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Oral Answers to Questions
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mark Menzies (Fylde) (Con)
Q1. What steps his Department is taking to improve coastal safety.
The Secretary of State for Transport (Mr Patrick McLoughlin)
The Department works closely with many organisations to promote safety around our coast.
Last year we saw an increase in accidents around this time of year, and while I want to encourage everyone to enjoy our beautiful coast this summer, I want them to stay safe and to follow the advice of organisations such as the coastguard, the RNLI, the National Water Safety Forum and the Royal Yachting Association so that they enjoy their time around the coastline.
Mark Menzies
Over the summer months, millions of tourists will flock to tourist resorts such as Lytham St. Annes and the Fylde coast. Will my right hon. Friend assure the House that all will be done to keep our inshore waters as safe as possible to encourage more people to holiday here in the UK?
Mr McLoughlin
My hon. Friend is right that many constituents will flock to the coast, including the coastline in his constituency and many others around the UK. Our coastline is fantastic, attractive and beautiful, but it is also dangerous and people should not take risks or underestimate it.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Amphibious vessels such as the Duckmarine that recently sank in Liverpool appear to have at least three regulators: VOSA and the traffic commissioners; the Maritime and Coastguard Agency; and the Driving Standards Agency. Will the Secretary of State ask the accident investigators to consider whether this split regulation and split responsibility is the best way to guarantee public safety?
Mr McLoughlin
Of course we are all very concerned about the incident that happened in Liverpool and I will talk to the inspectorate about it. A report is being prepared by the marine accident investigation branch. I will want to see what it says, and I shall take the point made by the hon. Lady as Chair of the Select Committee.
Mr Iain McKenzie (Inverclyde) (Lab)
It has been revealed that the maritime rescue co-ordination centre in Belfast has been staffed below risk level on 191 shifts this year alone. Does the Minister find that acceptable, and, if he does not, what is he doing about it?
Mr McLoughlin
It is vital that we have cover, and that if there is low availability pairing arrangements ensure that others take over that cover. We will not demur from our responsibility.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
Q2. What his policy is on quality contracts for bus services.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
The regulatory framework around quality contract schemes is the one we inherited from the previous Administration and there are no plans to change it. The decision to pursue a quality contract scheme remains for the local transport authority to take, if it can satisfy itself that the scheme is in the public interest.
Mr Brown
The Minister will know that up until now most provincial passenger transport authorities have preferred the partnership route and, to my knowledge, at least two—Tyne and Wear and West Yorkshire—are exploring whether to go the quality contract route instead, not least because of all the financial pressures that are now upon them. What advice does he have for the two authorities?
Norman Baker
My advice is to consider what is best in the public interest for their constituents, to examine the options available in legislation, to pursue partnership working with bus operators and to try to secure the best possible outcome for the bus passenger.
Miss Anne McIntosh (Thirsk and Malton) (Con)
15. Some 45 per cent. of those travelling on the excellent bus services in North Yorkshire take advantage of concessionary fares. Will the Minister look kindly on allowing bus companies similar commercial freedom to that enjoyed by the railway companies that provide concessionary passes?
Norman Baker
The arrangements for train and for bus are slightly different in the sense that the railway arrangements for the discount card were set in place at privatisation and are funded by the train operating companies, whereas the bus arrangements are of course funded from the public purse. If the hon. Lady has particular concerns about the operation of the travel concessionary scheme in her area, I will be very happy to meet her and talk about them.
Graham Stringer (Blackley and Broughton) (Lab)
When the Minister sat on the Bill Committee for the Local Transport Act 2008, he was not satisfied with what the Government were then proposing because he knew, as do other hon. Members, that the current deregulated system allows bus companies to game the public purse to the detriment of the travelling public. Can he not persuade his hard-hearted Tory colleagues to help authorities that want to re-regulate the system to the benefit of the travelling public?
Norman Baker
As far as the landscape is concerned, following the recommendations of the Competition Commission, we have of course taken steps to improve it. The options available under the Local Transport Act—the hon. Gentleman and I sat on the Public Bill Committee—are still available. I encourage local authorities to explore the best possible options. What we are seeing across the country in places such as Brighton, for example, is a good arrangement between local authorities and bus companies, which is driving up passenger numbers.
Tim Loughton (East Worthing and Shoreham) (Con)
The Minister will well remember the grilling that he and I got before the inaugural meeting of the Youth Select Committee about a year ago on the whole anomaly of young people often qualifying for full adult fares at the age of 16 and of a postcode lottery in certain parts of the country. A year on, with the Youth Select Committee moving on to a new study next week, will the Minister update us on what progress has been made on getting fairer fares for young people?
Norman Baker
I do remember that particular Select Committee engagement, and I am sorry that my hon. Friend is no longer in his post to carry on the work he was doing. Since then, we have talked to the bus companies at the Department for Transport and they have produced this new website, which is useful for identifying offers and the availability of transport for young people. In addition, I have had discussions with the Minister for Schools about the situation for young people, and we are considering what further action, if any, we can take.
Graham Jones (Hyndburn) (Lab)
Lancashire county council is considering quality bus contracts. Will the Minister and his Department be as supportive as possible towards those authorities that wish to move towards quality bus contracts, providing support where necessary?
Norman Baker
We are always happy to engage with local authorities and to give them advice in so far as they request it. Obviously, when local authorities request factual information from the Department, we will be happy to supply it.
Guy Opperman (Hexham) (Con)
The quality of bus travel between Newcastle, Hexham and Carlisle has suffered terribly due to the mismanagement of Arriva. Specifically, many of my constituents encounter great problems with the service being perpetually late or even buses running out of fuel. Will the Minister reassure my constituents that the next time he meets Arriva, he will urge it to improve the quality of this service?
Norman Baker
I am always keen to improve the quality of bus services for passengers. The satisfaction level of bus travel as measured by the independent Passenger Focus is 84%, and in Tyne and Wear, for example, it is 87%. If the hon. Gentleman is concerned about particular issues in his local area, I would be happy to pursue them with him and the relevant bus company.
Alison McGovern (Wirral South) (Lab)
In theory, quality contracts and quality partnerships should make integrated ticketing—and, therefore, smartcard ticketing—easier to manage. We are still not seeing enough smartcard use outside London—specifically in Merseyside, where the project is long overdue. Will the Minister say specifically what he and his Department have done to empower integrated transport authorities to get smartcards available for passengers?
Norman Baker
As a matter of fact, we have provided significant sums of money to ITAs to take forward smart ticketing. We are also taking forward multi-operator ticketing guidance, in accordance with the Competition Commission’s recommendations, and I have made it plain to bus companies that we want to see progress on that matter. Only this week, I held a two-hour meeting with key operators in the bus and train world to talk about smart ticketing and to make sure we are making progress, which indeed we are, in both modes of transport.
Karl MᶜCartney (Lincoln) (Con)
3. What steps he is taking to reduce incidents of dangerous driving.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
We are taking forward the measures set out in the strategic framework for road safety. In 2012, a new offence of causing serious injury by dangerous driving came into force. We are also creating a new drug-driving offence and will consult on the limits shortly. We have also consulted on changes to make the enforcement of drink-driving laws more effective. Additionally, we intend to publish a Green Paper on young drivers later this year.
Karl MᶜCartney
My hon. Friend will be aware that in certain areas of our country there are drivers who have never taken a driving test. Has his Department investigated the potential benefits of requiring drivers to take a test every five or 10 years in order to reduce such incidents and make our roads safer by removing those who drive illegally?
Stephen Hammond
The Department has not investigated the potential benefits of that. We do not regard it as a priority, partly because if those people are driving illegally, they are unlikely to take the test. However, I can reassure my hon. Friend that we take illegal driving very seriously, and that the automatic number plate recognition system is helping us to crack down on illegal drivers.
John Robertson (Glasgow North West) (Lab)
Does the Minister now regret the axing of the targets on deaths and serious accidents on the roads, particularly in the light of the first increases in both categories for more than 10 years?
Stephen Hammond
I am afraid that the hon. Gentleman is out of touch. If he looks at the 2012 figures published this morning, he will see that deaths and serious injuries have reverted to the trend we had expected, and have fallen.
Dr Sarah Wollaston (Totnes) (Con)
When will the Minister’s Department implement part 6 of the Traffic Management Act 2004 to prevent dangerous driving and to allow the prosecution of those who drive in cycle lanes and commit other moving traffic offences?
Stephen Hammond
My hon. Friend will be pleased to hear that we are having cross-departmental discussions on the matter. No decision has been taken yet, but I hope we will come to a conclusion in the near future.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
When the Government announced trials of 80 mph limits on our motorways, there was dismay at the prospect of higher emissions, higher costs for drivers and collisions at higher speeds. The Minister announced in a recent speech that the trials were still on track, whereas the Secretary of State suggested in a press interview last Sunday that they were off the table. If there is one thing we need in road safety, it is clarity. Will the Minister tell us whether the Government are still pressing ahead with such a dangerous policy?
Stephen Hammond
The Government made an initial assessment of the possibility of introducing trials of 80 mph limits, but it is not a priority. What is a priority for this Government is the transformational investment that is delivering growth and road safety. Yesterday’s announcement by the Chancellor will give us the means to deliver that transformational change.
Peter Aldous (Waveney) (Con)
4. What progress he is making on funding the refurbishment of railway stations.
The Minister of State, Department for Transport (Mr Simon Burns)
In the past two years, more than £238 million has been spent on schemes benefiting more than 100 stations nationally, including major investment at Birmingham New Street, London King’s Cross and Reading stations. Work includes improved access, better parking, retail outlets and ticket offices.
Peter Aldous
I am grateful to the Minister for that answer. Lowestoft station is Britain’s most easterly station, and while welcome work is currently taking place to improve bus interchange facilities the station itself remains shabby in appearance. Will the Minister confirm that as part of the negotiations for the extension of Greater Anglia’s franchise, the Government will do all they can to ensure that the station and its surrounds are smartened up and brought back into full use?
Mr Burns
Although there will be no changes in the requirements for the direct award up until 2016, my hon. Friend will be reassured to know that Abellio will be required to undertake normal repair and maintenance activities and to invest in areas where there is a positive business case. I fully understand what my hon. Friend says about the condition of Lowestoft station and the overall impression it gives, and I will certainly draw both his comments and mine to the attention of Abellio.
Emma Reynolds (Wolverhampton North East) (Lab)
Given that on a recent visit to Wolverhampton the Transport Secretary described our train station as “awful”, and given that the Department for Transport contributes to the regional growth fund, will the Minister commit himself to supporting the bid to the regional growth fund by Wolverhampton city council and a consortium to rebuild the station and regenerate the surrounding area?
Mr Burns
The hon. Lady is absolutely right: my right hon. Friend the Transport Secretary did visit the station, and he had a very jolly visit. I can also reassure her that a considerable amount of investment is being made in the area, but the specific bid proposals she mentions will be fully considered and decisions will flow from that in due course.
Mr Russell Brown (Dumfries and Galloway) (Lab)
When the Minister discusses the refurbishment of stations, will he look closely at accessibility for passengers with poor mobility, especially wheelchair users? Will he also take that a step further and speak with some of the train operating companies about the dismal access for some wheelchair users when trying to get on trains?
Mr Burns
The hon. Gentleman raises a very important point. It is crucial that access for those with restricted mobility is improved. That is why, as he will be aware, there is the Access for All scheme, with investment of more than £300 million for the whole programme, and with an additional £100 million to be made available for the next control period. We are as anxious as he is to ensure that there are improvements for such people.
Robert Halfon (Harlow) (Con)
Q5. What steps he is taking to support motorists; and if he will make a statement.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
Roads are vital to people and to the economy, but they have suffered from a lack of investment, and we expect traffic to increase in the years to come. Yesterday, the Chancellor announced the largest programme of investment on our roads for half a century to tackle congestion and support growth. As my hon. Friend will know, since we came to power we have been working hard to minimise costs for hard-pressed families by keeping fuel duty down.
Robert Halfon
The best way of helping Harlow motorists would be to provide an extra junction on the M11, junction 7a, which would reduce traffic and help businesses in my constituency. May I urge the Minister to give it his strong support?
Stephen Hammond
My hon. Friend will recall that I visited him in Harlow a few years ago and saw the scheme for myself. I know that there will be consultation on it over the summer, and that it is a priority for Essex county council. I do not think that I should prejudge the consultation, but, as he knows, I should be happy to meet him and his constituents to discuss the matter.
Robert Flello (Stoke-on-Trent South) (Lab)
Will the Minister join me in congratulating Driver First Assist? It has provided great support for motorists, piloting work with the emergency services and the road haulage industry to promote crash-scene first aid and crash management skills among drivers. Will the Minister and the Secretary of State keep an eye out for an invitation to the national roll-out launch, which I believe is winging its way to their inboxes?
Stephen Hammond
I am delighted to support that initiative, and I look forward to the invitation. Let me also congratulate the road haulage industry on the work it has been doing to make its drivers aware of the danger posed to cyclists by vehicles, and on its excellent work in upgrading the technology in a number of vehicles.
Jenny Chapman (Darlington) (Lab)
6. What his policy is on the privatisation of east coast main line services; and if he will make a statement.
The Secretary of State for Transport (Mr Patrick McLoughlin)
This Government’s programme for rail franchising was announced on 26 March. The comprehensive schedule included the intention to return the inter-city east coast franchise to the private sector by February 2015, and that remains our policy.
Jenny Chapman
The east coast main line will have returned £800 million to the Exchequer by the end of this financial year. Are not the Government taking us from a position in which the line subsidises taxpayers to one in which taxpayers, through their fares, will subsidise shareholders?
Mr McLoughlin
I am guided by the words of the last Labour Transport Secretary, who said:
“I do not believe that it would be in the public interest for us to have a nationalised train operating company indefinitely…because of our recent experience of rail franchising”.—[Official Report, House of Lords, 1 July 2009; Vol. 712, c. 232.]
He said that when he held the job that I hold now, and I think he was right.
Andrew Bridgen (North West Leicestershire) (Con)
The east coast main line has benefited from major improvements over the last 20 years. Will my right hon. Friend assure me that the Government will not neglect the need for future investment in that important route, notwithstanding the huge amounts of money that are being sucked into the doomed HS2 project?
Mr McLoughlin
Huge investments are being made in the east coast and, indeed, a number of other railway lines. Our package of rail investments between 2014 and 2019 will lead to the largest-ever electrification on our railways. The Chancellor confirmed that and further investment in the railways yesterday.
Phil Wilson (Sedgefield) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests.
I support the HS2 project, but because that network will not extend to the north-east of England, there will still be a need for investment in the east coast main line. One option, under the intercity express programme, is the building of a further 270 carriages at the Hitachi factory in Newton Aycliffe. Will the Secretary of State agree to that? It would constitute an investment in sustainable jobs, and an investment in the long and proud tradition of train building in the United Kingdom.
Mr McLoughlin
I welcome Hitachi’s investment at the Newton Aycliffe site, following a £4.9 billion contract that it has already won for refurbishment of IEP trains. The Department is currently considering other proposals. Huge investment is being made in all our railways, partly as a result of the huge increase in the number of people who use them.
Sheila Gilmore (Edinburgh East) (Lab)
Q12. During a debate in the House last Thursday, the Minister of State acknowledged that investment in infrastructure and rolling stock for East Coast would be financed by the taxpayer, but that there would also be some private investment. Perhaps—
Mr Speaker
Order. We do not need these constant sedentary interventions from the Minister of State. The message is clear and simple: be quiet, man.
Sheila Gilmore
What additional investment does the Secretary of State see privatisation bringing?
Mr McLoughlin
I simply say to the hon. Lady: look at what has happened since privatisation—and, indeed, all the current franchises in operation were let by the last Government.
Maria Eagle (Garston and Halewood) (Lab)
At the previous Transport questions the Minister of State said on East Coast that
“the involvement of the private sector means that we can increase, over and above the taxpayers’ money, the money that can be invested”.—[Official Report, 25 April 2013; Vol. 561, c. 995.]
Yet he has now admitted to me in a letter that the investment
“comes from an increase in the value of Network Rail’s regulatory asset base”,
and he says
“it is through private sector operation that we can best realise the benefits of the planned investment.”
Why does the Secretary of State not now just admit to the House that his Minister was wrong?
Mr McLoughlin
No, what my right hon. Friend said was absolutely correct. We are seeing huge investment in the railways and, as I said just a few moments ago, all the franchises currently in operation were let, and endorsed, by the last Government.
Maria Eagle
The fact is that the Secretary of State’s policy does not bring in any additional investment and is costing taxpayers, with millions of pounds paid to train companies to extend contracts so we can focus on East Coast. He claimed West Coast is paying more money back to the taxpayer than East Coast: it is not. He said Lord Adonis backs his plans: he does not. He says they are vital to bring in investment: they are not. Is it not the case that, one by one, his arguments for this costly and unnecessary privatisation have fallen away?
Mr McLoughlin
It is wrong to draw direct comparisons between one company and another. East Coast uses older rolling stock, which is cheaper to rent than the Pendolinos used by West Coast, so I do not acknowledge what the hon. Lady says. What I do acknowledge is that there has been huge growth in the railway industry since privatisation. That has been brought about in the main by competition between the different rail-operating companies—something that the last Government endorsed throughout the entire 13 years when they had the power to change any of these things.
Mr David Ward (Bradford East) (LD)
7. What progress he is making on approving schemes under the local pinch point fund.
The Secretary of State for Transport (Mr Patrick McLoughlin)
From the local pinch point fund, I have announced 72 schemes across the country that will benefit from £190 million of Government funding. Together with third-party contributions, including from the private sector, over £300 million will be invested as a result of that fund.
Mr Ward
I thank the Secretary of State for his answer, and for the welcome infrastructure investment, particularly in commuter routes. Despite the fact that in Bradford people are either travelling up a hill or are just about to do so, cycling is very popular. Every day tens of thousands of people travel from Bradford to Leeds and from Leeds to Bradford. Can the Secretary of State give me any information about the “highway to hell”, the proposed scheme for the cycling superhighway between Leeds and Bradford?
Mr McLoughlin
I am always keen to look at schemes that help cyclists, including by increasing their safety. A number of schemes are currently before the Department, and I hear what my hon. Friend says in support of that bid, but I have to say there are bids from a number of colleagues for these schemes.
Iain Stewart (Milton Keynes South) (Con)
I thank my right hon. Friend for the approval given for the improvements under the fund to the A421 in my constituency. May I ask what his hopes are for the future scope of that fund, so we may, perhaps, bid for further schemes on the A421, including at the western edge of my seat leading into your constituency, Mr Speaker?
Mr McLoughlin
Well, Mr Speaker, I do not think I want to prejudge any future schemes that may or may not be developed. What I would like to point out is that we announced the local pinch point fund last year, and it has been incredibly successful. We had more bids than we had money available for it. Although I am mindful of that, I will see what else can be done. However, as a result of the Chancellor’s announcements yesterday and the statement shortly to be made by the Chief Secretary, there will be huge investment in our roads, which is much needed.
Rosie Cooper (West Lancashire) (Lab)
8. What assessment he has made of the potential role of the local growth fund in improving transport; and if he will make a statement.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
The single local growth fund will incorporate devolved major transport scheme funding along with other funding streams from across Government. The contribution the fund can make to improving transport will ultimately be determined by local decision takers. The Chief Secretary will make a statement on the matter in 31 minutes.
Rosie Cooper
I will try to get in before him. The Burscough curves, the Ormskirk bypass and a railway station for Skelmersdale are much-needed transport projects in West Lancashire that would benefit from local growth fund money. Following the Chancellor’s statement yesterday that local enterprise partnerships are to bid for single growth fund moneys, it is unclear to me who is responsible for making decisions on local transport priorities. Is it LEPs or the local transport authorities? Whose door do I knock on to get that much-needed money?
Norman Baker
We have set up local transport bodies and I have recently been engaging with them on their assurance frameworks, so in the immediate future I would suggest that the hon. Lady contacts her local transport body. The LEP responsibility kicks in from 2015.
John Pugh (Southport) (LD)
Does the Minister agree that the local growth fund should be used to boost cross-country connectivity and not just to join together the big cities, particularly in areas such as Lancashire?
Norman Baker
I certainly agree that it is important to consider all aspects of the geography when considering bids. It is not simply a matter of building huge new roads from A to B. Often, the local pinch point investments referred to by my hon. Friend the Under-Secretary a moment ago can be very effective indeed, so we should be prepared to be open-minded about the schemes that are appropriate for funding.
Dr Julian Huppert (Cambridge) (LD)
9. What steps he is taking to support the get Britain cycling campaign.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
I welcome the work that my hon. Friend and the hon. Member for Dudley North (Ian Austin) have undertaken through the all-party cycling group inquiry. We are looking at the recommendations carefully and will respond in the near future. The coalition Government takes cycling very seriously and is committed to leading the country into getting more people cycling, more safely and more often.
Dr Huppert
I thank my hon. Friend the Minister for that comment. We look forward eagerly to the response and hope that it will be very positive. One suggestion that came up repeatedly was that safety for both cyclists and pedestrians would be driven by 20 mph speed zones as the standard on most residential side streets, but one problem is that the police do not seem to be enforcing them properly. Will the Minister have words with the police to get them to enforce the law?
Norman Baker
I entirely agree that 20 mph zones and limits can be useful in particular locations. I know that my hon. Friend the Under-Secretary has already taken up the matter of police enforcement with the Association of Chief Police Officers. Of course, operational matters are for the police to decide, but in my view if a local democratically elected body decides that a 20 mph limit should apply, the police should enforce it.
Mr Ben Bradshaw (Exeter) (Lab)
The Minister says that he takes cycling seriously, so when will the Government implement the relevant part of the Traffic Management Act 2004 to enable local authorities to enforce measures against law-breaking motorists who drive in cycle lanes and sit in advanced stop boxes for cyclists?
Norman Baker
My hon. Friend the Under-Secretary responded to that exact question on part 6 of the Traffic Management Act a moment ago. We have had representations about that; I am considering the matter seriously; we are in discussions with other Government Departments; and I hope to make a statement shortly.
Ian Austin (Dudley North) (Lab)
With roads congested, high petrol prices and obesity increasing, investing in cycling generates huge benefits and savings elsewhere. What confidence can the Minister give us that yesterday’s 9% cut in the Department for Transport’s budget will not see the paltry amount of money that Britain spends on cycling reduced still further?
Norman Baker
I do not accept that we spend a paltry amount of money. The local sustainable transport fund is £600 million—more than £1 billion with match funding—94 out of the 96 schemes have cycling elements; we have spent £107 million more on a range of cycling schemes in recent months; and there will be a further announcement on cycling spending shortly. I can assure the hon. Gentleman absolutely that spending on cycling will continue.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
11. What his plans are for future investment in London’s transport network.
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
In his spending round statement yesterday, my right hon. Friend the Chancellor announced that the Government will give the Mayor almost £9 billion of capital spending and additional financing power to the end of this decade. We will also consider the case for Crossrail 2. In return, we expect the Mayor to bear down on the running costs of Transport for London. The Chief Secretary to the Treasury will make a statement in a moment about investment in infrastructure, including investment in transport for London.
Seema Malhotra
The Piccadilly line is vital for thousands of my constituents travelling to work at the airport or to London and is a key route for Heathrow’s passengers. It is increasingly overcrowded and in need of upgrading. Will the Minister reassure me that where cuts are being made to Transport for London’s budget, made necessary by the Government’s failure to deliver growth, that will not put at risk this vital investment?
Stephen Hammond
The hon. Lady seems to have missed my response to her question, in which I said that we announced yesterday that we were giving the Mayor almost an extra £9 billion of capital. It is for the Mayor to make decisions about how he deploys that capital.
Lyn Brown (West Ham) (Lab)
Yesterday, when summing up the debate on HS2, the Minister of State, Department for Transport, failed to give comfort or even mention the Stratford solution to the congestion at Euston. Will the Government give a commitment to take seriously the cost-effective proposals for HS2 at Stratford to help the east of London, the City, Essex and Kent?
Stephen Hammond
My right hon. Friend obviously did not have quite enough time to mention Stratford in his closing remarks, but I assure the hon. Lady that the Government look at all these things seriously and will continue to do so.
Simon Wright (Norwich South) (LD)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Transport (Mr Patrick McLoughlin)
Since I last addressed the House, I have been able to announce the full programme of local pinch point schemes, benefiting from £190 million of capital funding from the Government. Recognising the crucial role that such capital investment plays in unlocking growth, my right hon. Friend the Chancellor of the Exchequer yesterday announced a 5.5% real-terms increase in the Department’s capital budget.
The Government have also this morning published the complete road casualty statistics for 2012. I can tell the House that in 2012 the number of reported deaths on our roads fell by 8% to their lowest level since records began in 1926. This is welcome news. However, we cannot afford to be complacent. The number of cyclist fatalities increased by 10% within the year, underlining the importance of our continued work in making cycling safer.
Simon Wright
Norwich is one of the country’s leading cycling cities, with one in five adults cycling at least once a week. The city has ambitions to double this figure in the next 10 years, and Norwich’s bid for city cycling ambition funding would go a long way to achieving that aim. May I urge the Secretary of State to back the bid and inform me when he intends to make an announcement?
Mr McLoughlin
I welcome Norwich’s ambitious plan to double the number of adults cycling over the next 10 years. An announcement on the successful cycling ambition grant bidders will be made as soon as possible, but as I said in my opening statement we cannot be complacent about cycling safety. I look to the increasing interest in the House in this subject and I will consider what else the Department can do.
Lilian Greenwood (Nottingham South) (Lab)
Will the Secretary of State introduce new legislation to improve the regulation of level crossings before the end of this Parliament?
Mr McLoughlin
I will certainly consider what the hon. Lady says about level crossings. I have had conversations with Network Rail about what we should do about them. I will look at whether legislation is the right way to go or whether we already have the powers to get things put right.
Mr David Ward (Bradford East) (LD)
T5. My constituents face some of the highest car insurance premiums in the country. I am aware that many Departments have to be involved in this, but will the Minister reassure me that dealing with this terrible issue remains a top priority?
Stephen Hammond
I can indeed reassure the hon. Gentleman about that. My right hon. Friend the Secretary of State and I hosted a follow-up summit on 25 March to discuss with the industry ways to bring down premiums. The Ministry of Justice has already banned referral fees and is consulting on steps to reduce the number of fraudulent whiplash claims. We are also taking steps to ensure that drivers are better prepared, the driving test is safer and there will be more responsible drivers on the road, which again will help to drive down premiums.
Mr William Bain (Glasgow North East) (Lab)
T2. In the past few years, rail fares have been rising almost three time as fast as wages, and are among the most expensive anywhere in Europe. What will the cap be on regulated rail fares by franchised rail operators in the 2015-16 financial year?
Mr McLoughlin
With the help of my right hon. Friend the Chancellor, we have capped the overall increase in regulated fares to RPI plus 1. I am very aware of the pressure of rail fare increases that passengers face, and so are the Government.
Harriett Baldwin (West Worcestershire) (Con)
T6. This week, a private developer announced plans to invest £400 million in private housing in Worcestershire; it is also going to help with the dualling of the southern link road. Will the Department commit to working with my county council to ensure that we use the opportunity to unlock further investment in Worcester Parkway station and a new bridge across the River Severn to the heart of cyber valley in Malvern?
Stephen Hammond
I am happy to assure my hon. Friend that we will of course be pleased to work with the county council, as we already do. I was delighted that we were able to approve the Worcester integrated transport scheme last year, and my door is always open should she wish to make the case for her constituents.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
T3. Last Friday, many hon. Members from across the north-east went to their local East Coast rail station to highlight the planned privatisation. At Newcastle Central station and elsewhere, the support for East Coast’s remaining in the public sector was overwhelming, and that has since been emphasised by many letters and e-mails. So why is the Secretary of State ignoring the views of those who use East Coast rail and pressing ahead with a costly, wasteful, unnecessary and ideological privatisation?
Mr McLoughlin
As I have said many times, if it is ideological, it must have been the ideology of the previous Government, because that is what the former Transport Secretary and the former Chancellor said should happen. It is not ideological; it is about getting the best service and making sure we get long-term planning on the east coast main line. I believe that we will get a better service because that planning for the future will take place.
Stephen Gilbert (St Austell and Newquay) (LD)
T7. Forget high-speed rail; in south-west England and Cornwall, we welcome average-speed rail, reduced fares and wi-fi on long-distance services. What progress is being made?
Mr McLoughlin
I was down in the west country—the Cornwall and Devon area—just a few weeks ago. I fully recognise the importance of mobile services for the travelling passenger and I am keen to see improvements made. We are discussing with First Great Western how to deliver better services to the hon. Gentleman’s constituents.
John Robertson (Glasgow North West) (Lab)
T4. Following on from the question asked by my hon. Friend the Member for Glasgow North East (Mr Bain) about fares, in a recent poll by Passenger Focus only 42% of passengers were satisfied with the service they were receiving. Exactly what is the Minister going to do to improve that? Might it not be time for us to freeze fares until people are satisfied with the service?
Mr McLoughlin
The Opposition have to decide whether they want investment to continue at the levels that we are putting in to the railways. If they do, it has to be paid for. I believe the cost has to be shared between taxpayers and those who use the services. I make no apology for the amount of investment that this Government are putting in to Britain’s railways. It is desperately needed and the right thing to do, but it has to be paid for.
Mr Alan Reid (Argyll and Bute) (LD)
T9. I am pleased that in recent years the volume of freight being carried on our railways has increased, and it is important that that welcome trend continues. What plans do the Government have to encourage as much freight as possible to transfer from road to rail?
The Minister of State, Department for Transport (Mr Simon Burns)
The hon. Gentleman raises an extremely important point. He will be as pleased as I am that since privatisation, freight transport has increased by 60%. We are helping the rail industry to develop a strategic freight network, which will make rail freight increasingly competitive, so that we can get even more freight off our congested roads and on to our railways.
Graham Jones (Hyndburn) (Lab)
T8. Will the Minister look into the scandal of Driver and Vehicle Licensing Agency checks on the practices of private parking companies? Schedule 4 to the Protection of Freedoms Act 2012 is supposed to protect motorists from rogue car parking companies, such as the operator of Eastgate car park in Accrington, but the answer to a freedom of information request on 18 June revealed that, in breach of the 2012 Act, the DVLA is not checking either notices or correspondence between car parking companies and motorists.
Stephen Hammond
I visited the DVLA only a couple of weeks ago to look at the various departments there, and I know that the agency is alert to the problems of fraudulent car park operators. If the hon. Gentleman brings this particular case to me, I will make sure that we look into it.
Sir Alan Haselhurst (Saffron Walden) (Con)
Does my right hon. Friend the Secretary of State accept that the transformation of the passenger experience at Stansted airport needs to be matched by a transformation in the time it takes to get to Stansted airport, specifically an improvement on the 51-minute journey, which I understand he undertook a week ago?
Mr McLoughlin
My right hon. Friend is right. As he knows, I was at Stansted last week and saw at first hand the subject of his representation and his call for greater investment in Stansted airport. I would like to discuss that with him and think about it with Network Rail.
Valerie Vaz (Walsall South) (Lab)
T10. Stafford road and Stanhope way in my constituency are in a state of chaos owing to unco-ordinated bus services using narrow residential roads. What plans does the Minister have to look at the strategic co-ordination of bus services outside London?
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
We think that these decisions are best made locally. It is therefore a matter for the relevant local authorities to engage with the main bus operators to drive that forward. We have incentivised partnership working through the creation of Better Bus Areas. That is putting £70 million more into the bus network, so there is a financial incentive for local authorities and bus companies to work together. If they are not doing so, I suggest the hon. Lady contact both of them in her area.
Dan Rogerson (North Cornwall) (LD)
Further to that answer from my hon. Friend, what steps are the Government putting in place to protect vital rural bus services, particularly in sparsely populated areas?
Norman Baker
I hope my hon. Friend will have noticed in the statement yesterday that we have fully protected the funding for bus services in order to recognise their importance to rural areas, including his. In addition to that, we are continuing to fund new bus initiatives—Better Bus Areas, the green bus fund and so on—to make sure that buses are properly funded in this country.
Ian Lavery (Wansbeck) (Lab)
Earlier this week statistics were released suggesting that in London, transport spending per head of population is 520 times more than in the north-east region—£2,700 in London, compared with a measly £5 in the north-east. What is the Secretary of State going to do to ensure a fairer distribution of transport finances to the north-east region?
Mr McLoughlin
It is right that there has been large capital investment in London. Building Crossrail was the right thing to do. It was long overdue and it is now being built. It is currently the largest construction project anywhere in Europe. But I also think we must get the balance of transport spend right, and that is partly why HS2 is an important means of spreading those benefits. I very much bear in mind the points that the hon. Gentleman makes. As I pointed out to one of his hon. Friends, we are spending £4.9 billion on the intercity express programme for new trains for the north-west and the south-west.
Mr Marcus Jones (Nuneaton) (Con)
1. What steps he is taking to improve the role of the House in scrutinising European Union-level decision making.
The Leader of the House of Commons (Mr Andrew Lansley)
This coalition Government have significantly increased scrutiny of European Union-level decision making through the provisions of the European Union Act 2011. Three Bills were taken forward in the last Session to signal the approval of Parliament under the Act. In addition to that, the Prime Minister has made 16 statements to this House on business at the European Council. The House will be aware that the European Scrutiny Committee is currently conducting an inquiry into the European scrutiny system in the House and we await its findings with interest.
Mr Lansley
The Deputy Leader of the House and I visited the European institutions during the Whit recess. It was clear to us that there is more that we can do in this House to improve our engagement with and impact on European legislative proposals, especially through the work of the Select Committees of this House. In my view, which I think is widely shared, this House is the prime source of democratic legitimacy and accountability for law making. We should therefore be taking every opportunity to develop our influence, including in EU law making.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
2. What comparative assessment he has made of the opening hours of the Library and the Table Office and the sitting hours of the House.
Mr Frank Doran (Aberdeen North)
In the absence of my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), I have been asked to reply.
Members expect that both the Table Office and the Members Library will remain open at least until the rise of the House on sitting days. In the case of the Table Office, the Adjournment of the House at the end of sitting is the point at which no further procedural business can be transacted. Some adjustment has been made recently to opening hours of the Table Office and the Library to reflect the earlier sitting of the House on Tuesdays and Thursdays and the use made of services by Members.
Dr Coffey
I thank the hon. Gentleman for that answer. I recognise the importance of the Table Office staying open until business has finished, for example so that amendments can be laid, but I suggest, as we are trying to save money, that we look again at the Library service’s opening times so that when we have a late moment of interruption on, say, a Monday, we do not have Library staff here until 1 o’clock in the morning, as frankly that is unnecessary and more office hours would be appropriate?
Mr Doran
I think that Library staff who are on duty are working on other matters, because Members phone in with questions and all the rest of it. The present arrangements were agreed by the Administration Committee after a study of last year’s changes to the House’s sitting hours. If the hon. Lady wants to take the matter to the Committee to look at again, I am sure that its Chair, who is sitting next to her, will be happy to listen.
Diana Johnson (Kingston upon Hull North) (Lab)
3. What steps he plans to take to promote the transparency of hon. Members’ membership of all-party parliamentary groups.
The Deputy Leader of the House of Commons (Tom Brake)
Rules relating to APPGs are a matter for the House. The hon. Lady might be aware that the Standards Committee is currently conducting an inquiry into APPGs. Its terms of reference include the transparency of the House’s regulatory system.
Diana Johnson
Given the public concern about APPGs and lobbyists, might it be possible, as a very small measure, to list next to each Member’s entry on the parliamentary website all the APPGs to which they belong?
Sir Alan Haselhurst (Saffron Walden) (Con)
Will my right hon. Friend assure the House that he will take no steps in this matter until he has heard the evidence and read the report from the Standards Committee, to which the Administration Committee has submitted its own evidence?
Tom Brake
Yes, I would like to assure the right hon. Gentleman that that is the case, and we await the Committee’s report with great interest. Incidentally, Members still have an opportunity to contribute to that process. I am sure that we will then want to allow the House the opportunity to consider the matter in great detail.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I am sure that the whole House will want to join me in thanking you, Mr Speaker, for the leadership you have shown in recent weeks in helping to restore public confidence in Parliament after the public’s concerns about lobbyists and APPGs. The Administration Committee, which is so ably chaired by the right hon. Member for Saffron Walden (Sir Alan Haselhurst), has recommended, as part of a range of measures, the scrapping of APPG passes. Will the Deputy Leader of the House confirm that the Government will not oppose those recommendations? On the broader concern about the transparency of APPGs and lobbyists, does he not now accept that all lobbyists must be covered by a register and a code of conduct?
Tom Brake
The Administration Committee makes sensible proposals, and I look forward to the House being able to come to a decision on them in due course. On lobbyists, the hon. Gentleman will have heard the debate that took place just a couple of days ago. The Government have made our position very clear: we will come forward with a third-party register of lobbyists.
Mr David Nuttall (Bury North) (Con)
Does the Deputy Leader of the House not agree that the real problem with APPGs is that there are simply far too many of them and that the House would benefit from the imposition of a moratorium on the creation of any new ones and a programme of amalgamation and mergers across the whole system?
Tom Brake
The hon. Gentleman makes an interesting point. We all have our different views on whether there are too many APPGs. The Standards Committee might want to consider that proposal. If it comes forward with proposals to limit numbers, that is a matter that I am sure the House would want to consider.
Sarah Newton (Truro and Falmouth) (Con)
4. What plans he has to introduce an e-petitions system applicable to both Parliament and Government.
Simon Wright (Norwich South) (LD)
6. What plans he has to introduce an e-petitions system applicable to both Parliament and Government.
Glyn Davies (Montgomeryshire) (Con)
8. What plans he has to introduce an e-petitions system applicable to both Parliament and Government.
The Leader of the House of Commons (Mr Andrew Lansley)
The introduction of the coalition Government’s e-petitions system has been a successful improvement for public engagement with Parliament. However, it is clear that the public expect to be able to petition their Parliament and seek action from their Government. I want to work with the Procedure Committee, the Backbench Business Committee and interested Members from across the House to develop the current system into something that more fully meets that expectation.
Sarah Newton
I thank the Leader of the House for his answer, but can he really assure the House that any changes to the e-petition will not impact on or restrict the work of the Backbench Business Committee?
Mr Lansley
I agree that reforms of this House should not have an adverse effect on the successful work of the Backbench Business Committee, which this coalition Government established. It may be possible, none the less, that there is a role for a Select Committee or Committees in examining petitions, taking evidence on petitions, seeking information from Government, and even recommending debates in Parliament. However, I envisage that it would remain for the Backbench Business Committee to consider and schedule debates.
Simon Wright
Under the current system, the MP of a signatory to an e-petition is not made aware that a constituent’s signature has been added. Can reforms to the e-petition system take account of the importance of promoting direct engagement between the signatory and their elected representative?
Mr Lansley
My hon. Friend makes a good point. Improving engagement with Parliament and politics must be the focus of any improved system. I am grateful to him for his suggestion on how we can achieve that. However, I alert him to the fact that more than 11 million signatures have been added to petitions in the two years or so since the Government’s e-petitions system was established. I am not sure that hon. Members would welcome an e-mail for each of those signatures, but I do agree that there are ways in which we can open up the data overall to help Members and their constituents to identify and work together on popular petitions.
Glyn Davies
In order to increase opportunities for debate on e-petitions with 100,000 signatures, will my right hon. Friend consider bringing forward a motion to reopen Westminster Hall on Mondays?
Mr Lansley
My hon. Friend may not know this, but I have this week written to the Chair of the Procedure Committee, my hon. Friend the Member for Broxbourne (Mr Walker), to set out the Government’s response to the Committee’s sixth report of the previous Session, which related to debates on Government e-petitions in Westminster Hall. I hope that we will shortly be able to bring forward a motion to extend the practice of opening up Westminster Hall for e-petitions until the end of this Parliament while we consider longer-term proposals for the petition system in this House.
Natascha Engel (North East Derbyshire) (Lab)
When the right hon. Gentleman is looking at the e-petition system and perhaps setting up a Committee to do so, will he ensure that we do not ignore paper petitions and give e-petitions and paper petitions the same status?
Mr Lansley
The hon. Lady is right. I referred to the petition system advisedly—that is, not just the e-petition system. At the moment the e-petition system is working well and is a significant improvement on what happened in the past. The paper petition system in this House is somewhat anachronistic. What we need—I want to work with colleagues to make this happen—is a petition system that enables our constituents to petition their Parliament but also engages with Government to get a response from Government. The signal improvement, I hope, will be for this House to be able to use the petition system as a basis for demonstrating further improvements in the engagement of the House with the issues that matter to our constituents.
Andrew Bridgen (North West Leicestershire) (Con)
5. What progress he is making on the introduction of measures to improve financial scrutiny of Government expenditure.
Dr Julian Huppert (Cambridge) (LD)
9. What progress he is making on the introduction of measures to improve financial scrutiny of Government expenditure.
The Deputy Leader of the House of Commons (Tom Brake)
The coalition Government are keen to build on the success of the alignment project in simplifying Government financial reporting. We intend to do this by working with Select Committees to support better scrutiny of Government expenditure and to promote greater efficiency and improved value for money in all Departments.
Andrew Bridgen
What assessment has the Deputy Leader of the House made of estimates day debates in scrutinising Government expenditure? Could they be a useful tool to monitor the ever-escalating costs of projects such as HS2?
Tom Brake
The three estimates day debates each Session present a valuable opportunity for Select Committees to hold Departments to account, but too often the debates are focused on specific Committee reports rather than departmental expenditure as such. We are keen to explore with Select Committees any ways in which we can enable these debates to focus on a wider range of financial and performance-related documentation. I am sure, for instance, that as part of that process the Transport Committee would want to pick up on the issues that the hon. Gentleman has raised in relation to HS2.
Dr Huppert
The public believe that Parliament scrutinises Government expenditure. When I talk to people they are surprised that in fact we have a few debates about very specific items on estimates days and do not even look at the entirety of one Department’s expenditure. Will my right hon. Friend look urgently at options to reassure the public that Parliament does look at expenditure in these areas, whether through debates in this place, Westminster Hall or Select Committees? We have to hold the Government to account.
Tom Brake
I thank my hon. Friend for that question. Some Select Committees do provide the level of scrutiny that he wants. For instance, the Health Committee and the Transport Committee look at the estimates carefully. I am pleased to say that at least one of the estimates day debates, on 3 July, is a broad one that will look at public expenditure on health and care services.
George Freeman (Mid Norfolk) (Con)
As we drive forward the necessarily tough reforms and efficiency savings in the public sector, I urge the Government to keep their foot on the pedal in driving that revolution through the internal mechanics of Government. What steps can this House take better to scrutinise Government expenditure and, indeed, expenditure in the House, so that we can show the public that we are putting our own house in order?
Petition
Mark Field (Cities of London and Westminster) (Con)
It is a pleasure to present this petition on behalf of Mr Mark Gregory, managing director of PHA Media of Wardour street, and 156 other London residents.
The petition states:
The Petition of a resident of the UK,
Declares that the Petitioner believes that actions of individuals who are sleeping, sheltering, littering and defecating on Cato Street, London, are unacceptable and detrimental to the local businesses and residences. The Petitioner therefore requests that the House of Commons urges the Cities of London and Westminster local authority to resolve this issue and remove those individuals from Cato Street and surrounding areas.
And your Petitioner, as in duty bound, will ever pray.
[P001190]
Investing in Britain’s Future
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (Danny Alexander)
I am grateful to you, Mr Speaker, for allowing more time than is usual for a statement, given the range of announcements to be made today.
Yesterday, my right hon. Friend the Chancellor set out the difficult decisions that the Government have taken to continue the process of restoring our country’s finances. I pay tribute to his work to see the country through these most difficult of times.
Today, I will set out how the British economy can succeed in the global race by creating balanced growth and delivering lasting prosperity. Most past Governments of every colour have prioritised short-term convenience over the long-term national interest. Today, we change that. We are shifting the Government’s policy horizon to match the modern economy’s horizon, because the coalition Government want to make the right long-term choices for Britain.
I therefore announce the most comprehensive, ambitious and long-lasting capital investment plans this country has ever known. We are putting long-term priorities before short-term political pressures. I tell the House in all candour that these are not easy choices. There is no easy way to create jobs and prosperity. It is a difficult path, but the right one.
Today, it is clear that the British economy is moving from rescue to recovery. We inherited an economy in dire straits. Official statistics published this morning show that the recession in 2009 was even deeper than we first thought. We have made painful choices to get our economy back on the right track. We are making good progress—the deficit is down, jobs are up—but as we move from repair to renewal, we need to invest in the fabric of our nation. I can do that because we have chosen to find savings from day-to-day budgets, allowing us to recycle billions into long-term capital spending. That is not the easy choice, but the right one.
We can guarantee £300 billion of capital spending by the end of the decade. Today, I can set out our plans for more than £100 billion of that for the infrastructure of our country: the biggest public housing programme for more than 20 years, the largest programme of rail investment since Victorian times, the greatest investment in our roads since the 1970s, fast online access for the whole country and the unlocking of massive investments in cleaner energy to power our economy forwards, all at a price that we can afford to pay, without adding a single pound to our borrowing forecasts. Investing in stronger communities, in better infrastructure, in new sources of energy—that is how we will build a stronger economy in a fairer society, enabling everyone to get on in life.
At every stage of the process, we have sought to cut waste and inefficiency first, focusing on the back room, not the front line. We should not pretend that that is painless. Back-office efficiencies mean thousands of job losses. Contract renegotiation means rightly asking more for less from our suppliers. But that is the right way to make savings, while improving the quality of our public services.
Across government, we are using our capital budgets to help our public sector become smaller, more efficient and more effective. In 2015-16, we will invest £25 million in the best digital equipment for our police and £100 million in a new prison in north Wales—a scheme that will eventually save £20 million every year. More than £200 million is being invested over three years to increase the digitisation of Her Majesty’s Revenue and Customs’ customer services, a move that will save more than £50 million every year in administrative costs.
I pay tribute to the Minister for the Cabinet Office and Paymaster General and his team for their expertise and insight in unlocking these savings. I am the first Chief Secretary ever to have had this pool of commercial expertise at my disposal during a spending round. They tell me that we can do more to save money for the taxpayer. So, working closely with the Minister for the Cabinet Office, I will conduct a further rolling efficiency review of all Departments to unlock savings to support our economic priorities. I will strengthen the financial management capability in Government, too. We will take action to sell off £15 billion-worth of public assets by 2020. Some £10 billion of that money will come from corporate and financial assets, such as the student loan book, and the other £5 billion will come from land and property.
The Government are the custodians of taxpayers’ assets. When we no longer need them we should sell them back at a fair price and not act like a compulsive hoarder. Too often, local and national Government sit on an area of land that could be put to good use for the economy, housing or schools. Today, we say this to businesses and communities, “If there are any publicly owned sites out there that you can make economic use of, then tell us.” Unless Ministers can be convinced that the site is needed, we will sell that land at a fair price and we will use the proceeds to pay down our debt and invest in our economy.
Let us not forget that the plans we inherited from the previous Government included significant cuts to capital spending in this Parliament. We have added to those plans year-on-year with more money for investment in this Parliament. Some people say that we are not delivering, but since we came to office more than 30 transport schemes have been completed, 150 railway stations have been upgraded and we have built 84,000 affordable homes. However, we need to work more smartly to improve delivery. No single Government infrastructure project in recent memory has been quite as triumphant as the 2012 Olympic and Paralympic games, so we appointed Lord Deighton, the man who oversaw that success, to improve infrastructure delivery across government. He is working his way through Whitehall Department by Department, helping to develop clear delivery plans. Today, the Government are accepting his central recommendation that we take crucial infrastructure delivery out of the hands of civil servants and into the hands of commercial experts.
Our innovative UK guarantee scheme is enabling privately funded projects to go forward, too. It has already provided certainty to investors in the Drax power station and the Northern line extension. I can announce that UK guarantees will be available for two more years to December 2016. I can announce today that we will offer a guarantee of up to £500 million to support investment in the Mersey Gateway bridge and a multi-million pound guarantee to advance the new nuclear power station at Hinkley point, a guarantee that could provide growth in Liverpool and a guarantee that could provide power to 8% of the UK’s homes. These deals are not yet done, but they are a major step forward for our country’s future.
Let me turn to how we will invest in stronger communities. The Government have made a very strong commitment to education. We have protected the schools budget, including the pupil premium. We know what parents want: a good school nearby in a good state of repair, and this is how we will give it to them. First, some buildings simply are not good enough, so we are rebuilding 261 of the worst schools as part of the Priority School Building programme. With the moneys I have committed today, we will complete this by 2017—two years early. There are many other schools in need of repair and investment. The previous Government stopped even checking just how many schools were in need of repair. We have started again. We will put £10 billion behind this, which will be enough to clear the urgent backlog. We are investing, too, to create 1 million new places in a decade across the country, including in Lancashire, Leeds and London—better buildings and a place for every child are the best investment in our future generation.
We will continue to invest in the health of the nation, too. The health budget will rise in 2015, including on capital. That means we can begin redeveloping the Royal Liverpool hospital next year, and I can also announce a further £150 million for health research infrastructure, including facilities for our world-leading work on dementia.
Our new approach to housing is truly transformative. Our Help to Buy scheme is already getting people on to the ladder. But, put simply, this country does not have enough homes that people can afford. The previous Government allowed the number of affordable homes to fall by a shocking 420,000. A good home should not be a luxury for the few, but an achievable aspiration for the many. We are already ensuring that the affordable housing supply increases every year, not decreases, as it did in every year but one under the previous Government. But our housing associations have told me that they can do more. To do that, they need certainty on rents, alongside public investment. So today I can provide both those things: I can guarantee that social rents will be set at the consumer prices index plus 1% out to 2025—the longest period of certainty ever; and I can provide £3 billion more capital over three years from 2015 to deliver 165,000 new affordable homes. On average, that is more each year than in any of the past 20 years; it is more in three years than the previous Government managed in seven. And we can do all that because our approach gets twice as many houses as they did for every pound we put in, getting more for the taxpayer and more for this country. This spending round also funds over 2,500 more new homes specifically designed for older and disabled people, and £160 million for decent homes, mainly in London. I know that issue is important to many MPs, particularly my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes). This is the most ambitious and significant investment in affordable housing for a generation.
