given that the bid involves a payment of a levy by businesses as a result of a majority vote, and there will always be some businesses that may have voted against it, it is important to see that the procedure cannot be challenged in the courts. I understand that the City of London Corporation has already brought this difficulty to the attention of the department, and that the department acknowledged the difficulty. However, the Bill seems to provide an opportunity for clarification, which perhaps the Minister will be able to offer in his reply. Perhaps he could also indicate if there could be an amendment of the regulations fairly soon.
The City is anxious to get ahead with this and the regulations need to make it possible and ensure that it would be beyond challenge. I hope that my noble friend will be able to reply accordingly.
Lord Ahmad of Wimbledon
My Lords, I am grateful to my noble friend for tabling these amendments and giving me the opportunity to set out the Government’s position.
Turning first to Amendment 48ZE, I have noted my noble friend’s comments, both here and in Committee, and share his opinion on the unique role of the City of London. As I said in Committee, I know the City of London well. It is a world-leading financial and business centre, as we all know, and central to the health of our nation’s economy. It plays a key role in promoting growth and, as my noble friend has said, faces particular challenges in delivering new development in a complex, densely developed, urban and historic environment—challenges that it meets with admirable results, as I am sure all noble Lords would agree.
In bringing forward our proposals to enable business and commercial schemes to benefit from the nationally significant infrastructure regime, we have sought to strike a careful balance between the need to respect existing procedures within the planning system—where these work effectively—alongside developing a simple and consistent approach for dealing with development which is potentially nationally significant.
In seeking to strike that balance, we have considered the particular circumstances of London and, of course, the planning roles of the mayor, the City and other local planning authorities in London. That is why we have included a provision requiring the mayor’s consent before a direction is issued that a project in Greater London can be considered through the infrastructure planning regime. If the mayor does not think a project should be directed into the regime, the application will be dealt with under normal Town and Country Planning Act procedures.
I know that officials have met with the City of London and I have already alluded to local planning authorities in London, and the views of the Corporation of London are recognised within that. As representations are made, certainly with the Mayor of London as well, those representations would be given due consideration.
Among other respondents, the City of London has also raised detailed comments on the thresholds proposed in the consultation paper, as my noble friend mentioned. We are currently considering the responses that we have received, including those from the City of London. I reinforce the point that I set out in Committee, as my noble friend noted, that the thresholds set out in the consultation document were not intended by themselves to signify whether a project was, or was not, of national significance. The thresholds were intended to be a gateway to the Secretary of State’s direction process. On any request for a direction, the Secretary of State would have to consider the details and circumstances of the particular project. With this in mind, and in light of the existing requirement in the legislation for the Mayor of London’s consent to be obtained for London projects, we do not consider that at this stage it is desirable to add to the primary legislation as envisaged by this amendment.
A further qualification in the Bill would add unnecessary complexity, which runs counter to our objective of simplifying and streamlining procedure. We will also be prescribing the types of development in regulations, which will of course be subject to the affirmative procedure. Your Lordships will therefore have another opportunity to consider the types of development, in London and elsewhere, that might be directed into the infrastructure planning regime.
Turning now to my noble friend’s amendment on business improvement districts, it may help if I briefly say a few words about how business improvement districts operate. A business improvement district is a defined geographical area within which the businesses agree to pay a levy that is used to enhance the local trading environment. More than 100 such schemes have been introduced in England in the past decade and the Government consider business improvement districts to be an important tool in the current economic climate for promoting the localism agenda and local growth. The importance of business improvement districts was recognised in both the Portas review itself and the Government’s response to it.
Lord Jenkin of Roding
My Lords, I am grateful for the trouble that my noble friend has taken in responding to these two points. On the first one, I recognise that this is very much a matter for regulations and I am grateful for his understanding of the position that the City has found itself in. On the second point, I shall be glad to take him up on his offer of a meeting. Perhaps I will be able to bring one or two of the experts from the City with me because I would not trust myself to deal with the technicalities by myself. Having said that, I beg leave to withdraw the amendment.
Lord Ahmad of Wimbledon
“Delegation of planning functions by Mayor of London
(1) In section 38 of the Greater London Authority Act 1999 (delegation) after subsection (2A) insert—
“(2B) In relation to a function listed in subsection (2C), subsection (2) has effect—
(a) as if paragraph (b) referred only to members of staff appointed under section 67(1), and(b) with the omission of paragraphs (c) to (f).(2C) The functions referred to in subsection (2B) are—
(a) the function of giving a direction under section 2A(1) or (1B) of the Town and Country Planning Act 1990 (call-in of planning applications by the Mayor), and(b) the function of determining an application by virtue of section 2A or 2B of that Act.”(2) In consequence of subsection (1), omit section 2B(8) of the Town and Country Planning Act 1990 (which disapplies section 38(1) of the 1999 Act in relation to functions under sections 2A and 2B of the 1990 Act).”