Too many Members of this House, on both sides, have in recent years seen the devastation that flooding can cause in their constituencies. We need to work with the private sector to protect families from the threat of flooding, so we will provide £370 million in 2015 and increase that in real terms every year to 2020. More than 400,000 households will be protected over this decade. Insurance also has a vital role to play in helping households deal with the consequences when flooding does occur. I am pleased to tell the House that we have now reached an initial agreement with the Association of British Insurers on the future of flood insurance. The industry wants to do the right thing and so do we. We have always said that we wanted to find a solution that works for households at risk of flooding, wider bill payers and the taxpayer. The industry’s proposed scheme, known as Flood Re, promises to do that by effectively limiting insurance prices for high-risk households. Up to 500,000 households would be helped, with support targeted towards those on lower incomes. Support would be funded by a levy on insurers, something the ABI has promised us will not increase customer bills in general. Importantly, there will be no cost to taxpayers.
There remain many details to work through, so we propose also to take powers to allow us to regulate for affordable flood insurance should that prove necessary. We are seeking these powers in the Water Bill, which we are today introducing to Parliament. The Secretary of State for Environment, Food and Rural Affairs is today launching a public consultation on our proposed approach, and we welcome views on it. He will introduce our final proposals to Parliament as a Government amendment in the autumn.
Local businesses, local communities and local authorities know best how to make the decisions to support growth in their area. For decades we have not given them enough chance to do so, but now we are. Yesterday, the Chancellor confirmed that we are establishing a single local growth fund to transfer funding streams to local enterprise partnerships, as recommended by Lord Heseltine, with £2 billion in 2015 and at least that in every year for the rest of the decade. In total, at least £20 billion will be under the control of LEPs to 2020. The details of how that will work are set out in the document published today.
We have also reached agreement with Greater Manchester on its innovative “earn back” scheme, which will allow it to invest in its priorities, such as the Trafford Metrolink and the A6 to Manchester airport relief road. I know that many hon. Members, including my hon. Friend the Member for Cheadle (Mark Hunter), have been campaigning on that for many years—as indeed has the Chancellor, for that matter.
The regional growth fund has also been a fantastic success, thanks to the drive of people up and down the country, led by my right hon. Friend the Deputy Prime Minister. The £2.4 billion in this Parliament is safeguarding half a million jobs, spread across every English region. Furthermore, we are today investing an extra £600 million so that we can do even more to strengthen our communities.
For our economy to grow, however, we need those communities to be better connected. In the last two decades, rail passenger numbers have doubled, and that figure is set to rise by nearly 15% over the next five years. More people are using our railways than at any time since 1927, so we have set out a clear, long-term plan to cope with that demand. Last year, we announced that Network Rail had been funded to deliver the largest programme of rail investment since the Victorian era, and today I reaffirm that commitment. This investment will bring new life to our rail networks, upgrading stations such as King’s Cross, Manchester Piccadilly and Birmingham New Street, improving links from Liverpool to Newcastle through the northern hub and opening up a new line from Bedford to Oxford. We are also electrifying 850 miles of railway. By comparison, the previous Government managed nine miles in 13 years.
My hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) will be pleased to hear that Network Rail is conducting a feasibility study into electrifying the Lakes line between Oxenholme and Windermere. We are going one better in London, and from 2015, we will fund Network Rail to begin work on electrifying the line connecting Gospel Oak and Barking. Nowhere is fast commuter transport more important for our economy than in London, and our investment in Crossrail will support more than 120,000 additional peak-time commuters every day. The Government are committing £2 million to support a funding and financing study into Crossrail 2. The challenge for the Mayor of London now is to determine how at least half of the cost of the scheme can be met through private sources, ensuring that it will be affordable to the UK taxpayer.
Keeping London connected is crucial, but it must not be done at the expense of our other great cities. It is not good enough that the UK has just 68 miles of high-speed rail, compared with 1,000 in Germany and more than 2,000 in France. We want a high-speed line that connects eight of the UK’s 10-biggest cities, making daily commuting between them possible for the first time. Today, therefore, we provide long-term financial certainty for High Speed 2, setting a funding envelope of £42.6 billion for construction costs and £7.5 billion for rolling stock, and we are setting a clear budget for the scheme of £16 billion for the next Parliament.
Yes, that is a higher overall budget than previously put forward. We are learning from our Olympic experience and setting a long-term, realistic financial plan with the right contingencies. This is the longest and largest transport budget the Treasury has ever set aside, and the people running the project will have to deliver within it.This project will change the economic geography of our country, and I urge hon. Members to support it. It is not being built at the expense of a single other rail project. Taken together, we are supporting more than £30 billion of investment in rail, making this coalition the most pro-rail Government in history.
We also need to think of the remote parts of the UK that HS2 will not reach. Air connections are crucial to those regional economies, so to help maintain those connections, I can announce today that we will provide £10 million a year for a new regional air connectivity fund. I look forward to Howard Davies’s report into that and other aviation issues.
Millions of people rely on our road network. We have worked hard over the past three years to protect road users, cancelling fuel duty increases and saving 13p on a litre of petrol, but our road system has been decaying for decades, and without further significant investment now, by 2040, nearly a quarter of motorists’ travel time could be spent stuck in traffic. I can therefore announce today the biggest programme of investment in our roads in 40 years. The Government will invest more than £28 billion over the six years from 2014 in the enhancement and maintenance of national and local schemes. First, we will take action to fix the backlog of maintenance that has left road surfaces crumbling in communities up and down the country. We are committing £10 billion of investment in road repairs between 2015-16 and 2020-21. More than £4 billion of that money will be spent on national road maintenance—enough to resurface more than 21,000 miles of road, which is the equivalent of London to Beijing and back—while the other £6 billion will be spent locally, allowing local authorities to fill the equivalent of 19 million potholes a year.
Secondly, we will deliver all the major projects in the Highways Agency’s pipeline. We will add two lanes to the busiest motorways, bringing another 221 lane miles to our road network, and we will tackle some of the most congested parts of our network, through projects such as the £1.5 billion A14 scheme between Huntingdon and Cambridge. This scheme is of strategic national importance and will unlock jobs, housing and growth in the region, as well as providing key relief for a major freight route. I am delighted to announce that we will be bringing forward the start of construction by almost two years, to 2016.
I can confirm today that there is more: the A19 between Newcastle and South Shields, the A63 in Hull, the M6 junctions between Birmingham and Manchester, the M5 junctions from Bromsgrove to Worcester, the A38 Derby junctions, the M1 junction near Long Eaton and south of Rugby, the A21 between Tonbridge and Pembury, junctions on the M4, the M23 Gatwick junctions and the A27 Chichester bypass.
This money will pay for us to identify and deliver solutions for the most notorious problem spots across the country. Any hon. Member from the Prime Minister down who lives in Cornwall or who has driven there for their holidays will want to see a better A303. Any hon. Member planning a trip to Scotland—Scotland as part of a strong United Kingdom—will want to see a better A1 north of Newcastle. We will also look at the A27 corridor, the trans-Pennine route and connectivity to Leeds airport.
We will ensure that these investments are delivered, because I can also announce that we are transforming the Highways Agency into a publicly owned corporation, an organisation that will have the long-term funding certainty and flexibility to deliver the best possible road network for the UK’s motorists. We are legislating to ensure that these reforms and this investment are guaranteed.
Where our predecessors left the road network on the hard shoulder, we are bringing it into the fast lane. We are not only building the roads of the future but developing the cars of the future. This Government remain committed—[Interruption.]
Mr Speaker
Order. There is a very disorderly atmosphere in the House. Mr Docherty, you are in a very jolly frame of mind, but it would be greatly to your benefit and that of the House if your jollification could be a tad more restrained.
Danny Alexander
Thank you, Mr Speaker.
This Government remain committed to ensuring that the UK remains at the forefront of decarbonising road transport and investing in electric vehicles. In the 21st century, good communications are not just about faster roads and high-speed railways, however; they are also about high-speed internet access. The Government have already committed £1.2 billion of public investment to fixed superfast broadband. I saw at first hand the impact that that investment is having on smaller communities when I visited Rothbury in Northumberland. It is crucial, if we want to rebalance our economy, that it is not just the biggest cities that have access to the fastest broadband.
The UK already has better broadband coverage, usage and choice than Germany, Italy, France and Spain, but we want to go further. I can announce today that we are providing a further £250 million to ensure that fixed superfast broadband reaches 95% of the population by 2017. We will work closely with industry to ensure that at least 99% of the UK population have access to superfast broadband—whether fixed, wireless or 4G— by 2018.
Let me now turn to how we support the private sector to deliver our energy needs. Some Members will know that I was privileged to spend my early years on the Hebridean island of Colonsay. Then, the island had no mains electricity. Unreliable diesel generators powered the island, and regularly broke down. Until mains electricity arrived, we never quite knew when the lights would go out. We do not want any community in our country to face that problem in the future. Our existing power stations are closing, as they are too old or too dirty to continue. They must be replaced and added to as our need for electricity grows. Thanks to the hard work of the Secretary of State for Energy and Climate Change—
Danny Alexander
He is the best ever.
Thanks to my right hon. Friend’s hard work, we are ready to unleash the energy revolution that our country needs. Today’s news from the British Geological Survey of 1,300 trillion cubic feet of shale gas—double the previous estimate—confirms its huge potential for the UK. That is almost as much hot air as the shadow Chancellor produces in a year—[Interruption.] And if they would stop fracking around on the Opposition Front Bench, they might learn something. The plans that we are setting out today provide the framework to kick-start this industry in a way that protects the environment and supports local communities.
As well as revolutionising the way in which we get our energy, we are transforming how we generate and supply it. As we face the challenge of climate change, we need to bring forward investment in low-carbon technologies. This country has massive potential in wind, wave and tidal. We need to harness it. We are putting in place a comprehensive energy policy through the Energy Bill that is in front of this House. This is an approach that we know will work for consumers and investors alike. Last year we made the unprecedented decision to set out funding plans for low-carbon generation all the way to 2020, providing up to £7.6 billion in real terms.
Now we can set out what this means for investors. We do this through setting strike prices. If future prices are below this level, we will guarantee a price to the generator, giving them the confidence to invest now. But if they rise above it, we will claw back money for consumers. We were planning to set strike prices next month, but we have been able to make faster progress so, today, I can announce that we are publishing the prices for renewable generation ahead of schedule. Prices have been set for key renewable technologies, including onshore and offshore wind, tidal, wave biomass and solar. The prices are broadly similar to those we would have to pay under the renewables obligation. We will set the price at the level we need to bring forward sufficient investment, but not a penny higher. As these technologies develop, costs will fall, so we will reduce the price too. For instance, next year we will guarantee generators £155 per megawatt hour of offshore wind. By 2018 this will fall to £135. We expect our reforms to bring forward 8GW to 16 GW of offshore wind capacity. Industry asked for certainty; we have given it. Now industry needs to get on with it.
Yes, this approach has costs now but, in the long term for consumers, they will be more stable than they would otherwise have been. In fact, when this investment goes alongside our plans for energy efficiency, overall our policies could save an average of £166 per household by 2020. We are taking the right decisions now for the good of our country.
In addition, we need to guarantee that capacity will be available at short notice to meet spikes in demand, for instance through gas-fired stations. Today we can provide details on a new regime that will achieve this. The first auction for this new capacity market will run next year to provide certainty for the winter of 2018. But there is financial risk for construction, too. That is why we have set up a Green Investment Bank to back green energy projects. It has committed over £600 million already; for instance, it has invested in the Walney wind farms off the north-west coast of England, which are expected to provide energy to the equivalent to 300,000 households. We have already pledged to provide £3 billion for the bank and, today, I can announce that we will provide an additional £800 million so that it can expand further. Crucially this will include, for the first time, the power to borrow half a billion pounds in 2015-16 from Government. This is a real milestone in green investment, delivering a key promise we made in our election manifesto, unlocking over £100 billion of private investment into our energy networks, and supporting jobs, growth and prosperity for years to come. Our energy policy is a win for consumers, a win for investment and jobs and a win for our climate; the greenest Government ever.
In the last three years we have re-secured for this country a very precious commodity: credibility. No one doubts that the coalition is serious about sorting out the economic mess that we have inherited. People have the right to know that we will continue to work hard to repair the economy, that interest rates will stay low and that we will get our country back on an even keel. But repair is not all we do, because people also have the right to expect that Britain stays one step ahead in the world, that we ease congestion on our roads and deliver faster broadband to make sure businesses in every corner of this country can serve their customers—[Interruption.]
Mr Speaker
Order. There is a lot of noise in the Chamber. I think that the Chief Secretary is nearing his end.
Danny Alexander
I am certainly nearing the end of this statement.
People expect us to ease congestion on our roads and deliver faster broadband to ensure that businesses in every corner of this country can serve their customers, and that we make sure all parts of Britain keep going. They expect that we will invest in a modern railway so that commuters get to work on time and home in the evening to see their kids. People have the right to expect that we keep spending serious money on the schools and hospitals on which all families rely, and that we make sure that the lights stay on in our homes, even when the demand on energy is surging.
The plans I have set out today deliver all that and more. This is an ambitious plan to build an infrastructure of which Britain can be proud and, in doing so, to help build a stronger economy in a fairer society where everyone can get on in life.
I commend this statement to the House.
Chris Leslie (Nottingham East) (Lab/Co-op)
What a lot of hot air from the Chief Secretary. Haven’t we heard it all before? Plenty of empty promises. But I must ask: when will the Government pull their finger out and actually start to build some of these things?
The Chief Secretary to the Treasury has been sent out with this long-winded statement to talk and talk and talk about infrastructure investment, but all the evidence shows that the Government are failing to deliver. As John Cridland, the director general of the CBI said yesterday:
“While the Government talks a good game on infrastructure”—
and I think even that is a bit doubtful—
“we’ve seen too little delivery on the ground so far.”
It is no wonder that the director general of the British Chambers of Commerce has described the Government’s plans for infrastructure as
“hot air, a complete fiction”.
Should not the Chief Secretary be listening to his leader—not the Prime Minister, but the Deputy Prime Minister, who said this week:
“The gap between intention, announcement and delivery is quite significant”?
A little more action and a little less Tory from him would not go amiss. Why is the Chief Secretary neglecting the health of our flatlining economy, and why was there nothing—I repeat, nothing—in yesterday’s spending review to kick-start a strong and sustainable recovery?
Will the Chief Secretary confirm that this Tory-led Government have spent £5.6 billion less in capital investment over the last three years when compared with the plans they inherited from Labour? No wonder that their plans for construction and growth have been such a total flop. Is he not just a little embarrassed that the infrastructure activity in the British economy collapsed by a staggering 50%—it has halved—in the first three months of this year? Does he not realise that three years of economic stagnation means that this is the slowest recovery for over a century, with just 1% growth compared to the 6% that the Chancellor promised when he started his cuts programme?
The Treasury’s performance on capital infrastructure is lamentable. Just one project has been supported by the Government’s supposed emergency guarantees legislation, which should have underwritten up to £40 billion of infrastructure. Two years ago, the Chancellor told us—I do not know whether he remembers this—that a further £20 billion would be leveraged in from pension funds, yet in March he let slip that only £1 billion had been committed and that no investments had yet been made. Of the 576 projects in the Government’s existing infrastructure pipeline, just seven have been completed and 80% of them have not even started. All the while, the construction sector has lost 84,000 jobs since this Government came to power.
When the Prime Minister said, over 18 months ago, that he would go on
“an all-out mission to unblock the system and get projects underway”,
what happened? All that chillaxing has been at the expense of the recovery that should have been well under way years ago.
Let me ask the Chief Secretary about the detail of his statement. Will he confirm that the Government’s plans for housing construction are stagnant and that no Government have presided over such a low peacetime level of new housing completions since the 1920s? Will he confirm, too, that the local government capital budget, which includes housing, is being cut by over a third—35%—in yesterday’s spending round announcements for 2015. Will he confirm that particular figure? It looks, from the Chancellor’s face, that that is in fact the case. What action is he taking to tackle the lengthening time for both major and minor planning applications to be decided, despite his promise two years ago that they would improve on the 13-week time scale? What happened to that?
On transport, will the Chief Secretary now tell us when he is going to publish the three long-awaited national policy statements on ports, transport networks and aviation? I hope that somebody is keeping an eye on the High Speed 2 budget, which seems to have leapt overnight by £8 billion. It was good that he gave the go-ahead to the Mersey Gateway bridge—again. In fact, he also re-announced the A14 funding, which I think the Chancellor announced two years ago in the November 2011 autumn statement—and in exactly the same words.
On energy and carbon reduction, is not the Renewable Energy Association right to describe the decision to undermine the feed-in tariff rates as “a horrendous strategic mistake”? On shale gas, would it not be sensible to be led by the evidence rather than by political antipathy to renewables? If the Chief Secretary really wants to encourage new investment in our energy infrastructure, should he not have a decarbonisation target to clean up our power supply by 2013?
On flooding, it was noticeable that the Chief Secretary said that the devil was in the detail and there is still a lot to be worked out, but will he stand up and confirm that these changes might need primary legislation? If so, when is that going to happen?
On schools, does the right hon. Gentleman not now regret scrapping Labour’s Building Schools for the Future programme? On “Newsnight” last night, the Education Secretary did not seem to realise that his capital budget was being cut in real terms, perhaps because his so-called Priority School Building programme announced three years ago has so far seen construction start on only one school building.
Does the Chief Secretary not understand how dangerous it is to ignore the warnings from the International Monetary Fund, which says that Britain should bring forward capital infrastructure projects because we need a significant near-term stimulus now, in 2013, not several years away? Why does he not listen to the advice of the IMF? Why does he not come clean and admit that he is cutting the capital investment budget overall, in real terms, by 1.7% for 2015-16, as it says at the bottom of page 11, table 2 of yesterday’s spending review, should anyone care to look at the detail? Is it not the truth that there is no new money for infrastructure? He is spinning a line, rolling multiple years together to make the figure sound big, reheating old announcements in his microwave statement, which should have turned into action long ago.
The House can at least agree that the Government have been negligent with the health of our economy and that the deficit is not falling as a result. The scandal is that they are still ignoring the urgent need to kick-start growth when they should bring forward projects without delay. We are seeing no delivery for three years, no infrastructure brought forward and, for all the hype, real terms cuts to long-term infrastructure in 2015. Something has got to be done about this lot, because so far they are not capable of delivering the goods.
Danny Alexander
What a pathetic response to a very serious long-term and detailed plan for this country’s infrastructure. We heard no admission of Labour’s 13 woeful years of delivery of infrastructure. Given some of the hon. Gentleman’s questions, he obviously had not listened to my statement.
On borrowing, our deficit is falling as a share of GDP, which is the proper measure, but only the Labour party could claim that new figures showing that we borrowed less in previous years are bad news for the country—the Labour party is addicted to borrowing— and that is on the day when we learned that the hole that Labour left in our economy was even deeper than previously said. Today’s figures show that the 2008 recession shrunk our economy by 7.2%, not the 6.3% of previous estimates. As the first shadow Minister to respond since the new figures came out, the hon. Gentleman made no apology for the mess the Labour party made of the economy. We are clearing up its mess, and he ought to have shown a little humility on that point.
On delivery, let me give the hon. Gentleman the facts about this Government’s record. Since 2010, 30 major road schemes have been completed. Of the 24 major projects announced since 2010, eight are under construction, and eight more start this year. Of the 56 local road schemes announced, 28 have been completed or are under construction, and 15 more start this year. Some 150 stations have been upgraded across England and Wales, including Blackfriars and King’s Cross. Some 190,000 school places have been completed for the next school year, and 81 free schools have been built. Some 84,000 houses have been completed, and 59,000 houses have been protected from flooding. Crossrail is employing 8,000 workers with six boring machines—more than the Opposition Front Bench.
On investment, we have added £20 billion of investment at every fiscal event since the 2010 spending—
Mr Speaker
The length of the Chief Secretary’s answer is improper, regardless of its content. The way in which a Minister replies to questioning is a matter for him, and he is at liberty to refer to material, but he must not dilate in his answer. If it were to become effectively a second statement, he might have some difficulty retaining the attention of the House.
Danny Alexander
Thank you for that advice, Mr. Speaker. I was merely attempting to respond to the inaccurate account of our investment given by the hon. Member for Nottingham East (Chris Leslie). In fact, investment as a share of GDP will be higher during the current decade than it was during the 13 years for which Labour was in office. We are spending more and underspending less than Labour did. Ours is a record of delivery and a record of action, and today I have given the House our promise of more.
The hon. Gentleman asked about the private sector. We have been listening to the private sector, which is why we are setting out the long-term plans that it wants. He asked about the planning system. We have reformed the planning system, and he voted against that reform. He also asked about flooding. As I said in my statement, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will be announcing amendments to the Water Bill. The hon. Gentleman will know from the spending round document which was published yesterday that the forecast for local government self-financed expenditure is up, not down. I am sorry to hear that he opposes investment in shale gas. His Building Schools for the Future programme was expensive and inefficient, which is why we have introduced the Priority School Building programme.
I should very much have liked to hear from the hon. Gentleman that he supported our detailed and ambitious plans, and so would the country. I am sorry that we did not hear that from him, and I hope that he will reflect on it in the days to come.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I congratulate my right hon. Friend on his statement. I thank him for his announcement about flood defences, which will pave the way for a flood insurance agreement, but will he please give careful consideration to maintenance spending as well? The Environment, Food and Rural Affairs Committee took evidence from the Association of British Insurers about the subsidy issue. There is a fear that a subsidy will be paid by all households that take out insurance, which would have implications for their spending. We want insurance to be available, yet affordable.
Danny Alexander
I know that the hon. Lady has taken a great interest in this subject. Maintenance spending constitutes a major part of the DEFRA resource budget that was announced yesterday. DEFRA has made considerable efficiencies in flood resource spending, and will continue to have a significant budget. I have been assured by the Association of British Insurers that the proposed levy will not add to people’s bills overall.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I am afraid that the Chief Secretary’s statement was an insult to the intelligence of the British people. We have established, have we not, that in 2015 we as a nation will be spending £10 billion less on infrastructure than we spent in 2010. How can the Chief Secretary allow infrastructure and structural investment funds from Europe to be protected in Scotland and Wales while they are being cut by two thirds in England, at a time when English local government is being asked to cut its day-to-day spending on essential services by a third, allegedly to allow funds to be invested in infrastructure?
Danny Alexander
The Prime Minister secured an extremely good deal on structural funding for the United Kingdom at the recent European summit. There will be a fair allocation of the small reductions in funds between the four constituent nations of the UK, and I think that is the right and proper approach.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
I congratulate the Chief Secretary on his excellent statement, but perhaps he will forgive me if I do not share his enthusiasm for HS2. I am delighted to learn that there is to be a new prison in north Wales, because I have been asking for one for eight or nine years, but I am sorry that the statement made no reference to Wylfa.
More important is the question of airport capacity in the south-east. We cannot duck that Howard Davies report for much longer. We must have it well before the general election, otherwise we shall be building HS2 in completely the wrong place.
Danny Alexander
I am aware of my right hon. Friend’s views on HS2, as is the House. She should know that Hitachi is considering the Wylfa power station as part of its acquisition of Horizon. As for her last point, I will certainly take it up with her.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
I was pleased to hear that the Government intend to upgrade the A63 at Castle street in my constituency, in accordance with the last Government’s 10-year highways plan. However, the road currently cuts the city off from the waterfront. Will the Chief Secretary agree to work with the Secretary of State for Transport and the right hon. Member for Tunbridge Wells (Greg Clark), the cities Minister, to ensure that the Castle street project includes an iconic land bridge that will enable us to fulfil our economic potential by connecting the city with the waterfront?
Danny Alexander
I am grateful to the right hon. Gentleman for his comments and of course I will do that. That is why we have funded the local growth deal under the Heseltine recommendations, and this road investment will also help to unlock port facilities for greater use, for renewables among other things.
Stephen Williams (Bristol West) (LD)
My right hon. Friend has made a sweeping series of announcements that will be felt in every community around the country, in particular the investment in rail infrastructure. As well as that renewal of Victorian infrastructure, however, does he agree that his announcements on science, superfast broadband and low-carbon energy are paving the way for the hi-tech, low-carbon future?
Danny Alexander
I agree very much with my hon. Friend. The commitment on broadband in particular, with fixed broadband in 95% of the population and superfast broadband—mobile, 4G and so on—to 99% or more of the population, will be welcomed in every corner of the UK, no matter how remote.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
The biggest problem facing the north-east of England is the need to strengthen the region’s private sector employment base. How will today’s statement help to do that?
Danny Alexander
I would refer to two things. First, the single local growth fund, which we have worked on with the North East local enterprise partnership in particular, will be very welcome news in the north-east. I also hope the commitment to the A1 north of Newcastle will promote significant investment in the north-east economy.
Sheryll Murray (South East Cornwall) (Con)
I particularly welcome the money earmarked to tackle flooding, as there was a fatality in my constituency earlier this year. Can my right hon. Friend confirm this should help people in places like Looe, which is still suffering from road closures due to the horrendous situation we had earlier this year?
Danny Alexander
The precise details of where the money will be spent will be for the Environment Agency to develop, but the purpose of announcing this funding now is precisely to help communities such as my hon. Friend’s to ensure they are not in danger of flooding in future.
Mr Ben Bradshaw (Exeter) (Lab)
My constituents in Exeter saw under the last Government five new high schools, several new primary schools and a new medical school, but so far, in more than three years, they have seen absolutely nothing of what this Government have promised on infrastructure. Why should they believe anything the right hon. Gentleman has said today, given his appalling record at delivering what he has already promised?
Danny Alexander
If the right hon. Gentleman were giving a balanced account, he would also have referred to the flood defences we are investing in, and the local road project around Exeter that has been completed.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
I welcome the capital for the A27 Chichester bypass, for which my hon. Friend the Member for Chichester (Mr Tyrie) and I have been pressing for a number of years. I also welcome the initial agreement the Government have reached with the insurance industry based on the Flood Re proposals, and the new powers they are contemplating, which may help to tackle the refusal by a minority of insurance companies to insure houses that have suffered flooding, such as the company that has just written to one of my constituents withdrawing cover because the boundary of his property suffered flooding in June last year, despite neighbouring properties being insured by other companies. Will my right hon. Friend look into the practices of companies that are refusing to abide by the current statement of principles?
Danny Alexander
First, every insurance company will have to sign up to the Flood Re deal in order to be valid, and as I said in my statement, we will bring forward amendments to the Water Bill to take backstop regulatory powers in case that does not happen.
Hugh Bayley (York Central) (Lab)
Some of my constituents cannot sell their homes because when they, or the new buyer, seek flood insurance, it is completely unaffordable; one person was told the excess would be 20% of the value of the home. When will this initial agreement become a substantive agreement, so as to allow these people to get on with their lives?
Danny Alexander
As part of the proposed arrangements, excesses would be capped to deal with the problem the hon. Gentleman mentions. We will bring forward the amendments to the Water Bill in the autumn.
Pauline Latham (Mid Derbyshire) (Con)
I particularly welcome the announcement about the A38 in my constituency, as there is a huge problem there for both local and long-distance traffic, because it is the one place where drivers have to stop at two roundabouts. I therefore know everybody locally will welcome that. May I also welcome the house building measures? We do need that to get the economy going locally; we need more houses, and we certainly need more affordable homes.
Danny Alexander
I agree with both my hon. Friend’s points. We need to invest in the road networks to support growth and the economy and this is the biggest plan for road investment since the 1970s. Affordable house building by housing associations accounts for 40% of all new housing starts this year. It is very important we maintain that record and build on it in the years to come.
Helen Goodman (Bishop Auckland) (Lab)
Yesterday we learned that of the £530 million the broadband delivery unit had been allocated, only £3 million had reached local authorities. Today, the Chief Secretary said that beyond 2015 he was allocating £250 million to broadband roll-out, but previously we were told that the BBC licence fee would be top-sliced to the tune of £300 million. What has the Chief Secretary done with that £50 million? Has he cut it or has he lost it?
Mr Jonathan Djanogly (Huntingdon) (Con)
The investment of £1.5 billion in the A14 and the bringing forward of the project will be welcomed by my constituents and many people and businesses throughout the east of the country. Will the Chief Secretary say a little more about how the requirement for money will be split between central Government, the region and local businesses?
Danny Alexander
The Department for Transport will make an announcement on that in due course. The point I am making today is that we have set aside the funding for delivering the project as planned, bringing the start date forward by two years to 2016. The road is one of the most important and clogged up economic arteries in our country and we need to invest in it to ensure we get our economy moving.
Mr Mike Weir (Angus) (SNP)
Publication of the strike price for renewables today is very welcome, but as yet we have had no mention of the strike price for nuclear. Indeed, the only mention of nuclear in the statement was a multi-billion pound guarantee to build Hinkley Point. How does that stand with the promise for no public subsidy for new nuclear?
Danny Alexander
It stands completely alongside that promise. First, I welcome the hon. Gentleman’s positive remarks about strike prices and he will see in the document we published today strike prices for all the other forms of renewable energy. Of course, in the case of nuclear, there is a detailed and ongoing commercial negotiation. I am sure that he would think it right for us to drive a hard bargain in those negotiations, because of course these prices will have to be paid by consumers for 50 years to come.
Margot James (Stourbridge) (Con)
I very much welcome the shift from entitlements and consumption to capital investment that will create jobs now and underpin our future prosperity. It represents a crucial part of the Chancellor’s rebalancing of the economy strategy. Will my right hon. Friend the Chief Secretary comment on the benefit of the plans to regions outside London and the south-east, such as my own area of the west midlands? Will we see more projects like the excellent new transport interchange opened in my constituency of Stourbridge last year?
Danny Alexander
I welcome that project, which is another example of projects being delivered by this Government during this Parliament. Of course, the plans I have set out today on roads, on energy and on rail will directly benefit every part of this country, including the west midlands. The hon. Lady is right that even at a time of austerity we are squeezing spending wherever we can to realise more resources for investment in the long-term infrastructure needs of this country. That is the right strategy and it is a shame the Opposition seem to oppose it.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I welcome investment in transport, but can the Chief Secretary tell us how much extra he has announced today in addition to ongoing programmes and projects that have already been announced? That includes the Mersey Gateway, which has already had its go-ahead.
Danny Alexander
Today I have announced the guarantee for the Mersey Gateway bridge, which is necessary to enable that project to go forward because of the private funding. That is a new announcement of a guarantee. We are setting out tens of billions of pounds of new investment in roads until 2020. I know that the hon. Lady in particular has argued in the past for longer-term certainty on funding for road projects to allow us to get better value for money for those investments. That is precisely what we will do.
Duncan Hames (Chippenham) (LD)
This must be the most substantial and, dare I say, lengthy commitment to a stronger economy made by a Liberal in government from that Dispatch Box since Lloyd George. How much less could we have afforded to invest in our future had the Government not taken the decisions necessary to ensure that the interest rates at which we borrow are kept low?
Danny Alexander
My goodness! I am not sure quite how to respond to that one—I am blushing slightly, but I am grateful for the positive remarks from my hon. Friend. He makes a very important point. If we had not entered into the process of clearing up the economic mess left by the Labour party, we would not be able to invest any of this money at all.
Derek Twigg (Halton) (Lab)
The Chief Secretary has confirmed what the Chancellor told us on 20 October 2010, at column 963 of Hansard, that financial support would be available for the Mersey Gateway in my constituency. However, the devil is in the detail. Will the Chief Secretary meet me to hear the concerns of my constituents? The funding package given to Halton borough council restricts its ability to give discounts or free travel across the currently free Widnes to Runcorn bridge when the Mersey Gateway opens.
Danny Alexander
My hon. Friend the Financial Secretary, who is also responsible for cities policy within the Treasury, will be pleased to meet the hon. Gentleman to discuss precisely those concerns.
Craig Whittaker (Calder Valley) (Con)
Constituents in the Calder Valley who cannot get flood insurance for their homes and businesses after the three devastating floods that we experienced last summer have contacted my office. Can my right hon. Friend tell the people of Calder Valley, after the announcements today, how long they will have to wait before the initial proposals become actual proposals, and when all of them will be able to get flood insurance and at an affordable price?
Danny Alexander
The existing statement of principles, which was due to expire this month, will be continued for the next year or so until this arrangement is fully in place. I hope the hon. Gentleman will welcome the long-term commitment to capital investment in flood defence, which of course will be of benefit to his constituents, along with those of many other hon. Members.
Mr Clive Betts (Sheffield South East) (Lab)
Not one mention was made of local councils in the statement or of the role they can play in helping to rebuild our infrastructure. Why does the Chief Secretary continue with the ridiculous mortgage guarantee scheme, which the Treasury Committee, the International Monetary Fund and the Governor of the Bank of England have all said is more likely to add to housing demand than increase housing supply? Why does he not use the billions of pounds available to allow local councils to build homes that people can afford to rent and put thousands of constructions workers back in work?
Danny Alexander
Local authorities were mentioned in my statement, particularly in relation to the single local growth fund. The money goes to local enterprise partnerships, which as the hon. Gentleman knows bring private sector businesses and local authorities together to spend the money. Part of the money going into the single local growth fund comes from the new homes bonus, so it will enable LEPs to invest in housing if that is what they choose as part of their local economic priorities. As for the mortgage guarantee scheme, it is important that, when it is hard for young people to put together the deposit they need to buy a house, we support them. That demand will also bring forward additional supply. That is the view of the Home Builders Federation, and I agree with it.
Tim Loughton (East Worthing and Shoreham) (Con)
I, too, am delighted that the Chief Secretary has named the A27 as part of the road works, but he mentioned only the Chichester by-pass. Will he confirm that the study will include a holistic study of both the bottlenecks at Worthing and Arundel? Otherwise he will just create two bottlenecks further down the A27, which is the longest car park in West Sussex.
Danny Alexander
I can confirm that we are getting on with the Chichester by-pass, one of the Highways Agency schemes that is already worked up. We will be conducting further work across the corridor, including Worthing and Arundel, to invest across the corridor between now and 2020.
Ms Karen Buck (Westminster North) (Lab)
The housing investment that the Government have announced must be set against the halving of the affordable housing programme inherited from the previous Government, which led to a halving of social house completions last year. Is it not true that the right hon. Gentleman’s affordable rent model is based on higher rents, that higher rents mean higher housing benefit, and that housing benefit will cost his Government £13 billion more in this spending period than it did under the previous Government, and can he explain how that makes sense?
Danny Alexander
I think the hon. Lady was giving a back-handed welcome to the commitment that we made to affordable housing today. On rents, the policy that we have set out of CPI plus 1 for 10 years for uprating of rents saves the Government a growing amount of money in housing benefit payments for the simple reason that tenants rents will increase less fast than previously. That is good news for those individuals, and will save the Government money, as was announced in the costings document yesterday.
Mr Alan Reid (Argyll and Bute) (LD)
I am delighted by the broadband announcement, but Scottish Government money is also required. In the current round, the Scottish National party Government reduced this Government’s target of 90% to only 75% in Argyll and Bute. Can the Chief Secretary please persuade the Scottish Government to put in their fair share of money so that the new targets can be met in Argyll and Bute?
Danny Alexander
I will certainly do my best. I should say that the additional £250 million will need local matching, including in Scotland from the Scottish Government, to get to 95% of my hon. Friend’s constituents and, I hope, to 99% in due course. I remind the House that this is one of the areas in which we are better together as one united kingdom.
Albert Owen (Ynys Môn) (Lab)
I genuinely welcome the announcement of a new prison in north Wales, for which I and many colleagues across the House have been campaigning. However, in the future—even after a projected Bill has been passed—can we expect all big energy announcements to be made by the Treasury? Is that not a further downgrading of the Department of Energy and Climate Change, where we have a part-time Minister from the Department for Business, Innovation and Skills with the Secretary of State? Is not the Chancellor doing this for self-serving Treasury purposes?
Danny Alexander
I am grateful to the hon. Gentleman for his comments about the new prison. I think my right hon. Friend the Secretary of State for Energy and Climate Change welcomes the fact that he has full and wholehearted support from the Treasury for his policies to bring forward the low-carbon investment this country needs.
Mr Rob Wilson (Reading East) (Con)
Having been an early applicant for a university technical college, UTC Reading will open in September. May I welcome the 20 UTCs and 180 new free schools announced in today’s statement? Does the Chief Secretary agree with me that those innovative new schools are essential to raising educational standards and providing the skills this country will need in the global race ahead?
Danny Alexander
I certainly agree with the hon. Gentleman that the innovative UTC model offers real benefits to the Government’s strategy on raising educational standards across the whole schools system. That is why we have invested in more UTCs, and I am delighted to hear that the one in his constituency is working so well.
Geraint Davies (Swansea West) (Lab/Co-op)
The vast majority—some 80%—of investment announced is in London and the south-east, and there was virtually no mention of Wales. Why is there no investment in an M4 relief road, a high-speed rail link to Wales, superconnectivity status for Swansea or a reduction in the Severn bridge toll, so we are not taxed for our infrastructure in Wales, or more money for the Welsh Government? Where is the cash for Wales?
Danny Alexander
There are projects and programmes announced today, including on energy and broadband, which will be of huge benefit to the hon. Gentleman’s constituents, and I hope that he would welcome them, as well as the new prison in north Wales, which his hon. Friend the Member for Ynys Môn (Albert Owen) welcomed just a moment ago—[Interruption.] A prison for English people? I am sure there will be some Welsh people in there too, if that is what the hon. Member for Swansea West (Geraint Davies) would like. As for the M4, this is closely connected to the discussions, which are in their final stages, on our response to the Silk report, which we will publish very shortly. I hope that he will, in due course, have news that he will wish to welcome.
John Glen (Salisbury) (Con)
I warmly welcome the £10 billion investment in roads, in particular the mention of investment in, I assume, the dualling of the A303. Will the right hon. Gentleman confirm that representations from residents around Amesbury and Stonehenge will be heard and that economic benefits will also accrue to Wiltshire from the investment announced today?
Danny Alexander
Those representations certainly will be heard as the Department for Transport and the Highways Agency develop their plans for that important route.
Jack Dromey (Birmingham, Erdington) (Lab)
The £3 billion investment in affordable house building will not make up for the cuts in 2010 that led to a 29% collapse last year, will do nothing for affordable house building this year or next, and therefore mean five wasted years under this Government. May I ask the Chief Secretary this question: is it true that the amount announced today is less than in the last two comprehensive spending reviews?
Danny Alexander
As I said in my statement, and the hon. Gentleman should welcome this, we will through this announcement be building more homes on average every year than in any year but one under the previous Government. Frankly, he should be ashamed of the fact that the number of affordable homes in this country fell by 420,000 during his party’s time in office—a total disgrace.
Andrew Percy (Brigg and Goole) (Con)
The announcement about the A63 is good news for the sub-regional economy in Humber and for my constituents in Brigg and Goole, and comes on top of other investments which have already been delivered, such as the Humber bridge, the Get Moving Goole project and the A160. We are doing very well on roads, but can I ask the Chief Secretary to continue to listen to representations about the electrification of rail services on the north and south banks of the Humber?
Danny Alexander
There has been a strong cross-party campaign on the A63, and I am pleased to have been able to make the announcement today. We will certainly to listen to the hon. Gentleman’s representations on the other subjects he mentions.
Mr Jim Cunningham (Coventry South) (Lab)
We should obviously welcome any investment in the economy, but the Government should not have cut it in the first place. The Chief Secretary has mentioned on one or two occasions, as have other Ministers, that some of that investment will be financed out of efficiency savings. Are there any efficiency savings left?
Danny Alexander
This is the first Government who have made a serious effort to look for efficiency savings. I mentioned in my statement the excellent work of the efficiency and reform group in the Cabinet Office under my right hon. Friend the Minister for the Cabinet Office, which has yielded up a view that there are more savings yet to be had in Departments. That is why I announced today a rolling programme of efficiency reviews across major Departments to unlock yet further savings over the next two years.
Andrew Jones (Harrogate and Knaresborough) (Con)
I particularly welcome the announcement on the new regional air connectivity fund. Aviation capacity is often described as a south-east issue, but it applies right across the country, especially in Yorkshire. May I urge my right hon. Friend to continue to focus on connectivity between modes of transport and on the fact that this issue applies right across the country?
Danny Alexander
I very much agree with my hon. Friend’s point. As the Member of Parliament for Inverness, I am all too aware of the importance of air connectivity for remote areas of the country. This fund will help to ensure that for all parts of the UK there is support available when those projects can be justified.
Mr William Bain (Glasgow North East) (Lab)
Given that the Chancellor has had to admit that the spending round did not bring forward a single penny of new public capital investment for 2015-16, can the Chief Secretary tell the House when we will have the judgment of the Office for Budget Responsibility as to whether his statement today will make any difference whatsoever to growth this year, next year or the year after?
Danny Alexander
The OBR will publish a new growth forecast at the time of the autumn statement. At the Budget this year we allocated an additional £3 billion of capital in 2015-16 and for the remaining years of the decade, and the announcements today are partly about how we will use that money.
George Freeman (Mid Norfolk) (Con)
I welcome this major package of investment, which contrasts with the record of gridlock under the previous Government. I particularly welcome the investment in science and research and development infrastructure, the investment in broadband for the rural economy, and the A14, which will help to unlock Britain’s fastest-growing city, Cambridge. With respect to the eastern region, may I ask that priority be given to the A47, which is a strategic artery linking east-west and linking the offshore energy cluster and the life science cluster with Cambridge? What reassurance can my right hon. Friend give us that in this £28 billion roads package, the A47 may yet be able to receive funding?
Danny Alexander
I am grateful for the welcome and I will certainly pass on the point about the A47 to the Secretary of State for Transport.
Chris Bryant (Rhondda) (Lab)
Even the Chief Secretary must admit that the Government completely and utterly bungled the west coast rail franchise. The way that they are now implementing the roll-out of superfast broadband is exactly the same bungle. It is working out as a bung to BT. Is it any coincidence that the chief executive of BT is to become a Trade Minister, so it will get yet further bungs?
Danny Alexander
What a pathetic comment. There was a proper competition for all the contracts in every county in England, as well as in Scotland and Wales. The hon. Gentleman should welcome the fact that the Government are making a serious financial contribution—the first Government ever to do so—in the roll-out of superfast broadband across the country.
Mr Ben Wallace (Wyre and Preston North) (Con)
Assuming that 10% of shale gas is recoverable, Lancashire and Yorkshire are sitting on $440 billion worth of gas. Will the Chief Secretary ensure that the communities that live closest to this potential development are generously compensated, and that a sizeable proportion of those revenues, which could potentially go to the Treasury in London, are used to improve and develop those great counties of England?
Danny Alexander
As the hon. Gentleman will see when he looks at the document that we published today, part of the announcement states:
“Operators will commit to provide £100,000 in community benefits at exploration phase, per well-site where hydraulic fracturing occurs. They will commit to sharing their proceeds with communities, providing one per cent of revenues to communities that host them.”
Kevin Brennan (Cardiff West) (Lab)
May I echo the Chancellor’s praise yesterday for the Chief Secretary for the great job that he has done as the Tory election strategists’ little helper? Beneath the hilarious hyperbole in today’s statement, is not the truth, as per the Chief Secretary’s own document, that gross investment is falling by £1 billion next year—by 1.7%—or is the document wrong?
Danny Alexander
We set out the plans for capital investment in 2015-16 and beyond yesterday and in the Budget last time. We have set aside £50.4 billion in 2015-16. That is £3 billion more than was previously promised, which we added to at the time of the budget. Those comments are ludicrous when we have not yet heard an apology from Labour for the mess they made of the British economy.
Neil Parish (Tiverton and Honiton) (Con)
I welcome the Chief Secretary’s statement. Affordable flood insurance for all is essential. Also, the A303/A30, which runs from Honiton up into Somerset and Wiltshire, is absolutely essential for the visitor experience in the west country and for its businesses. One final plea is for new school buildings for Tiverton high school and a new school building for Mrs Ethelston’s primary school in Uplyme.
Danny Alexander
I agree wholeheartedly about the importance of the A303 and those road connections. The south-west is a vital part of our economy and needs to be properly connected to the rest of the country, and this investment will do that. With regard to the specific points on schools, I will ensure that they are brought to the attention of the Secretary of State for Education.
Katy Clark (North Ayrshire and Arran) (Lab)
Is it not a shocking indictment of this Government that since 2010—[Interruption.] I suggest hon. Members listen to what I have to say before responding. Is it not a shocking indictment of this Government that since 2010, 84,000 construction workers have lost their jobs and construction output is down by 12%? Is not this statement just another example of smoke and mirrors that will do nothing to improve investment before 2015?
Danny Alexander
The hon. Lady is right to highlight the problems in the construction sector, but those problems started in 2008 when her Government were in office. They saw a major drop in output. By investing more in affordable housing, in both this Parliament and the next, we are giving companies in the sector certainty so that they can plan for the future and we are providing Government investment to help ensure that jobs are maintained in a vital part of our economy.
Dr Julian Huppert (Cambridge) (LD)
There is much to welcome in the statement: increased funding for affordable housing, science and green investment—it is all excellent. The announcement on the A14 will be welcomed by many. There is a long history of schemes for that road coming and going, while the poor design continues and the Huntingdon viaduct is well beyond its design life. Can my right hon. Friend confirm whether it will be a toll road? I certainly hope that it will not be. Can he be clear on that point?
Danny Alexander
The road will be taken forward according to the plans set out previously. That will include some tolling for new capacity.
Roberta Blackman-Woods (City of Durham) (Lab)
The north-east leads the way in the British export industry, so can the Chief Secretary tell us what percentage of infrastructure spending will go to the north-east, and by when, to support the expansion of our manufacturing export base?
Danny Alexander
The hon. Lady is absolutely right to highlight the fact that the north-east is the only region in the country that is a net contributor to the UK’s exports. The infrastructure investment announced today, for roads, broadband and so on, will help those industries. I cannot give her a precise breakdown, but I urge her to encourage the local enterprise partnerships in the area to take a full part in the local growth fund, which is a huge opportunity for the north-east.
Mr David Nuttall (Bury North) (Con)
I warmly welcome the announcement of further investment in high-speed broadband. Nearly two years ago almost £1 million was awarded to the Labour-controlled Greater Manchester authorities to procure improved broadband. Today, thousands of my constituents in Bury, Ramsbottom and Tottington are still waiting and have seen no improvement whatsoever in broadband speeds. Will the Chief Secretary please undertake to speak to whoever it is, whether in Broadband Delivery UK or local government, to ensure that my constituents will at last see a real improvement in broadband speeds?
Danny Alexander
I am sorry to hear about the experience of the hon. Gentleman’s constituents. The Greater Manchester Combined Authority is actually one of the most innovative in the country. The earn-back deal, which we have confirmed agreement on today, will give those authorities a real incentive to invest in the local economy. I will certainly pass on his specific concerns to BDUK.
Heidi Alexander (Lewisham East) (Lab)
I am afraid that half an hour of windy rhetoric from the Chief Secretary does nothing to make up for the dreadful, short-sighted decisions that this Government took when they first came to power three years ago. If investing in schools and homes is so important to them, why was one of their first actions to axe the Buildings Schools for the Future programme, and why did they cut the national affordable housing programme by 63%?
Danny Alexander
If investing in schools and houses was so important to the previous Government, why did they preside over a fall in affordable housing stock of 420,000 and cancel the survey to evaluate the maintenance needs of our country’s schools? It is also about getting the best value for taxpayers’ money, which, frankly, Building Schools for the Future was failing to do in a big way.
Glyn Davies (Montgomeryshire) (Con)
I greatly welcome the Chief Secretary’s announcement of investment in road infrastructure. I particularly welcome the reference to M4 improvement in the Chancellor’s statement yesterday. However, the mid-Wales economy depends on other improvements on the Welsh-English border at Llanymynech. The cost-benefit on the Welsh side is huge, but on the English side it is very weak. Will my right hon. Friend ensure that mid-Wales does not lose out on transport infrastructure improvement because of the way in which devolution works?
Danny Alexander
Many of these matters are devolved to the Welsh Assembly Government, and so it is for them to take them forward. I have regular and friendly discussions with the Finance Minister of the Welsh Assembly Government, and I will draw my hon. Friend’s concerns to her attention in my next conversation.
Huw Irranca-Davies (Ogmore) (Lab)
As regards capital spending that creates jobs, it would be wrong to say that this is a “jam tomorrow” statement; it is a case of jam in a couple of years and then only perhaps and not very generously. Can the Chief Secretary confirm that in 2014-15 flood capital spending will be £344 million less than we spent in 2010? If he is not sure, he can turn to the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), who is on the Bench next to him and who should have been making that statement today.
Danny Alexander
In 2014-15 spending will be £358 million, rising to £370 million in 2015-16.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
May I give my heartfelt thanks to the Chief Secretary for mentioning the improvements to the A303 for which I have campaigned for the past 15 years? How long does he estimate that it will take for the dualling to become a reality?
Danny Alexander
The A303 is one of the most notorious transport bottlenecks in the country, and these improvements will have a major impact on the economy in the south-west of England. The Highways Agency will be developing the detailed plans, so we will need to consult on those, including, no doubt with my hon. Friend. This is part of the funding that was set out for between now and 2020 to deliver improvements on that route.
Kate Green (Stretford and Urmston) (Lab)
I welcome the encouraging news about the Trafford Park extension of the Metrolink. Will the Chief Secretary comment on new Homes and Communities Agency regulatory powers that appear to be restricting housing associations’ ability to open up new and commercial income streams, with a knock-on effect on their ability to build more homes?
Danny Alexander
I am grateful for the hon. Lady’s comments on the Trafford Park Metrolink extension. On her question, I will certainly look into that, because I do not want the Homes and Communities Agency to be doing anything that holds back housing associations from engaging in appropriate developments. I will take up her point with my right hon. Friend the Secretary of State for Communities and Local Government.
Guy Opperman (Hexham) (Con)
Northumberland residents will welcome the good news about the A1, flood defences, and the potential school rebuilding programme. Greater funding for broadband is key to England’s least densely populated county. I know that my right hon. Friend has visited Northumberland. Will he give more details about the expanded broadband plans?
Danny Alexander
There is a broadband plan in Northumberland that has been negotiated by the local authority with the supplier, funded partly by national Government and partly by local government. Today’s announcement is about extending broadband to reach 95% of the population of Northumberland and to work with the industry to find ways to get broadband, whether mobile or 4G, to 99% of the population. We will keep my hon. Friend updated on that.
Sheila Gilmore (Edinburgh East) (Lab)
I fear that the Chief Secretary does not really understand housing finance. The homes to be built from 2015 have a subsidy level of under £20,000 per unit, and that is how he is able to announce that there are suddenly double the number that there might otherwise have been. The problem with that, as he knows full well, is that it requires much higher rent levels, and that will have a knock-on effect on the housing benefit budget for years into the future. Is that sensible?
Danny Alexander
The move from social rents to affordable rents for homes newly built by housing associations is a right and fair way to ensure that there is a balance between the subsidy given to the individual and the capital subsidy given to the builder of the house. It allows us to build many more houses for the amount of money that we have available, and the hon. Lady should be grateful for that.
Jessica Lee (Erewash) (Con)
I thank my right hon. Friend for his statement, particularly the announcements about my constituency, notably the improvements on the M1 at the junction at Long Eaton. I add to that the nearby work on the A38 at Derby and the campaign that I have been leading for many years to secure the reopening of the train station at Ilkeston, now agreed by the Department for Transport. Does he agree that all those points link together to bring great improvements and opportunities for the people of Erewash, as well as encouraging businesses to invest in the area?
Danny Alexander
It is clear that the hon. Lady’s campaigning is a model of parliamentary effectiveness and I urge her to continue with it to the further benefit of her constituents.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
In response to my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), the Chief Secretary spoke of his “commitment to the A1”. What he actually said in his statement was:
“Any hon. Member planning a trip to Scotland…will want to see a better A1 north of Newcastle.”
Is that really his idea of a commitment? If he can say nothing more credible—I hope that he can—is it any wonder that he inspires so little confidence in the country?
Danny Alexander
I am sorry to hear such a curmudgeonly response to what I thought was a very positive announcement. [Interruption.] The point that I was making in my statement was that there are a number of long-standing issues on our highways network that have never been addressed. We have set aside the funding and will bring forward the plans to ensure that the improvements to that route take place between now and 2020.
Mr Speaker
My sense is that there is nothing unparliamentary about the use of the word “curmudgeon”. It is very much a matter of taste.
Paul Burstow (Sutton and Cheam) (LD)
I congratulate the Government on the announcements about social care spending and the health service. I draw my right hon. Friend’s attention to a capital project that will serve my constituency: the commitment to an investment of £219 million in St Helier hospital. However, that project has been stuck in the mud for the past three years because local NHS managers have been blocking its progress. Will he intervene with Ministers at the Department of Health to unblock that project and provide the much-needed investment?
Danny Alexander
I agree with the first part of what my right hon. Friend said. The massive reforms to health and social care that we announced yesterday are hugely important for the future of this country. I am proud to be part of a Government who are taking those matters forward. Much of the credit for that must go to him for the work that he did in government and for his campaigning outside government. On the latter point, I will certainly raise that matter again with Ministers at the Department of Health.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
It was quite reasonable for my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) to try to find out exactly what the Chief Secretary has announced about the A1, so I will try again. Is he making a commitment to the dualling of the A1 from Newcastle to the Scottish border? If so, when will the work start? If he is not making that commitment, what is he announcing today?
Danny Alexander
I am committing to undertaking the improvements that are necessary to bring that road up to a proper standard. There is clearly the need for a detailed feasibility study to consider precisely what is needed at every stage of the route. The money is set aside for that investment between now and 2020, so it will take place.
Julian Smith (Skipton and Ripon) (Con)
Superfast North Yorkshire is about to make North Yorkshire one of the first counties in England to deliver 90% broadband coverage, but we need a bit more help to get to 95%. We also have the Tour de France coming next year, and there is a big risk that the cyclists will come a cropper on our potholes. Can we have a conversation soon about how North Yorkshire can get the cash quicker?
Danny Alexander
I am sure that Ministers at the Department for Transport would be happy to have that conversation. As the hon. Gentleman will know, in the autumn statement last year, we set aside additional funds this year and next year for road maintenance and dealing with pinch points. I dare say that some of that money could be used to ensure that the Tour de France passes off without pothole-caused incidents.
Diana Johnson (Kingston upon Hull North) (Lab)
Is not the A63 announcement more about news management than road management, given that the work is due to start no earlier than has been planned for many years? Is this not another case of jam tomorrow, while Hull continues to have traffic jams today?
Danny Alexander
As we are the first Government to have committed to undertake that work, I thought that the hon. Lady would have welcomed it.
Roger Williams (Brecon and Radnorshire) (LD)
There will be a broad welcome for the certainty that is brought by the Chief Secretary’s announcement of a new prison in north Wales. However, any announcement on infrastructure spending by Departments whose responsibilities are devolved to Wales will have Barnett consequentials. Will he give a flavour of the consequentials that will accrue to the Welsh Government?
Danny Alexander
The Barnett consequentials of the 2015-16 public spending round were set out in the Chancellor’s statement yesterday. On the resource side, the Welsh Assembly Government will see a small reduction in their budget and, on the capital side, a small increase. I am sure that they will work with him to ensure that the money is used wisely for the benefit of the people of Wales.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I welcome the A14 construction phase starting two years earlier, but I am particularly pleased by the publication of the draft strike prices. That should encourage SSE and ScottishPower to go ahead with their investment decisions in Galloper and the East Anglia Array, making Suffolk truly the green coast of the country.
Danny Alexander
The hon. Lady and I share a passionate commitment to green energy, and I hope that the strike prices now complete the picture for energy companies looking to invest. My message to the energy companies is, “You have the certainty you need, now bring forth the investment that the country needs.”
Mr Marcus Jones (Nuneaton) (Con)
I welcome the announcement on superfast broadband and hope that Arley, in my constituency, will benefit. Will my right hon. Friend seek to ensure that far more priority is given to providing superfast broadband on our industrial estates that are, at times, being overlooked in the current roll-out?
Danny Alexander
The hon. Gentleman makes an important point. I will say two things. First, I will draw his point to the attention of BDUK. Secondly, specific funding has been set aside to ensure that enterprise zones have the best broadband in the country. Broadband is a crucial part of those zones being able to attract the investment they need.
Stephen Gilbert (St Austell and Newquay) (LD)
Despite the welcome news on capital spend on flood defences, there remains the very serious issue of flood insurance. As my right hon. Friend will know, the current agreement with the insurance industry runs out in just three days’ time, yet he is not promising legislation until the autumn. What can be done in the meantime to maintain affordable and available flood insurance, so that people can protect, mortgage and sell their homes?
Danny Alexander
I am grateful to my hon. Friend. Let me repeat what I said in my statement. The existing statement of principles will continue until such time as the new arrangements that I described in my statement are put into place. The new arrangements will last a very long time and will protect his constituents. Alongside the extra capital investment we have announced today, they will ensure that we keep people safe from the risk of flooding.
Business of the House
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Mr Andrew Lansley)
The business for the next week is as follows:
Monday 1 July—Motion to approve a ways and means resolution relating to the Finance (No.2) Bill, followed by remaining stages of the Finance (No.2) Bill (Day 1).
Tuesday 2 July—Conclusion of remaining stages of the Finance (No.2) Bill (Day 2).
Wednesday 3 July—Estimates Day [1st Allotted Day]. There will be a debate on public expenditure and health care services, followed by a debate on Rail 2020. Further details will be given in the Official Report. At 7 pm the House will be asked to agree all outstanding estimates.
[The details are as follows: The Health Committee, 11th report, 2012-13, Public expenditure on health and care services, HC 651, and the Government response (CM 8624); and the Transport Committee, 7th report, 2012-13, Rail 2020, and the Government response, 9th special report, 2012-13, HC 1059.]
Thursday 4 July—Proceedings on the Supply and Appropriation (Main Estimates) Bill, followed by general debate on NATO, followed by general debate on corporate structures and financial crime, followed by general debate on the economic implications for the UK of an EU/US trade and investment agreement. The subjects for these debates have been nominated by the Backbench Business Committee.
Friday 5 July—Private Members’ Bills.
The provisional business for the week commencing 8 July will include:
Monday 8 July—Remaining stages of the Financial Services (Banking Reform) Bill.
Tuesday 9 July—Consideration in Committee of the Northern Ireland (Miscellaneous Provisions) Bill.
Wednesday 10 July—Opposition half day [4th Allotted Day]. There will be a debate on an Opposition motion, subject to be announced, followed by the Chairman of Ways and Means is expected to name opposed private business for consideration.
Thursday 11 July—Business to be nominated by the Backbench Business Committee, including a general debate to mark the 25th anniversary of the Piper Alpha disaster.
Friday 5 July—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 4 and 11 July will be:
Thursday 4 July—Debate on the 8th report of the International Development Select Committee on post-2015 development goals, followed by debate on 10th report of the International Development Select Committee on Pakistan.
Thursday 11 July—Debate on social care reform for working age disabled people.
Ms Angela Eagle (Wallasey) (Lab)
I thank the Leader of the House for announcing next week’s business.
We are approaching the 65th birthday of the NHS, so will the Leader of the House now admit the truth: that in a reversal of their infamous airbrushed election poster, it is clear that this Government have cut the NHS and not the deficit? The Financial Services (Banking Reform) Bill is due to return to the House on 8 July, but with only one day of debate for all its remaining stages. After the important recommendations from the Parliamentary Commission on Banking Standards last week, which the Prime Minister claimed he supported, why has the Leader of the House scheduled only one day of debate? I am sure he agrees with me that we must act to reform the problems in our banking system, so will he now undertake to provide a second day to ensure that all the necessary amendments have time to be heard?
Does the Leader of the House agree with the assessment that the Tory handout EU referendum Bill of the hon. Member for Stockton South (James Wharton), which reaches the House next Friday, is
“a transparently cynical attempt to combat the rise of UKIP and to try to appease Tory backbenchers”?
I see that the Leader of the House does not, but those are not my words; they are the words of Stockton South Tory Councillor Mark Chatburn. How long does the Leader of the House think that this farcical misuse of the private Member’s Bill procedure by Tory Whips will carry on before the obsessive anti-Europeans realise they have been sold a pup?
This week, we have seen two alternative Queen’s Speeches put down on the Order Paper, one from the self-proclaimed Tory Taliban and one from Labour MPs. They want women to lose their right to protection if they are sexually harassed at work. We want respect for our armed forces. They want to scrap the BBC. We want fair prices on our railways. They want to bring back smoking indoors. We want to tackle the scourge of zero-hours contracts. I am proud of our Labour Back Benchers and the work they are doing, but can the Leader of the House tell us whether he can say the same about his?
This alternative agenda kicks off next week with the plan to hijack the August bank holiday and turn it into Margaret Thatcher day. [Hon. Members: “Hear, hear.”] I can see that there is a lot of support for that among those on the Government Benches. Some might think that they are too obsessed with this controversial and divisive figure from the past, but I do not think they are showing nearly enough zeal. Why celebrate her once a year—why not every week? Are they not missing an opportunity? If they were real believers, would they not want Thursday, Friday, Thatcherday? I think she would be very disappointed in them. Perhaps we could name other days after current members of the Cabinet— 29 February could be named after the Deputy Prime Minister, because it gets noticed only once every four years and makes absolutely no difference to anything in the meantime.
Yesterday’s spending review underlined the scale of this Chancellor’s economic failure, with living standards falling, the economy stuttering, borrowing up, long-term unemployment up, prices rising faster than wages and bank lending down. He has not even managed to keep his prized triple A rating. He is presiding over the slowest recovery for more than 100 years, and businesses and families across the UK are paying the price. He can put on a mockney accent and eat as many posh burgers as he likes but, unlike millions of people up and down this country, he will never understand what it really feels like to be paying the price for his economic incompetence.
With a public relations man as Prime Minister, this Government are all too quick to issue press releases but too incompetent to deliver them, so we need a debate in Government time on Government incompetence. In their fourth year in office, only one of the 261 new schools they promised in their “priority” building programme has actually been built; only seven of the 576 infrastructure projects they promised have been completed; and they have delivered a paltry 2,000 of the 100,000 new homes they promised under the NewBuy scheme. They said that they would set up a British investment bank to help businesses grow, but no business has yet had help. They said that they would set up the Youth Contract to get young people back to work, but no one has used it. They promised councils £530 million for superfast broadband, but so far they have paid out only £3 million. They said that they want more infrastructure spending, but yesterday revealed a £1 billion cut in capital spending. They said that they would bring down borrowing, but it is £245 billion higher than they planned. Is not the truth that they are posturing, not governing? They are spinning, not delivering. It is not just the Chancellor’s Byron burger stunt that was a sham—it is the whole Government.
Mr Lansley
I do so look forward to the shadow Leader of the House’s response to the business statement, but mainly—normally—for the humour. On this occasion, however, it fell short of her normal high standards, which is a pity—I look forward to future weeks.
The hon. Lady asked about NHS spending. The figures demonstrate that the coalition Government have met their commitment to real-terms increases in NHS resources year on year. In addition, the Chancellor’s statement yesterday confirmed that we will make provision for a further real-terms increase in NHS resources in 2015-16. As she must recognise, that contrasts with my predecessor as Health Secretary, the right hon. Member for Leigh (Andy Burnham), who regarded real-terms increases for NHS resources as irresponsible—that was the Labour party’s view. We are delivering on our manifesto promises. The NHS could not have afforded Labour’s irresponsible policies.
The hon. Lady asked about time on Report for the Financial Services (Banking Reform) Bill. I direct her to my right hon. Friend the Chancellor’s response on Tuesday to my hon. Friend the Member for South Northamptonshire (Andrea Leadsom). We are clear that we will welcome, and consider positively and carefully, the Parliamentary Commission’s report and that, where necessary, we will legislate to bring its recommendations into force using that Bill. She must realise that the Government have allowed two days on Report more often than did our predecessors, but that that must be an exception rather than the rule. In this instance, as always, we will consider the requirement for debate on Report and make time available accordingly.
I will tell the hon. Lady exactly what the European Union (Referendum) Bill is about: it is about my hon. Friend the Member for Stockton South (James Wharton) taking the lead and giving the people of this country a choice. There are Opposition Members who do not share her unduly cynical view and recognise that it is a genuine attempt by Parliament to exercise its responsibility and give people confidence that they can decide our future in Europe. I and my hon. Friends support it, and I hope that hon. Members from all parties will do so too next Friday.
Given the Chancellor’s statement yesterday and the Chief Secretary’s excellent statement today, I am not sure why the hon. Lady tried to rerun some of the arguments from the Opposition that were demolished by the Chief Secretary. If she wants to talk about future business, she can use the half day available to the Opposition on 10 July, and I would be delighted if they chose to debate living standards in this country, given that yesterday’s statement made it clear that a five-year council tax freeze would be available. I and many others saw council tax double under Labour. Yesterday, the Chancellor announced a three-year council tax freeze and two further years available.
In addition, 24 million basic rate taxpayers will benefit by nearly £700 from the coalition Government’s commitment to increase the personal tax allowance. The consequence of not having to impose the fuel duty escalator will be a saving of £40—13p a litre—for the average motorist. If, on the other hand, the hon. Lady wants to debate the economy on 10 July, she will have the opportunity, among other things, to debate why we are in this situation: because they doubled the debt, leaving us with the highest deficit in the OECD and £157 billion of borrowing, which we have reduced by one third to £108 billion this year.
[Interruption.] It is all very well Opposition Members making gestures to suggest flatlining. The economy did not flatline at the end of the Labour Government; it fell, as new statistics tell us, by 7.2%. There was a 7.2% crash in the gross domestic product of this country. That is the basis of the crisis that we had to resolve when we came into office, and if the hon. Lady wants to have a debate on that, we will be very happy to accommodate her.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Will the Leader of the House consider allowing a debate on the time allocated to Departments for answering oral questions in the House and, therefore, the time that Members have to scrutinise Ministers and hold them to account? During such a debate, we could perhaps examine why the Department for Transport, which has now been given responsibility for some of the largest capital expenditure in any Department in Government, answers questions for only 45 minutes. We could consider extending that to a full hour, which would be the proper amount of time to allow for correct scrutiny.
Mr Lansley
The total amount of time available is fixed, so if we give more to one Department, we have to take it away from another. We look carefully at the volume of questions to the various Departments—I promise my right hon. Friend that we do this rigorously—and we try to ensure that if a Department answers questions for less than an hour, it is because it has proportionately slightly fewer questions being asked of it.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
Will the Leader of the House find time for the House to debate a report prepared in 2008 by senior police officers and said to have been given to Lord Leveson’s inquiry? It alleges sustained and persistent access to information contained on the police computer and other organisations’ databases that is supposed to be confidential but is in fact widely shared via improper methods. We understand that the report exists. Will the Leader of the House confirm that that is so? Will he find time for us to debate it and, before we do so, may we see it?
Mr Lansley
The right hon. Gentleman will understand that, without prior notice of his question, I have been unable to ask my colleagues about the issue that he has raised, and I do not know the answer to his question about whether such a report exists. However, he will have heard my right hon. Friend the Home Secretary speaking at the Dispatch Box recently, setting out measures to promote the integrity of the police. I will ask her to respond to the right hon. Gentleman, but I think he should take considerable reassurance from the wide range of measures that she announced and that are being taken forward. They involve not only inquiries but proposals relating to the College of Policing and the Independent Police Complaints Commission.
Mr Andrew Tyrie (Chichester) (Con)
May I reinforce the request from the Opposition Front Bench for two days on Report for the Financial Services (Banking Reform) Bill? I take it that the Leader of the House rejected that request; at least, that is what I think I heard. Some months ago, the Parliamentary Commission on Banking Standards, which I chaired, recommended that the Report stage be taken in September, but that was rejected too. We have now produced a further report with more than 100 recommendations. Colleagues from all over the House have told me that they would like an opportunity to consider those recommendations and express their views on them before the Bill goes to the other place. Frankly, I simply cannot understand why the Government are dragging their feet on this, bearing in mind that they were the prime movers in the creation of the commission. Nor can I understand their decision, in view of the fact that the Enterprise and Regulatory Reform Bill, the Justice and Security Bill and the Crime and Courts Bill all had two days on Report.
Mr Lansley
The Government, and the House, are grateful to my hon. Friend and his colleagues on the Parliamentary Commission on Banking Standards for the work that they have done and the excellent report that they have produced. That entirely justifies the decision that the Chancellor and the Prime Minister made to proceed by way of a parliamentary commission rather than a public inquiry. That is what has enabled us to reach this point at this time. I will not repeat all that I said to the shadow Leader of the House, but we should not regard two days on Report as anything other than the exception. We have allowed it more often than our predecessors did, but it must be—[Interruption.] It is not a matter of priority. It is a matter of judging the necessity for debating time on Report in the light of the amendments that have been tabled at that stage. I have announced the provisional business for the week after next. We are making rapid progress with the Bill and it is important that we continue to do so, but I will of course always listen carefully to what my hon. Friend the Member for Chichester (Mr Tyrie) has to say.
Mr Ben Bradshaw (Exeter) (Lab)
Can the Leader of the House explain why the Government have still not sent the royal charter on press regulation, which was passed overwhelmingly by this House, to the Privy Council? The motion on which we voted stipulated that it should be sent in May. Can he reassure the House and the victims that it is not because the Government are planning to do some kind of grubby backroom deal with elements of the press and to further water down Lord Justice Leveson’s recommendations?
Mr Lansley
As I understand it, this is simply a matter of the proper processes relating to the approval of a royal charter by the Privy Council being pursued, in circumstances in which other proposals are also being presented. The Privy Council Office has gone through a process of securing the examination of other proposals as well, but these are matters of continuing discussion among my colleagues and I will ensure that the House is updated as soon as we are clear about the timing.
Mr William Cash (Stone) (Con)
The Leader of the House will not be surprised by my question, because this is the fifth time that I have asked for a debate on the Francis report. In fact, I am now going to insist on one, if I may. I know that the Secretary of State for Health believes that there should be a debate on that issue. It is incredibly important for the national health service and for the people affected by what happened in Mid Staffs and by the Francis report. Will the Leader of the House please provide time for a debate in Government time on the Floor of the House before the recess? Giving excuses about approaching the Backbench Business Committee is simply not good enough. We want a debate, and we insist on it.
Mr Lansley
My hon. Friend and other Members have discussed this matter with me, and I have written to my hon. Friend the Member for Stafford (Jeremy Lefroy) about it this week. I have said before, and I repeat today, that it is our expectation that we will secure a debate on the Francis report. However, after consultation with my right hon. Friend the Secretary of State, I think it makes sense for us to do so at the point at which the Government are in a position to make their full response to the Francis inquiry. My hon. Friend the Member for Stone (Mr Cash) will know that an interim response has been made thus far. I cannot therefore commit to a debate on the Francis report this side of the summer recess, but I will continue to have discussions with my right hon. Friend the Secretary of State on when it will be the right time to do so.
Kate Hoey (Vauxhall) (Lab)
The Leader of the House will know that it has been a very long time since we had a debate in Government time on Zimbabwe. The situation there is now grave. Mugabe has decided arbitrarily to call an election, without discussion and with very little of the global political agreement having been carried through. It is important that our Government should be involved in putting pressure on South Africa in this regard. Could we at the very least have a statement on this matter from the Foreign Secretary before the recess, as this is an important issue for British people?
Mr Lansley
I am sure that many Members share the hon. Lady’s concern about the situation in Zimbabwe, as they have done for many years. I will of course talk to my hon. Friends at the Foreign and Commonwealth Office about what form of statement might be made, if appropriate, to update the House. In respect of a debate, I should point out, perhaps not for the first time, that it is clear as a consequence of the Wright Committee reforms that, as significant areas are priorities for the House to debate as Members feel strongly about them, time has been made available to the Backbench Business Committee to accommodate them. It is therefore to the Backbench Business Committee that Members should make their representations. I am happy to stand at the Dispatch Box and be the intermediary to enable that message to be heard by the Committee, but Members should also make the case directly to the members of the Committee that there is a priority for such debates to take place.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Yesterday, my right hon. Friend the Chancellor of the Exchequer announced that money would be put into helping problem families. Plymouth has a significant number of such families, and that number has stubbornly remained high despite the very best work of Plymouth city council and the various agencies. May we have a debate on this matter, so that all of us who represent challenging inner-city areas can have a conversation about it and share best practice?
Mr Lansley
My hon. Friend raises an important aspect of the positive announcements made by the Chancellor yesterday. There are now many local authorities —Plymouth clearly is one—that are making increasingly effective use of the resources provided to the troubled families programme. Some £448 million over three years was announced in December 2011 by the Prime Minister, and the extension now announced for funding in 2015-16 enables a further expansion. I cannot offer time at the moment, but my hon. Friend makes an interesting point. Many hon. Members may now feel that they are starting to understand the benefit of this programme and the opportunity that the extension might give, and they are probably starting to think that it is time for them to start sharing that knowledge in this House so people can see the progress we are making.
Caroline Lucas (Brighton, Pavilion) (Green)
May we have a science-led debate on whether Ministers should be spending more time working out how to keep fossil fuels in the ground and less time squandering taxpayers’ money on tax breaks for shale gas that scientists say we simply cannot afford to burn if the Government are to keep to their commitment to limit global warming to below 2°, a commitment that was reaffirmed at the G8 last week?
Mr Lansley
I am not sure that I am likely to agree with the hon. Lady on the possible benefits of investment in shale gas exploitation, not least for hard-pressed consumers who want to see the benefits in terms of energy prices, and for the security of energy supply in this country. She has had opportunities during discussions on the Energy Bill to consider these matters and I am sure that there will be further opportunities in the future.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
Following on from the previous question, from press reports this morning and from the statement by the Chief Secretary in reply to my neighbour and good friend the hon. Member for Wyre and Preston North (Mr Wallace), is it not time that the Chamber had a full debate on the impact of shale gas? As you know, Mr Speaker, we are very generous people in Lancashire, but we want to get to the bottom of the appropriateness of the compensation scheme, whether it will be underpinned by statute and how we will ensure that the communities most affected get the compensation they deserve.
Mr Lansley
My hon. Friend makes further good points on this. I cannot offer a debate at the moment, but he will be aware that Ministers from the Department of Energy and Climate Change will be answering questions on 11 July. I will draw their attention to the points that my hon. Friend and other hon. Members have made. I have said that I cannot promise a debate immediately, but hon. Members may seek opportunities elsewhere. I hope that when the time comes, we can take forward what I think are rather exciting announcements about the potential capacity for shale gas exploitation, while making sure that Members of this House are aware of the benefits that will flow not only to consumers and the economy, but to their constituents.
Chris Bryant (Rhondda) (Lab)
At 4.20 pm on 18 March, the Prime Minister, no less, stood up and urged this House to support a motion that would, as my right hon. Friend the Member for Exeter (Mr Bradshaw) said, call on the royal charter on press regulation going to the Privy Council meeting in May. I understand that the Government say that, bizarrely, the Prime Minister was beaten to it by the press barons. Will the Leader of the House guarantee that it will now go to the July meeting? That is the will of this House and the House of Lords. It was a deal between all party leaders and was supported by everybody. If it is not going to go in July, will he guarantee that he will write to me to explain why not?
Mr Lansley
I cannot make any such guarantee; it is not in my gift to do so. The will of the House was expressed very plainly but it has not been possible to comply in terms of timing. I will ensure that if not I then my right hon. Friend the Secretary of State for Culture, Media and Sport writes to the hon. Gentleman.
Mr Rob Wilson (Reading East) (Con)
Yesterday’s announcement of new funding for joint health and social care was a welcome step towards the integration of health and social care, and I think all of us across the House would welcome that. Yet some short-sighted councils are closing down care home facilities without providing proper alternatives. Labour-run Reading borough council wants to close the Arthur Clarke home in my constituency, which will cause great distress to residents and families, risks breaking up a successful work force and will end up putting greater stress on the local NHS. Will my right hon. Friend support a debate to highlight the issue of care home closures and their impact on the local communities they serve?
Mr Lansley
The Liaison Committee has timetabled a debate on public expenditure and health care services on Tuesday. Clearly the issues that my hon. Friend raises are relevant to that debate and he may wish to utilise that opportunity. I felt strongly that the Chancellor’s announcement yesterday was extremely important and welcome, and it followed the announcement made in the spending review of 2010. The NHS has used its resources, together with local authorities, in developing health and social care interactions very effectively, which has demonstrated how these additional resources might make a much greater difference in terms of promoting independence and preventive health care.
Barbara Keeley (Worsley and Eccles South) (Lab)
On shale gas, we learned from BBC news this morning that the Government were likely to announce a streamlined planning process to award drilling permits for shale gas, but we did not hear any more detail. We got one mumbled sentence in the statement from the Chief Secretary. For constituencies such as mine, this is a key issue because we now have the threat of fracking for shale gas close to two housing estates. May we have a debate in Government time on Government plans for shale gas? We need to explore the reality of what the exploration and exploitation of shale gas will mean for communities before we are hurtled into a streamlined process, which apparently will be announced on 18 July, the day the House rises.
Mr Lansley
I will not reiterate the points I have made, beyond saying that DECC Ministers will be here on 11 July to answer questions. I know that they will want to keep the House fully updated. I hope that we might have an opportunity for a debate between now and the summer recess, if not in Government time, then in Back-Bench time or elsewhere.
While I am at the dispatch Box, Mr Speaker, I said to my hon. Friend the Member for Reading East (Mr Wilson) that there was a debate on public expenditure and health care services next Tuesday. I was wrong; it is Wednesday.
Dr Julian Huppert (Cambridge) (LD)
We rely absolutely on the police and the intelligence and security services, who do a great job, but we must have confidence that they are acting within clear and agreed safeguards. This has been hit by a series of revelations over the last few weeks about GCHQ and the activities of undercover policing. Will there be an opportunity for an open debate in this House so that we can set out what we believe are the parameters within which they should do their vital work?
Mr Lansley
My hon. Friend will recall that my right hon. Friend the Foreign Secretary came to the Dispatch Box when there had been previous press reports to give the assurances in relation to GCHQ that my hon. Friend and others have sought. These matters continue to be carefully considered inside Government. It is very difficult sometimes to have debates about some of these matters, but the House should remember that now, literally, following the Justice and Security Act 2013, we now have the Intelligence and Security Committee of Parliament, part of whose work is to ensure that precisely those sorts of safeguards and scrutiny are in place.
Mr Speaker
Order. There are still several colleagues trying to contribute and I am keen to accommodate them. I just remind the House that there are two debates to take place today under the auspices of the Back Bench Business Committee, the first of which in particular is extremely heavily subscribed, so there is a premium, both in this session and subsequently, on brevity.
Diana Johnson (Kingston upon Hull North) (Lab)
Two weeks ago, the Leader of the House told me that the reason food bank use had trebled in the last year was that the Government were now advertising in job centres that food banks were available. To explore this further, may we have a debate to explain why, in Hull, police and retailers have been reporting a serious increase in food theft? Is it down to shops advertising food better?
Mr Lansley
Oh well, sarcasm does not always read so well in Hansard. The hon. Lady will find that I said this was one of the reasons—[Interruption.] One of the reasons for the increased take-up of food banks was that the previous Government did not allow relevant information and material to be made available in jobcentres, while this Government did. That is the simple fact of the matter.
Karl MᶜCartney (Lincoln) (Con)
The last time I stood here and mentioned the bullying and financial incompetence of the Independent Parliamentary Standards Authority, I opened a veritable Pandora’s box of pain for myself and those close to me. Does my right hon. Friend think we should have a debate on IPSA, as many colleagues on both sides of the House have offered me their support and would no doubt like to discuss reforms to this unfettered regime, which continues to act like the KGB of our civil service, breaks the law, ignores the Data Protection Act and is now—I am personally pleased to report—in trouble with the Information Commissioner’s Office?
Mr Lansley
My hon. Friend feels strongly about IPSA. I believe that a number of Members feel the same on the basis of their personal interactions, but there are others who have felt that since its establishment, the service it provides has improved. Either way, I would say to my hon. Friend and the House that IPSA may have statutory independence, but that does not mean that it is without scrutiny. IPSA also has an informal relationship with Members, and that should be used to convey messages about IPSA’s operation. The Speaker’s Committee for the Independent Parliamentary Standards Authority is a mechanism that can be used—I know this as a member of it—to send messages to IPSA about how it does its work.
Robert Flello (Stoke-on-Trent South) (Lab)
The Secretary of State for Defence is meeting the Colombian Defence Secretary today to discuss our further military support for the Colombians. Given the murder of four innocent protesters by the Colombian army and police over recent days, may we have a debate in Government time about why we are considering giving military support to a Government whose Ministers, including the visiting Defence Secretary, routinely name their political and social opponents as “terrorists”, thereby effectively placing a death sentence on them?
Mr Lansley
Beyond saying simply that I will ask my right hon. Friend the Secretary of State for Defence to respond to the hon. Gentleman’s points, I had better not trespass any further for fear of demonstrating my ignorance.
John Glen (Salisbury) (Con)
This week, Wiltshire police announced the relocation of Salisbury police officers to a new building shared with Wiltshire council, thereby saving £500,000 and avoiding a 50% under-occupancy. Will the Leader of the House make time for a debate on how to encourage effective collaboration between local public agencies so as to optimise service delivery and allow space in the outgoing building for the new Salisbury and South Wiltshire university technical college?
Mr Lansley
My hon. Friend makes a good point. I know that work has been done previously both in Wiltshire and in neighbouring authorities to try to secure that sort of collaboration between authorities in order to deliver savings to all through the rationalisation of back offices and sometimes even of front-line services. Clearly, under this Government, local authorities have been taking exceptional measures to try to deliver efficiency savings and maintain front-line services. What my hon. Friend describes provides a very good example of how, with the new police and crime commissioners, we might find a greater impetus, and indeed a political impetus from elected commissioners, to try to make those savings happen.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Given that we have received news of an actual cut in planned capital investment and a virtual strangling at birth of the Heseltine proposals, may we have a debate on the Government’s plans to stimulate jobs and growth in economies such as those in Birmingham and the west midlands?
Mr Lansley
I am not sure whether the hon. Gentleman and I listened to the same statements yesterday and today. What I heard, including today, was an announcement of £2 billion a year going into the single pot to support local enterprise partnerships across the country, and that will accumulate into a substantial sum of money. This is a devolution of resources that never happened under the Government the hon. Gentleman supported. Additionally, if I heard it correctly, £500 million extra is going into the regional growth fund, and we have all seen how that has made a big difference to projects. I am afraid that I do not recognise his premise; we are supporting manufacturing and growth across the regions.
Glyn Davies (Montgomeryshire) (Con)
There has been a huge and resounding welcome throughout Wales of yesterday’s confirmation that the budget for Sianel Pedwar Cymru or S4C is to be protected—demonstrating a commitment to Welsh language and culture by the Prime Minister and the Department for Culture, Media and Sport, as well as the Wales Office. May we have a debate on the importance of S4C to demonstrate its significance for Wales, the economy, the language and the culture as well as to the Union?
Mr Lansley
I cannot offer my hon. Friend the prospect of an immediate debate, but he used his opportunity at business question last week, if I recall correctly, to raise this issue. I am pleased that he has found that his representations have been successful.
Helen Goodman (Bishop Auckland) (Lab)
Facebook is providing a meeting place for paedophiles by continuing to publish on its pages indecent images of children, and it receives income from advertisements displayed alongside these pages from many household-name companies. The internet summit of the Secretary of State for Culture, Media and Sport did not even address the question of child protection on social media. When is she going to come to the House to tell us how she is going to bring this disgusting practice to an end?
Mr Lansley
The hon. Lady raises an issue of the greatest importance to Members, and indeed to people across the country and especially to parents. I will, of course, talk to my right hon. Friend the Secretary of State. I was not present at the summit meeting with internet companies, but I know that she is working very hard on these issues. I particularly welcome the additional support given to the Internet Watch Foundation, which was previously based in my constituency and continues to operate out of Cambridgeshire. I hope that we will be able to work together across the House to ensure that we take every practical measure we can to reduce child exploitation and abuse.
Ian Swales (Redcar) (LD)
Sixth-form colleges are a vital and highly successful part of our education system, but they are treated by the Government as orphans of the further education sector. This means that they face issues that school sixth forms do not. May we have a debate on sixth-form colleges, and which Department does the right hon. Gentleman think should respond to such a debate?
Mr Lansley
I cannot promise an immediate debate, although I must say that in due course such a debate would be useful and would be appreciated not least by myself and my hon. Friend the Member for Cambridge (Dr Huppert), in whose constituency are two very successful sixth-form colleges at Hills road and Long road. My hon. Friend the Member for Redcar (Ian Swales) makes a very important point, and I hope that we can take it up at some point. If we had a debate specifically about sixth-form college teaching up to A-level, it would be the responsibility of the Department for Education to respond, but if the debate related specifically to apprenticeships and skills-based learning, it would engage the Department for Business, Innovation and Skills.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Given that the Health Secretary, the Work and Pensions Secretary, the Lord Chancellor, the Chancellor and even the Prime Minister seem to have a basic lack of understanding of basic statistics, when will the Leader of the House organise a training course for them, and will it be a back-to-basics training course?
Mr Lansley
Since I do not accept the premise, I am not planning to arrange such a thing.
Jake Berry (Rossendale and Darwen) (Con)
It could be genuinely useful for Members of all parties to have a debate on youth unemployment, including on apprentices, in Rossendale and Darwen. Over the last 12 months, youth unemployment has dropped by 20%, and we have tripled the number of people entering into apprenticeships since the general election. It would useful to explore whether that supports our world-class manufacturing and what it says about the hugely successful 100 in 100 campaign, which we are now running for our second year.
Mr Lansley
My hon. Friend makes very important points. I cannot offer an immediate debate, but I hope that an opportunity will arise before too long, because the 1 million apprenticeships created under this Government are vital and are making an enormous difference. We have persistent, worrying and continuing levels of youth unemployment, which grew under the last Government at a time when the economy was growing and even before we hit the Labour-induced recession. This programme should, through traineeships alongside apprenticeships, help some of the young people who have found the greatest difficulty getting into work. That will also help us to achieve the Government’s objectives clearly set out in the Queen’s Speech, which is to ensure that all young people gain access to traineeships, apprenticeships or college-based education.
Kate Green (Stretford and Urmston) (Lab)
My constituent, 18-year-old Natalie McCusker, has been waiting more than 18 months for a lung transplant. I learned from a written answer on 15 May that waiting lists in the north-west are among the longest in the country. May we have a debate on selection and allocation policies for donated organs? As it is national transplant week in the week beginning 8 July, might that not be an apposite time to have the debate?
Mr Lansley
In this instance, it would be appropriate for the hon. Lady to approach the Backbench Business Committee or to seek an Adjournment debate, but I have great sympathy with her comments. As I have in my constituency Papworth hospital, the largest hospital provider of heart and lung transplants in the country, I am only too aware of the difficulties associated with accessing lung transplants and the availability of suitable organs for donation.
Mr William Bain (Glasgow North East) (Lab)
Will the Leader of the House provide a debate on why nine in every 10 people being referred to the Government’s Work programme are being so badly failed by the scheme? Last Friday, a constituent told me she was referred to a scam employer paying her cash in hand, and the police were called in to close the business down. Do we not need to debate in full the growing problems with the Work programme?
Mr Lansley
I cannot offer the hon. Gentleman a debate immediately, but he would find it helpful to look at the written ministerial statement made this morning by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Fareham (Mr Hoban). It set out the new statistics, such as that the Work programme has enabled 132,000 jobseekers to escape long-term unemployment and find lasting work, up from 9,000 at the end of March 2012. The hon. Gentleman will see the impressive trajectory of improving performance under the Work programme.
Points of Order
(11 years, 5 months ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
On a point of order, Mr Speaker. May I draw to your attention the written ministerial statement provided this morning on flood insurance? There has been no opportunity to consider what is in that statement, and the Chief Secretary was not able to give full details in his statement earlier. My constituents are particularly concerned about flood insurance and the provisional deal that seems to have been reached by the Government and the insurance industry. May I ask that the appropriate Minister be brought to the Dispatch Box to answer questions, so that we can have effective scrutiny of the issue?
Mr Speaker
The Leader of the House has signalled an interest in coming in on this issue. He is welcome to do so.
The Leader of the House of Commons (Mr Andrew Lansley)
If I may say so, the hon. Member for Kingston upon Hull North (Diana Johnson) asked a question at business questions, and she might have asked one that related to the issue she now raises. I would have been very happy to explain that, in addition to the written ministerial statement, following statements today there will be the presentation of the Water Bill, which will then be available for Members to see. As was made clear earlier, my right hon. and hon. Friends at the Department of Environment, Food and Rural Affairs are today publishing a consultation that sets out the Government’s intentions and gives people an opportunity to respond.
Mr Speaker
I thank the Leader of the House for what he has said. In relation to the point of order made by the hon. Member for Kingston upon Hull North, what I have to say is twofold. First, my understanding is that the motivation of the Government in issuing a written statement was that the time of the House would be heavily absorbed today by both the Chief Secretary’s statement and the business statement, and the Government were mindful of the fact that this is a Back-Bench business day. It is only fair to be clear about the motives of the Government on the matter.
Secondly, in so far as the hon. Lady feels dissatisfied—and she is a persistent and indefatigable Member—I assure her that she will find other opportunities for the matter to be debated. I do not know whether the Government will decide to come forward with an oral statement because of the intellectual force and personal charm of the representations that she has made today, but even if they are not so minded, the hon. Lady can apply for debates, and I have a hunch that she will do so.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. On 18 March you were very wise—[Hon. Members: “Always.”] And on many other occasions—you are always wise and wonderful, never curmudgeonly, and all the rest of it. But, on 18 March, you very wisely dug the Government out of a hole and enabled the whole House to come to a view on the future regulation of the press, by allowing a manuscript amendment and a change to the order of business, without the normal rules of the House. That was a wise course of action to take. Since then, however, the declared will of the Prime Minister, the Government, the Opposition and the whole House, which was for the matter to go to the Privy Council meeting in May, has not been implemented. You are, as I understand it, a Privy Counsellor, and I suppose you could go to the Privy Council and insist that the matter be carried forward as swiftly as possible. You might not want to go down that route, but I wonder whether you could chase this matter up a little, because the whole House, the victims and all those who had their phones hacked would be profoundly disappointed if the matter did not go to the July meeting of the Privy Council, if legal advice were not provided, if no reason were provided to the House, and if no action had been forthcoming when we came back in September.
Mr Speaker
My response to the hon. Gentleman’s point of order, of which I did not have advance notice—I make no complaint about that; I simply point out that I did not have such notice—is twofold. First, I am a Privy Counsellor, but as the hon. Gentleman well knows, I do not call meetings of the Privy Council, which take place perhaps from time to time. Secondly, I understand the hon. Gentleman’s point—I would be exceptionally unwise if I did not—and if he is minded to pursue the matter, he will have multiple opportunities. I have a sense that the hon. Gentleman understands at least as well as I do that in campaigning quantity, persistence and, above all, repetition are at least as important as the quality of the arguments themselves.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
On a point of order, Mr Speaker. You have ruled that there will be a tight limit on speeches today, because the debate is obviously oversubscribed. Do you not share my concern that the Secretary of State for Justice has not even bothered to turn up for the debate?
Mr Speaker
I am grateful to the right hon. Gentleman for his point of order. I had not noticed the absence of the Secretary of State. It would undoubtedly enrich the House were he to be present, and there will be some sadness and disappointment if he is not present, but precisely which Ministers are fielded by the Government is, of course, a matter for the Government.
Bill Presented
Water Bill
Presentation and First Reading (Standing Order No. 57)
Secretary Owen Paterson, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Vince Cable, Secretary David Jones and Richard Benyon, presented a Bill to make provision about the water industry; about compensation for modification of licences to abstract water; about main river maps; about records of waterworks; for the regulation of the water environment; about the provision of flood insurance for household premises; about internal drainage boards; about Regional Flood and Coastal Committees; and for connected purposes.
Bill read the First time; to be read a Second time on Monday 1 July, and to be printed (Bill 82) with explanatory notes (Bill 82-EN).
Backbench Business
Legal Aid Reform
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
May I remind the House that this debate is extremely heavily subscribed, as a consequence of which I have had to impose a five-minute limit on Back-Bench speeches?
Sarah Teather (Brent Central) (LD)
I beg to move,
That this House has considered legal aid reform.
I thank the Backbench Business Committee for allowing the House to debate this very important issue. I am hugely grateful to the many Members who have remained in the Chamber on a Thursday afternoon even though the debate is not on a dividable motion. I offer my apology for the fact that I did not ask for a full day’s debate—clearly, there is much more desire to debate this matter than I expected when I went before the Committee.
As many in the House will know, the background to the debate is that just after the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into force, the Government began a new consultation, “Transforming Legal Aid.” That consultation closed on 4 June, and the Government are due to respond after the summer recess. The proposals were incredibly wide ranging and arguably more significant in some ways than those in the LASPO Act, but it looked as if the House would not get an opportunity to debate that consultation document before the Government responded. As the Government are currently proposing secondary legislation for the matter, my concern is that we may not get an opportunity to have a debate before the legislation is introduced.
Because the proposals are so complex and wide-ranging, I think it important for us to get the details right, and I therefore hope that the Minister will view the contributions of Members in all parts of the House as part of the consultation process.
I am grateful to the 31 members of all parties who supported my application to the Backbench Business Committee. I particularly thank the right hon. Member for Tottenham (Mr Lammy), who is a former legal aid Minister, and the right hon. Member for Haltemprice and Howden (Mr Davis), who I know wants to speak later about some of the constitutional implications of the proposed changes.
The fact that so many organisations, including Mind and Shelter, have contacted Members of Parliament with briefings and queries demonstrates that it is not just lawyers who are worried about these proposals.
Karl Turner (Kingston upon Hull East) (Lab)
Is it not very disappointing that that the Justice Secretary has not bothered to come to the House today? As the hon. Lady has pointed out, the debate is very oversubscribed. More than 96,000 people signed the e-petition, and I believe that 96 Members of Parliament signed early-day motion 36. The Justice Secretary should be here.
Sarah Teather
I would have been delighted to see the Justice Secretary, but I am, in fact, delighted that the Minister is present. I trust that he will listen carefully to what Members say today, and will relay it faithfully.
Sir Edward Garnier (Harborough) (Con)
Like the hon. Member for Kingston upon Hull East (Karl Turner), I am a member of the Bar, but unlike him I do not do any legal aid work.
Does my hon. Friend agree that although the debate is important, it would not have had to take place had the Government chosen a better way in which to find their savings? It would have been better to continue with the proposals for further privatisation of the prisons, rather than attacking the legal aid system.
Sarah Teather
I certainly think that there are better ways of finding savings. I hope that some Members will refer to the way in which we manage some of the services that we privatise. The way in which contracts are managed is very important. The privatisation of the interpretation and translation services, for example, appears to have led to greater delay and driven up costs.
Dr Julian Huppert (Cambridge) (LD)
I congratulate my hon. Friend wholeheartedly on securing a debate that is clearly of interest to Members in all parts of the House. About two years ago, I too secured a debate on legal aid, which I think she attended, and that prompted a great deal of interest as well. The issue is incredibly broad, covering such matters as the residence test and, in the case of criminal legal aid, choice and diversity. Is it not important to ensure that small providers can continue to provide a service?
Sarah Teather
I will struggle if I try to give way to everyone. May I at least respond to one intervention before I accept another?
I intend to speak about the residence test rather than about criminal legal aid, but I know that a number of Members—including the hon. Member for Kingston upon Hull East (Karl Turner), who supported the application to the Backbench Business Committee, and my hon. Friends the Member for Redcar (Ian Swales) and for Leeds North West (Greg Mulholland)—want to refer to it specifically.
Sarah Teather
I will give way first to the hon. Lady and then to the hon. Gentleman, but after that I must make some progress.
Caroline Lucas
I wanted to intervene early in the debate to crush the myth that this is about savings. It should be made absolutely clear that no money will be saved. Indeed, a barrister at Matrix Chambers has suggested that, rather than saving £6 million—which, in the great scheme of things, is not very much in any case—the changes are likely to generate on-costs of about £30 million.
Sarah Teather
I entirely agree with the hon. Lady. She was referring, of course, to the changes in civil rather than criminal legal aid. I think that the costs are likely to be significantly greater, especially if people remain in detention or cannot be released from hospital.
Jake Berry
Let me begin by drawing Members’ attention to my declaration of interest, largely because I am immensely proud of being a solicitor. What concerns me most is discrimination against small high street practices such as Holt and Longworth and other small firms in my constituency, which, although they are the backbone of our profession, will probably cease to exist.
Sarah Teather
I find it extremely worrying that the Government should pursue a line that would put small and medium-sized firms out of business, apparently deliberately. It flies in the face of everything they are trying to do to promote growth and the high streets. I trust that the Minister has noted what the hon. Gentleman said.
I hope that the hon. Member for Stretford and Urmston (Kate Green) will catch your eye later, Madam Deputy Speaker, because I know that she wishes to speak specifically about issues relating to civil legal aid for prisoners. I shall not have time to speak about that myself, but I think that it is important for it to be covered today.
Let me now say something about the residence test. As a former children’s Minister, I know that the proposed changes have particular implications for children, and as chair of the all-party parliamentary group on refugees, I am very concerned about the impact on those who seek sanctuary on our shores.
The Bill that became the Legal Aid, Sentencing and Punishing of Offenders Act was highly contentious and fiercely debated in both Houses. Many were persuaded of the need to save money, but all sought to ensure that the most vulnerable members of society would continue to have access to justice. Time and again, Ministers assured the House of Commons that when people’s lives or liberty were at stake, access to justice would be preserved. However, the new residence test appears to undermine that directly.
Schedule 1 of the Act lists the categories that the Government sought to protect from cuts—groups whom they recognised to have a vital need for legal representation. Children who may be subject to care orders, children with special educational needs, victims of domestic violence, victims of trafficking, asylum cases, those in immigration detention, those facing immediate homelessness, and those with mental health issues are just a few of the very vulnerable groups that are identified. I am afraid that people in all those categories may be denied legal aid if they fail to pass the residence test.
Mr Jim Cunningham (Coventry South) (Lab)
Does the hon. Lady agree that what may happen—if it is not already happening—is that citizens advice bureaux and law centres will become overloaded with casework, and people in all the categories that she has listed will start coming to elected Members of Parliament for help?
Sarah Teather
I think the hon. Gentleman is absolutely right. Those in what was originally a category of people needing legal aid will still have problems after being denied it, and will arrive at all our surgeries seeking our help with problems that still exist and are still insurmountable.
Mr Dominic Raab (Esher and Walton) (Con)
I thank the hon. Lady for giving way; she is being very generous. Does she know whether the family of Jean Charles de Menezes would have qualified for legal aid under the new residence test? That is a very esoteric but important category which ought to be protected.
Sarah Teather
I understand that the family of Jean Charles de Menezes would not have qualified under the new test. As the hon. Gentleman says, that was an incredibly important case which had huge implications for policing policy, and it is for precisely that reason that we need to be careful about identifying categories of this kind.
A number of Members have said that the changes will not save money. That, I think, is the point. The Government are apparently not seeking to save money with the changes in the residence test; they say that their purpose is to shore up public confidence in the legal aid system. However, I do not think that the public will continue to have confidence in a system that denies access in certain cases, including the one that was referred to by the hon. Gentleman.
Particularly unjust, in my view, is the position of those who, having gained refugee status, will be forced to wait 12 months before becoming eligible for legal aid. I think it extremely unlikely that we would be complying with article 16 of the Geneva convention if we proceeded with that proposal. Many of the people involved are very vulnerable, and there is frequently a gap in communication between the Home Office and those who should be seeking care for them in the form of housing or benefits. Many would face a period of homelessness if lawyers did not intervene to ensure that local authorities do their duty.
Sarah Teather
I will, but I am conscious that I am taking up the time of others who wish to speak.
Keith Vaz
I am most grateful to the hon. Lady, who has been extremely generous in giving way. She is right about immigration, which has become more complex. One of the reasons for opposing these proposals is that the few remaining specialist legal aid immigration lawyers will disappear if they are accepted.
Sarah Teather
I fear losing specialists in immigration law. I already see constituents who are consulting lawyers who are, I am afraid to say, less than qualified to do the job, and that is what creates many of the delays and bad decisions in the first place.
Sarah Teather
I have tried to take as many interventions as possible, as I know that some Members will not get an opportunity to speak, but I also do not want to speak for too long, and there are some points I want to make on the residence test, so I shall continue
Were it not for the intervention of lawyers, many refugees would be homeless at the very time when the state has recognised they are absolutely in need of protection. They will also be unable to challenge other decisions, such as on special educational needs and other forms of care. Young unaccompanied asylum seekers are particularly vulnerable. The Coram Children’s Legal Centre provided an example of a young woman from Eritrea who was just 16. The Home Office accepted that she required refugee status. However, after that happened, as is often the case, her local authority began disputing her age. Were it not for the intervention of lawyers, she would not then have been cared for by the local authority, as she had no chance of proving she had been resident in the UK for 12 months; in fact, she had not been resident in the UK for 12 months, and she had certainly not been lawfully resident in the UK for 12 months.