Lord Ahmad of Wimbledon
My Lords, the existing legislation gives the Mayor of London specific powers in relation to planning in the capital, including the ability to call in applications for his own decision if they are of potential strategic importance for this city. In Committee, my noble friend Lord Tope made the case that the mayor should have the ability to delegate these decisions where he is unable to take them personally. This amendment responds to that suggestion. We agree that it is sensible for the mayor to have some ability to delegate these decisions. There may be times, for example, when he is out of the country or, very occasionally, a conflict of interest with his other mayoral responsibilities could arise. In these circumstances the ability to delegate will allow a quicker decision and minimise any delay to investment from the planning process. Equally, we recognise that these are important decisions for London, and so this amendment limits the office holders to whom the delegation may apply to those post-holders who are appointed by, and are directly accountable to, the mayor himself. In practice, this will allow decisions on whether to call in applications of potential strategic importance, or whether to grant permission for such schemes, to be made by the appropriate deputy mayor, should the Mayor of London be unable to make the decision himself.
This is a pragmatic amendment which responds to what was raised in Committee and which will assist with the efficient operation of the planning process in London. I hope that noble Lords will be able to support it. I beg to move.
Baroness Hanham
“Authorisation of road user charging under Planning Act 2008
(1) Section 144 of the Planning Act 2008 (content of order granting development consent: highways) is amended as follows.
(2) After subsection (2) insert—
“(2A) Subsection (2) does not apply to an order that includes provision authorising other charges in respect of the use or keeping of motor vehicles on roads.
(2B) In subsection (2A)—
“motor vehicle” has the meaning given in section 185(1) of the Road Traffic Act 1988, except that section 189 of that Act (exceptions: certain pedestrian controlled vehicles and electrically assisted pedal cycles) applies as it applies for the purposes of the Road Traffic Acts;
“road” has the meaning given in section 142(1) of the Road Traffic Regulation Act 1984.”
(3) Omit subsection (3).”
Baroness Hanham
My Lords, the amendment responds to a commitment made by my noble friend Lord Attlee in Committee, when the noble Lord, Lord Berkeley, and the noble Baroness, Lady Valentine, referred to the Planning Act 2008 in respect of road-using charging. The aim of the amendment that they proposed was to provide greater flexibility for developers wishing to include road-user charging provisions within a development consent order.
I am pleased to say that the Government have now considered this matter further and we agree that there is a good case for making changes to the Planning Act 2008 to remove any ambiguity. This amendment will remove any doubt about whether modern methods of road-user charging, such as those using camera and number plate recognition, can be included as part of any development consent order. It achieves this, quite simply, by disapplying the provisions of Section 144(2) of the Planning Act 2008 in respect of such schemes. The amendment also deletes subsection (3) to enable the transfer of roads from one highway authority to another in appropriate cases: for example, from the local highways authority to the Highways Agency. I hope that the noble Lord, Lord Berkeley, will agree that the amendment achieves what he was seeking, and that he will feel able to support it fully. I beg to move.
Lord Berkeley
My Lords, I am very grateful to the Minister for the work that she has done and for being able to convince the Department for Transport to support this very sensible amendment. I hope that it will enable a proper, modern and efficient tolling system to be installed on the proposed new road in east London, the river crossing in east London and any other projects that come up. It is a major step forward, and I am very grateful.
Lord Adonis
My Lords, I echo what my noble friend has just said. This is a very sensible amendment, and we thoroughly support it.
Lord McKenzie of Luton
“(11) This section shall not come into force until the Secretary of State has—
(a) published detailed up to date comparative estimates of the total numbers of those ratepayers who would be liable to pay more or less as the case may be if this section were or alternatively were not brought into force, and(b) consulted formally with those likely to be affected by the bringing into force of this section, after publishing the information required under paragraph (a).”
Lord McKenzie of Luton
My Lords, this amendment was retabled before we had the opportunity to meet representatives of the Valuation Office Agency. I thank the Minister for organising that meeting, representatives of the VOA who turned up and engaged with us, and other noble Lords who attended.