Those who struggle to make a claim for asylum initially are frequently particularly vulnerable to wrong decisions being made. I include in that category young people, those who have experienced sexual violence, those who are claiming asylum on grounds of sexual orientation and those who have been tortured. Many of these people fail to disclose that in their initial interviews. It is only on subsequent fresh applications for asylum that the right decision is made, because all the information is provided. Once that fresh application is accepted, they become eligible for legal aid. However, they need a lawyer to put in an application, so these people find themselves in a position of not being able to gain the status they deserve. Similarly, victims of human trafficking may need to challenge the identification given to them. Without access to legal aid, they are unable to do that.
Perhaps the most bizarre aspect of this residence test is not about asylum seekers, but about British-born children. British-born children under the age of one will fail a residence test. I do not know whether Ministers did not communicate with the Department for Education, but it is common practice in care proceedings that a child will be allocated a solicitor. That is why certain categories of children were listed at the back of schedule 1 to LASPO. Examples of other kinds of case that would be excluded are British citizens who from time to time get wrongly deported—I am afraid that does happen—and high-profile cases such as that mentioned a few moments ago. I am aware that my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) wishes to raise Baha Mousa’s case and the case of Afghani interpreters.
Perhaps the most invidious and troubling cases, however, are those involving people in immigration detention. That, too, was specifically included in LASPO because it involved the state depriving people of their liberty. They must instigate their own proceedings. We often have indefinite detention for these people; their case does not automatically review, yet they will not be eligible for legal aid, because they are not lawfully here. The chief inspector of prisons has previously expressed concerns about that group, and this makes it significantly worse.
The argument Ministers have offered to me is that I should not concern myself with this group because exceptional funding is in place to support them. I want to debunk that myth right away. First, the application process for exceptional funding is exceptionally complicated; it is extremely difficult to provide the required evidence to the Legal Aid Agency, which is why very few people have applied, and people need a lawyer to be able to fill in the form. I understand that 100 cases have been accepted by the LAA, and the Public Law Project has told us it knew of just one case that had been accepted. Secondly, exceptional funding exists for cases outside the scope of LASPO, yet all the cases I have detailed are within its scope, but are outside that of the residence test. Thirdly, there is no procedure for urgent cases. That is not much good for people who may have a pressing problem with their housing or who are seeking a non-molestation order as a result of domestic violence. Finally, there is no exemption for those with no capacity to litigate.
The residence test is likely to be seriously detrimental to many of the most vulnerable groups that we have sought to protect during previous cuts to legal aid. I want to remind the Minister—as one former Minister to a current Minister—that being judicially reviewed is annoying. I remember that; it is very frustrating when we are taken to court, but we have to be humble enough to accept that Ministers, and others in public authorities, sometimes make the wrong decisions, and we also have to be man enough to accept the risk that some of the things people will JR us about may not seem to be particularly significant. That is what we need in a free society; that is the price we pay for making sure citizens are able to hold the state to account and for preventing overbearing state power from interfering with people’s right to live in the way they choose.
Madam Deputy Speaker (Dawn Primarolo)
Order. [Interruption.] Mr Lammy, it is not a good idea to be on the move in the Chamber when one wishes to be called to speak. It is not a good way to try to catch the Speaker’s eye.
Mr David Lammy (Tottenham) (Lab)
I am very grateful, Madam Deputy Speaker. I seek your forgiveness for being on the move, but I was consulting colleagues about whether, given the importance of this debate, a vote of this House might be required, and whether I could invite colleagues to join me in the No Lobby after this debate. That would, of course, require Tellers.
Why is this so important? It is important because the Secretary of State has caricatured this debate as being solely about producers and suppliers of legal services. He has sought to suggest that it is about fat-cat lawyers and their fees. He also sought to suggest that this follows in a long line of reform to legal aid over the last 10 years and that ultimately it is about saving £220 million of taxpayers’ money. I think it is hugely important that Members are able to assert that that is not the case.
These are profound changes that would completely unsettle our constitutional arrangement, which begins with Magna Carta, where it was said we should not sell justice, deny justice or delay justice to anyone. When this House last met to discuss issues of such importance, the subject was the suspension of habeas corpus. On that occasion, the House met for three days, there was huge debate, we sat through the night, and then the House was able to vote. It is a travesty that the Secretary of State is not present, and that the Government seek to make such a profound change in our country by secondary legislation. That is why I urge Members to follow me into the No Lobby after the conclusion of this general debate.
John Hemming (Birmingham, Yardley) (LD)
Does the right hon. Gentleman agree that the removal of people’s choice of advocate is a very profound change?
Mr Lammy
It is absolutely the case that in our system the choice of lawyer is fundamental and essential. In fact every democratic country we can think of enables that choice. That this Government should seek now to say that someone facing criminal charges cannot choose, and therefore have confidence in, the person to be charged with preserving their liberty is a huge exception to the democratic system we have sought to preserve for so long. Of course it will lead to huge miscarriages of justice.
Mr Henry Bellingham (North West Norfolk) (Con)
I am very grateful to the right hon. Gentleman for giving way and I hope he gets extra time for taking a second intervention. I hear what he has to say, but does he agree that whoever was in power at the moment, having to make difficult choices, would almost certainly have to look at what is one of the most generous legal aid systems in the world and make savings to that budget? Does he agree that the problem is not so much the principle of the savings but how this is being done and the fact that there needs to be consultation on a number of specific points that, to be fair, the Government have agreed to reconsider?
Mr Lammy
The hon. Gentleman is right. It is totally unacceptable that the Government have sought to rush this measure through after a speedy consultation that lasted less than two months. It is wrong that there should not be a vote in the House and it is wrong to caricature previous changes to legal aid as having any relationship with these changes. When I was legal aid Minister, changes were made to scope in personal injury in an attempt to take out those who were caught up in speeding or traffic cases in the legal aid system. We introduced fixed fees to maintain costs. We introduced online and phone systems for free legal advice to limit costs. Those were the sorts of changes we introduced; we did not attempt to charge and make an attack on judicial review.
Judicial review is so important. Most people in this country feel that public authorities are benign until they have a disabled child, or one with special needs, and seek to challenge the local authority or the school, until they have an elderly relative in a care home and abuse goes on in that care home, or until they live in the path of High Speed 2 or Crossrail. There are people in this country who would seek to use judicial review and it is a travesty that this Government would run a coach and horses through it for £6 million.
The hon. Member for North West Norfolk (Mr Bellingham) mentioned savings and savings can be made in other ways. Tagging a defendant costs £13.41 in Britain, but £1.22 in America. Let us find the savings through cheaper procurement. Let us find the savings in the court system. Let us not rip up a democratic, constitutional system that we have had for so many years and that has served us well.
We have heard that the parents of Jean Charles de Menezes would not have received legal aid under the changes being made to the residence system. In fact, after these changes, babies in our care system aged under one would not get legal aid, even though children sometimes need access to it. There are many headlines at the moment about Jimmy Mubenga, a young man who lost his life in a deportation case. His family would not get legal aid. Is that really the kind of country we want to live in? Is that what we want to arm our Foreign Secretaries with when they are trying to speak powerfully to foreign Governments who seek to oppress their citizens? It cannot be, so I ask the Department to think again about the decision and to think very hard about the changes it is attempting to railroad through Parliament.
Those are the reasons it is important that we have the opportunity to vote. It is deeply concerning that it has taken senior Back Benchers going to the Backbench Business Committee to bring this discussion to the House in the first place. I cannot think of an occasion in the past few years when that has happened on such a major issue. I ask the Secretary of State to be mindful of the petition signed by thousands of people because they, too, are concerned about the situation.
The caricature that implies that those who are caught up in the criminal system are thick and therefore do not need a choice of lawyer is a disgrace coming from a Secretary of State for Justice. For legal aid lawyers to be caricatured as fat cats when their average salary is less than that of nurses and teachers in this country and when we are talking about high street firms in Bristol, Swindon and Brixton—places as different as that—is unacceptable. This is not about the producer, but about the citizen and the consumer. It is about hard-fought battles that have taken place in this Chamber over many years. I ask the Government and hon. Members to join me in the No Lobby after the debate.
Mr Jonathan Djanogly (Huntingdon) (Con)
I declare any interest I might have as a practising solicitor, although not one who has ever done any legal aid paid work.
The Government have given a very clear explanation of how, under any reckoning, this country spends by far the most of any in the world on legal aid and will still do so after these proposed savings, which have to be made in these times of tough spending decisions.
Let us first acknowledge that the difficulties in providing criminal legal aid are not new. Indeed looking through my old notes for the debate, I found my question asking a Justice Minister in the previous Labour Administration what he was going to do about the then crisis, with barristers going on strike, some 25% of criminal law firms having closed shop in the previous four years and rates having been frozen for a decade. The then Labour Government acknowledged that the system was unsustainable and prepared, but subsequently failed, to introduce contracts for criminal legal aid tendering. Admitting their inability to reform the system, they then went for the relatively easy route of making savings through further rate cuts.
Even then, the Labour Government were so frightened of initiating the cuts that they organised them to take effect after the general election. That was the position that this Administration inherited and one of the main reasons why we decided to reform civil legal aid first to allow the criminal legal aid market to settle after Labour’s cuts.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I have no argument about whether the savings should be made, but why does the hon. Gentleman think it is right to have a widespread attack on legal aid when the chair of the Criminal Bar Association has said that banking fraud cases are taking up 45% of the legal aid budget?
Mr Djanogly
They do. The consultation considers very high cost cases and identifies them as a specific area that needs to be looked at. I agree with that.
During debates on what is now the Legal Aid, Sentencing and Punishment of Offenders Act 2012, Labour spokesmen said that we should be looking at making savings by contracting criminal legal aid rather than touching civil legal aid. Now it seems that they have made another U-turn and are saying that they do not want criminal contracting at all. The position of Labour Members is not only inconsistent but deeply irresponsible, because they still acknowledge the need for legal aid savings but do not have a clue how to deliver them in practice. That is not the position of a party that can be serious about government.
Jake Berry
The criminal legal aid solicitors to whom I have spoken in my constituency have said that they would prefer a further cut in their rate to the structural changes the Government are talking about, because those structural changes mean that a solicitor in Rawtenstall has to travel to Blackpool to go to the police station. That is completely unsustainable.
Mr Djanogly
Further cuts in the rate are the easy option. The market is out of sync with the legal profession and it needs reform.
My theory is that Labour’s contracting proposals failed because they not only succumbed to the reactionary wing of the legal profession but shied from the bottom line facts of criminal legal aid contracting, which are that in order to get efficiencies and savings, contracting will always involve fewer but larger practices operating over a larger area. If the market is to be sustainable, there must be fewer firms each receiving a larger slice of the remaining pie.
Although I support the Government’s consultation and the contracting proposals in general, my personal view is that we are missing an opportunity radically to restructure the market and bring it into line with modern practice norms. At the core of that lies the need to consider the type of organisation that can bid and how they are paid. The historic position in England and Wales is that the client instructs a solicitor and then, particularly for more complicated advocacy, the solicitor employs a barrister. That involves two fees and I would strongly advocate moving to a single fee.
Karl Turner
I wonder whether the hon. Gentleman has read the consultation document. The proposals are very different from what the previous Government proposed under best value tender. There are major constitutional differences in these proposals that will ruin the entire criminal justice system.
Mr Djanogly
The previous Government were considering contracting, as were Labour Front Benchers during this Parliament. We need to appreciate that the Legal Services Act 2007, brought in by the previous Government with Conservative support, has transformed the potential for legal service provision. To cut a long story short, there is now no reason why solicitors and barristers should not go into partnership together, or indeed, with non-legal organisations, via alternative business structures. There is no reason why barristers should not take instructions direct from the client nor any reason why barristers should not themselves bid for contracts and employ solicitors. In practice, there have been blockers to this kind of progress, not least a barrister regulator that seems unable to see the writing on the wall for its own profession.
If I seem radical, I am explaining a scenario that would seem more or less natural to most Commonwealth common law countries.
Mr Bellingham
On a point of order, Madam Deputy Speaker. I am sorry, but the right hon. Member for Tottenham (Mr Lammy) is on the move again. Surely right hon. and hon. Members should always stay in their seat and listen to the speech immediately after their contribution.
Madam Deputy Speaker (Dawn Primarolo)
The courtesies of the House are that a speaker should remain for the next two speakers, having contributed to the debate. It is regrettable. I did not see him move again, but I am sure that someone from the Opposition Benches will ensure that he returns quickly to hear the debate. Sorry for the interruption, Mr Djanogly.
Mr Djanogly
To retain the two-fee structure sends the wrong message either that the outdated current system can adapt to contracting or that it will soon be reversed and be back to inefficient business as usual. In the longer term both are unsustainable.
The legal profession, from mediaeval times, has always been against change. Most significant legal reforms emanate from Parliament. Our job is to create a marketplace for the future, not for the past. I support the Government’s proposals, but I recommend that we look again at bringing in a single-fee structure. Yes, that will force significant changes to criminal legal practice, but in the longer term it will provide a more flexible, efficient and sustainable platform for criminal legal aid provision.
I end by noting that it was not just the Labour Government’s inability to reform that constituted their failure but their shocking inability effectively to process legal aid payments and to monitor fraud and auditing systems. In all seriousness, when I started at the Ministry of Justice, the previous Minister had hardly been on speaking terms with the Legal Services Commission, and the delays and inefficiencies of the processing of claims, including criminal claims, were very serious indeed. Much of the processing has now been dramatically improved. The accounts published only this week are the first not to have been qualified in five years, and I congratulate the MOJ on that achievement. Significant savings have since been made by abolishing the LSC and reintegrating legal aid into the MOJ.
Ms Karen Buck (Westminster North) (Lab)
As the founding chair of the all-party parliamentary group on legal aid, I am pleased that Back-Benchers have organised an opportunity for us to discuss this important issue at this time and to touch on not just the “Transforming Legal Aid” agenda but the impact of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, much of which came into effect this spring.
As we know, the predominantly civil legal aid cuts that have come into effect have taken out of scope swathes of provision for benefits, social welfare and large areas of housing and employment. It has happened at the same time as local authorities are struggling with a 30%-plus reduction in their own funding, which has added to the squeeze on advice services. That impact is being felt up and down the country. Just this week, we were sorry to hear the news that Birmingham law centre was the first major urban law centre to go under. I am struggling to see whether we can sustain Paddington law centre, the second oldest law centre in the country, which has been hit by legal aid reductions and the loss of grant funding. Shelter, a major housing charity, has seen its advice services decimated as a result of cuts.
Mr Jim Cunningham
Does my hon. Friend agree that not only will citizens advice centres be affected, with people denied public justice, but small law firms will go out of business and 400 big companies will have a monopoly?
Ms Buck
My hon. Friend is correct. This is something that we will see in terms of the “Transforming Legal Aid” agenda. We are seeing advice deserts emerging. We are seeing the concentration of services in larger providers and, critically, we are seeing the loss of specialist services, which are so important. As is often the case with this Government, we are finding that cuts—the £350 million taken off the legal services budget—do not always mean savings. As we were warned, we are already seeing an increase in the number of litigants in person appearing in court. The Bar and judges warned that it would lead to additional costs.
A number of changes that have impacted on housing need have led to an 86% rise in homelessness acceptances in my local authority alone. Homelessness decisions remain within scope of LASPO, but debt and welfare advice provision does not and those issues are what lead people to the brink of homelessness in the first place. As a result of the loss of advice services and the dramatic increase in homelessness, we are seeing extra costs falling on local authorities and wiping out a number of the savings.
It was interesting to see in the comprehensive spending review statement yesterday further resources being directed to the troubled families programme. It is slightly ironic that we are rightly investing more in troubled families, knowing that debt and arrears are at the heart of the problems that they seek to overcome.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
My hon. Friend is making a powerful argument. In my area, since April the bedroom tax has increased arrears in the city already by £750,000, pushing more families into misery and making them more in need of the very advice to which she refers.
Ms Buck
My hon. Friend is absolutely right. It is another excellent example. I am sure that colleagues will have examples from a number of areas of service and from all over the country.
On the “Transforming Legal Aid” agenda, while it is true that a Labour Government would have faced difficult and not necessarily popular choices about the justice system and legal aid, one of the elements that we regard as critical is maintenance of the ability for the accused to have a choice of lawyers. There is a risk that the proposed changes will lead to a loss of specialist services and quality services driven by choice, and potentially to miscarriages of justice.
I want to share with the House a letter I received from one of my constituents in the run-up to today’s debate. It is from Anne Maguire, one of the Maguire Seven convicted in 1975 of possession of explosives together with her husband, two teenage sons, brother and brother-in-law and a family friend. She received a sentence of 14 years. She and all her relatives and friend were innocent and their convictions were quashed by the Court of Appeal in 1992. She says:
“Over many years, our solicitor Alastair Logan worked tirelessly without payment to overturn our wrongful convictions. Without his diligence and painstaking work, it’s no exaggeration that the miscarriage of justice we suffered would never have been put right. Under the government’s terrible proposals, solicitors’ firms such as Alastair’s would disappear to be replaced by a reduced number of large commercial operations with no interest in helping innocent prisoners.
Many more miscarriages of justice will occur if plans to award legal aid contracts to the cheapest commercial bidders such as the haulage company Eddie Stobart and to remove the ancient right of accused persons to choose their own lawyer are implemented.
I hope you'll attend the debate on Thursday”.
I am pleased to do that but also to join my colleagues in the vote.
I would love to be able to talk about the judicial review proposals and the accountability of public services that will be lost, but I want finally to touch on the issue of residency. As my parliamentary neighbour the hon. Member for Brent Central (Sarah Teather) has pointed out, urban constituencies such as ours with large migrant populations are most likely to feel the impact of the new residency qualifications. Those qualifications will have a particularly severe impact on children. I am indebted to a law company in my constituency called Just for Kids Law, which has raised with me its fears about the residency qualifications and the extent to which they will hit trafficked children and the children and families of victims of domestic violence, some of whom have come here on their husband’s visa. It will hit children and families of people who have come here to work in domestic service. This is something I am familiar with in my constituency and have many problems with. Finally, it will hit the babies and small children of British citizens who have been abroad and returned to this country, who will lose their qualification. That is a serious impact on the rights of children. I believe the measures must be resisted and look forward to joining colleagues in voting against them this afternoon.
Ian Swales (Redcar) (LD)
I rise to speak as a member of the Public Accounts Committee who is concerned about the effectiveness of the proposed measures, and as a constituency MP who is concerned about access to justice for my constituents.
We are told we have the most expensive system in the world, but only last year the National Audit Office found that the cost of our system was average, after accounting for variances in the role of the civil service and the judiciary, and the costs have been reduced since that finding. As a previous speaker said, 48% of our criminal legal aid costs are for 1% of cases, so why does the Ministry of Justice not look specifically at those cases in order to save money?
Mr David Davis (Haltemprice and Howden) (Con)
One of the misunderstandings in the mind of the public is that legal aid is a principal cost. In fact, our legal system costs half that of the Swiss and three quarters of the system in the other major European countries, and it delivers better results. Surely we should be proud of that?
Ian Swales
I am proud of that, and I am surprised by some of the comments from Front Benchers that seem to contradict what the right hon. Gentleman just said.
We also have a system in which tariffs vary widely across the country, sometimes paying twice as much for the same activity. Why does the Ministry of Justice not look into that? We often criticise the Ministry for not piloting its ideas, but they have tested this one by setting up five public defender services. They are proving to be three to four times as expensive as present local arrangements, and the one near me in Middlesbrough has already closed down. What has the Ministry learned and why is it planning to protect those offices from competitive tendering?
Mr Bellingham
The Crown Prosecution Service now has a lot of in-house lawyers, who are expensive and who have pensions, significant overheads and so on. Does the hon. Gentleman agree that going back to instructing the independent Bar, as used to happen, would result in savings and that the MOJ should look at that quite urgently?
Ian Swales
The hon. Gentleman has made his point fluently. I am not a lawyer and am unable to comment on those details, but I am sure that Ministers heard his point.
Looking at the effect on justice first, the evidence from the USA, where the MOJ’s planned approach is already in place, will give the public little comfort. Even people who are charged with the most serious crimes, including murder, are given low-cost lawyers and scant attention. Among the most serious duties a Government can have are to prevent people from dying in hospital and to prevent them from being wrongfully imprisoned. Why do we believe so strongly in choice in the first case while seeking to eliminate it in the second? Only through choice can standards be maintained and competitive pressures take effect. Yesterday, the Chancellor said:
“Our philosophy is simple: trust people to make their own decisions and they will usually make better decisions.”—[Official Report, 26 June 2013; Vol. 565, c. 306.]
I urge the Minister to follow that approach.
I also urge the Minister to look carefully at the financial incentives in the proposed contracts. As we on the Public Accounts Committee know, there is touching faith in most Departments that their private sector partners will “do the right thing”. They will—but it will be the right thing to maximise their profits. It beggars belief that firms might get the same fee for a quick guilty plea as they get for a trial lasting days or even weeks. I know that the Secretary of State is a great believer in payment by results, but is he really looking for justice through short trials with few witnesses, or for innocent, vulnerable people to be locked up through a quick guilty plea? That is what his system will encourage.
Greg Mulholland (Leeds North West) (LD)
Does my hon. Friend acknowledge the serious concern that there will be an incentive for legal representatives to encourage clients to plead guilty, because the fee will be the same? That is deeply worrying.
Ian Swales
I agree with my hon. Friend. I repeat: private companies will seek to maximise their profits. I advise anyone who doubts that to check the financial incentives in the GP out-of-hours contracts and then look at what has happened to the number of people attending hospital accident and emergency centres.
I will now deal with contracting. This time last week, I was in Westminster Hall discussing the court translation services debacle—a true horror story. The response from the Under-Secretary of State for Justice, the hon. Member for Maidstone and The Weald (Mrs Grant), showed breathtaking complacency about the overall effect on and cost to the courts system. She even seemed to be content with a present failure rate that is five times greater than the one contracted for. In addition, as has been noted, early results coming in on the new civil legal aid arrangements show more court cases, not fewer, and many cases doubling in length owing to inadequate representation. Again, I ask whether the Ministry is counting the full costs.
The most lucrative business in this country now seems to be winning Government bidding rounds, then—ideally—selling the contract for a quick profit, as we saw with the court translation service, or taking fat fees and getting other people to do the work, as we see in the Work programme.
Ian Swales
I am running out of time.
The Ministry has touching faith that many groups of lawyers will come together to bid; in fact, it will be largely the same magic circle of outsourcers, who hover like vultures around the award of almost every public contract—with the rumoured addition this time of a supermarket and a haulage company. One company likely to win work, of course, is G4S, with which the Secretary of State will be familiar from his previous job. G4S’s success in winning work in this sector raises the spectre that a person could be arrested, then have G4S legally representing them at the police station; providing the civilian staff processing them there; transporting them to court; representing them there; owning the court in which that person is tried; tagging them if they are on bail; and, if they are found guilty, transporting them to a G4S prison—oh, and it is quite possible that when they are released, G4S will be in charge of their rehabilitation. The potential perverse incentives in that chain are mind-boggling. I urge the Ministry of Justice to ensure that its contract packages meet its stated aims. The Ministry’s record on contracting is appalling. How will it be different this time?
I end with two questions for the Minister. First, if he or a member of his family were arrested, would he be happy with the new arrangements? Secondly, has he heard the right hon. Member for Sutton Coldfield (Mr Mitchell) express delight that he has just found the cheapest lawyer to fight his case against the Metropolitan police? I doubt it. Equal access to justice is a cornerstone of our society. The Minister has a lot to do to convince this House that that remains an objective of his Department and that it is competent to deliver it.
Karl Turner (Kingston upon Hull East) (Lab)
Prior to my election to this House, I worked as a criminal barrister from my local chambers in Hull, and before that, I was a criminal solicitor. I was never a fat-cat lawyer—in fact, my waistline has increased only since coming to this place.
Valerie Vaz (Walsall South) (Lab)
I am pleased that my hon. Friend is not a fat cat, but could he say whether fat-cat lawyers actually attend police stations at 2 o’clock in the morning?
Karl Turner
My hon. Friend makes a good point. As far as I know, it is very unusual for a partner in the firm to come out in the early hours of the morning. The important point is this: a solicitor who attends at a police station in the middle of the night is often dealing with extremely serious allegations—sometimes allegations of murder. I have been in that position on a number of occasions, representing clients who are alleged to have committed murder. The solicitor is there on his or her own, whereas the police have advice from the CPS and many officers to assist them. The solicitor is facing all that pressure and is not being paid properly, even under the current arrangements, for his or her expertise.
Of course we accept that in these straitened economic times, cuts have to be made to Departments across the board, but these plans are massively ill conceived. They will, in my respectful submission, irretrievably damage the criminal justice system. I will focus my remarks on price competitive tendering.
Robert Neill (Bromley and Chislehurst) (Con)
Can the hon. Gentleman help with this point, then? If irretrievable damage is done to the criminal justice system by any change to legal aid, why was it that the right hon. Member for Blackburn (Mr Straw), when Lord Chancellor, said:
“I hope that everyone…will accept that the growth of spending on legal aid seen in the early part of the decade and before is no longer sustainable”?
Karl Turner
It is very disappointing, but I suspect the hon. Gentleman has not read the consultation document.
I shall go on to deal with price competitive tendering, but first let me try to bust a myth. There seems to be a suggestion that the Labour Government were particularly generous to criminal lawyers. We were not. Criminal lawyers have sustained cuts to fees from successive Governments. The current proposals are far reaching and, if they go through, they will be horrifically damaging to the criminal justice system. PCT will inevitably lead to the market being dominated by the big multinationals—the usual suspects—G4S, Serco, Capita, and probably the new entrants to the market who have absolutely no experience, Stobart.
The plans are also unconstitutional. They dismiss the notion that an accused might have the right to choose a solicitor. The cavalier ignorance of the Lord Chancellor was exposed when he remarked:
“I don’t believe that most people who find themselves in our criminal justice system are great connoisseurs of legal skills.”
Not only does he dismiss everyone requiring legal advice as a criminal before they have even been charged or had a trial, but he apparently has the naiveté to think that those who come face to face with the criminal justice system are not capable of judging the competence of their own lawyers. This is the “too thick to pick” point. The notion is completely contrary to attitudes applied to, say, health services in this country or education, where choice is deemed essential.
The proposals look to implement yet another changing fee structure. Fees would be cut by 17.5%, on top of the 2011 reduction of 10%. Firms that successfully bid for PCT will have demonstrated that they can provide the services at the cheapest possible rate. This means that advice will probably be provided by less qualified people supervised, perhaps, by a single lawyer. The “stack it high, sell it cheap” mentality will reduce the criminal justice system to a sausage factory where the quantity of cases trumps the quality of the service provided every time.
The proposals specify this in paragraph 23, suggesting that there is no need to be concerned about the quality of provision because work shall not be
“above the acceptable level specified by the LAA”—
the Legal Aid Agency. The plans also perversely propose the same fee to be paid, whether the case is resolved by way of a guilty plea or contested at trial. There is strong concern that this will inevitably lead to undue pressure being put on a defendant to plead guilty when in fact they have a defence.
The proposals will change the sort of people coming into the profession. This is not a plea for so-called fat-cat lawyers, but as the eminent barrister John Cooper QC put it to me yesterday,
“This is recognition, before it’s too late, that if the proposals go through we will be complicit in excluding many young people from less advantaged backgrounds from becoming part of what can only be described as the National Health Service of the Law”.
I have only one minute left. The Lord Chancellor showed his ignorance and lack of understanding of the profession. He showed ignorance today by not attending this important debate, yet the civil servants Box is full to the gunwales. The Lord Chancellor should sit down and meet for the first time the chairman of the Criminal Bar Association, Michael Turner QC, and Bill Waddington, the chairman of the Criminal Law Solicitors Association, and discuss alternatives to these undemocratic, unconstitutional and worrying plans.
George Hollingbery (Meon Valley) (Con)
As there are only five minutes available to me, I hope hon. Members will understand that my arguments are unlikely to be in any great detail, and I will not take any interventions. I should point out that I am a complete outsider to the issue, having no legal qualifications at all.
I note the contribution of the hon. Member for Redcar (Ian Swales). His tract on the procession of G4S throughout the legal system was particularly persuasive. It is not something that had occurred to me before, but I think it is a cause for real and serious worry.
At the heart of the Government’s proposals lies the question of what is the best method of delivering savings without threatening the quality of justice dispensed. That is the question that exercises us today. Oral evidence given to the Justice Committee on 11 June made plain very real concerns from the legal profession about the proposals. Quality was high among those concerns for completely understandable reasons, but it must be a little worrying that some of the organisations representing the profession are refusing to engage with the process of designing the quality thresholds with which the contracts will be let. I understand their concerns and I understand that these are fundamentals changes being mooted, but I hope that at some stage those organisations will reconsider their position. It seems to me that it is not incompatible to be implacably opposed to the changes, but still to co-operate with the design. Surely to do so ensures that, should the argument be lost, the system will be as good as it can possibly be.
The Justice Committee’s session also threw up evidence from the profession that there were other areas where it felt that savings could be made, and should be made, first. Principal among these were the court system, and persuasive evidence was given that there are huge costs within the court system driven by other agencies and factors outwith the control of those providing legal representation. I have some sympathy with the argument that says that to reform the cost of representation without dealing with those factors misidentifies at least some of the source of the expense incurred.
Michael Turner, the Chairman of the Criminal Bar, gave in his evidence three compelling examples of how fees can escalate owing to factors wholly outside the control of those representing defendants. Although I can see that the pressing need to make savings and the time scale that might be involved in reforming the court system create difficulty for the Minister, I would like to hear from him about any plans that are in hand to deal with these issues.
The witnesses also made clear their concern that with some 13,000 responses to the public consultation, a response date of early September to an exercise that ended in June seems, shall we say, ambitious. Finally, although those who appeared before the Justice Committee seemed reluctant to explain alternative proposals that might meet the available budgets, I have to assume that such have been made and hope very much that the Minister can confirm that they will receive careful consideration, if indeed they have been received.
Mr Raab
My hon. Friend is very generous, in his own sober and stoic way.
Among the various alternatives that have been put forward, I have received a number of concrete suggestions about tighter court management of delays caused by the Crown Prosecution Service, and the idea of higher fees in commercial cases. Does my hon. Friend agree that such additional aspects ought to be considered by the Government?
George Hollingbery
Indeed. I thank my hon. Friend for his intervention. It was exactly such issues that Michael Turner brought up in his evidence and it seems that there are genuine savings to be made there, as well as costs incurred by those representing, which cannot be controlled by them. That is a very important point.
In the interests of timeliness, I shall move purely to the representations that have been made to me by my constituents. I have received 40 letters from constituents on legal aid and there are one or two specific, rather than general, issues that I would like to draw to the Minister’s attention. The first is about representation, which has been brought up in the Chamber today.
I met Robert Ashworth of Saulet Ashworth LLP in Portsmouth and although he did not agree with the Government’s changes, the point he made to me that people should be able to choose their representation seemed to be a good one for the following reasons. He believes there are considerable hidden cost savings in certain types of, shall we say regular, clients in having a trusted solicitor whose recommendations will be accepted without debate. A case in point would be a recommendation, after due thought by the solicitor and the representative, to offer a guilty verdict. If accepted, this can clearly lead to a large saving across many budgets. He believes, and I accept the core of his argument, that such savings might be lost to the system under the new arrangements. I know that he submitted his views to the Government during the consultation. I hope that the Minister will acknowledge that there is an issue to be considered.
The second issue that has been raised with me relates to rural sparsity. One of the concerns that has emerged from the consultation is that rural areas might be disadvantaged as a result of the proposals. In Derbyshire, Cumbria, Wales, parts of Norfolk, and indeed many other parts of the country, it is very likely that the contracts awarded will cluster in or around a small number of larger towns. In my own backyard, the Isle of Wight is a plain example, as my hon. Friend the Member for Isle of Wight (Mr Turner) has pointed out. That might limit access to justice, given the geographic scale of some of those areas. Once again, I hope that the Minister will offer some indication that that factor has been recognised.
Reform of the legal aid budget is tough. Its sheer scope and size mean that it just is not possible that it can escape savings. The industry itself might come forward with a comprehensive and deliverable package of change that recognises that reducing budgets is unavoidable and timeliness is essential. If it does, I hope and expect that the Minister will give the proposals due consideration. However, although I recognise that the Government’s proposals will lead to considerable change in the industry, they currently appear, at least to an outsider, to be the only game in town. I believe that, if handled correctly, they can be the right way forward, although, crucially, they must protect the quality of outcomes at the same time as saving money.
Rosie Cooper (West Lancashire) (Lab)
I congratulate the hon. Member for Brent Central (Sarah Teather) on enabling Members to debate how the Ministry of Justice is taking a hatchet to the British justice system. There is of course scope to tackle inefficiency within the justice system and to make the necessary changes while ensuring that the core elements of a sound justice system remain in place. Instead, what we see is a slash-and-burn approach to legal aid—I, other hon. Members, legal professionals and constituents have problems with it—that will absolutely rewrite the fundamental principles and values of the modern British justice system. The reforms attack the principles of fairness, justice and, fundamentally, hope.
Local justice has been a foundation stone of this country’s criminal justice system for years. Many small and medium-sized legal firms are the cogs in that local justice machine, alongside the police, magistrates, law courts and the Crown Prosecution Service. They often provide the link between each of those organisations that makes our justice system a strong and comparatively fair one.
Under the proposals, in Lancashire we would see a 70% reduction in legal aid services, which would leave just 14 firms covering a population of over 1 million. It would lead to advice deserts spreading across the country, especially in more rural areas such as West Lancashire. Local firms will be forced to close as they will be unable to compete with the large entities that are entirely commercially driven, which will be the only ones able successfully to bid for contracts. The only incentive for obtaining a contract will be to spend as little as possible on each case and to get them over and done with as quickly as possible, not to see that justice is done. There will undoubtedly be an increase in the number of miscarriages of justice, and righting those wrongs will be very costly.
Mark Tami (Alyn and Deeside) (Lab)
My hon. Friend is making an important point. Because of the fixed nature of the contract, there could be a vested interest in a firm getting people to plead guilty.
Rosie Cooper
I am sure that is exactly what will happen and that justice will be ill served by the people who support and vote for this awful idea. Has real consideration been given to the issue of conflict? The new legal corporations will reach into every stage of the criminal justice process, motivated by profit, not justice. The removal of a client’s fundamental right to choose their representative is completely unacceptable.
These proposals will cause problems for the justice system, including concerns about the right to a fair trial under article 6 of the European convention on human rights. An individual who is involved in multiple matters might end up with numerous representatives forced to deal with separate matters. That will add to the delay and the costs as there will duplication of effort in obtaining information and instructions, to the detriment of the individual. That is if they are to get legal representation at all. In a big sign of things to come, the Bar Council has already produced a do-it-yourself guide to representing oneself in court.
Caroline Nokes (Romsey and Southampton North) (Con)
Does the hon. Lady share my concern that we will see an increase in the number of litigants in person, which, far from driving down costs, will take up more time and add to costs?
Rosie Cooper
I absolutely agree. In fact, I think that the hon. Lady will find that that is already happening. How can that aid cost cutting or justice? It is a travesty.
Everything about the consultation strikes me as being about the easy option, not the right option for the people who sent us here or for justice. I believe that the cuts will be a false economy, as we will see increased inefficiency. One wonders how much could be saved if the Justice Secretary simply sorted out the waste in the system. For example, I know of one prisoner who was not produced in court by the Prison Service—it had nothing to do with the CPS—on three occasions, with proceedings stayed and all the associated time and costs wasted. If we tackled that waste, how much money would we save? We would still preserve justice and fairness at the heart of the system.
I wonder whether the Justice Secretary, if his family found themselves unable to afford legal representation—God forbid—would accept the crumbs that he is now throwing to everybody else. In closing, I ask the Minister, who is in his place, whether justice on the cheap is any justice at all.
Simon Reevell (Dewsbury) (Con)
I declare an interest: I practise at the criminal Bar. I will make my observations on the criminal justice system and the implications for criminal justice legal aid. I will start by saying that there is no reason in principle why the Ministry of Justice should not be asked to look at reducing its departmental spending or why its expenditure on legal aid should not be part of that review. I will not say to my constituents, who have been affected by all sorts of spending reductions across Departments, that somehow there is special pleading as far as criminal justice and criminal justice legal aid are concerned.
However, that does not mean that there are not some fundamental difficulties with the consultation proposals. First, simply as a Conservative, I do not like proposals that appear set on driving small businesses out of business. The years of dedication and expertise of those small businesses seems to me to be far more important than the fact that the business happens to be law. The principle is that we should be looking to encourage small businesses, not driving their business into the arms of large corporations.
Dr Sarah Wollaston (Totnes) (Con)
Does my hon. Friend agree that in places such as rural Devon we will see a mass driving out of those small businesses in small towns and that people will have to travel large distances to seek justice?
Simon Reevell
My hon. Friend makes the same point very well.
Secondly, as a Conservative, I do not like the removal of choice from the market. It does not really matter that the individual concerned happens to be a defendant in criminal proceedings; after all, at that stage he or she is presumed innocent until proven guilty—we do still have that. The removal of choice in the selection of representation concerns me. The idea that the state will prosecute, that it will contract those who defend, and that those contractors are likely, under these proposals, to employ the defence advocate, is worrying. I have dealt with cases that have involved issues of security and of taking on the Government, for example in relation to what the previous Government did in Iraq. I wonder whether someone working for an organisation that had a contract with the Government would feel as able as I did to take on those issues and seek to expose them in the course of a trial, regardless of consequences, as a member of the independent Bar.
There are smaller difficulties. The hon. Member for Redcar (Ian Swales) referred to the proposed fee structure. In fact, that already exists elsewhere. Some military cases in Germany are paid for on that principle, but with an escape clause, as it were, that recognises that it is not suitable for the more serious cases. That suggests that it is therefore not suitable to be rolled out across the Crown court system for the vast majority of criminal cases.
The expression of support for an independent Bar in the consultation document is inconsistent with the model that is proposed, under which advocacy would be kept in-house to offset the reductions necessary to take part in the tendering process. That has implications not only for members of the independent Bar but for judicial recruitment and for the availability of experienced prosecutors. The Ministry of Justice might want to think about what it is doing not only in relation to those who defend in the Crown court but to where it will get those to whom it looks to prosecute serious cases—the murders, the rapes, the woundings, and matters of that sort.
Having criticised the consultation document, it does contain something that has not been offered to any other group of people. I used to be a soldier. Soldiers were not told, “These are the proposals—if you’ve got some of your own we’ll look at them”; they were simply told, “These are the proposals.” It is the same for teachers, firemen and everybody else. Lawyers are being told, “These are the proposals—if you’ve got alternatives and they achieve the same result, then the Department will go with them.” Anybody who works in the criminal justice system knows that savings can be made.
Karl Turner
Does the hon. Gentleman agree that if the consultation document is really about considering alternatives, the Justice Secretary should meet the chairman of the Criminal Bar Association? He has made himself available on numerous occasions, and the Justice Secretary has refused to see him. Would it not be sensible for the Justice Secretary to agree immediately to that meeting?
Simon Reevell
The hon. Gentleman knows full well why that discussion has not taken place and that the prelude to it did not involve a method that was taught at the Bar school course that he did. I hope that those difficulties can be resolved.
Simon Reevell
No, the hon. Gentleman has had one go and that is quite enough.
The consultation has a blunt instrument to deal with the expense of long trials which impacts on the majority of Crown court work, but there is a simpler solution—the abolition of very high-cost cases. Nobody needs them, nobody wants them, and they can be got rid of. That would save money at a stroke.
Allowing choice but banning the practice of client poaching is another effective way of saving money. There are simple measures such as making prisons provide video links so that solicitors can have video conferences and therefore not have to be paid to travel to prisons. The majority of prisons will not allow solicitors to have such facilities. Other options would be controlling who within defence teams is paid to read and use material, thinking about whether those with frozen assets can be asked to pay for their own defence, and looking at how those who are convicted can be asked to contribute towards the cost of their representation. There are all sorts of ways of doing this.
If those making these proposals and those opposing them on the grounds of the consultation document, while recognising in principle that savings have to be made, were opposing litigants, a sensible judge would tell them to go outside and settle the case. The flaws in the consultation document are apparent, and the alternatives are there for consideration. I agree with the hon. Member for Kingston upon Hull East (Karl Turner) that we are getting to the time when this needs to be sorted out and resolved, because that can obviously be done with the acceptance of all.
Kate Green (Stretford and Urmston) (Lab)
I want to speak about these proposals specifically in relation to prisoners, not when they are on trial but after sentencing or when they are in prison on remand. The proposed savings of £4 million mean that they will no longer be able to access legal advice and will instead be expected to use the internal complaints system when they have problems.
It is unpopular to speak up for prisoners’ rights in this House, but it is so important that we do so, because it is a mark of our being a civilised society that we set parameters on what we do to people when we remove their liberty. Removing their liberty does not equate with removing all their human and legal rights.
Mr Andrew Smith (Oxford East) (Lab)
I entirely agree with my hon. Friend’s point about prisoners. I am sure that she will apply it equally to those in immigration detention. The removal of legal aid from those people breaches the specific pledge given by the Lord Chancellor to this House on 18 December last year, when he said that legal aid will continue to be available to anybody whose life or liberty is at stake. Is it not essential that that promise be kept?
Kate Green
My right hon. Friend is absolutely right. I do not have time to cover immigration in detail, save to say that we are talking about people who may be returned to face homophobia, torture and appalling treatment when they have lost asylum cases or are failed immigration seekers, yet they are being denied access to legal advice contrary to the assurances that we were given in this House.
We know that people in prison are more likely to have learning difficulties or mental health problems, or to be poorly educated. They are often the product of disruptive and difficult childhoods. Many of them have arrived in prison having spent most of their childhood, to our great shame, in public care. Those people are particularly poorly equipped to advocate for themselves and to use the internal prison complaints system. It is therefore particularly important, not only in their own interests but in the interests of the smooth running of the prison, that we take the steps that we should to ensure that they are given effective opportunities to make their case.
Steve McCabe
I agree that people are often not very well equipped to use the complaints system. Is it not also the case that if they are driven to the prisons and probation ombudsman, the average cost of a complaint is about £1,000 more than it would be if we referred them to a legal aid lawyer?
Kate Green
My hon. Friend is absolutely right. The £4 million cost savings are very likely to be eaten up not only by the cost of using the complaints and ombudsman systems but because of the impact inside prisons if prisoners are unable effectively to have their case made.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
My hon. Friend is making an excellent speech on the needs of prisoners. Does she agree that another cause for great concern is that prisoners will often go through this process when they have exhausted other routes and had unsatisfactory outcomes? Without adequate investment in the prison complaints system, there will be even greater miscarriages of justice.
Kate Green
My hon. Friend makes an excellent point.
What kinds of situations are we talking about when we say that prisoners need representation? It is about issues such as segregation and categorisation. It is about mothers separated from their babies who need to make the case to be with them in mother and baby units. It is about prisoners who need to access programmes that will be a prerequisite of their being considered for parole. It is about cases of bullying or discrimination, or cases where people are denied access to health treatments that they ought to get. These are really important entitlements that we must ensure that we protect for all people. We should not deny them to people simply because they are in prison serving a sentence for a criminal offence.
If we fail to deal with these cases adequately, we will, as my hon. Friends have said, drive up costs both outside and within the prison system. We will have more people in higher category prisons for longer. We will have more problems caused by failing to address their underlying health and well-being needs, and that will play out in continuing disruptive and difficult behaviour inside prison and on release. I invite the Minister, who is a very thoughtful Minister, to take account of the much broader context in which these apparently cost-effective measures will impact inside our prisons.
I particularly ask the Minister to comment on youth offenders, who are the most vulnerable group in our prisons and in our penal system. Are they too to be hit by this lack of access to legal representation? They, of all prisoners, will be especially poorly equipped to represent themselves. I hope that the Minister will at least be able to give us some assurances on young offenders.
Robert Neill (Bromley and Chislehurst) (Con)
I declare the interest that appears in the Register of Members’ Financial Interests that I am a member of the Bar, although I do not currently practise and have not done so since I have been in the House. For 25 years, I practised in criminal courts around London and the south-east. I defended almost invariably on legal aid rates and when I prosecuted, the remuneration was broadly the same. I have spent enough time at the sharp end to know and value the importance of legal aid in our justice system.
It is because I value legal aid that I find some of the responses to the Government’s consultation deeply disappointing. The criminal justice system and legal aid deserve better than the rather Panglossian view adopted by some Opposition Members and, I am sorry to say, some spokesmen of the profession that all is as well as it can be and that it would horrific to alter it.
More thoughtful Labour Front Benchers of the past have recognised that that view is not tenable. The former Lord Chancellor, the right hon. Member for Blackburn (Mr Straw), not only recognised that the growth in legal aid spending that we had seen over a decade or more was, to use his word, unsustainable, but observed that the profession needed to consider not just efficiencies, but structural change. He pointed out the opportunities that the Legal Services Act 2007 provided for such structural change. It is interesting that there is, yet again, collective amnesia on the Opposition Benches.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
If we put aside the issues of cost for one moment, because there is agreement that we must always consider value for money, is the hon. Gentleman content that the Secretary of State has conducted the consultation in a timely and proper fashion? The rush in which this matter is being dealt with and the lack of a substantive vote in the House are of real concern, given the issues with which we are dealing.
Robert Neill
It seems to me that the Secretary of State has adopted a careful and measured approach. What the hon. Lady says is thoroughly misleading. I am sorry to say that she does herself no service by making such a thoroughly meretricious point.
This matter has been the subject of great public debate. I have referred to the former Lord Chancellor’s speech in 2009, in which he made specific proposals, including bringing in fixed fees and graduated fees as a precursor to best value tendering. He may not have delivered on those proposals, but the ideas have been out there for a long time.
The Lord Chancellor has met the chairman of the Bar Council and the president of the Law Society. It is right and wise that he chooses temperate interlocutors. He has been most willing to engage with Members of this House who are interested in legal matters. The hon. Lady therefore does herself a disservice to characterise the process as rushed.
Robert Neill
The right hon. Gentleman had no difficulty serving in the Government of Tony Blair, who observed in 2003 that it was time
“to derail the gravy train of legal aid”.
He might like to think about his own background before he criticises anybody on the Government side of the Chamber.
Of course choice is important, but if we are to have a sensible and intelligent approach to choice, we must recognise that when choice is funded by the taxpayer, it should not come with a completely blank chequebook. It is legitimate to look at the way in which choice is delivered. We should link to the question of choice the important commitment to a proper quality standard. I hope that the Bar Council and the Law Society will work with the Ministry of Justice to develop a quality standard to ensure that the lawyers who come forward under this scheme are not just acceptable, but really good and able.
Robert Neill
I have given way twice, so my time is running out. I am sure that my hon. Friend will forgive me.
There might be different means by which the same objective can be achieved. It might be possible to have some form of panel system. It might be possible to have a different approach to police station work, where there is a strong argument for saying that firms need a guaranteed volume of work to make the business case sustainable, as opposed to the preparation of litigation and the ongoing court work in both the magistrates court and the Crown court. It is not unreasonable to say that choice has to be provided in the context of affordability. We must not be afraid to say that.
We must recognise that the number of people seeking work at the Bar and in the solicitors’ profession has grown greatly, frankly to an unsustainable level. The profession has to recognise that too many people are chasing a diminishing work load. The number of cases that go to court has reduced by broadly a third since I came to the Bar, whereas the independent Bar and the solicitors’ profession have become about three times as large. Something has to give. Let us sit down sensibly and find ways in which that can be achieved.
Robert Neill
I have given way twice and am afraid that I cannot give way any more. I am sure that the hon. Gentleman will find another opportunity to make his point.
We should not be sniffy about the development of alternative business models that might deliver the service properly. I recognise the points that have been made about accessibility in rural areas and about the particular types of expertise that may be needed. We could do more within the existing mechanisms to assist people with such issues.
I have come across such a situation in my constituency. Bromley council has set up an online platform in negotiation with reputable and well-established solicitors firms in the area that puts potential clients in contact with a solicitor, who provides the initial advice without any charge. There was difficulty in setting that up because, despite the willingness of the established solicitors firms to take part, the Solicitors Regulation Authority would not provide the necessary regulatory clearance. That is a needless bureaucratic obstacle to a practical solution to a genuine problem. That could sensibly be looked at and I hope the Minister will consider what might be done.
There are other ways in which we can make savings in criminal matters. My hon. Friend the Member for North West Norfolk (Mr Bellingham) has suggested using the independent Bar more within the Crown Prosecution Service. We should look at whether more efficiencies can be made in that body more generally. Perhaps we should look at the operation of the new centralised magistrates courts service. Again, there might be scope for savings.
We spend markedly more on legal aid than any comparable common law jurisdiction. We spend about £39 per head in the UK, compared with about £20 per head in the Republic of Ireland, about £10 per head in Canada and about £13 per head in New Zealand. Those are jurisdictions with the same system and trial processes as we have, but they do it markedly cheaper. I do not believe that a reduction of 10%, which is not out of line with other reductions, is unacceptable.
Valerie Vaz (Walsall South) (Lab)
It is a pleasure to follow the hon. Member for Bromley and Chislehurst (Robert Neill).
If the Lord Chancellor really wanted to engage with hon. Members, he would be sitting in the Chamber today. All hon. Members on both sides of the Chamber know how important, significant and seismic the Government’s proposals on legal aid will be if they are implemented. It is noteworthy that the Law Society, the Criminal Bar Association, the panel of counsel, the President of the Supreme Court, barristers, solicitors, the Equality and Human Rights Commission and our constituents are all ranged against the proposals and against the Lord Chancellor. We know why he is not sitting here today.
As I said in a point of order last week, the Leader of the House keeps insisting that Ministers have met the chairman of the Bar Council. It is the Lord Chancellor who has not met the chairman of the Bar Council and who refuses to meet him. He refuses to meet the very people who will be affected by the proposals.
Karl Turner
It ought to be on the record that it is the chairman of the Criminal Bar Association, Michael Turner QC, whom the Lord Chancellor is refusing to meet, not the chairman of the Bar Council.
Valerie Vaz
Absolutely. I am sure hon. Members received the e-mail from Michael Turner QC stating that the Lord Chancellor refused to meet him.
It is not clear what the Lord Chancellor is trying to achieve, other than to undermine the legal system. The Lord Chancellor does not appear to understand that if people are given access to legal services, they do not need to go to court—if that is where he wants to make the savings. Perhaps he wants to make the savings in court time. However, as a result of these proposals, court time will be filled by people who can afford going to court. In certain circumstances, companies can offset their legal costs against tax and even get the VAT back. An ordinary citizen cannot do that.
Judicial review is an important branch of law. Of course, the Executive do not like it because it holds the Executive to account—it looks at how public bodies come to a decision. Given the legislation enacted since 2010, it is no wonder that the Government want a neutered judicial review. No one can predict the outcome of a case, so having to make a judgment that there is a 50% chance of winning to receive legal aid, is absurd. Evidence has to be heard from both sides and a decision is made based on arguments that are made before an impartial judiciary. Lawyers are obliged to advise a client whether a case has merits before they proceed. What about the figures for judicial review? They are not increasing exponentially. A written answer to me revealed that in 2009 there were 2,145 cases in judicial review, with that figure going up to only 2,304 in 2011. In criminal judicial review, it was 316 for 2011. Those are just the figures for cases lodged; they are not even the figures for cases that have gone to completion.
Mr David Burrowes (Enfield, Southgate) (Con)
The statistics quoted by those who want to restrict judicial review are that there are just 144 successful cases out of a total of 11,359. We should be careful about those figures, because they include only successful public hearings. Most cases are settled way before public hearing—they are settled before determination—and that is the merit of judicial review.
Valerie Vaz
I thank the hon. Gentleman for that point. He speaks as a true lawyer; I know that he works very hard in his own law firm to deliver justice.
Let us blow the myth that lawyers are in it for the money. As my hon. Friend the Member for Kingston upon Hull East (Karl Turner) said, legal aid lawyers are not fat cats. Under legal aid, they do much more work than they are paid for. Treasury counsel, whom I had the privilege of working with when I worked for the Treasury Solicitors Department, have also expressed concerns about the reforms. They undertake Government work at incredibly low rates—much lower than if they were working in the private sector. They do both, but they bring the same intellectual vigour to Government cases as they do to anything else.
What of price competitive tendering? The number of contracts is to be reduced from 1,600 to 400. The west midlands can expect only 20 firms. According to the Law Society, however, approximately 800 firms operate in the west midlands. The Magistrates’ Association, another voice against these proposals, says that there appears to be little consistency in the number of contracts allocated to each area. The idea that one would get paid irrespective of how one’s client pleads is absurd. That is not justice; that is plea bargaining. The Lord Chancellor should know the difference. It is not choice either, as it concentrates representation and funds in a few hands. Lawyers pride themselves on their reputation—that is how they get their referrals. This will deny people the chance of choosing who they want to represent them. The hon. Member for Dewsbury (Simon Reevell) said that that is anathema to Conservatives. It is anathema to everybody when small businesses go out of business.
Michael Turner QC has come up with decent proposals, if only the Lord Chancellor would meet him. He has pointed out that 45% of the criminal legal aid budget of £1.1 billion is spent on fraud cases. If there is a banking case and the bank cannot recover the money, the fraud loss can be written off against tax, despite the state having spent money on investigation.
This is another policy from the Government that will benefit those who can afford it at the expense of the weak and vulnerable. There is no evidence for the policy. The Lord Chancellor has no mandate from the people, and no moral, legal or financial argument to continue with this course of action. He is tampering with one of the important checks and balances of the state. He is trying to weaken the golden triangle of Parliament, the judiciary and the Executive that underpins the rule of law and the framework of a good society—our society. These proposals are toxic to society and should be withdrawn.
Mr David Davis (Haltemprice and Howden) (Con)
My name is on this motion not because I do not think we need to control the cost of legal aid—we do—but should it be done in this way and at this speed? I think not. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 is barely complete, and has had no assessment. The consultation was extremely brief and we understand that the Government intend to place contracts in the autumn. Frankly, without primary legislation, the likelihood is that this business will be challenged in the courts. We will have more haste and less speed on the delivery of savings.
I want to deal with some fundamental points. This is not, as has been intimated, about the protection by silver-tongued lawyers of serial offenders: in the Crown courts in contested cases, half are found not guilty. What we are talking about, therefore, is providing justice to the innocent and to victims.
Mr Raab
Does my right hon. Friend agree that one of the discrete risks of allowing large firms to swallow up small firms may be a loss of small specialist firms capable of demanding the trust of specific local communities —in particular, practices representing victims such as in the Stephen Lawrence case and others?
Mr Davis
My hon. Friend makes a good point that I will return to later. He is exactly right—this is one of the likely unintended consequences of what is being proposed in the consultation.
In their efforts to cut legal costs overall, the Government are overlooking a far bigger cause of waste in the system than legal aid, namely the sheer inefficiency of the Crown Prosecution Service. In 2011-12, more than 123,000 prosecutions failed after charge because either no evidence was presented or the case was eventually dropped. The cost to the service, the courts and aborted defences was measured in tens of millions of pounds, not to mention the stress faced by people who were, presumably, innocent.
Mr Davis
If the hon. Lady will forgive, I am very tight on time. I will give way if I can a little later.
That does not tell the whole story, however. Time and again, we see trials delayed and extended by CPS incompetence. In my part of the world alone, the newspapers are littered with cases of lawyers not turning up, evidence not being presented and cases being adjourned again and again. I suspect we all have constituency cases just like that. This happens right across the country. We should not pretend that the legal aid system is a model of efficiency, but when it comes to finding savings and better, effective justice across the whole system, we should look first at the CPS itself before we let the axe fall again on legal aid.
I am yet to be convinced—this addresses the point made by my hon. Friend the Member for Esher and Walton (Mr Raab)—by Government assurances that the quality of legal aid providers will be guaranteed by a state body. This debate comes barely a week after the Care Quality Commission scandal. That demonstrates how difficult it is to guarantee the quality of complex intellectual services, which, of course, justice is. We should notice that even where the state has direct control—namely, the CPS and the Serious Fraud Office—it cannot guarantee quality there either. A judge in a recent murder case described the CPS lawyer as “completely inadequate”. The judge said that the lawyer cited old law, did not understand the current law, fell out with the prosecution team, and then simply did not show up on the following Monday. As a result, the trial had to be held six months later. If we cannot guarantee our own system and our own service, how are we going to guarantee 400 private operators around the country?
Mr Davis
The right hon. Gentleman is almost taking the words out of my mouth. I cannot believe that a Conservative Government are going to mandate how many companies and providers there should be. I know of no example in the world where a Government mandated the number of companies and then improved the efficiency of provision—not one. This is a Soviet proposal that I do not want to see. I do not mind if there are better ways of finding efficiency—as has been said, that is what we must find—but please do not lay down laws like that.
I wish briefly to discuss a couple of other troubling issues in the consultation document, the first of which is the 12-month residency test. That could deny justice to people who have suffered because of the actions of the UK Government—under UK jurisdiction—which we are responsible for resolving. Just to mention cases in which I have been directly involved, I can cite those of Binyam Mohamed, Serdar Mohamed, Yunus Rahmatullah, who is still in Bagram prison, and Baha Mousa. We are talking about: people who were subject to torture in which Britain was complicit; an innocent man beaten to death by British soldiers; people who have been rendered—and still are—to other countries; people who have been handed over to our allies—[Interruption.] From a sedentary position, my hon. Friend the Member for Esher and Walton mentions de Menezes, who was shot, although accidentally, by the British Government. All those people would be denied their justice. More important, given that in many of those cases the person is deceased, the British people would not know about the misdemeanours of their own Government.
That brings me to my final point, which is about judicial review. I sympathise with Ministers who find it irksome that we have so many judicial reviews, but the Government are in danger of getting themselves a reputation for wanting to act above the law. Irksome as it is, judicial reviews are what keeps British Governments honest—it does not matter of which party or of which origin, they keep the Government honest. I say to the Government that before they strike down these things at their own convenience, they should think again, come back more slowly and present this House with some primary legislation we can then be proud of.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is good to follow the right hon. Member for Haltemprice and Howden (Mr Davis), as I agreed with so much of what he said, particularly the need to save within the system but not in this way and certainly not at this speed. I am grateful for the opportunity to speak in the House on this important topic, which has caused great concern across the country and about which I have received an unprecedented number of representations, from constituents, barristers, solicitors and charities. Not least, I note that the Government’s own Treasury counsel have expressed opposition, as have Crown Court justices. This is a major issue of concern for all of us and all our constituents.
Access to justice must not be determined by the ability to pay. That is one of the most important safeguards we have in a state that believes in liberty and fairness. Labour has supported finding savings in the legal aid budget, but not in this way. We support people who can afford it paying their own legal fees. We support the use of the frozen assets of criminals to fund their legal costs. We also agree on the need to address the problems of very high-cost cases, not to mention the need to root out inefficiency in our courts and wider justice system—we would all like to see that done.
The problem is that the core of the Government’s proposals are likely to have consequences that go against the grain of so much that we are proud of in our system. We surely cannot go through a process of reform that leads us to a system that puts quantity ahead of quality, and risks leading to an increase in miscarriages of justice. The Government’s reforms will replace the current model whereby the Ministry of Justice purchases legal aid services from 1,400 local providers with a model involving just 400 larger providers. The fee structure will be changed so that lawyers’ fees are paid regardless of whether there is a guilty or not guilty plea.
I wish to raise a number of concerns, the first of which is about choice, which has been mentioned by so many hon. Members. Choice is vital to ensuring that people have trust in the person representing them. Under these proposals, defendants who want to change their provider will have to apply to a court and then it will be the Legal Aid Agency that will determine which other provider services their need. On quality, the tendering process will be skewed to the lowest-cost provider; lowest cost will trump quality. If it is hard for someone to change their solicitor, what is the incentive to firms to ensure that they provide the best quality to the vulnerable? There is a great concern that the state—the prosecutor—will also be picking someone’s defence. No doubt, that will again lead to concerns about conflicts of interest and miscarriages of justice.
I also wish to raise the issue of the impact the proposals will have on black and minority ethnic firms, which form a large proportion of solicitors, particularly in London. Some statistics show—the Society of Asian Lawyers has done some excellent work on this issue—that four years ago 4,000 firms of solicitors were able to offer legal assistance to those in the criminal justice system in London, and 40% of those firms were owned by Asian and black lawyers. Changes over the past few years have reduced the figure to 1,600, with a disproportionate number of the firms that have closed having been run by those from ethnic minorities.
It is not only Members who are raising concerns; research undertaken by the Legal Services Commission, as was, talked about the importance of BME firms. It said:
“The presence of such firms, positioned as they often are in the heart of the communities that they serve, provides reassurance to these communities, giving voice to their grievances and serving to boost social cohesion and confidence.”
Under the Government’s proposals, where BME firms secure a contract there is no obvious way in which BME defendants will be able to be allocated those providers should they so choose.
Legal aid is vital in ensuring that, after due process, those who are guilty are found guilty and the innocent are able to clear their names. We must ensure choice in access to legal representation and ensure that that choice is available to everybody, regardless of wealth or income. We must ensure that we do all we can to protect the British justice system, in which we all have great pride.
Steve Brine (Winchester) (Con)
I wish to make a few short remarks about the “Transforming Legal Aid” consultation, which has sparked such lively debate in this House and across the profession, to put it mildly. I qualify my comments by making the point that I am a member of the Select Committee on Justice, as is the hon. Member for Feltham and Heston (Seema Malhotra), whom I follow. The Committee is conducting a mini-inquiry into these proposals. Representatives of the profession have been before us already, and we will see the Lord Chancellor on Wednesday next week. So I have to say that I do not recognise some of the knockabout from the Opposition about the Lord Chancellor somehow being absent on this one. Members from across this House will be very welcome to come along when he comes before the Committee—we have never been so popular.
Some claims have certainly been made about these proposals in the past few months, one of which was made at the Committee’s first hearing on the subject, on 11 June: that the proposals will spell the end of the independent judiciary in this country, no less. That is quite a claim, but I do not think it is true and I do not think it helps the debate. Concerns certainly exist about the reduction in the number of those at the Bar if these proposals go ahead—future judges are, of course, drawn from these people. That point has not been aired enough in this debate so far, so perhaps the Minister will touch on it and allay the fears. Another point that has been made is that the effect of the proposals will be a fundamental change to the criminal justice system, and that is certainly true.
Many Members still wish to speak in this debate and I know that they will discuss many of these fundamental changes and what they might mean, so I wish to focus on the issue of choice. It has been repeatedly raised with me by constituents, as it has been raised by other hon. Members who have spoken this afternoon. During the consultation, a practising barrister in my constituency sent me what I thought was a useful case study—and one that I hope will show the human side of this point. Under the current system, he explained, a young man with profound mental health problems was again arrested for having a knife in a public place. My constituent, an experienced solicitor, whom the young man knew and trusted, was called. He had the defendant’s previous psychiatric reports on file and even his psychiatrist’s number in his phone. The defendant was questioned by the police and advice was tendered. A number of appearances in the magistrates court led to the case being committed to Crown court, at which point my constituent was instructed, as he had been before, and updated psychiatric reports were obtained.
Following various pre-trial hearings to sort out reports, a two-day trial was held, at the end of which the young man was acquitted and further psychiatric treatment was ordered by the judge. Happily, according to my constituent, the young man is now on the right medication, and has a diagnosis of Asperger’s. He even has a job for a couple of hours a week. My and my constituent’s concern is that under price competitive tendering, the duty solicitor, who almost certainly would not know the defendant, might well advise a guilty plea, with an alien barrister, either in the magistrates court or at first appearance in the Crown court. My constituent tells me that the fee is the same for a guilty plea as it is for a short trial, so what is the incentive to have a trial?
There is a huge potential conflict of interest for the advocate, says my constituent, with the young man possibly being sent to prison, resulting in devastating consequences for him and the state. I think he makes a powerful point. Putting aside the arguments about a reduction in choice in relation to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the European convention provisions on the right to a fair trial, which I understand opponents of the proposals will bring forward, if they are pursued, Ministers must address PCT and the choice issue, so that we do not throw the baby out with the bathwater and lose this fundamental right.
Hon. Members might know that Winchester is the home of the western circuit—or, more precisely, the chambers there have for centuries been the major providers of legal advice and advocacy for the large area they cover. The depth of specialist knowledge available across the circuit is its strength and benefits those whom I and others in the area represent. Many members of the western circuit will recognise the example I just gave and share the concern that many of us have about the future of specialisms.
Mr Raab
My hon. Friend is making a powerful speech. The aim of the reforms is to cut the number of firms from 1,600 to 400. On the four to five-year tendering periods, does he share my concern about the countervailing risk that we might see a small number of large firms snuff out the competition, creating a monopoly and leaving no incentive to compete on quality?
Steve Brine
I am not sure that that is the aim of the reforms, but it might be one of the consequences. I am concerned that without such competition, at the end of the contract period, a firm would be in an incredibly strong position to say to the Government, “Well, this is what we want to continue”.
PCT is seemingly not that popular, but I wonder whether it has to be the start and end of this conundrum. It might be the future, but perhaps not now and not to this very tight time scale. As we have seen this week, there is no money left. Clearly, savings must be found—we are told £220 million—so what is to be done? My right hon. Friend the Lord Chancellor has rightly said that we have one of the best legal professions in the world, and he is dead right that in a time of major financial challenge, the legal sector cannot be excluded from the Government’s commitment to getting better value for our constituents’ money. I asked the chairman of the Criminal Bar Association at a Select Committee evidence session whether he took at face value the Secretary of State’s assertions that we needed to make significant savings, and the response was this:
“There is at least £100 million that can be saved by plugging the gaps in the system. As we have also pointed out, if he wants real savings to the taxpayer and listens to the proposals that we have put forward, he can have himself £2 billion for a legal aid budget. The real sadness, for us, is that we are just not being listened to.”
I disagree with that. They are being listened to. The very fact that this debate is happening on the Floor of the House is proof of that. I suggest that the Criminal Bar Association, the Bar Council and others get these proposals into my right hon. Friend’s hands and give him some options.
I do not accept that this country faces a choice between well-funded public services that we cannot afford and terrible public services that we can. We need sustainable public services that we can afford in the long term, and that is as true in legal aid as anywhere else. It is true that we have one of the best legal professions in the world—a lot of it resides in my part of the world—and I want to see it live within its means. It is open to reform, but we might need to think, slow down, find initial savings and then reform the system in a way that leads to reliable savings in the long term. I still think that the Government and the profession can jump together on this one, if they slow down and talk. I remain ever the optimist that we can do that.
Paul Blomfield (Sheffield Central) (Lab)
I am pleased to be able to contribute to a debate in which we have heard many thoughtful contributions from both sides of the House. The number of speakers clearly illustrates the concerns on this issue, but time does not permit us to do justice to them all or me to reflect all the detailed representations I have received from my constituents. I shall therefore focus on the main ones.
The first concern is about price competitive tendering. To demonstrate the breadth and depth of concern, let me refer the Minister to his more senior colleague, the Attorney-General, who told The Law Society Gazette:
“I cannot see that competitive tendering in criminal legal aid makes sense—legal aid contracts do not pay market rates. If firms want to win a competitive tender, the only way they will be able to undercut each other is by steps that could open them up to potential allegations of incompetence”.
He continued:
“There are ideas creeping into the system that treat legal aid as if it is just about the economic provision of a service. That approach will lead to problems with lowered standards”.
Those comments were made in 2004, but are even more pertinent to today’s proposals. Furthermore, they were made by someone who not only is the Government’s chief Law Officer, but has considerable personal experience of the criminal justice system, and he clearly understands not only how the legal system works, but how markets work, so as Eddie Stobart prepares to dispense justice off the back of a lorry and G4S prepares to bring its expertise from the Olympics to the criminal justice system, we need to ask what the legal landscape will look like if these proposals are forced through.
As hon. Members have said, in the three months that businesses have in which to bid, small legal practices will be squeezed out of the system. It is deeply ironic that the Government are proposing a system so damaging to small businesses. Unable to grow to the scale needed to compete for contracts and unable to offer the loss leaders of the big companies that want to get into the market, hundreds of firms will go to the wall, and as was pointed out, this will affect not fat-cat lawyers, but many honest, hard-working and often poorly remunerated solicitors, who, with their modest earnings, make a real commitment to justice in this country.
Our bigger concern, however, should be about the impact on justice. We are looking at a cost-driven race to the bottom, with firms competing simply on price and, as was pointed out, being incentivised to cut corners and find the innocent guilty. As the consultation document makes clear, lawyers will receive the same fee for entering a swift guilty plea as for providing several days’ legal defence. Constituents have also made the point to me that losing the opportunity to choose a lawyer is a fundamental breach of rights. I am disappointed that the hon. Member for Bromley and Chislehurst (Robert Neill) minimised the importance of that. On that issue, the Justice Secretary’s own comments are as enlightening as they are shocking. He gave a real insight into his thinking when he said:
“I don't believe that most people who find themselves in our criminal justice system are great connoisseurs of legal skills”—
as they—
“often come from the most difficult and challenged backgrounds”.
He seemed to suggest that wisdom comes only with someone’s position in society, and that only those who can afford it should have a choice of representation.
Throughout the proposals, the same casual disregard is shown for those who are not considered worthy of justice. They include survivors of domestic violence—whose position was raised with me by the local medical committee in Sheffield—trafficked people, separated children who fail the residency test, prisoners whose cases cannot be addressed through the complaints system, legitimate asylum seekers wishing to challenge decisions, and those seeking access to judicial review.
Bargain basement representation will damage this country’s reputation for justice. I urge the Justice Secretary to listen to the wise counsel of the Attorney-General back in 2004. He should also listen to the widespread concern being expressed throughout the country and to the views being expressed on both sides of the House, and he should go back to the drawing board.
Neil Parish (Tiverton and Honiton) (Con)
I am delighted to be able to take part in the debate. I must declare straight away that I am not a lawyer. I hope that I can therefore approach the debate in an impartial manner. I have been listening to it, and I am concerned to hear that so many small firms of lawyers could be excluded from the large contracts. Devon and Cornwall cover 40,000 square miles, and that will be viewed as one contract. That is a huge area to cover. I am not against the principle behind the reform, but we must be careful about introducing contracts that will cover such huge areas. We must ensure that smaller companies have a chance to tender for that work.
Mr Burrowes
My hon. Friend makes a good point about small firms. I work in one such firm as a criminal defence solicitor. Does he recognise a certain irony, in that the Government want to avoid the legal aid deserts that it has been suggested could be created as a result of the equal-sized contracting model, and that the small firms, the medium-sized firms and the large firms are all saying that the proposed model is unviable?
Neil Parish
My hon. Friend speaks with a great deal of experience as a lawyer in a law firm. He has identified the problem with the reform, and I can relate to what he is saying. I suspect that all Conservative Members recognise the need to make savings, but we need to do so in a way that will still allow people to have a choice. Hon. Members on both sides of the House are keen to see small law firms get business and stay in business.
It is estimated that about £20 million is being spent on the defence of criminals, many of whom are probably not declaring all their assets, and I agree with the Government that that needs to be sorted out. That is perhaps a slightly different issue, but it is none the less essential that taxpayers’ money is used to the best effect. A cut-off point can be set on a person’s income above which they will not qualify for legal aid, but there are also cases in which someone who is eligible for it carries on a vexatious case against a person who is just above the threshold and has to fund the case themselves. That is perhaps not a matter for debate today, but it is essential, if we are to ensure that people can get access to legal aid, to ensure that those cases that are pursued are legitimate and not simply vexatious.
It has been pointed out that we are seeing a great many judicial reviews. It is right that the Government should be challenged, but it is not necessarily right that everyone should have access to a judicial review, as they are often unnecessary.
I broadly support the Government’s attempt to reduce the costs of legal aid, but I am concerned about certain aspects of it, as I live in and represent an area of Devon that is very rural and the proposed contract will be very large. I believe that the Secretary of State and the Minister are listening to these arguments; the Minister is nodding his head. I do not want us to be a Government who reduce choice, who drive out of business many small firms that do an excellent job and, perhaps, who do not save anywhere near as much money as we believe we will. Before we go ploughing on with this, let us sit down and have a proper consultation. I am hopeful that the Government are not just saying this and that they will have meaningful talks. I look forward to that happening.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
May I first of all declare an interest? For many years, I practised family and criminal law, both as a solicitor and barrister, and many of the cases were legally aided.
The effects of these reforms will be extremely detrimental to solicitors and their practices. Inevitably we will have advice deserts and this will impinge even more on the situation in Wales, where there is a requirement to provide services through the medium of Welsh. The Justice Secretary, sadly absent, has admitted that the Ministry only considered this factor a month into its consultation and his impact assessment does not even mention the Welsh language.
The consultation process in general so far has been nothing short of a sham allowing professionals only six weeks to get up to speed with proposals that will fragment the professional world they inhabit. To add insult to injury, the Government intend to introduce these reforms by secondary legislation without proper scrutiny by Parliament. This is scandalous. Unless these plans are stopped now and quickly, there will be no turning back.
Sir Edward Garnier
It goes further than the point made by the right hon. Member for Tottenham (Mr Lammy). It goes to the Bar as well, as the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) and I know. If the good barristers leave because they cannot afford to remain within the criminal legal aid system, we will not get the silks and we will not get the circuit judges and Crown court judges. In that way, we will see a diminution in the quality of justice that we all expect to receive.
Mr Llwyd
The hon. and learned Gentleman is absolutely right and I could not have put it any better.
One of the most contentious aspects of these so-called reforms is the removal of the client’s right to choose. Instead people will be allocated a provider, regardless of the complexities of the case or whether they have any particular needs or vulnerabilities.
Caroline Lucas
The right hon. Gentleman will know that the clause in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 that guaranteed the right of the individual to choose was deemed to be incredibly important and now is being completely ignored. Does he agree that there is a very real risk that the public simply will not have confidence in a system where the defendant’s lawyer is chosen by the very state seeking to convict them?
Mr Llwyd
That is a very important point, because it was considered vital in the civil context and yet curiously not even regarded as being of passing interest in the criminal context, where people risk their livelihood, liberty and everything else.
Comments made recently by the Justice Secretary in the Law Society Gazette make one rather suspicious that there is something ideological in the calculated removal of choice. He said that he does not believe
“that most people who find themselves in our criminal justice system are great connoisseurs of legal skills”
or to paraphrase—as we have heard—they are “too thick to pick”. These condescending comments display a sinister lack of compassion for the vulnerable in society and a cavalier disregard for these individuals’ best interests.
Denying an individual the right to choose their legal representation is arguably in breach of the European convention on human rights, article 6 of which sets out specific rights for criminal defendants including that they should be informed of the offence they are accused of in a language they can understand.
A loss of expertise will also follow, unfortunately; the point made by the hon. and learned Member for Harborough (Sir E. Garnier). It will deprive the legal system of practitioners, firms, solicitors and counsel with specialist knowledge of particular cases and areas of law. In the event of price-competitive tendering being introduced to the so-called market, the quality of service will be considered at only a preliminary stage of the process. The final stage of bids will be determined on price considerations only. Even at the starting price, following three previous cuts to legal aid fees over the last eight years, the Government have specified that bids must be at least 17.5% lower than the current rates.
The first casualty of this race to the bottom will be the quality of service. Astonishingly, as has been said, providers will be paid the same unit price for preparing each case regardless of the offence and regardless of a push for either a guilty plea or trial. This presents a conflict of interest, but the Justice Secretary has said that he is sure the professionals can be relied on to act in the best interest of the client—but the professionals will no longer be around; that is the point. They will have been priced out of the market altogether.
The proposals provide that daily payments to solicitors, for example, will be reduced after a second day. There are many reasons for delays in court—interpreters not turning up, people speaking the wrong language, change of court date at the last minute, Crown Prosecution Service witnesses and so forth—but the individual lawyers are now apparently to be penalised. With 400 remaining providers, advice deserts will develop in rural areas.
At present, there are 249 law firms in Wales undertaking some form of criminal work. Under these proposals, only 21 contracts will be awarded to provide legal aid criminal services in Wales. Providers will be expected to service work across large distances without any additional payment for travel costs. There will be no guarantee of work after the initial three-year contracts have come to an end. It is difficult to imagine small local firms being able to survive. With them will go knowledge of the local area, local police, courts and agencies and local access to justice. Instead, we shall have Eddie Stobart, Tesco, G4S, the Co-op and so forth. There is even talk of call centres. The prospect of tendering cases out to “Stobart Law” or “Tesco Law” fills me with absolute dread. It will mean an attack on the criminal Bar and will make a cataclysmic impact on the future of our criminal judiciary.
These proposals will, I am afraid, seriously undermine the rule of law. Why is it, then, that the Council of Circuit Judges vehemently opposes these plans? Why is the Judicial Executive Board similarly opposed? Why is Lord Neuberger, until recently the President of the Supreme Court, vehemently opposed? Why? It is because they are right. The Justice Secretary—a non-lawyer—knows better than the finest legal brains in the British Isles. It is time to reconsider, and if this consultation is not to be a sham, the Government must reconsider.
Peter Aldous (Waveney) (Con)
I am grateful to the hon. Member for Brent Central (Sarah Teather) for securing this debate. I shall concentrate mainly on the proposals relating to price competitive tendering. My concern is that these are not suitable for a county such as Suffolk, which covers a large geographical area, much of it rural in nature. Suffolk has three principal urban centres: Ipswich, Bury St Edmunds and Lowestoft, the latter being the principal town in my constituency. All are some distance from each other.
Having lived in Suffolk my whole life and having worked there as a chartered surveyor for many years, I do not believe that it is practical for a firm of solicitors based in one of the three towns to provide a good service across the whole county. If the proposals are implemented in their current form, I fear it could result in significant parts of the county being left without ready access to good legal advice. One would, in effect, be creating advice deserts, as many Members have said.
This would be bad for my constituents and bad for those towns and market towns where the presence of solicitors on the high street, often long-established family firms or partnerships, could be put at risk. There is a need for their continued presence. Large multi-discipline firms have their place, but we do not want a system that encourages all solicitors to locate on business parks, often inaccessible to public transport, on the edge of remote urban centres. My worry is that the proposals could eradicate those small legal firms who best know their clients, and this would be bad for community justice. These high street firms are not legal fat cats gorging on legal aid.
I do not like the idea of a state-imposed system of providing criminal legal aid, rather than that of allowing a market to develop organically. I shall make three observations to highlight my concerns.
First, I do not believe that four firms can provide comprehensive coverage across the whole of Suffolk. Rather than applying the same straitjacket to each of the 42 criminal justice service areas, would it not be more appropriate to look more closely at the make-up of each area and come up with a system that takes account of such features as rural sparsity and the location of the main police stations, police investigation centres and local courts?
Secondly, I am concerned that requiring firms to expand substantially to cover such large procurement areas could mean that solicitors spend most of their time sitting in their cars driving to courts and police stations. In Suffolk, Lowestoft is 45 miles from Ipswich and 54 miles from Bury St Edmunds. Is it realistic to reduce automatically by 17.5% fees that have been pegged back in any case for many years, and then expect a firm in, say, Ipswich to provide a comprehensive and good service in Lowestoft? Will such firms have a proper and full understanding of the needs, challenges and concerns of people in the Waveney area? Is it practical for solicitors to drive an hour through the night to attend at police stations? Driving up and down the A12 or along the A143 are not the easiest journeys at the best of times.
Thirdly, it has been suggested that one way in which solicitors can improve their productivity is to make greater use of paralegals. That would involve those who are not fully qualified and have lower hourly charge-out fees carrying out more routine work. Such an approach may well be practical in other legal fields where there are fewer legal obligations, but not in criminal legal aid, which is fundamentally different from other legal work.
We all must accept that savings have to be found. To find them, one must adopt a strategic approach, looking at the whole criminal justice process, from the police station through to the courtroom. I would be grateful for an update from the Minister on whether the Government will increase magistrates’ custodial sentencing powers from six months to 12 months, which will enable justice to be delivered more efficiently and quickly by magistrates who live in, and have a good understanding of, the communities they serve, and, according to my understanding, would produce significant savings of up to £40 million a year.
Bob Stewart (Beckenham) (Con)
On that point, I listened carefully to what my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) said about the Crown Prosecution Service not being up to the job. Surely more savings could be made there.
Peter Aldous
To find savings, we should look across the whole criminal process, from the police station on the first night through to the courts, whether magistrates courts, which I believe should have a bigger role, or the Crown court. We must look at the CPS as well, and my right hon. Friend the Member for Haltemprice and Howden, who is not in his place, made a very good point about that.
The Secretary of State should look again at the proposals for price competitive tendering. There is a need for a more local approach that takes account of the individual features and characteristics of different areas and communities, an approach that enables small and medium-sized firms of solicitors to have a sustainable and viable future, and an approach that provides local communities with access to legal advice and support from professionals who have local knowledge of the particular problems and challenges in their area.
Madam Deputy Speaker (Dawn Primarolo)
Order. A large number of Members still wish to speak, and there are only 30 minutes left before the debate will conclude. I hope that Members will try to make their comments succinctly so that as many as possible can speak, and that those who are tempted to make interventions will avoid doing so if at all possible, and save them for the Minister and the shadow Minister, so that Back Benchers get their comments on the record.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I will try to remember your advice, Madam Deputy Speaker.
Although I am not a lawyer, I should mention that my eldest daughter is a lawyer working in prison law, so I have drawn much of what I will say from her experience.
On the proposals being an attack on access to justice for all regardless of means, we must ensure that such access is protected. Even the Government’s Treasury counsel has roundly condemned the proposals. What concerns me particularly is the fact that they will not require primary legislation, but will be pushed through in secondary legislation. That is an insult to Parliament.
A system that would restrict access to criminal legal aid to people with assets of less than £35,000 would be very different from the current system. The Government say that they do not want to pay for the defence of wealthy criminals, but people who are charged are not criminals. Indeed, that is the point of charging them. The proposed restriction breaches the fundamental principle in our legal system that those who are charged are presumed innocent until proved guilty. Article 6 of the European convention on human rights requires that they have the right to a fair trial and to professional legal representation. I agree with my right hon. Friend the Member for Tottenham (Mr Lammy): this is akin to what might happen in a country run by a despot. It is entirely unacceptable. Our proud tradition of the right to access to the law dates back to Magna Carta, and we should not threaten that tradition.
I was also concerned to learn that in the autumn there is to be consultation on a proposal to restrict access to legal aid for recipients of benefits. The restriction of access to the law for the poor and vulnerable would take us back to the dark ages, and we must not let it happen.
Some Members have referred to the introduction of price competitive tendering, which many believe will lead to a race to the bottom and a dramatic reduction in the quality of services.
The importance of the right to choose one’s lawyer has also been mentioned. One of my constituents, who is a solicitor, told me of a vulnerable young woman who had been abused. She had been charged on three occasions, but because she had built up a relationship with her lawyer and trusted him, he was able to provide a high quality of representation, and she was acquitted. That would not happen under the proposed new system. Again, we should not jeopardise access to the law for the most vulnerable members of society. According to my daughter, it can take weeks for a trusting relationship to develop; in the early stages, one-word sentences may be the only form of communication.
There are also proposals to restrict access to legal advice in prisons. As I have said, my daughter works in prison law. I have been told that a very vulnerable client who was sentenced at the age of 15 and had served three times her sentence tariff was recently released following a judicial review. That would not happen under the new system—and she is not unique. As we heard from my hon. Friend the Member for Stretford and Urmston (Kate Green), many prisoners are extremely vulnerable, and may have mental health problems or learning difficulties. It should be recognised that punishment is not the only purpose of prison. Opportunities for rehabilitation should be offered, and prisoners should have access to the law when that does not happen. It should also be ensured that facilities are appropriate for those with learning difficulties or other disabilities.
It is a myth that restricting access to civil legal aid will save money. It has been suggested that the changes relating to prison law will save £4 million, but, as we know, there will be a cost of £10.3 million.
Jane Ellison (Battersea) (Con)
Before I make some brief remarks on behalf of the many members of the legal profession and the general public who have approached me, may I say a word to the House on behalf of the Backbench Business Committee? The Committee granted this debate to the hon. Member for Brent Central (Sarah Teather) and the right hon. Member for Tottenham (Mr Lammy) as a general debate with no Division to allow for a wide-ranging and frank discussion, which I think all Members would agree the House is having. We are also extremely mindful of the fact that the debate is over-subscribed and the House needs to give more time to this subject. Does the right hon. Gentleman want to intervene on me at that point to say anything?
Mr Lammy
The hon. Lady is a member of the Backbench Business Committee, and I wonder whether she is saying more time could be made available for us to return to this topic and have a vote. I am also mindful that the shadow Secretary of State has not yet spoken, however, and that I may not need to press this debate to a Division.
Jane Ellison
I hope it is possible not to do so, for the reason I have just explained. There is also a short, but important, debate to follow.
Sadiq Khan (Tooting) (Lab)
If it helps, may I say that as the Justice Secretary is running scared and is not here today, and as the Government are failing to allow a vote on this issue, the Opposition will use some of the limited parliamentary time available to us to hold an Opposition day debate on it?
Jane Ellison
I thank the right hon. Gentleman for his intervention.
I am not a lawyer, but many points have been put to me by people in the legal professions, and I therefore wish to pick up on a few of those points. Of course I do not think it is unreasonable to look for savings from this budget, just as savings are being looked for from all the others, but the question is how they are to be found. There seems to be a consensus emerging in the House that there are better ways to find savings in this budget than through these particular savings.
May I quote from one of the criminal barristers who wrote to me directly? She said:
“We who work at the ‘coal face’ know where the money can be saved and where the problems are. We are acutely conscious that every Department must sustain a cut in spending. But this is not the right way to do it—we would like to sit down with the MOJ and discuss how we can save money and preserve the justice system at the same time.”
Those are wise words and I think all Members would want us to try to find consensus as to how to proceed.
On the residency test, I represent the last British resident of Guantanamo bay, so I can think of obvious exceptions—people who very much need access to justice and who certainly would not qualify under that test. Turning to a slightly less dramatic aspect, I am also particularly concerned about victims of human trafficking. I said this in my submission to the consultation:
“Had I applied this test as an MP, a number of vulnerable constituents who I have been able to help would not have qualified. I would particularly wish to be assured that the proposed residency test would not stop victims of human trafficking or modern slavery being represented.”
Much has been said about the issue of high street firms. Not every high street firm is absolutely brilliant, and that is especially in an area in which I work a lot. I have a large immigration case load, and about 15% of my constituents do not receive notification of their leave to remain or get their papers back in a timely fashion, and we often have to chase them up. I would therefore just say that everyone can look to improve.
Price competitive tendering has been discussed, and I was particularly struck by the point made by the hon. Member for Redcar (Ian Swales) about the potential for end-to-end vested interests. That is particularly concerning and gave us all pause for thought. I also fundamentally agree with the points made by Conservative colleagues about price competitive tendering, and in particular the comments of my hon. Friend the Member for Dewsbury (Simon Reevell). It just does not feel like a naturally Conservative solution to a problem potentially to drive choice and competition out of the market. That just does not feel like what we should be doing.
Finally, I want to say a few words about the smooth running of the justice system, drawing on my own experience of particularly complex cases involving, sadly, people stuck in the revolving door of prison and the justice system, and often involving drugs and so forth. The Government are seeking to address that in a way I applaud, but these people often have very complex problems, and the cause of ensuring justice in the courts is almost certainly served by their being able to have some kind of continuity of representation, rather than starting again with a new solicitor every time.
I shall finish a little early to try to ensure that every Member has a chance to speak. To those constituents who may feel I have not touched on their particular point, I say those points have all been touched on in this debate, and I will make sure each of them is aware of what has been said.
The last point I want to make is about the money to be saved by the smoother running of the justice system. In recent weeks I have been stopped on the street by two part-time judges—there is obviously something about Battersea, as part-time judges just stop people in the street. They said that there are enormous savings to be made through the system running more efficiently, with fewer delays and mishaps. They also made the point that a rise in the number of litigants in person will almost certainly have a knock-on impact on the justice system, and not in a helpful or money-saving way.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I want to talk about the impact of the proposals, the process and the politics of the situation. Before I start, however, I should mention that I have raised the issue with the National Audit Office, particularly after its very good work on interpreters in the criminal justice system. The Secretary of State ought to be a little worried, because the NAO will be watching and monitoring the situation and waiting to assess the impact. Of course, it always does that retrospectively, but the Secretary of State could save himself a lot of grief from an NAO audit if he improved the scheme from the beginning. What the NAO can do well is consider the system as a whole. I have asked it to do that and it is considering that request at the moment.
As time is limited, I will not repeat the arguments on the impact of the scheme that have been made eloquently by so many Members. Let me touch on a couple of points, however. The system is often painted as dealing with criminals but, as my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) said, people are innocent until proven guilty. A local solicitor in my area has pointed out that more than 50% of the people who rely on legal aid with whom he deals are innocent and are neither charged nor cautioned. This is an attack on the innocent, as well as on those who appear in the picture painted by the Government.
One of the big impacts is through cost-shunting. We have heard a lot about self-representation, more time and duplication of work. Those are serious issues. I am a member of the Public Accounts Committee and when we consider such issues, we see time and again that one Department makes cuts and pushes the cost on to another. We must consider the system-wide elements and I am not convinced that the Government have done that.
I will not repeat the other arguments, save to mention what happened when I was a Minister dealing with challenging issues, when I took on dealing with children detained with their families. In that investigation, I uncovered the immense cost of not getting proper legal advice at the beginning of a case. It caused huge problems and damage to those children at a later date. There was also a huge issue with the geographical spread of cases. I did a round table in Wales and swathes of that nation in our country did not have immigration lawyers. I fear that this change will only exacerbate that.
On the process, the consultation has been rushed. There has been no proper opportunity for debate in this House and we have heard of some of the inadequacies in the consultation. The statutory instrument in the autumn will be the only opportunity the House gets to vote on these proposals and I am delighted that my right hon. Friend the Member for Tooting (Sadiq Khan) has said that the Opposition are not afraid of a debate on the issue.
There have been no pilots. The points about changes made elsewhere should also be considered and perhaps pilots could compare this option with some of the others. I was a witness in court in the past year and was appalled at how much time was wasted. I was in a room with four other witnesses, some of whom were also victims. Only one was called into court that morning. One woman had some sandwiches and I realised as I left that she must have been prepared—indeed, she had been before and knew that her case might not be heard. What a waste of everyone’s time and money! It is everyone’s—it is taxpayers’ money, it is my constituents’ money and the situation needs to be considered. This is not the way to do it. It is a cack-handed approach, but the situation is presented in a very political way.
Costs have gone down, as legal aid spend figures published yesterday show, but I have not time to go into that.
The Government are trying to paint the picture that they are being tough on criminals and immigration. That rhetoric is unhelpful. It attacks many of my constituents, who need good advice. Even with legal aid, we have a two-tier system. The changes will cut the vulnerable adrift. Many of my constituents have suffered because they cannot afford expensive lawyers and legal aid lawyers are already stretched.
There is politics attached to this. We have heard from the Deputy Prime Minister, who is quoted in the Daily Mail as saying:
“You could say it’s perverse that a Government with Conservatives in it is reducing public choice”—
we have heard that already—
“rather than increasing it…on the back of the consultation we should see if there are alternative, less disruptive, less unpopular ways of delivering”
savings.
So there you have it, Madam Deputy Speaker. If the Liberal Democrats decide that this is unpopular, they might persuade the Government to drop it. Given that we have no vote on it, that might be our best bet. So I urge those who are listening to this debate to turn up in droves to the surgeries of Liberal Democrat Members and persuade them that it is unpopular. Then perhaps the Deputy Prime Minister will have his way.
Mr David Burrowes (Enfield, Southgate) (Con)
I refer the House to the Register of Members’ Financial Interests. My interest is as a criminal defence duty solicitor, so I have a particular interest in relation to the criminal legal aid proposals. It is important that we focus on this issue, but we should not have this debate in a vacuum. Certainly, yesterday’s statement ensures that we do not have a vacuum; there is a need to make the £11.5 billion saving, and legal aid cannot be exempt.
We also heard from the Chancellor that this is about fairness. Reference was made to the national health service as an institution that we can be proud of, that the people are proud of and that is about fairness. The legal aid system is also an institution that is about fairness. It is one that we can be proud of, but it is not one that in polls people say is a No. 1 priority. That makes it even more important that we as a Parliament and a Government make sure it has integrity, but it cannot be excluded from the Budget round.
Why can we proud of it? Members do not have to take my word for it. Just take the word of the Secretary of State, who has been maligned and caricatured in many ways, but I am convinced is open and is listening to this consultation. We need to take his word for it—
Mr Burrowes
Let us not get into the “Where is he?” business, or who he meets with. Let us take this a bit more seriously. Let us listen to what he said in the document. He said:
“Access to justice should not be determined by your ability to pay, and I am clear that legal aid is the hallmark of a fair, open justice system.”
That is what we have all been saying throughout today’s debate. He went on to say:
“Unfortunately, over the past decade, the system has lost much of its credibility with the public. “
I look at the criminal legal aid system, predominantly in police stations and magistrates courts. The Secretary of State went on to say:
“Taxpayers money is being used to pay for frivolous claims, to foot the legal bills of wealthy criminals, and to cover cases which run on and on racking up large fees for a small number lawyers.”
The proposals seek to deal with that; for very high cost cases, I welcome that.
Police stations and magistrates courts have been under cost control for a number of years, with real-terms cuts. Is there evidence that the system has lost credibility with the public and we must change the system wholesale by introducing price competitive tendering? I think not. When we look at the elements of our system and ask what is delivering quality and what is making us proud of it, we see that it is the fact that it is based on the principle of choice. Yes, we can look at procurement going forward, but we cannot undermine the principle of choice.
When we look at those that I and others have represented over the years, we can characterise them as the good, the bad and the ugly. Choice ensures that the most heinous, wretched criminal is represented and has a choice of lawyer. The most worthy of saints also gets the choice of lawyer, without judgment or conditions. That is an important principle of which we can be proud. It means that, when dealing with the regular clients that I have represented over the years, we can enter a timely guilty plea, which is efficient; we can achieve a sentence that takes account of their mental health needs or drug needs and go the extra mile to make sure that they get drug rehabilitation.
We can also represent the young innocent because their parent has asked us to go down to the police station. They want to choose someone they trust, who can understand the person’s special educational needs, problems of communication or learning difficulties. They need their own solicitor to be involved. We must have choice, yes to protect the vulnerable but also to ensure quality, to ensure that there is a client base that is protected and maintained but also to ensure mutual trust and good will in the system.
Let us look at the costs of justice so that we can deliver efficiency. But let us also listen to the Ministry of Justice over the years, which has said that choice is the key deliverer of quality. Let us listen to Lord Carter, who conducted an independent review and said that choice had to be maintained. Let us also recognise our small firms, who make up three quarters of legal aid firms and do the business end—the 90% of cases that go through to magistrates courts. They are delivering out of good will—yes, they are paid, but a fairly limited wage—because they care about the system. They need to be maintained and encouraged. We need to go along with it, with a timetable and proper consultation so that we deliver an efficient justice system for the benefit of all.
Lyn Brown (West Ham) (Lab)
Rightly, a lot of attention has been given to the changes to legal aid for criminal law and the removal of choice of solicitor, and those are serious matters, but I will focus on the cuts to legal aid for judicial review. I do not speak as a legal expert—I am not a solicitor or a barrister—but I will illustrate how judicial review has worked in the past and how the proposed changes will militate against good outcomes.
A 12-year-old boy was excluded from school and his local authority placed him in the pupil referral unit. After a couple of days he stopped going, because the PRU was in an area where a different gang was based and he was scared. For two years, the boy received no education: the local authority occasionally organised meetings with the family and occasionally threatened to take his mother to court. Understandably, she wanted her son to be educated, but she understood his fears.
A local charity recommended a solicitor, who made repeated attempts to resolve the problem with the local authority. They were ignored. Eventually, the mother issued judicial review proceedings. They were ignored. An order was made for the matter to be expedited, with a date for the authority to set out what it steps it was taking to provide the boy with an education. That order finally galvanised the authority into action to avoid judicial review. A package was worked out, with good will, between the council, the PRU and the local college—a right and welcome outcome. Under the Government’s proposals, the case would not have received legal aid, as it was settled before the permission stage.
There are other cases that illustrate my worries about the future, such as the woman receiving treatment for cancer who was evicted because the landlord wanted to sell the property unoccupied. She would no longer be able to challenge the council’s decision not to provide her with emergency accommodation. A 16-year-old girl fleeing the physical abuse of her alcoholic mother and stepfather was living on the streets until the threat of judicial review convinced the council to find her accommodation. Shelter, which represented the girl, would not have been paid for the case because the local authority acted after it was threatened but before the case got to court.
What do those case studies tell us? They tell us that under the new regime, lawyers are unlikely to take on a case where there is a likelihood that it will be settled before permission stage, as they will not be paid. Perversely, the strongest cases will not be funded and taken up. People on low incomes will have much less chance of getting access to judicial review and to justice. We are told that cases such as the ones I have described are less likely to have a good outcome. The young man whose case I described is now enjoying learning and, hopefully, he will grow up to have a decent job and contribute positively to society. Imagine what might have happened if that intervention had not occurred early enough.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend agree that when changes are so far reaching, there really ought to be some sort of pilot scheme and evaluation before anyone takes any steps any further to try to implement any changes of this nature?
Lyn Brown
I absolutely agree. In the examples I gave, if the outcomes that were, in effect, negotiated before the cases got to court had not been achieved, the costs of the alternatives in terms of alienation, unemployment, ill-health, petty crime and worse, replicated across the country, would far outweigh the £1 million that I understand the change is designed to save. How much more would it cost us to keep that young man in the criminal justice system and to replicate that across the country?
Lyn Brown
No, I will not.
Even if we were to save £1 million, would that be worth the cost of losing the ability to change the lives of people like those in my examples? People must be able to hold power to account, and I fear that the proposals are a serious attack on the right of the most vulnerable in our society to do just that.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am dropping the time limit to four minutes. I am going to get everybody in, so nobody will miss out.
Greg Mulholland (Leeds North West) (LD)
I will keep my comments brief. As the mood of the House has made clear, there is an acceptance across the Chamber that reform is necessary and cost savings must be found in the legal aid budget, but there is an overwhelming view that although change may be necessary, the ones proposed are very clearly the wrong changes. Coalition colleagues have been keen to point out from the Conservative Benches that in their opinion this is not a Conservative reform and not one that they can support from their own philosophy. I understand and sympathise with that.
Let me say from the Liberal Democrat Benches that these changes are not liberal. They undermine the principles of liberal democracy and the justice system that is a key part of it. They threaten the liberal values of justice and fairness that our justice system should be based on. I am therefore saying clearly that as Liberal Democrats we should oppose them. As colleagues have said, we have already had substantial cuts to the legal aid budget through the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and the lower fees built into the 2010 criminal legal aid contract.
I have further concerns, apart from the financial ones. My hon. Friend the Member for Redcar (Ian Swales), as a member of the Public Accounts Committee, has laid out the Committee’s concerns. I am a member of the other overseeing Committee, the Public Administration Committee, and we have already expressed our concerns that in a number of areas Government procurement does not sufficiently allow small and medium-sized enterprises to bid. Here we have something that the Government are doing which will make that difficult or impossible and will damage or destroy many small businesses. As Members have said, many of the high street solicitors are not fat cats. Many of them operate in the heart of communities, and that will be ripped away by the proposed changes. That seems to undermine a number of other Government initiatives, including the Portas review, for example.
In 2011 at the Liberal Democrat federal conference we passed a motion noting that those least advantaged in society are often those who most need assistance in getting access to the courts and to legal aid, and that fair access to justice and to the courts is a mark of a modern, civilised and democratic society. The Liberal Democrat party as a whole therefore agreed that before any substantial changes are made to the legal system, full consideration, assessment and trials should be carried out, which is not the case at present.
Liberal Democrat lawyers have come up with a number of proposals to show that there are different ways of achieving the same aims. These proposals are worthy of consideration, and I hope the Government will consider them. They include lifting the bar on assets subject to a criminal restraint order from being used to fund reasonable legal expenses; removing long and complex fraud cases entirely from the scope of legal aid and instead requiring company directors to take out insurance against the costs of defending in prosecutions arising out of the conduct of their company; the use of penalties which could reimburse legal aid against the Crown Prosecution Service where prosecution conduct leads to wasted costs, long trial extensions and so on; a strategy for decriminalising minor offences and reducing the use of custody through restorative justice alternatives; and making savings from the administrative budget.
Liberal Democrat lawyers oppose the proposed changes and the Liberal Democrat party as a whole opposes the changes. I believe that the Liberal Democrat parliamentary party should oppose those changes, and that is the message that I want to send today.