Frankly, however, the meeting did not move us much further forward except to the extent that it reinforced our concerns about the composition of the data relating to the revaluation deferral. When we debated this in Committee, the Minister was reassuring on the figures, saying:
“The agency believes that 800,000 ratepayers may face increases, compared to only 300,000 seeing reductions. The Valuation Office Agency provides pretty detailed and good valuations”.—[Official Report, 4/2/13; col. 124.]
One thing we know is that the information is not detailed. The VOA report and our meeting yesterday confirm that the analysis is “high level”, is based on limited rental data, was not a projection of the valuation on which a 2015 revaluation would be based—2013—and has not been subjected to the rigour of moderation and validation. Moreover, the categorisation “en bloc” of the “other” category of hereditaments as properties that would see a tax rise we consider to be flawed. This undermines the very basis of the claim that 800,000 ratepayers may face tax increases from a revaluation and only 300,000 a reduction.
We accept that, on the basis of the information available to the VOA, it may not have been possible to do a detailed disaggregation, but that is no excuse for making sweeping categorisations and drawing broad conclusions therefrom. The Government espouse the benefits of stability for business by deferral of the revaluation, but this would have had much greater credibility had it been supported by a prior, robust consultation. At least those who might have anticipated a business rate reduction could have had their voices heard.
Meetings with those affected once the decision has been taken are all very well, but they are no substitute for proper consultation. There is nowhere we can go with this amendment from where we are, but I am bound to say that it smacks of bad policy-making, no prior consultation and insufficient data to support the policy. It is a curious policy anyway that prays in aid of the Government’s own failure—the lack of growth in our economy and the upheaval that this is bringing to business—to justify this departure from what has been a consensus approach to this aspect of local government finance for more than 20 years. I beg to move.
The Earl of Lytton
My Lords, it is an invidious task to be rising at this hour to address this important issue. I, too, am very grateful to the Minister for having organised the meeting with officials from the Valuation Office Agency, some of whom I would even classify as old friends. As I said to her at the end of meeting, I was better informed but, I am afraid, none the wiser.
The Valuation Office Agency maintained that no more detailed breakdown of the figures was available and that it had disclosed everything that was at its disposal, and I have to accept that. However, I point out that it concludes that there are 817,000, which has been rounded down in popular parlance to 800,000, business hereditaments out of a total of 1.7 million nationally that are said to benefit from the deferral of the revaluation. We also learnt that 64.6% of that 817,000, or 528,000, are classified in a very broad and non-subdivided category of “other”: that is, “other” than the bulk classes of retail, office and industrial. The 528,000 represents 31% of the 1.7 million hereditaments nationally. The narrative goes that all the 528,000 would be gainers under the deferral.
Given the spread of gainers and losers in the far smaller bulk classes, the assertion that the whole 528,000 in that “other” class of non-bulk properties constitute gainers stretches credibility. In truth, and from what I know of the market, it is most unlikely to be correct. Moreover, if it is true that the Valuation Office Agency has no other more detailed breakdown of “other”, it is difficult to see how it could have reached a conclusion on the 817,000 beneficiaries. It is an untested, apparently untestable and unverified basis of valuation opinion.
My own view, for what it is worth, is that around 600,000 to 700,000 businesses will be losers under this proposal, but I can no more prove that than the Valuation Office Agency is able to convince me of the veracity of the figures, except that I have used the same figures that it has used. I think this House should be furnished—indeed, I believe Parliament is entitled to be better furnished—with information that is accurate in order to enable it to make an informed decision. We are told that that additional information cannot be provided without spending some £40 million on a revaluation, as I think the noble Baroness said during the previous stage of the Bill. That is not my understanding of the typical cost of an impact assessment on tax changes of a type that I used to get involved with when I was in the public sector. I do not think that consultation of the sort that the noble Lord, Lord McKenzie, has suggested could come anywhere near that sort of figure.
Lord Smith of Leigh
My Lords, I do not know what it is about this clause but we always seem to reach it late at night—I am sure that we all wish we were somewhere else. I was the third musketeer who attended the meeting that the Minister kindly arranged and I echo noble Lords’ thanks to her for doing so, for the courtesy with which the meeting was held and for enabling us to talk to officials from the VOA. As the noble Earl said, we learnt a lot from that meeting, if not enough to change our minds.
I am sure the Minister thinks that we are the awkward squad, but we were trying to express our concern that the Government are pushing ahead with a policy on unfirm ground. What came through from the VOA officials was that the work that they had done to try to forecast valuations was pretty high level and they were not able to say what the precise impact would be. That was particularly the case with the “other” sector. They were unable to say precisely what might happen to the wide-ranging and different activities that are classified as “other”, so they chose—imprecisely, I thought—to push them all into being potential losers if revaluation takes place.
Included in the other categories is the category of pubs. I do not know what the situation is in areas where other noble Lords live, but if you took a drive in the area that I live in, you would see many pubs that have closed down or are offered for sale and so on. Because of the changing nature of drinking habits, pubs are not doing as well as they were. Clearly, if pubs were to be revalued at the moment, then surely they would actually gain from a revaluation, not lose.
The fundamental thing that I took away from the meeting was that the Government were really concerned with the concept of volatility and the belief that, if we do not change business rates valuation, as they should change in 2015, then people will continue to pay the same amount that they were paying and this will avoid volatility. However, if they do postpone the valuation, then in a sense we need to think that the volatility is bought at a particular cost. That cost, in a sense, is with the businesses which are least successful and which would have benefited from a revaluation; they are now subsidising those businesses which have been more successful. In other words, the retail sector of Wigan, which has not done very well, will be subsidising West End theatres. I do not think we can regard that as particularly fair.
I think that, as the noble Earl indicated and as I said in Committee, we need to recognise that the market does not simply stay still. If the Government want to change the cost of occupying premises, it is not simply to do with business rates; the rental value is reflected as well. Where business rates remain high, the pressure to reduce the rental value will be extreme. If we do come round to reinstating the revaluation in 2015, my view is that the volatility that the Government are so concerned about will be greater then because the pressures on the retail sector and other sectors will have had two more years to run, and therefore the changes will be even greater than they would have been if we had introduced the revaluation this year. Therefore, we will be buying stability for now but we will actually have greater volatility in the future.
It is a serious thing to change what has been a 20-odd-year process that all parties agreed was the way business valuations should be changed. It is a bit of a hobbyhorse of mine but, once we stop doing a routine revaluation, then we need a courageous Government to bring it back. Council tax valuations are still based on those set in 1991 because no Government have had the courage to revalue. We keep putting it off. It is not just this Government; the last Government kept putting it off. We are now in a nonsensical situation. I do not want us to be in that situation with business rates because clearly there is a great logic related to the rental values from business premises. We must not do that, so if we do delay it for two years, we should not delay it any more.
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have taken part in this debate. I state specifically that Amendment 49B would require the Secretary of State to publish updated estimates of the 2015 revaluation and to consult formally with those affected before this clause was brought into force. I say from the outset—and it has been raised—that the Government are totally committed to supporting business and delivering growth by providing a strong economic environment in which commerce and businesses can thrive. Businesses tell us that uncertainty is a major barrier to growth. Any business—small, medium-sized or large—will tell you that.
Clause 25 provides certainty over business rate bills for all businesses in England for the period up to 2017. The noble Lord, Lord Smith, talked about courage, and this policy is not being taken forward out of fear. It is being taken forward to address the issue of uncertainty. As business rates are linked to inflation, that means that there will be no real-terms increase in rates over this period. That is why we have decided to postpone the 2015 revaluation to 2017.
The importance of this certainty has been recognised by the Government in Scotland, who also announced their postponement before Christmas. Last week we heard that the Welsh Government will also postpone their revaluation to 2017. I welcome those decisions as they mean businesses operating across Great Britain can plan with confidence for the next four years. However, during the passage of this Bill we have heard too little from the opposition Benches about the benefits that this clause will give to business. Instead we have heard many criticisms of the Valuation Office Agency’s report on the high level impacts of a 2015 revaluation. In many cases, we have heard of criticisms from the private sector rating agents who advise ratepayers on appealing against the new assessments at a revaluation.
Following the Committee stage of the Bill, my noble friend Lady Hanham committed to, and we indeed arranged, a meeting with the noble Lord and the Valuation Office Agency to hear its concerns and to allow it to address and respond directly. That took place yesterday. I attended the meeting. I suppose I should be d’Artagnan of the Three Musketeers, but I am breaking ranks here because I am certainly from the other side. Never mind, one for all and all for one and we are certainly for business—and at the meeting certainly the VOA’s explanation of its work was one that I found helpful.