Jeremy Corbyn (Islington North) (Lab)
Thank you, Mr Deputy Speaker, for reducing the speaking time and ensuring that all Members are called. There is a message here: I hope we have another debate, at greater length, when we can have a vote on this important topic. Although it is always regrettable when the Secretary of State cannot be present, the good news is that he will be before the Justice Committee next week, so we will be able to ask him a few questions there.
There are some serious questions to be asked. We have gone through the miserable experience of LASPO, we have already seen the effects of the loss of legal aid, we have seen in our surgeries many people who cannot find a lawyer to help them, and many legal aid practices have already gone under in high-cost inner-city areas where low-income families are desperate to receive justice. I hope that we will have a serious response to the Ministry of Justice’s rather rushed consultation.
Like all Members who have spoken, I have received many representations on this matter. I do not have time to quote from or refer to them all, but I would like us to remember one important underlying principle. When the current legal aid system, more or less, was introduced in the 1940s—it was built on the rather ineffective system that existed before—the then Government, who were much more far-sighted than this Government, considered legal aid to be as valuable to justice in our society as health, education, housing or the welfare state system that prevented people from falling into destitution. What we are approaching, if we are not already there, is a system in which if someone is poor, destitute, marginalised and up against it, they will get no help and no justice and will continue to suffer. Legal aid is fundamentally important in a democratic, civilized society in which a person can have their day in court to get a verdict in their favour or otherwise.
I will mention the representations I received from INQUEST, a good organisation based in my constituency. It rightly points out that the cases of Jean Charles de Menezes and Jimmy Mubenga could not have been taken to court had these proposals been in operation. It also points out that the proposals are likely to breach article 2 of the European convention on human rights, which concerns the right to life. The Immigration Law Practitioners Association, which over many years has done fantastic work on ensuring that everyone is represented and gets advice, points out, in relation to judicial reviews:
“This is not an immigration problem or even a legal aid problem. It is a problem of access to justice, of equality of arms, of holding the State to account.”
That is what a judicial review must be about.
For those busy telling us that every lawyer is a venal fat cat interested only in practising commercial law and leaving the rest of the people to rot, I have an interesting e-mail from a young solicitor in my constituency. Jed Pennington, who has a good law degree from Cambridge university, turned down work in the commercial sector to work pro bono on many other things and on legal aid the rest of the time. He, like many others, is not a fat-cat lawyer. They are doing it because they believe in justice.
Matrix and Bindmans have pointed out that the proposed savings are nonsense. The cost increase will be at least £24 million if the proposals go through. It is time for this House to assert itself and listen to organisations such as the Islington Law Centre, which does great work in pointing out that loss of legal aid is loss of right and loss of justice. Reject it.
Nia Griffith (Llanelli) (Lab)
It is a disgrace that the Secretary of State is not here, but hon. Members should count themselves lucky that there is a Minister here at all, because in yesterday’s Westminster Hall debate on legal aid in Wales, secured by the hon. Member for Ceredigion (Mr Williams), we had a Whip replying, rather than a Justice Minister.
I hope that today the Minister will be able to respond to two very important points. One concerns a pilot. It seems that the idea of firms having to tender will be rolled out across the whole country without even first trying a simple pilot. A pilot scheme is absolutely essential. The other issue is the time scale. The way the proposals are being brought forward is so rushed.
Nia Griffith
I will not, because of the time available.
There seems to be absolutely no time to consider the proposals, certainly for small firms. If they are to contemplate trying to work together, they will need far more time to put together their tender and fully understand how it would work.
I come from the Dyfed Powys area, which is the largest police force area in England and Wales. It takes three and a half hours, for those who know the roads well, to drive from Llanelli to Machynlleth. The idea that only four firms could provide for that vast rural area is complete nonsense. Many local solicitors will be unable to participate and will effectively lose all the business. That means the clients will be unable to access the justice they need, never mind access to specialised areas or in the Welsh language. Even one of the larger firms in the area, which is obviously very small by national standards, has said that it cannot see itself tendering through the process. It is absolutely essential that clients have a choice. As many Conservative Members have pointed out, it is quite ironic that a Conservative Government are proposing to eliminate choice. Many clients have problematic backgrounds. They want to go to somebody they know who may also know their family, their circumstances and the community they come from.
We hear about all the stereotypes of clients who need legal aid, but Thompsons Solicitors has pointed out that it will often be used by someone to clear their name, such as a paramedic or teaching assistant who has been wrongly accused of assault or suchlike. My hon. Friend the Member for West Ham (Lyn Brown) made an extremely compelling case for the use of legal aid not only for judicial review but for the preparations leading up to it. JR is vital in holding our public services to account and avoiding many other complications for the clients involved further down the line.
The real threat that these proposals pose to justice is that people may be tempted to plead guilty rather than innocent. That is extremely worrying; it really is a recipe for miscarriages of justice. As for people trying to represent themselves, we should think about how that will clog up our courts, which will be completely overwhelmed. With the current staffing levels in courts, people already have difficulties in trying to get information, and they will not be able to cope.
Absolutely fundamental in all this is the fact that there is no redress for the ordinary person. We have seen this time and again with this Government, whether it is in trying to damage the employment tribunal system or trying to drive down wages in the context of rising prices. Every which way we look, it is the poor and the vulnerable who suffer. I very much hope that the Government will look again at these proposals.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate the hon. Member for Brent Central (Sarah Teather) on securing this important debate.
When the Bill that became the Legal Aid, Sentencing and Punishment of Offenders Act 2012 was being debated, I genuinely thought that things could not get much worse—that the Government would not go any further in what appears to be a crusade to dismantle universal access to justice—but I was wrong. Since then we have had the deeply worrying Justice and Security Act 2013, and now we have these proposals for secondary legislation that will deny access to legal aid to some of the most vulnerable and disadvantaged in our communities. Like many other hon. Members, I have been lobbied extensively by my constituents who share my passion about the importance of a justice system that supports the right to a fair trial. Yet that right is being fundamentally undermined, with precious few opportunities for MPs to scrutinise the details or to object.
Much has already been said about the impact of price competition tendering. I simply point out that many legal experts in my constituency have told me that if the changes go ahead, then cost becomes the determining factor, not quality, with the inevitable result of a huge loss of knowledge and expertise that will never be recovered. One of them notes that the effect will be more delays in court and a detrimental impact on victims and defendants in the criminal justice system. The system is already under immense pressure and only works because of committed judges, court staff, probation officers, barristers and solicitors who do what needs to be done out of professional duty and pride. Another expert issues this stark warning:
“PCT will in all likelihood destroy the independent criminal bar. A Bar that is held in the highest esteem throughout the world and which continues to adapt to a changing landscape.”
A constituent who works as a defence solicitor describes the likely impact of another proposal—namely, people having no choice about who represents them and the creation of a single fixed fee payable regardless of whether an individual pleads guilty. He says:
“The right to a fair trial will no longer be assured. Innocent people will end up in jail. Vulnerable and high maintenance defendants will be left unrepresented. The high maintenance clients will create delays and inevitable injustices in the Court and the vulnerable or weak will have inadequate protection from the police looking to meet their government imposed disposal stats.
In practice this will mean them accepting cautions at the police station and pleading guilty at court for offences they haven't committed. The police will have ‘solved’ many crimes. But it is unjust, and with criminal records, those affected will be prevented from becoming teachers, lawyers, doctors and MPs.”
I want to end with a few words about the judicial review process. Like many other hon. Members, I am deeply concerned about these proposals utterly undermining the JR process, which is one of the most important ways of achieving public body accountability. Environmental cases, social welfare cases, and cases about library closures, schools and so on were all done by way of judicial review. A consortium of non-governmental organisations working with refugees and migrants has commented:
“In our opinion the proposed change would result in an increase in unlawful decisions relating to access to services with disastrous effects on the individual and/or an increase in the number of individuals who seek to ask the court to intervene without the assistance of a properly qualified representative. This is not in the interests of justice.”
The homelessness charity, Shelter, has also raised concerns:
“Judicial review is the main mechanism Shelter uses to ensure local authorities meet their legal duties to help homeless people.”
It has stated that the proposals to limit legal aid funding for judicial review will have a significant impact on the ability of people on low incomes to question council decisions and, ultimately,
“will make it even more difficult for us to help homeless families find a place to stay for the night.”
The environmental charity, WWF, warns:
“These measures will significantly affect our ability to protect the environment… Individuals and civil society groups should not be denied their fundamental constitutional right to check an abuse of power and protect the environment on the basis of costs-cutting.”
Moreover, the Coalition for Access to Justice for the Environment has found no evidence to support the claims that the changes are justified because the Government are overwhelmed by judicial reviews on planning issues. That is not the case, nor are there any data to support a credible claim that judicial review is a significant impediment to economic progress.
If the planned changes go ahead, they will seriously damage public access to justice, the equality of citizen and state before the law, and our ability to hold the Government accountable.
Sadiq Khan (Tooting) (Lab)
I congratulate the Backbench Business Committee on holding this debate.
The Justice Secretary may be a rising star in the Conservative party, but this policy and his non-appearance this afternoon are misjudgments. More than 30 Members of Parliament have applied to speak on a Thursday when there is a one-line Whip and more than 98,000 people have signed a petition expressing concern about the proposals.
I have only 10 minutes to address the various points that have been made, so I will rush through the most pressing of them. First, I will make the position of the Opposition clear. We support efforts to find savings across the justice system. We support making those who can afford to pay their legal fees do so and restricting legal aid to those who are most in need. We support using the frozen assets of criminals to fund their legal costs. We would support moves to address the problem of very high-cost cases. We would support a root-and-branch review of our criminal justice system to cut out the waste and inefficiency that anyone who works in the sector or has used it knows is rampant.
We do not support the Government’s proposals to place the quantity of cases processed ahead of the quality of legal provision and to remove choice from defendants. We believe that those proposals could lead to more miscarriages of justice. We do not support legal aid being run by the same global corporations that run prisons, probation services, courts and tagging. I should say that those are the proposals not just of the Justice Secretary or the Conservative party, but of the Government, including the Liberal Democrats and Lord McNally.
I pay tribute to all 32 Members who have contributed to today’s debate. I agree with much that has been said and look forward to the Minister’s response. Will he clarify whether the changes will require primary legislation and when parliamentarians will have a chance to vote on the proposals? My right hon. Friend the Member for Tottenham (Mr Lammy) spoke about dividing the House this afternoon. I tell him that although we have a limited number of Opposition days, in the light of the Government’s failure to move on this issue, it will be a priority for us. We will have a debate on a motion that divides the House because of the issues that have been raised this afternoon.
The Government’s latest proposals on legal aid are this Parliament’s second attack on access to justice. Social welfare legal aid has been decimated. We were accused of scaremongering during the passage of those proposals. However, law centres have closed—we hear today that the law centre in Birmingham will be closed—leaving the most vulnerable without recourse when they suffer wrong decisions by the Government and other organs of the state. In the recent past, more than 600,000 people have been denied access to advice in areas such as social welfare, debt, employment and housing law. There has been a 30% fall in the providers of civil legal aid and a 12% fall in the providers of criminal legal aid. None of those providers was a fat cat or ambulance chaser.
It is disappointing that the Justice Secretary is not here. If he was, he would have heard 30 mini tutorials on our legal system. [Interruption.] The hon. Member for Bromley and Chislehurst (Robert Neill) would know all about that. Fundamental to our legal system is a presumption of innocence. A decision on guilt is taken by a court of law only after the evidence for and against a prosecution is presented and cross-examined in an open and transparent manner. Due process needs to happen. After all, removing an individual’s liberty is one of the most important powers in the gift of the state. Properly administered legal aid means that all individuals charged with a criminal offence have legal representation, not just those who can afford it, and ensures that our country’s precious rule of law applies to everybody. Legal aid helps those who are wrongly accused to maintain their innocence, and ensures that the state proves, beyond reasonable doubt, the case against a defendant. Please note that I use the word defendant, not criminal. I do not, unlike others, make sweeping generalisations that all those who receive legal aid are guilty criminals. The last time I checked, we still had a presumption of innocence in this country.
Many miscarriages of justice have happened because of an absence of proper representation for defendants: the Birmingham Six, the Guildford Four, the Maguire Seven and others. Because of legal aid, victims have confidence that genuine perpetrators of crime are prosecuted and punished. Victims of crime want certainty that the true perpetrator has been found guilty. They do not want the wrong person pleading guilty or being found guilty, and they certainly do not want the guilty walking the streets. Legal representation for defendants is crucial in minimising miscarriages of justice. These proposals introduce perverse incentives that could unbalance the criminal justice system, with representatives being paid the same whether someone pleads guilty or stands trial.
The Justice Secretary may not have turned up this afternoon, but he has sought to portray legal aid solicitors and junior barristers as fat cats. He knows that the profession has a public relations problem, and he has sought to exploit that in the media to further his own political aims. That is all a tough veneer that masks the real impact of his proposals. Local providers, often high street firms that know their local authorities, courts, police and probation, will be replaced by big corporations, maybe even the same ones that run prisons, probation and tagging—conflicts of interest at every turn. Strangely for a party that claims to be pro-enterprise and pro the high street, this will sweep away hundreds of small and medium-sized enterprises. High street firms will go under, an unintended consequence that will have an impact on the diversity of the judiciary.
The driver of the new contracts is how many cases can be done at the lowest cost per unit, not the quality of the legal representation provided. Why else propose to pay the same fee regardless of whether there is a guilty or not guilty plea? It is as if Ministers do not know the substantial difference in work load between the two pleas. In an era when so much in the public sector is about choice, the opposite will happen in legal aid. People will get what they are given, whether it is rubbish or good. The state will prosecute people and decide who defends them. The Justice Secretary would not accept a special adviser—also paid for by the taxpayer —or the external legal advice relied on by his Department, to be imposed on him. Nor would he accept where his children go to school being decided by someone else. Why then should someone who is facing serious allegations, but is presumed innocent, have no choice in their solicitor?
Lawyers who have the confidence of defendants are more able to give robust advice, for example for a defendant to plead guilty when the evidence determines that that is the best course of action. A lawyer who has acted in previous cases will know about a client’s learning difficulties, language and other problems that may be relevant to their current case, leading to a more efficient legal system that saves money.
Let me be clear and save the Minister’s time. He talked about Labour wanting to spend more, but we would make savings to the legal aid budget. We did so in government, as many legal aid lawyers keep reminding me. Despite what the Government claim, our legal aid budget was not increasing:
“The Government’s legal aid bill increased very substantially in real terms between around 1965 and 2000, but it has been cut since then”.
Those are not my words, but those of the President of the Supreme Court, Lord Neuberger, last week. The hon. Member for Enfield, Southgate (Mr Burrowes) also talked about cost pressures on solicitors as a result of Labour proposals. However, they did not lead to defendants being denied choice. In government, we did look at a version of price competitive tendering. We looked and we considered, but we recognised that it was fraught with danger and thought better of it. Back in 2009, the current Attorney-General, the then shadow Justice Secretary, supported that decision. He actually committed the Conservatives to suspending the scheme, claiming:
“We really should be concerned about the lasting damage that could be done if we’ve got this wrong”.
He said:
“It could permanently damage the provision of criminal legal aid.”
He knew that the proposals could mean a generation of lawyers leaving the profession and that once they are gone, they are gone. I see from recent press reports that he is unhappy at current plans, which are even worse than the ones he opposed when in opposition.
I note from the look on your face, Mr Deputy Speaker, that—
Mr Deputy Speaker (Mr Lindsay Hoyle)
It is 4 o’clock and we need to hear from the Minister.
Sadiq Khan
Notwithstanding your generosity in allowing the debate to carry on, Mr Deputy Speaker, time means that you have cut my comments short. I understand that, but may I say that it is unacceptable for the Government to be railroading these plans through, with no pilots, no proper consultation and no working with key stakeholders to see whether savings could be made in a less oppressive way? We oppose the current plans, but we are happy to work with the Government, with or without the Justice Secretary, to see whether we can make savings that are less unjust.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
May I start, as others have, by declaring an interest, as a non-practising barrister? I practised in the field of criminal law and a great deal of what I did was legal aid work.
I congratulate the hon. Member for Brent Central (Sarah Teather) and the right hon. Member for Tottenham (Mr Lammy) on securing this debate, which has been a very good, and understandably passionate, one. Having listened to a good deal of mock outrage from Opposition Members about the absence of the Secretary of State and their being stuck with me—I am trying not to take it personally—it is worth my reminding them of two previous occasions when we have discussed matters of great importance in the context of justice policy. The last statement in this House on a justice matter was about the rehabilitation reforms. It was a statement that Opposition Members had called for repeatedly, but the shadow Secretary of State was not here for it. Neither was he here the last time we had questions on justice matters, when we covered a range of important issues, including legal aid. I am sure we would not want to read too much into that, just as I am sure Opposition Members would not want to read too much into the Secretary of State’s absence today. As hon. Members have said, he will be appearing before the Justice Committee next week to discuss this very matter.
Sadiq Khan
Why does the Minister not just share with us where the Secretary of State is?
Jeremy Wright
I note that the right hon. Gentleman did not take the opportunity to share where he was the last two times, but I suggest that we might want to move on.
This is an important debate, as hon. Members from all parts of the House have said. Before I try to respond to a number of the specific points made—the House will understand that the time constraints we face mean that I will not be able to respond to everything, and I apologise for that in advance—let me say something about the context of these reforms.
It is right to say that the previous round of legal aid reforms, culminating in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, will have already removed about £320 million from the legal aid budget by 2014-15, but those proposals were primarily focused on civil legal aid scope and eligibility. Alongside those changes, we have made sweeping reforms to the central administration of the legal aid system. We have strengthened accountability and introduced a more rigorous approach to financial management by creating the Legal Aid Agency. But the successful delivery of that programme has not eliminated the need for reform. In order to meet the ongoing financial challenges facing the justice system, which many who have spoken have recognised, the Government have had to look again at the cost of civil legal aid, as well as turning their attention to arguably the most difficult part of the legal aid reform agenda: the reform of criminal legal aid.
Jeremy Wright
The position is, as I have just said, that the bulk of the work done under the 2012 Act dealt with civil legal aid and the bulk of the work being done under these proposals will deal with criminal legal aid. The total value of the savings that these reforms would make if fully implemented as currently proposed would be £220 million by 2018-19. That is a significant figure, given our financial circumstances.
Many hon. Members have questioned the need for further reform, while others have said we should go much further. My hon. Friend the Member for Huntingdon (Mr Djanogly) made an interesting speech about more radical options we could pursue. The answer is simple: criminal legal aid accounts for £1 billion of the overall legal aid budget, and in the current financial climate, the Government, being committed to eradicating the deficit and the national debt, cannot overlook such a sizeable portion of Government spending. We have had to make extremely tough choices in other areas, and it would not be right to exclude this one.
Many hon. Members have said that we should look for savings in other areas of the criminal justice system. My hon. Friend the Member for Meon Valley (George Hollingbery) made that point, as did my hon. Friend the Member for Dewsbury (Simon Reevell), my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Leeds North West (Greg Mulholland). All of them were right about the importance of looking at other areas. I think we heard some good suggestions today, and of course the Government will look in all those areas for savings, too, but that does not get us away from the need to keep the legal aid budget under proper scrutiny.
The package of proposals on which we have consulted is intended to ensure that our legal aid system commands the confidence of the public—that is important—and remains financially viable both now and in the years ahead. We are looking carefully at the 16,000 responses to the consultation, and, with reference to what my hon. Friend the Member for Brent Central said, I can reassure the House that I and my ministerial colleagues will treat everything said in this debate as important contributions to that process. We will listen carefully to what has been said today as well as to what was said in the consultation.
We are duty bound to ensure, however, that taxpayers’ money is spent only where it is justified and only on those who genuinely need the state’s assistance. The taxpayers, who fund the legal aid scheme, have every right to demand that their money be well spent and to ask important questions. They have a right to ask why the taxpayer should be paying the legal costs of the very wealthiest Crown court defendants up front; why the taxpayer should be paying for criminal legal aid for claims made by prisoners that can be better resolved by other means—I will return in a moment to prisoner law— and why the taxpayer should pay the legal costs of those with no strong connection to the UK.
As others have said, our legal aid budget is disproportionately high. My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) made that point very effectively. We have an extremely good legal system—it is greatly admired and, as others have said, it contributes significantly to our society—but that does not mean that it should be immune to the realities that the Government face. Efficiencies have to be made, and reform is the mechanism for achieving them.
Mr Lammy
No one is suggesting that there should not be reform. Has the Minister considered the fact that 45% of criminal legal aid goes on high-cost cases, many involving bank fraud? Why does he not ask the banking industry to come up with an insurance scheme and take that out, rather than dismantling the whole system?
Jeremy Wright
The right hon. Gentleman is right that very high-cost criminal cases are an important area for us to focus on, and we propose to take about 30% of the cost of those cases out of the system, but he would be wrong to assume that those cases, on their own, could achieve the savings we need to make. We need to look more broadly.
I want to turn to the particular proposals and concerns that hon. Members have concentrated on. Many Members have focused on the effect of the proposals on smaller firms and on the issue of price competitive tendering. In 2011, we said that competitive tendering would likely be the best way to ensure long-term sustainability and value for money in the legal aid market. Some Members were concerned that this was a new idea suddenly springing into the political landscape, but of course that is not the case. Indeed, the right hon. Member for Tooting (Sadiq Khan)was gracious enough to point out that the idea was first considered under his Government. In March 2010, the last Government produced a Green Paper entitled, “Restructuring the Delivery of Criminal Defence Services”. Among other things, it said:
“Currently the criminal defence service is highly fragmented, with a large number of small suppliers and relatively few large suppliers….We believe that these market trends are not sustainable. Therefore we believe a future tendering process would ensure a more consolidated market, with a smaller number of more efficient suppliers, required to undertake the full range of the services we need.”
That is what the Labour party thought in 2010, and lest we should run away with the thought that it has changed its view since then, let me quote from what I am sure is a very well-read blog written in October 2011 by the right hon. Member for Tooting. He said—as, to be fair, he also said today—that:
“I recognise that cuts need to be made…I would have carried through a new scheme for contracting of solicitors for criminal legal aid and lowered criminal defence advocate fees in the Crown Court…This more efficient contracting of legal services from solicitors has bizarrely not been implemented by the coalition government”.
So he criticises us for not doing it, then he comes here and criticises us for proposing to do it.
Another point that has been made repeatedly today is the effect that the proposals could have on smaller firms. I need to make it clear that the proposed competition model would see the number of contracts, not the number of firms, reduced from 1,600 to 400. Our proposals do not prescribe how many lawyers should be available or how those that have the contracts should divide up the work allocated to them.
The matter of client choice has also been raised by many hon. Members today. We have listened carefully to the concerns that have been raised not only in the debate but by those who responded to the consultation. Let me reassure the House that quality-assured duty solicitors and lawyers will still be available, just as they are now. The Legal Aid Agency will need to ensure, as part of the tendering process, that all providers are capable of delivering the full range of criminal legal aid services across their procurement areas. That is also true in relation to the points raised about rural sparsity and about the Welsh language.
We have a number of things to consider, and we will consider them carefully. We will come back with our conclusions in the autumn. I am grateful that the debate has taken place today and for all the contributions that have been made. We will consider them properly and respond accordingly in the autumn.
Sarah Teather
This has been an excellent and well-informed debate. If there is one thing I hope the Minister will take away and consider, it is that of the more than 30 contributions we have heard today, only one—in addition to his own—was unequivocally in favour of the proposals. I hope that he will reflect on that. Liberal democracies cannot afford to get themselves into a position in which they wield power over a citizen without giving them a right to challenge. It would undermine the rule of law if we afford citizens rights without giving them the means to secure them. I hope that the Government will consider these points carefully and come back with some very different proposals, which they will put to a vote in the House.
Question put and agreed to.
Resolved,
That this House has considered legal aid reform.
Multinational Companies and UK Corporation Tax
(11 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris White (Warwick and Leamington) (Con)
I beg to move,
That this House has considered the matter of multinational companies and UK corporation tax.
I am grateful to the Backbench Business Committee for giving the House the opportunity to debate the important issue of corporation tax and the avoidance of tax by multinational corporations. I was keen to see this debate take place, not only because of the gravity of the issue but because of the efforts that two local retailers, Frances and Keith Smith of Warwick and Kenilworth Books, have taken to raise the profile of the matter. They have launched a petition, which has gathered 170,000 signatures, calling on Amazon UK to pay UK corporation tax, and I would like to pay tribute to their public spiritedness and determination in pursuit of this cause. Individuals can make a difference in politics, as I am sure hon. Members would agree, and we should encourage more citizens to take similar action.
The issue that I would like to put at the heart of the debate is tax avoidance, rather than tax evasion, which is illegal. I think all Members would strongly condemn any kind of tax evasion. However, tax avoidance, sometimes euphemistically called “tax planning”, is also a matter of serious concern. The case that Frances and Keith have raised illustrates the problem. Amazon made £4.3 billion in sales in the UK last year, but its subsidiary Amazon UK paid only £2.4 million in corporate taxes. It does this by classifying itself as a service provider to its Luxembourg business Amazon EU Sarl in order to reduce its tax bill, yet its UK business employs over 4,200 people, compared with the 380 based in Luxembourg. Given the size of the UK market, it is laughable to believe that Amazon UK is somehow serving the Luxembourg portion of the business, but this is perfectly legal and Amazon UK is not an isolated case.
However, this avoidance is not without its victims. It is businesses such as Warwick Books in my constituency and ordinary people who pick up the bill. Through this creative tax planning, the burden of taxation is shifted on to individuals and businesses that do not have the resources to spend on reducing their tax bill and on hiring expensive accountants to find loopholes in tax law.
I understand that there are some who believe that businesses have a moral duty to pay only the absolute minimum of tax that they are legally obliged to pay, but I cannot believe that that is the case. Businesses, even multinational companies, are still members of society. They benefit from a strong education system, a functioning health care system, decent roads, a transport infrastructure, the police and our armed forces. The reason we raise taxes is in order to produce public goods. We can argue whether the Government spend that money wisely, or whether the Government should provide this or that service, but that is the basic principle behind taxation.
Businesses have a moral responsibility to play a full part in our society, and structuring their businesses in order to avoid taxation and to make it harder for tax authorities to monitor their business is not fulfilling that responsibility. Voluntarily paying tax is not a long-term solution to this issue. What is needed is for multinational companies to take responsibility for their actions and respect the fact that they need to structure their businesses to reflect the way they are operated, rather than merely to avoid that taxation.
If a company is legitimately servicing another company in another country, or needs to pay royalties as part of a franchise or needs to borrow money from its parent abroad, I believe we can all understand that this should be respected in the tax system. We do not wish to crush enterprise, nor do we wish to penalise international businesses that invest in our country, but multinational companies still need to play their part. The endless game of cat and mouse, with tax authorities having to plug gaps and investigate subsidiaries, and multinational companies developing ever more complicated legal structures to avoid paying tax, is simply unsustainable and destructive.
Many of these companies depend on individuals and businesses buying their services, but as they avoid taxation, the Government have to find this revenue from other sources, reducing the profits and incomes of others and leaving them with less to spend on other goods and services. The regulatory arms race between multinational companies and states seeking to raise revenue is also distracting. It is distracting the corporations from focusing on productivity and creativity, and one wonders what marvels or products might have been created if multi- nationals had put the effort they put into avoiding tax into developing new ideas, services and products.
Tax avoidance does not benefit our economy in the long term; that can only come through making our economy more productive and more efficient. We need to encourage businesses to focus on the real economy rather than on trying to enhance their profitability by avoiding taxation.
The sheer mechanics of the situation make it clear that action purely from the Government is unlikely to be the solution to the problem. There are hundreds of thousands of multinational companies, and only a handful of tax regimes capable of monitoring their information. It is always a game of catch-up, and while reforming tax codes and greater enforcement may help, they will not reach the nub of the problem. That is why I believe that we need to focus on the culture in international business, on the structure of these businesses and the codes of conduct they abide by. Fundamentally, businesses are staffed by people, and if we put in place the right frameworks, I believe that we can appeal to the better angels of their nature. This is the only long-term solution.
I am realistic, however, and I appreciate that there will always be corporations that are unwilling to contribute to the public good and wish to shirk their responsibilities. That is why I am pleased that Her Majesty’s Revenue and Customs has been given additional resources in order to clamp down on tax evasion, but HMRC also needs to be more robust in the way it holds these companies to account.
Katy Clark (North Ayrshire and Arran) (Lab)
Will the hon. Gentleman give way?
Chris White
I would like to, but if the hon. Lady does not mind, we are very short of time.
These companies need to be held to account and we need to feel free to investigate fully the accounts of any company that we suspect might be seeking to avoid paying taxation. This highlights another issue, one that is close to my heart and to that of many colleagues— the future of our independent retailers. Warwick and Leamington is full of many excellent independent businesses, which give our community its distinctive character, and not only provide incomes for the owners, but hire local residents and often give young people the chance to get their first experience of work.
Times change, and I do not think any of us would support or even want a situation where multinational companies were prevented from entering the workplace, but I think we all recognise the need for a mixed economy. We need independent, smaller businesses and large multinational companies working together. We need to recognise that in the 21st century, the idea of the capitalist as some profit-making machine, uncaring or unthinking about the effects of its business on wider society is completely outdated. For the most part, I believe that businesses recognise that.
International progress is essential, and the Prime Minister should be applauded for his efforts at the G8 last week and the agreement that he secured. Britain cannot take unilateral action without significantly damaging our economic position, and while changes such as the general anti-abuse rule are welcome, real progress will only come from companies themselves.
A model that we need to look at more closely is that of social enterprises, but a successful 21st century global economy needs to be one that combines equity with entrepreneurship; principles with profit; responsibility with reward. We are taking the first steps forwards by talking about this issue, but I hope that we can move towards action in the years to come.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I remind Members that there is a four-minute limit on speeches.
Margaret Hodge (Barking) (Lab)
I congratulate the hon. Member for Warwick and Leamington (Chris White) on securing the debate and on his contribution, with which I totally agree, and I congratulate my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) on supporting him.
The vexed question of multinational companies and their failure to pay a fair share of corporation tax on the profits they secure from the activities they undertake in this country has struck an incredibly powerful chord with the British public. If we take the Amazon example, we find that in 2012 it had sales of £4 billion in the UK, yet it paid only £2.4 million in corporation tax, and then took £2.5 million in grants from the UK Government. That is simply unacceptable.
In this climate, people are finding it tough to manage their daily income, there are public expenditure cuts and small businesses feel hounded by HMRC, so I can well understand why there is huge anger at the behaviour of multinational companies that seek so aggressively to avoid paying their tax. I am particularly cross about the argument, which so many of them put forward, that because they pay other taxes they can decide voluntarily whether to pay corporation tax. We all pay our council tax, VAT and income tax; they pay business rates and employer contributions, and should also pay their corporation tax.
I know the Minister is concerned that if we tread too heavily on companies they may seek to relocate elsewhere, but I draw to his attention the remarks of Eric Schmidt, the chief executive of Google, who said that whatever we decide to do, his company would remain here, because this is too important a market for it not to do so. I also draw the Minister’s attention to the fact that feelings are so strong on this issue that we should not, in an attempt to keep multinational corporations here, allow them to blackmail us. Such corporations will stay because of the market: they come here because we are outside the euro and have a strong financial services sector, not because our corporation tax regime treats them gently.
We must toughen up HMRC. It is unacceptable that there has not been one case challenging an internet company on whether it pays a fair share of corporation tax here. I am not convinced that such companies are acting within the law, and until we challenge them we will not know whether I and the members of my Committee, who I think feel the same as I do on the evidence we have received, are right or wrong. Greater transparency is needed. Gone is the age when one could hide behind taxpayer confidentiality; proper information should be given to the public, whether it is a matter of opening up the books of the FTSE top 100 companies, or more naming and shaming of people for tax avoidance.
We should be tougher on public procurement. I welcomed the initiative, but its practical effect is much weaker than the original intent. We must simplify our tax code—six people working on that is not enough. In a climate in which multinationals value their reputation, they see themselves in our market over the longer term, and they, too—
Charlie Elphicke (Dover) (Con)
It is a pleasure to speak in the debate, and I congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing it.
Hard-working families want a better life for themselves and their children. They go out each day, work hard, strive, and pay their taxes. They face increasing costs in some areas of their lives, particularly in rising household bills for gas, electricity and water. The average family have seen their annual household bills rise by £384 since 2010.
I am concerned about whether utility companies are paying the appropriate amount of tax. I have done a study of nine water companies, which, collectively, have a turnover of £28 billion and operating profits of £10 billion a year, yet they paid just £541 million in tax, an effective tax rate of 5%, which goes down to about 3% if we take into account those who have been declaring tax losses.
I have looked at two electricity companies, EDF and RWE npower, which have a collective total turnover of £25.6 billion and operating profits of £1.7 billion, yet they paid no tax whatever. It cannot all be explained by capital allowances. Foreign-owned utilities, particularly in the water industry, have been engaging in schemes using debt interest to avoid tax, which, on my calculations, have resulted in a loss to the Exchequer of about £1 billion over the last three years.
Let us take the example of Southern Water, which covers the area I represent. Over the three most recent years for which figures are available, it generated more than £2 billion in turnover, operating profits of £767 million and paid a net tax charge of £45.9 million. That is an effective tax rate of 6%. Yorkshire Water, over the last three years, generated £2.6 billion in turnover, operating profits of £990 million, and yet received a net tax credit of £46.2 million. Anglian Water, over the last three available years, generated £3.3 billion in turnover, operating profits of £1.4 billion and paid a net tax charge of just £124.7 million. That is an effective tax rate of 8.9%.
What concerns me particularly is that those companies have been abusing the interest deduction system. Over the last three years, Southern Water made some £481.6 million of net interest and interest-related payments to the multinational owners of group companies overseas. According to my calculations, the tax forgone is a potential £125 million for the Exchequer. Yorkshire Water, which is especially egregious in this respect, made £548.5 of net interest and interest-related payments to group companies. According to my calculations, the tax forgone is £142 million. Anglian Water made £365 million of net interest and interest-related payments to group companies over the three most recent years for which figures are available. According to my calculations, the tax forgone is some £95 million.
Over the three most recent years for which figures are available, EDF, which is owned by the French Government, made £268.4 million of interest payments to group companies. According to my calculations, the tax forgone is potentially £70 million, if we assume a corporation tax rate of about the average, 26%. Npower made £58 million of interest payments to group companies. According to my calculations, the tax forgone is £93 million.
I am calling on the regulators to examine the position and to say that if the water companies, in particular, are receiving too high a return in total, they should either be subject to a windfall tax or reduce customers’ bills. Tax-avoiding water companies, and other utility companies, should be made to give a rebate to hard-pressed customers who have faced increased bills in recent years. I hope that Ministers will consider the options available to them. In any event, tax law should be changed so that interest is no longer favoured over equity. Specifically, interest payments from one group company to another should not be tax-deductible.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
I saw this somewhat curtailed debate as an important opportunity for other Back Benchers to add more power to the elbow of the Public Accounts Committee, chaired so forcefully by my right hon. Friend the Member for Barking (Margaret Hodge). The Committee has shone a powerful spotlight not only on multinational tax dodgers but, importantly, on the timidity of HMRC. I shall return to the subject of HMRC’s mindset a little later.
Controversy over profit-shifting is hardly new—it has rumbled on for years—but, with the G8 only just over, it is easy to forget that it is only a little over 12 months since the issue finally gained enough traction to be given a place on the national agenda. I think that the reasons for that are clear: it has happened because since the banking crash and the recession Treasury coffers are bare, because of the sheer cumulative scale of the avoidance, because of the sheer size of the deposits held by United States multinationals offshore—at the last count, $83 billion was held offshore by Apple, the biggest of them all—and because the companies themselves are so brazen. Eric Schmidt of Google said that he was proud of what the company had done. He said:
“It’s called capitalism. We are proudly capitalistic.”
This year, Apple put its money where its mouth was silent. In May, in the world’s biggest corporate bond issue, it raised $17 billion in the United States. Given the comfort of its offshore cash pile, it will pay even less tax, because the interest is tax-deductible.
It is cheaper to borrow than to pay tax in those companies’ universe. They are perhaps not so much “immoral”, as they were memorably described by my right hon. Friend the Member for Barking (Margaret Hodge), as entirely amoral. However, HMRC is so meek that legislators would not have the necessary ammunition without investigative journalists and campaigners prying into the shadows. It was a close friend and former colleague of mine, Ian Griffiths, who combed Amazon’s accounts in Luxembourg and the United States last year. “A great deal for Amazon: £7 billion sales, no UK corporation tax” was the headline on the front page of The Guardian. In February last year, Simon Duke wrote an in-depth piece in The Sunday Times about Facebook entitled “The Anti-Social Network”. He tracked the way in which the social website had deliberately organised the avoidance of millions in tax, routeing revenues through Dublin à la Google. A series of exposés followed on different companies—“the untaxables”, as the newspaper called them—and kept up the pressure.
The third journalistic push came from Reuters, an organisation for which I once worked as a journalist. Following his investigation of Starbucks, Tom Bergin revealed that rather than reducing sales booked in the United Kingdom, like Google and Amazon, it loaded its United Kingdom operation with so many costs that little or no UK profit was apparently made. Two campaigners have also been at the forefront of these investigations: Richard Brooks, a former tax inspector, and Richard Murphy, an accountant and founder of the Tax Justice Network. I urge the people at HMRC to read their recent books closely, as I entirely agree with the PAC report of last year that criticised the mindset of HMRC in not being more assertive in pursuing multinational tax avoidance.
We have heard about how absurd it is for HMRC to accept the way that Amazon does business; that flies in the face of common sense. Despite the scale of its operations here, its overseas Luxembourg subsidiary is not classed as having a permanent establishment. It is important that the OECD changes the rules as they are outdated, but we should not let our attention simply be deflected internationally as there are plenty of things we can do here. There is plenty that HMRC can do. To see that only takes an examination of its rule book, and the double tax treaty with Luxembourg, and the test it applies. With the tools at its disposal, it can push harder here and now, to pursue this issue and raise billions of pounds for the hard-pressed coffers of the Treasury.
Ian Swales (Redcar) (LD)
I welcome the moves the Government have been making, but there is still a lot more to do. For example, Vodafone declares a profit of £2.5 billion in Luxembourg, where it has no business. It is incredibly easy for companies to export UK profits to their country of choice. Luxembourg is often the country of choice. It is used by Vodafone, Tesco, Pearson, the Daily Express group and many others.
In fact, it is becoming almost compulsory to do this. Low-risk, profitable businesses, such as utilities, have to do it, otherwise they will be taken over, as most of them have been. That applies to trade takeovers too, such as those involving Boots and Cadbury. Under the system here in the UK, it is almost impossible to be a long-term profitable company without doing this kind of activity.
UK profits are exported. That is a key item in the business case for takeovers, and now we have also got the internet making all this even simpler. As many companies have shown, companies can build up a huge business in a country, apparently without being there. A little quoted part of HMRC’s own rules—I have not got time to read it out now—says it should be going after these companies. It does not apply its own rules, so I urge it to start getting tough and the OECD to start driving home the simple principle that if a company sells in a country, it must account for that there and owe taxes there. Until then everyone will be climbing on the bandwagon—or should I say the Trainline, which now apparently routes its ticket sales through Luxembourg?
I firmly believe the key reason for flat UK growth is that so much of our UK economic activity is no longer counted here. Has productivity really fallen so much that 1 million extra people are producing no extra output, or is that because, for example, Amazon, one of our fastest-growing businesses, is not actually here, and is therefore saving vast amounts of tax?
It is time for Brussels to deal with the cuckoos in the EU nest. Ireland, Luxembourg and the Netherlands have arrangements that routinely enable tax avoidance. I am sure the free movement of capital was never meant to mean the free removal of taxes. International work is vital. For example, are the Government dealing with scams used by banks? They can create instruments that are traded between countries with different tax regimes, and with a bit of fancy footwork create a net tax reduction manufactured out of thin air.
I welcome the moves to greater transparency, but there is a long way to go. I recommend the recent Private Eye article, “Where there’s muck, there’s brass plates”, which has highlighted that over 11,000 UK limited liability partnerships have been set up since that was enabled by the last Government and they are now one of the corporate vehicles of choice for the world’s money launderers and tax avoiders. They provide a magic mix of UK respectability and absolutely no transparency or scrutiny. Action is needed.
The Government obviously work regularly with advisers on tax matters, but who are they? They are top finance directors, who will almost certainly be engaged in tax avoidance, and big four tax partners who make a very juicy living from advising on how to avoid tax. I recommend that the Government add people who are involved in tax campaigning, as well as campaigning journalists, global poverty campaigners and other experts who do not have a vested interest in tax avoidance and who can see how toxic the current system is.
In a speech in January I went into more detail about the solutions. Today, I will just make one recommendation. It is time to cap the allowable offshore royalty and interest payments, possibly by only allowing a double taxation relief—in other words people only get tax relief on interest if they have paid tax on it somewhere else. Secondly, we should set up new systems to police our national borders—
Nick Smith (Blaenau Gwent) (Lab)
In the past 15 years, the world of e-commerce has become a fundamental part of our lives. It has shaped the way companies do business, how money is handled and many of our shopping habits, but it has also changed the nature of business on a global scale and therefore our ability to levy a fair level of taxation has fallen behind.
In my work with the Public Accounts Committee, I have seen the massive rewards for e-commerce leaders. As has been pointed out, Amazon alone made £4.3 billion of sales last year in the UK, yet by running its sales through Luxembourg it paid a meagre £2.4 million tax bill in 2012. That is less than one tenth of 1% of sales and that is just not good enough.
It would be remiss to ignore the thousands of jobs that such companies have created, but when our grants to those companies outpace the returns in tax, questions must be asked. In Wales alone, the Welsh Government have thrown millions at Amazon to bring it to Swansea. An £8.8 million regional selective assistance grant was given to bring the company into the city, while a £3 million link road entitled “Amazon way” finished construction late last year. So, we have a regional Government supporting regeneration and jobs, but the money from the Treasury used to fund that growth is not being recovered.
The Public Accounts Committee, of which I am a member, concluded that Her Majesty’s Revenue and Customs needs real teeth to be able to challenge the artificial nature of how businesses set up to avoid tax, as well as to be able to push against antiquated international tax laws. It is time for the Government to get a grip on tax avoidance.
E-commerce will increase as our appetite for doing our business online grows exponentially. Perhaps when he sums up, the Minister will reflect on examples such as the double benefit gained by Amazon thanks to the incentives it has received to set up in Wales and other places while we still suffer the loss of corporation tax revenue. I know the companies pay local rates and national insurance and have employees who pay tax too, but that does not excuse the times when they trouser our support and avoid corporation tax. Will the Government review the company support criteria in such cases? If companies like Amazon are not going to deliver, perhaps it is time that we all had a refund.
Katy Clark (North Ayrshire and Arran) (Lab)
I strongly welcome the cross-party will among Back Benchers to bring this incredibly important issue to the House.
The estimates of how much is lost to the British economy through tax avoidance in its many forms go up to in the region of £120 billion. Lots of people have different figures, but there is no doubt that if we could get on top of the issue—not of tax evasion, when people illegally do not pay their taxes, but of tax avoidance—many of our other debates in this House about the deficit and so on would be skewered. We face a major challenge, as over decades we have reached a situation in which we do not collect the taxes we need to pay for the services we want to provide in the communities we represent. We need to reach some sort of solution so that we can collect those taxes.
It is interesting that in this Back-Bench debate we have heard people from different political parties speaking with one voice. One of the problems in the debate is that for a long time the leaderships of the parties have not had the political courage to take on the multinationals. If we reflect on the speeches we have heard today and read Hansard tomorrow, we will see that it is notable that these companies are household names. They are not the kinds of companies that would move out of Britain. To suggest that Starbucks, Amazon, Vodafone, npower, Google or HSBC will pack up their bags, move away and stop making profits out of our constituents is ludicrous. The reality is not that progress will be made only by the companies themselves. Yes, we need to change the culture in companies. Yes, we need to name and shame. But as politicians we have to change the rules of the debate. That means changes in law so that we are far tougher on those who avoid taxes but also tackle those who evade taxes.
Paul Farrelly
Does my hon. Friend agree that we should use our influence within the European Union to, as the hon. Member for Redcar (Ian Swales) said, sort out the cuckoos in the nest who provide effective tax havens? Will she join me in congratulating Senator Philippe Marini, president of the French Senate finance committee, who has been in the vanguard in Europe of pressing for concerted European action?
Katy Clark
I congratulate all those who are working to get international agreements to tackle this problem, including the British Government.
The reality is that we also have to look at what we are doing here and now. Since 2005, we have lost 37,000 jobs in HMRC. We expect to lose another 10,000 tax inspectors by 2015. No doubt the Government will come back and say that there are slight increases in the numbers of staff in specialist and criminal investigations, but they are only one part of the team that looks at all these issues. We have to highlight clearly the use of tax havens by FTSE companies—98 out of the top 100 use them. We have to say that roughly one in five of the world’s tax havens are the responsibility of the UK and that the use of those tax havens is estimated to cost the UK £18.5 billion a year. These issues need to be tackled internationally, but we have a lot to do at home.
We need to build a consensus in all political parties that we need tax laws which ensure that multinationals pay their due in this country. Unless we do that, a lot of the other debates in this place, whether on legal aid or how we fund hospitals or education, are nonsense. We need the money to go forward. Perhaps one of the things that comes out of this financial crisis will be a recognition that all parts of society must make their contribution. Some of the companies that we have been talking about today should be at the top of the list for ensuring that we all pay our way.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Let me begin by commending the hon. Member for Warwick and Leamington (Chris White) for securing this Backbench Business Committee debate, ably supported by my hon. Friends the Members for Newcastle-under-Lyme (Paul Farrelly) and for Paisley and Renfrewshire North (Jim Sheridan).
Once again, we find ourselves discussing the challenge of corporate taxation—an issue which increasingly agitates not just businesses up and down the country but members of the public. The mood could not really be better exemplified than by the constituents of the hon. Member for Warwick and Leamington, who run the independent bookshop Warwick Books. As the hon. Gentleman outlined, Francis and Keith Smith achieved quite a remarkable feat by gathering 170,000 signatures for their petition calling on a certain online bookseller to pay its fair share of corporate tax. They highlighted the fact that last year the company made £3.3 billion of sales in the UK, yet it is not registered to pay corporation tax here.
The hon. Gentleman’s constituents and I have something in common in that we both studied at Northumbria university. I also understand that one of them once worked at Fenwick’s, which is a great Newcastle department store. So it is enough to convince me of their pedigree.
We have had a thoughtful and productive debate, with excellent contributions from both sides of the Chamber. All hon. Members have noted the cross-party agreement, certainly on the problem and the diagnosis, if not necessarily on the cure. I commend my right hon. Friend the Member for Barking (Margaret Hodge) for her contribution, for her powerful chairing of the Public Accounts Committee, and for the work it has done, and I commend all the members of the Committee who have raised this issue in the eyes of the public.
At the beginning of this year, my right hon. Friends the Leader of the Opposition and the shadow Chancellor laid down a challenge to the Government to end the era of tax secrecy and to use the G8 presidency to do that, both by showing international leadership and by taking action here at home. I think we all agree that sometimes there are good reasons why companies pay little, reduced or even no tax: some firms are investing large sums in research and development, assets and infrastructure, and where that is done for genuine commercial reasons and not simply to minimise their tax liability, it is to be welcomed and has to be acknowledged in the tax system. However, as I have said previously in this Chamber, something has gone very wrong in the system when a large multinational company can make £1.2 billion-worth of sales in this country and describe itself to investors as profitable, yet report no UK tax liability.
It is not only UK taxpayers who pay the price of such profits shifting, although the loss to the Exchequer is significant, and my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) powerfully argued the case for why this is so important to the UK Exchequer. Such behaviour totally undermines the notion of a level commercial playing field by putting at a serious disadvantage responsible firms that pay their fair share of tax on profits generated in this country, as well as employ thousands of people here and pay all the associated taxes. There are those who believe that the problem is just too difficult, too complicated, too entrenched to tackle, and I suspect that that is what some people—especially those who are involved in that sort of activity—would like us to think, but we believe that there are measures that the Government could and should be instigating right now to end the era of tax secrecy and move us toward the greater transparency that is so desperately required if we are to rebuild confidence in our tax system.
To give him his due, the Prime Minister committed to putting tax avoidance at the top of the G8 agenda when world leaders met in Northern Ireland last week, and many people—including several million campaigners for tax transparency—had high hopes for what could be achieved through the UK presidency of the G8. Ahead of the summit, we called on the UK to push for an internationally agreed system of country-by-country reporting in which multinational corporations, regardless of sector, would be required to publish a simple statement of the amount of tax they pay. We believe that that information should incorporate multinational revenues, profits and taxes paid in every country in which they operate, and include the key pieces of information that enable people, whether they are experts or not, properly to assess the amount of tax they pay. That would also benefit British consumers by enabling them to make informed choices about the companies they buy from. The G8 leaders’ communiqué stated:
“We call on the OECD to develop a common template for country-by-country reporting to tax authorities by major multinational enterprises, taking account of concerns regarding non-cooperative jurisdictions.”
That is a serious step in the right direction, but we need to see far more detail and we need to see it soon.
Today, we have heard about various tricks used by multinationals to minimise or avoid their tax liability in this country—for example, shifting profits and using complex corporate tax structures. It is increasingly clear that we have failed to keep pace with the changes, and my hon. Friend the Member for North Ayrshire and Arran talked about the resources HMRC needs to tackle the problem. We need progress on transparency if we are to put a stop to multinational and global companies hiding behind an unacceptable veil of secrecy about their tax.
The Exchequer Secretary to the Treasury (Mr David Gauke)
We have had a short but useful debate. I congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing it and thank the Backbench Business Committee for granting it.
Rightly, this issue has received much greater scrutiny in recent months. The public anger is understandable and not surprising, given that difficult decisions are being made on the public finances and the vast majority of people pay the taxes they owe, and the perception is that some companies are not contributing their fair share or complying with the law.
We should say at the outset, and the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) was right to say, that there can be occasions where it is entirely legitimate for a company not to be paying corporation tax if it is making use of reliefs or capital allowances in the way that Parliament intended. It is also the case—there can be confusion about this—that corporation tax is a tax on profits, not a tax on sales. It is also worth remembering that we do collect significant sums of corporation tax from large businesses. But where the public’s concerns are justified, where there is avoidance, by which I mean contrived and artificial behaviour contrary to Parliament’s intention, that is a very serious matter and it is right that we take action.
There is an issue of administration. The point has been raised about HMRC’s effectiveness in dealing with tax avoidance by large businesses. I should explain that HMRC works, with regard to large businesses, by putting in place CRMs—customer relationship managers. Their role is essentially to man-mark the most complex and high-risk taxpayers. In recent years that approach has proved to be effective in getting money in. HMRC secured £8 billion of additional compliance yield from large businesses in 2012-13, and more than £23 billion in the past three years. It is an approach that has been endorsed by the OECD. One of the difficulties that HMRC has is that it is bound by taxpayer confidentiality. It cannot give a running commentary to this House on the action that it takes, but the numbers demonstrate that HMRC is effective in getting money in.
Margaret Hodge
Why has HMRC not taken one case against any internet company?
Mr Gauke
Neither the right hon. Lady nor I know what action HMRC has taken with regard to individual companies. What we do know is that it has got billions of pounds in additional yield as a consequence of the action that it takes with large businesses as a whole. With reference to HMRC’s performance across the board, additional yield is being achieved year after year, and this Government have provided resources to increase the yield on evasion and avoidance.
One other constraint on HMRC is that it can collect only the tax that is due under the law, and there is an issue here because very often the law that applies to large businesses encompasses international law, OECD arrangements and what is set out in double taxation agreements. The point was raised about the definition of “permanent establishment”. That is set out not just in domestic legislation, but in international law. We have led the way in encouraging the OECD to look at what needs to be done to improve the international situation, to make sure that the base erosion and profit-shifting work can ensure that the tax rules are all up to date for the internet world.
We have had a very short debate, and in this very short speech and the time available to me I cannot do justice to all the points that were raised. Let me say in conclusion that HMRC has robust methods in place to ensure that tax compliance by the biggest businesses occurs, and the numbers support that. We have used our international position to make sure that there is progress in bringing international tax law up to date to reflect the current position. We have a Government who are committed to ensuring that large corporates pay the tax that is due.
Chris White
This has been a brief debate, but it was still an important one. I thank all Members who have taken part for the crucial points they made. More importantly, I hope that the debate was watched outside the Chamber by the companies that have been referred to and that they take the necessary responsibility to ensure that some of these things are put right. I applaud the Minister’s comments. The Government are moving in the right direction, but I think that this is still a work in progress.
Question put and agreed to.
Resolved,
That this House has considered the matter of multinational companies and UK corporation tax.
Anti-social behaviour on Cato Street (London)
Mark Field (Cities of London and Westminster) (Con)
It is a pleasure to present this petition on behalf of Mr Mark Gregory, managing director of PHA Media of Wardour street, and 156 other London residents.
The petition states:
The Petition of a resident of the UK,
Declares that the Petitioner believes that actions of individuals who are sleeping, sheltering, littering and defecating on Cato Street, London, are unacceptable and detrimental to the local businesses and residences. The Petitioner therefore requests that the House of Commons urges the Cities of London and Westminster local authority to resolve this issue and remove those individuals from Cato Street and surrounding areas.
And your Petitioner, as in duty bound, will ever pray.
[P001190]
Reserve Service Personnel
(11 years, 5 months ago)
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Nadine Dorries (Mid Bedfordshire) (Con)
I think that everybody in the House, particularly MPs, and indeed everybody in the country, is very aware of the work undertaken and the sacrifices made by those who serve in our reserve forces. In many cases, the job of the reservists is no different from that of the regular forces. Their family life is disrupted in the same way and they suffer the same strains and stresses. They go out and fulfil the same role.
There are two military bases in my constituency: Chicksands, the Army intelligence base, and RAF Henlow. Many of the staff who serve on those bases, as well as the soldiers and RAF personnel, send their children to school in Bedfordshire and, because they are there for quite a while, I am in the fortunate position of having many of them stay in the constituency and become reservists. A number of cases involving those reservists have come to my attention over the past few months.
I am often intrigued by the way we honour our armed forces and our soldiers, who do a fantastic job. The Royal Anglian Regiment is based as Chicksands. I will always remember a story I was told—I think the Minister was with me at the time—when the Royal Anglians came back from Iraq and presented to us on the work they had undertaken there. Some of the soldiers who were there that day are now living in Bedfordshire and serving as reservists. They were telling us about the respect the public show them when they come back from a tour of duty. They had just come back from Washington DC, where they had been making a similar presentation. They had stopped at an American diner to eat. When the soldier—the one who presented to us that day—went up to pay for the meal, the young girl at the checkout said, “You don’t need to pay, Sir. Your meal has already been paid for.” When he asked who had paid for it, she nodded to the window. Reversing out of a lorry bay was a lorry driver. She explained to our soldiers that the driver had just wanted to say thank you for the sacrifice they make on their behalf. I was incredibly touched by that story, particularly as I was told it by soldiers in our own regiment in Bedfordshire.
It is a huge honour the way UK citizens will wait for returning soldiers who have lost their lives in Afghanistan. They stand in the rain and the cold to honour those returning soldiers. It is therefore hugely dismaying for me to hear from reservists in my surgery who sit and give examples of employers who perhaps do not pay them the respect they deserve for the sacrifice they make.
I know that the military go a huge way towards providing for reservists all the assistance and benefits that regular soldiers in the Army receive. However, I have heard examples of things that have happened over the past year, the most recent of which made me call this debate. When reservists who served at the Olympics last year got back to their full-time employment, they discovered that they had lost their holiday entitlement and holiday pay. Some might say, “Well, they were only at the Olympics—it wasn’t a tour of Afghanistan”, but they were still protecting our safety and looking after us. If there had been a terrorist attack, they would have been in the front line and their lives would have been at risk. I found that attitude quite depressing.
We have legislation that enables employers to make allowances should they employ those who wish to risk their lives on our behalf, for our freedom and our safety, in order that they do not suffer as a result of doing so. I recently heard about the case of a soldier who had been on a tour of Afghanistan and on his return went straight back to work. Again, I heard the same story: he had lost his holiday pay and holiday entitlement. The legislation says that when reserve forces personnel return from a deployment they must be taken back
“on terms and conditions not less favourable to him than those which would have been applicable to him in that occupation had he not entered on such service.”
I know that the Minister is going to say that a White Paper is coming up shortly. That is indeed the reason I called this debate. I wanted to use it to highlight the position in which reservists who have been in the regular forces, and who have settled in Mid Bedfordshire and are now my constituents, find themselves. I do not believe that their situation is unique as it is probably occurring with employers not only in Mid Bedfordshire but nationwide. I would like the Minister to be aware of this problem, so I highlight it at time when he will be preparing the White Paper. The wording of the legislation needs to be tightened and secured to provide reservists with much greater protections than they have now. He will probably say that it is already quite tight, and I agree that one would think that there were no loopholes that employers could use, but I am afraid that they are doing that, and that is what we need to protect against.
There needs to be an effective means of challenging decisions made by employers should a reservist feel that he is being unfairly treated when he comes back from a tour of duty, whatever or wherever it may have been. At the moment, it is a situation that arises between the reservist and his employer. We need to widen that out and find a mechanism for an appeals process through which a reservist can challenge his employer without fear of losing his job.
At the moment, non-British companies operating in the UK are free from our law. The White Paper needs to explore how to find a way of ensuring that non-British companies comply with the legislation that we have to protect our reservists. It appears that non-British companies may be the worst offenders. We need to find a means by which we can name and shame companies that do not do their best for our forces or treat them in the way that we would like them to be treated. There is a huge gap between the respect shown towards our serving personnel by the lorry driver in the States and the way that some companies treat them in the UK.
A few people have said to me, “How do you expect a small business to be able to cope with taking on a reservist who may be going to disappear for a few months at a time?” There is provision to enable employers to do that without being inconvenienced in any great way. That provision enables the reservist to go and fight for his country. Surely the employer should be grateful that that person is fighting for the freedom of businesses to operate in the UK. It is therefore a double-edged sword. The employer should show the same respect that the lorry driver showed.
The last Government left a huge, multi-billion-pound black hole in the finances of the Ministry of Defence. The Secretary of State and his Ministers, while fending off demands from the Treasury for ever more spending cuts, have done their bit to recognise the contribution of reserve forces and personnel. Indeed, they will be relying on them more, because one of the realities of the cutbacks is that the reserve forces will increasingly be called to the front line and into more dangerous situations. That is one of the main reasons why the legislation needs to be tightened. The difference between serving in the reserve forces and the regular forces is becoming narrower as we rely more on our reserves.
I know that the Minister has been a reservist. He has told me some fascinating stories about his time as a reservist, none of which I can repeat here today, unfortunately. I wish I could, but they would be struck from Hansard in a flash. This is not blackmail, I hasten to add. I am not saying that I have something over the Minister. However, I hope that he will hear the plea from my constituents and all reservists across the country; that he will consider in the White Paper how the employment rights of British nationals who are employed in the UK by foreign companies can be protected and secured; and that he will consider tightening the wording in the legislation so that our reservists are not disadvantaged once they have completed a tour of duty. That is fundamental.
The White Paper is coming, so the Minister has a fantastic opportunity to do his best for his colleagues who do the job that he once did. I know that he will take up this challenge enthusiastically and do his best.
The Minister of State, Ministry of Defence (Mr Mark Francois)
I congratulate my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) on securing this debate on the terms of employment for reserve service personnel. It is timely in two respects. First, it relates to the White Paper that we will publish shortly. Secondly, we are in the run-up to Armed Forces day 2013 this Saturday, when the country will rightly pay tribute to our personnel, regular and reserve, the families who support them and our veterans.
I am delighted to see my hon. Friend in her place. To draw a military analogy, she got slightly waylaid on a jungle training exercise, but I am pleased to say that she has successfully rejoined her unit. I would like to make some general points about our reserve forces before addressing at least some of the issues that she raised in relation to her constituent.
Before I go any further, I should declare an interest or, given the circumstances, confirm one. I served in the Territorial Army as an infantry officer in the 1980s. I was a Royal Anglian—a regiment that proudly recruits from Bedfordshire as well as from my county of Essex. It is therefore quite possible that some of her constituents serve in its ranks. I served in the cold war, when we planned, in essence, for world war three. Fortunately, that nightmare never came to pass, so I was never mobilised for operations, I was never shot at with live ammunition, other than in training, and I bear no medals. However, I still proudly carry the Queen’s commission, which hangs on my wall at home. I have worn the uniform and I understand the ethos.
In truth, however, the role of the reserves has changed markedly since I served among them. Since 2003, there have been more than 25,000 reservist mobilisations for operations to fight alongside their regular counterparts, and 30 have paid the ultimate price for their country. I take this opportunity to acknowledge the tremendous contribution our reserves make to the defence and security of our nation, echoing the exact sentiments of my hon. Friend. Reserves have always played an essential role in our armed forces, and their dedication, professionalism and contribution have been vital to achieving success.
My hon. Friend will be familiar with the background to our new policy for reserves. The 2010 strategic defence and security review described the role of the reserve forces as part of our future, highly capable armed forces. As an integral part of this future force, we are growing the reserves to provide additional capacity, as well providing certain specialists—for example, medical personnel or cyber experts—whom it would not be practical or cost-effective to maintain as part of our regular capability. Seeing the very close relationship between my hon. Friend and her BlackBerry, she is indeed a cyber expert.
The changes we are making are substantial. They are about delivering defence differently from in the past. We are taking an approach that envisages military capability being delivered through a whole force comprising regulars, reservists, contractors and civil servants. This is already happening in Afghanistan today. For example, the Army is reorganising into an integrated force of 112,000 trained regulars and reservists that is able to meet the security challenges of the future. This construct, mirrored by the Royal Navy and the Royal Air Force, allows us better to harness the talent the country has to offer. This approach will deliver the Ministry of Defence’s contribution to national security in a cost-effective way that makes the best use of the resources available.
We need to develop the reserve component of the force. The 2011 independent commission on the reserve forces found at that time that the reserves were in decline, particularly in the Army, and needed to be brought up to date to meet the challenges of the new security environment. The key recommendations of the independent commission’s report were to stabilise the reserve numbers and increase the trained reserve strength; to provide the reserve forces with better and defined roles; to offer the right mix of interesting and challenging activities, with appropriate recognition and reward to attract and retain individuals in the reserve forces; to provide greater ease of mobilisation, better employee protection and greater recognition of employers; and to increase investment in the reserve forces.
In responding to the report last July, my right hon. Friend the Secretary of State for Defence announced a £1.8 billion investment programme in the reserves over the next 10 years. That is significant. There have been reviews of the reserves in the recent past that have led to comparatively little change. This review is different: it will deliver. It is supported by additional funding, by the requirement to deliver that is created by dependence of the Future Force on the reserves, and by the will, throughout Defence, to ensure that it succeeds. The commitment to deliver was reinforced by the publication in November last year of the Green Paper, “Future Reserves 2020: Delivering the Nation’s Security Together”. This set out our proposals to enable Defence to build and sustain over time the changes recommended in the independent commission’s report, and to ensure that we are able to deliver a reserve force that will meet the needs of the future whole force concept.
Following the publication of the Green Paper, we launched a consultation exercise, which has proved invaluable. We received more than 2,500 responses from reservists, employers, employer organisations, regulars and members of the public. In addition, some 50 consultation events were held with employers, reservists and their families. These responses were generally supportive of our proposals for the future of the reserves, and recognised that the future proposition requires the development of new relationships between Defence and reservists—and their families and employers—that will be crucial to achieving our goals. As someone who has commanded TA soldiers, albeit in the last century, may I just say that the relationship with families is also very important? There is an old saying in the Army, “Recruit the soldier, retain the family.” We need to ensure that families are supportive of our reservists, too. In order to retain the support of families, we need to get greater support from employers and, indeed, from society as a whole. They also serve who sit at home and wait.
Nadine Dorries
The Minister makes a fantastic point. It is the families who suffer when employers take away the holiday entitlement from reservists when they return. The children suffer as they do not get to spend time with their father or mother when they return from this very stressful situation. The stress factor is involved here, because when someone is returning from a tour of duty, they need that time off and that down time with their families to re-stabilise themselves—to step away from where they have been and back into the real world. So removing their holiday entitlement has another effect, as it prevents that process from taking place.
Mr Francois
My hon. Friend makes a very pertinent point. Holiday is important to the families as well as to the servicemen themselves. Of course, it is important to the children, where that is applicable. The ability to have leave, particularly when returning from operations, is very important. We understand that in the Ministry of Defence, and I hope, at least in general terms, to address that point as it relates to her constituent in a moment or two.
Given all the things I have been talking about, we have done considerable work with employers, and much of the consultation focused on them. We recognise that reserve service will affect different employers in different ways, according to their size and sector. We seek to develop relationships that are tailored to reflect that— relationships that are open, practicable and based on mutual benefit. I have had productive discussions with the British Chambers of Commerce, the Business Services Association, the CBI, the Federation of Small Businesses and the Institute of Directors to try to ensure that we achieve that. I hope that the fruits of some of those discussions will be reflected shortly in the White Paper.
Given all that, I was concerned to hear about the case of my hon. Friend’s constituent, and I shall explain the MOD’s policy as I believe it would apply in a case such as this. I understand that her constituent was mobilised into service as part of the deployment for Operation Olympics. I, too, pay tribute to all those service personnel, both regular and reserve, who, in many cases at very short notice, were mobilised to ensure the security of those wonderfully successful games. At the end of that service, a reservist would be entitled to a period of paid leave. For each month that they are mobilised they get about two or just over two days’ paid leave. In this particular case, her constituent might have been entitled to about eight days’ paid leave from the Ministry of Defence in view of having been mobilised for several months—it was both before and after the games. So the normal procedure would be for the leave to be taken at the end of the operation—in effect, it would be post-operation tour leave, to be paid for by the MOD.
In this case, without being familiar with all the detail, it sounds like my hon. Friend’s constituent took that post-operation tour leave of about eight days, and the employer then decided in effect to “net that off” and take it off her constituent’s leave from the company. It might be that the employer went slightly beyond that—we would need to know more details—but the reservist would still have had broadly the same amount of leave. One could take the view, however, that perhaps the employer should have been more generous, given the service that had been rendered, and should not have “netted off” the additional holiday. As I understand it, nothing in current legislation prevents the employer from doing that, but one could take the view that the employer should have been slightly more generous.
Notwithstanding that issue, we need to re-set the relationships between reservists, and employers and society as a whole, and we aim to do that via the White Paper. Greater reliance on reserves is more cost-effective for the nation, but requires a greater willingness by society to support and encourage reserve service. Our reservists make a contribution to society over and above most others. We recognise and value this and we must offer them attractive challenges, fair rewards and incentives, and we must undertake to provide them and their families with appropriate support, recognising the contribution they make. The White Paper, which we shall publish soon, will set out our plans in much greater detail and will set the agenda for a very significant change in the future of our reserve forces. This is tremendously exciting and I look forward to our reserves playing an even greater role in the defence and security of our nation.
When I served, there were 75,000 trained men and women in the Territorial Army. Our target now is to get to 30,000 by 2018. I have to believe that if we got to 75,000 then, with a smaller population, we can get to 30,000 within four and a bit years with a larger population. In order to succeed, however, we must have the support of employers and the right relationship between them and their reservist employees. We need mutual respect, and that is what we seek to engender via the White Paper. I congratulate my hon. Friend on raising the issue at this time—as I said, the debate was timely—and I believe that she has done her constituent a good service.
Question put and agreed to.
Westminster Hall
(11 years, 5 months ago)
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Air Transport (Northern Ireland)
(11 years, 5 months ago)
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Mr Laurence Robertson (Tewkesbury) (Con)
It is a pleasure to serve under your chairmanship once again, Mr Amess. I thank the Liaison Committee for nominating this important debate, and the Minister of State, Department for Transport, my right hon. Friend the Member for Chelmsford (Mr Burns), for attending. I know that he had a busy night last night, not necessarily helped by some who are in the Chamber today. I welcome him.
This debate comes on the back of the first report of 2012-13 by the Select Committee on Northern Ireland Affairs, which we published last November. I am grateful to all Committee members for the work that they carried out on this detailed inquiry, and to our officials, who are a bit thin on the ground today, although I am sure—at least, I hope—that quality will make up for the lack of quantity.
I am grateful to the many witnesses whom we interviewed during the course of our inquiry into the air transport strategy for Northern Ireland. We talked to representatives of the airports, the CBI, the airline companies, travel companies, the Consumer Council for Northern Ireland, unions, the UK Border Agency, Ministers, the Federation of Small Businesses and others.
Since the Committee was re-formed after the last general election, we have concentrated on trying our best to move towards a rebalancing of the Northern Ireland economy. We know that Northern Ireland has become somewhat over-dependent on the public sector, and we are well aware of the reasons why. There is a large deficit in the amount of Government spending in Northern Ireland relative to the amount of tax raised there. The same is true in Scotland and Wales, of course, but it is more pronounced in Northern Ireland. Wages are also lower in Northern Ireland, and there is great concern about people who perhaps do not feel that they have had the full benefits of the peace process. We as a Committee have considered security issues from time to time, of course, and we will do so again, but we are doing our best to encourage and work with the Government and make proposals about how we might rebalance the economy in Northern Ireland. It is obviously worth doing for its own sake, so that people in the Province can enjoy greater prosperity, but we also see it as a way to cement the relative peace achieved over the past 15 years or so.
Our first inquiry after the last general election was on the level of corporation tax. We recommended that the issue be devolved to the Northern Ireland Assembly so that it could set a rate that would be more competitive with the current tax rate in the Republic of Ireland. Corporation tax in the UK is 23%, but only 12.5% in the Republic. Although the Committee was certainly not unanimous on that proposal, we felt that it would help the economy in Northern Ireland move towards where we want it to be. We are debating aviation policy, not corporation tax, but I will talk about tax a little later.
I must stress the importance of air travel to Northern Ireland. It is an island off an island—a beautiful place, but nevertheless slightly remote. The only way that people there can travel reasonably quickly and efficiently either to the mainland or to the continent is by air. The sea crossing is lovely, but it is quite slow. [Interruption.] I do not know whether the Minister is thinking of extending High Speed 2 to Northern Ireland, but I am sure that it would be welcome if he did. However, as at the moment there are no plans to do so, we must stress how important air travel is to people in Northern Ireland for social, family and business reasons.
Kate Hoey (Vauxhall) (Lab)
Some Committee members suggested that it might be helpful for Ministers, particularly Ministers for Transport, to make the journey to Belfast from London or Southampton via the only real way other than flying, and to tell us all how long it takes, how much it costs and how it could possibly help improve business connectivity for that to be the only way by which a person can travel. It might be helpful for the Minister to make that trip so that he can experience it for himself. I had to make it once. It takes a very long time.
Mr Robertson
I thank the hon. Lady for her helpful intervention. I am sure that the Minister travels to Northern Ireland regularly, but it sounds like an invitation for him to do so in a different way.
When the Minister gets there, he will see that the rail links in Northern Ireland are not what we might want either, particularly between City of Derry airport and Belfast. I will come to that issue in a minute. It is a long and sometimes difficult journey. Northern Ireland Members sometimes have to leave Parliament early in the day—not in the morning, of course, but not too late in the afternoon—if they want to get back that evening, which may explain why they are sometimes unable to take part in debates such as this.
The background is that we have three airports in Northern Ireland: Belfast International, sometimes known as Aldergrove; Belfast City, nowadays named George Best Belfast City airport after the great footballer; and, of course, City of Derry airport. Belfast International airport has about 4 million passengers a year, Belfast City airport 2.4 million and City of Derry 400,000. When we compare that with Dublin, which has 90 million passengers a year, we see a big difference between the two, but Belfast International airport is busy and fulfils a completely different role from Belfast City airport. Both are important. City of Derry airport could probably be used more, especially this year, when Londonderry is the city of culture.
In terms of connectivity, it is extremely important that we retain capacity in the south-east of England, because many people fly from Belfast to London and then on to other cities in the world. There is some concern about the speed with which we are moving in that direction. The Committee expressed frustration about how long it is taking for the Government to decide whether we are to have, for example, a further runway at Heathrow, Boris island or something else. It is of some concern to the Committee that the Government seem to have ruled out a third runway at Heathrow before commissioning the Davies report.
The Minister of State, Department for Transport (Mr Simon Burns)
If it is helpful to my hon. Friend, the Government’s policy, in the manifestos of both the Conservative party and the Liberal Democrats, is that there will be no third runway at Heathrow during the lifetime of this Parliament. For the way forward beyond 2015, we have set up the Davies review, an independent commission, to consider what we should do to move forward on capacity in the south-east of England.
Mr Robertson
That is extremely helpful, given that we have less than two years to go in this Parliament before the third runway is a possibility. I cannot speak for the Committee on that—we did not express a view whether there should be a third runway at Heathrow—but we did say that we are concerned about how long it is taking. The Government’s response to our report said, reasonably, that they do not want to rush matters; they want to consider the issue in depth and detail, and to get it right. I fully understand that, but we feel that we are losing out to Dublin, Paris and Schiphol due to the delay.
It is important to Northern Ireland that we secure the routes from Belfast to London airports. A while ago, British Airways—or the International Airlines Group, to be more correct—took over BMI, and there was some concern about whether the route would be discontinued. We interviewed Willie Walsh of International Airlines Group, who was helpful to the Committee and stressed the importance of that route to British Airways. We are concerned that the long-haul routes appear to be more profitable for some airline companies. He said that BA was not in a position, necessarily, to buy an awful lot more planes that could fly long-haul, so the route from Belfast was valuable to it. That is a slightly negative way of getting to the position that we wanted to get to, and we must stress the particular importance to the people in Northern Ireland, and to its economy, of the routes from Belfast to London.
Recently, we had a bit of a scare when Flybe announced that it was ending flights from Belfast City airport to Gatwick, although it ended a number of flights to Gatwick, not just from Belfast. The good news is that EasyJet has taken over and assures us that that route is important for it. All these things are worrying and are a problem for people in Northern Ireland, because air transportation is so important to them.
Linked to the issues I have mentioned are the slots, particularly at Heathrow, which is under such enormous pressure. We want to move the situation on as quickly as we can. We discussed the possibility of ring-fencing certain slots, particularly at Heathrow, but as the Government correctly responded, it is difficult to do that under EU law and tends to distort competition and the free market. As an avowed free-marketeer, I have some difficulty with that. The slots are probably best secured by creating extra capacity in the south-east, and we are in a vicious circle in that respect.
I now return to tax: air passenger duty. A while ago it became obvious to the Committee that Continental Airlines, now operating under United Airlines—the only company flying from Belfast directly to Newark in the United States—was seriously considering ending its only flight, because of the high level of long-haul air passenger duty. We have since had discussions with that airline in the United States. It was a close-run thing. It was seriously considering ending that flight, because it did not feel that it could pass on the air passenger duty to the customers, owing to the proximity of Dublin. Four people travelling from Belfast to Newark would pay £260 in tax, whereas from Dublin I think the charge is €3 each, and there was talk of abolishing that. Because of the possibility of a short journey elsewhere, Belfast was in danger of losing out.
We did a quick report and put an awful lot of pressure on the Government to do something about this. To be fair to the Treasury, the Department for Transport and the Northern Ireland Office—I do not know exactly who took the decision; I suspect it was the Treasury—
Mr Robertson
The Treasury is all-powerful. The level of air passenger duty was reduced to that for short-haul flights, and the Government have since devolved decisions on air passenger duty to the Assembly, so it can decide how it wants to play it. That reduction saved that route. I pay tribute in particular to the Select Committee members from Northern Ireland, who put pressure on me as Chairman, allowing me to put pressure on the Government. We saved that route, but it was a close-run thing that demonstrates how important—how big an issue—air passenger duty is.
Okay, we saved that route and that is important, given the relationship with America, but 98.5%—the vast majority—of Northern Ireland passengers take short-haul flights. Many witnesses cited air passenger duty as a major problem and a major cost, particularly for people who travel an awful lot.
I have made mild criticism of the Government so far. They inherited a massive deficit from the previous Government and, as we saw yesterday, it is difficult to cut taxes at this moment. We fully understand that. However, I stress to the Minister—although we are glad that the Transport Minister is present, and we know that three Ministers cannot be here, we could have done with a Treasury and a Northern Ireland Minister here, too—that air passenger duty is important. I hope that he takes that message back to the Treasury, to see what can be done to lower this burden on the people of Northern Ireland.
The Committee also considered visas and tourism, which is important to Northern Ireland and, indeed, to the Republic of Ireland. Of course, the Republic of Ireland, the United Kingdom, the Channel Islands and the Isle of Man are not in Schengen, but in what is known as the common travel area. Although that is helpful, people coming from other countries to Ireland—it is a bit more complicated than this—may need a further visa to get into the United Kingdom, and vice versa.
Again, the Government agreed with our recommendation and are already acting to have discussions with the Government of the Republic of Ireland, to see if this situation can be made simpler. Obviously, there has to be a uniform security policy surrounding the common travel area, if we go down that route, but we encourage the Government in that regard. Of course, the island of Ireland is promoted as one destination in respect of tourism. There is nothing wrong with that, even for Unionists like me. It is sensible. However, we feel that there can be more simplicity with regard to travelling to both the UK and Ireland.
I thank the Committee for all its hard work in compiling this report. I hope that I have stressed the importance of rebalancing the economy in Northern Ireland and of the role that air transport plays in that.
Kate Hoey (Vauxhall) (Lab)
It is a pleasure to see you in the Chair, Mr Amess, and I am pleased to be able to say a few words. My colleague from the Northern Ireland Affairs Committee, the hon. Member for Belfast East (Naomi Long), wants to make a contribution, too. I thank our Chairman, the hon. Member for Tewkesbury (Mr Robertson), for putting the case so well and mentioning why our Committee felt that this is an important issue: the links between Northern Ireland and the rest of the United Kingdom, which are crucial, and particularly air passenger duty.
We need to thank the Government for listening to the Northern Ireland Affairs Committee and to the lobbying—all legitimate lobbying, I will add—that went on for a long time and getting the air passenger duty changed on the international flight from Belfast to Newark. That was crucial, because there was no doubt that people were travelling by car down to Dublin, even though it made the journey slightly longer, as it worked out cheaper due to the reduction there. The Irish Government make an issue of making it much cheaper to fly internationally, particularly to America. That is important. I hope that we have made that link with United Airlines permanent and that we see it increase. We now need a direct flight from Belfast to Canada, where there is a huge diaspora of people from Northern Ireland. That would be welcome.
In addition to what was always an important issue, we raised the other pressing, day-to-day issue in our recommendation 7 on tax policy. Air passenger duty throughout the United Kingdom is far too high. It is the highest in Europe. Some people argue that it is good, from a green point of view, and others argue that it is needed because the Government need the money. A cost-benefit analysis has not been properly done to show how much the United Kingdom would benefit economically if we reduced and, in some parts of the UK, abolished air passenger duty altogether.
Northern Ireland is a special case, just as the highlands and islands have become a special case, but whenever we ask why the highlands and islands get a reduction on their flights but Northern Ireland cannot, we come up against something about which I have made my views known clearly over time: the European Union and regulations, which make doing something about that difficult. Well, given how the EU works at the moment, that certainly will not be easy to do, but if we had a Government who committed to arguing for it, it might happen.
I feel strongly that travelling by plane from Northern Ireland to London, Manchester, Scotland or anywhere else on the mainland of Great Britain is not a luxury. People do not wake up and think, “Great, I am going to be flying from Belfast to London tomorrow. Isn’t that wonderful? I don’t mind paying APD, because it is such a nice way to travel.” The reality is that flying is the only way people can realistically travel, particularly to southern England. Flying is now very expensive for students who want to come back home between studying, and the cost to business people is very big. A growing phenomenon in the current economic situation is that more and more people—mainly young men but women, too—are flying over on a Monday morning, working in the building industry near Stansted and flying back on the Thursday night or Friday, and APD is a big addition to the cost.
We should be arguing that Northern Ireland is a special case because it is different. We are part of the United Kingdom, but we have water around us, and we therefore need to be treated differently. There is an idea that we cannot do something about APD for Northern Ireland. The Government’s response states:
“APD makes an essential contribution towards helping the Government meet its deficit reduction plans.”
I do not want to go further than to say that, in the long run, we would end up with more money if APD were reduced, but, obviously, if we were to treat Northern Ireland differently, APD would have to be devolved. In that case, the Northern Ireland Executive would have to make up the money to fund the reduction, but the people of Northern Ireland could debate whether they feel that that is a priority. I think that there would be support for it.
The Government’s response further states that
“in order to protect the public finances and also to comply with EU State Aid rules. It would not be possible under EU law to have different rates of APD on intra-UK flights from GB to NI than on flights from UK to other EU destinations.”
I am sorry, but I am a British citizen. I am part of the United Kingdom, and I want my Government and my country to be able to decide where planes are going to fly, how much that will cost and what the tax should be, and I do not want to be restricted. I am sure my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) on the Front Bench does not necessarily agree, but I do not want the EU to decide policies that should be for us to decide. That is why I support the need for a referendum, the need for a debate in the country and the need for us to decide our future relationship with the EU. I will not digress further, Mr Amess, although I am sure that you might want me to do so.
It is just not good enough for us to say that we cannot allow Northern Ireland to be treated differently and specially because of the peculiar nature of its situation, not only because it has a land border with another country, but because of the water that lies between us. It is not good enough just to say, “We cannot do this because the EU will not let us.” I believe we should reconsider, and I support the “A Fair Tax on Flying” campaign, which in some very good reports has shown how we are losing out across the United Kingdom because of the APD tax. I hope that the Government are listening.
I am surprised that the Secretary of State for Transport, in answer to a question not too long ago, said that he does not have a view on APD. He was asked,
“what assessment has the Department made of the impact of air passenger duty on aviation?”
And he answered:
“I am not sure we have taken a view on it.”
I hope that the Minister will clarify the Secretary of State’s answer, because that could be good news. The Secretary of State is my constituent when he is in London, so I know that he is quite a good egg. I hope that his answer means that we have not finally made up our mind, and I hope that my party will consider the matter very clearly, so that we can have a strong view before the next election.
There are now no direct flights to Heathrow from Belfast International, which is an important airport. They have stopped because of the merger of British Airways and BMI, and Aer Lingus then going to Belfast City airport. There is a bit of one airport playing off the other by lowering the amount of money that it charges for a short time, and after a year or two, the other airport seems to offer something more and the airlines go back. We need to ensure that both airports, while they are there, serve the needs of everyone in Northern Ireland.
I want to speak up for easyJet, which has brought an amazing amount of opportunity for people in Northern Ireland. I fly easyJet all the time, more or less. I think easyJet is a great airline. For short flights from Belfast, easyJet is absolutely brilliant and usually on time. I am not being paid by easyJet; I really do think that. I get cross when people dismiss easyJet as one of those cheap airlines, because it has brought huge opportunities for people to travel not just from Belfast to the rest of the United Kingdom but all over Europe. The more that that happens, the more that we will see people going from Belfast to Amsterdam and then to America. That will not happen unless we grasp the nettle of APD.
This debate has been a good opportunity, and I look forward to the Minister’s response.
Naomi Long (Belfast East) (Alliance)
I am pleased to follow the hon. Member for Vauxhall (Kate Hoey). I thank the hon. Member for Tewkesbury (Mr Robertson) for his chairmanship of the Committee generally, and particularly for his interest in aviation and aviation policy. Such issues have consumed a lot of the Committee’s time, whether it is the aerospace industry, aviation strategy or APD, which reflects the importance of aviation to Northern Ireland’s economy.
As an island off an island, our peripherality can be countered only by having good, quick connections. The hon. Member for Vauxhall made the point well that those of us who have on occasion laboured by boat, train and car to make the same journey would not swap an hour-long flight for the alternative. We certainly could not do so if we were seriously going to do business in the House or anywhere else. As a form of business travel, flying is the only viable option for people from Northern Ireland to make contact with the south-east.
I recognise and welcome the Government’s analysis of the contribution and benefits of aviation to the UK economy. That is especially true in Northern Ireland, particularly in my constituency of Belfast East, where aerospace companies such as Bombardier and Thales directly employ many highly skilled workers. Their employment contributes to the rebalancing of the economy, which the hon. Member for Tewkesbury has said is a priority for the Committee and for the Northern Ireland Executive. I believe all of us who represent Northern Ireland want to see that happen. Aerospace is a particularly important marketplace for us to sustain growth.
The tourism industry, both inbound and outbound, relies heavily on aviation, as would be expected for an island economy. Due to the relatively small number of direct flights to other international destinations, our connectivity to other parts of the UK is crucial if we are to ensure our connectivity with international destinations. Such connectivity contributes heavily to UK economic activity, and passengers who pay APD on both parts of their journey are particularly affected.
APD has a detrimental effect on the continued development of a thriving tourism sector in Northern Ireland by placing a cost burden on business, not least because of our unique position of having a land border with another EU state, placing us in direct competition with a much lower-tax economy. We have to be cognisant of that when we make decisions, and I will elaborate on that later.
I will start by addressing connectivity to and through the UK hub airports, and I will then reflect on what the Committee says about connectivity to the airports within Northern Ireland. Airports are recognised as devolved but there may be things that the UK Government can do to encourage more work on connectivity within Northern Ireland.
The UK is one of the best-connected countries in the world, and the Government are right to state that the broader the range of destinations served and the higher the frequency of flights to and from those destinations, the better connected we will be. That is particularly crucial in the context of Northern Ireland. It is vital for us to get access to the south-east of England and, through the main hub airports, to the rest of the world. On connectivity to the south-east, the overall gross value added of Northern Ireland is only about 80% of the UK average. Successive Governments have nominally committed to a policy of regional convergence, but London and the south-east are still regarded—I argue, protected—as the main drivers of the UK economy. Only three UK regions are net contributors to the Treasury, and Northern Ireland is the most dependent of the remaining nine.
Clearly, an active regional policy by Government is necessary to promote a more even distribution of economic activity throughout the UK. In the interim, it is imperative to ensure that the regions have good access to London and the south-east to assist with economic competitiveness. Northern Ireland’s unique position means that aviation is essential to that connectivity. There are no other appropriate means of transport to access mainland UK or other onward destinations quickly and easily for business purposes. On onward connectivity, as we rebalance the Northern Ireland economy, it is vital that we encourage and support indigenous businesses to expand their exports, attract new foreign direct investment and so on. Ease of travel and the frequency and cost of flights are always factors in our ability to maximise potential. Direct access to the main hub airports in the south-east is vital.
I concur with the Chair when he said that the Committee was concerned about delays to do with the Heathrow issue, and I will elaborate on that. Demand for landing slots for international flights is placing pressure on national connections, which worries us, as one of the most affected regions. If Glasgow loses its landing slot, people at least have the option to step on a train, but if Belfast loses its landing slot, we are talking about a three-day hike, so the issue of our connectivity is much more serious. Future proposals need to be evaluated not in isolation, but in terms of the economic impact in Northern Ireland and other remote regions of the UK, because equitable access to London is crucial. The lack of a decision on an additional runway at Heathrow or of a new hub airport—I am fairly indifferent to which option is pursued—has an impact on landing slots, which is important for Northern Ireland passengers in two ways.
First, the focus of the airports on through passengers is intensifying, because of constrained capacity, and both Heathrow and Gatwick now levy charges on passengers who arrive in those airports as their final destination from other UK airports, which adds to the cost of travel. Such charges might be relatively small at the point of introduction, but they will have an effect, because, as the pressure increases, the charges will increase. Furthermore, we often find that charges will increase as people’s tolerance of them increases. The charge is applied to transit passengers, but Northern Ireland has few through carriers, so most people arrive there as a destination, then have to change flights completely—they are not technically transit passengers, so they end up having to pay the charge.
Secondly, as others have mentioned, the flight connections between Belfast and London, and their frequency, are placed at risk as the pressure for landing slots—at Heathrow in particular—grows; they are at risk of being replaced by more lucrative long-haul routes. The Chair of the Select Committee has already reflected on the evidence given by Willie Walsh of IAG, but his twin reasons for the continued need for regional flights were to feed the passenger capacity of onward internationals and because of a lack of a fleet of international jets ready to take on the extra slots. That was not an option therefore, certainly in the short term. The reality is that the frequency with which the airline would want to fly between Belfast and London would be based more on its onward connections than on the convenience of those who travel for business and other purposes.
We heard good evidence about the possible constraints from the CBI, the Federation of Small Businesses, the Northern Ireland Assembly and Business Trust, and so on. We heard that frequency is almost as important as capacity for flights between London and Belfast, so that people can have more flexible travel arrangements. As already mentioned, Members from Northern Ireland will often struggle still to be in the House for the close of business at the end of the day, because the last flights leave so early. Not to join the bandwagon, but easyJet is one of the latest flights to leave and one of the few to allow us, for example, to vote in the House on a Wednesday night and still get back to Northern Ireland on a Wednesday night. There is an issue about the routes and, although we understand about public service obligations, it may need to be looked at in future. Any threat might not be imminent, but if the matter of Heathrow and capacity in the south-east is not resolved as a matter of urgency, the pressure on slots for flights to Northern Ireland will continue to increase.
I hope that something will be done as a matter of urgency. Given that the need for resolution is of acute importance to Northern Ireland residents, I regret the apparent lack of urgency in the approach taken. I have read the Government response to our first recommendation, and I understand the need for an evidence base and the reference to the Airports Commission, but the response goes on to mention that any decision will be “highly contentious” and that the decisions have been under discussion since the early 1990s. I suspect that the contentious nature of the decisions has had more impact on the time frame than the lack of an evidence base. Most people in Northern Ireland feel that that has been more the guiding factor, rather than the difficulty of the decisions to do with the airport.
Connectivity to airports within Northern Ireland is also important. Those are largely devolved issues, which was reflected in the Government response to the report, but that context is important. We are pleased to see commitment to creating lower-carbon methods of reaching airports in Great Britain, which we hope will be encouraged in the devolved Administrations. The Northern Ireland Administration do not have a climate change action plan, unlike the rest of the UK: Scotland has its own plans, and England and Wales are covered by what happens in Westminster. Northern Ireland sits outside those arrangements, and some impetus to drive something through the Assembly would be good.
Northern Ireland will obviously not benefit directly from high-speed rail. In case the Minister does not already know, I voted in favour of high-speed rail, which I hope will make him slightly more sympathetic to my other points. Investment in public transport is good and wise investment, and I say that as someone who comes from an engineering background. High-speed rail will not directly benefit us, but in Northern Ireland, by contrast, all our airports are within one mile of an existing rail line, and yet none has a direct connection to that railway. Someone arriving at Belfast City airport terminal can see the railway, but cannot reach it directly; people have to leave the airport site and walk across a dual-carriageway bridge and through some streets to get there. Relatively modest investment by the Northern Ireland Executive, therefore, could enable connectivity between the rail network in Northern Ireland, limited though it is, and air travel. We want to see the Government and the Department for Regional Development in Northern Ireland work on developing such access to identify funding and other opportunities.
The lack of ease of access to Belfast International airport in particular remains a problem, and one that has received attention as a result of the Northern Ireland Affairs Committee’s aviation inquiry. The road network serving the airport fails to meet the needs of Northern Ireland in pursuing inbound tourism and international investment as key drivers. We need to have an adequate and well-maintained road infrastructure to have onward connectivity within Northern Ireland and with the rest of the island, which is our main economic partner in terms of exports and other things. Improved infrastructure could attract more customers and international carriers to the International airport, improving our connectivity with the rest of the world. Road access to Belfast International is extremely poor in places, as the hon. Member for Vauxhall, who uses it regularly, is aware. Travelling from Belfast and after leaving the M2 motorway, one must proceed along seven miles of two-lane single carriageway, passing through a small town to reach the airport. The road is relatively straight and safe, but high traffic volumes during peak periods result in delays and an increased chance of accidents. No proposals or meaningful discussions have been forthcoming about upgrading the road. In our discussions with the devolved Administration, we have stressed that it should be examined.
First impressions are hugely important, and our public transport connectivity creates a generally poor impression, although we might have benefited slightly over G8—no one could actually get to Enniskillen, certainly by public transport, even had anyone wanted to go there to protest. It is something that needs to be addressed.
I next want to touch on air passenger duty, because we cannot discuss aviation strategy without looking at APD, which has a disproportionate effect on Northern Ireland passengers. The Committee spent considerable time discussing the issue, and some changes have happened, in respect of the International airport in particular, on the back of one of our previous reports. People frequently gave us evidence about the impact of APD. If we are to rebalance Northern Ireland’s economy, it will primarily be not by cutting the public sector, but by growing the private sector. In my view and that of a growing number of people, the APD regime is a significant obstacle to that. It is a commercial challenge to Northern Ireland businesses and conflicts directly with the positive measures that are being taken to boost tourism and related employment to encourage foreign direct investment and so on. It adds to the cost of indigenous businesses, particularly those seeking to grow their export markets.
The Committee received evidence from a large fish processor in Northern Ireland who exports to the far east, and finds APD a huge burden on his business. Being able to take his product to international markets and build relationships with those markets and clients is crucial for him in growing his export base. But in his evidence, Mr Rooney said that APD effectively consumes part of the budget he sets aside for travel, so the number of his mission journeys is limited by APD. If it did not exist, or were lower, he could travel more frequently to sell his products. He is very successful at getting them into the market when he has made those connections.
At best, APD adds to the cost base and, at worst, it could jeopardise connectivity between Northern Ireland and other UK and international markets, impeding our efforts. The levy was originally relatively affordable, but it has increased significantly, particularly on long-haul flights. Since 2007, the increases have been very steep—up to 260% for short-haul flights—and between 2008 and 2011 the number of passengers carried by Virgin Atlantic, for example, decreased by between 7% and 8%, but the amount of APD paid by its passengers increased by more than 45%.
Hon. Members will be aware that since I have been in Parliament I have raised the issue frequently—the Treasury would say relentlessly. I apologise that much of what I am saying today has been heard before, but until it is acknowledged and dealt with it bears repeating. I want to focus on what happens in Northern Ireland because of its uniqueness. It is an effective demonstration in microcosm of APD’s impact more widely throughout the UK.
When I have raised the issue with Treasury Ministers, I was scolded for not acknowledging the Government’s work on direct long-haul flights. I will not make that mistake again. I acknowledge that that was real progress, and I am glad the Government moved to devolve that and in the first instance to reduce it so that we retained the United Continental flight as our only long-haul direct route. Of the 600,000 passengers it carried in the last six years or so before the decision, 40% were inbound tourists and business visitors, so it was crucial to retain that connection to north America.
The route’s success is a tangible demonstration to others. The hon. Member for Vauxhall mentioned direct flights to Canada. We had those seasonally, but have since lost them. It would be good if they were restored, given the huge diaspora to Canada. It provides a good evidence base for other airlines to consider direct flights from Belfast. APD placed the direct flight in jeopardy simply because the rates are so much lower in Dublin, which is less than two hours away and, in contrast, has good road links. That is a challenge that we must face in developing our infrastructure.
I give credit to the Government for responding to the work of Northern Ireland MPs, the Northern Ireland Assembly and its Ministers, businesses and the Northern Ireland Affairs Committee’s report on APD by reducing the levy on direct long-haul flights and for devolving the matter to the Assembly. That change was important and very welcome, but affects around 2% of Northern Ireland passengers. It does not help with the unfair burden on Northern Ireland of APD more generally; for example, on regional flights, or because of the double duty that is paid because our access to main UK hubs often requires separate flights due to the limited number of through carriers. We pay short-haul to get to London and we pay long-haul to go from London. If we had a through carrier, we would simply pay long-haul, even if we stopped in London, but because we do not have seamless ticketing, we end up paying more and that should be looked at from the perspective of fairness.
The case for reviewing APD is strong throughout the UK. For island nations, connectivity and aviation are crucial. The situation is more acute in Northern Ireland because we have a land border with another EU member state and the price-sensitive advantage in the Republic of Ireland has directly affected Northern Ireland. It was initially a bigger issue with international long-haul flights because the extra time needed to get to the airport made it worth while, but when flying on even a moderate flight of, for example, four hours it is almost as quick for many people to go to Dublin as to International airport or elsewhere to pick up their flight. The savings may make it sensible financially to make that slightly longer journey, and that will be an increasing challenge.
APD also affects tourism because it reduces the cost for people flying into Dublin, and when they do so as inbound tourists it is very difficult to get them to cross the border to spend time and stay overnight in Northern Ireland. We are trying to grow our tourism, and the tourism offer has improved dramatically in recent years, but it is still difficult to get people who have flown into another jurisdiction to come north and spend time in Northern Ireland, which is what I really want them to do. Getting people to Belfast in the first place is hugely important.
When APD was first introduced, it was a means of taxing aviation to try to reflect the environmental impact. I have no objection to aviation paying its fair share in that regard. It is important that it does and that tax takes account of issues such as climate change and seeks to effect behavioural change. However, there is no realistic alternative in this case so it has become punitive for travellers.
I recognise the importance of addressing the deficit and do not dismiss it in the slightest, but international evidence suggests that tax on aviation is such a constraint on other revenue that it outweighs the benefits economically. The hon. Member for Vauxhall referred to that. The Irish Government committed to abolishing the tax equivalent of APD because it viewed it as a barrier to growth and tourism, despite it being set at €3. Most significantly, the tax in band B of APD covers flights of 2,000-4,000 miles at around £60 and £120 for economy and business-class passengers respectively. Comparing that with the zero charges that the Irish Republic is introducing shows the difference that it can make to the cost of a flight.
A PricewaterhouseCoopers study earlier this year indicated that significant economic benefits could be reaped from the abolition of APD. It estimated that APD would boost GDP by 0.46% in the first year, and amount to about £16 billion in the first three years and create almost 60,000 jobs in the UK in the long term. One of the most interesting facts in the report was that the abolition of APD would pay for itself because the increased revenue from income tax, VAT and higher employment and business growth would outweigh its loss. That is without the peripheral benefits, including more tourists coming to the UK and airlines expanding their networks within the UK. It suggests that in the first two years, the Government would gain increased revenue of about £500 million and about £250 million each year thereafter until 2020.
That study builds on previous studies by Oxford Economics, which suggested that abolishing APD would raise gross value added by between £1.8 billion and £2.9 billion because of the boost in the aviation and tourism sectors from increased passenger numbers, and would create 40,000 to 60,000 new jobs. The extra income available for consumers from lower airline ticket prices would also provide a stimulus to consumer spending, so additional spin-offs were predicted. To date, the Government have not accepted those studies so the answer is for the Treasury to commission its own independent cost-benefit analysis, as the hon. Member for Vauxhall suggested, to look at the impact of APD in the light of research.
I will not try to draw the Minister too far. I have frequently tried to do so in correspondence, and he has resisted effectively. I am sure he will do so again today, and I respect his deference to the Treasury, but I hope that he will take the opportunity to reflect on the fact that for most of us APD has been by far the biggest issue in aviation and connectivity, and pass that on to the Treasury.
I want to raise one more issue: the impact on the environment and people of having an airport nearby, particularly the impact of noise. I welcome the recognition of the need for a fair balance between the negative impacts of noise and the economic benefits of flights, but I am concerned that the main mechanisms for addressing those issues seem to be about engagement between airports and local communities. That is extremely valuable in building relationships and aiding understanding, but it does not necessarily improve the situation.
We would like to see independent monitoring of noise contours, with an independent body able to make decisions on how aircraft noise should be controlled in highly populated areas. The introduction of an independent body would increase public confidence and ensure that the existing noise monitoring undertaken by airports has a degree of independence, which it is currently not perceived to have. That would also provide a more robust approach and give additional transparency, as those who are making the decisions about monitoring and about the frequency and timing of aircraft movements would be removed from having commercial interests in the decisions.
The mapping and monitoring of noise exposure at designated airports is very helpful, but it should be considered for extension to airports with any significant neighbouring residential population, so that anyone living with aircraft noise is aware of the impact on their health. In particular, when there are schools nearby, that needs to be carefully considered. In my constituency, the George Best Belfast City airport is a hugely important economic driver: it is a good employer, employing more than 1,000 people, both directly and indirectly, and it creates jobs and opportunities for the city of Belfast. There is no doubt about that, but those who live close to the airport, under the flight path, find it difficult to deal with the effects. There are issues relating to how those effects, and the environmental impact, are monitored at a UK level, and it would be helpful for us to consider those in light of evidence that the Committee received. I thank the Minister for his attention to what we have said, and I look forward to hearing his response.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to see you in the Chair, Mr Amess, and it is a delight to follow the hon. Member for Belfast East (Naomi Long). She made reference to most of the report’s key points, which I will also refer to when I comment on the report, and she raised several other issues that I hope to cover. I thank the Chairman of the Northern Ireland Affairs Committee, the hon. Member for Tewkesbury (Mr Robertson), for the report and for his explanation of it: it is clearly a work of some significance. It is a good to see the Minister in his place to respond to the debate, and I hope not to be too long in my contribution, because responding to the points that have been made is clearly a matter for the Government.