As we have said before, we understand that ratepayers would like to know what the postponement of the revaluation means for individual rates bills. But that is just not possible without spending, as has been indicated by my noble friend, in excess of £43 million on the revaluation itself. What we do know is that the VOA’s report is the only analysis we have seen that has been published in full and looks across all sectors and regions. We have seen studies from some firms which look only at specific prime retail locations and we have seen others which have merely sought to redraft the VOA’s analysis. None of those studies from private sector agents attempts to capture the full picture of the revaluation as has been done by the VOA. As such, the VOA’s report remains the only credible analysis of the impacts of a 2015 revaluation.
I will address a couple of the points that have been raised by noble Lords. The noble Lord, Lord McKenzie, referred to the 800,000 premises that would have seen a real-term increase in their rates compared to the 300,000 seeing a reduction. Some sectors, as has been acknowledged, would have paid big hikes including petrol stations at an increase of 28%; the self-catering industry such as caravan parks at 29%; hotels at 6%; theatres at 25%; and pubs at 11%.
The question was raised about the challenge of including the 530,000 in the 800,000. These 530,000 properties were in the “other” category. The VOA acknowledges, as it does throughout its report, that at this stage in the revaluation cycle it has very limited evidence on those properties. But the VOA, as it said in the meeting yesterday, has looked at some of the larger groups of property within this extra “other” category. Within that category we find petrol stations with an increase of 28% tax paid; hotels with an increase of 6% tax paid, and pubs with an increase of 11% tax paid. So the VOA remains comfortable with its professional judgment to support the figure of 800,000 losers.
The amendment also seeks to ensure that we consult with those affected before we postpone the revaluation. On this issue of consultation, of course we recognise the importance of speaking to ratepayers about the rating system. Both the Government and the Valuation Office Agency have regular fora to discuss business rates and indeed in recent weeks the Department for Communities and Local Government has held several meetings with those affected by the postponement of the 2015 revaluation. But, as I have said before, our priority is to give businesses extra certainty now, before the revaluation process starts to raise doubts about future rates bills. As the revaluation is a statutory exercise we need to take primary legislation to stop it. That is why we have moved forward to include these measures in the Growth and Infrastructure Bill. By placing the date of the next evaluation on the face of the Bill, as well as the requirement for five-yearly revaluations thereafter, we have also shown our commitment to keeping rateable values up to date. As the noble Lord, Lord Smith, said, we have shown courage to ensure that businesses are clear and Governments are clear in setting these revaluations. We will of course continue to speak to representatives of ratepayers about the postponement of the rating system in general.
The hour is late and the noble Lord, Lord Smith, reminded us that we seem to reach this point on this issue at this time. In the light of the reassurances I have given I hope that noble Lords will understand why the Government cannot accept this amendment.
Lord McKenzie of Luton
My Lords, I start by thanking the noble Earl, Lord Lytton, and my noble friend Lord Smith for supporting the amendment and recognising that we have a shared frustration about the process that has been undertaken to deal with this deferral. I am not sure that it is a shared frustration, but we have a shared understanding of how that 530,000 “other” block was dealt with. We are each convinced that the way with which it was dealt does not justify the conclusion that was reached on the 800,000 and the 300,000. However, we recognise that we are not going to get any more of a detailed breakdown from where we are.
If we follow the line of certainty and how important it is to its logical conclusion, we would never change. We would never have a revaluation. The purpose of regular revaluations was to deal with the equity of the situation: that the burden should be shared fairly between businesses on an updated, regular revaluation. That was the whole purpose of it. My noble friend Lord Smith made a very telling point, which he has made previously, that the volatility that the Government are seeking to buy off by this deferral is in a sense being paid for by businesses that have done less well in recent times and that might have expected some reduction in their business rate assessment. That seems unfair to me.
My noble friend Lord Smith said that we may have been seen as the “awkward squad”. I confess to that and ask for another 200 offences to be taken into account. That is our job. Both the noble Earl, Lord Lytton, and my noble friend Lord Smith have concerns that the rhetoric and the analysis that are coming from this exercise do not altogether chime with what they see and understand on the ground, given their individual expertise and council leadership. Indeed, there are messages from some of the business community. The CBI is on record as suggesting that the benefits of this deferral have been overstated.
We are where we are on this. We are not going to change it from where we stand today. We will clearly monitor the situation.
On consultation, proper consultation is consulting in advance, before you take a decision, to get people’s reactions. I do not know—perhaps I can ask and the Minister can write to me—at what point the prospect of the deferred revaluation was first raised with ratepayer representatives. It would be helpful to know the starting point of that consultation. Having said all that, given the hour, I beg leave to withdraw the amendment.