I want to make two non-financial declarations, Mr Amess. First, I have family in Belfast, not too far from the constituency of the hon. Member for Belfast East, in Holywood. Secondly, I say to my hon. Friend the Member for Vauxhall (Kate Hoey) that I sailed from Southampton to Belfast last year to help celebrate the opening of the Titanic Belfast museum, which is a must for anyone interested in British history, British shipping or British tourism. Going to see it was a great opportunity that my wife and I took.
My hon. Friend, along with the hon. Member for Belfast East and the hon. Member for Tewkesbury, made some powerful points on air passenger duty, and I will come back to those in due course. My hon. Friend the Member for Vauxhall also commented on links to north America and particularly, potential new links to Canada, which the hon. Member for Belfast East also referred to. I am sure that the Minister will come back to those links in due course.
My hon. Friend the Member for Vauxhall asked for the Opposition’s view on APD. I know that the Minister would say the same thing as I would; it is a Treasury matter. However, I have had meetings with shadow Treasury Ministers, and the official Opposition policy is that we have given a commitment to undertake a review of APD, because there is an understanding—I am sure with the Government as well, because of the comments that they have been making—of the impact that APD is having on tourism, industry and connectivity. The hon. Member for Belfast East made significant comments on the Oxford Economics report, the PricewaterhouseCoopers report and what APD is doing, as well as whether it should be rebalanced and whether that could provide a greater incentive for the UK economy to grow. I have no doubt that colleagues in the shadow Treasury team are keen to look at those issues.
The hon. Lady made some points reinforcing the report’s recommendations, and I will try to refer to what she said briefly in my review of the recommendations. One thing that I will say is that from my time as aviation Minister, between 2007 and 2009, I know that the vast majority of airports take the issue of noise very seriously. We tried to reinforce the provisions, and the coalition has tried to reinforce the protection for communities around airports. My understanding is that the expansion of the airports in Paris, which we envy, because they have a greater capacity than we have, was partly dealt with by the appointment of a noise regulator for aviation in Paris, which provided the independence that the hon. Lady is asking for. This is about reassuring the public that somebody—whether the Government, an economic regulator, the Civil Aviation Authority, or whoever—is looking at the noise footprint and can ensure that it is within the contours; that all the arrangements, whether compensation, double-glazing or air-conditioning, that are in place for most airports are monitored appropriately; and that the matter is being dealt with efficiently.
On the report, the key question relates to recommendation 1 on connectivity. The Government, as I am sure the Minister will tell us, have set up the Davies commission, which is looking at capacity and connectivity. He knows that we think that it was a great idea and that we suggested it 12 months before they did it, but the fact that they got round to it is to their credit. We fully support it, and Labour’s position is that we will wait to see the outcome of the commission and its recommendations.
The only potential recommendation that we have firmly set ourselves against is if the commission comes out in favour of an estuary airport. I cannot imagine that it will, but that is one recommendation that we will not take forward. However, we will look at anything else that Davies comes out with, as the Conservative party has also said. I think that the Liberal Democrats are in a different place altogether on aviation. I am not clear exactly how they view aviation, given how important it is as an economic tool, which everyone who has spoken in the debate so far has recognised.
Mr Laurence Robertson
If an additional airport is not in Labour’s plans at all, the hon. Gentleman must be sympathetic to the idea of a third runway at Heathrow.
Jim Fitzpatrick
For the avoidance of doubt, we have said that we will look at whatever the Davies commission proposes, with the exception of a potential recommendation to build an estuary airport. We said that if that is a recommendation, we are sorry, but we are not persuaded at all by the evidence that that is the way to move aviation forward as an economic tool for UK plc. However, we will look at point-to-point, additional runways at Gatwick or Stansted, or a new hub airport—whatever the Davies commission comes up with, we will look at, but an estuary airport, from our point of view, is off the table.
Anecdotally, a range of events have been organised by a variety of different organisations, industry bodies, think-tanks and so on. The best story that I have heard from many such meetings was a question-and-answer session that included, on the top table, the chief executive of Schiphol airport. When he was asked what he thinks the answer to the UK’s aviation policy should be, his response was, “It’s not for me to say, but the recommendation I would give is that you should take your time and think about it long and hard.” The longer we take to make a decision, the more Schiphol is growing, day by day, week by week, and month by month.
As the hon. Member for Belfast East and my hon. Friend the Member for Vauxhall said, Schiphol advertises itself these days as the UK hub airport. It serves more than 20 British cities, while Heathrow only serves seven. Therefore, the connectivity from our regions is dwindling, and as slots from Heathrow become more precious and more airlines want to get in, that squeezes the ability for our regions and for Northern Ireland, Scotland and elsewhere to get in. Capacity is a big issue, and the connectivity points made in recommendation 1 are therefore significant.
On recommendation 2, we note the Government response. Naturally, I consulted my colleagues in the shadow Northern Ireland team and, if I may, I shall quote the points that they made to me. They said:
“The main political issue is Air Passenger Duty.”
They are aware of the
“keen debate on this around regional airports in the UK, particularly re Scotland.”
They say that their line to date, cleared with the shadow Treasury team, is that
“there are special circumstances in Northern Ireland. It is the only part of the UK that has a land border with another EU member state, which has lower rates of APD. Belfast City airport and Belfast International airport both compete with Dublin…on attracting airlines, routes and passengers. Conversely, it relies on…air transport for a link to the rest of the UK.
The government has removed”—
congratulations to the Government—
“APD on the long-haul New York flight from Belfast International airport, which we supported.”
That move is obviously well supported also in the Select Committee and by colleagues from Northern Ireland.
My colleagues in the shadow Northern Ireland team go on to say:
“We are sympathetic to the argument for reducing APD on all routes from Northern Ireland but would need to examine it fully, including the impact lowering the rate would have on the block grant. There are other options including looking at ‘protected routes’ that already exist in the UK for the air link to the Scottish islands, for example. Belfast-London Heathrow would be the obvious one for this.”
I cannot imagine that the Minister will say very much different.
On recommendations 3, 4 and 5, the Government response says that they concern devolved matters, and clearly that is the case. With regard to recommendations 6 and 7, I think that I covered the relevant points in my comments on APD. Recommendations 8 and 9 concern a key issue, and obviously the Government say so in their response. That matter is very much part of this debate.
On recommendations 10 and 11, we are told:
“The Government notes the comments on these areas”,
which I think is a very erudite thing to do.
As I said at the beginning of my speech, this is an important report. I am pleased to be here to contribute to the debate. I thank hon. Members for their comments and the Chairman and his Committee for producing the report. Like them, I look forward to the Minister’s response.
The Minister of State, Department for Transport (Mr Simon Burns)
It is a particular pleasure to serve under your chairmanship, Mr Amess. I thank my hon. Friend the Member for Tewkesbury (Mr Robertson) and the Select Committee that he chairs for giving us the opportunity to debate this report today. This has been an interesting, if sparsely attended, debate.
We continue to work closely with the Northern Ireland Executive on this important issue, because, as hon. Members will appreciate, air transport policy remains largely a reserved issue. However, as the recommendations from the Committee and the Government response show, a number of issues are devolved to the Northern Ireland Executive. As I said, that is reflected by the British Government’s response to the Committee’s recommendations. Things such as surface access to airports and matters pertaining to land-use planning are within the gift of the Northern Ireland Executive. Aircraft noise was mentioned by the hon. Member for Belfast East (Naomi Long). Those are all matters for the Northern Ireland Executive, so I hope that the Committee will forgive me if I refrain from discussing them in detail, simply because it is not my door they should be knocking at, but that of the Northern Ireland Executive.
Mr Laurence Robertson
Could I ask for clarification on something? We were told by the City of Derry airport that UK guidelines are that
“railway access to airport terminals can only be justified when passenger numbers reach 10 million per annum.”
Does the Minister know—perhaps he can write to me if he needs to find out—whether that is a devolved or a reserved matter?
Mr Burns
I hope that I can give some reassurance to my hon. Friend. That is a devolved matter, but what I will do, in the spirit of co-operation and friendliness, is write to him with the precise details to explain why it is and what the best way forward is for him and his Committee.
Mr Burns
That is fine; the hon. Lady is fine. I just thought for one ghastly moment that I had walked into a huge hole, so I am relieved that it was not me—not guilty, guv.
I welcome the fact that there is broad agreement—indeed, unanimity—on the importance of maintaining the UK’s position as a leading global aviation hub. The Government believe it to be vital to the Northern Ireland and wider UK economy. It is important to remember that the UK continues to have excellent aviation connectivity, both on a point-to-point basis and through the London hub. The five airports serving London offer at least weekly direct services to more than 360 destinations worldwide, which is more than Paris, Frankfurt or Amsterdam Schiphol. We have the third largest aviation network in the world after the United States and China.
Northern Ireland is increasingly well connected both to the rest of the UK and to the wider world. In 2012, Northern Ireland airports operated services to 23 domestic UK destinations on 36 routes, to 17 EU-27 destinations on 19 routes, to three other European destinations and, as we have heard from a number of hon. Members, to one north American destination.
Kate Hoey
I will try to restrict my interventions, but I thought that as the Minister had mentioned the increase, it might be worth pointing out, as I have been a user of it and you are our Chairman, Mr Amess, that the new easyJet route from Southend to Belfast is very popular.
Mr Burns
I am particularly grateful to the hon. Lady for mentioning that. She is absolutely right to do so. I am grateful not only because I am a Member from God’s own county, where Southend airport is, but because only in the last few weeks I have had the pleasure of visiting Southend airport and being able to find out for myself the increasing and expanding services that Southend airport is providing both to Northern Ireland and to other destinations in Europe. I think that it has the accolade of being called London’s fifth airport. No doubt, Mr Amess, you will correct me if I am wrong.
The Government believe that Northern Ireland is well placed to continue to grow the direct network as well as to enjoy vital connections through the UK and continental hubs. The Government recognise that, like elsewhere, the airports in Northern Ireland make a vital contribution to its economy. However, unlike in other parts of the UK, aviation plays a unique role in connecting Northern Ireland with the rest of the country. As such, aviation connectivity with the rest of the UK is extremely important to our national cohesion and will remain so.
We all know that the provision of commercial air services is subject to market forces. Ultimately, airlines operate in a competitive, commercial environment and it is for them to determine the routes that they operate and from which airports. It has been suggested that some form of intervention is necessary to protect air services between Northern Ireland and London from commercial market pressures. The hon. Member for Belfast East mentioned that. But air links to Northern Ireland remain commercially viable. Northern Ireland is well connected by air to London, with more than 18,000 flights a year between the two Belfast airports and the five main London airports. Those flights handled just over 1.9 million passengers in 2012. Over a third were between Belfast and Heathrow. That said, the Government fully support the efforts of the Northern Ireland Executive to develop the route network of Northern Ireland further.
Northern Ireland is also unique within the United Kingdom in that it shares a land border with another EU member state, as was mentioned by the hon. Members for Belfast East and for Vauxhall (Kate Hoey) and by the shadow Minister, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). Although that brings many benefits, the Government are highly conscious of the greater competition that it creates when securing air services, especially long-haul services. As such, in the recent Northern Ireland economic pact, we confirmed that the Government and Executive will work together to consider with the US authorities and other interested stakeholders the feasibility of establishing US pre-clearance facilities at Belfast International airport. It is complex work, with practical and legal issues that need to be addressed, but given that such facilities are currently available at Dublin and Shannon airports, we hope that progress can be made quickly. I think that all hon. Members present today, and those beyond the Chamber, fully appreciate the importance of establishing such a service, if the discussions and negotiations between our countries can come to successful fruition.
I think that every hon. Member has mentioned air passenger duty in the debate. As hon. Members have been gracious enough to mention in their comments, the Government have already taken action to ensure that the Northern Ireland aviation sector remains competitive. In November 2011, my right hon. Friend the Chancellor of the Exchequer reduced APD for passengers travelling on direct long-haul routes departing from airports in Northern Ireland. That move secured the continuation of the only current direct long-haul service operating from Northern Ireland. The Government have now gone further, as some hon. Members mentioned, and, reflecting the wishes of the Northern Ireland Executive, have devolved to Northern Ireland the power to set APD rates for long-haul flights departing Northern Ireland. The zero-APD rate for direct long-haul flights departing Northern Ireland, which took effect from 1 January 2013, puts Northern Ireland in a highly competitive position.
I listened carefully to my hon. Friend and the hon. Members for Vauxhall and for Poplar and Limehouse, and to the hon. Member for Belfast East in particular, when they spoke about the ways in which they would like to move forward. As the hon. Member for Belfast East correctly anticipated, I will be consistent and my comments will reflect what I said to her in my correspondence: APD is a matter for my right hon. Friend the Chancellor and it would be sensible for her to convey her views to the Treasury, so that it is aware of what she believes should happen. I will not detain hon. Members by going into detail on all the reasons for APD and why it is where it is at the moment, because that is well known. They can rest assured that we are aware of the views on and the reasons for APD and that the Treasury regularly monitors the situation carefully.
Mr Burns
The hon. Lady is extremely charming and in many ways intellectually seductive. She too has been a Minister. There may be only four close honourable friends of mine sitting in the Chamber, but unfortunately the walls have ears. I have always found that it is extremely wise when one is a member of a governing Administration to be bound by collective responsibility, which I happen to believe in as well; one fully understands the merits of the cases that the Government put forward as their policy and one fully supports them. I hope that explains to the hon. Lady that what my right hon. Friend the Chancellor had to do was due to the unsatisfactory, if not catastrophic, economic situation we inherited in May 2010. We have had to take some tough and difficult decisions. He is right, because it is right that we address the problems of the debt and the deficit.
I shall move on to the probably more neutral subject of aviation policy frameworks. Overall, the Government want aviation to continue across the country. To that end, we continue to deliver: we have delivered the Civil Aviation Act 2012, to bring the regulatory framework up to date, and we are implementing the recommendations of the south-east task force. We have also acted to ensure that the Northern Ireland aviation sector remains competitive. We plan to create an economic climate that enables people to travel and to use aviation to conduct business and visit friends and family as easily and cost-effectively as possible. Many people in Northern Ireland are concerned, as those in the rest of the country are, about capacity, particularly capacity in London and south-east England. Although it is across the Irish sea from Northern Ireland, capacity there does, as hon. Members have said, have a knock-on effect on those who wish to fly long-haul from Belfast and other parts of Northern Ireland to the rest of the world. They will frequently travel to London to meet their connections and then travel on or, as hon. Members have said, in some cases they go to Dublin.
The Government believe that maintaining the UK’s status as a leading global aviation hub is fundamental to our long-term international competitiveness. To make decisions, we need our evidence on the way forward to be as up to date as possible. Dealing with airport capacity, increasing the size of existing airports or creating new airports is highly controversial and arouses strong emotions. It is essential that we get it right, which is why I welcome the comments from the hon. Member for Poplar and Limehouse on his party’s attitude to how we are moving forward, but I exclude from that welcome the comments he made about Boris island; I must be totally independent, so I do not want to comment on any option and compromise that independence.
Jim Fitzpatrick
The only difficulty we have with the Davies commission is the timetable the Government have given it to arrive at its conclusions, which is after the 2015 general election. Like Mayor Boris Johnson, the CBI and the aviation industry, we would much rather the deadline were brought forward to before the general election, so that parties have an opportunity to examine the recommendations and include them or otherwise in their manifestos, and people can have the opportunity to decide.
Mr Burns
I hear what the hon. Gentleman says, but perhaps I should let sleeping dogs lie; he kindly did not mention that topic in his comments. The time scale that has been given, with interim recommendations for the short term announced at the end of the year and a full-blown report with recommendations in the summer of 2015, is the right one. On a very complex, difficult and controversial subject, the commission must have the right amount of time to assess fully all the evidence and come to a proper decision, rather than rush it for an artificial, more short-term deadline. I fear that if it had had a shorter time scale, all those who did not like whatever recommendation the commission made, would accuse it of a botched job because it was a rushed job, because it did not have enough time.
Jim Fitzpatrick
Forgive me, Mr Amess, but I must comment that the Davies commission was appointed more than 12 months ago. It has a three-year job, but there is no way that it takes three years to arrive at conclusions on an issue such as aviation capacity in the south-east. There is so much evidence available. Three years is far too long. The timetable is a political stitch-up to get past the general election, because the issue is a deal breaker for the coalition. That is the reality in politics. I am not knocking it; it is just where we happen to be. The timetable could have been shorter and that would not have truncated the opportunity for a full, thorough and comprehensive examination of the issues by the commission.
Mr Burns
I hear what the hon. Gentleman says, but I fundamentally disagree with him. The issues are extremely complex and difficult, and they have stumped successive previous Governments—we have been going around the houses for 30 or 40 years without a final conclusion. A timetable of just short of three years, to consider the recommendations for the short term and, hopefully, to find a proper and lasting solution for the long term, is the right time scale. With that, there can be no accusations that it is a botched job, or that it has been rushed because of an artificial deadline, and we will be able to get the right and relevant recommendation, which will secure our moving forward to keep our hub status and everything that flows from that. We will, hopefully, then be able to get cross-party consensus.
I think that all the political parties have behaved responsibly—sometimes uncharacteristically so, where British politics is concerned—in reaching consensus on high-speed rail, and when the Davies commission has reported, ideally we will be able to reach consensus on its recommendations. We will have to wait and see, but I think that the time scale is respectable and responsible, and provides the time for the work to be done without rushing it.
Mr Laurence Robertson
I hear what the Minister says, but the problem is that when the report comes out it will not be the end of the story. Everything then has to be negotiated, and then something has to be agreed, and built. So let us say that in 2015 a third runway at Heathrow is recommended. When does the Minister estimate it would be operational?
Mr Burns
I am not going to fall into the trap of signing up to, “Let’s say it’s the third runway at Heathrow airport”. The Davies commission is totally independent and I, as a Minister in the Department for Transport, will not in any shape or form be tempted into that, even as an example, because it could be misconstrued—as I said earlier, walls have ears—and I certainly do not want to compromise the commission’s independence.
Nevertheless, I get my hon. Friend’s point about how long any major infrastructure improvement project in this country, however much support it has in the political arena, takes to go from the idea, and the acceptance of the idea, to laying down the first bricks and opening the first door for the service, or whatever it is. That is another issue and, speaking from a purely personal point of view, I think it has to be considered, but I do think that the right way forward is for an expert organisation that is divorced from party politics to consider the issue and come up with a solution. I hope that one can then get swift consensus among the political parties—or the major ones—so that we can move forward.
From the past 24 hours, my hon. Friend will appreciate that notwithstanding the fact that most issues in the House of Commons have some opposition, having broad consensus that one is doing the right thing makes some of the parliamentary processes easier, and avoids one political party being against another in a kind of guerrilla warfare, trying to slow down and thwart what might be in the national interest. That is why the decision made by my right hon. Friend the Secretary of State for Transport to set up the Davies commission was the right one, and I look forward to the commission’s recommendations in the summer of 2015, so that we can seek to build political consensus and move forward. That is crucial, not only for Britain’s interests but for Northern Ireland’s as well.
This has been an important and interesting debate, and I welcome the fact that we have been able to discuss the valuable contributions made. As I said at the beginning, a number of the issues are devolved to Northern Ireland, and the Committee might well want to pursue them further with the Northern Ireland Executive.
Mr Laurence Robertson
Thank you, Mr Amess. This has, indeed, been an interesting debate, and we have covered all the relevant issues that are very important to Northern Ireland. I thank everyone who has spoken, and I thank the Minister for his comprehensive response.
I talked about competing with the Republic of Ireland or with Dublin. I should put on the record that as well as chairing the Select Committee, I co-chair the British-Irish Parliamentary Assembly, so I meant competition in a very friendly way. The Irish Government support reducing corporation tax to 12.5% in Northern Ireland, so I speak about such competition on the basis of co-operation.
It would be helpful if the Minister came back to me on my specific point about railway access to airport terminals, and we can take it from there.
I entirely agree with the points made, particularly by the hon. Member for Vauxhall (Kate Hoey), about EU interference on air passenger duty and landing slots. We should make our own decisions in this country, and perhaps we will be doing so by the end of 2017.
The Minister spoke about the reasons for APD, of which there are two: one is to raise tax and the other relates to green issues. On those green issues, if we over-tax our airlines, we will not reduce the number of flights or save the world; people will just fly from somewhere else. That is the point we have been trying to get across.
On the time scale, I have some sympathy with the Government, because airport capacity in the south-east should have been sorted out long ago by the previous Labour Government, but we need to speed up the process. I am concerned about how long it will take for the review, for action to be taken and then for building work to be completed. Northern Ireland might lose an awful lot of jobs while that is going on, and I am very concerned about that.
Let us say that the recommendation is made next year and that it is for a third runway. From a political point of view, if the Lib Dems do not like that, they can go into the election saying that they will not pursue that option, and we can go into it saying that we will. I do not see what is wrong with that. We will get to the point, before the next election, at which we disagree on several issues with the Lib Dems—and with the Labour party—and we will all go into the election putting forward our own views.
I would be nervous about going into the election and saying to the electorate, “I’m sorry, we have no policy.” This is a political point—you may rule me out of order in a minute, Mr Amess—but I would have a problem about going into the election and saying to my constituents, “I’m sorry, I don’t have a clue what we should do in the south-east.” I will not be doing that; I will be putting forward a very definite view. I want to impress on the Minister the importance of that point.
The debate has been very valuable: we have made our points to the Minister. I have known him for many years, and I know that he will go away, take those points on board and do his absolute utmost to help the people of Northern Ireland. It has been a privilege to lead this debate. As I have said, the very important thing to do in Northern Ireland is to rebalance the economy, and one way to help do so is by securing the aviation that enables people to travel not just to the mainland, but to the continent and to the growing markets that are emerging throughout the world.
Question put and agreed to.
Written Statements
(11 years, 5 months ago)
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ERDF/ESF 2014-20
(11 years, 5 months ago)
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The Secretary of State for Business, Innovation and Skills (Vince Cable)
I am today confirming how the €6.2 billion England allocation of the European regional development fund (ERDF) and the European social fund (ESF) will be allocated.
The European regional development fund, the European social fund and part of the European agricultural fund for rural development (EAFRD) will be allocated to local enterprise partnerships (LEP) areas for a full seven-year period through a new decentralised EU growth programme.
The Government have given a commitment that the growth programme funds will be allocated to local enterprise partnership (LEP) areas as an important new source of finance to stimulate local growth and jobs. This marks a significant shift from previous European programmes which were substantially centralised with limited local involvement in many key areas. Under this new model, decision-making powers will be transferred from Whitehall to local areas. LEPs and local partners will be in charge of European funds that will provide significant investment in innovation, business, skills and employment in a common agenda for growth and jobs that will integrate effectively with wider LEP strategic plans.
In February, the Prime Minister negotiated a real-terms cut in the EU budget for the first time in history. As the independent Office for Budget Responsibility has said, the effect of this deal was to reduce its forecast for what taxpayers across all parts of the UK will pay by £3.5 billion over the next five years.
The Government have set allocations that deliver the fairest split of funding across England, as far as EU rules allow. Allocations by LEP area for ERDF and ESF are set out in the annex. Allocations for the part of EAFRD being channelled through the growth programme will be published at a later date by the Department for Environment, Food and Rural Affairs.
Gibraltar’s current allocation will be frozen at €9 million and will be taken from the England allocation for “more developed” regions (Gibraltar is counted in this category).
The Government have today also confirmed the detailed allocations for the highlands and islands region in Scotland as €172 million and the allocation for west Wales as €1,783 million and for east Wales as €361 million.
All allocations are subject to final agreement on the EU regulations and the EU 2014-20 budget in the European Parliament. The European Commission will also need to agree the UK Government’s specific proposals.
LEP | Allocation €m1 |
|---|---|
Black Country | 177.4 |
Buckinghamshire Thames Valley | 13.9 |
Cheshire and Warrington | 142.2 |
Coast to Capital | 67.3 |
Cornwall and the Isles of Scilly | 592.9 |
Coventry and Warwickshire | 136.0 |
Cumbria | 91.4 |
Derby, Derbyshire, Nottingham and Nottinghamshire | 249.7 |
Dorset | 47.3 |
Enterprise M3 | 45.7 |
Gloucestershire | 38.3 |
Greater Birmingham and Solihull | 255.8 |
Greater Cambridge & Greater Peterborough | 75.5 |
Greater Lincolnshire | 133.5 |
Greater Manchester | 415.6 |
Heart of the South West | 118.3 |
Hertfordshire | 69.5 |
Humber | 102.4 |
Lancashire | 266.3 |
Leeds City Region | 391.2 |
Leicester and Leicestershire | 126.3 |
Liverpool City Region | 221.9 |
London | 748.6 |
New Anglia | 94.5 |
North Eastern | 539.6 |
Northamptonshire | 55.0 |
Oxfordshire LEP | 19.4 |
Sheffield City Region | 203.4 |
Solent | 43.1 |
South East | 185.9 |
South East Midlands | 88.3 |
Stoke-on-Trent and Staffordshire | 161.6 |
Swindon and Wiltshire | 43.6 |
Tees Valley | 202.6 |
Thames Valley Berkshire | 28.7 |
The Marches | 113.7 |
West of England | 68.6 |
Worcestershire | 68.1 |
York and North Yorkshire | 97.5 |
National Minimum Wage
(11 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
The Government have today written to the Low Pay Commission setting out the remit for its 2014 report.
The Government support the national minimum wage (NMW) because of the protection it provides to low-paid workers and the incentives to work it provides. Our aim is to have NMW rates that help as many low-paid workers as possible, while making sure that we do not damage their employment prospects.
The Low Pay Commission (LPC) is asked to:
Monitor, evaluate and review the levels of each of the different NMW rates and make recommendations on the levels it believes should apply from October 2014.
Review the contribution the NMW could make to the employment prospects of young people.
In making recommendations in the areas set out above, the Low Pay Commission is asked to take account of the state of the economy, and employment and unemployment levels.
Timing
In addition, the LPC is asked to report to the Prime Minister, Deputy Prime Minister, and the Secretary of State for Business, Innovation and Skills by end February 2014.
Copies of the remit have been placed in the Libraries of both Houses.
Welsh Funding
(11 years, 5 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
As agreed by the terms of the October 2012 joint statement on funding reform, the Welsh Government and UK Government completed a joint review of the pattern of convergence in Welsh relative funding in advance of the 2015-16 spending round.
In the run up to the spending round, Welsh Government and Treasury officials tested alternative spending scenarios for 2015-16 which were then assessed for their impact on Welsh relative funding levels. Based on this analysis, both Governments were able to conclude that no convergence is forecast during the 2015-16 spending period. That conclusion was formally recorded in an exchange of letters, between the Welsh Finance Minister and me, that took place ahead of the spending round announcement.
Following the spending round announcement yesterday, I am now able to confirm the relative funding trend for Wales up to 2015-16. There will be a small degree of divergence in Welsh relative funding during 2015-16 as shown in the table below:
2011-12 | 2012-13 | 2013-14 | 2014-15 | 2015-16 |
|---|---|---|---|---|
115.0 | 114.6 | 115.1 | 115.5 | 115.8 |
This work was taken forward collaboratively with the Welsh Government and is a good example of the two Governments working together for the benefit of Wales and the rest of the UK. The review process will be repeated ahead of the next formal spending review and I look forward to continuing to work closely with the Welsh Government on this process in the future.
School Teachers' Review Body (22nd Report)
(11 years, 5 months ago)
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The Secretary of State for Education (Michael Gove)
The “22nd Report of the School Teachers’ Review Body” (STRB) is being published today. The report contains recommendations on how to apply the pay award that is due to be implemented from September 2013.
I am grateful for the careful consideration which the STRB has given to this important matter. Copies of the STRB’s 22nd Report have been laid before Parliament today and are available in the Vote Office, the Printed Paper Office and the Libraries of both Houses, and online at: www.education.gov.uk and www.ome.uk.com.
The STRB has recommended that a 1% pay award should be applied equally to all salaries and allowances in payment, and to all points on the pay scales contained in the School Teachers Pay and Conditions Document (STPCD). This includes an increase of 1% from September 2013 in the values of:
All points on the unqualified, main and upper pay scales for classroom teachers;
The minimum and maximum of the pay range for leading practitioners and all pay ranges for individual posts set before taking account of the September 2013 uplift;
All points on the leadership pay spine;
Any individual allowances in payment and to the minima and the maxima of the ranges for all teacher allowances.
I am grateful to the STRB for these recommendations and, subject to the views of consultees, I intend to accept them in full.
My officials will shortly write to all of the statutory consultees of the STRB to invite them to contribute to a consultation on my acceptance of these recommendations, and on the text of the 2013 STPCD. The consultation will last for four weeks.
Electricity Market Reform
(11 years, 5 months ago)
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The Secretary of State for Energy and Climate Change (Mr Edward Davey)
The Government are making a range of key announcements today in relation to reform of the electricity market. Electricity market reform (EMR) is a central component of the Energy Bill currently being considered by Parliament, and will address the need to attract unprecedented levels of investment in the UK electricity sector over the coming decades as we replace our ageing energy infrastructure with a diverse mix of low-carbon generation, and meet the expected increases in electricity demand as sectors such as transport and heat are electrified.
The Energy Bill includes clauses to introduce contracts for difference, to support investment in low-carbon generation, and a capacity market, to ensure security of supply.
Contracts for Difference (CfDs)
CfDs form a core component of the Government’s strategy to bring forward investment in affordable low-carbon electricity generation—including renewables, carbon capture and storage and new nuclear. CfDs provide efficient and long-term support for low-carbon generation, reducing risks faced by generators by increasing revenue certainty and through the backing of a long-term contract. Generators are paid the difference between the market price and a “strike price”, but when the market price is high the generator must pay back the difference, which reduces costs to consumers when electricity prices are high. The Government are announcing today alongside the spending review draft CfD strike prices for renewables technologies, decisions on key CfD terms, and the levy control framework (LCF) profile to 2020-21. I am laying before Parliament our policy document “Electricity Market Reform—Delivering UK Investment”.
The aim of these announcements is to give investors early sight of the principal contract parameters, including terms and draft strike prices. We intend to publish further detail (including supporting methodology and analysis, a draft capacity market reliability standard, and a forward look to 2030) in the draft delivery plan for EMR in July. We will publish detailed drafting of key CfD contract terms in early August.
The paper will be available at:
https://www.gov.uk/government/publications/electricity-market-reform-delivering-uk-investment.
The Capacity Market
A key part of the challenge our market faces is in ensuring secure electricity supplies. In addition to the closure of ageing plant and increasing demand, the UK is seeking to decarbonise its electricity supply in order to meet our carbon reduction targets. These changes create an investment challenge, for some forms of capacity such as gas generation. The Government are taking clear action to address this by legislating to introduce the capacity market. The capacity market will give investors the certainty they need to put adequate reliable capacity in place and by protecting consumers against the risk of supply shortages. It does this by providing a predictable revenue stream to providers of reliable capacity, including both generation and non-generation measures such as demand-side-response and storage. In return, they must commit to provide capacity when needed or face financial penalties.
Government have confirmed today they intend to run the first capacity market auction in late 2014, for delivery in 2018-19—subject to state-aid clearance. In addition, I am laying before Parliament our proposal document “Electricity Market Reform: Capacity Market—Detailed Design Proposals”.
The detailed design proposals published today have been developed following discussion with stakeholders, and provide further detail on all elements of capacity market design. By publishing this detail now Government are seeking to give investors the information and time they need to start preparing for the capacity market.
We intend to consult in October on these proposals and draft secondary legislation to implement them. Secondary legislation will be subject to Parliamentary scrutiny in 2014 and it is expected to enter into force in July 2014.
Ofgem has also today published its 2013 capacity assessment—this shows de-rated capacity margins decreasing faster in the next few years than in Ofgem’s 2012 assessment. In response, Ofgem has published a letter seeking stakeholders’ views on the rationale for, and principle of, National Grid Electricity Transmission plc (NGET) procuring new balancing services to support electricity security of supply during this period. The Government, Ofgem and National Grid have a shared view of the risks and the suitability of the solutions being proposed for both the short and medium-term.
The paper will be available at:
https://www.gov.uk/government/publications/electricity-market-reform-capacity-market-proposals.
Flood Insurance
(11 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
The current voluntary agreement on flood insurance between Government and the insurance industry, termed the statement of principles, ends shortly. Without new arrangements, there is concern that households at flood risk will not have access to the affordable insurance cover they need.
Flood insurance is a complex problem. Ministers have consistently said that the aim is to find a solution which secures the availability of affordable flood insurance for households at risk of flooding without placing unsustainable costs on wider policyholders and the taxpayer. Our preference is to work in partnership with the insurance industry to deliver this.
This Government have therefore been working hard to develop a new approach with the Association of British Insurers (ABI) that promises to allow affordable flood insurance to continue to be available. I am grateful to my right hon. Friend the Minister for Government Policy who has led these discussions on behalf of the Government.
I am today launching a public consultation on how we intend to move forward. We will seek the necessary powers to take action in the Water Bill, also published today.
Following extensive discussions with the Association of British Insurers, we have established the principles for a new flood insurance solution based on their “Flood Re” proposal. I will arrange for copies of the memorandum of understanding we have reached with the ABI to be placed in the Library of the House along with the consultation document.
Flood Re promises to effectively limit the most that hundreds of thousands of UK households should have to pay for flood insurance. We anticipate that up to 500,000 high-risk households could benefit from Flood Re, and pay significantly less for their insurance than they might otherwise. Customers would be free to shop around to get the best overall deal from an insurer of their choice as well as limiting the potential for price rises, with some customers seeing prices fall. Flood Re would also constrain the excesses that could be imposed on households at high flood risk.
The benefits of Flood Re would be targeted towards those who need it most, helping those who are particularly hard-pressed with the cost of living. Furthermore, the ABI has assured Ministers that its proposal can be introduced without impacting customer bills in general. An internal industry levy would fund Flood Re, capturing the existing cross-subsidy in the market. Flood Re would operate as a not-for-profit reinsurance scheme managed by the insurance industry itself. There will be no contingent liability for the Government or the taxpayer from the Flood Re scheme.
Flood Re would be a novel approach and there remain many details to work through with the industry, including the relationship between Flood Re and Parliament. Our broad intention is that Flood Re, rather than Ministers, would be directly accountable to Parliament for its ongoing operations. Ministers would of course remain accountable to Parliament for overall policy on flood insurance. While novel, these arrangements are intended to strike a balance between the full requirements of accountability to Parliament and the need for Flood Re to operate as an integral part of the insurance market. I am writing with further details on this point to the chairs of the Environment, Food and Rural Affairs, Treasury, and Public Accounts Committees. Due to the statutory nature of the levy, Flood Re is also likely to be classed as state aid and so would need to be approved by the European Commission.
While it is our preference to work with the industry towards Flood Re there are therefore still significant issues to be overcome, many outside of the Government’s control. Households deserve to have confidence that this issue will be addressed one way or another. Because of the remaining uncertainties around Flood Re, the Government will also seek powers in the Water Bill to regulate for affordable flood insurance. This approach would be pursued if Flood Re would not or does not deliver what we need, and insurers are otherwise unable to keep prices at affordable levels. If introduced, the fall-back regulatory approach would place an obligation on each insurer to take their share of high flood risk households, or face penalties. This flood insurance obligation would have the objective of sustaining the existing market for high-risk households at affordable prices.
This Government do not intervene in markets unnecessarily, and whichever approach is finally pursued it would only operate for a limited time, and would be withdrawn within 20 to 25 years. In the long term we need to create a situation where everyone is fully aware of their level of flood risk, and households and communities are rewarded through their future bills for the steps they take to reduce flood risk.
We are seeking views on this as the way forward through a six-week public consultation. The Water Bill being published today will contain a placeholder clause on flood insurance. Following public consultation I intend to announce final proposals and introduce updated clauses to the Water Bill by Government amendment later this year.
The best way of securing affordable insurance in the long term is and will always be to reduce the chance of flooding in the first place. Investing in flood risk management remains at the top of the Government’s priorities. The Government also provide a range of further support for households to reduce their risk of flooding and find affordable insurance, for instance by signing up to free flood warnings, and help with fitting flood gates and other property-level protection measures.
I am also pleased to inform the House that insurers have agreed to continue to meet their commitments under the statement of principles until such a time as Flood Re can begin operation. This will provide valuable and immediate reassurance for householders.
The Water Bill will also reform the water sector to support growth and improve resilience, while ensuring it continues to attract long-term investment. It will introduce more competition in order to create a more innovative, efficient and dynamic sector which meets future demands and offers customers more choice and better service.
This Government are committed to delivering a new approach to flood insurance that is better than the statement of principles it will replace. I am determined to ensure, that one way or another, flood insurance is not just available but also that it is affordable. I believe that the proposals set out today will achieve this, and will for the first time provide real peace of mind to households at flood risk. With our investment in flood defence, and our approach to ensuring that only appropriate development takes place in flood risk areas, I am confident we have the right approach to tackling the long-term of risk of flooding.
Together our approach will help us build what we want to see—a stronger and more resilient economy in a fairer society.
Triennial Reviews
(11 years, 5 months ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
Today I am publishing the report of the review of the Environment Agency (EA) and Natural England (NE), which I launched in December 2012, and the report of the review of the Joint Nature Conservation Committee (JNCC), which commenced in March 2013.
These reviews have taken a fundamental look at how the bodies can continue to deliver the Government’s priorities for the environment with improved resilience in the face of current and future environmental and economic challenges.
I have concluded that the EA and NE should be retained as separate public bodies with separate purposes and functions, but that both bodies should continue to reform how they deliver their services to their customers and drive further efficiencies.
The bodies will be tasked with delivering the conclusions of the reviews, developing a jointly owned implementation plan in close consultation with DEFRA. DEFRA will hold to account the leadership of both bodies for the delivery of the reforms.
Working with the devolved Administrations of Northern Ireland, Scotland, Wales on the review of JNCC, I have concluded that JNCC is the most appropriate organisation to deliver its functions, and should be retained as a non-departmental public body. The review has identified a number of measures to deliver a more effective and efficient service which JNCC will now implement, developing their implementation plans in close consultation with DEFRA and the devolved Adminstrations, and reporting regularly on progress.
The reports of these reviews will be published online, and copies will be placed in the Libraries of both Houses.
Afghanistan (Monthly Progress Report)
(11 years, 5 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I wish to inform the House that the Foreign and Commonwealth Office, together with the Ministry of Defence and the Department for International Development, is today publishing the 28th progress report on developments in Afghanistan since November 2010.
Voter registration ahead of the 2014 presidential and provincial elections was begun as expected on 26 May. Women make up 50% of the voter registration teams. Phase 1 focused on 41 registration centres across all 34 provinces. Limited progress was made on the passage of two important pieces of legislation which will form the structural basis of the electoral system used for the 2014 and 2015 electoral cycle.
As the fighting season intensifies, we have seen an increase in enemy-initiated and spectacular attacks, particularly in the east, west and north of the country. Nevertheless, violence levels within central Helmand appear lower than at the same point in the fighting season last year and the ANSF are holding firm. The ANSF responded well to attacks on the International Organisation for Migration (IOM) in Kabul and the International Committee of the Red Cross (ICRC) in Jalalabad.
On 8 May, the Prime Minister confirmed in Parliament that UK force levels will be reduced to around 7,900 by the end of May, and to around 5,200 by the end of 2013, in line with security transition and progress on the ground.
On 15 May the NATO military chiefs of defence met and endorsed the concept of operations for the post-2014 NATO train, advise and assist mission in Afghanistan. Their advice to NATO Defence Ministers recognises the initial requirement for a regional approach to security.
On 14 May the Defence Secretary announced that some UK forces deploying to Afghanistan this October on Herrick 19 will serve up to eight months, rather than the usual six-month tours. In addition some personnel deploying on Herrick 20 in June 2014 may be required to serve up to nine months, to complete redeployment activity in Afghanistan should it continue into 2015. This will help to align our presence with key milestones between now and the end of 2014, such as the presidential elections and help to maintain operational continuity. Those personnel affected by the extended tours will be compensated from the 7.5 month point through the new Herrick draw-down allowance of £50 per day before tax.
This will be paid on top of the standard operational allowance package (except for those in receipt of campaign continuity allowance).
I am placing the report in the Library of the House. It will also be published on the gov.uk website www.gov.uk/government/publications/afghanistan-progress-report-May-2013.
Lithuania Presidency
(11 years, 5 months ago)
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The Minister for Europe (Mr David Lidington)
I am keen to keep Members fully informed on developments in the European Union and their implications for the United Kingdom and our priorities. I would, therefore, like to draw Members’ attention to a paper on the priorities of the Lithuanian presidency of the Council of the European Union, which has been placed in the Library of the House. I have also deposited a copy of the calendar of ministerial meetings for the duration of their presidency.
Health Council
(11 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Health (Anna Soubry)
The health part of the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council met on 21 June 2013 in Luxembourg. I represented the UK.
After considerable discussion and changes to the proposed text to address concerns of member states, including the United Kingdom, the Council agreed a general approach to the tobacco products directive. The UK secured a number of key changes to address UK policy priorities including: the ability to maintain picture warnings on all types of smoked tobacco; a more flexible approach to cross-border distance sales; adequate freedom for member states to take forward domestic public health policies in certain key areas, aiming for a higher level of health protection where this is justified. The UK supported the general approach. Four member states were not able to support the general approach.
The presidency provided progress reports on negotiations on the clinical trials regulation and the medical devices regulations.
Under any other business, the presidency provided information about the proposal for a decision on serious cross-border threats to health, the drugs action plan, the importation of active pharmaceutical products, the cross-border healthcare directive, the transparency directive and middle east respiratory syndrome coronavirus.
In the margins of the meeting I discussed the UK’s front-of-pack labelling scheme for food with Commissioner Borg and the Italian Minister, emphasising the voluntary nature of the recommendation.
Departmental Annual Report and Accounts
(11 years, 5 months ago)
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The Secretary of State for International Development (Justine Greening)
I have today published and laid before Parliament, the Department for International Development’s annual report and accounts for the year 2012-13.
The report provides information on DFID’s activities during 2012-13 in line with the International Development (Reporting and Transparency) Act 2006 and includes a full set of accounts for 2012-13. The report will be placed in the Libraries of the House of Commons and House of Lords for the reference of Members and copies will be made available in the Vote Office and Printed Paper Office. It is also available online on the Gov.UK website.
Office for Judicial Complaints (Annual Report 2012-13)
(11 years, 5 months ago)
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The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
With the concurrence of the Lord Chief Justice, I will today publish the seventh annual report of the Office for Judicial Complaints (OJC), which provides support to the Lord Chief Justice and myself in our joint responsibility for the system of judicial complaints and discipline.
Over the past year the OJC has seen the volume of complaints it receives increase by a third; receiving over 2,100 complaints and 550 written inquiries. I am pleased, therefore, that the OJC continues to deliver a good service; providing complainants with a first substantive response within 15 working days in 93% of all cases it receives.
Subject to parliamentary approval, this annual report will be the last published by the OJC prior to the introduction of the Judicial Discipline (Prescribed Procedures) Regulations 2013. The new regulations are the product of a review conducted by a working group, led by Lord Toulson, and seek to establish a more efficient and streamlined process for handling complaints about the conduct of judicial office holders.
The introduction of the new regulations will also see the OJC become the Judicial Conduct Investigations Office (JCIO). I am confident that the JCIO will build on the solid foundations laid by the OJC over the last seven years and, in tandem with the introduction of the new regulations, will deliver further improvements and efficiencies in the handling of judicial conduct complaints.
Copies of the report are available in the Libraries of both Houses, the Vote Office and the Printed Paper Office. Copies of the report are also available on the internet at: http://judicialcomplaints.judiciary.gov.uk/publications.htm.
Approved Driving Instructors
(11 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
The Driving Standards Agency (DSA) today launched a consultation on a reform of the regulatory framework for approved driving instructors (ADIs). The consultation seeks views on improving the way that people qualify to become driving instructors, including replacing the existing DSA qualifying tests with a new vocational qualification delivered by approved training centres and assessed by an external awarding organisation.
The new qualification would be aligned with DSA’s national standards that set out what skills are needed to be an effective driving instructor, and would reflect any changes introduced as a result of the Government’s upcoming Green Paper on young drivers.
The consultation also considers reforming the trainee licence scheme so that trainees would only be able to give paid tuition when accompanied by a fully qualified instructor; and seeks views on minor changes to the administration of the ADI register.
These proposals would also reduce the time and money that is currently wasted by many applicants as only 50% of them complete the current application process. Instead, the new system incorporates transferable credits which trainees will be able to carry forward to other vocational qualifications, if they change their mind about becoming an ADI. This allows for better job mobility.
The consultation will run from 27 June to 8 August 2013. The consultation paper is available at the following web address:
www.gov.uk/government/consultations/modernising-driver-training.
Employment, Social Policy, Health and Consumer Affairs Council
(11 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
The Employment, Social Policy, Health and Consumer Affairs Council met on 20 June 2013 in Luxembourg. I represented the UK.
There was a discussion on the European semester 2013 focusing on a number of documents linked to the European semester. The UK stressed the importance of the semester process in driving forward robust national labour market reforms and called on the Commission to share their staff working documents with member states in advance.
There was a separate discussion on youth employment. The UK cited its labour market flexibility and highlighted the youth contract and the work programme as key factors behind the fall in UK youth unemployment at a time when youth unemployment has risen in the EU.
The Council agreed a general approach on the European globalisation adjustment fund regulation (2014-20). The UK opposed this and stressed concerns about the efficiency of the instrument. There was also a progress report on the fund for European aid for the most deprived regulation.
The presidency secured Council agreement for a general approach on the proposed directive on minimum requirements for enhancing worker mobility by improving the acquisition and preservation of supplementary pension rights. The presidency provided updates on directives on equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation; enforcement of directive 96/71/EC on posting of workers in the framework of the provision of services; and gender balance among non-executive directors of companies listed on stock exchanges.
Ministers adopted two sets of Council conclusions on social investment for growth and cohesion and on women in the media.
Under any other business, the presidency provided updates on legislative files and preparations for the upcoming G20 Labour and Employment Ministers meeting and joint meeting with Finance Ministers. The Commission presented its legislative proposal on public employment services (PES) and the Lithuanian delegation outlined the work programme of their forthcoming presidency.
Social Fund (Annual Report 2012-13)
(11 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The Secretary of State’s annual report on the social fund for 2012-13 will be published later today.
The report records that total gross expenditure in 2012-13, excluding winter fuel payments, was £924 million. This figure includes 197,000 non-repayable community care grants and more than 2.8 million interest-free loans awarded worth over £558 million. Also, cold weather payments worth over £146 million, funeral payments worth £43 million and Sure Start maternity grants worth £39 million were paid.
In addition, over 9 million households benefited from a winter fuel payment at an estimated cost of around £2.1 billion.
This has been an important year in the history of the social fund as preparations were made to abolish those parts—community care grants and crisis loans—that had not kept pace with wider welfare reforms. They were too complex for ordinary people to understand and were poorly targeted, failing those they were meant to help the most.
From 1 April 2013 new local provision began, developed by upper tier local authorities in England and under arrangements made by the Scottish and Welsh Governments. I would like to take this opportunity to thank local authorities and the Scottish and Welsh Governments for the way in which they have engaged with the Department to deliver this significant change and to ensure help is now being targeted at those most in need.
The “Social Fund White Paper Account 2012-13” will also be laid in Parliament today. This publication provides an audited account of the social fund’s receipts and payments and notes on key balances.
This year, following nine years of qualification, the Comptroller and Auditor General is satisfied that the social fund is making award decisions materially in accordance with Parliament’s intentions and has not qualified his opinion on the regularity of social fund awards. The National Audit Office has tested samples of awards during the year and estimated the value of most likely error to be just 0.68%. This is a significant achievement for the Department and is the culmination of focused work over a number of years.
The social fund commissioner’s report on the standard of social fund inspectors’ decisions was published on 24 June.
All three of these documents will be available later today at: https://www.gov.uk/government/publications.
Triennial Reviews
(11 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
Triennial reviews of non-departmental public bodies are part of the Government’s commitment to ensuring accountability in public life. Later today I will launch a review of the Pensions Regulator, the Pensions Advisory Service, the pensions ombudsman and the pension protection fund ombudsman. This review will look at the functions of all four bodies and whether they should continue to exist in their current form. If the review determines that these bodies should continue, it will go on to consider whether they are operating in line with the recognised principles of good corporate governance. I will inform the House of the outcome of the review when it is completed and will place a copy of the review in the Libraries of both Houses.
Work Programme Official Statistics
(11 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
The Department for Work and Pensions has today released official statistics covering the performance of the Work programme up to the end of March 2013, showing performance to the end of the second financial year of the Work programme .
The Work programme is designed to help people who are at risk of becoming long-term unemployed. Many of those being supported by the Work programme are in receipt of benefit for nine or 12 months before joining and are then supported over a minimum of two years.
The figures published today show the Work programme has significantly improved. A total of 132,000 jobseekers have escaped long-term unemployment and found lasting work—normally at least six months (three months or more for the hardest to help). This compares to 9,000 for the period up to the end of March 2012—a significant improvement.
The figures also highlight more people are getting into work within a year of joining the Work programme. The UK Statistics Authority has said that it does not regard the calculation by commentators that 3.5% of people got into work in the first year of the scheme as the most relevant figure on which to assess performance. It says that performance is better measured by counting how many people referred to the Work programme get into sustained work in their first year on the scheme on this measure, while just 8.5% of those who started the Work programme in June 2011 completed at least six months of work in their first year, this success rate has increased dramatically to 13.4% for more recent recruits who joined in March 2013.
Compared to many employment schemes under previous Governments, the programme targets the hardest to help into work, such as those claiming employment and support allowance. Some people have been out of work for more than 10 or 15 years, so it will take time to help them back. But the Work programme is offering them more support than previous employment schemes, and 6,000 of the harder to help have now found lasting work. We expect providers to deliver improving results as they share best practice.
Although many providers are now meeting their contracted levels for helping jobseeker’s allowance claimants, some are lagging behind. The Department intends to refer more claimants to better performing providers. We will be implementing market share shift in at least 16 instances. Implementation of these shifts will begin in August.